Transportation groups stake early claims to carbon fees as climate bill develops

A slew of transportation groups are pressing the bill’s architects to
ensure all the money raised through planned carbon fees on motor fuels
is plowed back into road and transit projects.

That could put the
groups at odds with Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.)
and Joe Lieberman (I-Conn.), who plan to roll out their bill later this
month. Graham said in late March that he envisioned
money from the fees going back to consumers and also being used for
debt reduction.

Over two dozen groups made the case for transportation funding in an April 1 letter to the senators.

Here’s a blurb from the letter:

New fees placed on transportation fuels should be dedicated to the Highway Trust Fund and invested along with other surface transportation funds under a multi-year highway and transit authorization bill. Increasing the availability of funds for transportation would help address transportation infrastructure investment needs and expand access to public transportation and other fuel-saving transportation improvements.

The letter is from groups such as the American Association of State Highway and Transportation Officials, the American Public Transportation Association, the American Road & Transportation Builders Association, and the Associated General Contractors of America, as well as several other trade groups, unions and related interests.

They cite massive investments needed in the country’s transportation infrastructure, noting Transportation Department projections of over $30 billion annually needed to maintain systems in their current state, and $75 billion annually in new investment needed to improve them.

Kerry, Graham and Lieberman plan to address emissions from motor fuels like gasoline through new fees, rather than placing emissions from transportation fuels under a cap-and-trade program.

Graham said last month that the fee would be placed on fuel producers under the upcoming bill. He said some of the cost would be passed on to consumers, but added that it will not harm drivers because the bill will have a rebate mechanism.

“Some of it will be passed on, some of it will be absorbed, but the money we collect from them gets passed back to the consumer, which holds them harmless,” Graham said March 25. “Bill Gates may not get it, but most people in my state will, and any money not going back to the consumer from this linked fee has to go to something that the country needs, like retiring the debt, or I won’t support it.”

Here’s the whole letter:

Dear Senators Kerry, Graham and Lieberman:

On behalf of the organizations signed below, we write to urge you to develop a proposal for climate and energy legislation that retains the long-standing principle of dedicating revenues derived from transportation motor fuels to improving the nation’s highway and public transportation systems. To that end, we hope to work with you to develop a strategy that promotes energy independence, reduces greenhouse gas emissions, and improves the condition of critical transportation infrastructure.

Federal motor fuel user fees have supported the Federal Highway Trust Fund since 1956 and the Mass Transit Account of the Trust Fund since 1982. These user fees are the lifeblood of our highways and transit systems which move millions of people and tons of cargo every day. Previous increases in the federal motor fuels tax rate in 1990 and 1993 dedicated some revenue to temporary, short-term deficit reduction, an important goal that remains relevant today, but every other increase has supported long-term investment in our transportation infrastructure. Since 1997 all motor fuel revenues have been deposited in the Trust Fund.

Our surface transportation system faces monumental challenges. The needs of our roads and transit systems far exceed current investment levels. The U.S. Department of Transportation estimates that more than $30 billion per year of new investment is needed simply to maintain our highways, bridges, and transit systems in their current state of repair and $75 billion of new investment is needed annually to improve conditions and performance. Unfortunately, the current authorizing law for highway and transit programs expired last year and has been repeatedly extended on a short-term basis. This prevents states and transit agencies from advancing much-needed transportation projects that require predictable, multi-year funding. Further, the Highway Trust Fund has required several transfers of funds over the past three years and a restoration of interest payments to remain temporarily solvent, but it still cannot sustain the current rate of outlays. Any proposal to divert user fees from motor fuels while our roads, bridges, and transit systems are neglected is not sound policy.

The solution to the transportation crisis is the quick passage of a new multi-year authorization bill that accelerates job creation with significant new investment and institutes a more performance-oriented federal transportation program. Enacting a new transportation bill quickly will be very difficult, if not impossible, should Congress approve legislation that diverts revenue from carbon-based fees from motor fuels away from the transportation investment.

Failure to enact a transportation bill will not only harm our economic competitiveness, it will impair the ability of states, counties, cities and transit systems to reduce our dependence on foreign oil and reduce transportation-related emissions. Without a new authorization bill, expanding access to transportation choices like public transportation that reduce emissions and modernizing our highways and infrastructure simply cannot occur. The transportation sector accounts for 70 percent of domestic oil consumption and one-third of carbon pollution.

New fees placed on transportation fuels should be dedicated to the Highway Trust Fund and invested along with other surface transportation funds under a multi-year highway and transit authorization bill. Increasing the availability of funds for transportation would help address transportation infrastructure investment needs and expand access to public transportation and other fuel-saving transportation improvements. We hope to work with you to develop climate and energy legislation that benefits the environment, as well as our economy, our workers and the surface transportation infrastructure on which we all rely.

Sincerely,

American Association of State Highway and Transportation Officials (AASHTO)
American Road & Transportation Builders Association (ARTBA)
American Public Transportation Association (APTA)
Amalgamated Transit Union (ATU)
America Bikes
American Concrete Pavement Association (ACPA)
American Council of Engineering Companies (ACEC)
American Highway Users Alliance
American Society of Civil Engineers (ASCE)
American Traffic Safety Services Association (ATSSA)
American Trucking Associations (ATA)
Associated Equipment Distributors (AED)
Associated General Contractors of America (AGC)
Association for Commuter Transportation (ACT)
Association of Equipment Manufacturers (AEM)
Association of Metropolitan Planning Organizations (AMPO)
International Union of Operating Engineers
Laborers’ International Union of North America (LiUNA!)
League of American Bicyclists
National Asphalt Pavement Association (NAPA) 3
National Association of Counties (NACo)
National Association of Development Organizations (NADO)
National Ready Mixed Concrete Association (NRMCA)
New Starts Working Group
Safe Routes to School National Partnership
Transportation Trades Department, AFL-CIO
United Brotherhood of Carpenters and Joiners of America
Cc:
Chairman Max Baucus
Chairman Barbara Boxer
Chairman Christopher Dodd
Ranking Member Chuck Grassley
Ranking Member James Inhofe
Ranking Member Richard Shelby