Conrad Sees ‘Tough Choices’ Ahead on Transport, Naming VMT Tax & Tolls

Senate Budget Committee Chairman Kent Conrad (D-ND) today shed rare light on the extent of the nation’s transportation funding crisis, warning his fellow policymakers that “we are going to have to make tough choices” to raise enough money for continued federal investments in the built environment.

(Chart: Senate Budget Committee)

As he opened a hearing with Transportation Secretary Ray LaHood on the U.S. DOT’s proposed 2011 budget, Conrad pointed to “serious highway and transit funding problems going forward.”

After an $8 billion transfer in 2008 from the government’s general fund to the highway trust fund, followed by another $7 billion transfer this past summer, the newly passed Senate jobs bill would send another $19.5 billion from the Treasury to the federal transportation fund. “This is not my preferred alternative,” Conrad said, adding:

On the other hand, in the short-term, what is the alternative? I think we have to be very serious, what is the alternative? Are we really going to raise taxes in the midst of a continuing weak economy – one that is improving, but is still not fully recovered? Are we going to really raise taxes in that circumstance? 

During his speech, Conrad showed a chart (viewable above) depicting the yawning gap to come between gas-tax revenues — the primary source of money for the highway trust fund, which also pays for transit projects — and expected federal transportation spending.

“[W]e cannot afford to continue funding our highways and transit out of the general fund,” he said, urging LaHood and other lawmakers to start working on a long-term way to pay for future infrastructure investment.

Of course, Conrad’s chart makes one significant assumption: that the gas tax is kept at its current, non-inflation-adjusted level of 18.3 cents per gallon. Increasing that tax was one of five transportation financing options that he outlined today.

The others were: levying new charges of vehicle miles traveled (VMT), greater use of tolls, more transfers from the general fund (“which I strongly oppose,” he noted), and a revenue-raising option yet to be proposed by Congress.

“Now, let’s be frank,” he said. “None of these are popular options. But we have to
find a way to close this funding gap. We are going to have to start
making tough choices.”

Could Conrad’s candor signal an openness on his part to voting for any of those tough choices? As ever, congressional inaction on transportation is driven by the perception — debunked last year in a poll by the advocacy group Building America’s Future — that voters would rebel against any effort to raise new money, not to mention any legislative attempt to price road use more effectively.