State Officials Still Concerned About Federal Transportation Funding Uncertainty as President, Congress Offer Plans

We got a look this week at the Obama administration’s vision for transportation with the release of the President’s budget and authorization proposal and a new report looking at trends impacting the nation’s transportation system and the implications of those trends over the next 30 years. Meanwhile, Congress has begun looking at options for how to fund a longer term transportation bill with the debate appearing to coalesce around three possibilities. Nevertheless, state officials around the country remain concerned about the impact ongoing federal uncertainty is having on their ability to plan for the all-important transportation project construction season.

The President’s Transportation Budget

President Obama’s $4 trillion budget proposal was officially released this week and it includes not only $94.7 billion in discretionary and mandatory budget resources for the U.S. Department of Transportation in 2016 but also a $478 billion outline of a six-year authorization plan for federal transportation programs that includes many of the proposals included in the administration’s previous proposal last year. Among the funding highlights:

  • $1.25 billion per year for the TIGER competitive grant program;
  • A new six-year, $18 billion freight program;
  • Increased funding for transit and passenger rail programs including $23 billion in 2016 and $144 billion over six years; and
  • $6 billion over six years for the TIFIA credit assistance program.  

The president wants to pay for the plan with a one-time tax assessment on corporate foreign earnings.

The American Road and Transportation Builders Association was among the organizations that weighed in with analysis of the budget proposal.

The administration this week also released the list of transit expansion projects recommended for funding in FY 2016. Maryland’s Purple Line and Red Line light rail projects, which have been seen as in jeopardy under the state’s new Republican governor, are both in line to receive $100 million under the plan. Big ticket rail projects in Los Angeles, San Diego, Denver, Minneapolis and Fort Worth also made the list.

"Beyond Traffic" Report

The U.S. Department of Transportation has issued the public draft of its “Beyond Traffic 2045” report, a 300-page, 30-year vision for U.S. transportation policy that officials hope will jumpstart a national dialogue about America’s transportation needs and the changes that lie ahead. The report looks at the major trends shaping the changing transportation system and the implications of these trends for each mode. It also describes a baseline future scenario that may emerge from those trends and examines policy options based on the implications of the trends.

U.S. Transportation Secretary Anthony Foxx previewed the report during his appearance last month at the Transportation Research Board meeting in Washington, D.C.

“The work of this long-range visioning effort is to try to help us know where we’re going so when it comes to these discussions on policy or funding or what have you, we have a sense of where the country’s headed and can shape policy and funding and other issues accordingly,” he said. “We know that populations are shifting and growing now, that over the next 30 years we’ll have 70 million more people here in the United States. We know that new technologies are changing the game. In fact, five years ago, if you had uttered the word “uber,” some people would have thought you were saying “over” in German. Now that word and the company associated with it is worth $40 billion.”

The report looks at five major trends: how we move (the demographic, economic, geographic and cultural trends affecting everyday travel), how we move things (how changes in population, economy and technology are affecting the movement of cargo, freight and energy), how we move better (how technological advances are affecting and will affect the transportation system), how we adapt (how the transportation system is contributing to, and may be impacted by, climate change), and how we align decisions and dollars (the evolving role of government in planning, building, managing and regulating the transportation system).

Senate Hearing Examines Importance of MAP-21 Reauthorization

The governors of Alabama and Vermont and the head of the state DOT in South Dakota were in Washington last week to testify before a Senate Environment and Public Works Committee hearing on the importance of MAP-21 reauthorization (a webcast of the hearing is available here).

South Dakota, a rural state with a small population, long winters and a short construction season, is among a number of states looking at its own transportation funding needs this year. But the state’s transportation secretary Darin Bergquist had a message for the Senate panel.  

“States cannot do it alone,” Bergquist told the panel, according to USA Today. “We need a strong federal program.”

Bergquist said the short-term approach to the federal program that Congress has taken the last few years has produced an uncertainty that has meant his state hasn’t been able to move forward with major transportation projects.

“Extensions and very short term authorizations are a particular problem for a state like ours with a cold climate and short construction season,” he said. “Without multi-year funding, we have to focus more than we would like on short-term and smaller projects.”

The latest of those extensions runs out in May as do the funds remaining in the Highway Trust Fund. But U.S. Transportation Secretary Foxx told Senators the impact of uncertainty will be felt long before May.

“The crisis is actually worse than I think most people realize,” he said.

Foxx pointed to the state of Tennessee, which last fall made the decision to delay $400 million in road projects.

“As a former mayor, I can tell you these short-term measures are doing to America what the state (department of transportation) says they’re doing in Tennessee, literally killing their will to build,” he said, The Hill reported.

Others could follow in Tennessee’s footsteps, Foxx said.

“I predict… we’ll see more state departments of transportation slow or stop projects because they don’t know what’s on the other side of May 31. We’ll see states pulling back even before May.”

Gov. Peter Shumlin, from another cold weather, rural state—Vermont—called on Congress to pass a long-term transportation bill that would allow his state to plan for its future.

“When there is uncertainty about funding… we’re in a terrible position of having to dig for cash that we didn’t anticipate we would need, or turning to contractors and saying ‘We can’t do the work that we contracted you to do because we’re not sure we can pay the bill,’” Shumlin said, according to the Burlington Free Press.

The Vermont Democrat also noted that states like his depend more on federal help to meet their transportation needs.

“Let’s remember that while the rural states have a more intense infrastructure, more miles of road to maintain, we have fewer funding sources to do it,” he said.

Alabama Gov. Robert Bentley said getting the federal program on a more predictable path is important to his state for another reason.

“The certainty is so important to me because I signed a billion dollars in bonds and I want to make sure we pay it back,” he said, according to the Associated Press.

The state needs about $69 million per year in federal funds to pay off the bonds.

Bentley also urged the panel to pass a transportation bill that will give states flexibility in spending rather than mandating narrowly focused projects and programs.

“The earmarking of federal dollars hurts the ability of governors to allocate funds in our state,” he said.

Federal Uncertainty on Future Transportation Funding

  • At a briefing this week, White House Press Secretary Josh Earnest defended President Obama’s proposal to rely on repatriated corporate tax revenue to fund infrastructure as a more “reliable” source of funding than the federal gas tax, The Hill reported.
  • Competing repatriation measures are being proposed by Senators Rand Paul and Barbara Boxer and Congressman John Delaney, the AASHTO Journal reported. The Paul-Boxer bill already has some powerful detractors including Senate Finance Committee Chairman Orrin Hatch, The Hill reported.
  • Oregon Congressman Earl Blumenauer has again introduced legislation to increase the federal gas tax, Transportation for America noted. The UPDATE Act would raise the tax 15 cents over three years and index it to inflation. The bill has 23 co-sponsors in the House and the support of some national construction, transportation and labor groups.
  • Sen. Tom Carper has also said he’ll reintroduce legislation to raise the fuel tax and index it to inflation, Truckinginfo noted.
  • House Transportation & Infrastructure Committee members Janice Hahn and Richard Hanna are reintroducing legislation that would encourage—but not require—states to create their own infrastructure banks, The Ripon Advance reported.
  • House Republicans are reportedly thinking about bringing back House Speaker John Boehner’s proposal to pay for transportation funding with an expansion of oil and gas drilling offshore and on federal land, The Hill reported.
  • Sen. David Vitter has said the three possibilities for fixing the Highway Trust Fund this year include repatriation, additional domestic energy production or a gas tax increase paired with a tax cut of some other type, Politico reported.
  • A coalition of 50 conservative groups is mobilizing against an increase in the federal gas tax, The Hill reported. Meanwhile, AAA auto club, the U.S. Chamber of Commerce and the American Trucking Associations recently expressed their support for a gas tax increase in a letter to Congress, The Hill also reported, as long as the revenues are “used to ease congestion and improve safety.”  
  • Sen. Bernie Sanders recently proposed a $1 trillion plan to modernize the nation’s infrastructure. He penned an op-ed for The Hill about the plan. Sanders’ plan has the support of the American Society of Civil Engineers and labor group LIUNA. The bill does not identify a revenue source.
  • California Congressman Jared Huffman introduced legislation last month that would replace the gas tax with a carbon tax on fuels base on lifecycle carbon emissions.
  • Here’s a list of all of President Obama’s infrastructure-related quotes from last month’s State of the Union.
  • Transportation advocates had plenty to say about the speech’s infrastructure focus (see here, here and here).
  • Bob Poole of the Reason Foundation had a piece in Reason magazine last month pondering the question “Who’s Going to Pay for New Highways?”
  • According to the Congressional Budget Office, the Highway Trust Fund now faces a 10-year shortfall of $168 billion. That’s up from the previous 10-year estimate prepared last August that showed a $157 billion shortfall through FY 2024.
  • In a recent report, Kevin DeGood of the Center for American Progress writes that 40 percent of U.S. roadways don’t generate enough gas tax revenue to pay for their maintenance. Rather than arguing to raise the gas tax to produce more revenues to spend on roads though, DeGood argues that “In many urban areas, transit, passenger rail or other multimodal projects are the most effective means of achieving an efficient, economically productive, equitable and environmentally sustainable transportation system.” DeGood says federal funds should be allocated through a competitive process and that states should be granted more flexibility to decide how money should be spent. He also suggests that the name of the federal Highway Trust Fund should be changed to the Transportation Trust Fund in order to better reflect a broader scope of projects.
  • Steven Polzin of the Center for Urban Transportation Research at the University of South Florida penned a recent opinion piece for Planetizen about why transportation funding has been (and likely will continue to be) such a tough nut to crack at the federal level. “Maybe the people that are leading are not leading in the right direction,” he writes. “Maybe the public has become so cynical that no one will follow anyone until the credibility of the leaders improves or the consequences of not following become clearer. There may not be a ‘Hallmark’ happy ending to the search for a longer term transportation funding strategy—perhaps just more can kicking, uncertainty and frustration.”