authorization Archives - Transportation For America

Under President Trump, USDOT has hijacked the TIGER/BUILD competitive grant program, taking it far from its intended function. After a decade of experience with the program there are a number of simple steps that lawmakers could take to get it back on track and even improve it.

This is the second post in a series about the BUILD program. Learn more about the Trump administration’s dramatic changes to the BUILD program in the first post. Read the third post or download the full analysis.

The BUILD program’s greatest strengths lie in its differences from other federal transportation funding programs, which should be reinforced, rather than diminished in order to award funding to the same kind of projects as core federal transportation programs. BUILD has the potential to continue to fund great projects only if Congress stays diligent and ensures that USDOT executes the program as intended. BUILD is not a roads program, it is not a rural funding program, and it is not another vehicle for funneling more money without any accountability to state DOTs.

Recommendations to improve BUILD

1. Eliminate the $25 million cap on awards.

Even though the program is now larger (average of $967 million during the Trump administration) than it was in most years of the Obama administration ($596 million per year on average), the most recent appropriations bill included a $25 million cap on BUILD grant awards. This has the unintended consequence of making it more difficult to advance innovative, multimodal, and far more transformative or nationally significant projects. For such projects, $25 million simply isn’t enough.¹

The maximum award of $25 million was an informal practice established by USDOT early on when the program was funded at substantially lower levels, in order to help them equitably distribute a small amount of funds across the country, as mandated by Congress. However, with Congress providing larger amounts of funding for BUILD, this unnecessary cap serves only to limit the program’s ability to support larger projects that also bring more benefits.

2. Award planning grants, particularly for transit-oriented development and transit projects.

While recent appropriations bills have made planning grants eligible for funding, no such grants have been awarded. Many local communities desire investments in transit, transit-oriented development, and other multimodal infrastructure, but lack the resources or expertise to adequately plan for such investments.

Congress authorized planning grants within TIGER/BUILD four times—in 2010, 2014, 2018, and again in 2019, and USDOT awarded a combined 64 planning grants in 2010 and 2014. These grants helped local communities advance projects that were ultimately funded by a subsequent TIGER/BUILD construction grant, or other sources. For example, the 2014 funding of the San Francisco Bay Area Core Capacity Transit Study helped enable the advancement of the Transbay Corridor Core Capacity project in the federal transit capital program. In Indiana, another 2014 planning grant helped locals to advance the Red Line BRT project which also successfully received funds from the transit capital program and is currently under construction.

Innovative projects can struggle to get off the ground because transportation agencies can be hesitant to spend money on planning a project if there isn’t going to be any funding available to build it. But a program like BUILD can’t cover the capital costs of a project if no basic planning has been done. That’s why these BUILD planning funds are so important. USDOT should use its authority to make planning awards where appropriate, and Congress should also encourage USDOT to use this authority as well.

3. Strengthen requirements for modal parity.

This administration has made a dramatic shift to use the BUILD program to fund traditional road projects which can already be easily funded without restriction through a variety of conventional federal programs. This misuse of the program should prompt Congress to strengthen requirements to allocate funding to multimodal projects, including transit and passenger rail. Alternatively, Congress should consider dedicating more trust fund money to these modes if BUILD funding is not going to be made available to them.

4. Require a more equitable urban/rural funding split.

Congress should make clear that a more equitable urban-rural split is appropriate and provide more clear guidance to USDOT about how they are expected to consider the needs of both urban and rural America. Currently, USDOT awards grants to either urban or rural projects, with a set-aside for rural projects. This creates a false choice between the two.

For example, the CREATE project in Illinois, which will relieve freight rail bottlenecks and allow goods to more easily move to market through the country, is considered an “urban” project. This, despite the fact that about 25 percent of rail traffic in the United States travels through the Chicago region, and farmers and businesses from rural areas will benefit from reduced freight congestion. The benefits of an urban or rural project are not limited only to the jurisdiction where construction will take place. USDOT should consider the full impact of a project, on both urban and rural areas when determining a projects classification.

5. Authorize the BUILD program in long-term transportation policy.

The TIGER/BUILD program stands out as the only major federal transportation program that has not been authorized by the FAST Act and previous authorizing legislation, leaving its fate in limbo each year. While Congress has continued to fund it through the annual appropriations process, authorizing the program over multiple years at $1.5 billion annually would provide some certainty to potential applicants and allow Congress to establish more policy guardrails to ensure it operates as intended.

Many of these recommendations currently have support in Congress. In particular, 20 members of Congress recently signed a letter led by Representative Mark DeSaulnier (CA-11) to USDOT expressing concern about how they have been facilitating the BUILD program. That letter endorsed some of these recommendations.

The BUILD program has long been a bipartisan winner because it is so flexible. It gives communities a unique opportunity (and in some cases the only opportunity) to win direct federal assistance for a priority transportation project that would otherwise be hard or impossible to fund. However, the dramatic shift in focus underway at USDOT seriously undermines the utility of the program by directing dollars away from innovative, multimodal projects and instead heavily favoring conventional road projects that can already be more easily funded.

The recommendations above will help Congress keep TIGER roaring (or BUILD building) as the program enters its second decade.

Up next, lessons from the past 10 years of TIGER/BUILD that should inform federal transportation policy at large. Read the final post or download the full analysis.

Sean Doyle was the primary author of this report for Transportation for America, with contributions from Beth Osborne, Scott Goldstein, Jordan Chafetz, and Stephen Lee Davis.

The Senate approved their multi-year transportation authorization bill by a 65-34 vote this week. You can view our full statement on the DRIVE Act here from T4America Chairman John Robert Smith. Meanwhile, here are 10 things that you need to know about what’s in the Senate bill.

1) Funding from deficit spending vs. pay-as-you-go

How do you pay for a six-year transportation authorization when the transportation fund is broke and Congress is unwilling to raise the federal gasoline tax? For the DRIVE Act, the Senate bridged the gap between dwindling user fee revenues and total spending by getting creative. In the end, they cobbled together $46 billion in non-transportation-related funds, fees and accounting maneuvers.

Among some of the more controversial “pay-fors” in the Senate bill is a requirement to sell 100 million barrels of the 693 million barrels in the nation’s Strategic Petroleum Reserve (SPR) between 2018 and 2025, estimated to bring in $9 billion if it can be sold at $95 per barrel ($30-40 more per-barrel than today’s price). Add to that the indexing of customs fees (ironic for a Congress unwilling to index gasoline taxes), an extension of airport TSA fees through 2025, closing estate fee loopholes, and reducing the “fixed dividend rate” the Federal Reserve pays to banks.

But while the bill needs 10 years to recognize some of the new revenues or savings that won’t occur until the 2025, it would instantly transfer billions from the general fund to the transportation fund, increasing the deficit. Senator Bob Corker (R-TN) called it “generational theft,” while T4A Chair John Robert Smith asked, “Is it fiscally responsible to place the cost of paying for three years of transportation investments on the backs of our children and grandchildren?”

A final point of clarification on the length of Senate bill: the DRIVE Act authorizes six years of spending, but provides only three years of funding certainty. In 2018, Congress will have to find an additional $51 billion to fully fund the bill for the remaining three years of its authorization. Despite calls from a diverse cross-section of industry and advocacy groups for a “long-term, sustainable funding solution” for transportation, the DRIVE Act is patched together with temporary and speculative “pay-fors,” the type that are only going to get harder to find three years from now.

Policy	Ten-year savings
Reduce the fixed dividend rate the Federal Reserve pays larger banks	$17.10 billion
Sell 101 million barrels of oil from the Strategic Petroleum Reserve	$9.05 billion
Index customs fees for inflation	$5.70 billion
Extend current budget treatment of TSA fees from 2023 to 2025	$3.50 billion
Use private debt collectors to collect overdue tax payments	$2.48 billion
Extend Fannie/Freddie guarantee fees	$1.90 billion
Require lenders to report more information on outstanding mortgages	$1.80 billion
Close an estate tax loophole about the reporting of property	$1.50 billion
Clarify the statute of limitations on reassessing certain tax returns	$1.20 billion
Revoke or deny passports for those with seriously delinquent taxes	$0.40 billion
Devote civil penalties for motor safety violations to the Highway Trust Fund	$0.35 billion
Stop paying interest when companies overpay for mineral leases	$0.32 billion
Adjust tax-filing deadlines for businesses	$0.30 billion
Allow employers to transfer excess defined-benefit plan assets to retiree medical accounts and group-term life insurance	$0.20 billion
TOTAL	$45.80 Billion

2) Local communities get the short end of the stick…again

The DRIVE Act bypasses America’s cities and towns, reducing the already small amount of funding they directly control to invest in locally-driven projects by nearly $200 million in the first year alone compared to MAP-21. We were extremely disappointed to see a bipartisan amendment from Senators Roger Wicker (R-MS) and Cory Booker (D-NJ), with support from Sens. Casey (D-PA), Durbin (D-IL), Peters (D-MI) and Stabenow (D-MI) fail to receive a fair hearing on the floor. Their plan would have put a larger share of transportation dollars in the hands of local governments by increasing the amount of flexible federal Surface Transportation Program (STP) dollars directly provided to metropolitan areas of all sizes and allowing direct access to the funding for rural areas through a grant program. By failing to bring more dollars, control and accountability closer to the local level, the bill fails to restore the trust of the American people in how our transportation decisions are being made.

3) Progress on a national freight policy but with funding stuck in 20^th century silos

The Senate recognized the economic importance of moving goods efficiently throughout the country by including a new freight program that also includes real funding: almost $1 billion in the first year, and up to $2.5 billion annually towards the end of the authorization.

Unfortunately, 90 percent of the dollars reserved for the freight program are restricted to highway projects. This decision runs counter to the realities of how our freight moves: generally, no one product gets to its destination by one mode of transportation, but rather relies on a interconnected and efficient system of ports, rail lines, highways, urban streets and intermodal yards all working together.

There’s a mixed message here. The bill requires USDOT, states and MPOs to conduct thoughtful national- and state-level freight planning to analyze the condition and performance of the freight transportation system and identify the highest priority needs to create greater efficiency and reliability in freight movement, regardless of mode. After all this planning is done, the Senate bill instructs states and MPOs to focus only on highway projects at the expense of rail lines, ports and a truly intermodal network.

4) For the first time, intercity passenger rail is included in a surface transportation bill

While the popular shorthand for the transportation authorization is “the highway bill,” the nation’s transportation program has included dedicated funding for public transportation and bicycling and walking since 1982 and 1991 respectively. But intercity passenger rail has been consistently left out of the overall surface transportation legislation – until now.

For the first time, the nation’s passenger rail policy is included in the bill, laying the groundwork for further improvements and expansion of the nation’s passenger rail service to match the recent unparalleled growth in ridership. Previously, the passenger rail bill has always passed as a standalone authorization, but the DRIVE Act would enshrine the policy in the nation’s surface transportation bill. While the rail programs would still require annual appropriations for funding, it takes an important step forward in providing Amtrak sustainable funding and helping to expand service to meet booming demand.

5) Popular TIGER program fails to win a permanent seat at the table

The USDOT’s competitive TIGER grants represent one of the few ways local communities can directly access federal funds for their local priority projects. While disaster was averted as the bill was being drafted and TIGER hasn’t been changed in this bill, the Senate missed a major opportunity to authorize the program and make it a permanent part of the nation’s transportation policy. If this bill passed, supportive lawmakers will have to continue to fight each year for TIGER funding through the annual appropriations process, resulting in up and down fluctuations in available funding year to year. That makes it tough for local communities to plan and compete within this popular and oversubscribed program.

Nearly one-third of the Senate endorsed Senator Patty Murray’s (D-WA) amendment to authorize TIGER and provide $500 million per year in contract authority via the transportation fund. Unfortunately, along with the Wicker-Booker amendment, this important provision was not given an open and fair hearing on the floor.

6) TIFIA loans can fund TOD, but under a dramatically scaled back program

One of Senator Barbara Boxer’s (D-CA) signature achievements in MAP-21 was an expansion of the TIFIA loan program from nearly $125 million up to $1 billion in annual financing authority. This move greatly expanded an innovative program of low-cost federal financing that doesn’t have to be repaid immediately, allowing the financial benefits of a project to accrue before payments are due. While two good changes were made in the DRIVE Act — making transit-oriented development (TOD) an eligible expenditure and making it easier for local projects, TOD and ITS to access this program by lowering the total project cost threshold lowered from $50 million to $10 million — the program’s funding was scaled back significantly, from $1 billion to $300 million annually.

7) Transit wins additional funds, but projects with private involvement can ‘skip the line’

Overall, public transportation was spared any cuts and in fact received a larger portion of overall authorized funding. As initially introduced by Majority Leader McConnell (R-KY), the DRIVE Act provided transit with 24 percent of the bill’s funding, but the new money used to fill the gap in the transportation fund was directed almost entirely to the highway program. As a result, the mass transit account was set to end the third year of the bill (FY2018) with a negative balance of $180 million. This was fixed on the Senate floor with help from Sen. Durbin (D-IL) and others, and in the end transit received a nearly 25 increase in funding over the six years of the authorization.

One provision in the transit title of the DRIVE Act generating controversy is the ability for projects with any private sector involvement in design, construction, operation, or maintenance of transit projects to jump to the front of the line for the already oversubscribed transit New Starts Program.

8) Active transportation funding survives intact

While the bill represents a missed opportunity for local communities on the whole, the bill slightly increases funding for the popular Transportation Alternatives Program (TAP) to $850 million, but it caps the growth there over the life of the bill. Unlike other programs, this means TAP will not be able to grow with inflation over the life of the six-year authorization.

On a positive note, communities that use TAP to help make biking or walking safer and more convenient will receive 100 percent of the program’s funds, meaning all $850 million will be available to communities. States formerly controlled half of the program’s funds — but no longer.

9) Limited progress to improve accountability through performance measures

The DRIVE Act takes one small step to build on project selection and performance management, a key reform of MAP-21. The DRIVE Act provides MPOs and states support in developing their performance measure programs by requiring USDOT to develop datasets and data analysis tools. This includes addressing data gaps for trip origin and destination, trip time and travel mode.

While USDOT has yet to complete their assignment to establish rules for the performance measures contained in MAP-21, there were steps available to the Senate such as including measures such as connectivity and access to jobs or improving project selection processes to open up the “black box” and provide greater transparency and understanding for why one project receives funds over another. None of these positive ideas were included in the DRIVE Act that passed the Senate.

10) Positive advances for next-generation transportation research

At a time when transformative changes in technology are beginning to reshape the transportation landscape, providing an outcome-based 21^st century transportation research program is needed now more than ever. Fortunately, this is an area that the DRIVE Act did well. First, the bill establishes competitive funding for local governments and MPOs, among others, to deploy and test innovative research. This is important, since MAP-21 provided limited dollars outside of formula funds to test and deploy the next generation of transportation innovations. Second, the bill would require USDOT to study “shared use mobility” (car-sharing, bike-sharing, ride-sharing, etc.) and other innovative concepts, and provide local and regional leaders best practices and better understanding of the shared use transportation sector. This is important since we need to provide our leaders the understanding of this new transportation sector so that they can adequately plan and provide for its growth.

The last thing you need to know is that the work is far from over. While the Senate passed this long-term bill, both chambers also passed short-term extensions to MAP-21, setting up October 29th as the next deadline to agree on a multi-year transportation bill. Will the House pass the Senate’s bill? Will they draft a bill of their own? Will they fail to do anything and move to another short-term extension in October? Stay tuned.

Tag: authorization

BUILDing a better competitive grant program, in 5 steps