After last week’s marathon markup of the INVEST in America Act, House Democrats on Monday unveiled the Moving Forward Act. This legislation takes a comprehensive approach to infrastructure investment and mirrors the 2017 Infrastructure Report Card to include surface transportation, aviation, water, schools, rail, energy, and public park infrastructure investment. In addition to providing policy recommendations to improve our nation’s infrastructure, the legislation also looks to tackle our revenue deficit by making tax code revisions to support bond market financing and provides a $145 billion bailout of the Highway Trust Fund (HTF).
From nearly the beginning of our nation, state and local governments have depended on access to the capital market and issuance of tax-exempt bonds to provide for the nation’s infrastructure. The Tax Cuts and Jobs Act (TCJA) of 2017 reversed this trend and eliminated many valuable tools used by civil engineers to improve our nation’s infrastructure. The Moving Forward Act corrects some of the harmful TCJA provisions to include reinstating tax-exempt advance refunding. Aside from this TCJA correction, the legislation also takes the opportunity to reinstate Build America Bonds along with infrastructure tax credits, raising the state volume cap on Private Activity Bonds (PABs) and raising the cap on PABs issued out of the Build America Bureau from $15 billion to $18.7 billion. While ASCE continues to support direct funding, we support these financing tools as part of a multi-investment approach that can help state and local governments make strong infrastructure investments.
To pay for the $411 billion in HTF spending under the INVEST in America Act, $140 billion is needed to fill the current revenue gap. To tackle this funding issue, House Democrats had included in the Moving Forward Act a provision transferring over 5 years $145 billion in Treasury general funds (GF) to the HTF. This GF transfer includes $106.7 billion to the HTF Highway Account and $38.6 billion to the HTF Mass Transit Account. Under pre-COVID-19 HTF 5-year revenue projections, this GF transfer would raise the total HTF baseline from $214.3 billion to $359.6 billion, increase the Highway Account baseline from $188.4 billion to $295 billion, and the Mass Transit Account baseline from $25.9 billion to $64.5 billion. This bailout continues to kick the can down the road and is not the long-term revenue HTF solution ASCE has called on Congress to provide, leaving a $1.1 trillion 10-year funding deficit unsolved.
In ASCE’s 2017 Infrastructure Report Card, our nation’s infrastructure earned a cumulative grade of a “D+,” and to raise our grade we need to spend $4.59 trillion and fill a $2 trillion deficit – half of which is for surface transportation- over the next decade. While financing options are an important tool to help shrink the current investment gap, fixing the HTF is a critical component of any plan to rebuild and modernize our infrastructure. ASCE is pleased that the Moving Forward Act contains provisions that support a strong bond market but is concerned that House Democrats have not provided a long-term HTF revenue solution. As this legislation moves to the House floor for a vote, we continue to urge lawmakers to fix the HTF and provide funding certainty for our nation’s surface transportation network.