Obama Floats Interstate Toll Option to Fund Road Repair
Policy + Politics

Obama Floats Interstate Toll Option to Fund Road Repair


With pressure mounting to avert a transportation funding crisis this summer, the Obama administration Tuesday opened the door for states to collect tolls on interstate highways to raise revenue for roadway repairs. 

The proposal, contained in a four-year, $302 billion White House transportation bill, would reverse a long-standing federal prohibition on most interstate tolling. Though some older segments of the network — notably the Pennsylvania and New Jersey turnpikes and Interstate 95 in Maryland and Virginia — are toll roads, most of the 46,876-mile system has been toll-free.

Related: Glimmer of Hope for Ending Highway Construction Crisis

“We believe that this is an area where the states have to make their own decisions,” said Transportation Secretary Anthony Foxx. “We want to open the aperture, if you will, to allow more states to choose to make broader use of tolling, to have that option available.”

The question of how to pay to repair roadways and transit systems built in the heady era of post-World War II expansion is demanding center stage this spring, with projections that traditional funding can no longer meet the need. That source, the Highway Trust Fund, relies on the 18.4-cent federal gas tax, which has eroded steadily as vehicles have become more energy efficient.

“The proposal comes at the crucial moment for transportation in the last several years,” Foxx said. “As soon as August, the Highway Trust Fund could run dry. States are already canceling or delaying projects because of the uncertainty.”

While providing tolling as an option to states, the White House proposal relies on funding from a series of corporate tax reforms, most of them one-time revenue streams that would provide a four-year bridge to close the trust-fund deficit and permit $150 billion more in spending than the gas tax will bring in.

Related: Obama Looks to Tax Reform to Save America's Highways

The corporate tax reform proposal has gotten a lukewarm reception even from Democrats in Congress, and Foxx emphasized that the administration is open to any counterproposal that wins bipartisan support

With the trust fund about to run into the red and the current federal highway bill set to expire Sept. 30, Congress cannot — as its members often note — keep “kicking the can down the road.” Even a temporary extension of the current bill would require them to authorize a transfer of money from the general fund.

Details of the president’s proposal, which he first outlined almost two months ago, were welcomed as a sign of growing momentum toward a resolution, even by those who couldn’t fully embrace his plan.

“While we may not agree with all aspects of the administration’s proposal, we look forward to the continuing dialogue with Congress and the administration on charting America’s transportation future,” said Bud Wright, executive director of the American Association of State Highway and Transportation Officials.

Related: Hazardous Roads Ahead for U.S. Highways

Terry O’Sullivan, president of the Laborers’ International Union of North America, said the bill helped “advance the discussion” but said a federal gas tax increase should be used to fund it. “The gas tax remains the most tested and logical way of meeting our critical investment needs,” O’Sullivan said. “For too long, Congress’s duct-tape approach has made our roads and bridges unsafe, destabilized the construction industry and slowed our economy.”

The federal tax last was raised in 1993 and has not been adjusted for inflation. 

Another advocacy group, the nonprofit Transportation for America, spelled out its concerns Tuesday in a report, “The looming financial disaster for transportation.” The report provided a state-by-state accounting of the percentage of transportation funding that came from Washington. In most cases, it amounted to about half, though some states were far more dependent on federal dollars. (Federal funds accounted for 52 percent of the District’s funding, 49 percent of Maryland’s and almost 59 percent of Virginia’s.)

It also broke down the funding that would be lost by each major metropolitan area without federal revenue, pegging the Washington region’s loss at $424 million.

Related: Why You'll Need a Tank to Drive America's Highways

“Congress has an opportunity to not only save the transportation program, but to recommit to investing in the repairs and improvements our communities and businesses need,” said James Corless, the group’s director. Corless predicted that most Americans would accept tax increases to fund transportation. “When people understand where the dollars are being spent, the direct impact to their lives, they support paying their fair share,” he said.

Foxx said the highway trust fund would face a $63 billion shortfall over the next four years. “What our proposal would do is [use] pro-growth business tax reform to backfill in the highway trust fund,” Foxx said. “We would put that $63 billion back in place to stabilize the highway trust fund, and then the additional $90 billion would be spent on new programs.” He said the $302 billion bottom line for the proposal would be reached “through a combination of existing taxes that go to the highway trust fund that would equate to $152 billion on their own, and then $150 billion in transitional revenues from pro-growth tax reform.”

The proposal emphasizes a fix-it-first approach that would give funding priority to existing roads, bridges and transit systems rather than expanding their network.

It would expand reforms intended to streamline environmental reviews and project delivery that were begun in the current federal highway bill. It also would expand popular loan-guarantee programs that have been used by state and local governments to fund projects. The White House plan would almost double funding — from $12.3 billion to $22.3 billion — for transit systems and intercity passenger rail. In addition, the plan would increase the fine an automaker could face for a safety violation from the current $35 million to $300 million.

Though that proposal is not new, it takes on greater significance amid the debate over General Motors’s delayed recall of 2 million cars with faulty ignition switches that are alleged to have led to at least 13 deaths.

This article originally appeared in The Washington Post

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