Governors Would Take Almost Any Highway Measure Congress Offers

LA TRAFFIC 2

Cars move along during rush hour traffic on the US 101 Freeway in this aerial photograph taken over the Sherman Oaks neighborhood of Los Angeles, California, U.S., on Friday, July 10, 2015.

Photographer: Patrick T. Fallon/Bloomberg

U.S. governors don’t really care whether it’s the Senate or House plan to pay for the nation’s roads and bridges that advances. They just want a long-term deal.

Frustrated by 33 short-term funding extensions during the past five years that left them unable to plan, attendees at the National Governors Association meeting this weekend in West Virginia said it’s past time for action.

“I’ll take whatever they’re willing to give me,” said Virginia Governor Terry McAuliffe, a Democrat and incoming vice-chairman of the association. “Make a decision. Give us long-term funding. America needs this.”

The Senate is debating a proposal to fund the nation’s roads and bridges for three years, which includes reducing dividends the Federal Reserve pays its member banks to generate more than $16 billion. On Sunday, the Senate also advanced a provision as part of the bill to extend the U.S. Export-Import Bank’s charter.

A separate House-passed measure without the Ex-Im renewal would pay for highways through Dec. 18, with $8.1 billion mostly from tightening tax-compliance rules. The short-term fix is meant to allow work on a six-year bill paid for by international tax changes.

With a Friday deadline to reauthorize the fund and keep it solvent, House leaders have declared the Senate highway plan dead on arrival, putting pressure on both chambers to consider a short-term extension.

Stability Sought

Some of the 20 governors interviewed at their summer meeting at the Greenbrier in White Sulphur Springs favored the Senate plan, if only because it offers longer-term funding now. Almost all said a deal is more important than how it is funded.

“Whatever mechanism they use, we’d like to see stability and something that’s sustainable for a long period of time,” said Iowa Governor Terry Branstad, a six-term Republican.

Congress must strike a deal, said Colorado Governor John Hickenlooper, a Democrat who is outgoing chairman of the association.

“The critical thing is, roll up your sleeves, figure out your process and get the compromise,” he said.

At the same time that revenues and purchasing power are declining from the federal gasoline tax, congestion is increasing and states are failing to spend enough to refurbish crumbling roads and bridges.

Billions Needed

About $163 billion is needed annually over a six-year period for highways, bridges and transit systems, yet only about $105 billion is being invested, according to a December report from the American Association of State Highway and Transportation Officials and the American Public Transportation Association.

“Our transportation infrastructure just looks really bad in comparison with so many countries around the world,” said Delaware Governor Jack Markell, a Democrat.

Amid the uncertainty, Arkansas, Delaware, Georgia, Montana, Tennessee, Utah and Wyoming have delayed construction projects totaling about $2 billion, according to the Transportation Department.

“It’s had a dramatic impact,” said Republican Governor Asa Hutchinson of Arkansas, which has delayed contracts slated to start this year for 75 projects totaling $335 million.

Virginia’s McAuliffe said if there’s no deal by Friday it will affect about 400 projects totaling $1.2 billion in his state.

States Reacting

States including Republican-led Iowa and South Dakota have also increased gas taxes or borrowed to compensate for federal inaction.

“Once you start reacting to growth as opposed to preparing for growth, you’ve waited too long,” said North Carolina Governor Pat McCrory, a Republican who is proposing a $2.8 billion bond package for the November ballot. “Plus, it’s going to cost more.”

Some governors, including South Dakota’s Dennis Daugaard, a Republican, said increasing the federal gas tax -- which hasn’t been raised since 1993 -- is the best approach. It’s not being considered in Congress.

“It’s too straightforward, maybe,” Daugaard said.

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