Highway fix short-term relief for R.I.

NEXT EXIT? Construction on the Providence Viaduct at the Atwells Avenue exit on Interstate 95 South. The crisis over the solvency of the federal highway trust fund could jeopardize similar projects in Rhode Island. / PBN PHOTO/MICHAEL SALERNO
NEXT EXIT? Construction on the Providence Viaduct at the Atwells Avenue exit on Interstate 95 South. The crisis over the solvency of the federal highway trust fund could jeopardize similar projects in Rhode Island. / PBN PHOTO/MICHAEL SALERNO

On one side of the state line, Massachusetts highway projects are plowing ahead, despite the crisis in Washington, D.C., over the solvency of the federal highway trust fund.
A few miles west on the Rhode Island side of the line, “shovel-ready” construction projects such as repairs to the East Shore Expressway and replacement of the Great Island Bridge in Narragansett are on hold because of the risk that federal transportation money won’t be there to pay for it.
In all, Rhode Island has delayed 20 highway projects worth $67 million as a result of the congressional impasse over how to pay for highway spending long term.
More than most other states, Rhode Island relies on federal dollars from the highway trust fund to pay for its transportation projects: 80 percent of Rhode Island highway spending comes from the federal government.
Massachusetts, by contrast, receives roughly half of its highway spending from the trust fund, according to Mass. Department of Transportation spokesman Michael Verseckes, and as a result, has more flexibility to cover an emergency drop in federal assistance.
To the relief of state transportation departments across the country, the U.S. Senate last week joined the House in passing short-term legislation to prevent the trust fund from running out of money this month.
However, while the emergency fix will allow projects like the East Shore Expressway and Great Island Bridge replacement to begin, it almost certainly will place Rhode Island and other states back in the same uncertain position next May if not sooner.
The House version, expected to win out, replenishes the trust fund through May, while the Senate version only covers until mid-December.
In the absence of a long-term solution, the next crisis will then threaten another round of local projects, R.I. Department of Transportation officials warn, including, potentially, the second phase of the $147 million Providence Viaduct replacement underway now. “An extension … through May 2015 allows us to move some of these projects forward,” said RIDOT spokeswoman Rose Amoros. “We are still faced with having to reserve resources for debt-service payments, emergencies and ongoing construction contracts. Without a long-term solution, 10 months from now we will be in the same position as we are today.”
At the heart of the transportation funding problem is increasing insufficiency of gasoline tax collections, the traditional method of paying for highways, to keep up with highway spending.
Congress has not raised the gas tax since 1993, and in recent years Americans are driving less at the same time their cars have become more efficient, pushing down collections.
Meanwhile, highway spending continues to rise, depleting the trust fund.
The gasoline tax was chosen as a funding source for highways because it functions as a kind of user fee: those who drive the most pay the most.
But raising the gasoline tax is unpopular with voters and, consequently, with members of Congress, forcing a choice between spending less on highways, finding another user fee or funding the spending with general tax revenue.
House Republicans have been unwilling to allow a tax increase, instead insisting on short-term patches like the one just passed.
On the House side, the Ocean State’s two representatives favor the third option – supplementing highway user fees with more general revenue – plus some reluctant acceptance of a gas tax hike.
“All options have to be on the table, and it will require a variety of sources, but I like the idea of an infrastructure bank funded through repatriating corporate funds from overseas,” Rep. James R. Langevin said in a recent phone interview. “Corporations want to bring those funds back, but don’t because taxes are too high.” Rep. David N. Cicilline, like Langevin, said raising the gas tax or indexing it to inflation will likely “have to be part of the solution” long term, but he would look elsewhere first, including ending big agricultural subsidies and taxing hedge fund carried interest.
Those who support financing highway maintenance with user fees argue that it makes more sense for drivers, including the long-haul trucking industry, to finance the bulk of highway work, especially at a time when Americans are driving less.
To increase Rhode Island’s meager state-level highway resources, RIDOT Director Michael Lewis has pushed for tolls, including on the Sakonnet River Bridge and Interstate 95, with nothing to show for it.
But Cicilline and Langevin are not fans of the user-fee model for transportation financing.
“In a perfect world, public infrastructure should be supported by public spending,” Cicilline said.
Neither Sens. Jack Reed nor Sheldon Whitehouse could be reached for comment on the highway trust fund issue, but both have joined their House counterparts in blasting Republicans for relying on short-term gimmicks to resolve the funding crisis.
Few suggest the short-term funding just passed is great public policy.
It raids $1 billion from a fund meant to deal with leaking underground storage tanks, $3.5 billion in customs fees and $6.4 billion from “pension smoothing.”
Pension smoothing allows companies to set aside less for future employee pension liabilities, increasing the amount of income that can be taxed in the short term. But it does nothing to reduce the pension liabilities long term and should result in a corresponding drop in tax revenue in out years. •

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