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Time is running short for continued federal highway and transit funding

By Jeff Berman, Group News Editor
February 28, 2011

As was the case a year ago at this time, the clock is once again ticking on the future of federal highway and transit funding.

As LM reported, near the end of December during the Lame Duck session of the 111th Congress, U.S. lawmakers voted to extend federal highway and transit funding through a contributing resolution through this Friday, March 4.

This vote was part of H.R. 3082, which was sponsored by Texas Congressman Chet Edwards, and signed into law by President Barack Obama on December 22.  This continuing resolution is the latest in a series, which have been enacted to keep transportation spending afloat since SAFETEA-LU (Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users) expired on September 30, 2009. 

This funding, which goes toward surface transportation maintenance, development, and construction, has been kept afloat by multiple continuing resolutions typically ranging from four-to-seven weeks and keep funding at current levels.

When these previous continuing resolutions were granted, there was no clear picture as to the future reauthorization and if or when a new long-term alternative would be offered up. But that recently changed when the White House recently released its proposed Fiscal Year 2012 budget proposal.

Included in this proposal was a six-year, $556 billion surface transportation reauthorization proposal. if enacted, would be more than 60 percent above the inflation-adjusted levels of SAFETEA-LU (The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users), which expired on September 30, 2009, and has been kept afloat at the same funding level by the series of continuing resolutions mentioned above.
Included in this new six-year plan are:
-funding for highways, transit, highway safety, passenger rail;
-a National Infrastructure bank, which would be allocated $30 billion in loans and grants to support individual projects and broader activities of significance for the Nation’s economic competitiveness; and
-a proposal to boost transportation spending by $50 billion above current law spending in the first year of the authorization for roads, railways, and runways, among other components.

From a fiscal perspective, this bill tops the one proposed by former House Transportation and Infrastructure Committee Chairman James L. Oberstar. And as was the case back then, how to fund such a large bill remains a bit of a quandary, even though the White House made it clear that the current framework for financing and allocating surface transportation investments is not financially sustainable.

Officials explained that the President is committed to working with Congress to ensure that funding increases for surface transportation do not increase the deficit. And they said that this budget proposes to make all surface transportation reauthorization programs subject to PAYGO in which federal funding comes from available financing rather than borrowed sources of capital.

What’s more the primary funding mechanism for surface transportation—the federal gasoline tax at 18.4 cents for gasoline and 23.4 cents for diesel—has not been increased since 1993.

“The White House has identified what the needs are and has some creative approaches for how to meet them,” said Mort Downey, senior advisor at infrastructure firm Parsons-Brinkerhoff, in a recent interview. “The big unknown is how they pay for it and they are very frank in that it will require some additional resources…but the budget is structured so that these proposed programs would be mandatory and therefore subject to PAYGO requirements, which means they are inviting a discussion with the Congress that basically says ‘if you like this, let’s talk about how we can get it paid for.’ This will make for an interesting conversation, but at least they are starting from a very high point in describing what we need to be investing in.”

On top of ongoing funding issues looms the possibility of a shutdown of the federal government, with this Friday’s deadline for all federal continuing resolutions set to expire and the House and Senate still working to get a deal together to keep funding in place for the remainder of the fiscal year without having to call for further continuing resolutions.

If they are unable to reach an agreement, it would mark the first time the federal government has been shut down since 1996.
On February 11, House Transportation and Infrastructure Committee Chairman John Mica introduced a bill, entitled H.R.662—Surface Transportation Extension Act of 2011, which was approved by the House T&I Committee. This bill, if passed, would extend federal highway and transit funding through the end of the fiscal year and mark the seventh short-term extension of SAFETEA-LU, according to the American Association of State and Highway Transportation Officials (AASHTO).

For related articles, please click here.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

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. .(JavaScript must be enabled to view this email address).


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