Mica: States Will Have More Flexibility Without a National Infrastructure Bank
After years of deficit spending, the United States finds itself in dire economic straits. One need look no further than the current debate over the nation’s budget and debt limit.
When the economy was stronger, it was easier for the government to spend money it did not have on programs it could not afford. But as the economy continues to struggle, unemployment remains high, and Americans across the country tighten their belts more every day. Congress must act responsibly to get our fiscal house in order.
A framework released by Transportation and Infrastructure Committee Republicans in July to reauthorize federal surface transportation programs is a fiscally responsible proposal to increase the value and effect of our limited infrastructure resources while holding to spending levels that are supported by the amount of transportation user fees actually collected.
This proposal is the only initiative offered that protects the Highway Trust Fund and ensures its future solvency. This trust fund is maintained by user fees — gas taxes paid by motorists at the pump — dedicated specifically for transportation improvements. The trust fund provides guaranteed long-term funding to states for critical infrastructure planning and projects.
However, in recent years the government has been overspending from the trust fund. Last year, we spent about $50 billion from the trust fund but collected only $35 billion in revenue. Consistent overspending has necessitated the transfer of $35 billion from the general fund into the trust fund over the past three years.
The Republican proposal restores accountability to federal transportation spending and puts the “trust” back in the trust fund by aligning spending with revenues. Other proposals would either continue the current practice of deficit spending for transportation, which would bankrupt the Highway Trust Fund in less than two years; rely on a gas tax increase that will never pass through an increasingly conservative Congress; or create a national infrastructure bank to fund projects. Our initiative protects the trust fund. Ensuring the viability of this reliable source of funding will allow states to plan major multiyear projects.
Significant reforms and improvements for transportation programs will increase the investment value of available infrastructure resources.
By leveraging limited funds more effectively, the level of infrastructure investment is increased. But a national infrastructure bank is not the best way to achieve this leverage.
The Federal Highway Administration estimates that for every federal dollar invested in state infrastructure banks, $9.45 in loans for transportation projects can be issued. To encourage states to better utilize SIBs, the Republican proposal increases the percentage of federal highway funding that a state can dedicate to a SIB from 10 percent to 15 percent, and states will receive a specific amount of funding that can be used only to fund SIBs.
Many states currently have infrastructure banks. The proposal builds upon this existing SIB structure rather than increasing the size of the bloated federal bureaucracy, as some advocate, by creating a national infrastructure bank. States will have more flexibility to make project decisions.
The proposal also expands the successful Transportation Infrastructure Finance and Innovation Act program. By dedicating $6 billion to TIFIA, $60 billion in low-interest loans to fund at least $120 billion in transportation projects will be generated. Additional TIFIA funding will help meet demand for credit assistance for projects, enabling increased leveraging of Highway Trust Fund dollars with state, local and private-sector investment.
The new fiscally responsible initiative streamlines the federal bureaucracy in other ways as well. There are more than 100 federal surface transportation programs, many of which are duplicative or do not serve a national interest. An unprecedented consolidation and elimination of about 70 of these programs under this proposal will decrease the size of the federal bureaucracy, freeing up funds that can be invested in infrastructure instead of siphoned off to maintain unnecessary programs.
States are provided more authority and flexibility to address their most critical infrastructure needs. However, new performance measures and transparency requirements will hold states accountable for their spending decisions.
As this responsible Republican proposal moves forward, we welcome suggestions and ideas for a final bill that protects the Highway Trust Fund, reforms programs, downsizes the bureaucracy, cuts red tape and more effectively leverages our limited resources.
Rep. John Mica (R-Fla.) is chairman of the Transportation and Infrastructure Committee.