Funding

ARTBA believes the cost of building and maintaining highway infrastructure should be paid for by users of the system. Any user fee, mechanism or strategy should be sustainable, consistent, adjusted for inflation, and deliver dedicated, recurring revenues sufficient to meet the need for capital improvements to the nation’s highway and transit system.

  • Examples of user fees that meet these criteria include but are not limited to: motor fuels taxes, mileage use charges on individual and commercial travel, excises, and tolls.

All energy sources utilized to power vehicles (e.g. gasoline, diesel, electric, hydrogen) that use the nation’s highway and bridge system should be equitably taxed to pay for system improvements. As the nation’s highway vehicle fleet becomes more energy efficient, and as alternate energy-sourced vehicles become more prevalent, highway user fees must be appropriately adjusted and alternate forms of revenue collected, to ensure the revenue stream necessary for highway and bridge improvements is not compromised.

To assure the integrity of user financing, proceeds collected from those who directly benefit from the nation’s highway and bridge network should be deposited in the Highway Trust Fund and used exclusively to support surface transportation and other improvements that benefit such users.

The federal Highway Trust Fund’s expenditure authority-and funding sources to support it-should be made permanent to ensure that adequate financial resources to meet state needs are available. Recurring funding is critical to state and local government confidence in federal partnership. All levels of government should index highway user fees, regardless of energy source, to the Consumer Price Index to assure that these fees rise commensurate with increases in inflation.

Recognizing the enormous cost associated with meeting highway capital needs, “non-traditional” funding mechanisms should be considered for use when appropriate to supplement user fee revenue.

Non-transportation policy objectives should be pursued through federal General Funds or other appropriate non-transportation user fees. Limited Highway Trust Fund revenues should be preserved for and fully invested in transportation improvements. Highway Trust Fund Highway Account dollars should be earmarked exclusively for highway and bridge improvements.

To ensure that all federal transportation user fees are collected as intended, federal and state activities aimed at combating evasion in this area should be continued and expanded.

All levels of government must diligently monitor transportation improvement needs and continue to dedicate transportation revenue to highway improvements.

ARTBA opposes the concept of linking the availability of federal highway funding to state and local government compliance with federal mandates of any sort.

To assure equity in taxation and maximize receipts to transportation trust funds so that highway capital needs can be met, ARTBA urges all levels of government to eliminate exemptions from the motor fuel excise and other highway user fees.

ARTBA opposes temporary suspensions of federal motor fuels taxes for any reason. Such proposals are short-sighted and ultimately cost the motoring public and taxpayer more in the long-run.

Capital Budgeting & Budgetary Treatment of Highway Trust Fund

ARTBA urges the federal government to adopt a capital budget that differentiates between federal capital investments in public infrastructure and the general day-to-day operating expenses of government.  This accounting procedure is used by most state governments and many other nations.  Such an action would help ensure that highway user revenue is not impounded and that artificial spending ceilings are not placed on the user-supported “pay-as-you-go” federal highway program.  If and when the highway program becomes self-sustaining, it should be separated from the federal unified budget and exempted from any general spending caps or other “across-the-board” deficit reduction measures enacted by Congress or the Executive Branch.

Financing

Tolling

ARTBA believes state transportation agencies should be permitted to use federal funds to develop new toll highways and have maximum flexibility to design and implement toll-financing solutions.  When federal funds are used to finance the acquisition, construction, or reconstruction of a new or existing toll facility, states should be under no obligation to repay the federal funds used or to remove the toll once the non-federal costs have been recovered.

The U.S. Secretary of Transportation should be granted the authority to allow the imposition of tolls on existing federal-aid highways that have unusually high maintenance, construction or reconstruction costs.  The purpose of this action would be to allow states to use the toll revenue realized to repay bonds issued to finance these improvements.

Toll revenue generated in excess of the amount necessary to operate and maintain a facility should only be used for transportation-related purposes.  Privately operated toll highways may be a viable means of meeting increased traffic demands in some areas.

Public-Private Partnerships

While public funding is and should continue to be the foundation of advancing surface transportation infrastructure improvement programs, we recognize that private investment is also necessary if the nation is to meet its transportation capital needs.  ARTBA believes the public interest can be served well through public-private partnerships in transportation development.  ARTBA further believes that public-private partnerships should be structured so that each sector provides what it can most effectively contribute.  Such recognition of expertise should maximize project success and protect all applicable public interests.

In support of these pursuits, we recommend:

  • Federal and state transportation agencies should be encouraged to develop and fund proposals for appropriate projects using a public-private partnership approach to designing, constructing, improving and operating highway transportation projects.
  • When federal or other public funding is involved, public-private venture projects should be constructed in cooperation with applicable federal and state transportation agencies and in accordance with all relevant laws, including those applicable to competitive bidding for construction contracts.
  • States should be permitted to use federal funds as loans or matching funds for all public-private partnership transportation projects with a dedicated revenue source.
  • Appropriate types of tax incentives, such as arbitrage relief, public benefit bonds (which would be suitable investments for 401(k) and other employee benefit plans), private activity bonds, and volume cap flexibility should be considered to facilitate the private financing of transportation infrastructure projects.
  • Proposals have been suggested that would establish federal and/or state revolving loan structures, also known as “Infrastructure Banks,” to leverage funding for capital investment. While ARTBA encourages the development of innovative financing mechanisms as additive funding sources for transportation infrastructure investment, such “banks” or loan programs should not utilize Highway Trust Fund revenues to pay for non-highway programs or investments.

State participation in public-private partnerships should be optional, and non-participation will not adversely affect “traditional” federal highway program funding.