Senate Finance Chairman Wants Transportation Bill by July 4 Recess; More Reaction to House GOP Postal Plan
Senate Finance Committee Chairman Ron Wyden said this week his panel is hard at work considering options for saving the Highway Trust Fund from pending insolvency and he hopes to pass a bill out of the committee before the Senate adjourns for its July 4 recess. But the Senate is unlikely to consider a House Republican plan that would rely on savings from changes at the U.S. Postal Service, which continued to receive skepticism this week. And the closing of a bridge along a major artery in Delaware this week demonstrates what’s at stake in trying to find ways to invest in the nation’s infrastructure. I also have the usual round-up of links to items on MAP-21 reauthorization and the future of the Highway Trust Fund, state activity on transportation revenues, public-private partnerships and tolling and state multi-modal strategies.
Finance Committee Looking at 10 Options
The Senate Finance Committee met this week in a private session to begin trying to find a way forward to rescue the federal Highway Trust Fund. Chairman Ron Wyden said he wants to report a bill out of the committee before the July 4 recess.
“We’re pulling out all the stops to find a funding solution,” Wyden said in a press release issued following the meeting.
National Journal reported that the committee is considering about 10 options to rescue the fund, including several new or increased user fees. The leading proposal is reportedly a new fee that would be paid by oil wholesalers.
But a number of Senators are already saying a more likely scenario is a short-term extension of MAP-21 with a long-term solution having to wait until after the election.
Senate Budget Committee Chair Patty Murray is reportedly working with Finance Committee members on a trust fund solution. The Hill reported that Murray told her committee members in a memo this week that the consequences of insolvency for the trust fund would be catastrophic.
“A shortfall in the Highway Trust Fund would hurt workers who depend on jobs on highway construction and public transportation projects, and it would add to the uncertainty that states and local governments already feel in planning for future transportation projects,” she wrote.
Going Postal on Transportation Funding
One idea the Finance Committee is reportedly not considering: a plan House Republican leaders are working on which would enable a one-year trust fund fix by using 10 years of savings expected to accrue from ending U.S. Postal Service Saturday delivery. There was more reaction this week to the plan from a number of key players, including:
- Senate Environment & Public Works Committee Chair Barbara Boxer: “This idea is a jobs killer, which does not even fund the Highway Trust Fund for a long enough period of time to provide the certainty that states, cities and businesses need. … It is unworkable, makes no sense and ignores the huge infrastructure needs we face, as so many bridges and roads are in grave disrepair.” (The Hill, 6/2/14)
- Senate EPW Transportation Subcommittee Chairman Tom Carper: “The hard truth is that moving to a five-day delivery schedule isn’t enough on its own to save the Highway Trust Fund or the U.S. Postal Service. The numbers just don’t add up.” (Politico Morning Transportation, 6/2/14)
- Senate Commerce Committee Ranking Member John Thune: “I know they’re trying to come up with a way to do this on a short-term basis. Ultimately we’ve got to get to a longer-term solution. … We’ll take a look at it. It’s interesting, but I think we’ll probably have some other opportunities.” (Politico Morning Transportation, 6/5/14)
- Streetsblog USA: “the latest in a long line of hare-brained schemes for funding the Highway Trust Fund.” (Streetsblog, 6/5/14)
- Laborers’ International Union of North America General President Terry O’Sullivan: “The idea of robbing the U.S. Postal Service to provide another duct-tape fix to our nation’s critical transportation infrastructure would damage both Americans who rely on the mail service and those who want safe roads and bridges.” (Press release, 6/2/14)
- Transportation Trades Department, AFL-CIO President Edward Wytkind: “Abolishing Saturday mail delivery to pay for the funding shortfall in the Highway Trust Fund is a non-starter and should be dead on arrival. Instead of offering a responsible plan to fund our immediate and long-term surface transportation funding needs, Speaker Boehner, Majority Leader Cantor and Majority Whip McCarthy have put forth a misguided proposal that risks further delay in addressing the trust fund’s anticipated insolvency.” (Press release, 6/2/14)
Delaware Bridge Closing Likely to Disrupt North-South Traffic for Weeks
The emergency closure of an I-495 bridge near Wilmington, Delaware this week once again brought into sharp focus the precarious proposition of underinvestment in the nation’s infrastructure. The bridge was shut down Monday when its support pillars were found to be tilting, the Associated Press reported.
Delaware’s Transportation Secretary Shailen Bhatt ordered immediate inspections of all major bridges in the state in the wake of the closure, which snarled traffic along a key north-south artery, the AP noted. It could be weeks or perhaps longer before the bridge reopens, officials said.
The bridge was one of more than 20,000 bridges deemed to be “fracture critical” (meaning it doesn’t have redundant protections and is at risk of collapse if a single, vital component fails) in an AP analysis last year. More than 65,000 of the nation’s bridges are classified “structurally deficient.”
But Dan Vock of Governing magazine also noted in an article this week that “the number of bridges considered to be in the worst shape has declined in the vast majority of states—all but nine—in the years since a Minneapolis bridge collapse brought national attention to America’s decaying bridges.”
According to the article, Oklahoma, Missouri, Texas, Mississippi, Pennsylvania and Ohio posted the biggest improvements in the last six years and together were responsible for 57 percent of the decrease in structurally deficient bridges around the country.
MAP-21 Reauthorization & the Future of the Highway Trust Fund
- Dan Vock of Governing also reported recently on how state governments facing federal uncertainty are changing how they look at state capital budgets. Stabilization of budgets in this post-recession era means state officials can now pay more attention to long-term budget issues, Vock notes.
- The American Association of State Highway & Transportation Officials (AASHTO) Board of Directors last week approved a resolution calling on Congress to ensure the solvency of the nation’s Highway Trust Fund before the Federal Highway Administration is required to begin delaying reimbursements to states for transportation projects.
- Patrick Jones of the International Bridge, Tunnel and Turnpike Association noted in a recent piece for The Huffington Post that the debate over possible future tolling of federal interstates, reignited recently with the release of the White House’s $302 billion highway bill, should be a totally separate conversation from the one about the pending insolvency of the Highway Trust Fund.
- Kentucky: Frank Goad of The Lane Report, a statewide business and economic news magazine, talked to Kentucky Transportation Secretary (and current AASHTO President) Mike Hancock about how federal uncertainty has already impacted the state this year: “While Kentucky is a crossroads state for travel and interstate commerce, we are at a bit of a fiscal crossroads, too, in light of the Highway Trust Fund. There are projects we had to say go or no-go to this spring because the bulk of construction happens in warm weather,” he told Goad. “We had no choice but to take a chance on some projects, (even) knowing funds could be unavailable. It’s incredibly difficult to decide which ones to fund given the uncertainty in Washington.”
- New Hampshire: State transportation officials say concerns that federal money could run out this summer have them re-thinking how they’re going to fund all their scheduled projects in the coming months, and whether some may not get done, The Keene Sentinel reported.
- Arizona: Arizona DOT officials say they don’t anticipate any delays of current or scheduled projects this summer, Cronkite News reported. But they say they may have to reassess some things come September.
- Becky Moylan of the American Society of Civil Engineers offers “10 Myths About the Highway Trust Fund.” Among them: “The Highway Trust Fund is Running Out of Money Because We Waste Money,” “The Federal Government Should Get Out of the Infrastructure Business and Let States Make Their Own Decisions,” and “We Can Afford to Do a Short-Term Bill and Maintain the Status Quo.”
- A couple of those were also topics addressed in our policy eCademy last week on the future of the federal role in transportation, which you can find an archived recording of here and read a summary of here.
- One participant on that webinar, Emily Goff of the Heritage Foundation, took part in a Capitol Hill briefing for Congressional staff this week entitled “Which Way for the Highway Bill?” Another participant in that briefing, Innovation Briefs newsletter publisher Kenneth Orski, has posted his remarks online. He argues that state transportation funding solutions may offer potential solutions for the trust fund shortfall. Orski, by the way, will be among the speakers in July at the Southern Legislative Conference Annual Meeting in Little Rock. He’ll participate in the Legislative Fiscal Plenary Luncheon on July 27 alongside former U.S. Transportation Secretary Rodney Slater.
State Activity on Transportation Revenues
- California: The state is among those exploring the idea of a vehicle miles traveled or mileage-based user fee to fund transportation, the President of the California Foundation for Commerce and Education Loren Kaye noted in a recent piece for the California business and politics publication Fox & Hounds. Kaye cites a new report prepared for his organization (“Transitioning From the Gasoline Tax to a Fee on Vehicle Miles Traveled”) that analyzes how such a system would work in California.
- Michigan: After passing legislation this week to deal with Detroit’s bankruptcy, lawmakers are turning their attention back to trying to pass a transportation funding bill before their summer recess, The Detroit Free Press reported. They may try to seek a middle ground between a House-passed package of bills that proposes to raise about $450 million a year and a more ambitious Senate plan that could raise fuel taxes 25 cents by 2018 to bring in close to $1.5 billion a year (nearly the amount experts say is needed just to keep the state’s roads from deteriorating further). Some have suggested approving a significant gas tax hike but offering voters the choice to opt instead for a 1 or 2 percent increase in the state sales tax, an idea not favored by Gov. Rick Snyder.
- Missouri: Gov. Jay Nixon has come out in opposition to the proposed three-quarters of a cent sales tax hike for transportation that will be on the ballot in the state’s August primary, the Associated Press reported. He called the plan “neither a fair nor fiscally responsible solution” to the state’s transportation infrastructure needs.
- New Hampshire: New Hampshire Public Radio had a post-mortem recently examining “How New Hampshire’s Gas Tax Went Up—And What It Means.”
- North Carolina: A state DOT official said recently tolls on state highways are definitely in North Carolina’s future, The (Jacksonville) Daily News reported.
- Oklahoma: The Oklahoma Department of Transportation will start its 2015 fiscal year next month with $28.5 million less to spend due to budget cuts and funding changes enacted by the state legislature, The Tulsa World reported.
- Oregon: State transportation officials are pleased with preliminary interest from vendors hoping to work with the state in developing the first large-scale road user charge pilot project in the nation, Toll Roads News reported this week.
- Rhode Island: Legislative leaders rolled out a proposal this week that would end tolls on the Sakonnet River Bridge and create a transportation repair fund, The Providence Journal reported. Under the plan, motor vehicle inspection fees and court cost fees for motorists would be increased and funds would be shifted from the existing rental car surcharge fee and the motor vehicle title fee.
- Vermont: Gov. Peter Shumlin has signed the FY 2015 transportation bill, which contains $685.7 million for infrastructure improvements and maintenance—the largest investment in transportation infrastructure in state history.
- Wisconsin: Transportation Secretary Mark Gottlieb said last week that his department’s 2015-17 budget request will include a long-term solution to the state’s transportation funding shortfall, The Wisconsin State Journal reported. While not offering specific details of the solution just yet, he said it won’t include toll roads. Among the options said to be under consideration: a 5-cent-per-gallon gas tax hike, a 73 percent increase in annual registration fees for commercial vehicles, a $20 to $54 increase in driver’s license fees, the elimination of the sales tax exemption on vehicle trade-ins, and the adoption of a mileage-based registration fee system.
Public-Private Partnerships & Tolling
- Colorado: Gov. John Hickenlooper has vetoed legislation (SB 197) that sought greater transparency in public-private transportation projects, KDVR-TV in Denver reported. The legislation, which grew out of frustration about a lack of public input on a 50-year contract for the overhaul of U.S. 36, would have required the disclosure of information on the costs and alternatives of such deals, public participation at three stages in the development of any deal and more communication with state legislators. It would have required legislative approval for deals longer than 35 years and would have banned non-compete clauses that opponents said undermine local decision-making. While Hickenlooper said he supports the bill’s provisions to improve transparency, accountability and openness in P3s, he wrote in his veto letter to the Colorado Senate that “it also inappropriately constrains the business terms of future P3 agreements. These constraints on business terms would create a chilling component on future transactions, making investors unlikely or unwilling to bid on Colorado projects due to the increased risks this process would generate.” The bill’s sponsor, state Sen. Matt Jones, said he’s already drafting a revised version of the bill for consideration next year and working with the governor’s office on a possible compromise. Hickenlooper did issue an executive order aimed at increasing transparency around P3 projects and urging lawmakers to consider creating a “Center for Excellence” to determine best practices for future projects.
- Massachusetts: The (Attleboro) Sun Chronicle reported recently on highway projects under consideration for public-private partnerships in the state.
- Bloomberg News had a piece this week on road projects financed by lower-rated debt.
- Robert Poole of the Reason Foundation argues in a recent piece that “Conservatives Shouldn’t Be Bothered by HOT Lanes.”
- Michael Cheroutes of the Colorado High Performance Transportation Enterprise (the state agency that pursues transportation public-private partnerships) and Richard Davey of the Massachusetts Department of Transportation will be among the speakers later this month at the InfraAmericas U.S. P3 Infrastructure Forum in New York City. CSG is proud to be a supporting organization for the forum, which takes place June 17-18, at the Grand Hyatt. The event brings together state and federal public officials, infrastructure developers, investors, financiers and regional transportation authorities for a variety of panel discussions on the state of the P3 industry and networking opportunities. There is still time to register to attend the meeting here. You can also read my recent Capitol Ideas E-Newsletter article previewing the forum here.
State Multi-Modal Strategies
Spotlight on Rail Transportation
- Kentucky: I have an article in the latest issue of The Lane Report, a Kentucky business and economic news magazine looking at freight rail in the state. Officials from Class I railroad CSX, Class II railroad Paducah & Louisville Railway and Class III R.J. Corman talk about the present and future of their businesses. Experts from the Kentucky Transportation Cabinet and the University of Kentucky also weigh in. Among the issues discussed: the impact of Kentucky’s coal industry downturn for railroads, the role of railroads in getting heavy trucks off the roads, expected growth in intermodal traffic, where new business for the railroads might come from, the environmental benefits of moving freight by rail and federal and state investments in rail infrastructure.
- The article mentions a couple of TIGER grants awarded to Kentucky railroads in recent years. The U.S. Department of Transportation has announced changes to the TIGER application process for the next round of funding in the wake of last month’s GAO report that found DOT did not document key decisions, advanced projects with lower technical ratings over more highly-rated projects and changed technical ratings of lower-rated projects, Nossaman’s Infra Insight Blog noted. DOT now says that in the next funding round, once a project receives a technical rating, it will not change during the remainder of the review process.
- Speaking of Kentucky and railroads, Federal Railroads Administrator Joe Szabo was in Louisville recently to visit a Siemens Rail Automation plant where workers are assembling Positive Train Control components. Szabo wrote about the visit in a blog post this week.
- North Dakota: The Lane Report article notes the oil boom in North Dakota that has brought with it new burdens on state infrastructure but also significant investments in rail. Governing magazine has a piece this week on how one North Dakota boom town is dealing with success.
- North Carolina: One of the states hoping to follow in the footsteps of North Dakota is North Carolina, where Gov. Pat McCrory signed major energy legislation this week, The Charlotte Observer reported. The legislation sets the stage for preliminary exploration of the state’s shale gas potential. State-sponsored drilling could get underway this fall.
- Indiana: Late last month, Gov. Mike Pence joined officials from Amtrak, the FRA and Norfolk Southern at an event to kick off the $71.4 million Indiana Gateway project, which seeks to improve rail lines between Porter, Indiana and the Illinois state line. The project will improve seven locations on Norfolk Southern’s Chicago Line and one on Amtrak’s Michigan Line.
- Iowa: The state DOT is currently accepting applications for the Rail Revolving Loan and Grant Program, which provides financial assistance for projects that improve rail facilities and systems in the state, Progressive Railroading noted this week. The RRLG program is funded through legislative appropriations and repayments of past loans and can be used on projects aimed at targeted job creation, rail network improvement and rail port planning and development.
- District of Columbia: The Atlantic City Lab looks at how anticipated growth around DC Streetcar stops has arrived well before the Streetcar itself even begins service and whether that’s a bad thing for future streetcar extensions. Also this week, Streetsblog USA talks to the architects of move DC, the District Department of Transportation’s new long-range plan, which calls for congestion pricing, more high-capacity transit and streetcar, and protected bike lanes.
- Maryland: The Associated Press reported recently on how the proposed Red Line light rail project in Baltimore could impact economically distressed areas of the city depending on how it is routed.
- Michigan: A proposed 27-mile rapid bus project in Detroit is expected to get a public vote in 2016, Michigan Live reported.
- Ohio: The state DOT has a new interactive tool and survey that is letting Ohio residents design and prioritize a transit system they would like to ride.
- Texas: Austin is looking to build a light rail-streetcar hybrid, The Atlantic City Lab reported.
- Virginia: The Washington Post reported last week that higher tolls on the Dulles Toll Road, which are being used to help fund the Silver Line Metro extension, are causing some drivers to avoid the corridor.
- Newsweek has an article on why some light rail projects in the United States fail.
- Randal O’Toole of the Cato Institute weighs in on a trend in some cities (Seattle and Honolulu among them) to invest in rail projects that combine the high cost of heavy rail and the low capacity of light rail for what he calls “The Worst of Both.”
- The University of Minnesota’s David Levinson, who joined us on last week’s CSG policy eCademy, has a piece this week for The Atlantic City Lab called “How to Make Mass Transit Financially Sustainable Once and for All.”
- The Atlantic City Lab ponders whether the solution to ending drunk driving involves providing transportation alternatives.