Farm Equipment and Public Roads – Follow the Money

Congress and The White House are looking for almost any option to replenish the depleted federal Highway Trust Fund without raising taxes on fuel prior to the November election. One proposal is to use the proceeds from a windfall of taxes on repatriated corporate profits. House Speaker John Boehner has suggested cutting Saturday mail delivery and putting the savings into the trust fund. Even if either of the proposals were workable, neither is likely to have the support needed to pass. Two senators are even willing to step on the third rail and have proposed a 12-cent-per-gallon federal tax increase over the next two years, indexed to inflation afterward.

While fuel taxes feed the fund, rates have not been increased in two decades, making the revenue they generate susceptible to inflation and declining sales as Americans drive more fuel-efficient cars—even as U.S. infrastructure worsens.

Last week the U.S. Transportation Secretary wrote to the states, again warning that, in the absence of congressional action, the balance in the fund’s highway account would force the Transportation Department to start delaying payments to states as soon as August. That has states looking for ways to address the pending cash crunch. Some are preparing to postpone projects or trying to boost their own sources of funding.

The funding issue has become a hot topic in Missouri, where the Legislature recently passed a resolution to ask voters for a sales-tax increase to raise at least $5.4 billion over 10 years because a higher sales tax is considered more politically viable than a gas-tax boost. The Wall Street Journal reports that the bill’s sponsor said, “Our congressional members have told us, ‘Listen, the federal Highway Trust Fund is growing broke.’ It’s going to be up to the states to handle their own issues.”

Blake Hurst, President of the Missouri Farm Bureau, said he is looking to see how many rural projects are proposed before he decides whether to support a tax increase. The WSJ article pointed out that ever-larger equipment, such as his combines, leave little space for passing traffic. “We’re interested in maintaining that ability to get our stuff to market,” Hurst said.

During the debate over farm equipment weight issues in Wisconsin in the last few months, it was always clear that, while the traffic delays and the foul smell of waste spilled from overloaded equipment often made headlines, how the state and counties would pay for the road improvements needed to handle additional traffic and heavy equipment was always the real issue. The current concern over federal funding reinforces the wisdom of our advice to “always follow the money.”

We expect elected officials to look at anything that moves to blame for current road conditions. We also believe that axle weights and axle spacing will remain the key issue directly affecting many of our members.

In Wisconsin, it seems the Department of Transportation wants to work with us to improve the newly passed law and address as many concerns as possible. Officials seem interested in working on possible research projects to better understand how frequency of use influences road impacts and the degree to which flotation tires mitigate road damage, as well as how track vehicles impact the roads.

We need to be clear that, while our attention currently is focused on Wisconsin, we believe this issue to be much larger than one state.

In the coming months, we will ask members for their input regarding the types and amount of equipment that could be subject to additional weight regulation. In addition, we are working with AEM to gather information on current weight and size limitations on the books in each state.

In the meantime, we urge Association members to become more involved with our Product Councils and various ASABE Standard development projects. The broader the base of the input we receive, the better we can advocate on behalf of our industry.