The Fuse

With House Passage of STRR, Congress Could Pass First Long-Term Transportation Bill in a Decade

by R. Kress | November 05, 2015

The House today passed the first long-term transportation-funding bill in a decade. Since 2005, Congress has passed only stop-gap funding measures lasting no more than two years—but come November 20th, money for the nation’s transportation program is set to run out.

On Thursday morning, the STRR Act was passed with a 363-64 vote allocating $261 billion to the nation’s highways, some $55 billion to public transit and an additional $9 billion for safety programs. Approved in late October by the House Transportation and Infrastructure Committee, the bipartisan Surface Transportation Reauthorization and Reform Act of 2015—or the STRR Act—sets out the transportation agenda over the course of the next six years.

This amendment could send an additional $40 billion to the Highway Trust Fund by cashing in on funds from a Federal Reserve Surplus.

But the bill came with a catch: It needed Congress to solve a $16 billion annual shortfall from the Highway Trust Fund, financed by the gasoline tax. While the House bill originally would only have paid for the first half of the bill, the House also passed an amendment Thursday morning from Texas Republican Randy Neugebauer. This amendment could send an additional $40 billion to the Highway Trust Fund by cashing in on funds from a Federal Reserve Surplus.

Neugebauer’s newly-passed amendment has pinpointed a funding solution without invoking resistance to raising the federal gas tax—a point that newly-minted Speaker of the House Paul Ryan has already made clear is a non-starter.

Last night, the House reportedly debated over 100 amendments to the bill, with Ryan adding in a press briefing today that the legislative body had debated more bills in the last few days that the past few months. The bill also revives the somewhat controversial Export-Import Bank, a measure that is also included in the Senate’s transportation bill, the DRIVE Act.

The bill’s passage is a promising sign for the country’s beleaguered surface transportation system, but in the longer term, debates over highway funding are far from over.

The bill’s passage is a promising sign for the country’s beleaguered surface transportation system, but in the longer term, debates over highway funding are far from over. John Olivieri, national director of the transportation campaign for the U.S. Public Interest Research Group (US PIRG) notes that the Neugebauer amendment is only a stopgap solution to our funding challenges, telling The Fuse, “Obviously, the bill still has a host of other problems, but more than anything, this last minute amendment doesn’t appear to be the long-term sustainable solution that the country needs, as we will be still need to address the annual funding gap when the bill expires under this approach.”

However, he also doesn’t see raising the gas tax as a panacea. “We need to divorce revenue decisions from their funding streams,” Olivieri continued. “Rather than plugging the $16 billion gap in one way or another, we need a fundamental rethinking of the issue and some out-of-the-box ideas.”

It’s an issue at the heart of a recent report from the Frontier Group and the U.S. PIRG Education Fund, finding the notion that users of the roads are paying them is a myth. In particular, the report finds that the gas tax does not even approach the amount needed to uphold the quality of our nation’s roads—and with yearly rises in inflation, the value of the current gas tax decreases.

“We need to divorce revenue decisions from their funding streams.”

The report notes that in the 1960s and 1970s, the gas tax covered more than 70-percent of highway construction and maintenance costs. However, with inflation and increases in fuel efficiency, the report argues that roads are paying for themselves less and less every year. As a result, the report finds that the average U.S. household is paying an additional $1,100 annually in taxes and other road-related costs in addition to the individual drivers’ gas taxes and personal transportation costs.

“Our transportation policy crisis is rooted, in part, in a fundamental misunderstanding: The idea that when it comes to the roads, drivers pay for what they get through gasoline taxes and other driving-related fees, and that they get what they pay for by having those taxes and fees dedicated fully to highway construction, operation and maintenance,” the report states. “The ‘pay for what you get, get what you pay for’ framework casts highway spending as tantamount to an off-budget and self-financing government expense. It treats roads as infrastructure built by and for the benefit of motorists, marginalizing the interests of other users. And it treats gas taxes as ‘user fees’ that are often put off-limits for public purposes other than roads—even purposes that might deliver greater public benefits.”

By contrast, the report notes that since the early 2010s so-called user fees including the gas tax paid for less than half of the nation’s highway expenses. As a result, based on their research, the non-driving public is effectively subsidizing highways and roads without, in return, getting adequate funding for public transportation options.

While U.S. PIRG does not have a formal position on raising the gas tax, Olivieri notes that to do so would not be a panacea: Many states have constitutional requirements forcing them to use funding from the gas tax exclusively on highways and roads while allocating nothing to walking infrastructure, bike lanes and public transportation.

In the case of the STRR Act, Congress may have found a workaround in the form of the Neugebauer amendment. In the meantime, the House needs to bring the STRR Act and the Senate’s DRIVE Act together with only a little more than two weeks to spare before the transportation program’s stop-gap funding runs out.