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May 31st transportation funding deadline looming over lawmakers

We’re only three weeks away from the expiration of MAP-21, the transportation law of the land, and Congress still does not have a solid plan for renewing or extending it — or for keeping the nation’s transportation fund solvent past the first days of summer.

Well, we’re here. Seems like just yesterday we were writing the news that Congress had finally passed a new transportation law. But that law, MAP-21, the Moving Ahead for Progress in the 21st Century Act, was only two years in length instead of the customary six, and it will expire at the end of the month after its first short-term extension concludes. Congress is no closer to agreeing on a multi-year replacement than they were when they kicked the can down the road last summer. To complicate matters, the temporary funding patch that Congress passed in 2014 to keep the Highway Trust Fund solvent will run dry by mid-July, according to USDOT projections.

So far, Congress has not hatched a concrete plan to reauthorize MAP-21 and find a long-term stable funding source, but lawmakers do have some ideas.

In February, Rep. Earl Blumenauer (D-OR) introduced a bill that would nearly double the federal gas tax over the next three years to help fund a long-term transportation bill.

Last month, a bipartisan group of Representatives led by Reps. Renacci (R-OH) and Pascrell (D- NJ) introduced The Bridge to Sustainable Infrastructure Act, which seeks to raise the gas tax by indexing it to inflation by January 2016. The gas tax would then rise every three years unless Congress finds another funding source for the Highway Trust Fund, ultimately guaranteeing 10 years of funding for the transportation program. This bill is the only plan with any bipartisan support that proposes to raise user fees (i.e., the gas tax) in any way. It currently has 20 cosponsors: eight Republicans and 12 Democrats. 

Several lawmakers and the Obama Administration have proposed using a one-time repatriation of corporate profits as a source of funding. Barbara Boxer (D-CA) and Rand Paul (R-KY) introduced a bill that would encourage corporations holding profits overseas to return these profits to the US through voluntary “tax holiday” at a decreased tax rate of 6.5 percent. The Obama Administration’s plan would force companies to return their overseas money to the U.S. and pay a 14 percent tax rate on that money. Both repatriation proposals would transfer a portion of the earnings from the tax on returned corporate profits to the transportation trust fund.

Reps. John Delaney (D-MD) and Richard Hanna (R-NY) introduced a bill that would tax overseas profits by 8.75 percent, and would potentially raise $170 billion for the Highway Trust Fund.

What will happen before May 31?

Several lawmakers have sounded the alarm on finding a plan to reauthorize MAP-21 and keep the Highway Trust Fund solvent before the May 31st deadline passes.

U.S. Transportation Secretary Anthony Foxx called the short-term extensions that several lawmakers have proposed an “outrage,” saying that a long-term plan was necessary so transportation planners could be sure that they’d have the funding needed to move forward with long-term plans.

Senate Minority Leader Harry Reid (D-NV) is rallying fellow Democrats in the Senate to block a Republican-backed trade deal until the Senate deals with funding the Highway Trust Fund (and the Foreign Intelligence Surveillance Act). Senate Majority Leader Mitch McConnell (R-KY), meanwhile, also cited the need to address MAP-21, calling it a “must-do” item that needs to be completed by Memorial Day.

Over in the House, Majority Leader Kevin McCarthy (R-CA) sent a memo to his fellow House Republicans that urged them to act to keep the Highway Trust Fund solvent, which is set to go broke by midsummer. He said that any proposals to increase the gas tax, however, would be dead on arrival this Congress.

Next year’s budget

Whether Congress reauthorizes MAP-21 and extends the Highway Trust Fund will affect funding for next year’s budget for all transportation and housing programs. The House’s Transportation, Housing and Urban Development subcommittee released a transportation budget that proposes heavy cuts to TIGER, New Starts and Amtrak capital funding while holding steady funding levels for highways and other programs. The full House is expected to consider the Committee’s transportation appropriation bill upon return from a weeklong recess. The Senate Appropriations Committee has yet to release their proposed fiscal year 2016 transportation budget. While slow on the uptick, we expect this Congress to be more active on transportation items over the coming summer months. Stay tuned.

Obama budget cues start of serious negotiations over transportation funding

With the release of his budget proposal yesterday, President Obama at last offered some specifics on his plan to use the repatriation of taxable corporate profits to fund transportation. In doing so, he staked out a starting point for real-world negotiations over a possible six-year transportation bill – the first time such a prospect has seemed remotely realistic in six years.

His gambit joins a burgeoning set of transportation funding proposals in Congress (more about these later in this post), another hopeful sign that lawmakers are taking the issue seriously.

The less good news, of course, is that those negotiations over tax reform and transportation funding – to say nothing of policy – are almost certain to last beyond the May 31 expiration of the current law, MAP-21. That means another extension and lingering uncertainty until this can be wrestled to the ground.

With the addition of revenues from taxing American profits parked overseas, the Obama budget looks to invest $94.7 billion in fiscal 2016, nearly double today’s level of just over $50 billion. Invested along the lines of his GROW America Act, this would represent a 25 percent increase for the highway program and more than 70 percent for transit, which today is wildly oversubscribed.

All told, the Obama plan would authorize $478 billion for a six-year program of investment, $176 billion over the levels of MAP-21, and $76 billion more than the four-year version of GROW America released last spring. About $240 billion of that is from expected gas tax revenue. Placing a mandatory 14 percent tax on roughly $2 trillion in earnings held abroad by U.S. multinationals would yield about $238 billion, the Administration estimates.

The plan would make the TIGER grant program a permanent feature, funded at $1.25 billion a year, and would continue funding planning grants for planning walkable neighborhoods around transit stops. It also would establish passenger rail and multimodal accounts within the former Highway Trust Fund (HTF), now reconstituted as the Transportation Trust Fund. It would create a multimodal freight program, funded at $1 billion in 2016, and continue to promote the accelerated, inter-agency reviews to get projects moving faster.

While Republicans criticized many features of the Administration budget, the notion of using corporate tax reform to fund transportation seems to have growing bipartisan support, as support for raising the gas tax struggles to take hold.

Last week, the unlikely pairing of Sens. Rand Paul (R-KY) and Barbara Boxer (D-CA) announced they would introduce the “Invest in Transportation Act”, a plan to offer an enticement tax rate of 6.5 percent on corporate earnings returned to the U.S. from abroad, with all proceeds going to the Highway Trust Fund. Because it is voluntary, the exact amount is uncertain, but the senators have said they hope it can make up for flat or declining gas tax revenues.

On the House side, Reps. John Delaney (D-MD) and Richard Hanna (R-NY) have introduced the Infrastructure 2.0 Act, (HR 625), under which existing overseas profits would be subject to a mandatory, one-time 8.75 percent tax. This is expected to yield $120 billion, sending enough of that to the Highway Trust Fund to cover the gap between anticipated gas tax in-take and spending at current levels plus modest growth.

The bill also directs $50 billion of the $120 billion to capitalize an infrastructure bank called the American Infrastructure Fund (AIF) that could provide financing to transportation, energy, communications, water and education projects. Rep. Delaney establishes an AIF in another bill submitted last year along with Rep. Mike Fitzpatrick (R-PA), who reintroduced their “Partnership to Build America Act” (HR 413) on Jan 20. State and local government entities, nonprofit infrastructure providers, private parties, and public-private partnerships all would be eligible to apply for AIF financing. Through bond sales, the fund would be leveraged at a 15:1 ratio to provide up to $750 billion in loans or guarantees.

Not everyone in Congress has given up on the bird-in-the-hand funding source – the gas tax. Rep. Earl Blumenauer (D-OR), is set to reintroduce his UPDATE Act, which would hike the per-gallon tax by 15 cents, with 5 cent increases unfolding over the next three years, and index the overall tax to inflation. In the Senate, Senator Tom Carper (D-DE) is working with a bipartisan group to introduce a gas-tax bill, expected later this month.

Although more of an aspirational bill than a funding measure, Senator Bernie Sanders (I-VT) last week introduced his Rebuild America Act. Designed to illustrate the scale of investment the senator says we need, it calls for providing an additional $1 trillion in infrastructure investments over the next five years for roads, bridges and transit, passenger rail, airports, water infrastructure, marine ports and inland waterways, national parks infrastructure, and broadband and electrical grid upgrades.

It would add $735 billion to surface transportation investments over the next 8 years, with an additional $75 billion a year for the HTF. It also would capitalize a National Infrastructure Bank with $5 billion per year for fiscal 2015-19, estimated to stimulate more than $250 billion in investments. It provide for $2 billion more for TIFIA loans and $5 billion a year for TIGER.

And it makes all the other proposals look like skinflints in comparison.

At last, Congress and the White House appear to have moved transportation to a front-burner issue this year. With the Obama proposal as a strong starting place, here’s hoping negotiations proceed swiftly and in good faith so our communities can continue to plan, maintain and build for continued prosperity.

Tell Congress to send real dollars where the real needs are

Applause rang out from both sides of the aisle during the State of the Union last week when President Obama called for the ambitious, “bipartisan infrastructure plan” we need for a 21st century, “middle-class economy”. It’s time to get real about how we raise that money, and more importantly, how we should invest it.

While the President noted that workers are getting a welcome break with lower gas prices, he declined to call for applying some of that savings to making sure those workers can get to their jobs. He again floated the idea of relying instead on a one-time windfall from corporate tax reform, and now some key GOP counterparts seem warm to the idea.

The problem is that no such deal is likely before the transportation program expires and money runs out in May. And even if it were, we need more than a one-shot infusion.

Beyond that, we need a federal transportation bill that actually gets resources to local communities that are struggling to repair and expand transit, roads and bridges so people can get to work and goods can get to market. They need the latitude to fix bottlenecks and potholes and to innovate for the future, in accord with their residents’ priorities.

Tell your representatives: Act now to produce a bipartisan, long-term transportation bill with real money. The time for trial balloons and what-ifs is over.

Please send your representative a message to:

  • Raise revenue to stabilize the Highway Trust Fund and spur economic growth. For the near term, increasing fuel fees that have lost a third of their value since the last increase in 1993 is the only sure bet.
  • Ensure funds are flexible enough to spend on all modes of transportation. Let communities invest in whatever way will bring the biggest bang for the buck.
  • Empower local communities with more control and resources. Local leaders are best able to identify the particular transportation investments to address their communities’ unique challenges.

Your member of Congress has a crucial opportunity to refocus the transportation program in ways that will boost local economies, maintain our existing infrastructure, and prepare for the future.

Send a letter asking your member of Congress to step up.

SOTU reaction: To build a 21st-century, ‘middle-class economy’, President and Congress must provide stable transportation funding

press release

For immediate release 

WASHINGTON, D.C. – In response to President Obama’s call for increased investment in infrastructure Transportation for America Director James Corless issued this statement:

“President Obama tonight explicitly made the connection between his themes of helping the middle class and helping cities, towns and suburbs invest in infrastructure. Communities across the country are struggling in the face of unstable resources to fix and expand roads, bridges and transit systems so that people can get to and keep their jobs and goods can get to market.

The President also made it clear he is aware that time is running out on our transportation trust fund, and that Congress must act soon to renew our commitment to first-world infrastructure. Amid concerns of political stalemate, this is one area where bipartisan action is possible and clearly needed.

We applaud his continued call for smart, new investment, and welcome a significant infusion from the repatriation of corporate profits. However, that is a one-time funding source, and the President missed the chance tonight to embrace a more stable approach such as an overdue increase in gas tax revenues. Nevertheless, we urge him and leaders in Congress to come together on a plan for long-term, stable funding well before the May 31 expiration. We would note that the last increases in the motor fuels tax came with the leadership of presidents Reagan and Clinton, both of whom faced challenges in Congress but managed to find a way forward.

Communities across the country are leading the way with innovative, cost-effective investment strategies, with projects designed to sustain economic growth while improving quality of life. Any economy intended to give more people an avenue to middle-class jobs will have to be built on strong investment in basic infrastructure. The President surely knows it, but now he and his congressional counterparts will need to lead like they know it.”

 

Contact: David Goldberg
Communications Director
202-412-7930
david.goldberg@t4america.org

Backup contact: Stephen Davis
Deputy Director of Communications
202-955-5543 x242
steve.davis@t4america.org

Tell the President to back a bipartisan gas tax increase

The steep drop in gas prices offers the best opportunity in years to raise the revenue we need to rescue our transportation trust fund and build for the future. And, for the first time in recent memory, leaders in both parties are calling for a gas tax increase to avoid foisting monumental repair and construction bills on the next generation.

Now is the time:  Congress and the President must seize the moment.

 President Obama is keenly aware of the needs. In just about every State of the Union address since he was elected, he has called for more robust investment to fix our aging network and build what we need to keep people, goods and our economy moving. But the President’s proposals to fund his vision have been short on specifics. And he has opposed raising the gas tax in a weak economy.

Today, though, times are better and gas prices sinking. This time, the President must use the Jan. 20 State of the Union address to say how he would pay for the investments he knows are needed.

 Tell President Obama to voice clear support for a bipartisan move to raise real revenue.

We know we can’t rely on the gas tax alone over the long term. Consumption is likely to drop with cleaner, more fuel-efficient cars – and people are driving less. We need to diversify our revenue sources, even as we broaden the kinds of projects we build.

But that transition will take years, and we have a huge backlog of needs from a long recession that took a toll on our ability to maintain and build our network. Our local communities cannot begin to afford to make up the gap on their own. It’s a nationwide problem that needs national support.

By May, Congress must adopt a new transportation bill and find the money to pay for it. To make the best use of those dollars, Congress must get more resources to local communities, and give them the latitude to do best by their economies and quality of life.

Now, while consumers will feel the impact the least, is the best time to act for a near-term fix. The President can either stifle the conversation from the outset, or add his voice to the growing chorus.

 Please encourage him to add his support, in the high-profile setting of the State of the Union Address.

T4America applauds President and House tax chair for efforts to fix the transportation funding crisis, as local leaders plead for help

Today President Obama and House Ways and Means Committee Chairman Dave Camp (R-MI) introduced separate proposals that would prevent the looming insolvency of the nation’s key infrastructure trust fund.

President Obama today unveiled a proposal for a four-year, $302 billion transportation bill, with a windfall from business tax reform covering the shortfall in the Highway Trust Fund for that period. Chairman Camp proposed tax reform measures that would include staving off insolvency of the transportation fund for eight years. James Corless, director of Transportation for America, issued this statement in response:

“We are encouraged to see the threat to our nation’s transportation network begin to get the attention it deserves. With the bankruptcy of our transportation trust fund just months away, this can’t come soon enough. Just today, local leaders from across the country came to Capitol Hill to tell Congress what a robust federal investment in their transportation networks would mean for their economic development and long term prosperity. (See our blog post on today’s events here.)

These local leaders are putting their money where their mouth is, going to their voters for tax increases to pay for infrastructure they need. But as they said today, and as I reiterated in remarks to members of the House Transportation and Infrastructure Committee, their plans count on a dependable federal partner. Today’s actions by the Administration and key House leaders show the message may finally be getting through.

With the current transportation program expiring at the end of September, we look forward to working with Congress and the Administration on a fully funded program that promotes innovation, rewards initiative and gives local communities the latitude to solve their infrastructure challenges.”

T4 partners meet President Obama, talk about transportation and infrastructure

Three T4 America partners were invited to join us at the White House Monday to meet the President of the United States and talk about transportation funding, specifically the infrastructure portion of the President’s American Jobs Act. The President’s plan, which failed to make it to a final vote yesterday in the Senate, would have invested $60 billion into infrastructure.

White House staff contacted T4 America to invite a few of our local partners out there with boots on the ground working hard to get their local, state and congressional leaders to start making smart, solid investments in transportation to help boost the economy and get people back to work.

Brian Imus of Illinois PIRG, Scott Wolf of Grow Smart Rhode Island, and Arnold Weinfeld of the Michigan Municipal League (pictured, standing right) were invited guests of the President for his Monday working group meeting in the White House to talk about the urgent need for America to invest more dollars, wisely, in our aging transportation system.

Arnold Weinfeld got a chance to stand up at his front row table a few feet from the President and tell him the same thing that we highlighted on our blog last week, that fixing bridges and building transit and passenger rail are bipartisan issues in Michigan. Tired of waiting on Washington to act — similar to the President’s motivation for the jobs bill — Governor Rick Snyder has put forth an ambitious plan to invest in all kinds of transportation for the state.

Michigan citizens and local partners like the Michigan Municipal League or the Michigan Suburbs Alliance know that a successful future for Michigan hinges on making smart investments in transportation to keep people and goods moving quickly and safely, whether in a car over a repaired bridge, on foot to the corner store, or in a new light rail vehicle on the Woodward light rail line underway in Detroit.

We desperately need the fresh infusion of money into our deficient bridges and aging transit systems that the American Jobs Act would have provided. Unfortunately, the Senate failed to get the necessary 60 votes for cloture in the Senate to vote on the transportation portion of the American Jobs Act. But that doesn’t mean that it’s the end of the road for transportation funding. Far from it.

Attention in the Senate will now turn to the long-term transportation bill that’s seemingly been just over the horizon for months now. The Environment and Public Works Committee is expected to release their part of the bill this afternoon, for markup next Wednesday.

Though we do need the kind of infusion that the jobs act would have provided to get things rolling today and put people to work, we really need the certainty of a long-term reauthorization bill, new policies and clear reforms to make sure that we make the best use of our transportation dollars.

700 days since expiration of last transportation bill, Congress urged to pass an extension

P1010043President Obama gave a short speech in the Rose Garden this morning calling on Congress to come together quickly to pass a “clean” extension of the federal transportation bill to ensure that there’s no interruption in federal funding for transportation projects while they debate a longer-term reauthorization.

At the end of September, if Congress doesn’t act, the transportation bill will expire. This bill provides funding for highway construction, bridge repair, mass transit systems and other essential projects that keep our people and our commerce moving quickly and safely. And for construction workers and their families across the country, it represents the difference between making ends meet or not making ends meet.

If we allow the transportation bill to expire, over 4,000 workers will be immediately furloughed without pay. If it’s delayed for just 10 days, it will lose nearly $1 billion in highway funding — that’s money we can never get back. And if it’s delayed even longer, almost one million workers could lose their jobs over the course of the next year.

As a refresher, we’re currently on the 7th extension of the 2005 transportation bill (which incidentally expired exactly 700 days ago today in September of 2009.) The current extension of federal law expires at the end of September, leaving only a narrow window of time for the House and Senate — currently far apart on policy and funding levels — to come together on a new long-term transportation bill.

A “clean” extension would mean extending the old policy without making policy changes or tweaks — changes that don’t have time to be properly considered or debated. T4 America Director James Corless said in our statement earlier today:

Extending the gas tax and the current law that allocates transportation funds ought to be the bipartisan no-brainer it has been historically. To play politics with the extension would deliver a gratuitous shock to a struggling economy and to families relying on infrastructure-related paychecks.

Extending the old policy is urgently needed, but it’s still a band-aid. The bigger need will still remain: passing a robust, long-term transportation bill with updated policy and purpose that matches the needs of the 21st century in America. Corless continued:

Beyond that, the President is right to urge Congress to break the gridlock and adopt a fully funded, long-term authorization that will protect and create jobs while supporting a full-fledged economic recovery. To be most effective, the updated transportation bill needs to ensure timely project approvals, as the President noted; but more importantly, it needs to set clear priorities to avoid misspending our precious dollars. Those priorities should include holding states and localities accountable for smart investment strategies and for repairing and updating existing infrastructure, while expanding the network to provide more convenient, safe and affordable travel options for all Americans.

Rep. John Mica, the chair of the House committee responsible for writing the bill, released his own statement expressing his support for passing an extension, in which he said, “I will agree to one additional highway program extension,” seemingly acknowledging the reality that it will extremely difficult to pass a full six year bill in the short month of September.

The bigger questions still lingering from all of this news today are whether or not the extension will be “clean” — without policy riders of any kind — and what impact this will have on the long-term transportation bill being considered by each chamber. The House draft bill has already been released, and rumor has it that the Senate is planning to release theirs in just a few weeks. But the two versions are far apart on funding and length for certain, and possibly with regard to policy.

Stay tuned, September will be a busy month. The legislative calendar will get rolling when Congress gets back in session on the day after Labor Day.

Don’t let transportation get lost in the political shuffle; send a letter to your local paper

Newspaper pile Originally uploaded by Valerie Everett to Flickr.

When President Obama announced his vision on Labor Day for investing in 21st century infrastructure, he put our country on the right path toward smart transportation reform — a path that could transform communities across America and create desperately needed jobs.

But his bold vision to invest in safer streets, road and bridge repair, and high speed rail immediately came under fire from many of the usual suspects who prefer the current system of earmarks and oil industry tax breaks.

We need to respond to these attacks on transportation reform – publicly and quickly – to show the country and our lawmakers that the plan’s supporters greatly outnumber its critics.

Take 5 or 10 minutes and write a letter to the editor of your local paper today

Letters published in local papers are read carefully by members of Congress and their staffs – they represent the pulse of their communities. Getting a flood of supportive letters published will go a long way in helping shore up support for a transformational change in our country’s approach to transportation.

Plenty of old guard transportation insiders in Washington, DC – from the highway lobby to the oil companies – would love to see us pour twice as much money into the same old broken system, but we stand with Americans who want accountability for how we invest in transportation, ensuring that we invest in things that can get us moving again and create the most jobs.

Write your letter of support now – we’ll give you talking points to make it fast and easy, and we can even send your letter for you! Use our tool to write and submit a letter to your local paper.