Marine Transportation System

Posts Tagged ‘taxes’

Time for a Maritime Title

In Intermodal, Marine Highway, MTS Policy, Surface Transportation Policy, Water Resources on January 30, 2012 at 1:16 am

In a few days we will see if there is a maritime title, or section, in what is traditionally the highway bill.  What’s that, you say?  You heard right.

Back in July 2011  House Transportation & Infrastructure Committee Chairman John Mica (R-FL) let us peek at the planned contents of the surface transportation bill that finally will get its debut in committee on February 2nd.

That summary, aptly named A New Direction, included a description of maritime transportation provisions, which would have as much symbolic as substantive significance for those of us working the water.  Including a few marine transportation provisions in the once-in-a-decade highway and transit legislation could prove to be a foot-in-the-door for more of the same when the next big surface bill comes along.  (Some of us impertinently suggest that marine transportation in fact is a surface mode…the wet one.)

But one can argue that the foot has been in the door for quite some time.  The passenger-oriented Ferry Boat Discretionary Program has been the lone marine transportation element in surface transportation policy and program since 1991 and the landmark ISTEA. Interestingly, the ferry program is managed by the Federal Highway Administration–a fact that some folks in the Maritime Administration probably still have difficulty acknowledging–because that is where the money is.

John Mica has for years talked about having a transportation “vision” that is intermodal, multimodal and makes greater use of the maritime.  The Chairman’s intentions revealed last year with regard to a maritime title included three basic objectives:

  • Ensure full use of the Harbor Maintenance Trust Fund resources; only 60 percent of annual revenues are appropriated for channel maintenance.
  • Encourage  more maritime related activity including “short-sea shipping” by exempting cargo from the Harbor Maintenance Tax when moving between US ports.
  • Improve Corps of Engineer civil works project delivery.

This week the committee will meet to produce the bill.  There may be a maritime title with some placeholders to be added later.  Here’s what we see in our crystal ball:

  • The Corps project piece is not expected to be in the bill.  Such typical WRDA subject matter may be held back more as a matter of legislative strategy than anything.
  • Jurisdiction over the particular legislative remedy for the HMTF issue–contained in HR 104–is shared with the House Rules Committee where there is opposition to the so-called RAMP approach.  Appropriators are fighting it as well.  If RAMP isn’t included in the bill it won’t be for lack of trying by many stakeholders in the port navigation sector who have encouraged over 150 legislators to co-sponsor.
  • Maybe the topic that has the best chance of getting in the new maritime title is the HMT exemption for non-bulk cargo. But because the subject is within the jurisdiction of the Ways and Means Committee Mica’s transportation panel is expected to defer to the tax committee on bill language (likely to look like HR 1533).  So keep an eye on the Ways and Means hearing to occur this Wednesday. The HMT and HMTF issues will be heard and when that committee later meets to take up the transportation bill’s tax-related provisions we may find the HMT provision added.  (The subject of the vessel tonnage tax also is to be brought up at the Wednesday hearing.)

It looks like a maritime title will have, at best, a couple provisions. But if by the time the surface transportation measure goes to the House floor its 1000 or so pages include a maritime title–maybe only a wet highway provision to go with the dry highway ones–we should take a minute to savor a small provision and an encouraging direction for transportation policy.  Pbea

If you only have hot dog money in your pocket maybe you just buy a hot dog…but which hot dog?

In Efficiency, Infrastructure, Surface Transportation Policy on June 2, 2011 at 9:36 am

My previous post about the surface transportation reauthorization bill—TEA for short—ended with a bit of wait-and-see optimism.  That was then.  Here is a bit of face-facts pessimism to balance it out.  It’s the kind of yin yang see-sawing that this town sets the mind to doing.  Spend more than a few minutes thinking that things will turn out fine and then…

It would be so much easier if the main actors in the TEA deliberations agreed to settle for current revenue projections.

There is real money and then there is wish money.  Real money is in the bank, or will be. Wish money is what we want Congress to produce though new transportation revenue measures.  And what is the chance of that happening when?

We can speculate, as many do, that after the 2012 election office holders will muster what it takes to vote for new revenue. But after watching these first months of the New Washington—where donkeys and elephants can’t even agree which of them has the trunk—the best we may have reason to expect of the House, Senate and White House is that they will come to some basic agreement on the overall Federal budget.  Set your sights low.  A big transportation bill won’t figure into that deal.  And a more conservative Senate after the elections may cause our sights to be five clicks lower.  Meanwhile the TEA can gets kicked farther down the road.

Barring the use of creative accounting—the sort that will not serve us well as the government feels its way to solid fiscal footing—the options for a 6-year TEA bill could be limited to $556 billion (Obama), $339 billion (Boxer) and, maybe, $230 billion (Mica). The last of those assumes only projected Highway Trust Fund receipts. Those are the choices. In which case…

Let’s here assume Congress, at best, will extend the soon to expire excise taxes to avoid a total collapse of current programs.  The choice then that policy makers have is between A) extending current law authorization i.e., SAFETEA-LU and sit tight, and B) approving a new TEA bill that fits the revenue stream.

While hardly our preferred road to travel, the “B” route may not be a bad option.  Yes,  it would shrink transportation funding on which States and locals—already strapped for cash—now rely for road maintenance, transit projects, bike paths, and other uses enabled by over one hundred programs.  But—here’s the yang part–it also could have its benefits along with the pain.

  • Get past SAFETEA-LU by enacting reform policies e.g., performance metrics, that have emerged from the various advisory panels.
  • Give States maximum flexibility to put available Federal funds to their best use.
  • Focus Federal policy on what is in the national interest (building stage coach museums vs. easing interstate chokepoints).
  • Provide added impetus to enact creative leveraging of other sources of infrastructure funding e.g., expansion of TIFIA, new infrastructure bank.
  • Force government at all levels to adjust how investment decisions are made—where the priorities are and whether projects can be delivered more efficiently. (Recent testimony from the Congressional Budget Office—“The Highway Trust Fund and Paying for Highways”—provides a helpful review of options and makes the point that “selecting projects carefully can increase the highway system’s contribution to the performance of the economy.”)
  • Cause States to re-examine their own transportation funding mechanisms and, in States like New Jersey, face up to the under capitalization of transportation trust funds.
  • Give the nation the taste of intentional under-investing in America and the significant economic consequences of that.

Chairman John Mica (R-FL), facing the facts for months now, has vowed to get a 6-year bill done this year using existing revenue. That’s the best he can do given the current House majority and leadership.

Sen. James Inhofe (R-OK) is the top Republican on the Environment & Public Works Committee that will produce the bulk of the TEA bill.  As bullish as he has been on the need to produce a full 6-year bill (with earmarks!) he disagreed this week with his committee counterpart, Chairman Barbara Boxer (D-CA), who said she will put a full bill before her committee. Inhofe acknowledged that Congress may have to make do with current levels of revenue in a 2-year bill.

So here is a tough-love case for moving ahead today: improve the policy but face the fact that Washington, sadly, is not yet ready to go the full measure in addressing the terrible under-investment in our infrastructure.   Pbea

The Rush/No-Rush to Replace SAFETEA-LU

In Infrastructure, Politics, Surface Transportation Policy, Uncategorized on May 26, 2011 at 4:39 pm

You’d think that Congress and the Administration are proud of SAFETEA-LU.

That’s the “bridge-to-nowhere”, 6000+ earmark, strangely named measure that was signed into law in 2005 and immediately trashed on the front page of Parade (yes, Parade!), on editorial pages of all stripes, and by interested interest groups.

Freight stakeholders were grossly disappointed by the final product of a seemingly endless process born of a White House that didn’t seem to care, a Congress that seemed to care only about taking home projects, and policy makers who, for the most part, would have stumbled in answering the question: what is the underlying national policy and purpose?

In retrospect, the SAFETEA-LU experience was just what the doctor ordered.  Like the “Pirates of the Caribbean” franchise that premiered with a ridiculously entertaining first film and epitomized wretched excess by its third iteration, the “TEA” surface transportation bill franchise was not well served in 2005.  Time for a change.

The policy commissions (#1 and #2) authorized in SAFETEA-LU to look to the future and make recommendations for the next-go-round were among a comparatively small number of “LU’s” insightful provisions.  The resulting reports and recommendations emanating from think tanks and other organizations are urgent calls for reform.  A common assessment was that SAFETEA-LU does not address the pressing needs of the nation. The case is been made in the reports:

  • The National Interest (my caps) was lost in the flood of 6000+ earmarks.
  • The Highway Trust Fund is structurally flawed and is losing revenue.
  • Capital needs of our transportation system are greater than current funding levels.
  • American competitiveness is at risk if we ignore the problems facing a growing goods movement sector.
  • Too many discrete surface transportation programs limit the ability to focus funds on greater needs.
  • Metrics–performance measures–would help judge where Federal investments can have greater effect.

And there were more.

So you’d think the policy makers would be in a hurry to fix the problem,get “LU” off the books and put in its place a new stimulus for the lagging economy.

You’d think.

It doesn’t help that the public and their electeds are tax-talk shy.  That was a main reason why the White House delayed putting together a proposal for a new bill.  It is the reason why few in Congress are willing to talk even about adjusting the existing tax in order to plug the gaping hole that is draining the trust fund tank.  Formal appeals and press releases by stakeholders calling for action pile high.

Reading the signs as to where the key actors may be headed in recommending a 6-year bill…the Administration has budgeted a $556 billion without stepping onto the thin ice of tax talk.  The Senate is looking at $339 billion, which will require around $75 billion in undefined additional revenue.  The House appears rigidly set in whatever revenue the Highway Trust Fund fairy will collect in fuel and the other excise taxes currently in effect.

Like just about everything else in this town, it’s the talk about spending–or silence about revenue–that is governing the legislative agenda.

It’s not that key actors don’t want to get a bill written and made law.  They really do.

They understand the potential for claiming and real job creation.  They want to shake off the dust of inaction.  They actually want to solve problems.

Chairman Barbara Boxer and her Republican counterpart met the press this week. Chairman John Mica frequently and convincingly voices his intent to produce a bill this year.  And the President outlined, in greater detail than the others thus far, his policy direction when issuing his FY 2012 budget.  There are other signs of what passes for progress in Washington.  Freight related bills have been introduced and await movement by the lead committees.  However a good many seasoned observers do not expect a bill will be signed into law until after the 2012 election because of tax issue avoidance.

But let’s stay optimistic.  Next we need to hear from the tax committee chairs.  Because, in more ways than we might want to admit, it’s all about the money.   Pbea

What TIGER Tells Us

In Marine Highway, Surface Transportation Policy on February 23, 2010 at 12:39 pm

No, not that Tiger.

The eagerly awaited TIGER grants were announced last week.  An experiment in government.  Against their better judgment members of the House and Senate gave $1.5 billion to the Administration and left it to the discretion of USDOT program managers, modal administrators, the Secretary (and perhaps the White House, just in case) to decide what projects were worthy.  (Egads! The bureaucrats!)

The multimodal discretionary grants program—later assigned a name and acronym at USDOT—was created a year ago in the cauldron in which Congress cooked up the economic recovery package.  The context was job creation in a failing economy.  But the genius of TIGER’s tenacious sponsors—most visibly Sen. Patty Murray (D-WA)—was that it also was a good time to try something different.  Politics would always be lurking in the background (if not in the foreground) when doling out tax revenue for public works but this was not a time for the earmarking norm.

Also lurking was the thought: if this works it could set the example for a change in transportation policy.

Lisa Caruso of the National Journal asks in her transportation “experts” blog if TIGER should be replicated in the surface transportation authorization bill.  Can it serve as a model for the revised policy and programs that many of us look for in the bill?

So far the respondents (scroll thru the page) generally agree there is benefit in the approach.  What’s not to like? Livable community folks liked the selection of street car and pedestrian path projects.  Goods movement was given a strong boost with around $300 million going to rail projects.  And it was good to see that at least one of the promising marine highway initiatives was granted $30 million.  (The first of many one hopes.)  That award illustrates how TIGER–and Secretary Ray LaHood–was open to more than the usual road, transit and bike path projects.

By and large, very good projects were selected.  But the question posed by Caruso is whether TIGER represents a policy approach worth continuing.

Some of the respondents think TIGER is a good starting point but that it is important to change the underlying policy.   In particular Steve Heminger notes it is not enough to create a grants program that is mode neutral.  An improved Federal policy and program should have a clearer, focused national perspective e.g., goods movement and metropolitan mobility.  It is a view I share.

Bob Poole raises an important policy question worth debating by suggesting an underlying weakness of a multimodal approach if a highway tax is the sole source of support.

One person’s response I would be interested to see is that of Sen. Barbara Boxer (D-CA).  In January 2009 the chair of EPW, which is to produce highway and other portions of the next authorization bill, flatly opposed the multimodal discretionary grants provision in the draft Senate stimulus bill, even as Heminger and other Californians welcomed the idea of a mode-neutral program and projects judged on their merits.  Boxer and others in the transportation leadership of Capitol Hill will decide whether the TIGER approach is just a brief detour from projects as usual.   Pbea

A Million Reasons

In Leadership, Surface Transportation Policy on September 21, 2009 at 12:26 pm

TollBanana

“Funding is the key,” said former DOT Secretary Norman Mineta.  He should know.

Mineta spoke to an estimable eighty invited to UVA’s Miller Center of Public Affairs to discuss how significant reform in surface transportation policy might be achieved.  He told them that funding is the prerequisite for the kind of major investment measure that all agreed is needed.

Noting the particular challenge, Mineta recalled how he  brought to the Bush (43) White House a proposal to add two cents to the Federal fuel tax.  The intent was to elevate road and transit program funding to level closer to actual system need.  The Commander-in-Chief said no.

Pop Quiz:

  1. On what bill did George W. Bush first exercise his power of the veto?  (Softball.)
  2. Aside from a $8 Bn game-changing plan to jump-start high-speed passenger rail, which president ruled out any immediate action on a major transportation infrastructure program because he (that’s a hint) was not inclined toward a tax hike or other revenue measure? (But why just pick on presidents?)
  3. Is there a snowball’s chance in Haiti that Congress will pass the next full-fledged TEA bill anytime soon?

(Answers: SAFETEA-LU, Obama, Not likely.)

It’s not a stretch to suggest that it may take years for official Washington to approve a costly multi-year surface transportation bill.  Certainly one that includes substantial reform  (such as sustainable transportation and livable communities), new attention to freight gateways and corridors, and overall higher levels of capital investment in our declining public works.  Hundreds of billions are needed over and above what is required to maintain what we already have.  And a declining highway trust fund makes even maintaining the status quo a pressing challenge.

Josh Vorhees of Energy & Environment News wrote a good story carried by the NYT.  The conferees at UVA know the timidity of the Electeds when it comes to approving new revenue increments to support this or that.  When it comes to the partisan battlefield there is no distinguishing a user fee from a tax.

Some time ago, when a toll increase was being contemplated by staff of  a public authority, the subject was referred to as “The Banana. ”  The T-word was not uttered in internal discussions–lest others outside the agency get wind of it before the numbers were fully crunched and the rationale fully developed.  “The Banana” was a calculated, albeit humorous, way to manage in the hyper-sensitive political world.

A some point–much sooner than later–the million reasons why a tax payer or system user should not be charged must be faced by our Electeds.  At some point the fact will sink in that America’s competitiveness is declining as other nations  are  using this lousy global recession as reason to engage in major infrastructure improvements.

Mort Downey recounted last week at a freight-related event how over the years Washington has managed to extend or raise the vehicle fuel tax even when the economy was in distress.  Somehow we survived.   Pbea

Our Turn to Pay the Freight

In Infrastructure, Surface Transportation Policy on September 9, 2009 at 5:21 pm
PBS "Blueprint America" Documentary:  "Keep on Trucking?"

PBS "Blueprint America" Documentary: "Keep on Trucking?"

Blueprint America is the PBS infrastructure series.  The series is one of the best I have seen on the subject, not that there is much competition on TV in this category.  Keep on Trucking? has the virtue of being taped in my Garden State, where men are men and women are truck drivers who train the men.

The segment reported by Miles O’Brien covers our reliance on trucking and the 50+ year old interstate highway model.  He reports on the benefits and limitations of the rail freight system.  He covers how trucking and rail compete and cooperate (“the term of art is intermodal”).  He introduces community concerns via New Jersey’s Ironbound, which is adjacent to the Newark container terminals.  And O’Brien overlays the  fact that Congress will have to replace SAFETEA-LU and face the political conundrum of taxes, with Jim Oberstar’s (D-MN) foot on the House accelerator.

Part of the value of this particular “…Trucking?” segment, as one individual awkwardly said, is the need “to look at the network of this nation as a whole” and “how these two modes can be interfaced in the most efficient way”.   “A freight relay if you will,” Miles O’Brien added, “… trains and trucks each doing the part of the job they do most economically, then passing the baton.”

Of course that topic deserves a 24-minute segment of its own…but not one limited only to two surface modes.

Predictably marine transportation was not mentioned.  Considering the key points made in the piece the marine highway should have been included in the “network of this nation.”  The water mode applies to the ideas of intermodal operation, efficiency, congestion mitigation, and the need to think outside the 1950s highway model.  As one voice noted, “it’s about retooling the freight infrastructure so American business can compete in the global marketplace.”  Not about maintaining the primacy of road and rail, one might add.

Miles O’Brien alluded to the fact that arriving at a new policy will not be easy.  “There is no love lost in the fight over infrastructure dollars.”  Bill Graves of the American Trucking Association asserted that the public shouldn’t be “deluded” that rail is “the answer”…the Association of American Railroads‘ ad campaign notwithstanding.

O’Brien expressed no particular confidence that Congress will adopt a new model.  He spoke of an American consumer trait, taking things for granted–”plentiful, high quality goods, delivered fast and cheap”–and made possible seemingly “like magic.”  Not willing to make it easy on voter or legislator, he said “it is actually about planning ahead and making big investments.”  The generation that built the interstate system did it.  “Now it may be our turn to pay the freight.”   Pbea

Follow

Get every new post delivered to your Inbox.