President Obama Announces a Proposal to Fund a Four Year Surface Transportation Bill at $302 Billion

On February 26, President Obama announced a proposal to fund a four year surface transportation bill that would increase spending by 22% for highways and 70% for transit over current levels.  The White House provided a Fact Sheet that outlines to proposal.   The current law, the Moving Ahead for Progress in the 21st Century Act (MAP-21) expires at the end of September.  That means that a new bill or an extension must be agreed to by both Houses of Congress by that time.  The President's envisions a $302 billion four year bill that builds on the substantive provisions of MAP-21.  More specifically, 

  • Administration envisions finding an additional $150 billion for a one time infusion into the Highway Trust Fund through various tax reforms.  This would cure the current shortfall and provide for an additional $90 billion dollars over current trust fund revenues, allowing for the four year $302 billion dollar bill.  
  • The plan highlights a “Fix-it-First” approach to encourage greater emphasis on repairing existing transportation facilities. 
  • The proposal would provide $206 billion for highway projects, $72 billion for transit, $19 billion for rail, and $10 billion for a multimodal freight grant program. 
  • The program would continue the TIFIA program at the current level of $1 billion per year. 
  • Also envisioned are new provisions to enhance program efficiency, improving project delivery and expediting the regulatory review process. 
  • The program would continue current themes of focusing on transportation design to support more resilient communities.  
AASHTO welcomed the announcement, particularly because of the additional funding it would provide for transportation funding and for addressing the growing shortfall in the Federal Highway Trust Fund.  Chairman Shuster of the House Transportation and Infrastructure Committee was encouraged by the President's proposal, noting that Chairman Camp of the House Ways and Means Committee also proposed funding transportation through $125 billion in tax reforms.  
 
The White House Fact Sheet was not clear as to whether the Administration plans to send a bill to Congress.  It also said nothing about additional funding for high speed raid projects.  Finally, the statement made no mention of long term fixes for highway trust fund, such as additional or alternative users fees, beyond the life of the four year proposal.
 
The White House also announced a new $600 million for TIGER grants from the Consolidated Appropriation Act, signed by the President on January 17, 2014.  It is clear that the Administration would like to continue TIGER grants for the foreseeable future.
 

Update Regarding Buy America and Utility Relocations

As we have previously reported,  the Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) recently adopted policies requiring Buy America compliance for utility relocations for federally funded transportation projects in cases where the utility performs relocation work.  On June 28, 2013, the American Association of State Highway and Transportation Officials (AASHTO), American Public Transportation Association (APTA), streetcar project sponsors, and associations representing electric, gas and broadband utilities sent a joint letter to the United States Department of Transportation (USDOT) asking for certain accommodations in implementation of the new policy.  The letter, addressed to Transportation Secretary Ray LaHood and Secretary-Designate Anthony Foxx, asks USDOT to clarify how the requirements will be applied, requests a transition period before Buy America requirements are applied to materials supplied by utility owners, and asks for USDOT to consider issuance of waivers for specialized utility products that may not be available from US manufacturers.  The letter also notes the importance of consistency in applying the Buy America requirements throughout the country, and cites a need for training and education of utility owners, suppliers and manufacturers.

The full letter can be found on APTA’s website.

On a related topic, FHWA has received a request for a waiver of Buy America requirements for various components related to the relocation of Pacific Gas and Electric's natural gas service facilities for a California project.  FHWA has requested comments regarding the waiver request.  View the request on FHWA's website.

Thanks to Frank Liu for his assistance with this entry.

AASHTO President Among Chorus of Voices Urging Swift Transportation Funding Action

Susan Martinovich, president of the American Association of State Highway and Transportation Officials (AASHTO), together with representatives of several state departments of transportation, held a news conference yesterday to urge Congress to take action before September 30 to extend the gas tax and to reauthorize federal highway and transit programs at current funding levels.  The press conference was held at the annual meeting of the Southeastern Association of State Highway and Transportation Officials.

A press release reporting the news conference quoted Martinovich, who is also the director of the Nevada Department of Transportation, as saying that "Congress must take action by September 30th, or the federal highway and transit programs that support thousands of jobs in every state will shut down." Both the 18.4-cents-per-gallon gas tax and the seventh extension of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) are set to expire on September 30.

AASHTO also reports that state transportation officials around the country are taking advantage of the congressional summer recess to advocate for a reauthorization that would maintain existing funding levels.  And in recent remarks, President Obama has also been urging Congress to take action, telling audiences:  “Tell Congress to get past their differences and send me a road construction bill  so that companies can put tens of thousands of people to work right now building our roads and bridges and airports and seaports.”

Major differences between the proposals currently under consideration are complicated by the fact that Congress has only 11 legislative days scheduled between its return to Washington and the September 30 deadline.  Because of the time squeeze, in a conference call to industry stakeholders last week, Sen. Barbara Boxer announced a proposal to extend  SAFETEA-LU for another four months at current funding levels, to allow time for Congress to debate and pass a multiyear reauthorization.  AASHTO’s report on that proposal is available here.  The bipartisan two-year reauthorization bill outlined by Sen. Boxer and Sen. James Inhofe in July would maintain funding at current levels.

NCSL/AASHTO to Offer Free Webinar on Transportation Governance and Finance at the State Level--Find Out How It's Really Working

The National Conference of State Legislatures (NCSL) and the Center for Excellence in Project Finance at the American Association of State Highway and Transportation Officials (AASHTO) recently released the report entitled "Transportation Governance and Finance: a 50-State Review of State Legislatures and Departments of Transportation," and will be hosting a free webinar on June 21 at 2pm ET to present the findings of the study (previewed during a committee meeting in January).

Listening to the webinar and reading the study is a must for anyone who wants to understand how decisions regarding transportation development and funding get made at the various levels of state government.  In particular it's a valuable opportunity for private P3 developers to gain insights into the workings of state transportation decision-making.

Click here for more information and to register for the webinar.

AASHTO Proposes a National Motor Fuels Sales Tax to Replace the Gas Tax

AASHTO recently sponsored a Congressional Forum on funding and financing surface transportation in the coming decade.  Academic co-sponsors were America 2050 at the Regional Plan Association; Fels Institute of Government at the University of Pennsylvania; Georgia Institute of Technology; Humphrey Institute at the University of Minnesota; Keston Institute of Infrastructure and Public; Finance at the University of Southern California.

Over 25 staff members of Senate and House committees participated.  John Horsley, Executive Director of AASHTO, made one of the presentations.  He explained in stark terms the short term funding crisis the Highway Trust Fund currently faces and offered a new solution – to replace the current excise tax on gas and diesel with a national sales tax on motor fuels.