Beyond the stimulus
With passage of the stimulus behind them and the reauthorization debate ahead, Congress is looking for longer term solutions to the transportation funding gap.
By Douglas Rooks
The transportation dollars from the federal stimulus bill – the American Recovery and Reinvestment Act of 2009 – are still being toted up at the state level, but already planning is under way for the six-year transportation reauthorization bill due by October 1.
The stimulus bill provides $27.6 billion for highways and bridges, $8.4 billion for transit, $9.3 billion for rail, and smaller amounts for aviation and other transportation programs. By all accounts, cash-starved state programs are eagerly awaiting the money. Maine’s share of $174 million includes $130.7 million for roads and $13.3 million for transit.
Still, the gap between existing funding and infrastructure needs has become so wide that it is clear that only a sustained federal-state effort will put transportation programs back on track.
In Maine, Transportation Commissioner David Cole said in a recent interview, the 20-year plan called Connecting Maine shows a $320 million average annual shortfall over the next 10 years. “We’re only expecting about half of what we should just to maintain the system and make a few new strategic investments,” he said.
The funding shortfalls just about every state has been feeling in recent years are about to be played out in Washington as well, he said. While the most recent six-year bill, known as SAFETEA-LU, was 20 months late with funding levels widely described as disappointing, “Most of the debate, and the delays, were about what programs should benefit, and what the state shares should be,” said Cole.
Even so, the federal Highway Trust Fund, that began the six-year funding cycle with a surplus, was drained quickly. For the first time in 2007, it faced an $8 billion deficit. Late last year, money had to be borrowed from general revenues to maintain scheduled payments to states.
So as Congress convenes to address the new authorization, the overriding issue, Cole said, will be: “How do we pay for transportation? The cupboard is bare.”
While the funding situation appears bleak, there are signs of hope, according to Jack Basso, director of program finance and management for AASHTO (American Association of State Highway and Transportation Officials) in Washington.
Basso, who served on the new administration’s transition team for transportation appointees, said, “This is the first president in 30 years to have made repairing and improving infrastructure a key priority during his campaign.”
Presidential focus will be helpful, certainly, and Basso said the new Congress is already at work determining the shape the reauthorization will take. Things are furthest ahead in the House, where Transportation & Infrastructure Committee Chair Jim Oberstar (D-Minnesota) is mapping out an ambitious schedule of hearings and mark-ups beginning as early as June.
Basso said the pace is more leisurely in the Senate, where three different committees will work on transportation issues. By what he called “an historical accident,” responsibility for transit issues rests with the Banking, Housing and Urban Affairs Committee, while the Commerce, Science and Transportation Committee deals with safety and rail issues. The meat and potatoes of federal funding, the highway and bridge program, however, is the responsibility of the Environment and Public Works Committee.
Coordinating all these elements takes some doing, Basso said, but over time, the Senate usually has been supportive of transportation needs. “We don’t question how they do it, as long as they get the job done,” he said. “As they say, it’s not a good time to slip onto the dance floor when the elephants are dancing.”
Maine’s Commissioner Cole expresses skepticism about a new Congress working that quickly. He said he thinks a continuing resolution for some period after Oct. 1 is likely – though it should be considerably less than 20 months. Getting the job done right, he said, is more important than doing it quickly.
The stimulus bill definitely has primed the pump for a Congress that will soon be focused on assessing the nation’s transportation needs and priorities, Basso said. He noted that the $27.6 billion slated for highways and bridges, most of which is expected to be spent within a year, compares to $43 billion in this year’s SAFETEA-LU allocation. “This is a big, big program,” he said, and added that, “We’re comfortable with where it takes us in setting up reauthorization.”
Financing for a new six-year bill is a subject Congress is approaching gingerly, given the current economic crisis. Yet both House and Senate committees are expected to give serious consideration to recommendations released recently by the National Surface Transportation Infrastructure Financing Commission.
On Feb. 26, the 15-member bipartisan panel recommended that the federal gasoline tax be raised by 10 cents a gallon from its current rate of 18.4 cents. It also called for a 15-cent increase in the federal diesel tax, now 24.4 cents per gallon. Revenues from both increases would be targeted to long-term highway improvements.
The commission also recommended a switch to a mileage-based system of electronic sensors on cars that would monitor miles driven and charge accordingly. A handful of states are currently testing such systems. The gas tax, even at the higher recommended level, is “not sustainable in the long term and is likely to erode more quickly than previously thought,” the commission said, as drivers switch to more fuel-efficient vehicles.
Even though it’s early, Cole said that Maine has several issues it hopes will attract attention and win support during the reauthorization debate.
One is truck weights, a long-time priority of MaineDOT and the Maine Legislature’s Transportation Committee. Winning approval to operate 100,000-pound tractor-trailers on the full interstate system, not just the Maine Turnpike, would immediately improve the efficiency of the system, Cole said. “Since the extra weight is almost all payloads, there’s no question that we’ll save energy and reduce the burden on our secondary roads that now get this traffic,” he said.
Yet the prolonged discussion over the issue has convinced him that not all states see it the same way. Since Maine is “surrounded by states and provinces that have 100,000-pound trucks or higher,” it might be better to pursue the weight increase as a pilot project for Maine.
“We’ve done the studies, and we’ve shown the benefits for us,” he said. And while Maine can look for other opportunities to put a pilot program in place, the reauthorization bill is the most likely avenue. “That’s the place you’re most likely to deal with policy,” he said.
Cole said that increased public awareness of Maine as a competitor in global markets makes it important for transportation leaders and planners to shift their focus.
“We have to devote a lot more attention to managing this large, complex system we call transportation,” he said. “We’re not just public works directors any more.”
Serving on the freight subcommittee for AASHTO, he said, has made him more aware not only of the interconnectedness of transportation systems, but of the economic opportunities it can offer Maine.
“If you talk to manufacturers, they all say the key issues are transportation and energy, their availability and costs,” he said. “And transportation is an energy issue, too, since it makes up one-third of our carbon footprint.”
Maximizing opportunities for intermodal connections, he said – with ports, rail and even passenger modes – “would be the best outcome for the state economy, no question.”
Another priority for Maine will be an attempt to extend the current federal funding for the Downeaster passenger train. The money comes from a program called CMAQ (Congestion Mitigation and Air Quality) from which each state gets a designated share. CMAQ grants are usually for three years, and the Downeaster has been extended once already. “We’d like to see it become a permanent exemption,” Cole said. “If the state wants to spend the money this way, we don’t see any reason it shouldn’t be able to.”
Cole said that Maine isn’t looking for funding for a Sears Island container port through federal reauthorization, “although anything they’d provide would be welcome,” he said.
The current marketing plan for the container port calls for a private developer to build the facility that would be located on the one-third of the island designated for this purpose; the remaining two-thirds carries a conservation easement under a recent executive order from Gov. Baldacci. This is a shift in policy from the construction of the Mack Point terminal opposite Sears Island. The state funded that project and then leased it to the private firms operating the facility.
Cole said that these days, private funding is the trend, and he offers two examples: two new Canadian ports that are under construction or far along in permitting – one on Prince Rupert Island in British Columbia, and the other in Nova Scotia. Both have private investors.
With the economic slowdown and credit crunch, Cole said, “It may take a bit longer, but all the experts say that container traffic should triple over the next 20 years. It’s a big market.”
Cole said Maine may benefit from new federal interest in transit and rail to launch some new initiatives, such as commuter rail to Portland from the Auburn area. “It’s going to take a long time to happen, but we have to start planning now if we want to take advantage,” he said.
Whatever Congress decides this fall, it is unlikely to complete the nation’s recovery from a long period of infrastructure neglect. Basso calls it “a long game of catch up that will continue for a long time.”
He notes that a report on infrastructure needs that was authorized by SAFETEA-LU and completed in December 2007, found that the federal government is spending only 40 percent of what would be required to fully fund identified needs – a projected $90 billion in spending against needs of $225 billion.
He said that, in one sense, the infrastructure deficit rivals the national debt as an issue Congress must contend with. “There’s no question that it would take a massive investment to get us back on track.”
Cole sees the question partly through the lens of economic competition. “China, India and Europe have all put transportation strategies at the center of their economic plans,” he said. “If we want to compete, we’ll have to consider doing the same thing.”