Nov. 5 (Bloomberg) -- Raising taxes “is off the table” when the U.S. House votes on a six-year plan for funding highways, perhaps early next year, said Representative John Mica, senior Republican on the Transportation committee.
The plan will use public-private partnerships, unspent federal dollars and accelerated release of aid to states to generate cash for projects, said Mica of Florida, in line to lead the House Transportation and Infrastructure Committee as a result of Republicans gaining control in the Nov. 2 election.
“We don’t have to spend a huge amount of more money, but we can leverage the money that we have, or better move the funds that we have, and get things done,” Mica said yesterday in a telephone interview.
Congress, which hasn’t enacted long-term highway legislation since 2005, has been struggling to pass a law that would let states and construction companies plan for projects based on specific levels of federal spending.
A $286.5 billion law passed during the administration of President George W. Bush expired more than a year ago, and transportation programs are operating on temporary extensions. Representative James Oberstar, a Minnesota Democrat and chairman of the committee, failed to win backing last year for his proposal to spend $500 billion over six years.
Oberstar, who was defeated in his re-election bid, never specified how the money would be raised.
Mica said he hasn’t determined a spending level for his proposed measure. He said he is a “strong advocate” of public-private partnerships and that he aims to set federal policy and standards under which projects can be pursued.
“Once we set the parameters, you’re looking at an explosive amount of investment,” Mica said. South Carolina raises $7 or $8 in private investment for each tax dollar, he said. “We don’t do that at the federal level,” Mica said
Reliance on partnerships would benefit companies including Sydney-based Macquarie Group Ltd., Australia’s largest investment bank, Morgan Stanley of New York and Carlyle Group, the Washington-based private-equity company, which all are seeking infrastructure projects for possible investment.
Federal accounts have unspent funds, Mica said. A railroad-infrastructure finance fund has $34 billion available and a harbor maintenance trust has $5 billion to $6 billion, he said.
Speeding grants to states also will boost effectiveness by meeting pent-up demand, Mica said. Florida can award projects at a 20 percent to 30 percent discount because of the slow economy, he said. “People are hungry for work,” Mica said.
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