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Conservatives See Highway Trust Fund Fight as Road to State Control of Transportation Spending

Conservative groups and Republican lawmakers want to revive a policy debate over the federal role in transportation policy as Congress gets ready to debate a long-term reauthorization of highway and transit programs.

The 2012 surface transportation law (PL 112-141) expires at the end of September, but money for projects dries up earlier than that, in July. Congress will almost certainly have to pass a short-term patch sometime in the next few weeks. In the Senate, leaders are looking at a six-month bill that would carry the program until the lame-duck session after the November elections. In the House, Speaker John A. Boehner said last week he’s looking for a “nine- to 12-month” solution, when a new Congress will be in place.

For conservatives, that will be the time to make another attempt to ease the federal government out of transportation decisions and give states more authority to spend federal money without following Washington’s guidelines and formulas so closely. That’s the case they already are making in proposals from the right addressing the impending shortfall in the Highway Trust Fund and the move toward the broader highway bill.

“You’re seeing the groundwork being laid now for what will become a real conversation about the future of the federal role in surface transportation,” said Dan Holler, a spokesman for Heritage Action for America, the political arm of the conservative Heritage Foundation. “Our point is the people up here aren’t the best ones to make decisions. Let’s cut out the middle man and move this back to the states where it belongs.”

Conservatives are rallying around bills introduced last year by Sen. Mike Lee, R-Utah, (S 1702) and Rep. Tom Graves, R-Ga., (HR 3486) that would phase out the federal gasoline tax and turn over most of the federal transportation program to state legislatures. Their bills would reduce the tax from 18.4 cents per gallon to 3.7 cents per gallon over five years. States could then decide whether to make up the difference by raising their own gas taxes. They would also have more authority to decide how that money would be spent.

“All states and localities should finally have the flexibility to develop the kind of transportation system they want, for less money, without politicians and special interests from other parts of the country telling them how, when, what and where they should build,” Lee has said of his plan.

Debate on the Gas Tax

Those calls are coming even as some lawmakers are trying to stimulate an effort to raise the federal gas tax for the first time in 20 years. Republican Sen. Bob Corker of Tennessee and Democratic Sen. Christopher S. Murphy of Connecticut joined together last week on a plan to raise the tax by 12 cents over two years and then index it to inflation, triggering a larger debate about whether the mechanism even makes sense in an era of greatly improving fuel efficiency.

The conservatives are arguing, however, that the fuel tax is misguided on a more fundamental level.

“It makes no sense that we have a federal gas tax where the money goes to Washington and then the states have to fight over how we get it back down,” said Barney Keller, a spokesman for the Club for Growth, whose members advocate limited government and low taxes. “It doesn’t make sense. It’s a ridiculous system. It leads to a bigger bureaucracy and more inefficiency.”

Graves’ House bill has picked up 41 co-sponsors. Lee’s companion bill in the Senate has four.

Rep. Kevin Brady, R-Texas, one of the co-sponsors, said he did not think the Graves measure would get very far, but it could serve as a marker for future talks.

“It’s still pretty bold for a lot of members. It will probably take some time to build adequate support for it,” he said. “We need to find a long-term fix. I think that’s the position of the Republicans in the House and I think states are eager to capture more dollars.”

Brady said he envisioned a reduced, “targeted” federal role in transportation policy, dealing most with projects of national significance or with transportation research.

Another co-sponsor, Rep. Blake Farenthold, R-Texas, said coupling smaller federal gas taxes with the ability of states to raise their own revenue is “a possible alternative.”

“The struggle between what’s appropriate for the federal government to do and what’s appropriate for the states to do is what we’re going to hash out in committee,” said Farenthold, a member of the Transportation and Infrastructure Committee.

The Haves and Have-Nots

What’s behind much of the talk about devolving power to states is the concern among some large, high-population states that they send more in gas taxes to Washington than they get in funding.

But transportation advocates say that distinction is irrelevant now that the transportation program relies on billions of dollars of cash infusions from the general fund because the motor fuel tax revenue is declining. In effect, there are no donor states anymore, said David Goldberg, a spokesman for Transportation for America, a bipartisan group that advocates “smart, homegrown, locally driven transportation solutions.”

“The truth,” Goldberg said, “is that everybody’s gotten more back than they’ve put in from the federal gas taxes because of the transfers from the general fund over the last five or six years.”

Also, making states responsible for their own transportation networks could have serious national consequences. States such as Montana or North Dakota that carry truck traffic to and from the West Coast are crucial for commerce and homeland security purposes. But they would not be able to maintain their current level of infrastructure if they were forced to rely on their own tax revenue.

“You’ve got a lot of your large-landmass, low-population states where it would be hard for them to actually raise enough gas tax revenue at the state level to replace what the federal funding brings to that state,” said Jim Tymon, director of program finance at the American Association of State Highway and Transportation Officials. “If you want an interconnected system of transportation across all states, that’s the whole rationale for a federal program.”

At the same time, Tymon said, weaning the country off a federal gas tax would take at least two years and be expensive, because Congress would have to come up with an alternate source to pay for the projects that are already in the pipeline.

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