Transportation bill includes higher fees for airline and cruise passengers

Transportation bill includes higher fees for airline and cruise passengers

The House on Thursday approved a 5-year, $305 billion bill that boosts highway and transit spending and assures states that federal help will be available for major projects. Senate approval was expected to follow later on Thursday.

If the bill becomes law as expected, costs will rise for airline and cruise passengers. Customs fees will be indexed to inflation, and the money will be used to help offset the cost of highway and transit programs.

Lobbying group Airlines for America had fought the proposed increase. On Wednesday, before the vote, A4A said, “Airline customers are already overtaxed, and this agreement will further drive up the cost of travel for the 2 million passengers who fly on U.S. airlines every day. It is unfortunate that, once again, Congress is placing the burden to fund highway spending on the backs of the flying public.”

The bill, approved by a 359 to 65 vote, doesn't include as much money or last quite as long as many lawmakers and the Obama administration would have liked. Nor does it resolve how to pay for transportation programs in the long term.

Despite that, the 1,300-page bill was hailed by public officials as a major accomplishment that will halt the cycle of last-minute short-term fixes that have kept the trust fund teetering on the edge of insolvency for much of the past eight years.

The bill restores $1.6 billion a year in transit aid for seven high-density Northeast states: Rhode Island, Connecticut, Delaware, Maryland, Massachusetts, New Jersey, and New York. The states provide over half of all public transportation trips in the U.S. The House bill would have made the money available to bus systems in all states.

A big shortcoming in the bill, though, is how it's all financed. The main source of revenue for transportation is the federal Highway Trust Fund, which comes mostly from the 18.4-cents-a-gallon gasoline tax. That tax hasn't been raised since 1993 even though transportation spending has increased. But raising the gas tax is viewed by many lawmakers as too politically risky.

To make up the shortfall, the bill uses $70 billion in mostly budget gimmicks, including one that would move $53 billion from the Federal Reserve Bank's capital account to the general treasury. It's counted as new money on paper, but is actually just a transfer of funds from one government account to another, federal budget experts said.

Other items in the bill also don't include the means to pay for them, including more than $10 billion over five years for Amtrak and other rail programs, $12 billion for mass transit and $1 billion for vehicle safety programs. The money for those programs remains subject to annual spending decisions by Congress.

Among the bill's losers are large banks, which would receive lower dividends from the Federal Reserve, with the savings used for transportation programs. Banking officials complained that banks shouldn't be asked to foot the bill for highways and bridges.

The bill also addresses several concerns raised by a deadly Amtrak derailment in Philadelphia in May. It provides $200 million to help passenger railroads install positive train control technology that accident investigators say could have prevented the derailment had it been in operation. It also raises the liability cap on total damages that can be awarded in such crashes from $200 million to $295 million. The derailment killed eight people and injured nearly 200 others.