Transportation Policy Academy 2014 – DC – Listening Session at U.S. Department of Transportation with Carlos Monje, Counselor to Secretary Anthony Foxx

The 2014 CSG Transportation Policy Academy in Washington, D.C. wrapped up September 17 with a listening session at the U.S. Department of Transportation. Carlos Monje, counselor to U.S. Transportation Secretary Anthony Foxx, and others were on hand to talk about federal transportation programs and to field questions and comments from the state legislators in attendance. Monje has recently been nominated for the post of Assistant Secretary for Policy at DOT. The wide-ranging discussion focused on such topics as efforts to push for a long-term transportation bill, the success of the federal TIGER program, public-private partnerships and mileage-based user fees. This page includes selected excerpts from participants in the meeting and links to additional resources on some of the topics discussed.

Policy Academy attendees following the meeting at U.S. Department of Transportation, September 17, 2014. Pictured L to R: Rep. Diane Lanpher (VT), Sen. Ernie Harris (KY), Rep. Bill Brawley (NC), Rep. Jay Roberts (GA), Rep. Patricia Higgins (NH), Sen. Mike Vehle (SD) and Sen. Curtis King (WA). Also attending the policy academy but not pictured were Rep. Ryan Yamane (HI) and Sen. Jim Smith (NE).

In August, Congress approved a last minute, temporary patch for the Highway Trust Fund rather than a long-term authorization bill that would have provided more certainty to states.

Carlos Monje (USDOT): (On the push for a long-term federal surface transportation authorization bill): “Secretary Foxx has been just really hitting the drumbeat on the need for a comprehensive bill, one that’s big, that provides some certainty for folks who are on the ground doing the planning. … Congress did give us a bit of breathing room (but) it’s going to run out really quickly. … We need to get Congress to do what it always has done, which is to pass a bipartisan bill and try to do it as quickly as possible. We’re going to be making the case over the next couple months about some of the policy pieces that we’d like to see in addition to just a big number that provides certainty over multi-year items like project delivery—how do we make sure we can get projects done more quickly. How can we invest in multimodal freight projects that cross jurisdictional boundaries that are hard to plan?”

Many of the legislators in attendance expressed concern about what will happen next spring, when the latest extension of the highway bill expires and when the funds used to patch the Highway Trust Fund last month are expected to run out.

Rep. Diane Lanpher (Vermont): “We’re all going to be holding our breath when we go to budget in January. We have to pass our budget by May and (then) the construction season (begins). I’m sure you’re not taking any delight in the situation either but…”

Sen. Mike Vehle (South Dakota): “We need a long-term bill. These extensions are tough on everyone for planning. Number two, I’m fond of having a bucket… and a dedicated fund that goes into that bucket so that we know this has got to go for transportation because I don’t want to go back to just relying on an appropriation every year. … And then I hate to see us subdivide this bucket because we’ve already done that. We’ve taken out some for transit and some for bike paths and now we want to take out some for freight and pretty soon durn, there’s not much left in my bucket to spread out. … Let the states decide how much they want to put into transit or bike paths or whatever but quit dividing up this bucket.”

Vehle: “We’re a rural state. We’ve only got 850,000 (residents) and you compare it to Florida, which has about twice as much miles of interstate than we have and they’ve got 18 and a half million folks to help pay for it. We’ve got 850,000. … Realize that we get more money back than we put in (to the Highway Trust Fund) but in order to have a system, it’s got to work that way. Otherwise, we’ll have gravel roads because there’s just not enough money out there. So I hate to see that formula or (U.S.) Sen. (Mike) Lee’s (Transportation Empowerment Act proposal) where they’re going to send it all back (to states). We need to have a national system of roads. Countries that don’t do that are Third World countries.”

Monje said to expect Secretary Foxx to embark on another bus tour this fall, similar to the one he did this spring, to push for a long-term transportation bill. His message, Monje said, will be “we have to do something, have to do something now and it’s fiscally responsible to spend the money now as opposed to later when it will cost more.” The Secretary is still hoping for action on a longer-term transportation measure in the lame duck session of Congress following the election. Some believe Republicans might be convinced to support a big transportation bill if they can blame the outgoing Democratic Senate for passing any tax changes needed to make it happen.

Monje: “There was always the assumption that Congress would step up and I just don’t know if we can keep assuming that. It’s going to take a push. It’s going to take everybody just having a similar message and having concrete examples saying ‘if we don’t do this, this bridge that’s falling down is going to keep falling down or this bottleneck won’t be relieved and it will still take 45 minutes to get to work.’”

The U.S. Secretary of Transportation recently issued the list of recipients of competitive transportation project grants awarded under the federal TIGER program. Projects in 46 states received funding.

Monje: “The need is overwhelming. We were able to fund 72 projects (with) $600 million. There were 800 that applied, $9.6 billion (in projects). For every one that we funded, we had to turn away 14. As the Secretary said, it’s easier to get into Harvard than it is to get a TIGER grant.” 

Monje: (on what goes in to determining the TIGER recipients): “There are a lot of things that we always look for. Partnership, a lot of leverage. Twenty percent is the minimum for urban projects in terms of matching funds. … Innovation, multimodal partnership. The Secretary did put a priority this year on what we call ladders projects. … Richmond (bus rapid transit) project. Nebraska BRT projects… ones that provide that final link and provide the spine to the transit network. Ruggles station in Boston.”

South Dakota was among the states that received a TIGER grant. The $12 million grant will go toward the reconstruction of a 41-mile portion of the state-owned MRC Railroad between Chamberlain and Presho.

Sen. Mike Vehle (South Dakota): “This is an unpopulated area and we raised $1 million from farmers and everyone. They said ‘if we can throw in money, do you think that will help?’ Yeah, let’s go guys. Let’s roll. I said that I think that was probably a show that it has support. The state put in money, the rail authority put in money, and then the people themselves said ‘we’ll ante up.’”

Monje also discussed the administration’s recent focus on public-private partnerships.

Monje: “I think one of the areas that we’re really excited about is … public-private partnerships. What are the ways that we can help states open themselves up to more of those? What are the ways we can provide technical assistance to beef up the pipeline of projects that are coming in and give the planners the tools to suss out which are the ones that could be possible to put into these kinds of financing mechanisms, recognizing it’s not a replacement for public sector dollars? …We set up a center along with Treasury and a few other folks to try to provide assistance. As you guys are going back, if there are model regs or any piece like that we can be helpful with, examples of success, technical assistance. We’re looking to build a concrete pipeline of actual projects and we would love to be helpful.”

Sen. Ernie Harris (Kentucky): “Virginia and other states are well ahead of where Kentucky (is on P3s) and I’m learning stuff to take back. … It’s a new environment in transportation. It’s been tried and we know the failures that have been publicized but we’re learning of the successes.”

Monje: (on tolling): “We spend a lot of time talking about tolling although it’s not popular but it’s something I know you guys are looking at at the local level.”

Monje: (on state transportation revenue efforts): “I think one of the best things that you guys can do is show the examples of success all across the country where Democrats and Republicans have come together to come up with reasonable, thoughtful financing mechanisms to get some certainty and to get some projects off the ground.”  

Lanpher: (on Vermont’s passage of a gas tax increase) “The success that we’ve had in that is because we’ve made the case. … We’ve seen what happens when infrastructure fails and the impact it has on all that cascading environment, business, economy. … What we’ve done is to take our responsibility, what we’ve needed to do to raise our state money to be able to match our federal formula money. It is not a way to supplant the responsibility of the feds to do their job. They need to do their job too. … Of course what we did raise (in Vermont) doesn’t even come close to what we should be raising. … Vermont did this study a few years ago and I was on that committee and … in that study we showed that we would have to double our state gas tax just to come up with what we should in order to maintain (our infrastructure). That’s not going to happen. So then we approach it from ‘what do we need to raise so that we don’t leave any federal formula dollars (on the table). That’s the minimum we need to raise.’ And that’s where we went. … We went with (a) 2 percent (increase) but we’ve got a ceiling and a floor on that as well. … But it was a tough sell because I had to tell them ‘don’t vote for this because it’s going to make (everything better) because it’s not.”

Rep. Bill Brawley (North Carolina): “We actually had an indexed gas tax in North Carolina, which we recently capped at 37 cents a gallon and part of the reason we’ve done that is—along with the new formula for funding, which is more data driven—we have a long history of raiding transportation funds for other purposes. … We’ve lost credibility on dedicated funding streams in North Carolina over the last 25 years. You’ll see that kind of cynicism even now. There’s a sales tax referendum in Mecklenburg County that supposedly will be dedicated mostly to schools, some to arts, some to libraries and there’s a lot of resistance because of the number of times that revenue streams are created for one purpose and then are diverted to another. That’s an old tradition all through North Carolina. … People feel like they pay money but they don’t get the benefit for it.”

Rep. Jay Roberts (Georgia): “We’re doing in Georgia a study committee right now. We’re traveling around the state to try to look at what we’re going to do when it comes to putting more money into transportation. We had the (Transportation Special Purpose Local Option Sales Tax ballot) measure (that failed in all but three regions of the state in 2012) … I was the author of that and what I tell people is ‘shoot me, kill me or whatever.’ But you talk about raising the gas tax. We constantly see the graph that as cars get more miles per gallon, you increase it and in a few years you’re going to be back in the same situation you are now. We’re actually looking at doing something outside the box, over and above. I’ve got my idea of what I’d like to do and that would be a straight one cent statewide sales tax, a half cent dedicated to transportation that would generate about $600 million to $800 million. … The other half cent would go toward reduction of state income taxes so you get everybody on board.”

Vehle (South Dakota): “I’m chair of (an interim committee on highway needs and financing) this summer … on what to do with highway needs and financing. … First thing I decided is we’d go around the state and we met in seven different communities so that no one had to drive over two hours in order to get to the presentation and the first thing I said at every one is ‘this is not political or partisan. If you want to point fingers, I’m going to gavel you down and then I’m going to show you that just East of here there’s a town called DC and that’s the capital you go to if you want to point fingers and not get something done. We’re not going to do that. We want to define the problem and have a solution. … We’ve done some studies and said ‘here’s the amount of money we raise, is the (state) DOT doing a good job with the money we’re giving them and then set a goal. … This is where we want to see the highways, how much does that cost us and then every year have DOT come in and say ‘here’s where we are today, here’s where we’re going to be at 10 years using the current funding schedule we’ve got.’ And then the legislature will have to decide. … We had one of these six years ago and I lost that by three votes in the state Senate and then of course we had the recession. And then we got the stimulus money. I always say I don’t care whether you like the stimulus programs or not, it saved our bacon. We got a lot of money. We got $183 million and didn’t have to put 20 percent match in. It was three-quarters of what we get every year from the feds. So it was like getting another whole year and we get everything spiffed up. But (after) 10 years, we’ve got a cliff.”

Several of the legislators also brought up the idea of a potential transition away from the gas tax to a mileage-based user fee system, an idea the Obama Administration and USDOT have not endorsed. Many are keeping a close eye on Oregon, which next year will start up the first large-scale test of such a system. But there are concerns that such state experiments may not work everywhere in the country.

Rep. Diane Lanpher (Vermont): “Even if we could get some regional state partnerships going … we’re just not going to be able to do that on our own given the (proximity) of New York, New Hampshire, how many from other states come through (Vermont). We would have to do this on a bigger scale, which is up at (the federal) level.”

Vehle: “Let’s say we get lucky and get a six or seven year (federal surface transportation authorization) program, which would be nice. By that time hopefully you will have done research—and other states are kind of the laboratories of doing this—that a (vehicle miles traveled system) might work. I always tell people eight to 15 years is somewhere where that’s probably going to be the way but it’s not ready yet and so we need to do something now. Everybody hates the gas tax. … But that might be our way now. We’ve got to get prepared. We don’t want to wait until the sixth year or the seventh year, however long that bill is—and I know I’m being optimistic on a six or seven (year bill) but it would be nice—then we might have something to replace it. But we can’t roll with it now. There (are) too many unknowns and you’ll stumble over your feet trying to put it out.”

Vehle: “Tolls are another thing. That’s nice. It’s not going to work in every place. (In) rural America, all you’re doing is (forcing the traffic) onto another road. And then the cost of doing all those interchanges for a lowly populated area. It’s just not there. I mean it’s nice but don’t trade that off and think you gave us something.”    

Vehle: “Some folks want to leave interstates in (the Highway Trust Fund) and just take out the National Highway System. Not only do we use the interstates in the rural part of the world but we also use the national highways—281, 83 in our state goes from Canada all the way down. If you have to monkey with it a little bit, but don’t go making big changes there. It’ll affect a lot of people.”

Vehle: “I happen to be a Republican but to the ones that are further to the right than me, … I always say ‘we always complain about DC not paying for what they’re doing. I don’t care whether it’s Social Security or Medicare or whatever. I say ‘okay, is that what we’re going to do with transportation? Are we going to use it all up and just leave it to our kids and grandkids to fix it up or are we going to pay for what we use?’ And I’ve got a lot of them going ‘oh, darn, he’s right.’”