July | August 2017




Expect Delays in Federal Transportation Bill

By Sean Slone, CSG Senior Transportation Policy Analyst
Even though President Obama gave a brief but notable mention to the nation’s transportation needs in his State of the Union address last week, the prospects of movement on federal surface transportation legislation seem to be small.
That was the message from speakers at the Transportation Research Board’s annual meeting in Washington, D.C., last week.
“Given the politics, the number of days that remain, the differences between what the Senate and House are looking at—I think it’s very unlikely we will have a surface transportation bill during this year of Congress,” U.S. Secretary of Transportation Ray LaHood said Jan. 25. Nearly 11,000 transportation advocates, experts and researchers from around the world attended the gathering.
LaHood’s pessimistic outlook at the event took some by surprise and came just hours after Obama, in his State of the Union, asked Congress to: “Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.”
With policymakers struggling to find a new revenue source for transportation and debating how to fundamentally restructure the federal program, another year of inaction in Washington could spell another season of doubt for state governments.
Republican leaders of the House Transportation and Infrastructure Committee this week released its long-awaited version of surface transportation authorization legislation. It’s a $260 billion, five-year authorization bill that would fund transportation programs at current levels. The bill proposes to supplement available Highway Trust Fund dollars with revenue from new oil and gas exploration leases. The committee and two other panels were scheduled to mark up the bill this week with House floor action predicted for the week of Valentine’s Day.
“A lot of what the president said last night about making America energy independent, rebuilding America, doing it in a financially sound way—this bill entails all those things,” Pennsylvania Republican Congressman Bill Shuster, a member of the House Transportation and Infrastructure Committee, said the day after Obama’s address.
But Democrats on the committee may need to be convinced that the Republican bill takes the right approach to funding transportation.
“There are some problems associated with … putting hope in revenues from oil and gas,” Oregon Democratic Congressman Earl Blumenauer said. “Nothing that I have seen indicates it’s anywhere near the amount of money that is necessary to fill (the funding) gap.”
LaHood was complimentary of a two-year, $209 billion authorization bill the Senate Environment and Public Works Committee passed last year on a bipartisan basis. Since then, the Senate Finance Committee has been working on how to plug a $12 billion funding hole in that bill. That panel also was scheduled to meet this week along with the Senate Banking Committee, which is required to consider the transit component of the legislation.
LaHood all but conceded another temporary extension of the 2005 SAFETEA-LU authorization bill will likely be necessary since the current one—the eighth since 2009—expires at the end of March. If another extension happens, politics could make it even less likely that Congress would come to agreement on a full bill until after the November election.
That would be bad news for state transportation departments, many of which need the certainty of guaranteed federal transportation dollars to plan and move forward on long-term projects.
But speakers at the transportation meeting said kicking the can down the road one more time should give policymakers pause.
“We are now six months away from the (Highway) Trust Fund going into a negative balance,” said David Burwell, director of the Energy and Climate Program at the Carnegie Endowment for International Peace. “We actually raise only 70 cents for every dollar we spend on transportation. That’s why the trust fund is going down.”
The federal gas tax that funds the trust fund is producing stagnant or declining revenues due to increased fuel efficiency and other factors. March 31, the day the latest SAFETEA-LU extension expires, is also the deadline for reauthorization of the gas tax.
Many speakers noted the search for a replacement for the gas tax is underway.
Blumenauer noted Oregon is considering a vehicle miles traveled mechanism for paying for surface transportation–one way to eliminate the gas tax.
“If we’re going to fund based on gallons consumed, we’re locked into a downward spiral that is going to result in a system that’s bankrupt,” he said. “We need to be moving now aggressively in helping other states do (vehicle miles traveled) pilot projects like Oregon so that sometime this decade, we can move away from a gas and diesel fuel tax and move to something that is more efficient, more fair and more sustainable.”
Jeffrey Shane agrees. He’s a senior partner in the Washington, D.C., law firm Hogan Lovells and a former U.S. Department of Transportation official.
“We didn’t used to be able to meter the use of our transportation assets; we now can,” he said. “We could have a vehicle miles traveled fee calibrated to the time of day, to the quality of the vehicle, to the fuel consumption, to the number of occupants of the vehicle. We could do it in a way that actually managed capacity, managed demand in a way that brought us so much more efficiency without laying down another mile of highway anywhere. But it’s going to take a tremendous overhaul in the way people think about transportation.”
While numerous concerns remain with regard to how a vehicle miles traveled—or VMT—fee might be implemented, what it might cost and how the privacy of drivers might be protected with their every mile being tracked, Shane and others believe it will be necessary to use the VMT fee to transition to a public utility model to pay for roads. Under such a scenario, drivers would get a bill at the end of the month for their road use just as they would for any other utility.
But part of the problem, experts say, is that Americans currently pay only about a tenth for the transportation utility of what they pay annually for other utilities such as water/sewer, cable/internet or electric power.
“(Last year), I drove a 10,000 mile distance in a 30-mile-a-gallon car and I bought 400 gallons of gasoline at a 40 cent a gallon gas tax—$160 (a year), less than 50 cents a day,” noted Doug Foy, founder and CEO of the strategic consulting firm Serrafix and a former cabinet secretary under former Massachusetts Gov. Mitt Romney. “We need to make people aware of the fact that we’re making out like bandits … on transportation and the system is collapsing around us.”
Shane believes the public and policymakers must decide soon if they want a transportation system that works and if they want America to remain competitive in the global economy.
“If we do, we’re going to have to start paying our way, because we can’t continue to fantasize that a transportation system supporting an economy like the one that we have can be operated more or less free of charge,” he said. “If you calculate what you pay to drive 10 or 15 miles, it is a very small fraction of what it costs to make that facility available to you.”
Still, Shane agrees with LaHood that surface transportation reauthorization will likely have to wait until after the presidential election and other complicating factors this year are over.
“I hope I’m wrong about that, but I think that’s the writing on the wall and I don’t understand why people are not screaming about that,” Shane said. “People don’t get it. We haven’t done a great job of educating the public and so we aren’t getting a groundswell of political support for the sort of changes that are going to have to happen at the end of the day.”

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