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Equipment Makers Offer Idea to Fund Highways

July 27, 2011

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The Association of Equipment Manufacturers says it has an idea for a revenue-neutral solution to rebuild and modernize America's interstates without raising the fuel tax.


The proposal was developed by Jack Schenendorf, former vice chairman of the National Surface Transportation Policy and Revenue Study Commission, attorney with Covington & Burling LLP, and Elizabeth Bell, associate with Covington & Burling.

As the deadline looms to reauthorize U.S. surface transportation policy, with no one willing to raise fuel taxes to bring in much-needed revenue, Schenendorf unveiled two alternative solutions to supplement current federal transportation revenues in a policy paper published by The Bureau of National Affairs.

The revenue-neutral transportation funding proposal offers two alternative solutions: a Federal Interstate User Fee (FIUF) and a Federal Motor Carrier User Fee (FMCUF).

Federal Interstate User Fee.
* All vehicles using the Interstate Highway System would pay a user fee. The fee would be collected through an "EZ Pass"-like system, which would be entirely electronic. There would be no tollbooths.

* All of the revenues generated by the fee would be deposited in a special account in the Highway Trust Fund. The revenues would be used exclusively to restore the Interstate Highway System to a state of good repair and to expand and modernize it.

* The fee structure would be set annually, by an independent group of experts, at the level necessary to reimburse the states in accordance with policies established by Congress for the federal share of these improvements. The fees would not be designed to control the level of traffic or to "price out" drivers from using the Interstate.

Federal Motor Carrier User Fee.

* Would be imposed on commercial trucks' usage of all roads and would be collected through GPS-like systems currently being used by many trucking companies.

* Trucks would not be double-charged for miles traveled on the Interstate; rather, those miles would be recorded through the Federal Interstate User Fee program.

* All of the revenues generated by this fee would be deposited in a special account in the Highway Trust Fund and would be used exclusively for freight-related improvements.

* The same independent entity discussed above would set the fee structure at the level necessary to reimburse the states in accordance with policies established by congress for the Federal share of these freight improvements.

To read the full text of Schenendorf's paper: www.aem.org/PDF/2011-07-27_SchenendorfModernizingSystem.pdf

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