Preparing for the Worst Case Scenario on the Highway Trust Fund

The U.S. Department of Transportation is putting the procedures in place and giving notice to state transportation agencies about what could happen if Congress does not act in the coming weeks to shore up the Highway Trust Fund, which is headed towards insolvency later this summer. I also have a roundup of this week’s other stories and links concerning MAP-21 reauthorization, the future of the trust fund, state activity on transportation revenue, public-private partnerships and tolling, and state multi-modal strategies.

Still Hope for Congressional Action but Time Running Out

U.S. Secretary of Transportation Anthony Foxx sent letters to state transportation departments and transit agencies this week outlining the steps his department will soon be forced to take to deal with impending insolvency of the Highway Trust Fund.

Foxx said barring action by Congress in the next few weeks, the department will be forced to implement a cash management plan beginning August 1, which will mean the reimbursement funds states count on to pay for road projects will begin to dry up.

But he offered some remaining hope that such drastic action won’t have to be taken.

“There is still time for Congress to act on a long-term solution,” Foxx said. “Our transportation infrastructure is too essential to suffer continued neglect, and I hope Congress will avert this crisis before it is too late.”

Foxx and others warned this week that nearly 700,000 jobs and 100,000 projects could be at risk next year if the trust fund is allowed to wither on the vine.

MAP-21 Reauthorization & the Future of the Highway Trust Fund

  • President Obama expressed the urgency of the trust fund situation during a speech Tuesday at Georgetown’s Waterfront Park, with the Key Bridge as the backdrop, The New York Times reported. He took a mocking tone in addressing why Congress hasn’t addressed the issue to this point. “I haven’t heard a good reason why they haven’t acted,” he said. “It’s not like they’ve been busy with other stuff.”
  • Senate Environment & Public Works Committee Chairman Barbara Boxer wrote an op-ed for The Hill this week on what’s at stake in the trust fund brinksmanship.
  • Secretary Foxx’s travels took him here to Kentucky this week. He held a news conference with Gov. Steve Beshear and Kentucky Transportation Secretary Mike Hancock in Frankfort to discuss the impact of the federal uncertainty for the Bluegrass State and the rest of the country, Louisville Business First reported.
  • Foxx this week pushed back on criticism of the President for not supporting a federal gas tax increase while states have been able to pass their own increases, Roll Call noted.
  • The U.S. Chamber of Commerce website had a recent post that explains what the Highway Trust Fund is and why you should care about it.
  • Some conservative groups are questioning whether there is a transportation funding crisis, The Hill reported.
  • Taxpayers for Common Sense President Ryan Alexander offers a list of things her organization thinks Congress should keep in mind in considering a long term solution for the trust fund in a recent op-ed for U.S. News & World Report.
  • The Washington Post’s Wonkbook takes on the topic at hand: “America is having transportation headaches—just in time for your (4th of July) travels.” Elsewhere Wonkblog examined “Why we need to raise the gas tax—and then get rid of it.”
  • Adrienne Lu of Stateline writes about how states are putting projects on hold as the uncertainty continues in Washington and which states are likely to be hardest hit by reduced or nonexistent federal transportation funding.
  • California: Will Kempton of Transportation California and James Corless of Transportation for America penned an op-ed for The San Diego Union-Tribune about the importance of a replenished HTF to California’s economy.
  • Pennsylvania: PennDOT officials say the state won’t have to cancel or postpone projects for the time being despite the federal situation thanks to the transportation funding package state lawmakers passed last year, The Pittsburgh Tribune-Review reported.
  • Beth Osborne of Transportation for America and Curtis Dubay of the Heritage Foundation discussed a proposed federal gas tax increase and the future of the Highway Trust Fund on C-SPAN this week.
  • The Mineta Transportation Institute at San Jose State University has released the latest results of a survey about public support for various tax options to increase federal transportation revenues, including those for public transit.

State Activity on Transportation Revenues

  • The Hill reported on state gas tax hikes that took effect on July 1 in New Hampshire, Maryland and Indiana.
  • Gas prices around the country were expected to be at a six-year high this holiday weekend due to concerns about Iraq and other factors, The Hill reported.
  • Delaware: The 10 cents-per-gallon gas tax increase that Gov. Jack Markell wanted may not be happening this year but drivers on Route 1 will see a $1 increase in tolls, which state officials hope will bring in $10 million for paving projects in the state, WDDE reported. The state will also borrow an additional $20 million for the projects. Unfortunately, that’s only about a third of what the gas tax increase was expected to bring in.  The state’s Transportation Secretary Shailen Bhatt is hoping for better results in 2015. “I am hopeful that there will be further discussion next year about revenue for transportation, because obviously $10 million in new revenue is not what is needed,” Bhatt said.
  • Missouri: Next City took a look this week at the issues at stake with Prop 7, the ballot measure Missourians will consider next month to amend the state constitution to add three-quarters of a cent to the state sales tax for the next 10 years to fund transportation projects. Also, a judge in Cole County recently dismissed a lawsuit challenging the ballot language describing the proposition, KOLR reported. St. Louis Public Radio had a list of “Five Things You Need to Know About Transportation Tax.”
  • Oregon: The Oregon Department of Transportation has a new report that details the state’s second successful mileage-based charge pilot program in 2012-13 and how lawmakers ultimately passed legislation last year to establish a more permanent program, which will launch this time next year. Attendees of our Transportation Policy Academy in Portland last year got an in-depth briefing on the program, which you can read about here.
  • Pennsylvania: A new report from the American Society of Civil Engineers gives seven of the state’s transportation and water systems a grade of D. And as The Philadelphia Business Journal noted in a recent piece, despite the transportation funding package passed last year and freight rail investments made in recent years, the state’s infrastructure concerns remain significant.
  • South Dakota: State Sen. Mike Vehle is leading a review of state transportation funding this summer and The Argus Leader reported on a recent public hearing, one of several being held around the state on the topic. I’ve been asked to address Vehle’s committee later this summer and I’ll have more on that in the weeks ahead.
  • Texas: Proposition 1, the measure Texas voters will consider November 4 to take annual oil and gas tax funds that go into the state’s Rainy Day Fund and redirect them to road construction and maintenance, is the focus of a recent column by (Waco) Tribune-Herald editor Steve Boggs. … Meanwhile, Senate Transportation Committee Chairman Robert Nichols said recently he’ll propose a constitutional amendment when lawmakers convene next year to dedicate a large portion of the vehicle sales tax to roads, WOAI reported. Independent analysts have said the state needs $4 billion more annually to repair and construct the roads to serve a growing population.

Public-Private Partnerships & Tolling

  • Alabama: A proposed toll bridge over the Tennessee River at Decatur that could become a P3 project may also become a road map for future highway and bridge projects in the state, The (Florence, AL) Times Daily reported.  
  • Colorado: A recent Denver Post editorial praised the state department of transportation’s efforts to take a “more deliberate and cautious approach” to future transportation projects in the wake of the public outcry about a P3 to widen U.S. 36 and legislation recently vetoed by Gov. John Hickenlooper that would have required greater transparency and a 35-year cap on contracts. Hickenlooper instead issued an executive order that provides for more public involvement when the state enters into P3s.
  • Kentucky: Trey Grayson, the new leader of the Northern Kentucky Chamber of Commerce and a former Kentucky Secretary of State, hopes to use his political relationships across the state to help get a new Brent Spence Bridge built in the Cincinnati area, The Enquirer reported. But he says a better public relations push is needed first. On the issue of whether the new bridge should be tolled, Grayson said “Tolling is how roads are built nowadays. But we have to convince people. We have to make the case because the default position is ‘I don’t want to pay for it,’” WKRC reported. U.S. Sen. Rand Paul among others have weighed in recently on efforts to build the bridge, The Enquirer also noted elsewhere.
  • North Carolina: The Charlotte Observer profiles Cintra Infrastructure, the firm the state has engaged to add toll lanes on Interstate 77. Cintra has faced revenue shortfalls and other issues on its toll roads in Texas and Indiana and was also part of the recently canceled U.S. 460 project in Virginia (more on that below).
  • Texas: A recent article in the Pittsburgh (TX) Gazette explained the concept of pass-through financing, one of the strategies the state is using to increase private sector investment in transportation: “Essentially, pass-through financing is a way for project developers to fund and be reimbursed for the upfront costs of construction or expanding a state highway project. The public or private entity developing the project will finance, construct, design, maintain and operate the project. TXDOT will then reimburse a portion of the project cost by making periodic payments to the developer for each vehicle that drives on the highway. These projects can be tolled or non-tolled. The option allows local communities to get much needed transportation projects financed and built more quickly than the traditional state transportation program. TxDOT can execute pass-through financing agreements with a regional mobility authority, regional tollway authority, city, county, public, or private developer.” … Also in the Lone Star State, dedicated managed toll lanes are scheduled to open on I-35E in the Dallas area on July 12, The Dallas Business Journal reported. Dubbed the TEXpress Lanes, they will have dynamic pricing that changes every five minutes based on traffic levels with a goal of keeping traffic moving at 50 mph and no cap on how high the tolls can go.
  • Virginia: The (Petersburg, VA) Progress-Index reported on how the state is going back to the drawing board on the U.S. Route 460 bypass, limited access toll road between Prince George County and Suffolk. Five different routes are being studied as an alternative to the original route. The McAuliffe Administration halted work on the project after concerns about the road’s environmental impact emerged. An internal state review recently concluded the public-private partnership set up to build the toll road was not transparent enough. Virginia Business also had a lengthy piece recently on the reassessment of Route 460 and what it could mean for the state’s public-private partnership program. And Trip Pollard of the Southern Environmental Law Center penned an op-ed for The Roanoke Times about the possible shift in focus in the state.
  • Washington: The Washington Department of Transportation has an interesting look at where revenues from road and bridge tolls go.
  • A number of states have undertaken major revamps of highway rest stops with the assistance of the private sector in recent years, USA Today noted this week.
  • David Kinkade of the U.S. Chamber of Commerce writes about how P3s are helping states bridge the gap in infrastructure projects in a recent post.

State Multi-Modal Strategies

Ports

  • As East Coast ports prepare to accommodate the larger ships expected when the widening of the Panama Canal is complete, West Coast ports are making efforts to try to keep the business they have, The New York Times reported recently.

Active Transport

  • Oregon: Portland officials recently held a town hall meeting and financial briefing on proposed street fees to pave and maintain city streets, Oregon Live reported.
  • Streetsblog USA says a Pew Research Center report studying political polarization in the United States shows stark differences in preference for urban versus rural living between people from different sides of the political aisle.  

Transit

  • District of Columbia: A blogger for Market Urbanism writes that the H Street DC streetcar line is bad news for bicyclists.
  • Michigan: The U.S. Department of Transportation is reviewing Detroit’s request for an additional $12.2 million for the city’s planned 3.3 mile, M-1 Rail streetcar project, The Detroit News reported. The city received $25 million for the project from USDOT last year.
  • Virginia: The Washington Post reports on Metro’s efforts to lessen the learning gap for potential riders of the Silver Line extension and answers some frequently asked questions.
  • Roll Call reported that several of the nation’s transit systems are seeing fare increases this month.

High-Speed Rail

  • California: State officials plan to accelerate building the Los Angeles County section of the state’s $68 billion high-speed rail system in an effort to secure additional funding for the project, The Los Angeles Times reported last month. … Meanwhile, the Federal Railroad Administration has issued a Record of Decision for the Fresno-to-Bakersfield section of the system. The ROD is the last step in the NEPA process and clears the way to break ground on the project.
  • Texas: Progressive Railroading reported recently on Texas Central Railway’s plans to build a privately run, Dallas-to-Houston bullet train in just six years.