Trump budget calls for drawing private highway funding, more tolls

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Commercial Carrier Journal (CCJ)  /  May 23, 2017

A 2018 fiscal year budget plan released Monday by the Trump Administration proposes slashing the Department of Transportation’s budget by nearly $17 billion annually by 2022, as well as allowing more tolls on U.S. Interstates and boosting efforts to draw private investors to fund highways.

Trump’s proposal, “A New Foundation for American Greatness,” calls for $200 billion in infrastructure spending over 10 years. The $200 billion in outlays isn’t necessarily meant to fund projects directly, but instead to entice states, localities and private companies to inject $800 billion more into infrastructure funding.

That would total $1 trillion, the infrastructure spending figure Trump consistently called for during his presidential campaign.

Trump’s budget does not explicitly call for removing the Interstate tolling ban, but rather would allow states “to assess their transportation needs and weight the relative merits of tolling assets.”

The budget also includes other initiatives meant to lure private investors, such as a removal of the $15 billion cap on tax-exempt bonds issued to private builders by the DOT.

The White House budget proposal also says it supports greater private spending on rest areas by removing the current restriction on commercial rest areas.

According to an outline issued by the Trump administration, private companies could “construct, operate and maintain interstate rest areas.”

Trump said he will release more specifics on his infrastructure plan this year.

The House’s Congressional Progressive Caucus, a group of Democrats, said they, too, plan to release an infrastructure proposal. It  would counter Trump’s push for greater private spending by calling for ramped-up federal spending on highways and other infrastructure projects.

Trump’s budget proposal, however, faces tough hurdles. Congress hasn’t passed a budget in several years, instead passing resolutions that continue prior-year funding levels over short-term periods. If Congress were to tackle a true 2018 fiscal year budget, it likely would take a different approach than Trump’s plan.

Trump’s budget slashes federal spending overall, including big cuts to Medicaid, SNAP (food stamps), disability and other social programs.

The DOT’s annual budget would drop from an estimated $79.4 billion for the 2017 fiscal year to an estimated $62.3 billion in 2022.

The budget also calls for tax cuts and a balanced budget, according to projections from Trump’s team. However, achieving the balance requires an aggressive 3 percent annualized growth in GDP over the next five years — a high mark for an economy that’s seen only 1 percent to 2 percent growth since the Great Recession.

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War of Words Erupts over Trump's Call to Allow Interstate Tolls

David Cullen, Heavy Duty Trucking  /  May 23, 2017

A 39-word statement in a just-released 6-page “fact sheet” on President Trump’s “infrastructure initiative” within his overall budget proposal has brought the toll vs. no-toll contenders out swinging.

The bullet item calls for reducing the restriction on tolling of Interstate highways so as to “allow the States to assess their transportation needs and weigh the relative merits of tolling assets.”

In the next sentence, the administration said that it also “supports allowing the private sector to construct, operate, and maintain interstate rest areas, which are often overburdened and inadequately maintained.”

The International Bridge, Tunnel and Turnpike Association was quick to praise the Trump Administration for seeking to draw down the restriction against Interstate tolling that dates back over 60 years.

“Today, the Trump Administration became the second straight White House to call for easing the ban on Interstate tolling and giving states the maximum flexibility needed to make the best funding decisions for their local transportation projects,” said Patrick Jones, IBTTA executive director and CEO.

Jones said IBTTA wants “Congress to immediately join with the President to reduce burdensome regulations that prevent state and local governments from utilizing all available funding mechanisms. Toll financing may not be the answer for every highway, bridge, or tunnel project in the country, but the power of tolling is proven and effective. 

“Combined with the President’s proposed investment in infrastructure, tolling can provide valuable resources to the states to tackle transportation infrastructure projects,” he added.

Not buying the administration’s proposal was the Alliance for Toll-Free Interstates. “We are very concerned about how heavily the Trump Administration wants to rely upon public-private partnerships to fund our roads and the idea of loosening the federal restriction on tolling interstate highways,” said ATFI Spokesperson Stephanie Kane. “As outlined in the proposed budget, leveraging $200 billion public dollars into a $1 trillion transportation plan will only be possible through widespread tolling to produce private sector profits.”

Kane also argued that tolls are “the worst funding mechanism available and are a highly inefficient use of funds, as a significant portion of every dollar collected – typically 12-20% even with all-electronic tolling – goes to administrative costs and to private sector profits rather than building and repairing roads.

“Tolling existing interstates is an idea that has been already considered and rejected,” she continued. “The now 19-year-old pilot program to toll existing interstates has failed in every state that has considered it. When the traveling public, businesses and local governments learn more about potential tolls in their area, they resoundingly reject the idea. Congress should heed this warning and not expand tolling.”

Natso President and CEO Lisa Mullings also expressed umbrage at the twin tolling and private rest-stop funding proposal.

“The proposals to toll Interstates and commercialize Interstate rest areas threaten the businesses that serve Interstate highway travelers, such as travel plazas, convenience stores and restaurants,” Mullings said. “Oftentimes, these businesses are the economic backbone of off-highway communities; these proposals therefore not only harm private companies but also thousands of local tax bases throughout the country.”

Mullings also said that while “public-private partnership sounds innovative… what we need to understand is that public-private partnerships in the context of surface transportation are nothing more than toll roads. It would be great if we had a magic pot of money to pay for construction and maintenance of our roads. We don't. Under this proposal, the same people who have been paying fuel taxes to build and maintain these roads will have to pay tolls, too.”