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Legislative Update

Legislative Update. July 15, 2011. Chris Hundt Michigan Department of Transportation. July 15, 2011. Overview. State Issues Fiscal & political environment Federal Issues Fiscal & political environment Reauthorization proposals. State Transportation Revenue. MDOT Match Issue.

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Legislative Update

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  1. Legislative Update July 15, 2011 Chris Hundt Michigan Department of Transportation July 15, 2011

  2. Overview • State Issues • Fiscal & political environment • Federal Issues • Fiscal & political environment • Reauthorization proposals

  3. State Transportation Revenue

  4. MDOT Match Issue

  5. Match Problems Not Exclusive to MDOT “Sadly, there are county road commissions in Michigan that are being forced to turn down millions of dollars in federal road funds for which they are eligible, because they simply cannot provide the required local match.” Michigan’s Roads in Crisis – Highway, Roads and Bridges CAC Report July 2008

  6. MDOT Reinvented • 15% reduction in staff since 2009 • Closing or consolidating eight facilities • Organizational changes and process improvements • Debt restructuring Better, faster, cheaper, safer, smarter

  7. Legislative Activity • FY 2012 state budget • NITC • Match Issue • SB 351/HB 4521 – sales tax diversion • Consolidation of government services

  8. Other Planned Legislative Activity Special message to the legislature on infrastructure in October • Transportation funding continues to be inadequate for state’s needs • Structural problem that directly affects Michigan’s economic vitality • Permanent solution for matching federal transportation funding is needed

  9. Recalls Add Uncertainty • Approved recall language • Representatives Damrow, Johnson, Jenkins, Potvin, Pscholka, and Speaker Bolger • Senators Booher, Emmons, Green, Jansen, Marleau, Nofs, and Major Leader Richardville • Awaiting clarity hearing • Representatives Cotter, Jacobsen, Scott, Shirkey • Senators Caswell, Kahn, Meekhof, Moolnaar, Proos, Schuitmaker, Warren

  10. Federal Reauthorization 2011 • SAFETEA-LU extended through 9/30/11 • Originally expired 9/30/09 • Currently on 7th extension

  11. History of Overdue Bills Number of Days Authorizing Legislation Was Overdue

  12. Recap of Key Milestones • August 2005 – SAFETEA-LU signed • September 2008 - $8.017 B GF to HTF transfer • August 2009 - $7 B GF to HTF transfer • September 2009 – SAFETEA-LU expires • March 2010 – HTF shuts down for two days • March 2010 - $19 B transferred from GF to HTF • September 2011 – 7th extension of SAFETEA-LU expires

  13. Federal Fiscal Environment

  14. Federal Fiscal Environment • Little/no apparent support for increasing user fees

  15. Infrastructure Needs Are Dramatic Maintain Scenario Improve Scenario Source: Report of the National Surface Transportation Infrastructure Financing Commission

  16. Infrastructure Needs Dramatic in Michigan

  17. Administration’s Proposal • Obama Administration released broad outline of reauthorization in February • $551 billion over six years (2012-17) • This includes $50 billion in up front funding • Assumes $231 billion in new revenue

  18. Administration’s Proposal Administration also proposed one-time funding of $2 billion for TIGER grants and $3 billion for airports

  19. Administration’s Proposal • Significant program consolidation to result in: • 6 highway programs • 6 transit programs • 2 rail programs • Expands HTF to TTF and include passenger rail

  20. Administration’s Highway Proposal (Billions)

  21. Administration’s Transit Proposal (Billions)

  22. Proposed Planning Changes ?

  23. House Rule Change • House procedural rules • “Cut-as-you-go” instead of PAYGO • Easier to reduce transportation spending • More difficult to increase revenue • Impact on firewalls and funding guarantees

  24. House Budget Resolution • Fiscal year 2012 budget resolution calls for big cuts • $30B per year from transportation • Does not allow for a “reserve fund” to bring in additional revenue for reauthorization

  25. House Reauthorization Proposal • Chairman Mica’s priorities: • Stabilizing the HTF (spending w/in its means) • $230 billion over six years • Reform federal program • Increase flexibility and accountability • Maximize private funds leveraged • Accelerate project delivery – 437 day plan

  26. Senate Activity • Agreement among transportation leaders • Fund program at current levels • Eliminate earmarks • Consolidate programs • Strengthen TIFIA • Expedite project delivery • Likely to be a two year bill

  27. Alternative Scenarios

  28. Immediate Concern is FY 2012 • House budget and reauthorization plan could: • Reduce highway program by 30% • Eliminate transit new starts • Cut funding for Amtrak • Impact to Michigan’s highway funding depends on where reductions are made, but estimated reduction ranges from $175 million to $360 million per year

  29. Other Complicating Factors • Congress has not been willing to juggle transportation with other priorities • Federal budget deficit • Trade Deals & TAA • Appropriation bills

  30. Questions?

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