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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.

Transportation funding: summer’s biggest blockbuster

Suddenly, transportation funding is the topic de jour.

Last night, the House debated the measure that will set transportation spending levels for the coming fiscal year, the Transportation, Housing and Urban Development bill. Among other controversial provisions, the bill would cut the popular TIGER grant program from $600 million today to $100 million. (You can read our full summary of the bill here.)

The TIGER cuts drew opposing statements from 13 Democrats and from the Obama Administration, which has called for an increase of TIGER funds to $1.25 billion. The Administration Monday declared its opposition to the THUD measure, citing in part a TIGER funding cut that “would reduce an already highly competitive grant program and its ability to support innovative projects across the United States.”

Meanwhile, both the House and the Senate are scrambling to find new ways to keep the highway trust fund solvent. With tax increases off the table in an election year as an expected shut-off of funding for new projects looms, both houses appear to be searching for short-term measures to plug the gap between lagging gas tax receipts and current spending levels.

As you may have heard, House Republicans have proposed to find the money by eliminating Saturday postal service and applying the savings (potentially up to $2 billion a year) to help fund the Highway Trust Fund. Interestingly, Postmaster General Patrick Donahoe, who has himself pushed to cut Saturday service, told interviewed by the Washington Post earlier this week that he was delighted by the idea.

However, this plan is not widely supported by either party. More than three-dozen House Republicans have signed a letter stating their opposition to five-day delivery service, and House Democrats do not see this as a viable fix for the funding gap.

In the Senate, Senator Harry Reid (D-NV) and Senator Rand Paul (R-KY) have created a bipartisan plan that includes a one-time tax “holiday” for multinational corporations to bring profits home from overseas with a lucrative tax deduction. Such a move would yield a windfall of $20 billion to $30 billion over the next two years, they estimate.

While that would be enough to cover the projected trust-fund shortfall for a year or two, it would not solve the longterm problem. It also has drawn opposition from other key leaders who fear a longterm hit to the treasury if the profit repatriation is not tied to comprehensive corporate tax reform – changes that are far too complex to work through before the looming deadline.

Stay tuned. It’s going to an interesting summer.

AP says attacks on transportation enhancements are “exaggerated and misrepresented”

On Friday, we highlighted the disingenuous attempt from some in Congress to tie the need to repair our bridges to the elimination of a tiny program to make it safer to walk or bike on our streets and roads.

Senators Rand Paul of Kentucky, Tom Coburn of Oklahoma and John McCain of Arizona have been targeting the transportation enhancements program, a mere 2 percent of the federal transportation budget. They say eliminating the set-aside would make it easier for states to repair bridges, even though many states have failed to prioritize maintenance when they can spend the bulk of their transportation funds however they want.

The Senators and their supporters seem to have gotten a good chuckle out of some particular projects. They point to, among others, roadside snack stand in Pennsylvania shaped like a giant coffee pot and a lighthouse renovation in Toledo, Ohio.

“We picked some of the more interesting and exciting ones to get our colleagues’ attention,” McCain reportedly admitted.

But exciting as they might be, the claims about the projects are “exaggerated and misrepresented,” according to a fact check feature in the Associated Press this past weekend.

That roadside coffee pot? AP’s Joan Lowy reports:

No transportation aid was spent on the coffee pot’s $100,000 restoration, said Olga Herbert, executive director of the Lincoln Highway Heritage Corridor. The money was raised entirely from preservation and civic organizations and local supporters”

“We did not use any of this $300,000 award for anything to do with the coffee pot,” she said. “It’s interesting that nobody from Senator Coburn’s office called me about this.”

As for the lighthouse in Toledo:

Actually, no transportation dollars have been authorized or awarded. The lighthouse renovation is among projects community officials tentatively hope to get around to in 2019.

Senator Paul has also repeatedly cited a supposed “turtle tunnel” project. But the project he referenced on U.S. 27 in Florida was a significant safety issue for motorists, many of whom were forced to swerve when alligators, turtles and other creatures crossed the highway from adjacent Lake Jackson. While Coburn claimed the project would require $6 million or more to finish on an undefined timeline, in fact, USDOT told Lowy the project was completed in September 2010 at $3 million, under budget and $3 million less than Senator Coburn claimed.

Streetsblog Capitol Hill has more.

The takeaway? At the least, members of Conrgess should do a better job fact-checking. While they’re checking the numbers, they might look to see how long it would take to repair bridges relying solely on this relatively tiny share of funds. It would take Paul’s home state of Kentucky 66 years of bike and pedestrian funding to achieve a state of good repair for their bridges. Pennsylvania wouldn’t catch up until sometime during the 24th century.

Safe to say, this isn’t the serious proposal for bridge repair that we urgently need. If Paul, Coburn and McCain are serious about fixing bridges and not just scoring political points, they’ll come back with something better.

Photo courtesy of the Associated Press.

Late update: Senator Rand Paul’s amendment to cut money for walking and biking and direct it to bridge repair failed in the Senate today, by a 60-38 count.

A real plan to fix bridges, or a reprise of attacks on pedestrian safety?

Our reports calling attention to our nation’s deficient bridges have gained enormous traction in recent weeks, to the point that members of Congress and the White House are citing our data in demonstrating the need for infrastructure investment. Unfortunately, some are using them to make disingenuous attempts to eliminate a small program they’ve been trying to put on the chopping block for years.

A New Trail Originally uploaded by M.V. Jantzen to Flickr.
Safe travels for people on foot, on bike and in cars on the new Wilson Bridge in Washington, D.C. Should we really have to choose?

The small Transportation Enhancements program represents less than 2 percent of all transportation funding, and more than half of that 2 percent is used to help make walking and biking safer — a worthy expenditure considering 10 percent of trips are taken on foot and 47,700 people on foot were killed from 2000-2009.

Senator Rand Paul is expected to offer an amendment next week to take all of the TE money and put it toward bridge repair. And a handful of others in Congress have been trying to kill this program for years, well before the current talk of austerity.

Sen. Paul’s proposal doesn’t represent a sincere plan to repair our bridges, but unfortunately, a handful in the media are still taking the bait.

The question is this: With the nation facing a transportation crisis that has gotten little attention outside of policy wonks and Washington, should the federal government continue to mandate that states spend federal dollars on pedestrian safety, bicycling trails, landscaping and historic preservation?

When you ask the wrong question, you often get the wrong answer. And this question in particular has been manufactured by those who would capitalize on the sense of urgency about our bridges to eliminate a program they’ve been after for years.

We’ve covered before how the money spent on walking and biking safety won’t actually do anything to address the bridge backlog. It would take Kentucky 66 years of bike/ped money to fix all of the bridges that are deficient today. And as we wrote in National Journal, “So what if we decided to ignore the significant safety issues faced daily by pedestrians and cyclists, and spent that money instead on bridge repair as some have suggested? We could indeed fix all the currently deficient bridges in the state of Missouri, for example. We’d just need to be patient because it would take 82 years. The State of Washington could get to its backlog in 164 years. And Pennsylvania could finish up with its deficient bridge list at the start of the 24th century.”

Raiding these safety funds to fix our bridges is like trying to stop a freight train with a BB gun. Beyond that, it’s false — and cruel — to suggest that we have to even decide between safety on our bridges and safety on our streets.

We have often pointed out the fact that states have the flexibility to spend up to half of their bridge repair money elsewhere, regardless of the condition of their bridges. But they also have the flexibility to spend most of their Surface Transportation Program dollars, usually the biggest pot of transportation funding, on almost anything they want. They could fix bridges, build transit, highways, bridges, sidewalks; it’s all eligible, and totally up to the states for how they spend it. No mandates from Washington.

Despite false assertions that we require states to build museums or turtle tunnels instead of repairing their bridges, there’s nothing stopping states from getting on top of their deficient bridges. Just like nothing has stopped Florida from spending their TE money each year while also setting up a bridge repair program to target funds first and foremost to bridges that need attention, resulting in some of the best bridges in the country. Meanwhile, Senator Paul’s state of Kentucky, with more than 2,700 deficient bridges, spends $6.50 on new highway capacity for every dollar they spend on bridge repair.

We don’t have to choose between being safe when we walk or being safe when we drive over a bridge. Anyone who tells you otherwise has their own agenda; an agenda that has very little to do with actually repairing our bridges.

It’s time for serious proposals from Congress to fix our crumbling bridges and infrastructure, rather than making a large percentage of people less safe in the name of grabbing a few extra bucks for our bridges.

Along these lines, a good step would be Senator Cardin’s “Preservation and Renewal of Federal-Aid Highways Act.” Tell your Senators to support this important piece of legislation.