Will the new transportation funding initiatives pass? (with related video)
Former U.S. Transportation Secretary James Burnley, who co-chairs the transportation practice at the Baltimore-based Venable law firm, weighs in on the important issue of federal transportation funding. Burnley served as the U.S. Secretary of Transportation from 1987 to 1989, and is an authority on transportation law and policy.
According to news reports, the Moving Ahead for Progress in the 21st Century Act (MAP-21), which provides funds to U.S. surface transportation programs, expires on September 30. The Highway Trust Fund is nearly broke, and senior DOT officials say they may have to slow down reimbursements to state and local governments as soon as July. Keeping those developments in mind, here are Burnley’s views on federal transportation funding.
GPN: Are the Obama Administration and Congress going to act in time to avoid a serious funding crisis?
James Burnley: It is extremely difficult to be optimistic. President Obama and the Republican leadership in Congress are opposed to an increase in the fuel tax, which hasn’t been raised in twenty years. Yet both sides recognize that additional revenues must be found very soon, or the current federal highway and transit programs levels could be reduced by more than one-third.
This has been avoided for the last six years because Congress authorized transfers to the Highway Trust Fund (HTF) from general revenues of $54 billion. But Speaker of the House John Boehner said very recently that he does not foresee the House authorizing any additional transfers.
GPN: What is in the proposed infrastructure-funding package?
JB: Despite this funding crisis, the Obama Administration has just proposed that over the next four years the federal government spend $302 billion on transportation and infrastructure, including an increase in federal highway programs of 22 percent and transit programs of 70 percent. It proposes to pay for this package by capturing $150 billion from “corporate tax reform,” to be added to the existing revenue flow to the HTF. Congressman Peter DeFazio, a very senior Democrat on the House Transportation Committee, has called this “an illusory, fake… not-going-to-happen” proposal. Such funding, if it did occur, would probably be the death knell for the “user pays” approach on the federal level.
GPN: What are some possible ways to change federal transportation funding programs and policies?
JB: There are other ideas for reforming, on a long-term basis, the federal role in financing transportation infrastructure. For example, HR 2084, the Partnership to Build America Act, would use the repatriation of offshore profits to finance an American Infrastructure Fund, which would guarantee state and local bonds, and do some direct lending. Originally introduced by Cong. John Delaney (D-Md.), it has 54 cosponsors (27 R’s, 27 D’s) in the House, and a counterpart bill has 11 cosponsors in the Senate. At some point in the debate, Congress may turn to this device or some other version of an infrastructure bank to plug, at least partially, the ever larger hole in federal support. Congress is also likely to remove federal impediments to state and local use of public private partnerships.
GPN: Who will be involved in the process in 2014?
JB: The key players in addressing the immediate crisis are the leaders of the Senate Finance Committee and the House Ways & Means Committee, and the leadership of the House and Senate. Unless they come to a quick agreement, the flow of federal dollars could begin to dwindle in four months. State and local governments would be well advised to begin crisis planning now for how to mitigate the impact.
GPN: Thank you, James Burnley, for your views.
Burnley continues to be a thought leader in transportation. He is a member of the Business Advisory Committee of the Transportation Center at Northwestern University. He was the 2013 Client Choice Award winner for the United States in the Shipping and Transport category. The sponsoring organizations make the awards to lawyers “globally that stand apart for the excellent client care they provide.” Burnley remains active in national Republican circles.
U.S. Transportation Secretary Hari Sreenivasan warns in this video that the federal Highway Trust Fund may run out of money later this year.