Behind the Transport Industry’s Lament About the Senate Climate Bill

While transport reform advocates hailed last week's long-awaited Senate
climate bill for
directing an estimated $6 billion-plus towards local land use
planning and green infrastructure, state DOTs and construction interests
criticized the legislation -- suggesting that the measure's sponsors
could face stiff resistance from the transportation industry's
mainstream despite making concessions to win over all sides.

Does the
Senate climate bill include a user fee? That depends on how the term is
defined. (Photo: Pop
and Politics)

The central complaint raised by
mainstream transport players boils down to, as American Association of
State Highway and Transportation Officials (AASHTO) executive director
John Horsley put it in
a statement, the Senate bill's "preemption" of user-fee revenue
that historically has gone into the nation's dwindling highway trust
fund.

"Congress can ill-afford to consider any legislation that" siphons
off money from the trust fund, which has required more than $30 billion
in replenishment from the general Treasury over the past 18 months,
Horsley said.

Stephen Sandherr, chief of the Associated General Contractors -- a
backer of the
Senate effort to bar the Environmental Protection Agency (EPA) from
regulating greenhouse gas emissions in the absence of congressional
action -- echoed that sentiment in his
own statement on the upper-chamber climate proposal.

"[B]y taking funds raised through the proposal’s new transportation
fees
and committing all but a small percentage to unrelated spending, the
legislation leaves our aging and inefficient roads, airways and transit
systems vastly underfunded," Sandherr said.

But does the Senate climate bill impose a user fee on
transportation fuel consumers? The text of the measure specifically
requires "each refined [fuel] product provider" to purchase emissions
permits from the EPA on a quarterly basis at a fixed price, with no
permit trading allowed. Horsley's depiction of those charges as a "user
fee" relies on the considerable likelihood that oil companies and
refiners would pass on the cost of those emissions permits to consumers
in the form of higher gas prices.

In the meantime, how much of the revenue raised by the bill's new
fuel permits would infrastructure receive?

The American Road and Transportation Builders Association estimated
last week that the Senate plan would raise $20 billion from the new
charges on oil producers and refiners, with about $6.25 billion of that
divided into equal parts -- one-third for the highway trust fund,
one-third for competitive federal grants similar to the TIGER
program, and one-third for local land use projects, in the style of
the so-called "CLEAN
TEA" proposal.