Congress Punting the Can & Hitting the Snooze with Temporary Highway Trust Fund Fix
Punting the football… Kicking the can down the road… Hitting the snooze button… Still driving blind… Road to nowhere… Spinning wheels… Riding on four flat tires… Pick your favorite metaphor and it’s probably been used to describe the House-approved temporary fix that the U.S. Senate appears poised to pass next week to rescue the dwindling federal Highway Trust Fund and ensure reimbursements for transportation projects will continue to go out to states through next May. It’s a plan that no one seems to like, that mostly prolongs the uncertainty states have faced in recent years with regards to the federal transportation program and that sets up another battle for next spring, albeit in what could be a substantially different looking new Congress. I also have a look this week at President Obama’s Build America Investment Initiative and a super-sized roundup of links from the last three weeks on reauthorization of MAP-21, the future of the Highway Trust Fund, state activity on transportation revenues, public-private partnerships and tolling and state multi-modal strategies.
Trust Fund Fix Waits For Another Week
With the Highway Trust Fund due to run out of money next month, the U.S. Senate adjourned early Thursday to head home to their states without passing a House approved temporary fix that would keep the fund afloat through next May. The patch will have to wait for next week, what is expected to be the last week Congress is in session prior to their customary month-long August recess. As of today, there are just seven days left before the U.S. Department of Transportation has said it will have to start cutting highway reimbursements to states if Congress hasn't addressed the pending trust fund insolvency.
The House bill, approved July 15th, would provide $10.9 billion to fund transportation projects for nine months. The Highway Trust Fund would receive a transfer of $9.9 billion from the general fund and $1 billion from a separate trust fund. The measure offsets the general fund transfers by extending customs fees and by using something called pension smoothing, which allows companies with defined benefit retirement plans to assume higher interest rates when calculating the amount they contribute for their employees’ retirement thus reducing their required contributions into the plans and raising the amount of taxes they owe. Critics have called the offsets gimmicks and smoke and mirrors, The Washington Post reported.
Senate Democrats have reached an agreement to proceed to consideration of the bill at a time to be determined. The Senate will also vote on four amendments to the House measure, all subject to a 60-vote threshold, Politico noted. The amendments include:
- The alternative bill offered by Senators Ron Wyden and Orrin Hatch of the Senate Finance Committee;
- A plan offered by Senators Barbara Boxer, Bob Corker and Tom Carper to end the temporary patch this December;
- Sen. Mike Lee’s Transportation Empowerment Act, a devolution measure which would cut the gas tax to 3.7 cents per gallon and give states more authority over transportation projects; and
- Sen. Pat Toomey’s amendment to waive environmental reviews for projects replacing infrastructure damaged in disasters.
More on the House bill, reaction to it and the path forward:
- House Ways & Means Committee: H.R. 5021
- U.S. Senate Democrats: Agreement on Highway and Transportation Funding Act
- Brookings: “House Transportation Bill: A Path to Nowhere.”
- U.S. News & World Report: “The Road to Budget Gimmicks: Congress’ fix for the Highway Trust Fund is just a budget trick.”
- The Hill: “Foxx: Temporary highway funding patch insufficient.”
- Roll Call: “’Pension Smoothing,’ the Highway Trust Fund’s Temporary Friend.”
- Fleet Owner: “Senate maneuver may well dead-end a long-term highway bill anytime this year.”
- American Society of Civil Engineers: “Statement on the House Plan to Maintain the Highway Trust Fund for Only 9 More Months.”
- U.S. Chamber of Commerce: “Statement on House Passage of Highway Trust Fund Legislation.”
- The Hill: “AFL-CIO to Congress: Don’t settle for highway stopgap.”
- The Hill: “Newspapers take dim view of highway funding stopgap.”
- New Republic: “The Highway Trust Fund Bill is Congress at its Worst: Short term? Check. Last-minute? Check. Short-sighted? Check.”
- The Washington Post: “House passes stop-gap bill to fund transportation through May.”
President’s Build America Investment Initiative
President Obama last week announced an executive action to create the Build America Investment Initiative, a government-wide effort to increase infrastructure investment.
As part of the effort, the Administration is creating the Build America Transportation Investment Center, which will be housed at the U.S. Department of Transportation and serve as a “one-stop shop” to help states and communities take advantage of innovative financing and forge partnerships with public and private developers and investors. The center will also provide improved access to USDOT credit programs such as TIFIA, provide technical assistance to states and distribute information on ways to reduce uncertainty and delays in the permitting process.
The initiative creates a federal inter-agency working group chaired by Treasury Secretary Jack Lew and Transportation Secretary Anthony Foxx that will examine and address barriers to private infrastructure investment and partnerships.
The Treasury Department will also host a summit on infrastructure investment this September that will bring together leading project developers and institutional investors as well as state and local officials and their federal counterparts.
A key focus of the initiative will be examining proven approaches closely and building on those models of success.
As the White House fact sheet on the initiative notes: “Some states and communities have established successful PPPs (public-private partnerships) and have developed strong institutional knowledge of how these projects are best structured and managed. Expanding that know-how to other states has the potential to increase the flow of capital by tens of billions of dollars over the next few years. Today, for example, the top five states in PPPs have nearly twice the per-capita value of projects as the next 20 best states—and if those states caught up, it could mean up to $30 billion worth of infrastructure projects.”
Transportation stakeholder groups were mostly supportive of the initiative. American Society of Civil Engineers President Randall Over said in a statement: “The newly created Build America Transportation Investment Center can play a vital role in sharing best public-private partnerships (P3s) practices and encouraging more states to utilize P3s to a greater degree, thereby creating a more robust U.S. market and attracting private sector investment in our nation’s transportation infrastructure.”
The White House website had a roundup of further reaction from the likes of Oregon Gov. John Kitzhaber, spokespeople for United Parcel Service and the American Trucking Associations and the President and CEO of the American Public Transportation Association.
In addition, this week the White House Rural Council announced plans to start a $10 billion investment fund that will give pension funds and large investors opportunities to invest in rural America agricultural projects including wastewater systems, energy projects and infrastructure development, The New York Times reported.
MAP-21 Reauthorization & the Future of the Highway Trust Fund
- Transportation Secretary Anthony Foxx gave a speech at the National Press Club in Washington this week and said he won’t be celebrating the temporary trust fund fix when what the nation needs is a long-term transportation bill. Foxx predicted that “Congress will push the snooze button on this issue until crunch time” rolls around next May. “We’ve got a big problem, and we’re treating it like a little problem,” he said. “We need a transportation reset, and it’s gotta be big.” Foxx said his department plans to release a document outlining a 30-year vision for the nation’s transportation system by the end of the year.
- In an open letter to Congress posted on the USDOT website this week, Foxx and 11 of his predecessors urged lawmakers to address the nation’s long-term transportation needs: “Never in our nation’s history has America’s transportation system been on a more unsustainable course. In recent years, Congress has largely funded transportation in fits and starts. Federal funding bills once sustained our transportation system for up to six years, but over the past five years, Congress has passed 27 short-term measures. Today, we are more than a decade past the last six-year funding measure. This is no way to run a railroad, fill a pothole, or repair a bridge. In fact, the unpredictability about when, or if, funding will come has caused states to delay or cancel projects altogether. The result has been an enormous infrastructure deficit – a nationwide backlog of repairing and rebuilding.
- Vice President Joe Biden used a white board to make the case for long-term transportation funding in a video released by The White House this week.
- Before leaving town, the U.S. Senate easily confirmed Victor Mendez to become Deputy Secretary at USDOT and Peter Rogoff as Undersecretary for Policy, Transport Topics noted.
- Some in Congress think reviving earmarks might improve the chances for longer-term transportation bills, Roll Call reported recently.
- Energy consultant and professional engineer John Miller ponders the question “Should the U.S. Implement a New ‘Value-Added Carbon Tax’ to Replenish the Federal Highway Trust Fund?” in a recent piece for The Energy Collective.
- In case you missed it, Jon Stewart had a funny bit on “The Daily Show” last week about the federal transportation funding situation.
- The White House issued “An Economic Analysis of Transportation Infrastructure Investment” earlier this month.
State Activity on Transportation Revenues
- In the latest issue of his Innovation Newsbriefs, Ken Orski writes that “States’ Transportation Revenue Initiatives Help to Compensate for an Absence of Congressional Action on Long-Term Funding.” Orski, by the way, will be a speaker at the Southern Legislative Conference annual meeting in Little Rock this weekend.
- The Fiscal Times had a recent piece on the “Ten States with the Worst Highway Spending Woes.”
- California: Voters in Alameda County will consider a transportation sales tax and a nearly $8 billion spending plan on the November ballot, The San Francisco Chronicle reported. A similar measure failed to gain the required two-thirds approval in 2012. The difference in this year’s measure is that the tax would expire in 30 years.
- Connecticut: Gov. Dannel Malloy is defending his administration’s record on transportation spending in the wake of criticism in a recent White House report, The New Haven Register reported.
- Idaho: Voters in the state recognize the need to address infrastructure but less than one in 10 support increasing the state’s gas tax according to a recent survey, the Associated Press reported.
- Indiana: The Blue Ribbon Panel on Transportation Infrastructure has issued its Final Report to Governor Pence. In its third recommendation, the panel says new, creative funding streams should be considered, those funding streams should be indexed to inflation for all modes of transportation, and they should be “user fees” in concept for all modes. Moreover, the panel said revenue diversions from transportation related activities should be ended and recommended the creation of new dedicated funds to enhance the effectiveness of airways and waterways infrastructure. The panel also identified top priorities for the state’s road construction projects.
- Maryland: Teddy Lederer on the Transportation for America blog notes that voters in the state have been mostly supportive of legislators who voted for the gas tax increase last year. Of the 82 Democrats who voted yes and ran for re-election, 94 percent kept their seat in the June 24th primary. No Republicans voted for the increase and 12.5 percent of them lost their seat in the primary.
- Massachusetts: 22News reported on the campaign to put an initiative on the ballot to repeal automatic indexing of the state gas tax, which was approved last year as part of the transportation package. The “Stop Automatic Tax Hikes Ballot Campaign” recently hand delivered more than 19,000 signatures to the office of the Secretary of the Commonwealth.
- Michigan: In an op-ed for MLive, Andy Welch and Scott Hagerstrom of the Americans for Prosperity Foundation write that lawmakers should consider dedicating a 6 percent sales tax the state levies on fuel (on top of the 19 cents-per-gallon excise tax) to transportation. Revenues from the sales tax are currently spent on things that have nothing to do with road improvements, they argue (some is spent on mass transit in Detroit). A $1.5 billion tax increase for transportation failed to win support in the state legislature earlier this year.
- Missouri: State transportation commissioners have approved a list of projects that would be funded by a 0.75 percent sales tax that voters will consider next month, St. Louis Public Radio reported. The list includes more than 800 projects totaling $4.8 billion.
- New Hampshire: The state’s recent gas tax increase has become an issue in the U.S. Senate race here, The Concord Monitor reported.
- New Jersey: State lawmakers have passed legislation to restructure transportation funding in the state. According to Go By Truck Global News, the bill aims to increase both public and private investment in infrastructure. It would repeal New Jersey’s existing State Transportation Infrastructure Bank and replace it with two revolving funds established within the Environmental Infrastructure Trust. The legislation now awaits the governor’s signature.
- North Carolina: A state Senate committee has passed a bill that would prevent counties from raising sales taxes to pay for both public education and public transportation, The News Observer reported. … Meanwhile, Wilmington voters will consider a $55 million transportation bond in November, WWAY reported.
- Oregon: The state’s efforts to pioneer a mileage-based road user fee are receiving new attention in the wake of the recent brief on the policy history of the program that I mentioned in a previous post and as a long-term highway funding solution appears unlikely in Congress this year. The Atlantic Citylab took a look at the program in a recent article. Think Progress also had a recent piece. And here’s The Washington Post’s take in a Q&A with Oregon State Sen. Bruce Starr, who authored the legislation creating the state’s new voluntary road usage fee program, which is due to get underway this time next year. Kevin DeGood and Michael Madowitz of the Center for American Progress meanwhile have a new brief out on “Switching from a Gas Tax to a Mileage-Based User Fee.” And the University of Texas at Austin has a new report looking at lessons learned in Oregon so far and how they could be applied in the Lone Star State.
- Pennsylvania: The Philadelphia Inquirer looked at what the state’s higher gas tax increase, approved last year, means for transportation projects.
- Texas: The Community Impact Newspaper looked at this November’s upcoming vote on a constitutional amendment that would allow revenues that go into the state’s rainy day fund to be spent on transportation.
Public-Private Partnerships & Tolling
- Roll Call reported Peter Ruane of the American Road and Transportation Builders Association and Peter Rogoff, who as mentioned above is now the Undersecretary of Transportation for Policy at USDOT, were sounding cautionary notes about the future of public-private partnerships at a recent conference.
- In a recent op-ed for the Express-News, Patrick Jones of the International Bridge, Tunnel and Turnpike Association makes the case for tolling as San Antonio finalizes plans for improvements to U.S. 281.
- Fitch Ratings said this week that the recent financial challenges faced by Texas State Highway 130 are “the latest demonstration of the risk in forecasting greenfield toll road traffic patterns,” Toll Roads News reported. Other toll roads including the Dulles Greenway, South Bay Expressway, Southern Connector, Santa Rosa Bay Bridge and Pocahontas Parkway have all faced similar traffic underperformance challenges that have resulted in downgrades and defaults.
- Roll Call and NPR both reported recently on why expanded tolling may face challenges.
- Robert Puentes and Bruce Katz of the Brooking Institution’s Metropolitan Policy Program write about America’s infrastructure crisis for the Canadian infrastructure magazine ReNew Canada. They write that Canada’s mix of public and private infrastructure investment may hold lessons for the U.S. and about how a coalition of three western states and one Canadian province—called the West Coast Infrastructure Exchange (WCX)—provides a good example of how a pipeline of investable infrastructure projects can be built. The WCX was also highlighted during last month’s InfraAmericas conference in New York. You can read my coverage of the event here.
- Real Business reports that interoperability of toll transponders across regions will be the next step in the evolution of tolling.
- Bob Poole of the libertarian-leaning Reason Foundation argues that “Conservatives Should Embrace Obama’s Plan for Tolls to Rebuild Interstate Highways.”
- Colorado: KUNC Public Radio took a look at the national and state trend toward more tolled Express Lanes.
- Illinois: The Chicago Tribune reported recently on how a portion of the Illinois Tollway is being used to test new technologies, including having motorists pay for tolls using smartphones.
- Indiana: The Indiana Finance Authority has closed financing on the I-69 Section 5 highway project, the state’s second availability payment-style P3, Nossaman’s Infra Insight Blog noted. It’s a 21-mile project outside Bloomington. … One recommendation of the aforementioned Blue Ribbon Panel on Transportation Infrastructure is to build a new toll road, dubbed the Mid-State Corridor, that would link southern Indiana with Daviess County, Kentucky, the (Owensboro) Messenger-Inquirer reported. The road, which the panel would like to see under construction in five to ten years, would take the place of the previously planned I-67.
- North Carolina: State Rep. Robert Brawley has introduced legislation calling for a statewide November ballot referendum that asks voters to consider the statement “No new toll or fee shall be imposed nor any existing toll increased for the use of any North Carolina road or highway.” The measure, House Bill 1274, could require the North Carolina Department of Transportation to suspend its planning of HOT lanes on I-77, at least until after the referendum, The Mooresville Tribune reported.
- Pennsylvania: The state DOT’s pursuit of a public-private partnership to replace several hundred deficient bridges all at once is the focus of a piece this week in the Johnstown Tribune-Democrat. Reporter John Finnerty notes that “unlike most public-private transportation projects, the bridge program will not tap toll revenue. Instead it will use higher wholesale gas taxes and vehicle fees outlined in the recent transportation plan, which aims to collect $1.2 billion more per year for road and bridge work.”
- Puerto Rico: Airport Improvement magazine looks at the public-private partnership to make improvements at the Luis Munoz Marin International Airport in San Juan, including the challenges of the public-to-private transition.
- Texas: Aman Batheja of The Texas Tribune reported recently on a shift against tolling among Texas Republicans as Gov. Rick Perry gets ready to leave office. Meanwhile, The Dallas Morning News reported that opposition may be emerging to a plan to convert underutilized carpool lanes on the Central Expressway to HOT lanes. … Also, Moody’s Investors Service announced recently it considers State Highway 130, the Austin-area toll road with the highest speed limit in the country, in default for failing to make its full June debt payment, Transport Topics reported. The tollway operator said the project is not in default because an agreement was reached with lenders that modifies the payment date. The privately developed and operated SH 130 has struggled financially since opening in 2012.
- Virginia: State transportation officials last week announced their plans for easing travel conditions on I-66, The Washington Post reported. Among other things, they hope to add part of the interstate to the regional network of HOT lanes that also includes I-495 and I-95. The Washington Business Journal meanwhile reported recently on the I-95 Express Lanes, which are now expected to open in early 2015. And The Post had a look at how the 95 lanes will work and how they’ll be different from those on the Beltway. … State agreements with private contractors are the subject of a study by the Joint Legislative Audit and Review Commission, The Richmond Times-Dispatch reported. Among the projects that would be reviewed: the project to build a new toll expressway along U.S. 460, which was shut down by Gov. Terry McAuliffe earlier this year amidst environmental and transparency concerns. Also, the expansion of the Midtown and Downtown Tunnels in Hampton Roads and a never consummated proposal to privatize operations at the Port of Virginia. …And the Virginia Office of Transportation Public-Private Partnerships this week announced they are seeking public input on how to increase transparency, competition and public involvement on future P3 projects.
State Multi-Modal Strategies
- Arizona: A new report from the Arizona Public Interest Research Group finds that Arizonans are driving less and seeking more transportation alternatives. The report argues that resources should be reallocated toward system repair and programs to expand choices.
- Texas: Aman Batheja of The Texas Tribune wrote recently about how some in the Lone Star State are concerned that growing traffic congestion will stem the rapid growth that has helped define the so-called “Texas Miracle.”
- Angie Schmitt at Streetsblog USA wrote this month about the debate over whether moving traffic or building healthy communities is more important in transportation decision making and how that debate has played out in places like Milwaukee and Cleveland.
- The U.S. Department of Transportation has released details of its proposed rulemaking to improve the safety of the transport of flammable materials by rail.
- Members of Congress expressed the need for expedited approvals of public-private partnerships to help fund improvements to waterway and harbor infrastructure at a recent hearing of the House Transportation & Infrastructure Committee’s Panel on Public-Private Partnerships. You can watch the hearing here.
- In a recent piece for Governing, Ed Crooks of KPMG took a look at the new Water Infrastructure Finance and Innovation Act (WIFIA) loan program created as part of the recently enacted Water Resources Reform and Development Act (WRRDA) legislation.
- A California Democratic Congresswoman wants to create a freight trust fund that would rely on 5 percent of duties collected on imports to the U.S., The Hill reported.
- Arizona: Tucson’s Sun Link streetcar system is launching service today, Progressive Railroading reported.
- California: Gov. Jerry Brown has signed legislation that will allow the Los Angeles County Metropolitan Transportation Authority to consider building a light rail line through the southern San Fernando Valley, The Los Angeles Times reported. Meanwhile, Eric Jaffe of The Atlantic Citylab reported on the state’s push to end car-first street planning, which could make transit projects easier and have an influence around the country.
- Colorado: The Regional Transportation District in Denver has approved another extension of the FasTracks rail system but it will need a hefty federal grant to keep moving forward, The Denver Business Journal reported.
- District of Columbia: The H Street-Benning Road streetcar line is now not expected to open until the first part of November at the earliest, WAMU reported.
- Georgia: The Atlanta Streetcar also won’t start rolling until November, the Atlanta Journal-Constitution reported.
- Hawaii: A University of Michigan study said Hawaii’s Big Island could improve residents’ access to public transportation by using Google and other technology to attract riders, the Pacific Business News reported.
- Michigan: The M-1 Rail Streetcar project in Detroit is expected to break ground this month and is being counted on to spark a boom in downtown and Midtown development including 10,000 new residential units, The Detroit Free Press reported.
- Minnesota: The St. Paul Metropolitan Council has approved the region’s first arterial bus rapid transit line, which will move into final design and construction later this year, Finance & Commerce reported. It’s the first in a planned series of BRT routes on arterial corridors. … Meanwhile, some still aren’t pleased with the design and low speeds of the new Central Corridor “Green Line” Light Rail line and are hoping for reform of the transit planning process.
- Utah: Officials in Davis County have selected bus rapid transit as their preferred transit mode and identified a preferred route for the BRT through Bountiful, Woods Cross and North Salt Lake to downtown Salt Lake City, The Salt Lake Tribune reported. The officials kept open the possibility of one day converting the BRT line to light rail.
- Virginia: The Washington Post reported on the increasingly contentious battle over a streetcar project in south Arlington. The Silver Line Metro Extension meanwhile is reportedly set to open this weekend, The Post noted elsewhere. And users of the Dulles Toll Road are paying an increasing share of the Silver Line’s costs, the newspaper reported.
- Washington: The Seattle City Council has approved sending a transit funding package to voters for consideration in November, The Seattle Times noted. If approved, the measure would levy a $60 car-tab fee and increase the city sales tax by 0.1 percent to raise $40 million annually for city transit, $3 million for regional transit routes and $2 million to give low-income residents a $20 car-tab rebate. The taxes and fees would sunset after six years. A King County transit funding measure failed in April but 66 percent of Seattle voters supported it. Unlike the county measure, the city plan would not fund any road projects.
- The economic impact of public transportation was the focus of a hearing this week on Capitol Hill.
- Next City recently looked at what happens “When Car-Loving Cities Start to Embrace Light Rail.”
- Rohit Aggarwala, who appeared on a CSG webinar awhile back, writes about “Why Higher Fares Would Be Good for Public Transit” in a recent piece for The Atlantic Citylab.
- Payton Chung of Streetsblog USA writes that a new report from researchers at UC-Berkeley identifies the factors that go into successful transit investments and could bolster efforts to maximize the effectiveness of new investments by more accurately predicting ridership.
- California: James Fallows made the case for California’s HSR project in a recent piece for The Atlantic. Ten Atlantic readers also weighed in with their opinions. And with the recent budget vote to commit hundreds of millions of dollars a year in cap-and-trade funds to the project, private investors are reportedly showing an interest in working with the state.
- Arizona: Phoenix recently approved a new “complete streets” ordinance, The Arizona Republic noted.
- Oregon: Portland officials said recently they were open to alternatives to a proposed street fee that could raise up to $53 million for street safety and maintenance projects, The Oregonian reported.
- West Virginia: The Charleston Daily Mail looked recently at efforts to improve safety for bicyclists in the state. The League of American Bicyclists this year ranked the state 44th in terms of bicycle friendliness, giving West Virginia poor marks in the “legislation and enforcement,” “infrastructure and funding,” and “evaluation and planning” categories.
- Wisconsin: State transportation officials and bicycling advocates are in the process of mapping, marking and promoting existing bike routes around the state and seeking proposals to create a state bike network, Gannett Wisconsin Media reported.
- The Associated Press noted recently that as cities look to attract more young people, the number of protected bike lanes has almost doubled since 2011 and may again by 2016, according to the Colorado advocacy group PeopleForBikes.
- A recent USA Today piece examined the “Bitter battle between motorists and bikers.”