CLIMATE:

Transportation lobby girds for assault on Kerry-Lieberman bill

Transportation's old guard is aggressively opposing the latest Senate climate proposal, arguing it diverts much-needed cash from the nation's crumbling infrastructure.

State highway officials and road builders -- arguably, the loudest voices in Washington transportation circles -- were early critics of how the climate bill sponsors, Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.), would address transportation emissions. Now, the two groups have begun to rally opposition to the legislation on the grounds that it will derail efforts to pass the next multiyear highway and transit bill.

More than two dozen other organizations that would benefit greatly from a new highway bill, ranging from general contractors to public transit officials, joined the American Association of State Highway and Transportation Officials (AASHTO) and the American Road and Transportation Builders Association today in sending a letter to Kerry and Lieberman calling for a sweeping rewrite of their proposal's transportation provisions.

Under their proposal, transportation emissions would be regulated under a national carbon cap, and producers and importers of gasoline and diesel would be forced to buy emissions allowances at a fixed price. In return, the proposal pumps $6.25 billion annually into the transportation sector to invest in more energy-efficient road and rail projects.

The proposal has received strong praise from many newer transportation advocacy groups that have placed a higher premium on injecting transportation into the larger climate and energy debate (E&E Daily, May 14). But the transportation traditionalists say that the oil companies will likely pass on the cost of the allowances to consumers at the pump, meaning road users won't be getting a fair return on their investment.

"This significantly undermines the user fee principle for financing federal transportation improvements that has served our nation and our economy well for more than 50 years," AASHTO and the others wrote.

According to the group's preliminary analysis of the bill, fees from on-road fuel consumption would generate at least $19.5 billion annually by 2013, more than three times the amount of federal money being funneled back into the transportation sector.

Further angering the transportation traditionalists is that of the $6.25 billion the climate bill would send to roads, rail and transit, $2.5 billion would head to the Highway Trust Fund, the cash-strapped federal account that currently pays the federal share of most surface transportation projects.

"Instead of returning revenue from these fees to improving the transportation system, the bill diverts at least 77 percent of the funds away from transportation infrastructure investment," the letter states. "As carbon prices increase, the bill diverts as much as 91 percent of fuel revenues."

Lawmakers have had to approve a trio of multibillion-dollar transfers to the highway account in the past two years to keep it from running dry. And the absence of a politically viable way to increase revenues into the trust fund -- which currently relies on federal fuel taxes -- has prevented lawmakers from moving forward with plans to pass the next multiyear highway bill.

The current bill was set to expire at the end of last September but has been extended through the end of this calendar year as Congress looks for a solution to the funding question.

Click here to read the letter.