By Sean Slone, CSG Transportation Policy Analyst
Several state leaders learned last week reauthorization of the federal highway program may be delayed, and some Senate and administration officials are focused instead on shoring up the federal Highway Trust Fund.
The Council of State Governments hosted a legislative “fly-in” June 23-24 that gave participants an opportunity to meet with staff from the key committees that will debate the next federal authorization for transportation programs.
The next reauthorization for transportation programs
While the House may pass the bill, the Senate is unlikely to do so. Senate Leaders support Transportation Secretary Ray LaHood’s call for a temporary extension that would keep transportation funding at current levels for 18 months to allow time to debate how to pay for new transportation spending and how to substantially restructure federal transportation programs.
But last week, 43 House Democrats sent a letter to President Barack Obama saying they are “profoundly disappointed” with LaHood’s 18-month plan.
Leaders of the Senate Environment and Public Works Committee, one of four key Senate committees with jurisdiction over the authorization in that body, said they will support the administration’s 18-month plan—and that move would mean the current transportation authorization, known by the acronym SAFETEA-LU, would not be reauthorized by its Sept. 30 expiration.
So even if the Oberstar bill makes it all the way through the House, its chances of passage in the Senate are slim, based on the interest from Senate leaders in the 18-month extension and other legislative priorities such as health care reform.
Revenues from the federal gas tax, which has been the traditional source of highway funding for many years, have been declining due to increased fuel efficiency, people cutting back on driving, increased use of public transportation, inflation and other factors. Two federal commissions concluded that only the gas tax can provide needed revenue to fund infrastructure improvements in the short term. Yet the administration said it will not support an increase in the gas tax as long as the recession continues.
Administration officials believe an 18-month delay would buy them time in hopes that the recession will be over by the end of 2010.
David Matsuda, deputy assistant secretary for policy at the U.S. Department of Transportation, told CSG’s fly-in participants the administration would like to view the 18-month plan as not just an extension of the existing program but as the first stage of a new authorization bill.
Matsuda told participants that although program consolidations will likely have to wait for the full-fledged authorization bill, the administration would like to see some reforms as part of the extension. Administration priorities, he said, are:
• A focus on livability and giving people more transportation choices.
• More authority for Metropolitan Planning Organizations to oversee transportation spending on a regional basis.
• Reform of how transportation projects are evaluated and selected including cost/benefit analyses and asset management.
Shoring up the Highway Trust Fund
Matsuda said the administration is very much on the same page as Oberstar in terms of the level of changes it would like to see to federal transportation programs in the next authorization. But he indicated the focus must be on shoring up the Highway Trust Fund and waiting out the recession.
“Once we can get past the crisis, we can have a better dialogue,” Matsuda said. “We don’t want to be proposing any new taxes now in the midst of an economic recovery.”
The Highway Trust Fund faces a $7 billion shortfall in this fiscal year because of declining gas tax revenues. Senate leaders, like administration officials, think the focus should be on shoring up that fund.
An 18-month extension in the current transportation plan could mean an additional $10 billion or more would be needed next year to make up the shortfall in gas tax revenues and to meet commitments to ongoing transportation projects around the country. Congress last year had to use $8 billion in General Fund dollars to bail out the trust fund.
Senate Environment and Public Works Committee staff told CSG’s fly-in participants that their top priority is making sure the Highway Trust Fund remains solvent as Congressional leaders try to nail down financial certainty for the future. They said they have a better shot at getting real reform in 18 months if they have the money behind it and warned that a half measure is worse than no measure at all.
But Rep. Peter DeFazio, the chairman of the House Highways and Transit Subcommittee, was quoted in The Washington Post as saying the 18-month plan would still cost tens of thousands of jobs because contractors need dollar commitments beyond 18 months to proceed with multi-year road projects. Such job losses could wipe out any gains made by the American Recovery and Reinvestment Act’s “shovel-ready” projects, some believe.
Participants in the fly-in were CSG Vice Chairman and Connecticut Deputy House Speaker Bob Godfrey, CSG Transportation Policy Task Force Chairman and Tennessee Senate Majority Leader Mark Norris, CSG-WEST Trade and Transportation Committee Chair and Montana Sen. Jim Keane, CSG Transportation Policy Task Force member and Minnesota Rep. Alice Hausman and Georgia Rep. Vance Smith, who was preparing to take office as that state’s Transportation Commissioner.
Staff of the House Transportation and Infrastructure, Senate Environment and Public Works, and Senate Finance committees briefed the state officials during the two-day session.