ATA CEO Chris Spear Calls on Congress for Sustainable, User-Funded Infrastructure Plan

By IndraStra Global Editorial Team

By IndraStra Global Editorial Team

Image Attribute: The file photo of American semi-trailers in a parking lot/ Source: Pixabay.com 

On March 6, 2019, Chris Spear, the President & CEO of American Trucking Associations (ATA) gave his testimony on "Our Nation’s Crumbling Infrastructure and The Need for Immediate Action" in front of Committee on Ways and Means, United States House of Representatives.

In his testimony, he strongly advocated for the real funding solutions from the federal government with respect to the nation's current infrastructure needs. 

"We are no longer facing a future highway maintenance crisis — we’re living it — and every day we fail to invest, we’re putting more lives at risk. In nearly 53% of the highway fatalities, the condition of the roadway contributed," he said. "Federal inaction has prompted cash-strapped states to adopt regressive revenue schemes that hurt commuters, communities and divert funds to noninfrastructure priorities."

Also, he added, "The federal government has a critical role to play in the supply chain. Freight knows no borders, and the constraints of trying to improve the movement of freight without federal funding and coordination will create a drag on all freight providers’ ability to serve national and international needs."

Proposed Solution 1: Build America Fund (BAF)

Build America Fund (BAF) would be supported with a new 20 cent per gallon fee built into the price of transportation fuels collected at the terminal rack, to be phased in over four years. The fee will be indexed to both inflation and improvements in fuel efficiency, with a five percent annual cap. We estimate that the fee will generate nearly $340 billion over the first 10 years. It will cost the average passenger vehicle driver just over $100 per year once fully phased in. Under the BAF proposal, the first tranche of revenue generated by the new fee would be transferred to the Highway Trust Fund (HTF). Using an FY 2020 baseline, existing HTF programs would be funded at authorized levels sufficient to prevent a reduction in distributed funds, plus an annual increase to account for inflation.

Proposed Solution 2: National Priorities Program (NPP) [In tandem with BAF]

A new National Priorities Program (NPP) would be funded with an annual allocation of $5 billion, plus an annual increase equivalent to the percentage increase in BAF revenue. Each year, the U.S. Department of Transportation would determine the location of the costliest highway bottlenecks in the nation and publish the list. Criteria could include the number of vehicles; the amount of freight; congestion levels; reliability; safety; or, air quality impacts. States with identified bottlenecks could apply to the US Department of Transporation (USDOT) for project funding grants on a competitive basis. Locations could appear on the list over multiple years until they are addressed. The funds remaining following the transfer to the HTF and the NPP would be placed into the Local Priorities Program (LPP). Funds would be apportioned to the states according to the same formula established by the Surface Transportation Block Grant Program, including the sub-allocation to local agencies. Project eligibility would be the same as the eligibility for the National Highway Freight Program or National Highway Performance Program, for highway projects only.

According to Spear, "this approach would give state and local transportation agencies the long-term certainty and revenue stability they need to not only maintain but also begin to improve their surface transportation systems. They should not be forced to resort to costly, inefficient practices – such as deferred maintenance – necessitated by the unpredictable federal revenue streams that have become all too common since 2008. Furthermore, while transportation investment has long-term benefits that extend beyond the initial construction phase, it is estimated that our proposal would add nearly half a million annual jobs related to construction nationwide, including more than 7,000 jobs in Massachusetts and over 41,000 jobs in Texas."

Proposed Solution 3: Repeal of the Federal Excise Tax (FET) on trucking equipment, provided the revenue it generates for the HTF is replaced.

According to Spear, "FET as an antiquated 12% sales tax, which was adopted in 1917 to defray the costs of World War I, is a barrier to investment in the cleanest, safest trucks available on the market. In fact, when the FET was first adopted, it was applied to all vehicles, and now is imposed only on heavy trucks. Income from the FET has varied widely, mostly in response to economic conditions." Over the past decade, revenue has ranged between US$ 1.5 billion during the recession year of 2008 and US$ 4.6 billion in 2015. This variability contributes to mismatches between federal-aid money authorized and revenue available for appropriation. In fact, the first bail-out of the HTF, in 2008, was necessitated largely by an unanticipated drop in FET revenue.

To learn more about the American trucking industry, download the latest American Transportation Research Institute (ATRI) report in pdf;

An Analysis of the Operational Costs of Trucking: 2018 Update (October 2018)

Alan Hooper (Research Associate), ATRI, Atlanta, GA

Dan Murray (Vice President, Research), ATRI, Minneapolis