New legislation focuses on ten-year, $100 million dedicated freight funding plan

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https://www.logisticsmgmt.com/article/new_legislation_focuses_on_ten_year_100_million_dedicated_freight_funding_p

Originally Published in Logistics Management

Late yesterday afternoon, Rep. Alan Lowenthal (D-CA) introduced legislation with an eye on creating a dedicated revenue source that will direct more than $100 billion over a ten-year period to rebuild crumbling United States infrastructure and to also bolster the national economy from a competitive perspective.Entitled “The National Multimodal and Sustainable Freight Infrastructure Act,” Lowenthal’s office said that this bill serves as a continuation of the success of the FAST (Fixing America’s Surface Transportation) Act in ensuring what it called continued investment in the goods movement network.This would be done by raising more than $10 billion per year that would be allocated for dedicated U.S. freight-related infrastructure projects, focusing on multimodal projects along with projects focused on the rebuilding of aging infrastructure and also relieving freight transportation system bottlenecks.“This legislation establishes a waybill fee on the cost of moving goods,” Lowenthal said on a media conference call yesterday. “It puts the money into a trust fund to provide funding for freight infrastructure projects nationwide. We need to move towards a transportation system that embraces the user-paid model. That is the logic behind the diesel taxes, but over the years we have seen increasing challenge from rate of fuel efficiencies and the importance of intermodal connections. Our current revenue streams are insufficient but modernizing the gas tax only brings us so far. A waybill fee is practical, is mode neutral, and it adapts to new circumstances.”And unlike the gas tax, he said it treats diesel, fuel cell, and electric power all the same, adding that many freight experts, including the Eno Center’s Freight Working Group, have endorsed this concept as a path forward for funding infrastructure.As for how the bill works, Lowenthal explains it establishes a freight trust fund by placing a 1% fee on domestic surface goods movement, which raises more than $10 billion each year and will grow over time. It will be split between a formula program and competitive freight grants, with states receiving millions to address freight needs.As an example, he said California would receive $410 million per year in formula funds alone each year, formula funds able to support any project identified as a state freight plan. And competitive grants would fund projects identified as those of significant freight movement with 5% set aside for zero emissions projects.“This approach builds on the FAST Act, using the same freight plans as a guide for investment,” said Lowenthal. “I am impressed with the comprehensive work states have done to identify key freight corridors that needed investment. My proposal drives funding to those projects.”This bill was firmly supported by the Washington, D.C.-based Coalition for America’s Gateways and Transportation Corridors (CAGTC).CAGTC Executive Director Leslie Blakey said on the call that freight needs over the last 50 years have seen benefits through things like the Highway Trust Fund, the building of the interstate highway system and other methods, but more needs to be done.“We have not paid attention to the infrastructure that moves our goods and pieces of infrastructure where modes come together and infrastructure and supply chain projects cross state lines…or through our ports or gateways,” she said. “Those needs have continued to languish, as demand for moving goods has grown inordinately over time. We are paying for this system through the costs of congestion, the costs of dysfunction, the costs of poor services that wind up costing manufacturers’ just-in-time systems, as well as retailers and other providers with a drag on their businesses. We are actually paying for all of this dysfunction probably at a much higher rate than if we actually enacted a fee that was directly attributed to the improvement of the system.”Blakey said that this legislation provides an opportunity improve the system through dedicated freight funding in a systematic and logical way, focusing on the most urgent and meritorious projects first and building out U.S. freight infrastructure so that the nation has a truly world class multimodal system that fully supports the needs of U.S. commerce. And she added it would provide benefits way into the future far larger than paying a fee will demand over the next ten years.This bill follows recent news of a recent meeting between President Trump and House Majority Leader Pelosi and Senate Majority Leader Schumer, in which they agreed to pursue an ambitious and sorely needed huge package on infrastructure improvements that supporters say is “big and bold” and could amount to as much as $2 trillion in new spending.What’s more, timing is urgent, given that the most recent report card on America’s infrastructure from the American Society of Civil Engineers (ASCE) rated America’s rail system with a B, bridges and ports with a C+, and roads with a D for infrastructure system grade of D+. The ASCE stressed that, “Our nation is at a crossroads. Deteriorating infrastructure is impeding our ability to compete in the thriving global economy, and improvements are necessary to ensure our country is built for the future. While we have made some progress, reversing the trajectory after decades of underinvestment in our infrastructure requires transformative action from Congress, states, infrastructure owners, and the American people.”