Cargo Business News

February 2013

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16 W Capitol Watch By elaine neSSle, Senior associate, Blakey & agnew, llC President kicks off discussion over transportation funding On a cold and sunny Martin Luther King Day in Washington, President Obama spoke to the masses sprawled out along the National Mall about his priorities for his next term. Among those issues he���d like to tackle prior to leaving office was increased investment in transportation infrastructure. An issue typically trumped by headline-catchers such as social security and health care reform, the topic of our nation���s physical infrastructure had a moment of attention and elevated importance. ��� Consensus is clear that the current transportation revenue stream is drying to a trickle and becoming more inadequate by the day, but an acceptable solution has yet to appear. ��� The statement draws forth a question people in the transportation industry have been grappling with for years: how do we pay for it? Is the president���s statement revealing of a funding proposal by the administration? From the standpoint of Congress, MAP-21 is in the rear view mirror and the drafting table lays empty. An official proposal to increase Highway Trust Fund revenue is yet to be seen. Several possible solutions that are rumored to be carrying water behind the scenes, including a sales tax on gasoline (which would automatically index to inflation due to the nature of a percentage tax vs. a flat tax) and instituting a carbon tax with a portion of the revenue dedicated to transportation. Chairman of the Senate Environment & Public Works Committee Barbara Boxer has been oft quoted that she is working to find a fix prior to the expiration of MAP-21. The American Association of State Highway and Transportation Officials (AASHTO), the lobbying organization for state departments of transportation, unveiled a plan to increase revenue during the Transportation Research Board���s annual meeting in mid-January. Outgoing AASHTO Director John Horsley requested that Congress do away with the cents-pergallon federal excise tax on fuels and replace it with a sales tax on fuels. According to AASHTO, the proposal would allow $350 billion in transportation investment over a six-year period, about $115 billion more than what is projected under the current structure. Just south of Washington, the Commonwealth of Virginia���s Governor Bob McDonnell has proposed an alternative to the gas tax to solve his state���s transportation funding woes: replacing the state���s 17.5 cents per gallon gas tax with a 0.8 percent increase in the state���s sales tax. Revenue generated would be dedicated to transportation funding, and, according to the governor���s office, would provide more than $3.1 billion over the next five years, representing a $1.8 increase over what is projected under the current revenue structure. If adopted, Virginia would be the first state in the union to eliminate a state gas tax. Consensus is clear that the current transportation revenue stream is drying to a trickle and becoming more inadequate by the day, but an acceptable solution has yet to appear. While MAP-21���s expiration, September 30, 2014, is the true deadline to find a solution, transportation leaders seem eager to rise to the challenge and beat the clock. Blakey & Agnew, LLC is a public affairs and communications consulting firm based in Washington, D.C. February 2013

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