Congress Set to Return Next Week with Transportation Funding Still a Question Mark for States

When Congress returns from a two-week break next week, members will still be faced with some crucial decisions about the future of transportation in the United States. That’s even though they passed a three-month extension of federal surface transportation programs before they left town. Despite continuing pessimism that lawmakers can reach agreement on a more long-term bill prior to the November election, state government officials and others are becoming more vocal about the challenges presented by the continuing uncertainty in Washington.

Authorization Updates

Here are a few recent items to bring you up to speed on the authorization debate before the Congress gavels back in:

  • It seems that few are predicting that the House and Senate can reach any kind of agreement by late June, when the latest extension expires. In fact, House leaders have reportedly already directed staff to prepare another 90-day extension that would take us through September.
  • Sens. Barbara Boxer and Tim Johnson sent a letter this week to House Speaker John Boehner calling for the consideration and passage of the Senate’s bipartisan authorization bill, known as MAP-21. In the letter, they cite a recent Standard & Poor’s report that warns not investing sufficiently in roads and bridges could mean $3.1 trillion in lost GDP growth by the end of the decade. Without a long-term authorization in place, states could pay higher interest rates on bonds that fund transportation or find it more difficult to get financing for transportation projects. The Fiscal Times reported recently on what’s at stake, including how states like Minnesota and West Virginia are putting projects on the backburner to focus on maintenance only (see more below) in the absence of certainty on future federal funding.
  • Treasury Secretary Tim Geithner is also among those calling for passage of a long-term bill, The Hill reported. During remarks to the Economic Club of Chicago last week, he said: “To make us more competitive, we have to be willing to make larger long-term investments in infrastructure, not just limp forward with temporary extensions.”
  • Both business groups and labor unions had a problem with Congress passing only a short-term extension last month.
  • Some in Congress are suggesting bringing back earmarks could help grease the skids for a transportation bill, Reuters reported recently.
  • Larry Ehl of Transportation Issues Daily recently weighed the odds that a multi-year authorization bill can emerge this year. His assessment: “Assuming the House passes a bill, there’s still a slim chance a multi-year bill can be passed this year. But odds are very high that Senate-House negotiations—if it even gets that far—will not succeed and SAFETEA-LU will be extended into November/December (or perhaps the spring of 2013).”
  • Veteran public policy consultant Ken Orski handicaps things this way: “The temptation for both parties to dig in their heels will likely outweigh the perceived political benefits of a negotiated compromise—which critics and political opponents on both sides would inevitably call a “political capitulation.” Despite the threat of a looming insolvency of the Highway Trust Fund (expected early in 2013 if the Fund receives no additional transfer of money), only confirmed optimists still hope to see a genuine multi-year highway reauthorization bill end up on the President’s desk this year.”
  • Transportation advocates are pessimistic about the chances for a long-term bill, The Hill reported earlier this month.
  • The Buffalo News reported recently on a Democratic Congressman who plans to introduce legislation to enact a $1.25 trillion, five-year plan to rebuild the nation’s infrastructure.
  • Some believe that even absent a new long-term authorization bill there are some policy options that could help the U.S. meet its infrastructure needs. “Federal policymakers should think beyond these (authorization) bills alone and focus on two politically viable approaches,” writes Scott Thomasson, President of NewBuild Strategies, a Washington, D.C.-based energy and infrastructure consulting firm, in a brief for the Council on Foreign Relations. “First, Congress should give states flexibility to pursue alternative financing sources—public-private partnerships (PPPs), tolling and user fees, and low-cost borrowing through innovative credit and bond programs. Second, Congress and President Barack Obama should improve federal financing programs and streamline regulatory approvals to move billions of dollars for planned investments into construction. Both recommendations can be accomplished, either with modest legislation that can bypass the partisan gridlock slowing bigger bills or through presidential action, without the need for congressional approval.”
  • Ryan Holeywell of Governing wrote recently about the “messaging problem” that transportation investment continues to face and how a number of advocacy organizations and others are trying to retool that message to win support from the public and policymakers. It’s an issue I’ve blogged about here before, most notably in this piece from last spring (see also here). Holeywell reports that the University of Virginia’s Miller Center, a policy think tank, is poised to release a report in the weeks ahead on how the transportation community can reshape their message going forward.  

What the Lack of a Long-Term Bill Means for States

The Congressional recess included a Senate Budget Committee field hearing in West Fargo, North Dakota, The Jamestown Sun reported. North Dakota Sen. Kent Conrad, who chairs the panel, asked local and state officials to testify about the challenges they face in the absence of a multi-year bill.

North Dakota Department of Transportation Director Francis Ziegler said his office is unable to plan past the funding provided in each extension (the most recent one was the ninth such extension since the previous multi-year bill expired in September 2009). That limitation can bring projects to a screeching halt until more dollars come along. When a project is delayed, it can end up being more expensive since construction costs go up with inflation and additional work on the project is needed later.

“When the highway bill doesn’t last long, it’s very hard to be certain the project you’re developing is going to be built,” Ziegler said.

The mayor of Carrington, Don Frye, told committee members his central North Dakota town sees hundreds of semi-trucks a day that pass through on their way to and from the oil rigs in the western part of the state, which causes wear and tear and creates congestion on roads not built for crowded conditions.

“Every city in North Dakota in some manner is tied to a federal or state highway,” Frye said. “These highways are used to move people, goods and services throughout our state and region. … The lack of a multi-year transportation bill places all of these uses in serious jeopardy.”

West Virginia Transportation Secretary Paul Mattox told the Charleston Daily Mail this week that the indecision is not only making it difficult for his department to plan for long-term road projects, it’s also raising the costs on projects the state already has underway. Mattox points to moves by rating agencies to reduce ratings for GARVEE bonds (a federal program that allows states to take on debt for projects secured by the promise of future federal transportation dollars). The lower ratings mean that states must pay higher interest rates and thus they can’t raise as much money by issuing the bonds. They will also have to make higher payments each year to pay off the bonds (using those promised federal highway dollars).

“The banking industry is starting to lose faith in states to have the ability to make those payments,” Mattox told the newspaper.

State and local officials in Rhode Island held a news conference this week alongside members of the state’s Congressional delegation to call for the passage of the bipartisan Senate transportation bill.

“From Tiverton to Woonsocket, families are waiting for Washington to create well-paying jobs and put our state back on the right track,” said U.S. Rep. David Cicilline (D). “Unfortunately, the House Republican leadership has repeatedly stood in the way of progress and refused to even consider the bipartisan Senate transportation bill.”

“Major roads and bridges in Providence and Rhode Island are in need of significant repair, and this legislation would put an estimated 9,000 Rhode Islanders to work during these challenging economic times fixing roads and bridges and improving public safety,” said Providence Mayor Angel Taveras. “That is an investment we can’t afford to miss.”