Saturday, May 21, 2016

AASHTO Journal: Eno: Put Multimodal Freight Grants Program in General Fund, Levy Shipment Fee

The Eno Center for Transportation proposed that Congress alter the new freight programs in the FAST Act to carve out a national multimodal grant program paid for by general funds, and levy a percentage fee on the cost of surface freight shipments to support it over the long run.
That proposal, which Eno released May 19 as part of "Infrastructure Week," calls for Congress to expand the Fast Act's discretionary freight grant program from $800 million a year that is now part of the highway account of the Highway Trust Fund.
dollarpump.jpgUnder the proposal, Congress would make that a general fund program of "at least $2 billion annually, with the ability to increase funding as the program becomes established." The full report detailing the plan is available here.
And instead of the FAST Act requirements tying most of that grant pool to highway-related freight projects, Eno said Congress should make the expanded grants program fully multimodal in nature, "which means expanding the existing eligibility to include more rail and port infrastructure as well as reducing the limits on intermodal infrastructure."
The center said it explored options with a bipartisan group of former government officials, a "freight working group" that includes a number of transportation financing experts and freight industry veterans, and researched the issues with other industry experts to hammer out a set of funding options and the consensus recommendation.
If lawmakers acted on the proposal, it would be the first time that Congress instituted a permanent program to pay for freight shipping infrastructure projects across the full range of transportation modes. Other than in emergency legislation such as the 2009 Recovery Act, or in limited programs such as the TIGER infrastructure grants, Congress has authorized modal funds through separate programs aimed at highways and transit, railroads, aviation and marine transportation.
Eno said building the freight grants program on general funds would avoid "return-to source" claims that come with dedicated revenue sources, "in which freight modes and geographies would want to see their portion of the funding returned directly to them in project grants."
And Eno argued that since the freight industry supports the entire U.S. economy, "using general funds to make freight system improvements, as is common in other countries, is justifiable."
It also said a practical aspect of the proposal is that using general funds gives Congress "the ability to fully fund the program immediately while a long-term funding source can be developed."
Eno noted that Congress has already "shown a recent willingness to support transportation programs with general funds," such as using general fund transfers to help pay for the FAST Act, and paying for annual TIGER grants from general funds.
Its long-term funding proposal would assess a fee of at least 0.3 percent "on the cost of shipping for all surface transportation modes" – truck, rail and barge – that would be charged to cargo owners at the same rate across modes.
It would also apply the fee to private fleets such as retailer-owned truck operations. However, it would exempt flight and international portions of shipments.
Eno said its proposed COFS fee "is still a policy novelty [but] its appeal as a relatively fair, stable, multimodal, and small fee on shipment costs has prompted some political support." However, Eno added: "Passing such a fee would require considerable bipartisanship in Congress, as well as agreement across several levels of stakeholders."


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