Transportation Investment Merits a Mention in President’s State of the Union but Details Too Scarce for Some

The nation’s infrastructure factored into President Obama’s State of the Union address this week and there was plenty of reaction and analysis from a variety of transportation interests about what was said and what was left unsaid. Here’s a roundup.

State of the Union Reaction

The president told Congress Tuesday night he wants them to pass surface and waterway transportation funding bills by this summer and to pay for them with reforms to the corporate tax code.

“We can take the money we save from this transition to tax reform to create jobs rebuilding our roads, upgrading our ports, unclogging our commutes—because in today’s global economy, first-class jobs gravitate to first-class infrastructure,” he said.

Not everyone was a fan of the president’s plan.

“The president’s proposal for maintaining roads and bridges is well intentioned, but falls short of what is required because it does not provide a sustainable funding solution for the nation’s transportation problems,” said AAA President Robert Darbelnet in a statement after the speech. “AAA urges Congress and the Administration to instead focus on options like increasing the gas tax because it is the most effective and fair way to fund transportation in the near term. … A gas tax increase would provide the necessary funds to improve our system, while also upholding the long-standing principle that those who use the roads should pay for their upkeep. … Increasing the gas tax is deficit-neutral and would provide funding certainty for the program into the future.”

The chairman of the House Transportation and Infrastructure Committee, Rep. Bill Shuster (R-PA), also found the president’s plan lacking.

“I welcome the president’s interest in improving our infrastructure,” Shuster said in a statement. “We have significant long-term infrastructure needs that must be addressed and responsibly paid for to improve our economic competitiveness, efficiency and quality of life. However instead of showing leadership on these critical issues, the President offered little more than recycled sound bites from old speeches. … I am committed to moving forward with fiscally responsible transportation solutions to promote competitiveness and economic growth, reform programs, and focus our resources where they are needed most.”

The American Road & Transportation Builders Association was encouraged by the president’s interest in infrastructure but wants to see more specifics.

“It is commendable that President Obama once again used his State of the Union address to talk about the need to repair the nation’s transportation infrastructure,” said ARTBA CEO Pete Ruane in a statement. “Now we would like to see specific plans about how Congress and the President plan to tackle the underlying problem: the need for new, long-term revenues.”

Ruane also noted that “time is of the essence.”

“The federal Highway Trust Fund—the source of 52 percent of all state highway and bridge capital investments—will be unable to support any new improvements in fiscal year 2015, unless the President and Congress act this fall. … Our message to Congress and the Administration is simple: Fix the Highway Trust Fund as soon as possible.”

The President of Associated Equipment Distributors, which represents the construction equipment distribution industry, was also hoping to hear something more concrete from the president. A recent report from the industry group said the construction equipment sector would lose $2.4 billion in revenue and roughly 4,000 jobs next year if the Highway Trust Fund is allowed to go belly up.

"We appreciate the president reminding lawmakers that transportation and waterways bills need to be priorities in 2014,” said Brian McGuire in a statement. “But proposing to pay for infrastructure with short-term, highly-speculative gains from a tax reform bill that may or may not happen this year does nothing to restore the long-term fiscal integrity of the Highway Trust Fund. New, transportation-dedicated user fees have to be part of the solution. By failing to alert Congress and the public to that simple fact, the president missed an important opportunity to move the ball down the field."

Others offered praise for the President and Congressional leaders and expressed optimism about a bipartisan groundswell of support for infrastructure investment.

“In calling for greater investment in transportation the President joins the chairs of two key infrastructure committees, Rep. Bill Shuster (R-PA) and Sen. Barbara Boxer (D-CA), who have shown great leadership in working across the aisle to raise awareness of the need to save our federal transportation fund from insolvency and make crucial investments for America’s future,” read a statement from James Corless, Director of Transportation for America, a Washington, D.C.-based coalition of elected, business and civic leaders from around the country. “They, in turn, are echoing what we are hearing from local elected, business and civic leaders around the country, who are all but begging for a robust federal partner to help them get workers to jobs and goods to market. The President, the committee chairs, and local leaders are right: We absolutely must put more money into fixing and modernizing our infrastructure, or watch it crumble along with our economic prosperity. And just as importantly, we have to get those resources into the hands of the local communities that will drive our economic success.”

Patrick Jones, Executive Director and CEO of the International Bridge, Tunnel and Turnpike Association, also praised the president for touching on the need to address infrastructure needs as a way to create jobs. As he often does, he also put in a plug for tolling as a way to help fill in some of the funding gaps.

“The transportation funding needs of states are great,” Jones said in a statement. “The resources of the federal government are limited. Therefore, we ask Congress and the President to give states maximum flexibility to meet their individual transportation funding needs, including the use of tolling on the existing Interstate highway system.”

States & the Future of the Highway Trust Fund

My article in this week’s issue of the Capitol Ideas E-Newsletter examines the pending insolvency of the Highway Trust Fund and its potential impact for states. It includes comments from a number of state DOT officials and other experts who were among the speakers earlier this month at the Transportation Research Board annual meeting in Washington, D.C.

There was also more recently about the potential impact of the trust fund collapse for one state. State transportation officials in Vermont say they'll soon begin feeling the pinch. Deputy Secretary Sue Minter said her agency is unable to commit to projects in the 2015 fiscal year due to the uncertainty and will soon have to decide whether to put projects out to bid for the coming summer construction season.

“For us, a risk starts to build in spring,” Minter said, according to The Times Argus newspaper. “Well, if we don’t know what the future is, we may have to delay. That’s what we’re trying to avoid.”

Legislators are concerned about the prospects as well.

“I think we have to either do a parallel budget, in a way, or actually start canceling some projects, or else we’re going to be coming back for a special session, and I don’t want to do that,” said Senate President Pro Tem John Campbell, who is a member of the Senate Transportation Committee.

Congressman Peter Welch, a Democrat, who was in Montpelier recently to meet with the committee, reportedly told members that Congress is aware of the urgent funding crisis facing Vermont and other states but finding consensus on a plan to replenish the trust fund may be difficult.

“There’s an element in the Congress that will not consider (raising) any kind of revenue under any circumstances,” Welch said. “There’s another element in Congress that is arguing that the states should bear much more of the burden, in effect, of the transportation policy. That’s not realistic. There has to be a significant federal participation here.”

Vermont raised its state gas tax last year but because of a small tax base, the state still expects to rely on federal dollars for a significant portion of its transportation spending in the years ahead.

State Sen. Dick Mazza, who chairs the Transportation Committee, expressed frustration that lawmakers in Vermont “bit the bullet” in 2013 but Congress is not willing to do the same by raising the federal gas tax.

Further Reading