New Hope for Infrastructure Funding?
On March 6, the House Ways and Means Committee held a hearing - "Our Nation's Crumbling Infrastructure and the Need for Immediate Action" - in order to explore federal funding options to maintain and modernize the nation's infrastructure. The hearing featured testimony from House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Oregon) and Ranking Member Sam Graves (R-Missouri), as well as representatives from the American Society of Civil Engineers, the U.S. Chamber of Commerce, the Competitive Enterprise Institute, the American Trucking Associations, and the AFL-CIO. Chairman DeFazio and Ranking Member Graves each highlighted several federal funding mechanisms that could be used to pay for a comprehensive infrastructure package, such as increases in federal fuel taxes and continued efforts to reduce federal regulatory barriers in order to speed up construction projects at the local level.
In his opening remarks, Chairman DeFazio emphasized the significant role the Ways and Means Committee plays in passing a comprehensive infrastructure bill, as well as the need for the federal government to continue to partner with state and local governments to address the issue. Importantly, he noted that "In order for [the House Transportation and Infrastructure Committee] to do its work, particularly when it comes to surface transportation, we need the Committee on Ways and Means to act to raise federal revenue…We cannot limp along on short-term patches, leveraging or shifting responsibilities to other levels of government. It’s time for Congress to step up and do its part.”
While it is promising that Congress and the Administration indicate willingness to tackle the nation's infrastructure funding issue - the March 6 hearing was the Ways and Means Committee's first hearing on the topic in several years - few, if any, new funding or financing options surfaced. Some witnesses called for raising the federal gas tax, while fees on vehicle miles traveled were also mentioned. Many acknowledged that the Highway Trust Fund is no longer a viable long-term solution, and that "several tools" are neeeded to "close the infrastructure investment gap."
ICMA has joined several other organizations representing state and local government and other tax-exempt bond issuers, borrowers, and municipal market professionals in sending a letter to Ways and Means Chairman Neal and Ranking Member Brady, thanking them for their attention to the nation's infrastructure needs and encouraging them to maintain the tax exemption on municipal bonds and to reinstate the ability for governments and other qualifying entities to advance refund tax-exempt municipal bonds.