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Rail News: Federal Legislation & Regulation

House gas tax proposal would 'erode' transit agencies' credit ratings, APTA says


A House proposal to cut off federal gas tax revenue to the nation’s transit agencies would damage their credit ratings, hurt their ability to borrow funds and hamper their ability to plan long-term transportation infrastructure projects, American Public Transportation Association (APTA) officials said today during a press conference.

APTA released a policy report detailing how a House Ways and Means Committee proposal to remove the current Mass Transit Account from the Federal Highway Trust Fund would “have a profound impact” on public transit systems and, as a result, economic development.

On Feb. 3, the House Ways and Means Committee voted to divert $25 billion in dedicated fuel tax revenue from the Mass Transit Account, which represents almost half of the federal government’s investment in public transit authorized by the House surface transportation bill, said APTA President and Chief Executive Officer Michael Melaniphy.

Under the committee’s proposal, federal gas tax revenue would fund only highways. The Mass Transit Account would be removed from the federal Highway Trust Fund and replaced with a new “Alternative Transportation Account,” which would be funded with a one-time appropriation of $40 billion to cover fiscal years 2013 through 2016. Also competing for a portion of the $40 billion would be the Congestion Mitigation and Air Quality program and several other federal highway programs, APTA officials said.

“This would be very bad public policy and very harmful not only to transit agencies, but to the nation’s transportation solutions,” said William Ankner, a financial consultant who participated in the press conference on APTA’s behalf. Ankner is a former transportation secretary for Louisiana who helped prepare APTA’s new report.

The measure would create such financial uncertainty that credit-rating agencies would likely downgrade transit agencies, thus restricting their ability to borrow funds for long-term projects, he said.

The media conference participants also noted that the committee’s proposal would end bipartisan support for public transit that dates to 1983, when President Ronald Reagan signed legislation that created the Mass Transit Account as part of the Highway Trust Fund. Since then, the account has helped states and local communities plan multi-year projects that help to alleviate local transportation congestion, attract private-sector investment in those projects, and otherwise enhance local economic development stemming from transit systems, they said.

“We know that for every dollar invested in public transportation, $4 is generated in economic returns,” said APTA Chairman Gary Thomas, who also is president and CEO of Dallas Area Rapid Transit.

The committee’s proposal is “counterproductive” to Congress passing a long-term surface transportation funding bill before the current funding measure expires March 31, said Janet Kavinoky, executive director of transportation and infrastructure for the U.S. Chamber of Commerce.

“The business community is very concerned about this,” she said.

Contact Progressive Railroading editorial staff.

More News from 2/8/2012