SESSION 5: TRANSPORTATION ISSUES

1. SESSION 5: TRANSPORTATION ISSUES Rob Henken President, Public Policy Forum August 5, 2014

2. Purpose • Discuss the key points of contention surrounding a new Federal transportation bill and how those might be resolved. • Contemplate how a new Federal transportation bill might affect state and local infrastructure needs and issues. • Review the various options for addressing transportation funding needs at the federal, state and local level and the likelihood of a major overhaul in transportation finance policies.

3. Transportation Facts • 24% of the nation’s bridges are either structurally deficient or functionally obsolete. • 32% of the nation’s major roads are in poor or mediocre condition. • Transit systems nationwide face an estimated $77 billion maintenance backlog. • Federal and state gas tax growth reached a plateau in the late 1990s. • Per CBO, Highway Trust Fund will have a $12 billion deficit this year - $45 million in spending supported by only $33 million in revenue.

4. Landmark Legislation: ISTEA • Passed year after 1990 Clean Air Act and in many respects a response to that Act. • “Flexible” funds previously reserved only for highways can be spent on transit improvements. • Metropolitan planning organizations given increased responsibility for planning and allocating funds for transportation improvements. • Planning process must now include considerations such as land use, intermodal connectivity, and methods to enhance transit service. 

5. TEA-21 • The Transportation Equity Act for the 21st Century (TEA-21) signed by President Clinton in June 1998 – reauthorized surface transportation programs for the next 6 years. • Per USDOT, “TEA-21 builds on the initiatives established in ISTEA…(it) combines the continuation and improvement of current programs with new initiatives to meet the challenges of improving safety…protecting and enhancing communities and the natural environment…and advancing America’s economic growth and competitiveness.”

6. SAFETEA-LU • The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) signed by President Bush in August 2005, reauthorized programs thru 2009. • “The largest surface transportation investment in our Nation's history…builds on the firm foundation of ISTEA and TEA-21.” • But recognizing that long-term and structural issues not addressed, creates two blue ribbon commissions to address programmatic and funding concerns.

7. A Call to Action?

8. The Problem: Building America’s Future • “Year after year, Washington kept getting three essential pieces wrong. First, it lost focus and strategic vision. Second, it stayed wedded to revenue sources that no longer meet our capital needs and to policy approaches that year after year locked us into increasingly archaic priorities. And third, it failed to ensure that federal dollars were directed to projects that would strengthen our economic competitiveness.”

9. MAP-21 • Moving Ahead for Progress in the 21st Century Act (MAP-21) signed into law by President Obama in July 2012, reauthorized programs through September 30, 2014. • Per USDOT, “MAP-21 represents a milestone for the U.S. economy – it provides needed funds and, more importantly, it transforms the policy and programmatic framework for investments to guide the growth and development of the country’s vital transportation infrastructure.”

10. Latest Developments • In April, Obama proposed 4-year, $302 billion transportation bill financed largely by elimination of corporate tax breaks. Others have proposed gas tax increase, but no agreement on multi-year package. • HTF depleted, USDOT said funds to states would be shut off in early August; would impact more than 100,000 projects, kill 700,000 construction jobs. • House approved a “patch” in mid-July – would add $10.9 billion to HTF, keeping it afloat through May; financed largely through “pension smoothing.” • Senate approved House bill on July 31, averting the “crisis” for now.