Roads and bridges may be local projects, but there’s no getting around their funding being planned and executed on a national scale. That message was driven home today in testimony by three representatives of key stakeholder groups before the U.S. House Transportation & Infrastructure Committee.
Gaveling in the committee’s second hearing on reauthorizing surface transportation, Chairman Bill Shuster (R-PA) remarked that with “both sides of the aisle” and “both sides of the Capitol as well as both ends of Pennsylvania Avenue are talking about the need for a long-term surface transportation bill, I feel confident we will get there and make the investment needed."
Noting in his opening remarks that the committee members share the “common objective of a six-year bill” and that “funding will be one of the linchpin options” in achieving that, Ranking Member Peter DeFazio (D-OR) also stressed the dire urgency of passing a short-term patch to keep funds flowing to highway and bridge projects through this year.
“Spring starts in a week and that is really the start of the traditional construction season for the year,” he said. “States have already notified the federal government they will be delaying or postponing or cancelling projects and I expect the number of those will grow very quickly in coming weeks if we do not have a short-term bill.
“Just to get [project funded] to the end of this year with current anemic levels of spending would require slightly less than $10 billion,” DeFazio continued. “So we need some sort of commitment from the federal government in the next week or two or three or we will see a dramatic drop-off in construction activity this summer… I feel a tremendous sense of urgency” about passing a short-term bill.
The first witness, Gov. Patrick McCrory (R-NC) who spoke on behalf of the National Governors Association, pointed out that he recently unveiled a 25-year infrastructure improvement plan (“Mapping Our Future”) for North Carolina “to best leverage our infrastructure to catalyze economic growth.”
Now the state is focused on investing in that plan, he continued, but “the funding we have to invest in our transportation infrastructure to address these needs is insufficient. Using funds currently available, we will only be able to fund approximately 18% of transportation projects submitted by local planning organizations over the next ten years.
“Over the next 25 years we have identified our needs between $94 and $123 billion,” said McCrory. “We simply must find a way to increase our funding of investments in all modes of transportation. If we don’t invest, we risk delays in the delivery of goods and services, inefficiencies in the movement of freight, and lost time due to congestion…”
McCrory pointed out that North Carolina is “pursuing alternative revenue solutions such as increased use of public-private partnerships and taking advantage of low interest rates for bonding as well as grappling with identification of new and innovative revenue mechanisms.” As one example, the governor noted that he is seeking a transportation bond of $1.2 billion to “allow for the quicker construction of projects in the 25-year vision plan.”
Nevertheless, he emphasized the key role the Federal government must keep on playing. “Make no mistake,” said McCrory, “part of the solution must be continuation of a strong, flexible and reliable federal program, which currently makes up almost 28% of our total transportation budget.
"I am not here to endorse devolution of the federal surface transportation programs,” he continued. “In fact, I believe the federal government plays an extremely strong role in ensuring our country is able to move goods and people throughout our 50 states.”
On the other hand, McCrory said that “in recent years, the federal program has not kept pace with the states’ needs– which are the nation’s collective needs. Congress is stymied in enacting longer term legislation and more reliable funding streams.
“But elimination of the federal program would be catastrophic not only to North Carolina,” he added. “Most, if not all, of the states you represent and the country as a whole would suffer.”
Impact of Uncertainty
Mayor Ralph Becker (D-Salt Lake City) who spoke on behalf of the National League of Cities, said that “for cities, every transportation project is a partnership — with other local and regional authorities, with the state, with the federal government, and with the private sector…. Unfortunately, uncertainty at the federal level is causing discord in the intergovernmental partnership, and driving up the risk and costs associated with transportation finance and innovation. And States are not uniform in their approach to allowing municipalities to raise revenue through taxation to account for that uncertainty.”
Turning to the movement of freight, Becker observed that “every link in the movement of goods from ports, agricultural centers, and manufacturing plants to their destination should be strong, but the links known as ‘first and last miles’ are behind. The federal government is devoting significant investment to the modernization of U.S. ports to accommodate super-max containerships and ensure our global economic leadership. Investments in the roads immediately outside our ports and leading to the highway system should be made in conjunction with ports modernization, but unfortunately these municipally owned stretches of road are among our most neglected.”
Becker also brought forth specific policy proposals authored by NLC and several other major local government organizations including these:
- Congress should increase the allocation of surface transportation funding available for local governments to invest in transportation projects that serve small and large urban areas, counties and growth areas within metropolitan planning areas. “We believe a share of 75 percent allocated by population to local areas is reasonable given the significant share of the nation’s infrastructure that is locally owned and managed.”
- Congress should reauthorize and improve the Transportation Alternatives Program (TAP) by increasing to 100 percent the share of TAP funds allocated by population to local areas “so that the modest funding reserved for this program cannot be diverted to projects at odds with active transportation options.”
- Funding for “on-system, Non-National Highway System Bridges” that was lost under consolidation in the previous authorization should be restored. “In the past, these bridges were eligible for funding under the Bridge Program, which was eliminated under MAP- 21. Funds under the Bridge Program were mostly reallocated to the National Highway Performance Program which, unfortunately, excludes these bridges from eligibility.”
Stability and Flexibility
The final witness, John Cox, Director of the Wyoming Department of Transportation who spoke on behalf of the American Association of State Highway and Transportation Officials, stressed that Federal transportation policy should provide “robust investment levels coupled with long-term funding stability. Furthermore, the program should provide States with flexibility by not diminishing the percentage of funds distributed by formula and by streamlining regulations and program requirements. Enacting this well-funded, long-term Federal program with flexibility for States is absolutely critical if we are to address significant transportation challenges, and, thereby, strengthen the United States and its economy.”
Echoing Rep. DeFazio’s opening remarks, Cox stated that authorization for the Federal highway, transit, and highway safety programs will expire on May 31st and that “a short time later the Highway Trust Fund will not have sufficient cash balances to reimburse State DOTs and local transit agencies for costs already incurred on highway and transit projects.
“Over the past six years,” he continued, “Congress has had to pass 11 short-term extensions and transfer more than $60 billion from the General Fund into the Highway Trust Fund to keep it solvent. The negative impact of these short-term extensions and the near-constant threat of Highway Trust Fund insolvency cannot be overstated.”
Cox explained that lacking a “predictable stream of Federal funding makes it nearly impossible for State DOTs to plan for large projects that need funding over multiple years. Major transportation projects in several States are sitting on the shelves or have been delayed due to the unpredictability of Federal funding. Such delays have serious economic consequences both in the short- and long-term. These projects employ thousands of companies and hundreds of thousands of workers every year. Once completed, they help stimulate economic growth in every community where they are built.”
He bluntly pointed out that If Congress doesn’t pass a surface-transportation bill “by the end of May or if the Highway Trust Fund is allowed to fall below $4 billion,” the Federal Highway Administration “will change how quickly they reimburse State DOTs for work already completed. Rather than reimbursing States as soon as the reimbursement request is submitted, FHWA may delay reimbursements or make partial reimbursement subject to available cash in the Trust Fund. States count on prompt payment from the Federal government to be able to manage cash flow and pay contractors for work they have already completed.”
Cox also reminded the committee that there is no constitutional basis whatsoever for the “devolving” Federal powers to the separate States when it comes to transportation policy. “Going back to the founding days of the Nation, Article I, Section 8 of the United States Constitution notes that it is a duty of the Federal government to provide support for national transportation investment.
“Through the development of post roads, canals, railroads, and highways with strong Federal support throughout history, transportation investment has an outstanding track record of creating jobs and supporting economic development throughout the country,” he added.
“We cannot address our nation’s 21st century surface transportation investment needs without reaffirming the strong Federal-State partnership that is the bedrock of the national transportation program from the very beginning,” Cox said in conclusion. “AASHTO remains committed to helping Congress pass a robust, long-term surface transportation reauthorization prior to the expiration of the current MAP-21 extension in May.”