Rough road ahead
Over the four decades that he has been involved in national transportation issues, Jack Basso has been immersed in many legislative struggles that have shaped the landscape of the nation’s system of roads and bridges. But the upcoming 2009 debate in Congress over the transportation reauthorization bill is shaping up to be one of the most important in a long time, says the director of management and business development at the Washington-based American Association of State Highway Transportation Officials (AASHTO). “This will be an historic legislative process,” Basso says. “We’re looking at similar kinds of changes that go back to 1955-56, when Congress created the highway system.”
Whether looking back to the 1950s or to more recent legislative breakthroughs like the Intermodal Surface Transportation Equity Act of 1991, transportation leaders are unanimous in their appraisal of the importance of the bill that the new Congress and administration will take up shortly after the legislative season begins in 2009. “It’s all on the table,” says Robert Fogel, senior legislative director for transportation for the Washington-based National Association of Counties (NACo). “Everything is open for discussion.”
At issue is the effort by Congress and the new administration to set the nation’s transportation policy for the rest of the decade and possibly for decades to come. The bill’s outcome is critically important for state and local governments that depend on federal assistance to maintain and improve their transportation systems.
In such a wide-ranging bill, the issues at stake cover almost every aspect of transportation policy. The bill must balance the need to maintain and improve mass transportation against growing deficiencies and concerns about the nation’s highways and bridges as well as the issue of rural road safety.
Beyond the scope of policy, the legislation will establish the funding mechanisms that will ensure that the national transportation system will meet the demands of an expanding population while also accommodating environmental priorities from those who want more federal money devoted to transit systems rather than roads and bridges. Not to mention, the bill comes at a time when the main source of revenue — the Highway Trust Fund — is under stress.
Of considerable concern at the local level is the demand from county and municipal officials that they are allowed to assume a greater decision-making role in fund allocation and priorities. “We need to go back and look at everything together to define what we want to do in transportation,” says Leslie Wollock, principal legislative counsel for the Washington-based National League of Cities (NLC). “Transportation is not an end in itself. It’s a means to an end.”
Such broad thinking almost ensures that the legislative process will be historic — and turbulent. “There’s a lot of different things going on,” says Anthony Giancola, executive director of the Washington-based National Association of County Engineers (NACE). “It makes crafting a bill more complicated than in the past.”
Playing beat the clock
The current authorization that guides national transportation policy was adopted in 2005 and expires on Sept. 30, 2009. The bill, which carried a $287 billion price tag, endured an arduous legislative ordeal that was completed two years late and required 12 extensions to keep the transportation system limping along while legislators debated.
Transportation leaders are hopeful but realistic about the prospects for completing the legislation in time. Failing to finish the bill would mean more extensions and more stopgap measures, which no one wants. “Ideally, we would like to see this put away,” Basso says. “You can’t do policy on short-term extensions.”
Although the legislation sets the transportation policy and standards and parcels a large portion of the funding, transportation leaders point out that, essentially, there is no federal highway system. The roads and bridges, including the Interstate Highway System, are maintained and operated by states and local governments, except for those on federally owned land.
Everyone agrees that the backlog for projects is enormous. Currently, $238 billion is needed to maintain highway and transit systems, and another $293 billion is needed for improvements, according to the Washington-based National Cooperative Highway Research Program. Every aspect of the system requires significant changes, from reducing congestion in urban areas to eliminating dangerous intersections in rural counties. The Federal Highway Administration estimates that repairing and modernizing the nation’s bridges alone would cost $140 billion.
Yet, only $188 billion, including $43 billion for highways, was available in the last round of funding to meet that $531 billion estimated to maintain and fix them. “We need to dramatically increase the funding in surface transportation,” Basso says. Plus, Basso is concerned about the inadequacy of the way money is generated to pay for the improvements. “We are facing a funding crisis in the Highway Trust Fund.”
The trust fund, which was created in 1956, is at the heart of the debate on meeting the nation’s transportation needs. The fund currently provides about 45 percent of all the money for highway needs, with the remainder coming from state gas taxes and local general revenue, according to AASHTO.
The trust fund receives its revenue from an 18.4-cent-per-gallon tax on gasoline, set in 1993. Just three years ago, the fund enjoyed a surplus of more than $10 billion, but the economics have changed dramatically with the rising price of gasoline. Americans are driving fewer miles in more fuel-efficient cars. In September, Congress was forced to transfer $8 billion from the general fund to the trust fund to prevent transportation projects from shutting down.
At the same time, the cost of construction has increased dramatically, partly because of the competition for materials from countries around the world. While overall inflation is running about 3 percent, the increase in construction costs have been running twice that rate.
A number of groups have proposed revising the federal gas tax formula as a means of raising revenue to repair and build the nation’s transportation system. In a legislative position paper, NACE proposes a 7-cent increase in the gas tax to build a $73 billion program for highways by 2015, from the current $43 billion figure. An alternative suggestion would be to index the gas tax to the rate of inflation, which would raise $82 billion for the highway account in 2021.
State transportation officials are studying a variety of changes that would simplify the 16 current funding categories to focus on six core projects. In addition, performance measures might link investment to outcomes. But, the big concern is revamping the funding mechanism because inflation will reduce today’s 18.4-cent tax to only 15 cents in 2015, unless Congress changes it.
Other innovative programs are being proposed to help generate funds using market-based or technology initiatives. The Bush administration has been promoting a stronger “user-based” system that would rely more heavily on toll roads. An experiment in Oregon is using satellite technology to track the number of miles that a car has driven and then bills the driver based on usage. While those options may be added to the mix, they are not seen as a solution to the funding problem.
While agreeing that the transportation system needs more funds, many local government officials are equally concerned about how the funds are distributed. They point to what they consider to be an inequitable process that dedicates funding to the states and forces local governments to rely on state largess and their own general funds, primarily from property taxes.
The equity of the distribution varies by state, Fogel says. Under the current system, he says, a substantial burden is placed on local communities, especially counties that often have to maintain a large network of badly outdated rural roads and bridges. “We have a substantial responsibility but generally don’t have a dedicated source of revenue to meet the need,” he says. “Every trip begins on a local road, and many weren’t built to handle the traffic that has developed over the last 25 years.”
Two-lane rural roads are among the most dangerous in the nation, Fogel says, yet the federal highway program to improve safety is “dramatically under funded,” pointing out that $90 million of the program is allocated for rural safety out of the $43 billion total for the highway program. “There’s a disconnect,” he says.
Rather than breaking the highway program into pieces, he says, it should be looked at as a system. “If you do something on one road, it affects others,” he says, noting, for example, that interstate improvements create additional traffic on feeder routes.
Fogel would like more money directly allocated to counties, cities and metropolitan transportation agencies. “The state departments of transportation view the money as theirs and spend it as they see fit,” he says. “We are arguing for a fair and reasonable share to be spent on locally owned transportation systems.”
Wollock agrees that the current system “gives a lack of say to local government.” “It doesn’t make sense to where we are as a nation,” she says.
Basso is accommodating without being committed on the subject of distribution of funds. “Generally, we want to support state preeminence,” he says. “But we want to work cooperatively with local entities.”
All of the government organization officials are aware of the rising importance of another issue — environmental impact — in the realm of transportation appropriations. With growing interest in stemming climate change and shifting to less dependence on fuel, “smart growth” advocates will be clamoring for additional funds for mass transit and bike paths at the expense of highway and bridge construction.
At the same time, transportation officials complain that the multiple federal agencies involved in permitting add significant time and cost to projects. Fogel says agencies should be forced to act within a time limit and allow transportation officials more flexibility to meet the requirements of the environmental regulations. “We would like to see a more streamlined process,” he says.
The political landscape also will have a significant role in the debate. U.S. Senate jurisdiction over the transportation bill is shared by the Environment and Public Works Committee, which is chaired by Sen. Barbara Boxer, D-Calif., who is a strong environmentalist and advocate for energy independence. “Her position adds a whole new flavor in the Senate,” Giancola says.
A final issue embedded in the bill is the controversial subject of earmarks, which has become a rallying cry in the presidential campaign and generally the subject of some ridicule because of projects like the Bridge to Nowhere. Everyone agrees that earmarks have grown far beyond their original intent.
Until 1982, there were no earmarks in transportation bills. In that bill, there were 20 earmarks worth $300 million. By 1998, earmarks had grown to 1,200 projects worth $9.3 billion. In the most recent bill, they accounted for 5,300 projects totaling $26 billion — more than 15 percent of the total bill. “We oppose earmarks, period,” Basso says.
Fogel takes a more philosophical position on the subject. “It’s hard to reform the system,” he says. “We would like to see [earmarks] more transparent, so people know who gets what. But, legislators are elected to bring home the bacon.”
Despite so many competing interests, the legislative process will ultimately work, Wollock says. “There’s a general consensus that we’re facing a huge crisis,” she says. “I’m optimistic.”
Then, she adds: “It could be an interesting time.”
Robert Barkin is a Bethesda, Md.-based freelance writer.
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