ICYMI – Baltimore Sun Editorial Supports Delaney Infrastructure Bill as Part of Long-Term Infrastructure Solution
WASHINGTON – On April 10, 2015 the Baltimore Sun published an editorial supporting Congressman John K. Delaney’s Partnership to Build America Act (H.R. 413) as part of a path to a comprehensive, long-term infrastructure solution.
In 2013, Delaney first introduced the Partnership to Build America Act, which creates a $50 billion dollar infrastructure fund that is capitalized by selling bonds to private companies. In exchange for purchasing these bonds, the companies will receive a one-time tax break on repatriating their overseas profits.
Delaney has expanded the framework of the Partnership to Build America Act with the Infrastructure 2.0 Act. The Infrastructure 2.0 Act also creates the same $50 billion dollar infrastructure fund and also fixes the Highway Trust Fund shortfall for six years, using revenues from international corporate tax reform. Delaney’s solution was later included in the President’s Budget and the Department of Transportation’s Grow America plan. The Infrastructure 2.0 Act also establishes a bipartisan and bicameral commission tasked with developing a permanent solvency solution for the Highway Trust Fund.
The Baltimore Sun’s editorial is copied below and is available online here:
Congress on the budget clock, again
By Editorial Board, Baltimore Sun, April 10, 2015
Wouldn't it be great to live with 1993 prices? A dozen eggs was less than a dollar. First-class postage was 29 cents. And the cost of a gallon of gas was $1.13.
Of course, average income was significantly less 22 years ago, too, at slightly over $30,000 per household, but that tends to be forgotten. Say what you will about the first year of Bill Clinton's presidency (when the unemployment rate 6.9 percent, much worse than today's), but at least the prices were good by 21st century standards.
Obviously, you can't turn back the clock. Producers can't sell eggs for that price because the cost of raising hens is much higher today. The U.S. Postal Service faces much greater expenses, and even with the recent spike in production of oil and a possible nuclear agreement with Iran, gasoline prices aren't likely to sink to 1993 levels either.
So why would anyone believe the United States can have its highways, bridges and public transit for 22-year-old prices? But that's essentially what we're stuck with as Congress hasn't changed the gas tax — the primary source of revenue for the federal Highway Trust Fund — since it was last increased in 1993.
Most taxpayers probably don't even realize this. Sales taxes, property taxes, income taxes and many other sources of revenue used to pay for government services increase with inflation. But the federal gas tax still returns the same 18.4 cents per gallon (24.4 cents on diesel) that it did in 1993. Because of this loss in buying power (as well as improved fuel economy of vehicles), the federal highway fund is set to go bankrupt in a matter of weeks.
There are any number of short-term fixes available between now and the May 31 deadline. It's entirely possible Congress might do what it's done in the past — take money from elsewhere to keep the transportation budget limping along for another six months to a year or two. But it's time that such short-term fixes — which amounts to borrowing money from China to pay to patch domestic pot holes —come to an end.
Transportation Secretary Anthony Foxx has begun promoting the administration's $478 billion, 6-year plan which uses a one-time tax on overseas profits to augment gas tax receipts. Rep. John Delaney of Maryland has gotten some interest in tapping that same well of repatriated profits to finance infrastructure through a somewhat different mechanism. Still, what's missing from either approach is a reality-check on the gas tax and a commitment to the much larger sum this country needs to invest in its crumbling transportation infrastructure.
Granted, the federal gas tax isn't popular, particularly in Red States. But that seems to be mostly a problem for politicians and not the public. Opinion surveys show voters are willing to pay more in taxes for improved roads and bridges. One poll by AAA found 68 percent of Americans felt that way, and a majority would be willing to pay $10 more per month (which, incidentally, would mean doubling the gas tax).
But there's a simpler answer. Don't immediately raise the gas tax from 1993 levels. Instead, first take advantage of new revenues related to corporate tax reform and repatriation of profits as President Obama and Congressman Delaney have proposed. Then allow the gas tax to automatically adjust with inflation annually in future years. Maryland's most recent gas tax hike included just such a mechanism. It simply puts the tax on a level playing field with most other taxes.
These periodic increases would be so small as to be irrelevant, particularly when gas prices rise or fall a dime or more in a week. But more important, Congress will have provided a more reliable and responsible fix to its aging transportation infrastructure, a growing problem that is costing consumers much more in lost time and economic opportunity than any advantage gained by keeping the federal gas tax at 1993 levels.
In the meantime, the clock is ticking. Should Congress fail to act and the trust fund become insolvent, officials estimate that 6,000 transportation construction projects may be stopped in their tracks along with 660,000 jobs. Corporate tax reform and the indexing of the gas tax would seem to be modest sacrifices to avoid a major road block.
##