Last week, the House Transportation and Infrastructure Committee marked up the Aviation, Innovation, Reform, and Reauthorization (AIRR) Act (H.R. 4441), a 273-page piece of legislation to reauthorize and make changes to the Federal Aviation Administration (FAA).
A major provision of the AIRR Act (Title II) removes the Air Traffic Organization (ATO) from the FAA and establishes a non-profit corporation, called the ATC Corporation, to provide Air Traffic Control services.
Understandably, many conservatives are eager to privatize our nation’s air traffic control system. But, concerns have arisen that this attempt would instead create an organization similar to other government-sponsored enterprises that keep taxpayers on the hook for serious missteps.
Beyond the structure of the new entity, there are several other conservative concerns:
Claim: TEA does not fix the Highway Trust Fund (HTF)
TEA reduces the federal role in transportation once prior obligations of the HTF are met. The bill does not (and should not) propose a solution to past mismanagement and past commitments that were based on unrealistic projections of revenue and/or the assumption of a general fund bailout. Conservatives have proposed numerous offsets and reforms that would enable the HTF to be brought to solvency through spending reductions and devolution of responsibilities to the states.
Claim: TEA will require states to raise their gasoline taxes.
TEA gradually reduces the federal gas tax over a five-year period, while block-granting a portion of those revenues to states over that same time period. This is intended to allow states to transition to a funding structure that allows them the independence to manage their unique infrastructure requirements. Under the current HTF financing structure, one in four of the dollars states send to the federal government are diverted to non-highway spending. Eighteen percent of gasoline taxes go to the account dedicated to mass-transit within the Highway Trust Fund. Transit users do not pay anything into the Highway Trust Fund. There is more than enough funding at the current taxation levels to fund the maintenance of the national highway network—the issue is the wasteful federal diversions and mandates that increase project costs. State tax burdens will be much lower without federal mandates and wasteful spending absorbing billions of dollars in revenue. TEA returns the responsibility for raising revenue to the states, gradually phasing out federal gas taxes to a low, but sufficient level. States then have the flexibility to fund right-size transportation budgets how they see fit.
Claim: TEA will damage the national transportation network.
Transportation Empowerment Act
- Empowers states to set transportation spending priorities and enables them to determine the best funding sources.
- Transitions control from federal to state over a five-year period, avoiding disruption.
- Lowers the federal gas tax from 18.4 cents per gallon to 3.7 cents over the same time period; states would be free to increase their state gas taxes or find other funding mechanisms.
- Reduces red tape, including the Davis–Bacon prevailing wage requirements and other federal mandates.
- Enables greater private-sector participation in funding and financing capital-intensive projects
- Emily Goff, “Empowering the States by Turning Over the Federal Highway Program,” Issue Brief, November 15, 2013, http://www.heritage.org/research/reports/2013/11/impact-of-turning-over-the-federal-highway-program-to-the-states.
- Emily Goff, “Transportation and Infrastructure Policy: More State and Less Federal Control,” Issue Brief, March 13, 2013, http://www.heritage.org/research/reports/2013/03/transportation-and-infrastructure-policy-more-state-and-less-federal-control.
Support From Others
- “Shifting power toward taxpayers and their local and state governments is the right direction to take.” Kyle Wingfield, “End D.C.’s Highway Robberty,” Atlanta Journal-Constitution
- “Congress has created the perception that all states are enriched by federal largesse, while it has created uses the money to keep control over any state that might stray into finding innovative solutions.” Dennis Polhill, Senior Fellow, Independence Institute, “A Chance to Bring Transportation Power and Money Back to the States,” Denver Post, December 6, 2013, http://www.denverpost.com/opinion/ci_24672758/chance-bring-transportation-power-and-money-back-states#ixzz2rc2kcg7Q.
Transportation Secretary Anthony Foxx called for Americans across the country to “get a little noisier” on the issue transportation funding Wednesday and asked them to pressure Congress to come up with a long-term solution to the issue.
Foxx approved of the $10.9 billion stopgap lawmakers enacted last week to keep the Highway Trust Fund (HTF) solvent through next May but wants Congress to pass a multi-year bill before the year’s end, Politico Pro reports (sub. req’d). He said that Americans just need to be given the facts “as we know them.”
If that’s the case, Americans should know that “many individual states are trying to compensate for the lack of congressional action on long term funding by raising additional revenue of their own,” according to Ken Orski of Innovation NewsBriefs.
This morning’s WSJ editorial on yesterday’s highway and transit bailout (see the scorecard) is a must read. After slamming the bill as “a tribute to budget gimmicks” that “does nothing to address the revenue-spending mismatch that is today’s highway fund,” the editorial offered up some serious GOP accountability:
Republicans over the years have proposed a number of innovative reforms to a federal highway program that bristles with waste and bureaucracy. These include devolving more power to the states to set priorities, slashing the billions thrown at money-losing urban mass-transit projects, streamlining environmental laws that add to construction costs, and potentially devoting some royalties from expanded federal oil and gas drilling to fund roads. Too bad they never seem to get around to implementing them.
House GOP leaders are claiming the temporary nature of this patch is designed to give them another run at reform next year, perhaps with the support of a Republican-led Senate. We’ll hold them to that. The trust fund problem has been begging for a fix for years. This latest stopgap is a dodge, not a victory.