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Initial Thoughts on the Surface Transportation Reauthorization and Reform Act

This morning, the House Transportation and Infrastructure Committee released its Surface Transportation Reauthorization and Reform Act. Unlike the Senate bill, which relies on imaginary pay-fors to support obscene spending increases, the House bill maintains less irresponsible baseline funding adjusted year-to-year for inflation. Eno has a useful table here.

We’re still reviewing the bill, but a few things immediately jumped out at me.

There is no movement on lifting the federal prohibition on states tolling their own Interstate segments (Section 1401). Further, the existing Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP), which allows states implement tolling on Interstate reconstruction projects, remains open to just three projects. Tolling supporters have called for the slots to be increased to 10 or even uncapped. While the bill includes a new use-it-or-lose-it provision with respect to the ISRRPP slots, the lack of progress is unfortunate, as states are becoming increasingly desperate to raise their own funds for needed projects, and will likely turn to more regressive non-user revenue-raisers such as sales taxes. See Reason Foundation’s Bob Poole on the advantages of Interstate tolling here and here.

In addition, TIFIA is watered down further, with small local infrastructure projects as little as $10 million now becoming eligible (Section 2001). Given that TIFIA is supposed to provide credit assistance for projects of national and regional significance, it seems strange to amend it in order to boost small parochial projects. Is TIFIA now going to be used for bikeshare-style urbanist gimmicks?

One policy bright spot, though, is found in Section 6015, Surface Transportation System Funding Alternatives. This provision orders the secretary of transportation to set up a program to assist states in piloting “a user-based alternative revenue mechanism”—which is code for mileage-based user fees (MBUFs). The bill provides $15 million in FY 2016 for the program and $20 million each year from FY 2017 through FY 2021. A number of states are currently considering MBUFs. Oregon has been piloting its program since July—see Cato’s Randal O’Toole, who is one of the volunteers, here on some early hiccups in Oregon. California is currently developing its own pilot program. We’d like to see more. See my post here on why MBUFs are superior to fuel taxes and why common criticisms of MBUFs are largely red herrings.

For more on what actual fiscally conservative and pro-market surface transportation reforms would look like, including the recommendation that Congress support state MBUF pilot efforts, see my CEI whitepaper, “Reimagining Surface Transportation Reauthorization.”