Missed Opportunity for Highway Revenues in House Committee Hearing
On July 19, 2022, the House Transportation and Infrastructure Committee held a hearing to have U.S. Department of Transportation Secretary Pete Buttigieg answer questions regarding the implementation of the Infrastructure Investment and Jobs Act. It was a missed opportunity for a much-needed policy discussion about the long-term revenue sources and funding sustainability of our transportation system.
The hearing failed to serve as a platform to engage Members of Congress and Secretary Buttigieg in a dialogue about policy differences regarding the ongoing transportation revenue crisis and the future of the user-pay principle that have served as the foundation of the federal transportation program.
“As we continue to transition toward electric vehicles and zero-emitting vehicles, it means that we’re going to need to have other means for filling gaps in the Highway Trust Fund,” Buttigieg stated. “Up until now, Congress has been prepared to do that through general fund transfers. That’s certainly a legitimate way to fund our highway needs.”
While this may be true from a basic policy standpoint, it raises many questions for the USDOT and an Administration that aspires to be transformative, as well as for a Congress that claims to hold infrastructure investment as a high priority on both sides of the aisle.
The reality of the circumstances we face at the federal level suggests that Congress will remain divided, and policy and decision making will remain highly divisive. In this environment, counting on general fund transfers to fund and finance the ongoing needs of the American transportation system makes our future finance methods uncertain, political, and unreliable. “I think that ultimately this will be not a technical decision, but a policy one,” Buttigieg said, “that largely comes down to whether Congress will continue to hold to the user-pays principle or seek an alternative means for funding.”
The responsibility for sound financial and management principles for transportation is a shared responsibility among Congress and the Administration. Sustainable and dedicated revenue sources are essential ingredients to ensure that new public investments remain adequately funded to sustain operations and ongoing maintenance that drive safety, mobility, asset availability, and reliability. Both the legislative and executive branches of federal government need to focus better on this as a critical issue for our nation’s global competitiveness, quality of life, and economic prosperity.
The exchanges on tolling and private investment were also lacking substantive discourse. Questioned about USDOT’s consideration of toll facilities as a viable option to contribute to Highway Trust Fund shortfalls, Secretary Buttigieg explained that this approach is used on certain heavily trafficked roads, especially if they were built with that type of operational model in mind. He contended that it is tougher to see how this approach could be adopted on a wider basis unless we could find a nonintrusive way to do that. No recognition was given the revolution in toll facilities in the last 15 years to eliminate highway choke points and process traffic seamlessly through open-road toll system designs and all-electronic cashless operations.
Buttigieg concluded that he believed tolling would be limited to specific locations and high-traffic highways and bridges, rather than an approach for how the road system at large would be funded. In response, Representative Daniel Webster (FL-11), who raised the tolling question, did not offer any evidence of the benefits from expanded toll roads in Florida’s Orlando metropolitan area in terms of delivering new infrastructure that enables economic growth and expanded access to economic opportunity.
On using private sources of funding and finance to address transportation revenue concerns, Buttigieg said there is a place for private investment, citing some of the work the Build America Bureau to unlock private value. He concluded that he was less confident that the approach could address large-scale Highway Trust Fund shortfalls.
There is no one silver bullet to address the systemic and structural shortfalls of federal transportation revenue. A variety of solutions are needed to contribute to a comprehensive and viable toolbox of solutions – including tolling, road-usage charging, congestion pricing, and other mechanisms that allow users to pay for the facilities and services they consume. But continuing to avoid the tough decisions on how to pay for transportation infrastructure does a disservice to the American people.
The transportation industry has come together to advocate for federal funding solutions – but to no avail to date. We expect our federal leaders to recognize our national transportation revenue crisis and embrace an openness to engage an array of options.
IBTTA hopes to engage USDOT, the Biden Administration, and Congress in encouraging user-payment practices that are equitable, sustainable, and dedicated to funding and financing essential transportation facilities and services for generations to come.