Congress agrees to extend federal transit funding though March
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Funding for federal highway, transit, and highway safety will remain intact at current levels through March 31, 2012, with Congress passing H.R. 2887, The Surface and Air Transportation Program Extension Act of 2011.
The marks the eighth extension of federal transit funding since the previous six-year, $285 billion authorization, SAFETEA-LU, expired on September 30, 2009.
While this legislation clears the way for transportation projects to be funded through March 2012, larger problems remain when it comes to funding these efforts in a meaningful way on a long-term basis.
The federal gasoline tax, which has been at 18.4 cents for gasoline and 23.4 cents for diesel and has not been increased since 1993, has served as the primary funding mechanism for transportation.
“Most people in transportation would agree that gasoline taxes need to be increased…in order to avoid the Highway Trust Fund being bankrupt,” said Leslie Blakey, executive director of the Coalition of America’s Gateways and Trade Corridors. “The schedule needs to be accelerated. The long-term stimulus effect of this would more than offset the relatively minimal economic drag that an increased fuel tax would have.”
Along with the repeated call by many freight transportation stakeholders to increase the gasoline tax has come the vital need for a new surface transportation reauthorization, rather than the continued slate of short-term extensions.
This was made clear by Janet Kavinoky, vice president of Americans for Transportation Mobility Coalition and executive director, Transportation Infrastructure, for the United States Chamber of Commerce.
“Now, Congress must turn to passage of a multi-year reauthorization measure,” said Kavinoky in a statement. “The longer it takes to pass a multi-year bill, the more expensive the problems are to solve. Conditions get worse; land, labor and materials get more expensive. Highway and transit investments facilitate national, regional, and local economic growth in the long term, and create direct jobs in the short term. The longer we wait, the longer the United States forgoes these opportunities.
She added that a multi-year reauthorization bill must reform and refocus surface transportation policies and programs so that Americans get the greatest return on highway and transit investments.
Investment in transportation infrastructure was prominently mentioned in a speech President Obama made to Congress last week, which focused on job creation and the economy.
In a wide-ranging speech centered on a piece of legislation—the $447 billion “American Jobs Act”—transportation infrastructure was one of the key themes for job growth, with unemployment currently at 9.1 percent, and ways to improve the economy, with GDP growth growing at a sluggish 1.3 percent in the second quarter.
Obama wasted little time explaining current state of transportation infrastructure in the United States.
“Everyone here knows we have badly decaying roads and bridges all over the country,” he said. “Our highways are clogged with traffic. Our skies are the most congested in the world. It’s an outrage.”
He went on to say that building a world class transportation system is what made the U.S. an economic superpower, while other countries like China are now building newer airports and faster railroads at a time when millions of unemployed construction workers could build them right here in America.
In pushing the urgent need for more infrastructure spending, the bill would call for $50 billion to be allocated for transportation spending—including highway, public transit, intercity rail, and aviation systems—and $10 billion for an infrastructure bank, which he has pushed for multiple times during his term as president.
Regarding the infrastructure bank, he explained it in simple but direct terms.
“[W]e’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it will do for the economy,” he said. “This idea came from a bill written by a Texas Republican and a Massachusetts Democrat. The idea for a big boost in construction is supported by America’s largest business organization and America’s largest labor organization. It’s the kind of proposal that’s been supported in the past by Democrats and Republicans alike. You should pass it right away.”
The infrastructure bank legislation President Obama cited by Obama was drafted in March by Senators John Kerry (D-MA), Kay Bailey Hutchison (R-TX) and Mark Warner (D-VA) and is entitled the BUILD (the Building and Upgrading Infrastructure for Long-Term Development) Act.
The main objective of the legislation is to support the establishment of an American infrastructure bank in the United States to leverage private investment.
But unlike other calls for an infrastructure bank in the past, which have typically proposed an allocated funding amount that would serve as the primary source of funding for infrastructure projects, this one is different in the sense that it would require a lower up-front investment, which would subsequently be supported by private sector investment.
“These transportation and infrastructure investments would both be hugely helpful for Congress to act on,” said Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors. “Shrinking the project delivery time through a revamped criteria [how badly a construction project is needed and how much good it will do for the economy] would be one of the most effective things Congress can do immediately to help move these transportation projects along. This plan would be hugely helpful for the construction industry and the delivery of transportation projects.”
The speech was encouraging in the fact the President Obama continues to be a believer in infrastructure, said Mortimer L. Downey, Chairman, Coalition for America’s Gateways and Trade Corridors, Senior Advisor, Parsons Brinckerhoff, and Former U.S. Deputy Secretary of Transportation.
“He talked about the right things when it comes to infrastructure and economic growth,” said Downey. “This and his recent call to extend current surface transportation funding [which is expiring on September 30] are key to having long-term success.”
About the AuthorJeff Berman Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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