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Finally, a Sensible Freight Bill

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For far too long, goods-movement has been something of a step-child in U.S. transportation policy. To be sure, our deregulated and self-supporting freight railroads do a fine job of hauling bulk commodities and, increasingly, intermodal containers. Trucks carry the lion’s share, by value, of all freight moved in this country, but they share our inadequate highway infrastructure with cars, vans, buses, and miscellaneous other vehicles. And while federal cost allocation studies show that heavy trucks don’t pay their full share of highway costs, neither do they get the level and quality of service that efficient goods-movement requires.

But when a bill called the FREIGHT Act was introduced in both houses of Congress in July, I wrote somewhat critically about it in this newsletter. It would direct federal funds to all freight modes (including freight railroads) except trucking, and specified no funding source. I worried that this might be yet another raid on the already inadequate Highway Trust Fund, to benefit those who pay nothing into that fund.

So when I wrote my column for the September issue of Public Works Financing, I laid out some thoughts on what a sensible federal goods-movement policy might be. First, I said, avoid creating a common-pool fund, since that will inevitably lead to cross-subsidies for modes that don’t pay, paid for by those who do. Instead, create several strategic freight funds—one for highways, one for ports, one for railroads, one for waterways—each paid for by a user tax or fee agreed to by the users of the respective mode. Each would be governed (or at least advised) by a stakeholder board, under the principle of “user pay means user say.” Those boards would weigh project proposals and decide which would add the most real value for their mode. Multi-modal and inter-modal projects would involve joint investments from two or more of these funds, paid for in proportion to their importance to the modes involved.

To my surprise, within a day or two of submitting my copy, I received news releases announcing the introduction of the Freight Focus Act of 2010 (HR 6291) by Rep. Laura Richardson (D, CA). While it only calls for creating a single Goods Movement Trust Fund, it is also based on ensuring that “if funding came in from a specific mode, those funds will be dedicated to projects for that mode.” The bill includes a 12-cent/gallon increase in the diesel tax paid by trucks, but is drafted to permit the addition of other user taxes—potentially from railroads, port users, and waterway users. It would also create a National Freight Advisory Committee–a stakeholder body to help develop a “national freight plan” and to provide input into funding priorities. The measure has received kudos from the Coalition for America’s Gateways & Trade Corridors, the Retail Industry Leaders Association, and the American Trucking Associations.
This is a huge improvement over the vague and unfunded FREIGHT Act.

Reprinted with permission from Surface Transportation Innovation.

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