APTA: Tax bill fails to protect Highway Trust Fund

The House tax bill's failure to address long-term solvency of the Highway Trust Fund (HTF) is a "glaring omission" in efforts to reform the nation's tax code, American Public Transportation Association (APTA) officials told members of Congress last week.

In a letter to the House Ways and Means Committee, APTA Acting President and Chief Executive Officer Ricard White wrote that the proposed Tax Cuts and Jobs Act (H.R. 1) neglects to include a long-term solution to the trust fund's solvency.

"This is a missed opportunity to do something meaningful and immediate to address our long-term transportation infrastructure challenges," the letter stated.

The fund, which helps pay for highway and public transportation infrastructure projects, is supported by revenue from the federal gas tax. Although the Fixing America's Surface Transportation (FAST) Act of 2015 provided a temporary five-year funding boost, the trust fund in 2020 will face a funding gap of $20 billion between its annual spending levels and what it takes in through the tax.

White noted that more than 250 House members have already indicated support for finding a long-term solution for the HTF.

"A predictable, long-term federal commitment to surface transportation investment is essential to the nation's economic growth and international competitiveness," White wrote. "With funding for the HTF running out in 2020, now is the time to move forward. This tax bill represents the best and most realistic opportunity to accomplish this goal."

White's letter addressed several other concerns about the bill, including a provision that would repeal the use of Private Activity Bonds (PABs), a financing mechanism for public transportation infrastructure.

"Preemptively removing PABs as a financing tool for infrastructure projects would undermine Congress' stated goal of leveraging a $1 trillion investment in our nation's infrastructure," White's letter stated. "Instead, this provision would have a chilling effect on private sector investments in infrastructure projects."

Additionally, APTA officials are concerned that the bill removes the option for employers to deduct the cost of providing commuter tax benefits; and fails to extend tax credits for alternative fuels and related infrastructure that expired Dec. 31, 2016.

Congress should use tax reform legislation to encourage investment in the nation's infrastructure, "not discourage it," Write wrote.

"As introduced, H.R. 1 does not address this fundamental and critical issue for the public transit industry or the country," he added.