Wanted: Leaders who make tough decisions on transportation funding

By Saba Long

Legislators in Washington, D.C. approach funding transportation infrastructure the same way the Falcons approach a fourth quarter deficit – by ignoring it until the clock is about to run out.

U.S. Transportation Secretary Anthony Foxx and eleven of his predecessors penned a letter to Congress on Monday urging tmembers to reconsider their approach to dealing with the shortfall of the Highway Trust Fund.

Foxx wrote: “In recent years, Congress has largely funded transportation in fits and starts. Federal funding bills once sustained our transportation system for up to six years, but over the past five years, Congress has passed 27 short-term measures. Today, we are more than a decade past the last six-year funding measure.”

This level of stopgap governing is an abdication of leadership.

It is of no use but to generate headlines and partisan pandering that does nothing for the person driving over a structurally-unsound bridge.

Equally appalling is the pitch for pension-smoothing to fill in the funding gap.

What is pension-smoothing? According to Leonard Burman, a former official at the Congressional Budget Office, it is as a way companies can postpone contributions to their pension funds.

This means that their tax deductions for pension contributions are lower now, but the actual pension obligations don’t change, so contributions later will have to be higher—by the same amount plus interest. In present value terms (that is, accounting for interest costs), this raises exactly zero revenue over the long run.

In debt reduction conversations earlier this year, the Heritage Foundation came out against pension-smoothing, noting: The proposal to “smooth” pension contributions would merely shift tax revenue from the future into the present while destabilizing pensions even further and increasing the risks of a taxpayer pension bailout.

Creating a corporate loophole for short-term gain and long-term pain is Washington, D.C. dysfunction at its finest.

Why not raise the gas tax? Neither party is for it. Charge for vehicle miles traveled? Too intrusive. Sales tax increase? Not happening either.

This failure to make the tough choices is not just a federal problem but also a state issue. Regardless if Congress elects to choose a short or long term funding measure, our state and local governments and transit agencies rely heavily on federal funding for transportation infrastructure projects.

In Georgia, federal assistance is upwards of 35 percent of our transportation budgets. When we sit on interstate parking lots or have to replace tires due to terrible road condition, we experience the cost of ineffectual leadership on this issue.

If local and national leaders want to do something meaningful for corporate America, forget pension-smoothing and actually fix our transportation crisis.

Let’s look at just freight.

According to the U.S. Department of Transportation, freight tonnage will increase 62 percent by 2040.

In 2006, the total logistics costs rose to nearly 10 percent of the Gross Domestic Product, after declining through the 1980s and 1990s, reflecting increases in fuel prices and increases in congestion in U.S. highways, rail lines, and ports. The DOT estimates the cost of congestion approaching is $200 billion per year for all modes of transport.

During the 2012 T-SPLOST campaign, we discussed the congestion tax – a cost commuters unwillingly pay when sitting in traffic. Imagine the cost of doing so for UPS, one of metro Atlanta’s Fortune 500 companies.

The longer government officials kick this can down the road, the worse that road becomes. These stall tactics are unsustainable, and they are a reflection of bad governing.

We need leaders who are willing to make the tough decisions.

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2 comments
writes_of_weigh
writes_of_weigh

Georgia transportation funding (at least for transit and commuter rail purposes) has an easy solution. In 2019, the lease of the State of Georgia owned Western & Atlantic right-of-way is up for renewal. The 50 yr. lease (worth little more than a $million/yr based on 1969 dollars/estimates) is currently held by CSX Corp., which has incorporated the property into it's system maps, and utilizes the line of railroad to link it's mid-western routes/traffic floes to it's southeast (Atlanta connected) network, over a more level(and thus much lest costly) routing, than utilizing it's only alternative train routing via the more "mountainous" Birmingham, AL (ex-Louisville & Nashville RR)mainline. Outside investor groups may well be in a position to increase the value of the W & A  right-of-way by starting a bidding war on the route, or conversely, the State Properties Commission could negotiate in extracting urgently needed transit route upgrades/tradeoffs(think adding Marta/commuter rail operations(to Cobb/Cherokee/Bartow/(Athens)Clarke/Walton/Fayette) linking downtown Atlanta to any of the aforementioned counties/destinations on the rest of CSX 's north Georgia network. The W & A lease renewal(not unlike NS 's lease of the (State owned) North Carolina Railroad) should reap a windfall for Georgia's dollar and rights-of-way impinged transit budget. One wonders if either candidate Carter or (Gov.)Deal is up to the task?

The Last Democrat in Georgia
The Last Democrat in Georgia

"The longer government officials kick this can down the road, the worse that road becomes. These stall tactics are unsustainable, and they are a reflection of bad governing."

...You got that right, sister.

Good article, Ms. Long.