The Fuse

The DRIVE Act: Forward Looking, but Lacking Funding

by R. Kress | June 24, 2015

After years of harried stopgap measures, transportation advocates are praising a proposal for Congress’ first multi-year authorization for surface transportation spending in over a decade. The bipartisan bill, which would include funding for highways, public transportation, and local infrastructure projects, was introduced on Tuesday as the Developing a Reliable and Innovative Vision for the Economy or DRIVE Act.

Set for a hearing today, the DRIVE Act is a substantial bid to determine a long-term solution to an imminent deadline on federal infrastructure spending. Senators on both sides of the aisle came together to introduce the new legislation this week, which would allocate some $275 billion over the next six years to state and local infrastructure projects, bridge and highway repair, and create a multibillion-dollar freight program, according to a fact sheet. Of this, it would allocate around $43 billion annually to the federal government’s highway program.

The problem, however, is that the legislation contains no explicit provisions on where the funding for these projects is intended to come from.

The forward-looking solution would mitigate stopgap spending scrambles like the one that is set for July 31: At that point, the current infrastructure funding measure expires, and political gridlock has yet to allow for an extension. The most recent highway funding bill was passed in 2012—since then, Congress has routinely come up against deadlines and pushed through a series of stop-gap extensions. At this point, it has been more than a decade since Congress has passed a transportation bill that lasted longer than 27-months.

Bipartisan support obscures funding uncertainty

The legislation was introduced by Senator James Inhofe (R-OK) chairman of the Senate Environment and Public Works Committee, and has passed out of committee vote. Inhofe underscored the need for long-term planning and stability, stating, “Our nation’s roads and highways have suffered under too many short-term extensions, which have led to higher costs, more waste, and less capability to prioritize major modernization projects to address growing demands on our interstates…The DRIVE Act will provide states and local communities with the certainty they deserve to plan and construct infrastructure projects efficiently.”

On the surface, the bipartisan bill appears to be the kind of longer-term legislative move that state and local governments require in order to plan and initiate infrastructure projects that operate on timeframes longer than one to two years. The National League of Cities released a statement hailing the bill, calling it an answer to their “call for greater certainty that only a long term transportation bill can provide.”

However, the real challenge with the DRIVE Act is that, without accounting for funding sources, it is effectively a set of recommendations and suggestions rather than a long-term policy strategy. For that reason, its co-sponsors admit that the legislation is just a starting point.

“The clock is ticking,” Sen. Barbara Boxer (D-CA) said in a statement, “Action in the [Senate Environment and Public Works] Committee is a major first step—the other committees also need to act.”

The co-sponsors of the bill have said they are leaving it up to Congress to find a funding solution to make the DRIVE Act possible. “Our work, however, is not finished, co-sponsor Sen. Tom Carper (D—DE) said in a statement. “In order to make the DRIVE Act a reality, we must provide full funding so that city, state and local governments have the certainty they need to make the investments we’ve outlined in this bill. I am steadfast in my dedication to working with my colleagues in Congress, Republicans and Democrats alike, to find the bipartisan funding compromise Americans expect and deserve.”

Looking Past the Gas Tax

At the moment, the federal gas tax is not the funding compromise that Sen. Carper is seeking. Standing at 18.4 cents per gallon, it is effectively even lower today than when it was last increased some 22 years ago, since it has not been adjusted for inflation. Had it been, the tax would stand closer to 30 cents per gallon. What’s more, in the past several decades, cars have become increasingly fuel efficient and new technologies are predicted to further that trend, making the gas tax a diminishingly pragmatic source of funding for surface transportation unless it sees a significant increase.

Under these circumstances, the Highway Trust Fund falls short of paying the average $50 billion annual price tag on federal transportation funding by about $16 billion dollars per year. As a result, the Congressional Budget Office has estimated that it would take around $100 billion to make up the difference over the course of the six-year funding measure contained in the DRIVE Act. For its part, the DRIVE Act does not offer any clues as to where that estimated $100 billion could come from—and does not contain any measures to increase the tax. Thus, despite the enthusiasm from transportation advocates, without an answer to the Highway Trust Fund shortfalls, the DRIVE Act has no bankroll.

“Now it’s time for the Senate Finance and House Ways & Means committees to do theirs and provide the path forward with a sustainable revenue stream for the Highway Trust Fund,” American Road & Transportation Builders Association (ARTBA) President and CEO Pete Ruane said yesterday in a statement. “Transportation investment is a core federal responsibility.  It’s time to transcend politics and do the right thing for America.”

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