Five-Year Anniversary of Stimulus Observed as Transportation Investment is Debated in Washington & State Capitals
The benefits of the American Recovery and Reinvestment Act to the nation’s infrastructure were touted this week as the 2009 federal stimulus package turned five years old. Meanwhile policymakers and analysts continued to express concern about future federal and state infrastructure investment both in Washington and state capitals.
ARRA Turns Five
At an event in Illinois this week, Vice President Joe Biden proclaimed the success of the Recovery Act in staving off a depression in the United States, the Associated Press reported. Biden told a crowd at America’s Central Port in Granite City near St. Louis (which took advantage of $14.5 million in stimulus money) that improving the nation’s infrastructure should be a priority even when things aren’t as dire as they were when President Obama signed the ARRA into law on February 17, 2009.
“The answers to our problems are not that complex,” he said. “Do whatever has to be done to rebuild this skeleton of this country. … Build, build, build the most modern infrastructure in the history of the world, and the world will come to us.”
After the event, a number of Republicans labelled the stimulus spending a wasteful failure which had little effect for Illinois where the unemployment rate is virtually unchanged from five years ago.
But U.S. Secretary of Transportation Anthony Foxx, who joined the Vice President in Illinois, said in his blog this week that there is plenty of evidence that the ARRA has had an impact for infrastructure and the economy including: improving 42,000 miles of roads; repairing or replacing more than 2,700 bridges; and helping transit agencies purchase more than 12,220 transit vehicles.
“The projects we have supported are much more than abstract milestones,” the Secretary writes. “Each one represents good jobs. Each one represents a community benefiting from economic activity stimulated by construction and renovation. Each one represents greater safety. And each one represents improved infrastructure that makes getting from point A to point B easier for people and for the freight that fuels our economy.”
More on the ARRA Anniversary
- The President’s Council of Economic Advisers, which was charged with providing Congress quarterly reports on the effects of the ARRA as part of the legislation’s accountability and transparency provisions, issued its final report in the series this month, which can be read here.
- The Transportation Research Board recently issued a special report on "Transportation Investments in Response to Economic Downturns." The report offers a series of recommendations for changes in state and federal financial and administrative practices to prepare for any future transportation stimulus package.
- The Hill newspaper reported this week on how the Recovery Act has become a battleground to define the President’s legacy.
- For those feeling nostalgic, take a look back at my report on the one-year anniversary of the ARRA in my 2010 report “Shovel-Ready or Not: State Stimulus Successes on the Road to Recovery.”
- Also worth revisiting: my article from the 2011 edition of The Book of the States entitled "Recovery Act Transportation Spending: 'Summer of Recovery' Becomes Fall of Discontent."
MAP-21 Reauthorization & the Future of the Highway Trust Fund
- The U.S. Department of Transportation updated its Highway Trust Fund Ticker this week. It shows that the HTF’s highway account is still expected to see a shortfall in early August. Congress would likely need to act before its August recess and well before the expiration of MAP-21 at the end of September in order to rescue the fund. Sequestration cuts have taken their toll on the highway account, DOT reported. Although a $10.4 billion transfer from the General Fund was authorized in MAP-21 for this fiscal year, the transfer was only $9.7 billion because of the automatic cuts. The mass transit account meanwhile got only $2 billion of the $2.2 billion transfer that was authorized.
- Secretary Foxx was among the speakers this week at the U.S. Chamber’s transportation summit in Washington, USA Today reported. “We need to invest more funding,” Foxx told the group. “Obviously we want to avoid a train wreck. … Every year we wait is compounding the investment that our children and grandchildren will need to make. The fiscally responsible path is to invest now and not later.” The secretary also blogged about his message to the Chamber this week.
- Following his speech at the summit, the Secretary told reporters that the federal government would consider adopting “emergency measures” to continue funding state infrastructure projects in FY 2015 if the HTF is allowed to expire this summer. “We don’t want to go into emergency measures, but that’s got to be on the table,” he said.
- The Chamber’s Transportation Summit also featured a panel discussion on the role infrastructure plays for key sectors of the economy. C-SPAN covered the discussion, which you can watch here.
- Kevin DeGood, Director of Infrastructure Policy at the liberal-leaning Center for American Progress has a brief this week on “Understanding the Highway Trust Fund and the Perils of Inaction.” As DeGood explains: “Current projections show that the highway account will run out of money as early as this August. … Under federal law, the HTF cannot run a negative balance. In order to guard against this, the U.S. Department of Transportation … will begin taking special administrative actions this summer during the heart of construction season. Specifically, when the highway account dips below $4 billion, USDOT will either substantially delay payments to states or pay a reduced share—65 cents on the dollar, for example—and special measures will take effect when the mass transit account dips below $1 billion.” The brief includes a 50-state chart of the estimated funding cuts and jobs lost for FY 2015 should insolvency come to pass.
- DeGood also offers his assessment this week of legislation I mentioned in my previous blog post that appears to have some support on both sides of Capitol Hill: Rep. Tom Graves’ and Sen. Mike Lee’s proposals to cut the federal gas tax and gut much of the federal transportation program in the interest of giving states more decision-making authority (and funding responsibility). DeGood argues that Lee’s home state of “Utah is proof that a sustained partnership with Washington can produce real benefits. While Sen. Lee’s desire to improve national policy is laudable, ending the highly successful federal-state transportation partnership takes things a step too far.”
- The Illinois Chamber of Commerce also recently weighed in on the so-called “devolution” debate. Their conclusion: “Collectively or individually, the needs of the U.S. transportation system and individual states (are) too great for any state to do on its own.”
- Uncertainty surrounding the future reliability of federal transportation funding prompted Moody’s Investor Services to downgrade transportation bonds for Maine and 15 other states, The Bangor Daily News reported.
- Tennessee: Transportation Commissioner John Schroer was again sounding the alarm this week about the uncertainty of the federal transportation program and what it could mean for his state if the Highway Trust Fund is allowed to wither on the vine, The Leaf Chronicle reported. Noting that Tennessee is one of only four states that has no transportation debt, Schroer told the Clarksville Urbanized Area MPO that “it’s getting harder and harder to be a pay-as-you-go state.” Half of the Tennessee Department of Transportation’s budget comes from the federal gas tax, Schroer said. “By the end of August, there will be no more federal dollars available for transportation, period. There will be no new highway construction starts in 2015, based on current revenue expectations. We really need a long-term transportation plan … and the state needs to enact legislation to increase levels of revenue for transportation.”
- Clark Barrineau from the American Society of Civil Engineers blogged last week about some recent examples of states being concerned about the impending HTF insufficiencies.
State Activity on Transportation Revenues
- Arizona: State Sen. Steve Farley of Tucson has introduced legislation (SB 1262), which would create a task force to study ways to replace gas and diesel tax revenues, the Cronkite News Service reported this week. Farley said the state needs to find a new, stable funding source for transportation. “Transportation is a key component of government,” the Democrat said. “We have to find a way to carry out this core function of government.”
- Idaho: The Idaho Press-Tribune offered a point-counterpoint op-ed this week on the question of whether it’s time to raise the state gas tax by 6 cents. Julie Pipal, the president and CEO of the Idaho Trucking Association, argues in favor of the increase. Pipal’s group is supporting an effort by House Transportation Committee Chair Joe Palmer and others to implement such an increase over three years. AAA Idaho argues against the measure, saying consideration should be given to the greater costs trucks impose on roads and bridges versus passenger vehicles.
- Michigan: The particularly brutal winter is prompting state lawmakers to consider injecting $100 million into local and state roads to help deal with pothole repairs and the like, The Detroit Free Press reported this week. The state’s average snowfall is 77 inches and is already at 122 inches for the year. The roads money would come from a $115 million reserve fund for road projects.
- Minnesota: A coalition of transportation, business and labor interests called Move MN this week called for a new 5 percent sales tax on fuel to help raise money for road and transit projects, the Associated Press reported. Members of the group touted a $750-million-a-year spending plan at a legislative hearing Tuesday. Under the plan, the 5 percent sales tax on wholesale fuel would produce $360 million annually for roads and another three-quarter-cent sales tax increase in the Twin Cities region would produce another $335 million for transit projects.
- New Hampshire: Transportation Commissioner Chris Clement warned lawmakers this week he could have to lay off 700 department of transportation workers if the legislature fails to approve an increase in the state’s gas tax or a new casino, The New Hampshire Union Leader reported. Clement told members of the Senate Ways and Means Committee that his agency faces shortfalls of $48 million and $105 million over the next two budget cycles. The committee hearing was held to consider Sen. Jim Rausch’s bill, SB 367, which would increase the state’s 18-cent gas tax by 4.2 cents a gallon and index the tax to the CPI to provide for quadrennial increases going forward without legislative approval. But, as the newspaper also reported, the discussion kept turning to gaming as an alternate revenue source.
- New Jersey: Legislation is under consideration that would direct the state’s toll roads (the Atlantic City Expressway, Garden State Parkway and New Jersey Turnpike) to develop plans for more commercial, business or retail ventures at rest areas, The Press of Atlantic City reported. State lawmakers see the rest stops as a potential source for transportation funding—one that would allow them to avoid raising taxes or increasing tolls.
- South Carolina: A House committee voted this week to allow counties and cities to buy some state roads, The State reported. South Carolina currently owns and maintains more than 41,000 miles of roads, a vestige of years of state control over local governments. State officials hope reducing the miles of roads under state control could help them reduce a $29 billion deficit in the amount projected to be needed over the next three years to repair roads and bridges.
- Washington: The Auburn-Reporter has an interview this week with Transportation Secretary Lynn Peterson, who tells the paper that if the legislature can’t reach an agreement on a transportation package this year, her agency expects a 52 percent budget decrease over the next four years. But even if a transportation package passes, most of the revenue is already bonded for capital projects and won’t cover the state’s maintenance and preservation costs. Meanwhile, members of the Senate Majority Coalition last week unveiled a new funding proposal and said they stand ready, willing and able to negotiate a gas tax increase, Washington State Wire reported. But Democrats reportedly continue to balk at some reforms the majority coalition wants to see. Crosscut has more on the Coalition’s latest proposal.
Evolution of Public-Private Partnerships
- Colorado: Despite receiving a petition signed by 20,000 people urging lawmakers to strip the Colorado Department of Transportation of the power to enter into public-private partnerships, the Colorado Transportation Commission voted this week to approve a P3 to extend toll lanes on U.S. Highway 36, The Denver Channel.com reported. CDOT officials expect to sign a contract next week authorizing a private consortium called Plenary Roads Denver to operate and maintain the toll roads on the Denver-to-Boulder highway for 50 years. But CDOT officials are also conceding public input on the project could have been handled better, The Denver Post reported. “This is a lesson learned,” said CDOT spokeswoman Amy Ford. “It is clear the public has a lot of questions about this and we should have engaged them sooner and more robustly.”
- Pennsylvania: Five construction and engineering firm teams have expressed interest in the Pennsylvania Department of Transportation’s Rapid Bridge Replacement Project, a planned P3 with which the state hopes to replace up to 500 structurally deficient bridges, The Central Penn Business Journal reported.
- The contractor building new locks for the expanded Panama Canal agreed to restart construction this week following a dispute over cost overruns that had stalled work on the $5 billion project, Transport Topics reported.
- Smart Growth America this week announced its list of “The Best Complete Streets Policies of 2013.” While most of the policies on the list are at the local level, a policy adopted by the Massachusetts Department of Transportation also made the cut. According to the organization, 27 states plus Puerto Rico and D.C. now have Complete Streets policies along with 51 regional planning organizations, 48 counties and 482 municipalities.
- Oregon: Portland Mayor Charlie Hales said this week he’s looking to new taxes and fees that could be used to fund street and sidewalk improvements in the wake of some recent pedestrian deaths, Willamette Week reported. Hales and City Commissioner Steve Novick (who spoke to our Transportation Policy Academy last summer) have a fee plan that could be put before voters in November.
- Advocacy Advance, which is a partnership of the Alliance for Biking & Walking and the League of American Bicyclists, has issued a new report looking at how Statewide Transportation Improvement Programs (or STIPs) factor in investments in biking and walking infrastructure.
- Arizona: The city of Tucson will ask the federal government to grant permission to operate fewer cars than are now mandated on its new downtown streetcar line, The Arizona Daily Star reported. City officials are hoping to get it up and running before University of Arizona students return for the fall semester.
- Tennessee: The director of the Nashville Area MPO argued for transit funding for his city in a recent op-ed for The Tennesseean. “Today’s companies and talent look to locate in cities that give people the option to avoid sitting in traffic, if they so choose,” writes Michael Skipper. “Without action on regional dedicated funding, Nashville stands to lose out on its economic development agenda to metros such as Denver, Austin and Charlotte.”
- Florida: Gov. Rick Scott is proposing spending more than $213 million for a transportation hub at the Orlando International Airport that would create 1,900 construction jobs, 380 permanent jobs and a new rail line, reported CBS Miami and the Associated Press. The Greater Orlando Aviation Authority is providing $467.5 million for the project, which includes an intermodal transit facility.
- D.C. Area: The Metropolitan Washington Airports Authority this week announced a series of upgrades for the redesigned Terminal A at Reagan National Airport. They include full-service dining, publicly accessible iPads and charging stations, and expanded food, beverage and retail options.