[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: LONG-TERM FUNDING
FOR HIGHWAYS AND TRANSIT PROGRAMS
=======================================================================
(115-38)
HEARING
BEFORE THE
SUBCOMMITTEE ON
HIGHWAYS AND TRANSIT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
MARCH 7, 2018
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
______
U.S. GOVERNMENT PUBLISHING OFFICE
30-253 PDF WASHINGTON : 2018
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
Vice Chair Columbia
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
SAM GRAVES, Missouri ELIJAH E. CUMMINGS, Maryland
DUNCAN HUNTER, California RICK LARSEN, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL E. CAPUANO, Massachusetts
LOU BARLETTA, Pennsylvania GRACE F. NAPOLITANO, California
BLAKE FARENTHOLD, Texas DANIEL LIPINSKI, Illinois
BOB GIBBS, Ohio STEVE COHEN, Tennessee
DANIEL WEBSTER, Florida ALBIO SIRES, New Jersey
JEFF DENHAM, California JOHN GARAMENDI, California
THOMAS MASSIE, Kentucky HENRY C. ``HANK'' JOHNSON, Jr.,
MARK MEADOWS, North Carolina Georgia
SCOTT PERRY, Pennsylvania ANDRE CARSON, Indiana
RODNEY DAVIS, Illinois RICHARD M. NOLAN, Minnesota
MARK SANFORD, South Carolina DINA TITUS, Nevada
ROB WOODALL, Georgia SEAN PATRICK MALONEY, New York
TODD ROKITA, Indiana ELIZABETH H. ESTY, Connecticut,
JOHN KATKO, New York Vice Ranking Member
BRIAN BABIN, Texas LOIS FRANKEL, Florida
GARRET GRAVES, Louisiana CHERI BUSTOS, Illinois
BARBARA COMSTOCK, Virginia JARED HUFFMAN, California
DAVID ROUZER, North Carolina JULIA BROWNLEY, California
MIKE BOST, Illinois FREDERICA S. WILSON, Florida
RANDY K. WEBER, Sr., Texas DONALD M. PAYNE, Jr., New Jersey
DOUG LaMALFA, California ALAN S. LOWENTHAL, California
BRUCE WESTERMAN, Arkansas BRENDA L. LAWRENCE, Michigan
LLOYD SMUCKER, Pennsylvania MARK DeSAULNIER, California
PAUL MITCHELL, Michigan STACEY E. PLASKETT, Virgin Islands
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
(ii)
Subcommittee on Highways and Transit
SAM GRAVES, Missouri, Chairman
DON YOUNG, Alaska ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee Columbia
FRANK A. LoBIONDO, New Jersey STEVE COHEN, Tennessee
DUNCAN HUNTER, California ALBIO SIRES, New Jersey
ERIC A. ``RICK'' CRAWFORD, Arkansas RICHARD M. NOLAN, Minnesota
LOU BARLETTA, Pennsylvania DINA TITUS, Nevada
BLAKE FARENTHOLD, Texas SEAN PATRICK MALONEY, New York
BOB GIBBS, Ohio ELIZABETH H. ESTY, Connecticut
JEFF DENHAM, California JARED HUFFMAN, California
THOMAS MASSIE, Kentucky JULIA BROWNLEY, California
MARK MEADOWS, North Carolina ALAN S. LOWENTHAL, California
SCOTT PERRY, Pennsylvania BRENDA L. LAWRENCE, Michigan
RODNEY DAVIS, Illinois MARK DeSAULNIER, California
ROB WOODALL, Georgia EDDIE BERNICE JOHNSON, Texas
JOHN KATKO, New York MICHAEL E. CAPUANO, Massachusetts
BRIAN BABIN, Texas GRACE F. NAPOLITANO, California
GARRET GRAVES, Louisiana DANIEL LIPINSKI, Illinois
BARBARA COMSTOCK, Virginia HENRY C. ``HANK'' JOHNSON, Jr.,
DAVID ROUZER, North Carolina Georgia
MIKE BOST, Illinois LOIS FRANKEL, Florida
DOUG LaMALFA, California CHERI BUSTOS, Illinois
BRUCE WESTERMAN, Arkansas FREDERICA S. WILSON, Florida
LLOYD SMUCKER, Pennsylvania, Vice DONALD M. PAYNE, Jr., New Jersey
Chair PETER A. DeFAZIO, Oregon (Ex
PAUL MITCHELL, Michigan Officio)
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BILL SHUSTER, Pennsylvania (Ex
Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
WITNESSES
John C. Schroer, Commissioner, Tennessee Department of
Transportation, on behalf of the American Association of State
Highway and Transportation Officials:
Testimony.................................................... 8
Prepared statement........................................... 47
Responses to questions for the record from Hon. Grace F.
Napolitano, a Representative in Congress from the State of
California................................................. 59
Michael Lewis, Executive Director, Colorado Department of
Transportation, on behalf of the Western Road Usage Charge
Consortium (RUC West):
Testimony.................................................... 8
Prepared statement........................................... 60
Responses to questions for the record from Hon. Rick Larsen,
a Representative in Congress from the State of Washington.. 65
Chris Spear, President and Chief Executive Officer, American
Trucking Associations:
Testimony.................................................... 8
Prepared statement........................................... 68
Responses to questions for the record from Hon. Rick Larsen,
a Representative in Congress from the State of Washington.. 84
Edward L. Mortimer, Executive Director, Transportation
Infrastructure, U.S. Chamber of Commerce:
Testimony.................................................... 8
Prepared statement........................................... 85
Responses to questions for the record from Hon. Rick Larsen,
a Representative in Congress from the State of Washington.. 98
Thea M. Lee, President, Economic Policy Institute:
Testimony.................................................... 8
Prepared statement........................................... 99
SUBMISSIONS FOR THE RECORD
Report, ``Matrix of Illustrative Surface Transportation Revenue
Options,'' published by the American Association of State
Highway and Transportation Officials........................... 109
ADDITIONS TO THE RECORD
Joint written statement of Nathan Nascimento, Vice President,
Freedom Partners and Brent Gardner, Chief Government Affairs
Officer, Americans for Prosperity.............................. 117
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BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: LONG-TERM FUNDING
FOR HIGHWAYS AND TRANSIT PROGRAMS
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WEDNESDAY, MARCH 7, 2018
House of Representatives,
Subcommittee on Highways and Transit,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:01 a.m., in
room 2167 Rayburn House Office Building, Hon. Sam Graves
(Chairman of the subcommittee) presiding.
Mr. Graves of Missouri. The subcommittee will come to
order. Without objection, the Chair is authorized to declare a
recess at any point. I want to welcome everybody. I especially
want to welcome our witnesses today. I know some of you have
come from a ways, and we do appreciate it.
The question before us today is how we ensure that we have
resources to build and maintain a surface transportation system
that will meet the needs of the Nation and remain competitive
in the 21st century.
The movement of freight is expected to increase by 40
percent over the next 30 years, while vehicle miles traveled
are projected to increase by nearly 20 percent. At the same
time, driverless vehicles and other advances in technology are
going to change the way freight and passengers move through our
transportation network, and our system needs to keep pace with
these changes.
Unfortunately, our current method of funding our Federal
transportation programs is no longer sustainable. Beginning as
early as the spring of 2020, States may have to halt
construction of surface transportation projects because, once
again, the Highway Trust Fund will not be able to meet its
obligations.
There are many reasons for this, and, obviously, the
current motor fuel taxes and other user fees bring in less
money, fuel economy standards have increased, and not all users
pay into the trust fund. But the fact remains the Highway Trust
Fund is going broke and we have to act to fix that.
Continuing to rely on bailouts from the General Fund is not
the answer. There simply isn't enough money left in the couch
cushions. We need to work together to reform the Highway Trust
Fund to ensure that users that benefit from the system pay into
the system. We need a long-term sustainable solution that gives
our State and local partners the certainty they need to plan
and build their projects. We need a solution so we can build a
modern and efficient transportation system, a system that will
move people and goods efficiently, grow American jobs, and
ensure that we remain competitive in the global marketplace.
Our witnesses today are going to offer potential solutions
and discuss some of the innovative new approaches to funding
our surface transportation programs. And, again, I thank you
all for being here.
I will now recognize Ranking Member Norton of the
subcommittee for her statement.
Ms. Norton. I want to thank you, Chairman Graves, for this
hearing. And I think anyone who has traveled the streets of the
Nation's Capital, or the highways leading into the Nation's
Capital will also say thank you for today's hearing on how to
fund the highway and transit infrastructure of our country so
that it is sustainable, so that we don't have to come back in
literally a few months because the Highway Trust Fund has run
out of funds, as if that were any surprise.
I do believe that anyone who heard Secretary Chao's
testimony yesterday will agree that they did not hear any real
plan for investments in infrastructure, but I am encouraged by
what appears to be the President's openness to higher gas
taxes. One thing seems clear, it takes money to fix the
highways, and for a quarter of a century we have been under the
illusion that that is not really the case.
So I hope that the President's apparent openness to higher
gas taxes can inspire the committees of jurisdiction, the
Highway Ways and Means Committee and the Senate Finance
Committee, to finally, at last, act.
Last year, Chairman Graves and I got 250 Members of
Congress, with very robust representation on both sides of the
aisle, to sign onto a letter to the leadership of the Ways and
Means Committee urging a prominent solution to this Highway
Trust Fund crisis.
In this letter, we specifically urged a long-term dedicated
user-based revenue stream that can support transportation and
infrastructure investments. I mean, I hope those words don't
sound like cliches. It is the only way to say them, and we have
been saying them now for decades without any results.
We do all agree on two things: The importance of
infrastructure investment to our national economy, and the need
for real investment to improve our infrastructure. Our
disagreements start with, and perhaps end with, how to pay for
it.
It seems to me that today's subcommittee hearing shows that
we are well past the point of glossing over the problem and,
again, saying the taboo words ``all options are on the table.''
What are they? Congress needs to make tough decisions, as
always, and find a permanent long-term revenue stream for our
highways and bridges.
Many of the so-called options, such as finding cheaper ways
to borrow, will not produce real revenue to make a difference
in our infrastructure backlog. Other options, such as public-
private partnerships--and I commend the committee for the
special Panel on Public-Private Partnerships on which I was
among those who served, because this panel did a very thorough
investigation of P3s.
But I believe that all those who served on that special
panel will agree that P3s are, perhaps, best seen as a rather
expensive scheme to borrow private money, certainly borrow more
money than we borrow by the Federal Government, to do the same
thing. Far too many projects simply have no revenue stream
attached to them to pay for a P3. And, of course, you have to
pay for the profit margin as well. Transit P3s rely on
dedicating decades of future tax revenue to pay the investors
and slashing labor benefits to protect profits.
Yet another option, tolling. Let's deal with that one and
see where the American people stand on tolling. A Rasmussen
survey found that just 22 percent of Americans favor putting
tolls on interstate highways for infrastructure maintenance.
Three times that many, or 65 percent, are opposed to turning
the Nation's interstate highways into toll roads.
Pushing tolling on urban areas is just not the answer. That
leaves real user fees. In other words, we are back to where we
started, back to where the Eisenhower administration started
us. And if we think we are smarter, we certainly haven't proved
it since then.
The politics of raising the gas tax has paralyzed the
Congress for a quarter of a century. And yet, 24 States who are
represented by Members of Congress have simply not had the same
hesitation, including some deeply conservative States that have
raised their gas taxes over the past 4 years.
Today, I am very pleased we will hear that the U.S. Chamber
of Commerce, State departments of transportation, and the
trucking industry support higher gas taxes. These are the folks
who are going to have to pay them, and they are for them. We
have heard multiple reports, of course, that the President
supports the gas tax. So I think and hope that with this
hearing, the reality is beginning to settle in that there is
what appears to be an American majority for raising the gas
tax.
The FAST Act also funded an alternative funding
demonstration program for States to experiment. I thought that
was a great leap forward. It was only $20 million, as I recall.
Today, we will hear from the Colorado Department of
Transportation, on behalf of the Western Road Usage Charge
Consortium. They will describe the possible future of a
mileage-based user fee and the benefits this system can have on
providing a sustainable long-term funding stream. It is really
the only new idea.
In the new world of Uber, Lyft, and autonomous vehicles,
there are many unknowns, and I am pleased that our subcommittee
has had hearings on some of those unknowns. And we don't know
how these technologies may affect our infrastructure assets
over time. However, in the immediate term, we face a massive
infrastructure backlog that continues to mount while Congress
does nothing, and that needs to be rectified first. These new
technologies do not eliminate that need.
I am grateful, again, to Chairman Graves for holding this
hearing and look forward to our continued work together to hold
the Ways and Means Committee's feet to the fire to deliver the
funding for our Nation's highway and transit systems. We can't
afford to wait any longer.
I thank you, and I yield back, Mr. Chairman.
Mr. Graves of Missouri. I now turn to the chairman of the
full committee, Bill Shuster.
Mr. Shuster. Thank you, Chairman Graves. Thanks for holding
this hearing today.
Thanks for the panel coming today. I think that the panel
may have different ideas on how to get where we need to go, but
I think we are all on the same page that we need to go there.
So, again, I am looking forward to hearing from all of you.
I will say--look, I have been very excited that we have had
a President of the United States in his inaugural address utter
the word ``infrastructure.'' I don't think we have had anybody
say that since maybe Lincoln. He uttered ``internal
improvements,'' and the internal improvements of the 1800s are
today the improvements to the infrastructure.
I was pleased he put out a plan. Some of it was, I thought,
good. Some of it was not so good. Some of it we need to work on
and maybe improve upon it.
I know the ranking member talked about P3s. I do not think
they are a silver bullet. I do think that we can enhance them.
It is a tool in the toolbox. And when we are talking about
infrastructure and improving highways and bridges, I don't
think that is necessarily what we are talking about, tolling
roads, at least not in my district, in my State, are you going
to toll a road. We took an attempt at that in 1981 in the
northern tier and that fell flat.
There are things we need to do in the permitting process.
The President, I think, is right, reducing that time. I think
we have all seen these road projects take an average of about
14 years. That is entirely too long. And I know that MAP-21 and
in the FAST Act, we have done some things to push forward
reforms on streamlining, but I think we can still do more. And
I think that it is important that the focus which we did in the
FAST Act needs to--the intended purpose of the Highway Trust
Fund was to build the Interstate Highway System. Then over the
years, we kept diluting it and diluting it. We need to get back
to that and improving that.
I know in my State, I talk about I-81 all the time. And I
know that we have the commissioner from Tennessee. It happens
to run through Tennessee also. But if you go through the six
States, New York, Pennsylvania, Maryland, West Virginia,
Virginia, Tennessee, they may not all have the same wherewithal
to do things.
Some States, and I will be interested to hear from the
commissioner today about, you know, he has got I think nine
interstates running through his district. I-81 is important to
me; I am not so sure how important it is to Tennessee, and if
he is willing to spend State dollars on that highway--but that
is what the Federal Government's job is, to say, Look, we are
going to put two more lanes on I-81, or we are going to do this
highway. It is critical to Pennsylvania. Maryland has 18 miles.
Tennessee may say, well, I-81 is not that important to us, so
you better give us a push and you better give us some money to
help us do this. So, again, I am interested in hearing that and
hearing from all of you.
My intent is hopefully working with the Democrats on the
committee to put together a big, broad bipartisan
infrastructure bill. And as the ranking member pointed out, we
can put all we want in there about revenues, but it has to go
to the Ways and Means Committee. I think that it takes
Presidential leadership to do the things we need to do, and,
quite frankly, how do you fund it? I know Ranking Member
DeFazio has ``A Penny for Progress.'' It is a good idea. There
are lots of ideas out there.
But the easiest one for us to all understand, not that it
is easy to pass or increase, is what we pay at the pump, and we
haven't done it for 25 years; we haven't increased that.
Thirty-one States have done it. There has been no political
price to pay for it. In fact, it is pretty popular in the
States they have done it in. Indiana, a Republican State, did
it; South Carolina, a Republican State, did it. Pennsylvania,
when they were controlled by Republicans in both Chambers and
the Governor, did. And many--Utah has done it, which is maybe
the reddest of the reddest States. And so it has been done, and
nobody has paid the political price for it.
I believe we will pay a political price if the trust fund
runs out in October of 2020, when it is projected. For those
that forget what the political calendar looks like, that is
October before the Presidential election. So we are going to
pay the price if we don't address this; and we already are
paying it in congestion and, you know, bad roads, failing
bridges across this country.
So I for one think it is time to do it. The President has
said he would support that. And, again, move forward. The time
is now. It takes Presidential leadership to do this, but we
need to invest in our infrastructure.
Now, a lot of folks on my side, and I get it, and a lot of
folks on the other side may not be too warm and fuzzy on an
increase to the user fee right before an election, but there is
always a lame duck session.
So I think it is important we put a document out there, we
get a debate started in this country, and then the timing of
it, we will figure that as we move forward.
But I also want to point out to those on my side in
Congress talk about the user fee--and that is what it is, a
user fee--that it is regressive. And I come from rural
Pennsylvania. It is a regressive fee. Those people in my
district will pay more, because they use the roads more. In
fact, that is their only alternative. They don't have any other
way to get around. But that regressive tax also has a
progressive benefit to those folks in my district. The most
rural counties in America, for every dollar they put in, they
get $1.70 back. You can't build roadways from Pittsburgh to
Philadelphia unless the population centers subsidize my
roadway.
So when we talk about transit doesn't pay into the trust
fund, they don't. We subsidize SEPTA [Southeastern Pennsylvania
Transportation Authority]. We subsidize the Pittsburgh Transit
Authority at 30 percent. If you go to my district, a rural
district, they are subsidizing those roadways from 50 to 70
percent.
So we need to back off and look at this in a different way.
It is what Republicans have done historically. The three great
infrastructure Presidents are Lincoln with the Transcontinental
Railroad; Teddy Roosevelt, the Panama Canal; and Eisenhower
with the Interstate Highway System.
So, again, it is something that there is a Federal
responsibility. Even Adam Smith said it; and that is why we put
that up there to remind us. When we all want to quote Adam
Smith, he said it is erecting and maintaining infrastructure to
promote commerce. And then, of course, the Constitution is
pretty clear to me, also.
So it is a role of ours. I have gone over 1 minute and 17
seconds, which I never do, but I am so passionate about this
that I felt--I am glad that Chairman Graves has indulged me.
So, with that, I am looking forward to hearing from you and
I thank you, Mr. Chairman.
Mr. Graves of Missouri. I now turn to Ranking Member Peter
DeFazio.
Mr. DeFazio. Well, thanks, Mr. Chairman.
In February 2017, we convened a hearing in this room to
talk about investing in infrastructure. There was consensus we
needed to invest. There were a number of ideas out there that
were practical. Here we are 13 months later talking about the
same thing. You know, it is time to stop talking and do
something. I mean, this is getting absolutely absurd.
You know, as the chairman said, 31 States have raised
substantial revenue, 24 just with gas taxes, others with a mix
like my State of fees and taxes. No one has lost their
election. No one, for the gutless wonders I work with, no one
has lost their election--in fact, in New Jersey, the only two
people who lost were two Republican State senators who voted
against the gas tax increase.
Now, I am sure it was a coincidence, but it sure as hell
didn't help them. But around here it is like, oh my God, we
can't even. I mean, I came out with ``A Penny for Progress'' to
make people think how pathetic they are. I say to them, you are
going to lose your election if gas goes up 1\1/2\ cents a
gallon? It probably went up 2 cents a gallon while you were
driving to work today because something happened in the Middle
East, or the oil companies needed more profits. One and a half
cents a gallon, borrow $500 billion, pay it back, no unfunded
debt. Well, we can't do that. Talk to the Speaker. Oh, that is
a tax increase. Can't do that, we don't increase taxes.
Well, if you don't increase taxes, we are not having an
infrastructure bill and we are doing nothing, and we are just
sitting here jawing. That is all we are doing, sitting here
jawing and pretending. That is the reality.
You know, P3s have come up. We had a 6-month-long select
panel meet on that issue; and at the end, the bipartisan
consensus was P3s are a nice tool. And the biggest advocates we
had before us from Wall Street and providers, Macquarie Capital
and others, admitted they can't address more than 10 to 12
percent of our infrastructure needs, because the only places
that pay back are in major urban areas and have high volumes of
traffic--ironically, in blue areas. Those are really the only
places that are viable for P3s.
So that is not a solution, it is a tool. Some say, Oh,
let's do VMT. Tomorrow? No. Next week? No. This year? No. Maybe
10 years from now. Yeah. We are not ready to go to VMT. So
anybody that says, ``oh, let's just do VMT''--that is what the
Speaker has said, ``oh, I like VMT''--you can put it off into
the distant future. Oh, we will do that someday. Meanwhile, the
country falls apart. And we are losing productivity, we are
wasting fuel, people are damaging their vehicles, and we just
can't get there.
Now, we hear a lot about, oh my God, the magic solution is
just to deal with the horrible delays with environmental
reviews. All we have to do is get rid of NEPA and, whew, we
save more money than it could cost to rebuild the
infrastructure. Really? No. In fact, the one report that people
rely on by some guy who works at--a hack at a think tank named
Common Good quoted reports that actually contradicted his
conclusions. They said the biggest problem is funding, it is
not the delays.
Yeah, you are right, for 4 percent of the projects that
involve Federal money, there's 96 over here, 4 over here--it
takes a little more than 3 years, on average, because these are
huge projects with major impacts that people have concerns
about and it takes a little while to work that stuff through.
Maybe we adopt the Chinese model and say, ``hey, don't worry
about it, I am knocking on your door, the bulldozer is down the
street. It is coming; your house is gone; your property is
gone; we are building a new highway here.'' We could adopt that
model.
In fact, John Mica offered that in a bill a few years ago
until I pointed out that allowing the President the authority
to waive all laws would allow that to happen. Then Jerry Nadler
chimed in and said, ``oh, this is great, because then we could
use illegal immigrants, too, and it would be cheaper to do the
projects.'' He was kidding, of course.
So no, that is a myth. Yeah, can we improve it more? Have
we improved it more? Yes. Are there improvements pending that
DOT has adopted? Yes. Are there some other things we could do
to tweak it around the edges for these major projects? Maybe,
sure, and I am open to that. But to say this is a magic wand?
Ninety-five percent of the projects get categorical exclusions.
There is no delay. There is no evaluation. They are eligible.
So let's cut the BS. I mean, seriously.
Now, Secretary Chao came yesterday, apparently. I am sorry
I couldn't be here. I had a medical appointment and tried to
get here. I drove 120 miles to catch a plane, got canceled;
drove 120 miles back, took another plane yesterday, couldn't
get here. So, anyway, she said she came with no solutions or
pay-fors. Well, then that means we are dead in the water if she
represents the views of this administration. This is not going
to come from Congress.
You know, the President supports a gas tax. I will stand
next to the President. I heard in a meeting where he may have
said something about a substantial increase in the gas tax. I
have never confirmed that he said that, but I also said in that
meeting when one Republican Senator said, oh, those Democrats
all just attack you, I said, well, if he did that, I would
stand next to him. This would be bipartisan. It has been
bipartisan in every State. Nobody has lost their election over
this.
What is the problem? The problem is the Speaker is
ideologically opposed to Federal investment and increasing
taxes in any form, no matter how much it benefits the Nation,
ideologically opposed. And the rest of his team, that would be
McCarthy and Brady, are following him. There hasn't even been a
single hearing in Ways and Means on revenues for the Highway
Trust Fund or infrastructure. And until we see that, until they
hold a hearing and we see some progress, we would just be
wasting our time over here to move forward or say we are going
to move forward with some legislation that isn't going to be
paid for or financed.
Now, we need Presidential leadership, I agree with the
chairman there. We need Presidential leadership. And if he
would stand up and say he wants a gas tax, Bill would stand on
his right, I would stand on his left, or I will stand on his
left and Bill can stand on his right, I don't care, and we will
be with him.
So that is where we are at. That is the truth of it. You
have all got some ideas. I haven't read all the testimony yet.
I am sure they are all great ideas, but we have to have real
money, plain and simple. Thank you.
Mr. Graves of Missouri. I will now turn to Congressman
Duncan to introduce our first witness.
Mr. Duncan. Well, thank you, Mr. Chairman. And I want to
welcome all the witnesses, but I especially want to welcome my
good friend, Commissioner John Schroer, who is starting his
eighth year as our commissioner of transportation in Tennessee.
And he has done a great job. He came in and made some
changes in some projects that have saved the Tennessee
taxpayers $610 million in the time he has been in office. The
Tennessee DOT has remained operating debt-free and on a pay-as-
you-go basis. And then he and our great Republican Governor,
Bill Haslam, got through the first gas tax increase in
Tennessee in 30 years; the IMPROVE Act, which will fund 962
road and bridge projects across all 95 counties; and also, in
addition to the State projects, will provide an additional $105
million annually for cities and counties to support local
infrastructure needs.
I might add that my younger sister, I tell people all the
time she is much more powerful than I am, because I am one of
435, she is one of 33 State senators. And she supported the gas
tax increase, although I do tease her and tell her that I think
she is a little more liberal than I am, and she teases back and
says that everybody's more liberal than I am. So we go back and
forth a little bit.
But, Commissioner Schroer has done an outstanding job, and
in recognition of that, has become the national president of
the American Association of State Highway and Transportation
Officials. And it is an honor for me to welcome him here to the
subcommittee, and I thank you, Mr. Chairman, for allowing me to
do so.
TESTIMONY OF JOHN C. SCHROER, COMMISSIONER, TENNESSEE
DEPARTMENT OF TRANSPORTATION, ON BEHALF OF THE AMERICAN
ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS;
MICHAEL LEWIS, EXECUTIVE DIRECTOR, COLORADO DEPARTMENT OF
TRANSPORTATION, ON BEHALF OF THE WESTERN ROAD USAGE CHARGE
CONSORTIUM (RUC WEST); CHRIS SPEAR, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, AMERICAN TRUCKING ASSOCIATIONS; EDWARD L.
MORTIMER, EXECUTIVE DIRECTOR, TRANSPORTATION INFRASTRUCTURE,
U.S. CHAMBER OF COMMERCE; AND THEA M. LEE, PRESIDENT, ECONOMIC
POLICY INSTITUTE
Mr. Graves of Missouri. Mr. Schroer.
Mr. Schroer. Thank you very much. Thank you, Congressman
Duncan, for that great introduction.
Chairman Graves, Ranking Member Norton, and members of the
subcommittee, thank you for the opportunity to testify here
today. My name is John Schroer. I am the commissioner of
transportation for the State of Tennessee, and I am also
honored to serve as the 2017-2018 president of the American
Association of State Highway and Transportation Officials,
otherwise known as AASHTO.
I would like to first express appreciation to you on behalf
of the State DOTs for your leadership, along with your Senate
and House colleagues, in passing the FAST Act in December 2015.
The FAST Act continues to fulfill the constitutional directive
that investment in transportation is a core Federal
responsibility. While the FAST Act does not expire until 2020,
President Trump recently laid out his infrastructure plan. The
key component to the President's plan is for the Federal
Government to invest $200 billion over the next 10 years that
would create an additional $1.3 trillion in investment from
States, local government, and the private sector.
While leveraging Federal dollars is a great goal, there is
only so much that can be done. Currently, 80 percent of the
$217 billion invested in highway and bridge programs comes from
State and local governments. States are already answering the
call to action for increasing transportation investments. As
has already been said, 31 States, including my home State of
Tennessee, have successfully passed transportation funding
bills.
In 2017, I worked with Governor Bill Haslam to develop and
pass the IMPROVE Act to provide increased funding for
transportation for the first time in Tennessee in 30 years.
This conservative, responsible, and user-based approach raises
the gas tax by 6 cents, and diesel tax by 10 cents. This was no
easy sale to the Tennessee Legislature. Finally, after 2 years
of preparation, the only way we were able to get this bill
passed was to wrap it around the largest single tax cut bill in
the history of the State of Tennessee. The tax cuts were twice
the increase of the fuel tax.
AASHTO member States continue to believe that the best way
to fund the Nation's crumbling infrastructure is through
sustainable formula-based funding. The Highway Trust Fund has
provided stable, reliable, and substantial highway transit
funding for decades since its inception in 1956. However,
today, the solvency of the trust fund is in jeopardy.
Since 2008, the Highway Trust Fund has been sustained
through a series of General Fund transfers, now amounting to
$140 billion. Annual HTF spending is estimated to exceed
receipts by $23 billion by fiscal year 2027. AASHTO estimates
that the States may see a 40-percent drop from fiscal year 2020
to the following year. For Tennessee, this would represent a
$400 million reduction in our annual budget, wiping out the
increase we received from passing the IMPROVE Act, plus an
additional $150 million annually. This represents an overall
20-percent reduction in our total budget, and a 45-percent
reduction in our heavy building program. A cut of this
magnitude will eliminate our ability to make significant
inroads in addressing congestion through capacity expansion,
and Tennessee would largely become a maintenance-only State.
AASHTO strongly believes that the congressional
infrastructure package must focus on direct funding distributed
to States and transit agencies through formula programs, rather
than through grants or Federal financing support. AASHTO's
member DOTs already rely on various forms of financing and
procurement, ranging from bonding, TIFIA credit assistance,
State infrastructure banks, and public-private partnership,
just among some of the tools.
In Tennessee, a State that consistently has its roads
ranked in the top five in the Nation, we are a pay-as-you-go
State. We have no transportation debt and have no roads that
are tolled. We rely solely on the trust fund's formula money
and State revenues.
While we do not object to the current options to capital
markets for DOTs, we would strongly object to increasing those
options at the expense of the Highway Trust Fund. There is
ample documented evidence that shows infrastructure investment
is critical for the long-term economic growth, increasing
productivity, employment, household income, and exports.
Conversely, without improving our Nation's infrastructure,
deteriorating conditions can produce a severe drag on the
overall economy. In light of new capacity and upkeep needs for
every State in the country, the current trajectory of the
Highway Trust Fund, the backbone of Federal Surface
Transportation Program, is simply unsustainable, as it will
have insufficient resources to meet current Federal investment
levels beyond fiscal year 2020.
I want to thank you again for the opportunity to testify,
and I am happy to answer any questions that you may have.
Mr. Graves of Missouri. Thank you, Mr. Schroer.
Next we have Mr. Michael Lewis, who is the executive
director of the Colorado Department of Transportation, and he
is here on behalf of the Western Road Usage Charge Consortium.
Mr. Lewis. Thank you, Chairman Graves and Ranking Member
Norton, for the invitation to testify before the subcommittee
today specifically on a possible alternative funding mechanism,
what we call the road usage charge, or RUC. You may also hear
these systems referred to as a mileage-based user fee or
vehicle miles traveled fee.
I am pleased to be here representing RUC West, a voluntary
coalition of 14 western State departments of transportation
committed to collaborative research and information sharing on
the development of a new funding method for transportation
infrastructure. The primary goal of this coalition is to build
public sector organizational capacity and expertise in RUC
systems, including associated policy, administration, and
technology issues.
The Colorado Department of Transportation is facing a
nearly $1 billion annual funding shortfall over the next 10
years, and is exploring transportation funding alternatives, as
the gas tax is unable to meet the infrastructure investment
needs of the transportation system. To put it in simple terms,
we need to nearly double our current amount of funding to meet
the transportation needs of Colorado.
Sadly, our State's funding situation is not unique. It is a
dilemma that is shared by all States across our country. This
dilemma is driven by one simple fact: The gas tax, as we know
it, is not sustainable. For many years, gas taxes have worked
well as a user fee to fund transportation. The more someone
drove and used the system, the more fuel they purchased, the
more they paid toward maintaining and improving our system.
New fuel economy standards and the growing adoption of
alternative fuel vehicles have upset that balance. Alternative
fuel vehicles, including full electric, hybrid, compressed
natural gas, liquid natural gas and propane, pay little or no
fuel taxes, regardless of how much they use our highways. Their
adoption and use are not bad things. They have significant
positive benefits. But it also means that we must find a new,
fair, and equitable way to collect user fees to adequately
maintain the transportation system we all rely on.
So what are Colorado and other members of RUC West doing to
prepare for a future of more electric and alternative fuel
vehicles and increased fuel efficiency? We are working
cooperatively to research and evaluate a mileage-based fee
system as an alternative funding mechanism to replace the gas
tax.
As the number of people in Colorado increases, so do the
number of vehicle miles traveled and the wear and tear on our
roads. Under a road usage charge, vehicles pay for the miles
traveled, which equitably charges for the usage of the system,
regardless of fuel type or fuel efficiency. Using pooled
resources, RUC West has advanced research in the field by
examining the impacts of changing vehicle fuel economy on State
transportation funding, the effects of RUC on rural residents,
protection of user privacy, parameters for RUC per-mile rate
setting, and evasion and enforcement policy options.
A number of States have already deployed pilot programs. In
California, funding is used to evaluate a pay at the pump
option for RUC, which includes electric charging stations.
Colorado is working with the agricultural community to pilot a
RUC system for rural residents; Hawaii is researching RUC
collection on manual and automated readings at inspection
stations; Washington State is testing critical elements of the
interoperable multijurisdictional RUC system; and Oregon, the
leader, continues to refine and improve their operational RUC
system.
These individual State efforts demonstrate the complexity
and sophistication of RUC West member States and their
understanding of the RUC system. In short, our States are
working as laboratories, and are producing meaningful,
replicable results.
RUC West is demonstrating that the type of cooperation and
collaboration needed to define and implement a new model for
transportation funding is possible. In less than 5 years, we
have gone from one State with a pilot program to many States
with pilot activities and supporting legislation.
Are there questions and concerns about RUC? Of course,
there are. However, CDOT's recent pilot efforts demonstrate
that the questions have answers and the concerns can be
relieved. Our pilot allowed drivers of different vehicle types
to choose how they report their mileage and compare what they
pay under a road usage charge versus the current gas tax.
Participants reported high satisfaction with all aspects of the
pilot program. Ninety-one percent of participants said they
would participate in a future pilot.
Mr. Chairman and members of the subcommittee, it is ideas
like these led by States that can help answer the very nature
of this hearing, how do we provide long-term funding for our
transportation system? CDOT and RUC West will continue to
explore the possible funding mechanisms to ensure Americans
have the mobility they need for livable communities and
economic health. However, we cannot stress enough that we have
an immediate funding crisis in this country regarding
infrastructure. The findings from these pilot programs will
provide important information on how best to structure and
implement a sustainable funding mechanism for the long term.
Mr. Chairman and members of the subcommittee, the future is
upon us. We value our partnership with the Federal Government
to support this work. I appreciate the subcommittee's time and
attention to this important topic, and I will be happy to
answer any questions you may have. Thank you very much.
Mr. Graves of Missouri. Thank you, Mr. Lewis.
Next, we have Mr. Chris Spear, who is the president and CEO
of the American Trucking Associations.
Mr. Spear. Thank you, Chairman Graves, Ranking Member
Norton, and members of the subcommittee. Thank you for giving
ATA the opportunity to testify on long-term, sustainable
funding solutions for surface transportation infrastructure.
The fact that we are having this discussion today, more
than 2 years away from the expiration of the FAST Act, is
welcome. It is a testament to the leadership of this committee
and by President Trump, who I believe made this a front burner
issue. I commend that. Now the hard work begins, paying for it.
While ATA recognizes how difficult it is for Members of
Congress to commit to, or even openly discuss the types of
spending needed to address our ailing roads and bridges as well
as the revenue raisers necessary to get there, it is very clear
that doing nothing will impose a much higher cost on the
American people, and on the industry that I represent.
Each year, motorists spend more than $1,500, due to the
lack of infrastructure investment. That is $500 spent repairing
their vehicles and nearly $1,000 more wasted sitting in
traffic. The trucking industry loses more than $63.4 billion
every year because of congestion. That is 362,000 truck drivers
sitting idle for an entire year. And as much as we loved the
tax cut we got last year, we are going to give it all back,
because that $63 billion is like a 9-percent tax on our
industry. These are the costs of doing nothing.
Our solution, the Build America Fund, is the most
immediate, efficient, and conservative way to tackle this
problem. We are proposing a 20 cent fee on fuel at the
wholesale terminal rack, 5 cents per year for 4 years. Unlike
tolls or mileage fees, it is extremely inexpensive to collect.
More than 99 cents on every dollar will be spent on
transportation programs and projects, not paying for new
bureaucracies or lining the pockets of foreign banks. It
doesn't grow the budget deficit, it shores up the Highway Trust
Fund, and it puts real money on the table, $340 billion in new
additional revenue over the first 10 years.
Here are the alternatives: Doing nothing costs drivers 15
times more than they pay under our proposal. Borrowing money
from China just passes the buck to future generations with
interest. Some States, in desperation, are resorting to tolls.
Just look at I-66, just a stone's throw away from Capitol Hill.
You have toll rates now up to $47 just one way for a 10-mile
trip. Rhode Island is using a loophole in the Federal law to
discriminate against trucks by charging a truck-only toll for
more than a dozen bridges. And there is the idea of selling off
public infrastructure to the highest bidder, leaving the people
who rely on those facilities holding the bag decades after the
money gained is spent.
We offer a simple immediate solution: That same motorist
currently paying $46.75 to go one way one day on I-66 would pay
just $2 more a week under the Build America Fund for all roads
and bridges. That is hardly regressive, and it doesn't mortgage
our future or rely on inefficient fake funding schemes like
tolls. Rather, the Build America Fund is a no-brainer. And if
the money raised goes back into roads and bridges, people,
including ATA members, will gladly pay it.
Our proposal also fulfills the Federal Government's
obligation under article I of the Constitution to establish
roads and strengthen interstate commerce, not kick the can by
devolving authority to cash-strapped States. This is an
investment not just in our highway system, but in our economy
and in jobs. Perhaps most critically, we know that providing
the resources for highway safety improvements can save
thousands of lives and prevent countless injuries.
The trucking industry understands, like nobody else, roads
and bridges are our backyard. We see them every minute of every
day. To the 7.4 million hardworking people who move 71 percent
of the domestic freight in this country and to most Americans,
this is not about ideology, which is just another excuse to do
nothing.
ATA believes this is about doing what is right for America.
Trucking pays half the tab into the Highway Trust Fund, and we
are willing to pay more, because we know that the price for
this investment is small compared to all the benefits we will
receive. And that is why Ronald Reagan twice signed an increase
in the user fee into law. He led, and our Nation prospered.
Roads and bridges are not Republican or Democrat, they aren't
free, and they aren't cheap. It is time to start investing in
our future.
Thank you for the opportunity to testify today.
Mr. Graves of Missouri. Next, we have Mr. Ed Mortimer, who
is the executive director of the transportation infrastructure
at the U.S. Chamber of Commerce.
Mr. Mortimer. Good morning, Chairman Graves, Ranking Member
Norton, members of the subcommittee. My name is Ed Mortimer,
and I have the pleasure of serving as the executive director of
transportation infrastructure at the United States Chamber of
Commerce. I also serve as executive director for the Americans
for Transportation Mobility Coalition, which has been
established since 2000 with business, labor, and a variety of
transportation stakeholders that have been advocating on behalf
of the importance of a national infrastructure program. And I
am honored to be joined by one of our management committee
members, Chris Spear, here today.
America's transportation network is a vast system that
connects people and places, moves goods, and boosts our economy
and ensures our quality of life and safety. It has served as
the backbone of the Nation's economy. As this subcommittee
knows, America's infrastructure is aging and in dire need of
modernization.
We believe now is the time, now in our Nation's history, is
the time to have this discussion and to move forward with what
is the next system that we need to have. President Donald Trump
has repeatedly announced his desire to enact an infrastructure
investment plan, and many in Congress have expressed a
willingness to advance such legislation. We were pleased to see
the administration release their legislative principles, which
has allowed the House and Senate to begin this hearing process.
The national chamber and the Americans for Transportation
Mobility Coalition believe that this is a once-in-a-
generational opportunity for Federal leadership to modernize
America's infrastructure, and that this effort is critical to
our Nation's future economic success.
As this process moves forward, the national chamber
believes that any package should include the four following
principles, and I will note we released these principles on
January 18th on LetsRebuildAmerica.Com. The four principles
are: Increasing the Federal fuel user fee by 25 cents for
surface transportation projects; implementing a multifaceted
approach for leveraging more public and private resources;
streamlining the permitting process at the Federal, State, and
local level; and expanding America's workforce through work-
based learning and immigration reform.
We believe that business, labor, public transit advocates,
and other key stakeholders must partner with Congress to find a
long-term sustainable funding source for the Highway Trust
Fund. Currently stuck at 18.4 cents a gallon, the Federal
gasoline tax, as mentioned, has not been increased since 1993.
Since then, its purchasing power has lost over 40 percent. It
is the national chamber's position that the simplest, most
straightforward solution to this immediate problem, that we as
a Nation face, is to increase the user fee. It is not that the
user fee isn't sustainable; it is that we haven't adjusted it.
Could you imagine selling a 1993 product? That is what we are
selling U.S. infrastructure at now, at 1993 cost.
And yes, in the long run, we know that we need to look at
other methods to pay for future modernization of
infrastructure, but those are down the road. We are very
excited about some of the programs and the options that are out
there. But we have a problem today, ladies and gentlemen, a
problem today that needs to be addressed. Putting this off will
continue to cause our economy to suffer, will infect the
quality of life of all Americans, and will not allow us to have
the economic growth that tax reform, which the national chamber
was a big proponent of getting, we are not going to have the
full benefits of tax reform without getting infrastructure
modernization done with paying for it.
Again, we certainly see a very critical and important role
for private investment. We applaud this subcommittee for its
work in looking at public-private partnerships. We believe that
it is a tool in the toolkit. There needs to be more private
investment. We can get all the public investment in the world,
we are not going to solve all of our infrastructure needs.
So, again, enhancing and plussing up funding for current
Federal credit programs, looking at potentially creating a new
revolving loan program, all options that this subcommittee
needs to consider, but private investment has to be part of the
mix moving forward.
We talked about permit streamlining. This subcommittee has
done great work on the surface transportation side, but we need
to codify the administration's one Federal decision for that 2-
year timeline to get projects through the list. And the U.S.
Chamber of Commerce believes we need to additionally
incentivize State and local governments, if they are going to
get Federal money, that they also need to meet that 2-year
requirement. Again, not changing environmental law, maintaining
public input, but providing regulatory certainty. The number
one reason we hear private investors aren't investing more in
U.S. infrastructure, the lack of regulatory certainty in the
process.
The bottom line is that the time to make these important
investments is now. Delaying action only makes these decisions
more difficult and projects costlier. Our ATM Coalition has
been talking to people around the country. We talked to Vicki
Kitchin from the Build Indiana Council, who said, ``we need to
make these investments; it is our turn now.''
Our forefathers made the investments in infrastructure.
Chairman Shuster talked about Teddy Roosevelt, Dwight
Eisenhower. It is now our time to make those investments. We as
a business community are willing to stand with you, Members of
Congress, to get the job done. Delay is not an option.
Thank you for the opportunity to speak.
Mr. Graves of Missouri. Next, we have Ms. Thea Lee, who is
the president of the Economic Policy Institute. Thanks for
being here.
Ms. Lee. Thank you, Chairman Graves, Ranking Member Norton,
members of the subcommittee, for the invitation to come here
today. My name is Thea Lee. I am president of the Economic
Policy Institute, the Nation's premier think tank for analyzing
the effects of economic policy on the lives of America's
working families.
For many years, EPI has consistently and repeatedly
advocated for a substantial increase in investment in the
Nation's infrastructure, in light of the extraordinary benefits
this would bring to the U.S. economy, to workers, and to
American businesses.
The first step is to keep our current infrastructure from
further deteriorating. Allowing the Highway Trust Fund to
become progressively underfunded in the coming decade would do
great damage. The Highway Trust Fund is currently funded, as
others have talked about, by the Federal gas tax, which is not
indexed to inflation and has not been increased since 1993. To
ensure that the Highway Trust Fund has the resources to fund
its planned expenditures, the current gas tax should be raised,
or a new dedicated revenue source for the HTF should be found.
Adequately funding the HTF will also free up funding for other
infrastructure needs not funded by the HTF, like aviation and
rail.
But I want to be clear that simply maintaining the status
quo by finding a funding source for the HTF is far from
adequate. The current state of U.S. infrastructure is deeply
deficient, due to past neglect and underinvestment. So we don't
need to just maintain current infrastructure spending; we need
to substantially increase it.
Our research at EPI indicates that reversing this chronic
underinvestment in infrastructure will require a strong Federal
role and a commitment of Federal resources, even beyond new
resources for the HTF. Currently, we rely heavily on State and
local governments to finance a large share of infrastructure,
particularly highways and transit. This heavy reliance on State
and local governments has led us to the current situation,
which virtually everybody agrees is suboptimal.
I want to highlight some of the findings from our past
research on infrastructure. The first is that there is no free
lunch or free road or free bridge. American households will, in
the end, pay for improved infrastructure, either through higher
taxes or through user fees and tolls. Too often, advocates of
leveraging the private sector via public-private partnerships
or other schemes to incentivize private provision of
infrastructure obscure or underplay this basic economic truth.
Second, the Federal Government provides some key advantages
to financing over private actors, and even over State and local
governments. The clearest advantage is that the interest rate
paid on Federal debt is lower than what is available to private
actors or the States, making long-term debt financing cheaper
for the Federal Government.
Some have claimed that State and local provision of
infrastructure is more efficient, simply because these levels
of Government are closer to end users. But this argument is
clearly wrong. Economic efficiency depends on the funding
mechanism, not the level of Government. So a project financed
by the Federal Government through a user fee, like the gas tax
or mileage fee, is no less efficient than one financed by a
State government through a user fee. Crucially, because State
and local governments are not incentivized to take account of
externalities or regional spillovers, they may underinvest in
key infrastructure projects.
We know that it isn't just, for example, Maryland residents
who use Maryland roads and transit. Motorists and riders from
other States do as well. So if Maryland policymakers are
ignoring the potential benefits that accrue to out-of-State
users, they are likely to underinvest in Maryland roads and
transit. Virtually, all of our transportation systems are
linked across State lines, and serve nonresidents as well as
residents. So coordinating and prioritizing infrastructure
projects at the Federal level can lead to significant
efficiencies.
And it is essential that all infrastructure projects,
whether Federal or State, public or private, support good jobs
with good wages, and explicitly incorporate key labor standards
like Davis-Bacon. Infrastructure projects that pay good wages
have durable benefits for communities and local tax bases,
unlike those that seek to undermine decent wages and standards.
Public-private partnerships and State infrastructure
projects should meet the same high standards as federally
financed projects. Buy America provisions, ensuring that
infrastructure inputs and materials are made in America,
consistent with our international obligations, are also
essential for maximizing the benefits of infrastructure
investment, in terms of good jobs and strong communities.
Traditionally, there has been bipartisan support, there has
been business and labor support for infrastructure investment,
but in recent years, some of that has eroded.
I hope that the broad support that we heard in today's
hearing, and appreciate the other witnesses--I hope that that
broad support will enable action in the near future. As many
have said, and I totally agree with Mr. Mortimer, Mr. DeFazio,
that the timing is urgent to act on this, that we can't afford
to ignore it any further. It is important for our economic
health, for our global competitiveness, and for good jobs.
Thank you for your attention. I look forward to any
questions you might have.
Mr. Graves of Missouri. I will now turn to Chairman Shuster
for opening questions.
Mr. Shuster. Thank you. Again, thank you all for your
testimony. I appreciate you being here to talk about such an
important issue. I want to turn to Commissioner Schroer first,
and maybe last, because I would like to hear--your State of
Tennessee has--I think I counted nine interstate highways
running through it.
Now, I would like to think that since I-81 runs through
Pennsylvania that it is as important to your State as it is
mine, but I would like for you to talk about that, how
important it is, and maybe some of the other roadways through
your State. In Tennessee, where are you going to focus your
dollars? It would seem to me if I was a DOT commissioner or
secretary, I would focus them where I am going to get the best
bang for the buck.
But knowing that I-81--again, I go to I-81--it is important
to Pennsylvania. I am not sure--I think it is pretty important
to Maryland, but they have 18 miles of it, so they don't have a
whole lot of money that they have to spend to widen it. So,
again, you have got so many interstates coming through your
State, can you tell me which are the highest priority? Where is
I-81, for instance, on the priority list and what are low
priorities, which may affect other States if they are not a
priority going through your State?
Mr. Schroer. I can assure you, I-81 is one of my top
priority interstates.
Mr. Shuster. Thank you.
Mr. Schroer. As you said, we have nine interstates. We have
over 1,000 miles of centerline interstate roads running through
Tennessee. It is a pretty broad but not very tall State. But
one of our most important roads, except for I-81, is I-40, and
it goes all the way from, you know, the east coast to the west
coast and carries a huge amount of traffic.
The truck traffic that is on I-40 is significant and
carries a whole lot of commerce throughout the State; I-65
north-south, I-24, same way. And we have to spend those dollars
that we have to maintain and to increase any capacity that we
might need on those roads. But those roads are all important to
the State of Tennessee.
I do want to bring attention to another interstate that is
just sort of beginning in Tennessee, and it is I-69, and I-69
goes from Detroit to Texas. It is considered a road of national
significance. We have received over $350 million in earmarks on
I-69, and we have put those to good use.
We are currently working on an area around Dyersburg in
northwest Tennessee for a loop around that city. We have done a
lot of work on that road in Memphis, but there is a 70-mile
stretch south of Dyersburg to Memphis that runs through
farmland that is much, much more important to the whole
corridor of I-69 than it is to the State of Tennessee.
It is the cost of about $1.5 billion for this 70- to 75-
mile road. It is a road project that now has to compete with
every other road project that we have in the State of
Tennessee. And we rank roads on prioritization from safety,
congestion, and economic development; and, quite frankly, I-69
doesn't reach any of those parameters. So it is a road that we
will have a hard time funding and completing without some
Federal investment.
Mr. Shuster. What it sounds like is, quite frankly, you are
not going to spend your precious dollars on a roadway that
isn't that great a benefit to Tennessee, but if I am right, I-
69, I think, crosses through eight States. And Texas, for
instance--I have been in Texas. I have been in Indiana. I know
it is important to Indiana and Michigan.
But there will be a missing link in I-69, not because you
don't want to build it, but because you can't afford to build
it. That is a perfect example of what the interstate highway
program is all about. And I don't want to steal Mr. DeFazio's
thunder or his visual, but the State of Oklahoma and Kansas, it
sounds to me that could happen. I-69 could, over the years, be
built and all of a sudden, there are 70 miles in Tennessee that
you are not going to build it unless the Federal Government
contributes to it and gives you a push or an incentive, and
that is the money part. Is that accurate?
Mr. Schroer. We will have a hard time putting $1.5 billion
in that road as it competes with all the other roads across the
State of Tennessee. And if we do, it will take a long, long
time to do it. And without that link or any other links on I-
69, it is not an effective roadway for the country. And I think
that is an important road for the United States, especially the
north-south traffic.
Mr. Shuster. Thank you very much, I appreciate that.
I yield back.
Mr. Graves of Missouri. The Chair notes the presence of our
colleague and good friend, Mr. Larsen. We appreciate your
interest in this topic and your participation today. And with
that, I would ask unanimous consent that Mr. Larsen be allowed
to fully participate in today's hearing. And, without
objection, that is so ordered.
I now turn to Ranking Member Norton.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Lewis, you could do a real service to this committee by
making us understand whether VMT is the answer to our problems.
Now, I really don't want to go down a rathole, but I was one of
those who thought that, well, this may be the answer. But I am
looking at Colorado's comparison experiment, and we really need
your most candid assessment here, because Colorado had the
pilot program, and under your program, the drivers were able to
compare what they would pay under a road usage charge versus
current gas tax. I wonder if you see any problems in the
eventual transaction without a raise in the gas tax?
If we simply converted an inadequate gas tax to a per mile,
this is my real question, to a per mile. So status quo, but it
is a per-mile fee at the same rate, which is inadequate, would
the VMT do us any good, or is it inevitable that the gas tax
would have to come up, because as people saw these comparisons
they would see the difference? In other words, what did the
pilot tell us?
Mr. Lewis. Right. Thank you, Ranking Member Norton. I think
it is an excellent question. I think Mr. DeFazio raised it as
well and many of my panel members. We are not there today.
Ms. Norton. You are not what?
Mr. Lewis. We are not there ready to implement a road usage
charge today. That is why we have these pilot programs in place
initiated by Oregon more than 15 years ago to test out is this
a viable option.
I had the honor of testifying before this committee maybe 5
years ago, and we were talking about maybe by 2025 that would
be ready. I would say that may still be true--and I would
support my colleagues that we need a bridge. If we are ever
going to get to a road usage charge, we need a bridge to get
there. If it is 10 years away, Colorado is getting into a $5
billion deficit in that 10 years before we are ready to
implement a road usage charge.
Ms. Norton. But would that mean a gradual raise in the gas
tax over time so people wouldn't----
Mr. Lewis. That is certainly one option. It is what is in
place today. Administratively this would be the relatively easy
way to go. I think it is a politically difficult way to go, as
has been mentioned.
But if we are going to--the concern about the
sustainability, and some of my colleagues talked about this,
the sustainability of the fuel tax, (A), it is not indexed. We
know that. So in 25 years, we have lost 60 percent of its
buying power. But the other thing that is really important to
think about is we are--I believe there is no turning back on
the evolution of motor vehicles to be operated by electric
motors or alternative fuels. The auto manufacturers are
already, you know, planning to go that route. So over time, we
will be taking in--if we stick to the fuel tax, we will be
taking in less and less revenue per vehicle miles.
Ms. Norton. So the automatic vehicles will use, what,
less----
Mr. Lewis. An electric vehicle will pay no fees.
Ms. Norton. Oh, the electric vehicle.
Mr. Lewis. The electric vehicle will pay no fees. A
compressed natural gas vehicle will pay no gas tax. So those
are coming, and I think we need to prepare ourselves for that
and we need to get ahead of it. And I think that for every day
that we delay further study on a potential alternative is a day
that we'll be late implementing it. That is why we feel that in
the Western States it is so important to study more. These
questions that you have raised are absolutely important
questions. How do we operate----
Ms. Norton. Are you testing the transition costs as well so
that we would know whether or not a gradual raise in the gas
tax or some other solution as you see the comparisons?
Mr. Lewis. I think that is an administrative or legislative
discussion, because we see it as a potential future replacement
for the fuel tax. But in that period of time when we all know
that, you know, we still need to make that bridge so we have
sufficient revenues to fund the Highway Trust Fund, we are
going to have to do something more than what we are doing
today.
One of the pilots that is underway right now between
California and Oregon is to study about interoperability, how
does one State reimburse another State for travel between
States? That is something that has to be worked out. How do we
do that across the whole country? The I-95 Corridor Coalition
has a similar pilot underway to think about how would you do it
in--I believe Pennsylvania and Delaware are working on that.
There is a lot more study. We are not ready yet. I want to
be very careful to say we are not ready to implement that yet,
but it is an--I think what the pilots are showing----
Ms. Norton. How much longer--I mean, is there a timeframe
for the study?
Mr. Lewis. I think it is difficult--I would say it is, you
know, it is probably still 10 years off before it can be fully
implemented.
Ms. Norton. Thank you very much, Mr. Lewis.
Thank you, Mr. Chairman.
Mr. Graves of Missouri. Mr. Barletta.
Mr. Barletta. Thank you, Mr. Chairman.
Many of my colleagues are probably tired of hearing me say
this, but I grew up working in a road construction business, so
I know firsthand how uncertainty about Federal funding impacts
everyone from State and local governments right to the private
industry. That is why I believe so strongly in finding a long-
term, sustainable solution for the Highway Trust Fund's revenue
shortfall.
I think that President Trump's commitment to getting an
infrastructure package passed this year provides the perfect
avenue to do that, whether it is through a gas tax, which I
have consistently advocated for, or another user fee. We heard
Secretary Chao say it here yesterday that everything is on the
table. This administration is open to considering all revenue
sources. Charging a user fee to those that benefit from
activity is a conservative principle. Currently, however, not
all users of the trust fund are paying in.
Mr. Schroer, can you speak to actions our States have taken
or have looked into to ensure more users of the transportation
system are supporting that system?
Mr. Schroer. Well, thank you very much. As you know, we did
pass a new revenue bill last year, and that was a great
consideration to us. And so we, as part of the bill, while we
did raise gas taxes 6 cents and diesel fuel 10 cents, we also
added a fee for electric vehicles of $100 a year, and we added
a fee to alternative sources of fuel as well. So compressed
natural gas and other types of fueling, we added that to the
bill. So we felt like we made a start in looking at other
options as that happened. And so we hope it has an impact and
we think it was how we should go about it.
Mr. Barletta. Going back to the idea of a gas tax increase,
I recognize one concern about this idea is that it is
regressive. What we should not overlook, however, is the
financial costs from wasting time and fuel sitting in traffic
congestion and vehicle repairs incurred from potholes and other
roadway damage are also disproportionately shouldered by those
with lower income. I have always said it is better to spend
money to solve a problem so that you never have to deal with it
again, rather than keep putting a Band-Aid on this problem. You
wouldn't keep replacing your carpet in your home if your roof
was leaking. You would fix the roof.
Now, while I continue to hear all options are on the table
when it comes to a sustainable revenue source for the trust
fund, my question for each member of the panel is what is more
important, the outcome of permanently fixing the Highway Trust
Fund or the user fee mechanism deployed to fix it? If we can go
down the line.
Mr. Schroer. Well, I think as the State of Tennessee and
also as AASHTO, it is important for us to have a long-term
sustainable funding source. We are completely convinced that is
how it needs to be done. We feel it should be formula based
that allows States to put priorities on projects as best they
can. They know what is going on.
And AASHTO has recommended many different options. We have
revenue options that we have published for everyone's
consideration, but we do continually believe that a sustainable
form of revenue is important for us.
[AASHTO's ``Matrix of Illustrative Surface Transportation
Revenue Options'' is on pages 109-116.]
Mr. Lewis. And I fully concur with my colleague from
Tennessee. And I would also add, and to you who know the
construction industry, how difficult it is to plan. You can't
plan your labor, you can't plan your equipment purchases if you
don't know--if you look out on a 10-year horizon that there is
a sustainable level of funding.
So when money is dropped on us, which is great, we will
never turn it away, it is very difficult to put programs out
because our industry is perhaps not prepared for it. And so I
think that sustainability and that predictability of the
funding source is so critical to efficiency in this system.
Mr. Spear. I would say it is all about the money. You all
know how to do a highway bill. You have done the FAST Act, MAP-
21, SAFETEA-LU. I mean, you guys know how to write a highway
bill. That is not the issue here. The issue is funding it, real
money, putting real money on the table.
I think it is imperative that this President put the full
power of his office behind this. If he wants it done this year,
he is going to have to lead up here. He is going to have to
work collaboratively with you, not just throw everything on the
table. Pick something, pick several things, but to get to the
number that we are talking about, you are going to have to
really get behind this all the way through the process and work
collaboratively with you. We are here as a panel to really
support you through that process, and I think that is really
important.
Beyond the money, I think 10 years is really a good swath
of time to play with here, because it provides certainty. If
you are going to build a real major project, whether it be a
bypass, a bridge, a tunnel, you are not going to do it in a
matter of 12 months; you are going to do it over the course of
3 to 4 years. And to have that kind of certainty out there at
the State and local level is really significant, and I think
you will see a lot of economic gain from that type of
certainty. So beyond the money, I think the 10 years is really
an important element.
Mr. Mortimer. I couldn't agree more. I would also concur
that the national chamber put out its 25 cent gas tax, not
because we always love doing that, because we looked at all the
other options. But we are willing to work with the
administration and Congress. It has got to be long-term
sustainable, as Chris said, 10 years. If you are going to
modernize infrastructure, it has to be a 10-year plan.
So we have been patchworking this for the last 15 years. If
we are going to truly deal with it, let's come up with that
long-term sustainable funding source. And I think what I have
heard today is that, while vehicle miles traveled has some
outcomes in the future, we are not there. So if somebody can
come to us with a long-term sustainable source that is going to
invest and modernize infrastructure, the national chamber is
going to be all for it.
Mr. Barletta. That is like Dippin' Dots. It is the ice
cream of the future. It is always the ice cream of the future.
Ms. Lee. And, yes, you know, while we are always concerned
with the progressivity or the regressivity of any funding
mechanism, I think in this case, the user fee, the gas tax, or
other user fee is warranted to make sure that Highway Trust
Fund because the benefits are so widespread, as you said, and
the impact of congestion and other things fall on everybody.
But as I also said, you know, our belief is that we need
additional funding beyond making the Highway Trust Fund whole,
and that could be done in a more progressive way, particularly
at the Federal level and should be.
Mr. Barletta. Thank you. Thank you, Mr. Chairman.
Mr. Graves of Missouri. Mr. DeFazio.
Mr. DeFazio. Thanks, Mr. Chairman.
I am going to get the chairman his own copy, but this is
our latest version, and since he brought it up and Mr. Schroer
really underlined the need for Federal investment, I mean, when
you talked about that section of I-69 in your State that cost
$1.2 billion, which is delivering benefits for the nationwide
system, not just for your State. But, again, I have been
showing this for years. Amos Switzer's farm field, brandnew
Kansas turnpike. There is where it ended because Oklahoma got
in financial difficulty until we had the Federal program.
That's why we need a Federal program.
If devolution didn't work in the 1950s, how the hell is it
going to work in the 21st century when we are competing
worldwide with other countries? Back then we were the dominant
power in the world, we didn't need to worry about competing. So
I will get Bill his own copy.
Now, Mr. Lewis, on your VMT, and I--you know, you have a
lot of satisfaction with the small number of volunteers, you
had 150 or so, and you had highest satisfaction among those who
were GPS based. And I am going to have my staff follow up with
you because of all the concerns I hear about privacy. I mean,
when we did our first pilot in Oregon in Blumenauer's district,
I mean, the people in Blumenauer's district are not
representative of the people in my district, in my rural areas
in particular--they are happy that the Government should know
where I am all the time, and in my district it is like the
Government will know where I was after they have got the gun
from my cold dead hand in my car. So it is--you know, there are
some real issues there that need to be resolved.
But my question would be, did you use congestion pricing? I
mean, you are tracking the mileage by GPS because--here's my
concern: You live in eastern Oregon, you have to drive 30 miles
to the feed store. We shouldn't be charging that person the
same per mile as someone who jumps onto I-205 in Portland,
Oregon, which is backed up at rush hour, and now they are
talking about, you know, having to toll because they are trying
to drive people off of it. You know, so did you do variable
pricing?
Mr. Lewis. Thank you, Mr. DeFazio. We did not in our pilot.
Mr. DeFazio. OK. Do you think that, for purposes of equity,
that that is where we need to go?
Mr. Lewis. I think the system theoretically certainly
allows that to happen, which is either a pro or a con against
using a road usage charge.
Mr. DeFazio. Right. But, I mean, do you feel that it would
be equitable to charge a rural Coloradan, you know, X cents per
mile to drive on an empty road to the farm store, you know,
farm supply store, and yet someone who jumps on, you know, the
freeway right downtown in Denver, you know, at rush hour, they
pay the same per mile? That doesn't seem right.
Mr. Lewis. Well, I think the opportunity exists to evaluate
that and to make different pricing, but I do think that one of
the--and we are doing a second pilot this year specifically for
the rural parts of Colorado to learn more about their impacts
and their needs.
And one of the things we found in the previous study was
that, you know, many, as you know, coming from the rural part
of the State, that many of the highway users in rural areas
have, you know, older vehicles, larger capacity engines. If you
drive an F-250, you are going to use a lot more gas than if you
are driving a Prius in downtown Denver. And one of the
opportunities for a road usage charge is that there is more
equity because you are not paying based on the type of vehicle
you need to use for your purposes; you are paying on how much
you are using the roadway. So whether you are driving a Tesla
in Boulder or an F-250 in Brush, you are paying for the use of
the road, not what your vehicle uses in fuel. I think that is
an opportunity.
I think the issues you raise about equity on, you know,
using on a congested highway versus a two-lane rural roadway,
that is a very good comment, and I think that is something that
would need to be studied further. Can you provide different
levels of fees based on the type of road that is being used?
Mr. DeFazio. Yeah, well, that is--and again, these are why
we need--it is going to take us probably 10 years to get to
something that would be acceptable nationwide and coordinated
among the 50 States, since it isn't going to be a devolved 50-
State program, because that wouldn't work too well. So I
appreciate that observation.
I mean, the perversity of Oregon's current pilot is that if
you have one of those giant dually pickup trucks, you will save
money by paying under the VMT as opposed to the fuel tax. I am
not sure we want to encourage that, but I also get the thing
about the older, less efficient vehicles in the rural areas.
And my time is just about up here. I just want to
congratulate--you have all been great. But, Mr. Spear, thank
you for your extraordinarily outspoken factual testimony on the
issue and particularly bringing up the issue of I-66 and $46.75
to go 10 miles. That is one heck of a toll. Four dollars and
67.5 cents per mile. Not too many Americans can afford that.
That is not the future that we desire.
Thank you, Mr. Chairman.
Mr. Graves of Missouri. Mr. Young.
Mr. Young. Thank you, Mr. Chairman. I want to thank the
panel.
I am a little bit late, but everything I have heard here so
far is good. If you had done what I wanted to do in 2005, we
wouldn't be here today. At that time, it was 5 cents and
indexing it. People don't understand we passed it in 1991--by
the way, I have been through every highway bill since the
beginning, and 1991 is 18\1/2\ cents per gallon; for our trust
fund, as everybody knows, is about 7 cents now buying power.
That is why we are behind the curve.
I still believe in the user fee and the gas--I hate to say
tax--just the user fee, but it is a gas tax. I think it is
fair, so we are going to have carbon a long time.
But I want to ask you, Mr. Spear, you supported the fuel
tax, I think, most strongly for many years. What are we going
to do about the electric trucks and all of the other things
that are going to occur? How are we going to collect the money
if they don't use fuel?
Mr. Spear. Well, there are a number of ways you can do it
right now. I don't think we would shy away from looking at
alternative funding solutions, like using DMV registration
fees, for instance. My testimony speaks to this. You don't have
to create a huge bureaucracy to collect and capture alternative
fuel vehicles, like electrics, hydrogen, CNG. Just have them
register at the DMV annually. We all do that, no administrative
overhead, and that is about $29 billion over 10 years.
Mr. Young. But the only problem with a registration fee,
and by the way, I set up a commission and they came back with
about four different suggestions. I have a truck that is
electric. I register it and you charge me. But my truck only
goes 10 miles. His truck, the chairman's truck, goes 5,000
miles on a highway. We are paying the same price. That is not
fair. And so somewhere we have got to figure out equal or
equity for those that travel long distances and those who
travel short distances. But if I have my way, Mr. Chairman,
there will be no cuts for any electric cars or anything else
because they are using our roads.
Mr. Spear. That is correct.
Mr. Young. And we are going to be in carbon use for a long
time, regardless of what they say. Some people say 10, 20
years. I am saying 50 years before we finally get off of
carbon-driven automobiles. We will increase electric cars. We
have to collect some way, and I am looking for a suggestion. Is
it a registration fee? I don't think that is fair. Is it a
mileage fee? If we can collect on the mileage fee, that would
be fair because, otherwise, I pay for what I use and you pay
for what you use.
Ms. Lee, I want to ask this question because the Trans-
Alaskan Pipeline, which I am very well aware of, was built by a
project labor agreement. Yesterday, Secretary of Transportation
Elaine Chao urged inclusion of Davis-Bacon in infrastructure
development. Would you advocate these provisions be included in
any infrastructure package that comes before the committee and
the House as a whole?
Ms. Lee. Yes, I would. Davis-Bacon provisions?
Mr. Young. Why would you do that?
Ms. Lee. Because maintaining community standards in terms
of labor and wages allows, first of all, better quality
projects because you have less turnover, you have better
training, you have better quality of labor. And it provides
durable benefits to the community and to workers, so that I
think it is common sense that if you have an infrastructure
project, you want that to support good wages in the community
and not undercut wages.
Mr. Young. I thank you, because I have been an advocate for
this because I watched the pipeline be built in 3 years, no
delays, on time. I won't say it was under budget, but it was
darn near under budget. And I am a big believer in project
labor agreements because we will get a product that will be
finished probably under cost, and we won't have any problems of
one of the sideline groups having to strike and slowing the
whole process down. Our biggest problem, it takes a long time
to build a highway now, and it shouldn't. You know, the
permitting process, we tried that in TEA-LU. It improved it,
didn't finish it. We have to continue to do that so we are not
delayed.
And agencies are our biggest villains, because they never
do anything together. I have got a bridge here, and I think
most people know where it is, where they are building a
brandnew bridge next to another bridge that is falling down.
Now the the U.S. Fish and Wildlife Service want to study the
effect of the new bridge on the fish that swim back and forth.
That is pure--never mind, I won't say it. I am not going to be
a Don Young now, but it is a fact of life. So anyway----
Mr. Shuster. It is not my initials, is it?
Mr. Young. No, no, no, no, no, no, no, no, no. But anyway,
I want to thank the panel. And, Mr. Chairman, I am a big
supporter of paying. You cannot do this from smoke and mirrors.
You have to have a steady flow of income so you can plan ahead
of time. We made the mistake in 1991 because we didn't index
it. That is our biggest challenge.
So thank you, Mr. Chairman. I appreciate it.
Mr. Graves of Missouri. Ms. Esty.
Ms. Esty. Thank you, Mr. Chairman.
And I want to thank the panel, and you are all spot on. We
know what we need to do. This is not a dispute about policy. I
want to thank all of you for saying there is an immediate need.
It is about real funding. It is not about financing. We have
plenty of debt already. We need to get back to the user fee
pays and keeps up with those needs. And we have now got several
decades of not doing that. And that is a hidden cost, but it is
a cost and we are all paying it every day.
John Katko, who I think had to leave, and I were part of a
bipartisan group, and I will get you copies of this, 48 Members
of this House, half Democrats, half Republicans, calling for
real funding and real changes, and we need to do that right
now.
I mean, my home State of Connecticut, our Governor has
announced she is putting on hold over $3 billion worth of
projects until we fix this funding problem. There is no free
lunch, there is no free road, there is no free bridge.
So here's the question: Mr. Spear, you are totally right.
We need the President to lean in. It is not enough to say it is
all on the table. It has all been on the table for several
decades. So the question for all of us here, but as for you as
well, how are Members of Congress going to be held accountable
for doing something, not talking about it, but doing?
People were held accountable for the easy vote to lower
people's taxes. How are Members of Congress going to be held
accountable by the States, by the truckers, by the national
chamber, by the people who know the real cost to industry, to
individuals? How are we going to be held accountable--carrots
and sticks--so Members of Congress actually at this time with
this President do something right now? Because it is an
immediate need, we need to do it now. And every day we don't do
it is a cost to our citizens and, frankly, it is a cost to our
democracy. If we cannot do the basics on this, no wonder
everybody is so frustrated and so angry when we do know what to
do.
You know what, Syria and North Korea, we are not sure what
to do. We know darn well what to do here, so help us figure
out, like, how can you be part of it and what can we do?
Thanks.
Mr. Spear. Well, there is a lot to work with there. You
know, look, this is a wonderful venue. I sense a lot of
bipartisan spirit in the room about trying to address
infrastructure. The policy debate, as I said earlier, you all
know how to write highway bills. There is no magic needed
there. I think paying for it has always been the impediment. We
haven't raised this since 1993. If we had indexed it, the
Congressman is right, we probably wouldn't be having this
discussion right now.
But beyond the hearing, beyond the policy debate and
shaping legislation, you have got to vote. You have got to
vote. You have got to put these amendments, these funding
solutions on the floor and take votes. That is accountability.
And we don't do that enough anymore. We used to. Ten, fifteen,
twenty years ago you had regularity, bills passed. Whether you
liked it or not, the best policy won, you voted, and things got
signed into law.
I think the President getting in the game is critical, and
I commend him. We would not be having this discussion right now
if he hadn't made it so. He saw something during the campaign,
now into this year, that no one really else talked about. We
are still riding on the tails of FAST. We got a couple years
left. This is the time to have this discussion, but he has got
to lead. He has got to get squarely behind a funding solution
or solutions, take your pick, but don't cough up the menu and
say, Congress, you fix it. If that were the case, you would
have done that 25 years ago.
Ms. Esty. Anyone else want to weigh in?
Mr. Mortimer. Sure, Congresswoman, I will weigh in. Look,
what we have been doing at the national chamber is, you know,
Congressman Shuster talked about what Pennsylvania did. It was
the Pennsylvania chamber that was standing there. If you go to
all these State and local initiatives, it is State and local
chambers. So what we are doing is we are having our State and
local chambers, we had 37 of them write a letter to Congress
saying, look, it is time for Federal action.
So we are trying to mobilize our federation around the
country and reminding lawmakers you can do it. They did it,
they were successful. It is the business community working with
organized labor, working with public transit advocates. This
can be done. I don't know why there is this thought in this
town that you can't do this.
This committee has led many big bills to do it. It is just
time to get the political courage to get it done. All we can
offer as the business community, we are willing to stand with
you to do it.
Ms. Lee. And if I can just say, I think it is a powerful
coalition when you bring labor and business together and put
pressure on Members of Congress to do the right thing, to have
the political courage, and to be rewarded for taking that
stand. So it is time. Thanks.
Ms. Esty. Thank you all very much.
Mr. Graves of Missouri. Mr. Davis?
Mr. Davis. Thank you, Mr. Chairman, and thank you to the
panel.
Like others have mentioned, and I know this was just a
point of discussion from Mr. Spear, I think the President's
call for an infrastructure package is an opportunity for us to
look at fixing the Highway Trust Fund. I firmly believe, as
everybody has said on both sides of the aisle, this has to be a
priority for our Nation and has to be a priority for Congress.
Obviously, we are here because it is clear the trust fund,
the current funding sources, it is unsustainable. It is equally
unsustainable to continue to rely on budget gimmicks and
General Fund transfers to fulfill our surface transportation
investment obligations.
While I want to fix the Highway Trust Fund, I do not
support a solution that only raises the current revenue
sources. Solely raising the gas tax does not solve the long-
term problem. As you look at more and more electric vehicles on
the road as well as increased fuel efficiency, we have to think
differently. And I know I am not the only Member of Congress
because you have heard it here today that feels this way.
I think we need to look at the Highway Trust Fund as kind
of like a 401(k). We have got to diversify. None of you invest
your 401(k) in one stock. And frankly, when you look at the
potential for electric vehicles to be more ubiquitous on our
roadways in the upcoming years, if we don't do something now,
then we are going to continue to see the need for budget
gimmicks and General Fund transfers. That is why we want to
stop. That is why we are here today.
I just was out in California and rode in one of Tesla's
prototype semi trucks. Imagine when electric technology and
hybrid technology gets into the fleet level and what that is
going to do to decimate the Highway Trust Fund even more.
So you are here because we need to hear from you. Thinking
in that 401(k) approach, a diversification, I want to ask you
about, anybody on the panel wants to answer any of these
concerns, do you agree that we need to be looking at other
sources? And if so, what is your suggestion to bring in
electric vehicles into the mix?
Mr. Spear, Mr. Lewis, you guys can fight over who answers.
Mr. Spear. I think Congressman DeFazio really hit on the
point that this really isn't ready for prime time. We have got
a lot of pilots, a lot of studies, and we need to be looking at
alternative funding sources.
Mr. Davis. Are you talking about the VMT that Mr. DeFazio--
--
Mr. Spear. I am, and I think that is certainly one way that
governments are looking at it. It is not ready for prime time.
You are simply going from about 170 collectors of the fee at
the wholesale rack, which is what we are proposing, to every
vehicle on the road, millions. That is a huge bureaucracy to
administer as it stands. You have got privacy issues. You have
got cybersecurity issues.
Mr. Davis. Rural versus urban issues.
Mr. Spear. We are all for collecting. But I think, you
know, the electric and alternative fuel vehicles currently on
the roads today is very, very small. It is going to get big.
The debate for alternative funding needs to start now, but it
is probably going to come into play 10, 15 years from now.
Let's start and have that debate now.
But for this current 10 years, we need real money on the
table, which is why, in contrast, we are proposing using the
user fee. It is the most efficient, immediate, and conservative
way to raise money. It shores up the trust fund, less than 1
cent on the dollar to administer, and it is deficit neutral.
There is not one proposal on the table right now that does all
three of those things, except the user fee.
Mr. Davis. Well, Mr. Spear, I think you misunderstand what
my priority is. I think Congress is only going to act now to be
able to prepare for the future. I don't know if you have seen
this yet, Congress as a whole usually doesn't like to act on
anything without a deadline. And now, let's put our own
deadline in place, because when electric vehicles become more
of a part of our roadways, it is going to be that much harder
to be able to put them into the mix. We need to talk about
diversification now, and that has to happen.
Now the VMT, I disagree with many of my colleagues that
that is the right approach. I am not a big fan of the VMT
because I think it unfairly punishes rural America, where I
represent, versus urban America. A single mom in my district
that drives 30 miles to work is going to pay more than the
single mom who drives to work 3 miles in the city of Chicago in
Illinois. So I have got concerns with it.
Now, I think we need to look at some other sources. There
are other ideas out there--registration fees, battery taxes,
freight issues--but I want everybody at the panel to begin to
think about diversification now, because simply kicking the can
down the road is only going to lead us back to this same table,
the same debate, the same discussions that we are having today
and, frankly, that is why I am not in favor of solely looking
at the existing sources. So I appreciate it.
Mr. Lewis, I know you wanted to say something, if the
chairman would let you, but my time is up.
Mr. Graves of Missouri. Go ahead, if you would like to
answer.
Mr. Lewis. Thank you, Mr. Chairman.
Mr. Davis, I think that it is pretty easy to agree on what
that trajectory is of vehicles that will get off of using gas
and onto electric or other sources. We can look at what that
trajectory is. We can see over time what percentage of the
fleet and how quickly that is going to take over, and I think
that gets to your point, is as that percentage of the fleet
increases, we have to find a way to address those uses of our
roadways. And so whether it is a one-time charge as Tennessee
is doing or it is a per mile fee, I think we can start to blend
those two, and I think we need to start to blend those two, but
I am pretty sure it is going to happen. Is it 10 years, is it
15 years that that saturation of electric and other fuel
vehicles take on? It is going to become more of an issue. And I
think we need to start now thinking about how we get those into
the program.
But as you said, and as many have said, it is not going to
happen tomorrow. We need the bridge to fund the Highway Trust
Fund in a sustainable way while we transition to these other
modes of power.
Mr. Graves of Missouri. Mr. Payne.
Mr. Payne. Thank you, Mr. Chairman. And thank you all for
being here this morning.
I represent a very congested urban area with every mode of
transportation within my district. However, transit funding
issues are of particular importance to me at this time due to
my State--and I am from New Jersey--my State's transit agency's
troubled finances and some of the highest fares in the country.
Despite this administration's neglect of the transit in the
President's infrastructure package, I would like to hear some
more of the panel's ideas on innovative Federal transit funding
models you would recommend to this committee. Sir?
Mr. Schroer. In the State of Tennessee, the State does not
operate transit, and it is operated locally. And so as one of
the opportunities we had in our bill, the IMPROVE Act, we
allowed large cities and large counties to actually do a
referendum to raise taxes to fund transit. And as a matter of
fact, as we speak, the city of Nashville is working on a
referendum on May the 1st to implement their first large
transit program. So that is an opportunity.
And obviously, transit has been part of the funding through
the Highway Trust Fund for a long time, and I would think that
would be a good source and it should probably continue.
Mr. Payne. Thank you.
Mr. Mortimer. Congressman, I would just add on that, so we
are big supporters of full funding of public transit as part of
the Federal program and as the infrastructure program, so
obviously the gas tax increase that we talked about, we support
the 80 percent, 20 percent for transit. That needs to continue,
so the administration's proposal to eliminate the CIG program
we think is a bad idea. We need to fully fund the New Starts
programs.
I think there are a lot of ways that public transit can
look at innovative ways of finance. This subcommittee created a
Penta-P program trying to incentivize communities to look at
public-private partnerships as an opportunity. The Denver Eagle
project was one that was able to utilize that program. There
could be others that make it easier for transit to look at
that.
We also have got to figure out ways to capture the value
around transit stations. Right now, the Federal Transit
Administration doesn't fully capture that value and how we
provide that value into helping defray the costs of those
projects. Those are some of the ideas that we have.
Mr. Payne. OK. Mr. Spear?
Mr. Spear. I was going to say buses do benefit from the
Highway Trust Fund, so shoring up the trust fund is a critical
element to the solution that we would recommend. Our proposal
certainly focuses on that, and that is a benefactor. I think
making certain that the trust fund is whole is really critical,
but also that the moneys that go into the trust fund are put
back into the designated places. Diversion of funding is really
an element that we need to avoid that we are actually raising
money, putting money back in. And tolling schemes don't
generally do that. Diversion of funding and diversion of
traffic, quite frankly, causes a heck of a lot of problems. You
are moving people off those roads onto side roads. You are
creating more congestion, more problems for those side roads,
more congestion and safety issues in communities. These are all
very impactful.
So making certain that the trust fund moneys go back into
the modes that they are intended to is really critical.
Mr. Payne. OK. Thank you.
Mr. Lewis.
Mr. Lewis. I would also add that, you know, we were talking
about the transportation system. All these modes need to
interconnect, and they all have value. Transit is very
important in many of the rural areas of Colorado as well. It is
not just the urban areas. So I think we need to recognize that
we have a users of a transportation system, and there are
different modes that make sense in different locations.
Mr. Payne. OK.
Ma'am? OK.
Well, thank you for the answers that you have given.
And, Mr. Chairman, I will yield back.
Mr. Graves of Missouri. Mr. Faso.
Mr. Faso. Thank you, Mr. Chairman.
I want to thank the panel for your testimony today. It
feels like we are all preaching to the same choir; the question
is whether anyone is hearing it.
Mr. Spear, your Build America Fund recommended a 20-cent
per gallon fee phased in over a 5-year period--a 4-year period
collected at the terminal rack. Could you further explain how
you envision that proposal and what its advantages would be
over a pure gas tax increase?
Mr. Spear. Certainly. Yes, it does move it a couple steps
up from where it is currently done at the pump. This came from
an idea from Kenan Advantage, one of our members. They are the
largest mover of fuel in North America. And the rack basically
consists of three things. The wholesale rack is ports,
terminals, or pipelines. That is where tank trucks go to get
their fuel before they go to the filling station to where we
fuel up. It is already taxed at the rack. There is only 170
owners of the rack. It is the most narrow chokepoint in the
supply chain, and they are already paying it. So putting it
there basically bakes the fee into the price of fuel.
Mr. Faso. So are these all fossil fuels?
Mr. Spear. Yes.
Mr. Faso. So we would be talking about natural gas as well?
Mr. Spear. Yes.
Mr. Faso. And propane?
Mr. Spear. Yes.
Mr. Faso. And obviously, if that were the case, that would
get at one of the core issues that folks are raising here about
electric vehicles, the electricity has to come from somewhere.
I know a lot of people think electricity comes from the switch
on the wall, but ultimately--yes, Mr. Lewis, it doesn't. But
ultimately, those electric vehicles are powered by a central
fuel source.
Now, maybe battery technology and distributed generation in
the future, that would be a different equation, but you are
suggesting something that would, in essence, be a centralized
collection point, 170 places? I am hard-pressed to think that
is----
Mr. Spear. 170 owners.
Mr. Faso. Owners. And so how would this also affect
electric generation, natural gas, et cetera?
Mr. Spear. Well, it is something more broadly that we would
need to look at. As I said earlier, you are not seeing a
widespread use of alternative-fueled vehicles yet. You will in,
certainly, 10, 15 years. We are looking at it through the lens
of the next 10 years, and we believe this is the best proposal
to raise immediate money, but we would look at alternative
funding solutions for capturing alternative use vehicles as
well, certainly.
Mr. Faso. Do any of the other members of the panel have a
thought about this particular proposal that has been raised by
Mr. Spear and his association?
Mr. Mortimer?
Mr. Mortimer. Sure. I think it is something worth
exploring. We haven't dived into it as much as ATA did. But
again, I think our view is as long as it is transparent to the
taxpayer, we know where the revenues are being collected, we
know where they are going. I think the business community is
willing to be supportive of those----
Mr. Faso. So how would it actually be transparent to the
taxpayer, since the cost of this will be built into the price
of the fuel or the electric product, correct?
Mr. Spear. I think the assurance that you all want to make
for people paying into this is that the money is actually going
to go back into roads and bridges. That is the guarantee they
are looking for here. We are more than welcome and happy to pay
for an increase in the user fee, so long as it goes back into
roads and bridges.
The nice thing about the rack is that it bakes it into the
price of fuel. Most people that fuel up at the pump aren't even
going to notice 5 cents. It goes up and down that much, as we
said earlier, you know, just on our commute in. So, you know,
that is the best place we believe to bake it into the price of
fuel and get $340 billion of new revenue over the next 10
years.
Mr. Faso. Any other members of the panel want to weigh in
on this point?
Mr. Lewis. I just have an anecdotal comment. We did some
focus group work in Colorado recently, and a surprisingly large
number of the folks that we interviewed didn't even know there
was a gas tax.
Mr. Faso. Interesting.
Mr. Schroer?
Mr. Schroer. As a department, we are not really that
concerned about actually where it is collected. I do think
that, you know, the closest it gets to the wholesale place, the
more apt you are to have a better efficiency in the collection,
and that is important.
I will have to say that we have to look at the other
alternative sources as a point of revenue. We did that in
Tennessee in our bill. We looked at other--we taxed electric
vehicles and other forms of energy as part of that bill, and I
think that is something that we have to look at as we go
forward.
Mr. Faso. Mr. Chairman, thank you. My time is up.
Mr. Graves of Missouri. Mr. Larsen.
Mr. Larsen. Thank you, Mr. Chairman. And I want to thank
the subcommittee for letting me sit in as well today. I will
return the favor if anyone wants to sit on the Aviation
Subcommittee.
Voice. It was close to an objection.
Mr. Larsen. Mr. Spear, back to the wholesale versus retail.
I had a question that was asked already, so I appreciate how
that would be structured, but how do you--if you charge at the
rack, how do you ensure that that unit of propane is going to
be used for a vehicle as opposed to being used for nonvehicle
use?
Mr. Spear. Oh, I think that is where you would look to
legislation for that and how the Highway Trust Fund is
currently administered to ensure that there is no diversion
between the relationship of Federal and State administration of
the trust fund, that those funds actually go to their intended
purpose and not diverted.
Mr. Larsen. Well, I understand the intended purpose would
be for transportation, and I fully support that, but I am
saying, not all propane, I guess, that would be delivered would
necessarily be used for a transportation purpose; it would be a
legitimate purpose, but not transportation.
Mr. Spear. That is true. More broadly, transportation
logistics, perhaps. We look at the rack as the solution for
diesel and petrol for roads and bridges, and that is the lion's
share of the $340 billion over 10 years that we are talking
about.
Mr. Larsen. Yes, OK. With regards to electric, since we pay
retail, pay at the pump for gas and gas tax, has anyone looked
at the possibility of developing the same kind of notion for
electric? That is, when I plug in my electric vehicle, every
electron that goes in, there is a little tariff on it that ends
up transferred to the Highway Trust Fund?
Mr. Lewis. California, I believe, is currently undertaking
a pilot that does exactly that.
Mr. Larsen. Can you not use California as an example?
Mr. Lewis. I do apologize for that, but it came to my mind.
But they are doing that to study the collection of a fee at the
charging stations for the miles used for that vehicle.
Mr. Larsen. OK. So kind of like the gas tax at the pump. So
it is collected then, then transferred to the trust fund.
And then back to the bigger question about the gas tax and
the elasticity of it. We keep going back to it and, speaking of
kicking the can down the road, we ought to charge people for
saying that and that would fund the Highway Trust Fund. I bring
that up because the Transportation Revenue Commission from 2005
or 2007, recommended moving towards a vehicle miles traveled,
and that is either 10 or 12 years since that came out, and we
are still piloting RUCs throughout the States. We are not
moving quickly on this and not moving quickly enough to
determine if it is a viable, legitimate supplement or
complement to the Highway Trust Fund.
I am a little more with Mr. Spear and Mr. Mortimer on are
we ever going to get to it. You know, it is another 10 to 12
years down the road maybe, but not at the rate we are going. Is
there a way to get to a decision faster on the use of RUCs?
Mr. Lewis. Yes. I think if there is more success and that
you have got the 14 Western States----
Mr. Larsen. Yes, Washington is one of them.
Mr. Lewis. Then Washington is one of them, it is
combining--we are learning from those experiences. We are
learning from the good and the bad of how these are unfolding.
You know, if we think that that is 10 years away, if we look
back 25 years, the last time the fuel tax was increased, maybe
10 years isn't so long, you know. So I think--and there is
probably a role that USDOT can play in they are already playing
in helping us fund some of these pilot programs. There are
probably some interoperability studies that can be done. You
know, there is an I-95 work and there is a Western States work.
How do we tie the two together?
So I think there is more that can be done if we look into
the future and look at those curves and how quickly is the fuel
efficiency going to go up and how quickly are the electric
vehicles going to get into the system. On that curve, we can
plan out a transition time, I think, but we need to take
action.
Mr. Larsen. Yes. OK.
And, Ms. Lee, do we have a workforce that can--do we have
the numbers in the workforce to do this?
Ms. Lee. Yes, we absolutely do. You know, first of all,
there are a lot of trained workers who are out of work or have
dropped out of the labor force, but I think, you know, the
labor market continues to be weak, even 9 years after the
economic recovery. And so I think this is exactly the kind of
boost that we need in terms of labor market participation and
creating good jobs that would be spread all over the country.
So it is a huge advantage, and also we can pair it and we
should pair it with training, you know, with good training and
apprenticeship programs that make sure that they are
incorporating underserved populations and others that haven't
been part of that.
So I think this can be a tool for equity in the labor
market, and it would be an excellent one that is both good
macroeconomically and also good for local labor markets.
Mr. Larsen. Thank you. And I just would note finally, Mr.
Mortimer's testimony, your rewritten testimony, that getting
rid of workers, moving them out of the U.S. workforce by not
extending DACA [Deferred Action for Childhood Arrivals] or
doing what we are doing with the TPS [Temporary Protected
Status] folks, you are moving workers out of the U.S. labor
force is not a good idea.
So thank you, Mr. Chairman. I yield back.
Mr. Graves of Missouri. Mr. Perry?
Mr. Perry. Thank you, Mr. Chairman. Thank you, ladies and
gentlemen for being here. We are all concerned about the
vitality of the Highway Trust Fund and maintaining that. With
that, I am concerned because the gas tax, of course, being
bantered about as one of the most regressive taxes especially
for low-income individuals who spend more of a proportion on
their income on gasoline than other folks and, of course, it
follows the supply chain as every retailer and everybody in
business as the additional cost of the gasoline and
transportation into their product and everybody pays that as
well. And having just passed the American Tax Cuts and Jobs
Act, I am a little remiss that we would immediately think about
taking that away through an increased gas tax without something
to offset it on the other side. And we all know we need a
revenue source, but I am not sure that that wholly gets to the
issue. And I think you would acknowledge that there are other
vehicles that are on the highways that aren't paying through
the gas tax, and even just increasing it fails to capture the
revenue from those that are using it, even though it is, I
would agree, a user fee.
Mr. Mortimer, in particular, the U.S. Chamber of Commerce
has endorsed a 25-cent increase of the Federal gas tax, which
is the largest increase in the history of the tax. Do you know
how much it will cost the average consumer, the household,
annually, additionally?
Mr. Mortimer. Sure, Congressman, thanks for the question.
Yes. So it is 25 cents, it would be 5 years over a 5-year
period.
Mr. Perry. Right.
Mr. Mortimer. And under our estimates, it is $9 a month. So
we are talking about $104 a year. And Mr. Spear talked about
the $1,500 that Americans of all economic levels are losing
because of inadequate road conditions and sitting in
congestion. So we just did the math and said, look, this is
something that, while it may be regressive in one sense of
collection, the benefits outweigh the regressive nature of
collecting the fee. Infrastructure is an asset that we all
benefit over many years, so the regression upfront is more than
paid for when the reality is we get modern infrastructure and
people's mobility improves.
Mr. Perry. And certainly, coming from Pennsylvania, we have
got a lot of old infrastructure, a lot of roads, and I am on
this committee because I want to be, and I believe it is
constitutional that the Federal Government is involved. But I
struggle with this, and my figures are a little different. I
come up with $285 a year per household additional on gas, which
maybe it is not to some people certainly in this town, but it
is a lot to a lot of people in the district that I represent
and hope to continue to represent.
Let me just ask you this. You know, I think that most
people acknowledge that they benefit from a robust
infrastructure regardless of how much they use it and they are
willing to pay for it, but they want it be as efficient as it
can be. And I would say, even with the increases, if we can
show something on the other side of the ledger which would be
much more palatable to people if you said to them, look, we are
going to take more of your pay at the pump or at the--you know,
if it is electric vehicles or what have you, but we are also
going to reduce the cost or increase our efficiency.
There are a couple laws in particular that I am interested
in the national chamber's position on. Of course, the
prevailing wage law hasn't been changed since 1935. The
threshold is $2,000 since 1935, and my estimates, that the
average wage is 22 percent higher than the actual market rate.
So it is not really prevailing if that is the case, and people
can dispute that, but I think it is hard to, at least at some
point, not acknowledge that it is higher than the market rate
and that labor costs are about 50 percent of construction
costs. And with that, the requirement tends to inflate the
costs by anywhere from 7 percent, I think legitimately, to
about almost 10 percent.
That one and project labor agreements where the agreement
is we will complete the job on time and not strike and, you
know, for the cost that we estimated, and to me that is a
simple contractual agreement. I agree to pay you this, you
agree to do this work. I don't expect you to not get it done on
time and I don't expect you with--you know, without unforeseen
eventualities to run over costs.
Where does the United States Chamber of Commerce stand on
those two issues, understanding that we do recognize the need
to fund the Highway Trust Fund with some measure, but there is
another side of the ledger that needs to be dealt with and
modernized as well?
Mr. Mortimer. Right. Good questions. Look, I mean, I
think--so I spent 10 years with an engineering firm, so I am
very familiar with how Davis-Bacon works. The bottom line is
most engineering firms will tell you around the country if you
are not paying the prevailing wage, you are probably not going
to get the type of workforce to do the work that you need to
get done. So whether the Congress decides to change the law or
not, engineering firms are probably going to be paying that
cost. That is my experience in my 10 years there.
The U.S. Chamber of Commerce, we are in a coalition with
organized labor, and we made an agreement that on
infrastructure issues, we were not going to talk about any
changes to the Davis-Bacon law or to project labor agreements,
on infrastructure. Other parts of the economy we can have that
discussion, but we thought it was more important to bring
organized labor together to try to get a broad constituent of
folks push this infrastructure issue, and so we had to make the
decision that, for the immediate time being, in an
infrastructure world, that we don't see the need and we don't
see the interest in Congress right now to have an adjustment in
Davis-Bacon. If that discussion happens, maybe the national
chamber will relook at that, but that discussion is not going
on in the debate, and we feel we have a great relationship with
organized labor, and part of that is because we agreed not to
talk about and not get involved in those issues.
Mr. Perry. Appreciate your response.
Thank you, Mr. Chairman. I yield back.
Mr. Graves of Missouri. Mr. Lowenthal.
Dr. Lowenthal. Thank you, Mr. Chairman and Ranking Member
Norton, for holding this important conversation. I want to
applaud members on both sides of the aisle who have
demonstrated our bipartisan commitment on this committee to
trying to fix the Highway Trust Fund and to discuss some of the
issues around that and put our country on a sustainable path
towards infrastructure investment.
My first question is for Mr. Schroer. I want to thank you
for your testimony. I was in another committee hearing earlier,
but I read the written testimony and for AASHTO's continued
work to highlight our needs for infrastructure investment
across the country. I appreciate that AASHTO continues to
include a freight bill user fee in its matrix of revenue
options highlighted in exhibit 2 of your written testimony.
As you may know, I have also introduced a bipartisan
legislation that would implement this sustainable freight user
fee to finance a freight trust fund. The DOT estimates that my
plan would send over $100 million a year just in formula
funding to freight priorities in Tennessee. What do you think
you and your colleagues across the country could do with these
kinds of resources to improve goods movement?
Mr. Schroer. Well, in Tennessee, no question. As I
mentioned earlier, we have nine interstates that travel
throughout our State and heavy truck traffic, and we are
concerned about being able to fund those and add capacity on
those roads for the increased freight movement. And it does--we
worry about safety of passenger vehicles and an increased
movement of those and throughout our State. So money that can
be used for freight movement is critical. We actually have
hired several people in our department to only look at freight
movement and projects that we can do that will enhance the
movement of freight throughout our State. So it is a critical
piece for Tennessee and across this country.
Dr. Lowenthal. Talking about a dedicated freight revenue
stream user fee, Mr. Lewis, what about in Colorado, could you
use the money?
Mr. Lewis. Oh, absolutely, Congressman. I think, you know,
we established something called a Freight Advisory Committee
about 18 months ago that brought in our partners in the
trucking industry, shipping companies, the rail industry, to
talk about what are those priorities. I mean, just think of the
geography of Colorado. The Continental Divide that separates
the Front Range from the western slope, the whole western two-
thirds of the State, all fuel, motor fuel, heating oil,
aviation fuel to get to the western slope has to cross over the
Continental Divide at a pass at 12,000 feet. Has to go, rain or
snow, and that is the path that we access the whole western
part of the State.
We are just not able to grow the economy unless we are able
to do something about that weak link in the transportation
system, and that is true throughout the State. So dedicated
freight revenues are critically important to the economic
growth of the State.
Dr. Lowenthal. Mr. Spear, I appreciate your comments in
your written testimony about a freight weigh bill fee and the
creation of a multimodal freight program. You know, I
understand the concerns of the trucking industry about the
collection of this fee, the potential for evasion or diversion,
and the use of revenues collected by the trucking industry for
other transportation modes. I understand those kinds of
concerns. I personally believe we can overcome these issues by
working with you and the ATA and other stakeholders that
actually support this proposal to craft a final proposal that
addresses these concerns that you have raised. Would you be
willing to work with us on that?
Mr. Spear. It is a much better alternative than litigation.
So yes.
Dr. Lowenthal. Also, it is sustainable, what we are talking
about, and doesn't have the issues of the highway transit fund,
which is not a sustainable funding trust fund.
Mr. Spear. Well, it could be. It could be. That is up to
you. We are here to help you. We are certainly united in
helping you get that done. But I do feel that the provisions
that you put into the FAST Act, on having freight plans, more
oversight, not to the States, but of the DOT, reviewing those
freight plans. As I said in my testimony, my opening statement,
we lose, as an industry, $63.4 billion a year sitting in
congestion. For passenger vehicles, that exceeds $100 billion.
These are measurable numbers.
Dr. Lowenthal. Right.
Mr. Spear. And so having good freight flow, good freight
plans are the starting point. You saw that in the FAST Act. Now
we need to really keep the feet to the fire and make certain
these plans are implemented and funded.
Dr. Lowenthal. And I agree with you. I concur with you. And
as I yield back, I think we should follow the money again here
too. We have to have a sustainable funding stream.
And so, with that, I yield back.
Mr. Graves of Missouri. Mr. Smucker.
Mr. Smucker. Thank you, Mr. Chairman. I would like to thank
the chairman for scheduling this hearing on this very, very
important topic, and it should be an important priority for us.
I was part of the legislature in Pennsylvania when we
recently passed the wholesale gas tax. Mr. Spear, just a quick
question first. You talk about the fee at the terminal rack. Is
that similar to the wholesale gas tax?
Mr. Spear. Very much, yes.
Mr. Smucker. And then, Mr. Spear, I would like to--you used
the term ``gotta vote,'' and I sense the frustration in your
voice. It has been a long time since we have addressed this. I
would like to just explore that a little and talk about what
happened in Pennsylvania. But if we had to vote today, what do
you think the vote count would be?
Mr. Spear. I would say, right now, we would probably have
some work to do. But that is where, you know, having hearings
like this, having this kind of dialogue, having the
bipartisanship, having this panel, which is very diverse, by
the way. There are not a lot of issues that we all agree on.
This is one of them.
Mr. Smucker. Right.
Mr. Spear. And so in terms of policy and bills, you guys
know how to write a highway bill. It is getting the votes for
the funding, and we are prepared to really work that hard.
Mr. Smucker. Well, I appreciate that. And I agree with your
sentiment. This is something that needs to be done, but we also
need to have the support to get it done.
Mr. Spear. Correct.
Mr. Smucker. And so I guess what I am asking you is this:
One of the really important components--there are, I guess, two
things that I could mention that were really, really important
in Pennsylvania. And it was passed in Pennsylvania, not unlike
a lot of other States now, that we have all talked about a lot
of States that have done the same thing. And by the way, in
Pennsylvania, it was Republican control, Republican Governor,
Republican both Houses. And it was a time when we were trying
to drive more fiscal responsibility, cutting areas of
Government. We had folks who said they absolutely wouldn't vote
to raise taxes, but were able to--you know, people came to
understand that this really is a user fee on a very important
core function of Government. You can maybe cut in other areas,
but this is a core function of Government that affects our
economy, affects the consumers. And you have already talked
about some of that.
But what was very critical was the leadership at the top,
and we happen to have a secretary who was absolutely
outstanding in driving the discussion. And I think we have that
in the President today, a President who really is focused on
infrastructure. And then it was building the public support.
And this is where I would like to--you know, at the end of the
day, we are legislators, we are here to represent the views of
our constituents. And we have a lot of constituents--I am from
a conservative district. I have a lot of folks who don't want
to raise taxes. They don't want more dollars going to the
Government. They want dollars in their own pocket. And so that
is a very important sentiment that we have to recognize.
So my question to you is, who is reminding the people of
the cost of having infrastructure that is not working? Cost in
congestion, cost in--you know, if your car hits a pothole, that
is going to cost you $100 just to fix that, and the cost in--
you see it in the trucking industry, the cost added to every
single product because of additional freight costs. If your
trucks are sitting, I don't know how many--the number you said,
but are sitting in congestion, 360,000 drivers or something
like that. I mean, that adds to the cost.
But what we saw in Pennsylvania was, you know, proponents,
all the stakeholders really had sort of a strong engagement in
reminding the public of the need and of the cost if we didn't
do anything. I am not seeing that yet here. So I would like to
ask you what you are doing now, and maybe for Mr. Mortimer as
well. What are you doing now? What do you intend to do to help
build the public support for this and to gain the support here
within the legislature?
Mr. Spear. Well, I think for starters, I said at the
outset, the President's ability to amplify this issue is
absolutely essential. He has done that, and I think we are
seeing the benefit. Having this debate, we are having it
because he made it a priority, a front burner issue.
He does need to go further. We need to really down-select
what the funding solutions are going to look like, but we also
need to shape the narrative. We have a coalition. It exists. We
have been very aggressive, not only working Capitol Hill and
with States and other stakeholders, to really capture the
narrative.
And how we explain this really does need to center on the
cost of doing nothing. People out there are paying $1,500 a
year, $1,000 spent wasted in fuel sitting in traffic, the other
$500 spent on repairing their vehicles. That number comes down
exponentially. And we are only talking about them paying in
about $110 more a year in fuel prices, OK. So they get better
roads and bridges everywhere in the United States. That $1,500,
there is your offset. Our industry, $63 billion sitting in
traffic. That number comes down.
So these are very measurable, they are real, real dollars,
and I think we have a solution that really can tell that
narrative to people and it will resonate. If they know the
money is going back into roads and bridges, they are willing to
pay for it. We have seen polling that has evidenced that.
So we obviously have work to do. We need to shape this
landscape up here, need to help you get the votes. We are ready
to do that. We think the votes are there.
Mr. Smucker. I know I am out of time, Mr. Chairman. Just
one quick followup to that. I agree, and I think we have
homework to do. This is something we need to continue to push.
But I think the role that you all can play in this is
absolutely critical. You have described it very well. And from
my perspective and from what we saw in Pennsylvania, I think we
can't do it without that kind of engagement from all of you and
other stakeholders in the process.
Mr. Graves of Missouri. Mrs. Napolitano.
Mrs. Napolitano. Thank you, Mr. Chairman. And thank you to
the panel for all your testimony.
And we all agree, and you apparently agree with us. We need
more money for transportation infrastructure.
Mr. Spear and Mr. Mortimer, the businesses you represent
depend on reliable, congestion-free roadways and infrastructure
to spur economic productivity. My State of California recently
passed a major, major bipartisan transportation bill with two-
thirds vote of our legislature, known as SB-1, and provides $54
billion in infrastructure investment over the next decade. SB-1
is paid for with a 12-percent gas tax increase and increased
fees on energy-efficient cars, since they are not currently
paying their fair share of use of the highway.
Do you support the California infrastructure package, SB-1?
Because there is an effort to repeal the package. And will you
be opposed to such an effort?
Mr. Spear. Taking a State-by-State approach is very, very
difficult for an industry like ours that is interstate
commerce. The platform that we would propose is very much a
Federal one, because we move State to State. We are in and out
of California all the time.
California does have the luxury of raising the kind of
revenue needed. Whether we agree with it or not is irrelevant,
actually, but you do have that ability. Most States don't. In
fact, over half the States in the United States do not have the
ability to raise that kind of cash, certainly not the ability
to administer it.
There is a Federal role. We don't believe in devolution. We
think there is a constitutional responsibility of this body,
this legislative branch, to fulfill when it comes to interstate
commerce. So we would look at working with State to State by
having a strong federally funded program and administrative
capability to ensure that all States have the ability to do it,
not just California.
Mrs. Napolitano. Thank you.
Mr. Mortimer.
Mr. Mortimer. Yes, Congresswoman. So the U.S. Chamber of
Commerce, again, like Chris, we are very focused on the Federal
and the interstate connection there and the interstate
commerce. That being said, I believe that the California
chamber and others have been very opposed to any effort to
repeal that, because my understanding is the California
business community was the one that helped enact that. So I
will let them speak for themselves.
But, again, from our perspective, we are trying to get into
a situation where we need to modernize our infrastructure. It
is going to take all the stakeholders, both Federal, State and
local, to bring more resources to the table. And so we need to
have that discussion and we need to really think through these
things.
Mrs. Napolitano. We addressed that. California took care of
that.
Mr. Schroer and Mr. Lewis, the Trump administration's plan
calls for more State investment, but prohibits State
governments from setting local hire preferences on
infrastructure projects. Most taxpayers believe that when they
are paying for a public transportation project, they should be
given a preference on jobs associated with the project.
As representatives of Tennessee and Colorado DOTs, do you
believe you and other State DOTs should be allowed to set local
hire preferences for your citizens that are paying for the vast
majority of the State projects?
Mr. Schroer. Do you want to take that one? I will be glad
to answer it. Go ahead.
Mr. Lewis. Thank you, Congresswoman. I think that there is
a balance. We have a major project in Colorado right now on
Interstate 70. It is a $1.2 billion renovation of Interstate 70
between Denver International Airport and downtown. We were able
to work with the USDOT and the Federal Highway Administration
on a pilot program that allowed a percentage of local hire.
It was very important to the community that--we were a
disadvantaged community that this project is going through--
that we have a training program and a hire program within that
affected community. And it was very effective in getting
support from the community on moving the project forward.
But I do think that there--so I support that. I think we
need to be careful not to become islands, because it is the
United States of America.
Mrs. Napolitano. Right.
Mr. Schroer. In Tennessee, we have not pursued that option.
I will say that we have a lot of work going on. We actually
have almost full employment in the State of Tennessee, which
makes a big difference, and also then makes it sometimes
difficult to man the projects that we are doing. We do
entertain quotes from outside of the State contractors, and
they bid as they would normally. And we are a low-bid State, so
we look at that.
But I think it is important to know that the cost to bring
in people from other States to do work is part of the process,
and our local contractors and workforce actually have a
competitive price advantage because they are just that local.
Mrs. Napolitano. Well, Mr. Chair, I have run out of time,
but I had another question. May I go on?
This is for Mr. Schroer and Ms. Lee. In addition to
California passing the $54 billion infrastructure package, the
county of L.A. has recently passed two transportation
measures--this is the county--to provide $120 billion in
infrastructure over the next 40 years. The voters approved it
by 70 percent. The most recent infrastructure sales tax
implemented was last year.
I am concerned that the administration's infrastructure
plan significantly penalizes State and local governments that
raised revenues prior to 2018. Not only do States and locals
that recently passed this infrastructure package score poorly
when rated by the plan, the administration limits the projects
to qualify for only 5 percent or $5 billion out of the $800
billion for new incentive projects.
Well, we share the concern, and I am sure you would too,
that the States have done the right thing, and yet they are
being penalized and should be rewarded instead.
Ms. Lee. Yes. It seems like it is counterproductive to
penalize the States that have been able to find the funding and
be able to move forward and actually make those investments in
infrastructure. So it seems like this is one of those
situations where there is no need for the Federal Government to
weigh in against those States that have been able to find that
funding.
Mrs. Napolitano. Thank you.
Mr. Schroer. So Tennessee is one of those States that have
passed new revenue. We did it last year. There are 31 States
that have done that. AASHTO for sure believes that we have to
be given credit for that. I know the President's package
supposedly has a clawback provision where credit is given for
States that have passed laws to increase revenue for the last
several-year period. We haven't yet seen the formula. We hope
that that is part of the President's package, if that were to
pass, so that we get credit for what we have done.
Mrs. Napolitano. Thank you, sir.
Thank you, Mr. Chair.
Mr. Graves of Missouri. Mr. LaMalfa.
Mr. LaMalfa. Thank you, Mr. Chairman.
Being a fellow Californian too, I hate to have to speak
against my dear colleague there, a very gracious lady, but on
this gas tax that was foisted upon California taxpayers, road
users, indeed, it really wasn't bipartisan when only one State
senator and zero members of the assembly Republicans voted for
the measure, and that we know already 30 percent off the top of
it is going to go for things besides the highways. None of it
will add any extra capacity or any extra lanes.
So, as the national chamber fellow pointed out, the folks
that were from business that were in favor of it were those
that are getting the project work and labor as well. That is
why the voters are going to have a chance, hopefully, to speak
on it and have a chance to speak on these increased taxes as
well, because, you know, if we are talking--if that has already
happened at the State level and now the Federal level wants to
double-whammy them with additional gas tax, this affects real
people out there. You know, if it is going to be $300 to $500
per household and then another round at the Federal level, real
people pay for this.
So what never gets talked about much around here is how do
we decrease the cost of building a mile of highway or repairing
a bridge; you know, even our President is talking about that.
Why does it take so many years to study, permit, and all that?
So that is where the frustration lies. And when people--you
know, when people pay at the pump, they believe those dollars
are going to their highways, yet we know the highway transit
fund is being used for much urban transit, for trains, for
buses, things that don't pay back into it.
So since the trust fund is paying out into several
different types of things that are nongas transportation and
many people use these methods, what are ways--and I will throw
this to Mr. Schroer or Mr. Lewis--we can actually increase the
share that these other users--you know, we talked about
electric cars a little bit, OK. Well, California's new law
doesn't even kick in until I think 2020, and it is only $100
per electric car to pay into that system. So they are really
not paying any kind of fair share. It seems to be the focus, to
me.
But I would like to hear from you, is a much heavier load
by the electric cars that are going to be coming more and more
into play, it seems, especially with the legislature trying to
ban fossil fuel vehicles by 2040 in California, or we should
quit directing money to those that are not paying it in the
mass transit. They should be finding other ways to tax that in
order to pay their fair share, instead of a so-called highway
fund not going for highway dollars. Please, Mr. Schroer or Mr.
Lewis.
Mr. Schroer. Well, I agree that we should look at--we think
that everybody who uses the roads ought to pay for their fair
share. And I think the State of Tennessee has done that in
their bill. I do think the issue of vehicle miles traveled is
one of those issues that we are going to have to look at as
more and more cars become electric or other sources of fuel. It
is a progression, as we have talked about today.
I will say on the transit side, I understand there are lots
of concerns with regard to transit, but I also will tell you
that if you use transit, you take cars off the highway. And
when you take cars off the highway, there is less wear and tear
on those roads. And there is an inconvenience to riding
transit, much different than having a personal automobile. So
there is a personal inconvenience that people use----
Mr. LaMalfa. Well, that completely ignores the rural part
of the country here where there is no transit between Richvale,
California, and Montague, California.
Mr. Schroer. So in Tennessee, Congressman, we fund transit
in all 95 counties. And so it is an integral part of our rural
areas to get people to the doctors and hospitals that don't
have opportunity to transit. So we use that money. Almost all
that money is Federal dollars, comes from FTA, and we put it to
good use, and people in our rural counties use it a lot.
Mr. Lewis. Congressman, I would support everything my
colleague has said. I think, you know, Colorado is sort of a
microcosm of the rest of the country, very dense urban areas,
lots of congestion, but vast parts of the State are open. And
our State transit system is critical to servicing those rural
parts of the State, making a connection to the Denver metro
area for hospital and other services. So it is an integrated
system, one that is growing in Colorado. And as Mr. Schroer
said----
Mr. LaMalfa. Let me touch on Colorado a little bit. How
have you handled the out-of-State drivers and the drivers that
are using off-road, private roads, farming, you know, timber
areas? How has Colorado handled that with its VMT pilot? You
know, again, out-of-State people aren't going to--how do you
deal with that?
Mr. Lewis. Well, again, this was a very small pilot program
that we did over the course of the last year. And we gave users
an option to whether to use a GPS way of measuring their
mileage or just strictly by the odometer. With an odometer
reading, you don't know where you are driving. You don't know
what kind of road you are on.
Mr. LaMalfa. For out-of-staters, though?
Mr. Lewis. There were no out-of-staters in the system, but
if you were driving out of the State--and no money was
collected, this was just a pilot. So if a vehicle was driving
in Kansas with just an odometer reading, you would be paying
for the mileage you used in Kansas; whereas, with a GPS, it
would know you are at the border and you would not be charged
for that use of the Kansas roadways. You would only be charged
for the use of the Colorado roadways.
Mr. LaMalfa. So you have a bureaucratic nightmare for the
off-roaders or people traveling out of State or you have a
privacy concern--I think Mr. Spear made a mention--on GPS
following you around where you are going, right?
Mr. Lewis. I think the concern about privacy, that is
something that has been a longstanding concern. It was a
concern in Oregon when this was first proposed and implemented.
The people that used in the pilot--and we specifically went to
folks that were not in favor of a usage tax, a road usage
charge. They found it very convenient and that their privacy
concerns were largely overcome. I think all of us----
Mr. LaMalfa. Really?
Mr. Lewis. It was. They were.
Mr. LaMalfa. How did you do that, beat them over the head
or what?
Mr. Lewis. No. I think they felt confident that their
personal data was protected and that they were not----
Mr. LaMalfa. By this Government?
Mr. Lewis. Yes.
Mr. LaMalfa. The people who can't keep your health records?
I mean, that is funny. I am sorry. But it is an intrusion on
that. And for the off-roaders, I just see that, you know, the
easiest thing you do is pay at the pump, right? There are a
couple different methods you are talking about paying.
All right. I am over time here, but I haven't gotten any
closer to being a VMT advocate than I have--thank you, Mr.
Chairman. I will yield back. Sorry.
Mr. Graves of Missouri. Mrs. Lawrence.
Mrs. Lawrence. Thank you.
I must say this conversation is much, much needed. I can
tell you my frustration is that we keep talking about it. It is
amazing how we have consensus that we need to create policy and
we need to find the funding, but we keep going in a circle.
To that end, Mr. Lewis, can you briefly describe the
mileage-based fee system and discuss what challenges await in
trying to implement such an alternative to gas tax? And if you
could, while you are talking about that, discuss whether the
gas tax should be eliminated if the mileage-based fee system is
implemented.
Mr. Lewis. Right. Thank you, Congresswoman. There are still
a number of challenges. I think we have all testified today and
many of the questions of the committee have centered around the
existing system that we have today, which is collecting a user
fee through the form of a gas tax. There is a very robust, more
than a century-old system of collecting that user fee.
I think the challenge that we are facing is that in the not
too distant future, and we can have debates about how far away
that future is, the more that electric vehicles and other fuel
vehicles are making up the fleet, we will not be collecting
those user fees through the existing gas tax. It isn't going to
happen tomorrow, but it will happen.
And I think what we have to do is work on a transition plan
that as the fuel tax becomes less viable, that we already have
in place a system to replace it. And it isn't going to be, you
know, midnight on a particular year on December 31 that we
switch from one to the other. I don't see that as being the
way. I think there will be a transition, over the course of a
number of years, in order to move off of the existing fuel. It
doesn't change the need we have today, and the need we have
today is very real and the existing system of revenue is what
we have.
Mrs. Lawrence. I thank you for that, because I think we
keep getting caught in what we can't do, what is not happening,
what is not working, to actually start moving the needle down
the road. Because cars that don't use fuel is a reality. I am
from Detroit. It is coming. So I am very intrigued by that.
Mr. Spear, your testimony makes some strong arguments
regarding the negative impacts of tolling. You cite that
expansion of tolling is far more regressive than raising the
existing user fee. Can you elaborate on the equity and the
impacts of tolling?
Mr. Spear. Absolutely. And I appreciate the question. There
is a lot of talk about public-private partnerships. When we
speak about roads and bridges, that is really code for tolling.
Mrs. Lawrence. Yes, it is.
Mr. Spear. Tolling is only profitable if you have a lot of
throughput, meaning a lot of people moving through there.
Mrs. Lawrence. Exactly.
Mr. Spear. That is only applicable--we could measure that
very easily as a business model. You can see what is profitable
and what is not. It is really only applicable on 1 percent of
the roads and bridges in the United States. So for the rest of
the country, the 99 percent, it is fake funding. It doesn't
exist. So it might work in certain venues.
Mrs. Lawrence. You are preaching to the choir, but thank
you.
Mr. Spear. Yeah. Now, it might work in other modes, but
specific to roads and bridges, we believe that this is not a
viable solution. And it is extraordinarily regressive, costs up
to 35 cents on the dollar to collect.
Our Build America Fund, 20 cents over 4 years, $340
billion, less than 1 cent on the dollar to administer, is the
most conservative, immediate, and efficient way to raise
revenue, and it shores up the trust fund and it is deficit-
neutral.
Mrs. Lawrence. Another question I wanted to add as kind of
a comment, when we are looking at a comprehensive plan to fund
an investment in our infrastructure, the toll and the private-
public partnerships repeatedly come up.
If we can move something right now, today, the transition
plan that you talked about, so that we are actually recouping
funds for the roads, but also as we continue to change the way
we fuel our vehicles, we have it. Is that something that you
think that this body--and I am very impressed by your
diversity. I was a mayor, so I look at how much it costs to
build a road. I look at the condition, how many people are
using it. And God help me, when the potholes, which they are
there now, you get beat down to the ground because of the
potholes.
So what is the one thing, if you could just give me that,
that you think that we can attack right now that we can bring
forward that you think would get the biggest consensus so that
we can actually start moving in the right direction?
Mr. Schroer. I will be happy to--I think we have to address
the shortfall in the Highway Trust Fund first. I think that is
what we have to do. I think that is our number one criteria
today. We have got a recision that we are getting ready to
face, it is a $8 billion recision that will affect Tennessee
significantly and as to every other State. If we don't address
that, then we are not going to get to the core issues that we
have. And it allows States to put their money on projects that
they feel are most important to them. I was a mayor as well; I
understand that.
And it needs to be as close to the States--a decision on
those projects needs to be as close to the State as possible.
And that means it shouldn't be in the Federal Government's
hands, it should be in the States' hands, working with local
communities on projects that are most important to them.
Mrs. Lawrence. Mr. Lewis.
Mr. Lewis. And I would think that as part of a--if there
were a funding increase to go forward, I think tying to that
would be some sort of transition plan. You know, a time-based
study that would say, based on the saturation into the fleet,
how quickly could we move to an alternative to the gas tax?
Because until we put a plan together, it is always the future.
It is always tomorrow. And it will be tomorrow tomorrow. So I
think there is some sort of----
Mrs. Lawrence. I am willing to work with you all. Thank you
so much.
I yield back.
Mr. Graves of Missouri. If there aren't any further
questions, I want to thank our witnesses for all being here.
You all gave great testimony. Obviously, this is a very, very
big problem that we are going to have to tackle. And I think
you saw the bipartisanship that was displayed here in this
committee, which we are very proud of on top of that, trying to
find solutions.
With that, I would ask unanimous consent that the record of
today's hearing remain open until such time as our witnesses
have provided answers to any questions that may have been
submitted to them in writing, and unanimous consent that the
record remain open for 15 days for additional comments and
information submitted by Members or witnesses to be included in
today's hearing. Without objection, that is so ordered.
If no other Members have anything to add--and there aren't
any--this subcommittee stands in adjournment.
[Whereupon, at 12:30 p.m., the subcommittee was adjourned.]
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