tax reform Archives - Transportation For America

Tax reform promises prosperity but is more likely to assure austerity

Transportation for America Kevin F. Thompson offered this statement:

“The supporters of this tax package have promised that it will bring great prosperity. But the trillion-dollar deficit it creates all but guarantees that Congress will be forced to cut funding for job-creating surface transportation programs and other infrastructure investments that the President claims to support — imperiling the country’s economy. In other words, their promises of prosperity will actually lead to years of austerity.”

—

Transportation for America is a program of Smart Growth America, the only national organization dedicated to researching, advocating for, and leading coalitions to bring better development strategies to more communities nationwide. From providing more sidewalks to ensuring more homes are built near public transportation or that productive farms remain a part of our communities, smart growth helps make sure people across the nation can live in great neighborhoods. For more information visit www.smartgrowthamerica.org.

Recent Federal Activity Summary – Senate passed its version of the “Tax Cuts and Jobs Act”

As a valued member, Transportation for America is dedicated to providing you the latest information and developments around federal policy.

This weekend, the Senate passed its version of the “Tax Cuts and Jobs Act” by a vote of 51 – 49. Senator Bob Corker (R-TN) was the only Republican to join all Democrats in opposing the bill. While deeply flawed, the Senate bill retains private activity bonds, which are a critical tool for financing investment in a variety of infrastructure projects.

The President has set an ambitious goal of signing tax reform legislation into law before Christmas. While it has been suggested that the House could simply vote to send the Senate bill to the President, indications are that the House would prefer to work out the differences between the two bills. Therefore, the next step is for the House and Senate to reconcile their differences through a Conference Committee. The House is expected to vote to proceed to conference on Monday evening, and formal negotiations are expected to begin immediately (informal negotiations have been ongoing).

The House version of the Tax Cuts and Jobs Act repeals private activity bonds and eliminates the ability of employers to deduct the cost of providing transit benefits to employees. These proposals undermine efforts to rebuild our infrastructure and make it difficult to envision how the Administration can achieve its stated goal of creating a new, $1 trillion infrastructure package.

Furthermore, both the House and Senate bills would dramatically increase the federal debt. This will force the Administration and Congress to make difficult choices, or trigger substantial cuts to important programs, including infrastructure. The Administration and Congress have proposed deep cuts to transportation programs in their FY18 budget and appropriations proposals. It is therefore likely that, once a deficit increasing tax bill is law, the Administration and Congress will use the required $150 billion in annual spending cuts to target investments in roadways, transit, and other infrastructure needs. The law requires Congress to pay for a budget-busting bill. Unfortunately, Congress will likely pay for these tax cuts by cutting programs that reinvest in our country, including critical transportation programs.

As the House and Senate head to conference, our top priority is to inform the public and Members of Congress that these bills will create, and green light, a torrent of cuts to transportation and infrastructure programs.

Please contact your Representative and Senator today to make sure they understand all that is at stake. Make sure they are talking to their leadership and letting them know how important it is that they not cut infrastructure programs!

Stories You May Have Missed – Week of December 1st

As a valued member, Transportation for America is dedicated to providing you pertinent information. This includes news articles to inform your work. Check out a list of stories you may have missed last week.

The U.S. Senate in the early hours of Saturday morning passed a sweeping tax reform bill. The House of Representatives is scheduled to vote on Monday to go to conference to work out the differences between the Senate and House bills. (Politico)
Transportation for America released a statement on the Senate tax reform bill after passage. (T4America)
The House and Senate tax bills spell trouble for any infrastructure package. (The Hill)
Governing Magazine covers how the tax bills will negatively affect transportation projects. (Governing Magazine)
“Southern California transport agencies raise concerns about tax reform proposals.” (Southern California Association of Governments, American Shipper)
“Uncertainty mounts over timing of Trump’s infrastructure plan.” (The Hill)
House Republican leadership are pushing a two week short term continuing resolution until December 22^nd in order to avoid a government shutdown and create more time for negotiations over full year appropriations. (Fox Business)
“Uncertainty Surrounds Avoiding Shutdown Showdown.” (Roll Call)

Senate tax bill greenlights a torrent of cuts to transportation programs

After the United States Senate voted early Saturday morning to approve passage of their tax reform bill, T4America director Kevin F. Thompson released the following statement.

“The Senate’s action today on tax reform may be a cause for celebration for some, but it greenlights a torrent of cuts to vital transportation programs and infrastructure investments that will ultimately leave our cities and towns, large and small across the nation, less competitive. Whether cuts to the funding to improve or expand public transportation systems or the competitive grants that support the smartest projects, these cuts to transportation programs and investments are a blow to every community working hard to improve access to jobs and opportunity.

“This tax reform measure triggers ten years of annual automatic cuts to transportation programs unless Congress takes further action, and it may also signal the final demise of a national infrastructure package. After creating more than a trillion dollars in new debt, it is difficult to fathom where this Congress will find the resources to pay for another trillion-dollar program. Long-term, that means our country falls further behind, our economy suffers and the cost of any future infrastructure investments are even more prohibitive.”

Tax reform proposals would cut more than taxes

Though presented by Congress as a sensible approach to provide relief from a complicated tax code, Congress’ tax reform proposals would actually increase the deficit and trigger $150 billion in automatic reductions that are likely to end up resulting in deep cuts to vital transportation and infrastructure investments.

A Harvard-Harris poll released yesterday showed widespread support for a simplified tax code, as well as tax cuts for individuals and small businesses. That is good news for the Senate as it considers tax reform this week. However, the same poll found that 54 percent of Americans oppose the current tax reform proposals because they will hurt them financially.

More Americans might consider joining the ranks of the opposition if they truly understood the net impact of the tax reform measure. Namely, because the proposed tax cuts actually increase the federal deficit by $1.5 trillion over ten years, they trigger a little known or understood federal law that will automatically require $150 billion in cuts to federal entitlements every year for the next ten years to make up the difference. (Learn more about the Statutory Pay-As-You-Go Act here.)

The potential loss of deductions for state and local income and property taxes or the possible elimination of the write off for interest paid on your mortgage are small potatoes compared to the real cost and impact of these future cuts.

Federal spending in 2016 was about $3.5 trillion. Nearly, 65 percent of that money paid for entitlements like Social Security, Medicare, Medicaid and other discretionary programs for health care and unemployment. Another 15 percent went to national defense and six percent went to service the interest on our burgeoning national debt. Just seven percent, about $245 billion, paid for everything else — affordable housing, economic development, job training, education, natural resources, public safety and yes, the $2.4 billion we invest annually in public transit improvements and construction.

The current tax proposal will require Congress to cut $150 billion dollars annually from federal spending. And considering that the President wants to increase defense spending and avoid cuts to entitlements, these cuts will likely come from other discretionary programs, like infrastructure. The end result will leave our country poorer, sicker and less secure. Cities and towns, big and small, will continue to struggle with more traffic congestion, poor air quality, and less competitive regional and local economies.

The impacts of deficit-driven tax reform couldn’t come at a more inopportune time for transportation infrastructure. The Highway Trust Fund, which funds most surface transportation investments, is solvent only because of massive transfusions of cash and creative accounting gimmickry. The President’s 2018 budget proposal is already recommending deep cuts, phase-outs or the complete elimination of popular and oversubscribed programs like the program that supports all transit capital investments and the popular Transportation Investment Generating Economic Recovery (TIGER) Program.

The law requires Congress to pay for the tax cuts in this budget-busting bill. But unfortunately, Congress will likely choose to pay the tab by cutting the programs that reinvest in our people and their communities, including critical transportation programs.

After clearing committee late on Tuesday, a final vote on the Senate proposal could happen as soon as this Thursday. It is time to tell your elected officials that the price of this tax bill is too high to pay.

Stories You May Have Missed – Week of November 24th

“Trump’s missing infrastructure plan.” (Axios)
President Trump has promised to reveal his infrastructure package after tax reform is signed into law. (The Hill)
The White House does not know what policy item is next on the President’s agenda after tax reform. An infrastructure package could be next, but other items are under consideration like welfare reform and another attempt at healthcare reform. (Politico)
Senate Minority Leader Chuck Schumer “Says No to Gas Tax Hike, Complicating Trump’s Infrastructure Push.” (The Daily Beast)
Richard Florida argues that driverless cars will exacerbate inequality and not be the panacea everyone is expecting. (City Lab)
Wired magazine looks at how cities are rethinking what curbed spaces are used for, including drop-off spaces for ridesharing vehicles. (Wired)

Recent Federal Activity Summary – Week of November 17th

As a valued member, Transportation for America is dedicated to providing you the latest information and developments around federal policy.

Tax Reform

House: On Thursday November 16^th, the House of Representatives passed H.R. 1, the “Tax Cuts and Jobs Act,” also known as the Republican’s tax reform package. The bill passed by a vote of 227-205; 227 Republicans voted for the legislation, and 192 Democrats and 13 Republicans voted against the legislation.

What Does this Bill Mean for Transportation?

The bill proposes changes to commuter tax benefits for parking, van pooling, and riding transit and terminates private activity bonds (PAB’s). Employers will no longer be able to deduct or “write off” the subsidy they provide for fringe benefits, including commuting benefits. The bill maintains the ability for employers to provide either a pre-tax benefit or a subsidy. In the case of a subsidy, while the employer can no longer write off this expense, they will not have to pay payroll taxes on the fringe benefit. There is no change to the benefits associated with providing the pre-tax benefit.

Private activity bonds are tax-exempt bonds used to fund a whole range of infrastructure projects that have a “private” use of at least 10%. PAB’s have been used to finance a wide range of infrastructure projects around the country, including roads, highways, housing, hospitals and airports. Recently, PAB’s have been used to fund a lot of transportation projects that are using private public partnerships for financing, including the Purple line in Maryland and the Rapid Bridge Replacement Project in Pennsylvania.

The House’s elimination of PAB’s will greatly harm the ability for state and local governments and private entities to obtain financing and build infrastructure projects that use financing tools, such as toll roads and transit and rail stations. This step is directly at odds with President Donald Trump’s proposal to expand the use of PAB’s to help fulfill his promise to rebuild America’s infrastructure.

Senate: The Senate Finance Committee approved the Senate version of the tax reform package on Thursday November 16^th by a party line vote of 14-12. All Republicans voted in favor and all Democrats were opposed. The Senate bill keeps both the commuter benefits and private activity bonds intact, but does eliminate the $20 a month benefit for people who bike to and from work. The House bill also eliminates the bike benefit. T4America is joint signatory of a letter to members of Congress urging them to preserve the bike benefit because it promotes physical activity, reduces traffic congestion and air pollution and promotes walkable communities.

The Senate is scheduled to consider the Senate Republican tax bill when they get back from Thanksgiving recess. Congressional Republicans and the White House hope to have a tax bill on President Trump’s desk by Christmas. It is still unclear whether the Republicans have the votes to pass the tax bill in the Senate. All the Democrats are opposed to the bill so Republicans can only lose two votes and still pass their bill. Right now, Senator Ron Johnson (WI) says he is opposed to the bill in its current form and other senators like Susan Collins (ME), Lisa Murkowski (AK), Bob Corker (TN) and Jeff Flake (AZ) continue to be undecided on if they will support the bill.

One final possible hiccup for the Republican tax reform bill is a congressional budget provision known as the “Pay As You Go” (paygo) rule”. Paygo requires immediate, across-the-board spending reductions to many mandatory programs like Medicare and Medicaid for any bill that reduces taxes and doesn’t fully offset them with revenue increases elsewhere. The GOP tax cut plan would add $1.5 trillion to the debt over the next decade. Under paygo rules, the government would have to make $150 billion in mandatory spending cuts every year for the next 10 years, unless that provision is waived with 60 votes in the Senate, which would require Democratic support. If the Paygo rule is not waived, not only will mandatory spending programs like Medicare take an automatic 4% spending cut, Congress will have to cut a lot of discretionary spending elsewhere to comply with the Paygo rules. Cuts to defense spending are a non political starter right now, so Congress would likely cut from the non-defense discretionary spending accounts. This fact means that funding for popular programs like TIGER, Capital Investment Grants and Amtrak are at risk to be severely cut back or even eliminated entirely if this tax reform bill passes.

The bottom line is that the Republican tax reform bill, especially the House version, will make it harder for state and local governments to make much needed infrastructure investments by stripping away financing tools that governments and private entities rely on. Additionally, the tax bill will potentially lead to devastating discretionary spending cuts that could eliminate programs like TIGER that we fight to fund every year because they are vital to our communities and economies. These two outcomes break the promises made by both the President and Congress to invest more in our infrastructure, not less.

U.S. Department of Transportation (U.S. DOT) Nominations Confirmed

During the week of November 13th, the U.S. Senate confirmed two U.S. DOT nominations. Derek Khan was confirmed to be Undersecretary of Transportation for Policy and Steven Bradbury was confirmed to be General Counsel for U.S. DOT. Mr. Kan’s nomination hearing was held in June and he had bipartisan support, but his nomination was held up by New York and New Jersey Senators concerned over the Trump’s administration’s withdrawal from a non-binding commitment with New York and New Jersey to fund half of the Gateway project. Mr. Kan was confirmed by a vote of 90-7.

Mr. Bradbury was confirmed by vote of 50-47. His nomination was more controversial because of his work at the Office of Legal Counsel in the Department of Justice under President George W. Bush. All Democratic Senators and Republican Senators John McCain (AZ) and Rand Paul (KY) opposed Mr. Bradbury’s nomination.

Nomination of Lynn Westmoreland

Additionally, the Senate Commerce and Transportation Committee on November 8^th, reported favorably via voice vote the nomination of former Congressman Lynn Westmoreland to the Amtrak Board of Directors. There is no timeline right now for when the full Senate may consider his nomination.

Westmoreland served in Congress for twelve years, including a six-year stint on the Railroads Subcommittee of the House Transportation and Infrastructure Committee. During Westmoreland’s tenure in Congress he voted twice to cut Amtrak’s funding, including a vote for a failed bill in 2009 that would have eliminated all federal funding for the passenger railroad.

At a confirmation hearing in the Senate Commerce Committee on October 31, Westmoreland said he does support Amtrak funding, but that “the Board should look at the long-distance routes” and “should shutter these ‘unprofitable’ routes.” In his response to written questions from Senator Roger Wicker (R-MS), a member of the committee, about his votes to cut funding for Amtrak’s long distance routes, Westmoreland deflected and said his vote for the 2015 FAST Act demonstrates his support for Amtrak because it “reauthorized funding for Amtrak.”

Amtrak will only survive politically if it is a robust national system that serves as many states and communities as possible. Mr. Westmoreland has not adequately justified his prior votes to cut Amtrak funding and considering his Senate Commerce Committee testimony; we remain extremely concerned about Mr. Westmoreland’s commitment to funding long distance train routes. Given the vital importance of long distance Amtrak routes and Mr. Westmoreland’s record in opposition to those routes, we don’t think he is a good fit for the Amtrak board.

Sign-on letter to support transit capital funding

Reps. Earl Blumenauer (D-OR) and Jackie Walorski (R-IN) are leading a sign-on letter calling for funding for the transit Capital Investment Grant program in the FY2018 federal funding bill. These champions are collecting signatures on this important letter, which they will then send the to senior appropriators and leadership. Please let your Representatives know how important transit funding is to your region and encourage them to sign on to this letter. We will keep you updated on the timing of the appropriations process and negotiations.

Recent Federal Activity Summary – Week of November 6th

As a valued member, Transportation for America is dedicated to providing you the latest information and developments around federal policy. This dedication includes in-depth summaries of what is going on in Congress and the U.S. Department of Transportation (U.S. DOT). Check out what you may have missed these past two weeks in Congress and at U.S. DOT.

Amtrak opponent Rep. Lynn Westmoreland nominated to Amtrak board of directors

On October 6 President Trump nominated former congressman Lynn Westmoreland to the Amtrak Board of Directors.

During Westmoreland’s tenure in Congress he voted twice to cut Amtrak’s funding, including a vote for a failed bill in 2009 that would have eliminated all federal funding for the passenger railroad.

In response to a question from Sen. Cory Booker (D-New Jersey), Westmoreland said he supported funding the Gateway tunnel project between New Jersey and New York.

In a questionnaire for the committee, Westmoreland said the biggest priorities for Amtrak were “encouraging individuals to choose its service over other competing methods of transportation”; maintaining safety and security; and “building out the high-speed rail plans it currently has.”

Westmoreland served in Congress for twelve years, including a six-year stint on the Railroads Subcommittee of the House Transportation and Infrastructure Committee.

Tax reform package

On November 2 the House Ways and Means Committee released the “Tax Cuts and Jobs Act,” the Republican’s tax reform package.

The bill proposes changes to commuter tax benefits for parking, van pooling, and riding transit. The bill eliminates the ability of employers to deduct or “write off” the subsidy they provide for fringe benefits, including commuting benefits. The bill maintains the ability for employers to provide either a pre-tax benefit or a subsidy. In the case of a subsidy, while the employer can no longer write off this expense, they will not have to pay payroll taxes on the fringe benefit. There is no change to the benefits associated with providing the pre-tax benefit.

Sign-on letter to support transit capital funding

Reps. Earl Blumenauer (D-OR) and Jackie Walorski (R-IN) are leading a sign-on letter calling for funding for the transit Capital Investment Grant program in the FY2018 federal funding bill. These champions are collecting signers until the November 9 deadline and then will send the request to senior appropriators and leadership. Please let your Representatives know how important transit funding is to your region and encourage them to sign on to this letter.

T4America opposing USDOT rollback of greenhouse gas rule

T4America has submitted a comment opposing USDOT’s proposal to rescind a federal requirement for states and MPOs to measure their carbon emissions as part of a larger system of accountability for federal transportation spending.

Our comment in opposition focuses on three issues:

FHWA had legal authority to adopt the Greenhouse Gas (GHG) measure;
The Proposed Rule fails to account for the overwhelming benefits of the GHG measure and is inconsistent with the approach taken in related executive orders and rulemakings and the public welfare; and
Establishing a performance measure for GHG emissions is good governance and smart transportation policy.

The 2012 transportation law MAP-21 required transportation agencies to begin using a new system of performance measures to govern how federal dollars are spent and hold them accountable for making progress on important goals, like congestion, traffic fatalities, reliability, road/bridge condition, mode share and carbon emissions. For two years, USDOT worked to establish this new system, soliciting reams of public feedback, and finalizing the measures in January of this year. T4America worked to ensure that new performance measures would account for all people using the transportation system and supported measuring carbon emissions from the transportation system. Climate impacts aside, tracking carbon emissions is one of the best ways to judge how efficiently the transportation network is moving people and goods. If USDOT drops this measure, we will lose an important metric for determining who is using their funding to most efficiently connect people with destinations and move goods to market.

The Trump administration first attempted to revoke the greenhouse gas performance measure without public input but was sued by environmental groups. USDOT has launched a new rulemaking to propose removing the rule. T4America’s comment opposes revoking the requirement that transportation agencies measure carbon emissions.

Stories You May Have Missed – Week of October 27th

Stories You May Have Missed

“White House eyes 7-cent gas tax hike for infrastructure plan.” (The Hill)
National Economic Council Director Gary Cohn discussed with the Bipartisan House Problem Solvers Caucus last week a potential timeline of an infrastructure package and the possibility of a gas tax raise. Mr. Cohn said that an infrastructure package could happen in the early part of 2018 and that a gas tax increase could be voted on as part of an infrastructure plan. (Politico Morning Transportation)
House Republicans are scheduled to release their tax reform plan on Wednesday. Details are scarce right now but many tax credits could be at risk including potentially the parking and transit benefit, to help pay for the expected reduction in corporate and individual tax rates. (CNN)
16 State DOT’s gave back their biking and walking money from the Federal Highways Administration rather than investing in bike and pedestrian projects. (Safe Routes To School)
A new report from MIT looks at the potential future effect of Automated Vehicles on real estate and how communities will develop. (The Drive)
The Utah Legislature and Salt Lake City are currently examining and debating potential governance reforms to the Utah Transit Authority (UTA) structure. (Deseret News)
A new business group, the Washington Partnership is pushing to overcome political differences and get Virginia, D.C. and Maryland to agree on how to reform Metro. The Washington Partnership is concerned that the problems at Metro will harm the Washington D.C. metro economy. (Washington Post)

Recent Federal Activity Summary – Week of October 9th

President and Congressional Leaders Release Tax Reform Proposal

On September 27th, the Trump Administration, the House Committee on Ways and Means, and the Senate Committee on Finance released what they call the “Unified Framework for Fixing Our Broken Tax Code”. The full framework is available here, and a one-page overview is available here. The proposal would eliminate many tax benefits, including the commuter transit benefit. In 2016, federal law was changed to establish permanent parity between the transit benefit and parking benefit, raising the cap on transit and vanpool benefits to $255.

Tax reform efforts are focused on eliminating many provisions of the tax code, including transportation fringe benefits that cover parking, transit, and vanpools. T4America is concerned that, under the recently released framework, the commuter benefit is at risk of disappearing for good. Eliminating this benefit will end a critical incentive to take transit to and from work, taking money from transit systems already struggling to maintain a state of good repair. T4America will keep you updated as Congress moves forward with this process.

House and Senate Advance FY18 Budgets

The Process: The President submits the President’s Budget Request (PBR) to Congress in the spring. Soon thereafter, the House and Senate Budget Committee’s develop budgets that may or may not be informed by the PBR. Before Congress can consider the 12 appropriations bills that fund the entire federal government, it must first approve a budget. The Congressional budget sets the funding allocations for each of the 12 appropriations bills, allowing the appropriations committees to begin work on the bills. For FY18, the Congressional leadership has chosen to add “reconciliation instructions” to the budget. This is a special process, under which a bill can pass with without a filibuster, using only a majority vote in the Senate (as opposed to the traditional 60 votes). The FY18 budget will include instructions to approve comprehensive tax reform using this process. Passage of an FY18 budget allows Congress to complete its FY18 appropriations work.

The House: On October 5th, the House approved H. Con. Res. 71 — “Establishing the congressional budget for the United States Government for fiscal year 2018 and setting forth the appropriate budgetary levels for fiscal years 2019 through 2027” by a vote of 219-206. H.Con.Res.71 cuts transportation funding, including cuts to Amtrak’s long distance routes, transit, TIGER, New and Small Starts, bike and pedestrian funding, and many other priorities.

The Senate: On September 29th, Senate Budget Committee Chairman Enzi (R-WY) released his FY18 budget. The proposed budget reduces non-defense discretionary spending by $632 billion. This would have a significant negative impact on our transportation programs. The Committee marked up and approved the budget on October 4th and 5th. The full Senate will now consider the budget in the coming weeks.

T4America will provide additional analysis of the House and Senate budgets in the coming weeks.

Senate Environment and Public Works hearing on FHWA nominee

On October 5th, the Senate Environment and Public Works (EPW) Committee held a Hearing on the Nomination of Paul Trombino III to be Administrator of the Federal Highway Administration. Mr. Trombino is the President of McClure Engineering and the former Director of the Iowa Department of Transportation.

Mr. Trombino has a history of public comments suggesting an openness to new ways of thinking about our nation’s highway system. T4America submitted suggested questions to the Committee to help prepare for the hearing. Chairman Barasso (R-WY), Ranking Member Carper (D-DE), and Members of the Committee focused their questions on the proposed infrastructure bill, project review and approval process, resilience, and Public Private Partnerships. Mr. Trombino stated he is not aware of the status of the proposed infrastructure package but that he will become aware and brief Congress should he be confirmed. On other issues, Mr. Trombino pledged to work to address Senators concerns.

Absent any additional and disqualifying information, T4America expects the EPW Committee to favorably report Mr. Trombino’s nomination to the full Senate.

Senate Commerce Committee Approves Autonomous Vehicle Legislation

On Friday, September 8, the Senate Commerce, Science, and Transportation Committee approved held a markup to amend and vote on S. 1885, The American Vision for Safer Transportation through Advancement of Revolutionary Technologies (AV START) Act. The bill was approved by the Committee and will now be referred to the full Senate for further consideration. Despite some minor improvements, T4America remains concerned that this bill will preempt the ability of local governments to enforce their local traffic safety laws, potentially putting the public at risk. In addition, the bill does not provide the data-sharing framework necessary to ensure that local governments and law enforcement can adequately prepare for these vehicles.

Here’s the link to the statement T4America put out after the markup: https://t4america.org/2017/10/04/t4america-statement-senate-commerce-av-start-markup/.

What Happened at the Markup

There were 28 amendments offered during the Committee markup, a number of which were considered and approved en bloc, the result of an overnight deal. The full list of all approved amendments is available here: https://www.commerce.senate.gov/public/index.cfm/pressreleases?ID=BA5E2D29-2BF3-4FC7-A79D-58B9E186412C. T4America is analyzing the approved amendments and updated bill text and will continue to provide additional details.

For additional information, please see our previous policy update.

U.S. DOT Releases Proposal to Harmonize Environmental Reviews

At the end of September, US DOT released a supplemental notice of proposed rulemaking (SNPRM) that will harmonize to a much greater extent the National Environmental Policy Act (NEPA) review for projects that need review from multiple U.S. DOT agencies. If you would like to submit comments to U.S. DOT about this regulation, comments are due to U.S. DOT on or before November 28th.

Under this SNPRM, the Federal Railroad Administration (FRA) will be added to the Federal Highways Administration (FHWA) and the Federal Transit Administration (FTA) existing rules and regulations for NEPA reviews under part 771 and part 774 of title 23 of the Code of Federal regulations. The SNPRM proposes to make some changes to part 771 and 774 to account for some of the unique characteristics of rail projects.

This proposed change will ensure that a project undergoing NEPA review through multiple U.S. DOT agencies has one set of rules and regulations to follow. Currently, FRA’s NEPA review regulations are different than FHWA’s or FTA’s. Additionally, the proposed rule change ensures that a record of decision related to NEPA from one U.S. DOT agency is accepted by another U.S. DOT agency. Finally, U.S. DOT is proposing to require that the lead U.S. DOT agency designated to conduct the NEPA review must explicitly include in their NEPA coordination plan “participating agencies that are responsible for providing input within their agency’s special expertise or jurisdiction” and reach an agreement between the two agencies on the timeline for that secondary agency to provide their input. This requirement will ensure that necessary agencies have a chance to give their input with respect to the NEPA review but that there is a concrete timeline for that review to take place.

The practical effect is that as a result of this rulemaking, there should be a “single NEPA document that can be used for all Federal permits and reviews for a project to the maximum extent practicable and consistent with Federal law.” That should speed up environmental reviews without harming the intent of NEPA, leading to faster timelines for the construction infrastructure projects without causing environmental harm.

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.

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.”