Thursday, June 28, 2012

Breaking News on Transportation Funding!

Congress reached a deal late on Wednesday (6/27) to fund transportation through 2014. Like an attempt at sausage making, it’s a bit of a mess. States can opt out of federal mandates to build bike facilities, something Republicans from southern states were keen on eliminating. Beautification mandates can also be discarded. 

The decline of a dedicated funding source for transportation continued. Since the gas tax is slowly withering thanks to inflation, Congress was forced to raid the general fund to the tune of $5 billion. They also pulled $3.7 billion from a fund to fix leaking underground fuel tanks, so good luck with your groundwater quality. Gas guzzlers and imported cars play a role in funding, with $700 million pulled from the former’s tax and $4.5 billion from the latter’s tariff. 

For my analysis of alternative proposals, see my earlier post, How to Pay for Roads. You can read about my own proposal for using weight as the basis for a replacement tax in my follow-up post, How to Pay for Roads, Part 2.

Democrats focused on the fact that funding will be maintained at current levels with a slight adjustment for inflation, perhaps creating three million jobs. As Barbara Boxer put it, “This job creation is the critical focus of Democrats because we know that the unemployment rate in construction is at an unacceptable level.” 

The fight re-commences in two years…

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