WASHINGTON, D.C. — The private sector is willing to pay higher user fees to fund transportation infrastructure and is ready to unleash a quarter of a trillion dollars in capital for public-private partnerships, U.S. Chamber of Commerce President and CEO Tom Donohue said on Wednesday.
He reiterated his support for raising the federal gas tax, saying modest increases should be phased into the major highway construction funding mechanism and the tax should be pegged to inflation. Increasing the gas tax, which hasn’t been raised since 1993, would buy the nation more time to find a new way to pay for highway and road construction, Donohue said at the U.S. Chamber of Commerce’s first annual Transportation and Infrastructure Summit in Washington.
“Shippers are for it. Truckers are for it. Simpson-Bowles was for it ... The Chamber is for it,” he said.
Donohue repeated his support for a gas tax increase at the House Transportation and Infrastructure Committee’s first hearing of the year, drawing the ire of Rep. John Mica, R-Fla., the former chair of the committee. The Florida congressman said in a statement that Donohue has “lost touch with the business people he represents” by backsliding “again to a myopic tax and spend agenda.”
“We don't make it personal, and it is always unfortunate when others do. The realities of our infrastructure challenges have to be addressed, and we will keep offering solutions, even if they are unpopular. If any of the solutions were popular, this would be done already,” Janet Kavinoky, the chamber’s executive director of transportation infrastructure, responded in a statement.
Donohue also urged Congress to consider the inland waterway industry’s proposal to boost construction by taxing itself more via a hike in the barge fuel tax. The former president and CEO of the American Trucking Associations said Congress needs to find a way “unlock” the full potential of the Harbor Maintenance Trust Fund so U.S. ports would get all the funding for maintenance dredging owed to them, not just half.
“The bottom line is that the private sector is ready to pay its share to help maintain public investment in public infrastructure, which will improve productivity and enhance our nation’s competitiveness,” he said.
Donohue said the nation has been too slow in leveraging private capital for major infrastructure projects and called on all states to pass legislation allowing public-private partnerships by the end of next year. By providing the first wave of capital, the private sector “can help projects get off the ground and completed much faster than if the state, the federal government and others had to do go through their kubui dance that it takes to get a lot of these projects going,” he said. The nation is only tapping about 9 percent of the potential private capital, Donohue said.
British Columbia, Canada, has had so much success with public-private partnerships that facilities such as hospitals are being completed ahead of schedule and before staff can be lined up. “This a problem we’d like to have,” Donohue said. Much of the province’s success is that there is a Vancouver office dedicated to “helping facilitate PPPs and making sure the public is getting the biggest bang for their buck.”
Although 33 states have passed legislation allowing PPPs, “only a handful” have forged such pacts with the private sector, Donohue said. The private sector needs to educate state and local authorities on how private companies can help push projects forward, considering a McGraw Hill study found 61 percent of such officials have “no experience with PPPs” or understanding of how they work, he said.
“In fact, many government officials ... still believe the private sector is donating this money. We ain’t donating it. We are investing it,” he said.
Echoing a similar refrain of the Chamber, Donohue said the federal government “needs to stay out of the way” and remove barriers to private investment. The federal goverment can help foster PPPs by providing technical assistance and low-cost financing. The federal government “could make programs like (the Transportation Infrastructure Finance and Innovation Act program) more efficient, and they can help attract capital to highways and transit, intermodal rail and port projects,” Donohue said. The private sector can lend its “knowledge, expertise and innovation” to make infrastructure work more efficiently.