Some in industry remain hopeful despite gas-tax increase rejection

Senate still working hard on releasing its version of long-term bill by end of September

July 27, 2010

U.S. Rep. John Mica (R-Fla.), the Transportation and Infrastructure Committee Republican leader, declared a federal gas-tax increase to fund a long-term transportation bill a dead issue during a Congressional oversight hearing on the Obama administration’s failed stimulus.

Still, some in the highway and bridge industry remain hopeful that a long-term highway bill can be worked out by mid-2011.

Although some leading Democrats support a gas-tax increase in the next surface transportation reauthorization, U.S. Secretary of Transportation Ray LaHood, who testified at the hearing, confirmed that the administration does not support any increase in the gas tax.

At the hearing, discussion continued to center around the need to pass a six-year surface transportation reauthorization, something the Democratic majority has been unable to accomplish to date.

“Only a long-term transportation bill will truly spur employment in this country and in the construction industry, which is now facing an incredible 20.1% unemployment rate,” Mica said. “Unfortunately, the Obama administration undermined [Transportation & Infrastructure] Committee Chairman [Jim] Oberstar’s efforts to promote a long-term reauthorization, and did not want to see a vote on a gas-tax increase after passing a number of other controversial measures over the past year.”

Mica, who has been a strong opponent of increasing the federal gas tax, said the next Congress will be even less inclined to come to Washington and propose a gas-tax increase.

“The next long-term reauthorization must consider a host of financing alternatives to help stabilize the Highway Trust Fund, which currently relies on the increasingly obsolete gas tax for funds.

“We must also cut the red tape in the infrastructure project approval process,” Mica continued. “As the stimulus has shown, projects take too long to get through the bureaucratic approval process. This country rebuilt the I-35W bridge in Minneapolis within 437 days, when a project of that magnitude usually takes seven or eight years. We can use that project as a model for speeding up the process for many other major infrastructure improvements.”

Referring to the American Recovery and Reinvestment Act, Mica said, “The stimulus is still missing the mark and failing to deal with record unemployment in the nation. Overall, four-out-of-five stimulus jobs have been government jobs, and in September we will face a layoff of a half-million temporary census workers.

“According to the U.S. Government Accountability Office, over 50% of highway stimulus projects have been short-term repaving projects,” Mica said. “The project approval process must be cut significantly to speed up major infrastructure projects and we need a long-term transportation bill to really get people working again.”

Still, the Senate remains committed to produce its version of the next six-year highway bill by the end of September. Many believe the bill will call for $350-400 billion in transportation investment. Oberstar’s package in the House calls for $500 billion.
Furthermore, some in the industry say a Republican swing in the House or Senate following the November elections could accelerate movement on reauthorization much like it did during the Clinton administration. The first couple of years of Clinton’s reign were turbulent while the Democrats controlled both the House and the Senate, but Congress and the administration became more productive when the chambers became balanced.