Perspectives



Painting the Bridge

There’s a saying among those who maintain big bridges—think Golden Gate or George Washington—that when you finish painting it from end to end, it’s time to start again. That’s how it feels with respect to surface transportation legislation. In June 2012, when we last wrote on the subject for EFR, the outlook was cautiously optimistic. A sharply divided House and Senate were in conference on an authorization bill, with a hope that something could be cobbled together after a long series of temporary extensions. Observers and practitioners in the transportation field were willing to see almost any outcome, provided that it offered a period of stability, but feared that the partisan divide might be too difficult to bridge. The Senate had passed a two-year bill, making use of a variety of funding mechanisms to fill the gap between traditional gas tax revenues and program needs. The House, unable to pass a multi-year bill that met its revenue test, instead put forth a simple extender bill with some program reforms and agreed to take that to a House-Senate conference. The Administration, sidelined throughout much of the debate by virtue of their unwillingness to offer a firm proposal, was encouraging action throughout and attempting to at least guide, if not lead, the process.

Somehow, it all came together in the conference, and a new acronym, MAP-21 (Moving Ahead for Progress in the 21st Century) replaced the series of “TEA” acronyms when President Obama signed the new bill into law in the White House East Room on July 6th. MAP-21 is only a two year bill, covering the balance of federal fiscal year 2012 plus all of 2013 and 2014, but that’s a lot more running room than had been offered in short-term extensions of six months or less. Its funding levels are very slightly higher than those that were in place during SAFETEA-LU and its extensions, providing a total approximating $118 billion over the 27-month period. Highway and transit programs divide the total at the usual 80/20 ratio, continuing at roughly current levels, sharing in the diminishing proceeds of the gas tax and getting supplemental revenues from a variety of one-time infusions out of the general fund.

MAP-21 Highlights

While neither the funding levels nor the time period in MAP-21 met the hopes of the transportation community, it may provide the breathing space to look at longer-term issues even as it makes some sensible reforms to stem criticisms of the past programs. A brief look at some MAP-21 highlights will illustrate that point, perhaps putting to rest some of the issues that were past barriers to support a robust program.

Greater Program Flexibility 

With no project-based earmarks and a consolidation of funding categories, state and local funding recipients will have more ability to use funds according to their own priorities, with a greater focus on the higher-end elements of the transportation system.

Performance-Based Planning

Within this greater flexibility, transportation agencies will be required to emphasize performance against established criteria and desired outcomes as they develop plans and spending programs, hopefully creating the basis to measure success and support program continuity.

Streamlining Project Delivery

Reflecting a strong priority which was the only substantive element in the House-passed bill, MAP-21 creates a framework in which project delivery can happen in a more predictable way. Deadlines and action-forcing steps in the National Environmental Policy Act process, greater use of categorical exemptions, and other such measures hopefully will blunt the criticism that projects take far too long.

Enhancements Program

Much criticism had been leveled at the continuing flexibility for use of program funds for so-called “enhancements”—the ISTEA authorized program for bicycle, pedestrian, historic preservation, scenic byways, etc. By restructuring the authorization to cover a larger portfolio of transportation alternatives at state/local discretion, MAP-21 lowered another barrier to future agreement, although advocates for bicycle and pedestrian projects remain dissatisfied with the level of funding provided and with the possibility of states “opting-out.” 

TIFIA Program Expansion

In one of the few areas of expanded authority, MAP-21 increased the Transportation Infrastructure Finance and Innovation Act (TIFIA) program of credit support almost ten-fold. Prior law allowed for $122 million in authority, which would support about $1 billion in loans per year. Under MAP-21, the authority is increased to $750 million in 2013 and $1 billion in 2014, clearing the way to a lending level in the $10 billion range and supporting $20 to $30 billion in projects, depending on the level of local match.

Freight Programs

While there was no new program for freight projects, MAP-21 strengthened the federal role in freight-related investment through requirements for a national freight policy and related plans, plus an encouragement for state freight plans which can be the basis for an increased federal share in freight projects.

Transit Programs

Having avoided the risk to transit programs inherent in the House proposal to allocate all trust fund revenues to highways, the MAP-21 transit program generally mirrors the trends in the larger bill—fewer categories but a greater focus on recognized needs, such as the state of good repair of our transit assets and continuation of New Starts funding, although at a slightly reduced level. The Federal Transit Administration was given new authority for safety oversight and, subject to future appropriations, a program of emergency relief support similar to the traditional highway disaster grants. The latter program may become the funding vehicle for federal assistance in rebuilding after Superstorm Sandy.

Prospects Post MAP-21

Looking to the future, the optimistic view is that the overall program as re-enacted is a better foundation for long-term investment, but that view will soon be tested as we move into an early reauthorization cycle. Funding will obviously be the key issue, but MAP-21 also has unfinished business. Most notably, both the House and Senate had hoped to integrate rail programs into the framework of a surface reauthorization bill, but the political process intervened and the planned rail title was dropped in its entirety. The future of Amtrak and intercity rail as well as their integration into the planning and environmental process will await future lawmaking, either in a free-standing rail bill in the next year or as part of MAP-21’s successor. Similarly, a future bill could be a vehicle for a better-articulated funding role for the federal government with respect to our freight transportation system. There is also potential for greater attention to tolling as a means of project finance, since MAP-21 basically continues current policy under the primary rule that restricts tolling to new capacity.
 

Work has already begun to prepare for another reauthorization cycle—“repainting
the bridge,” as it were. The advocacy groups are tuning up their policies and recruiting their task forces. The Administration, having won re-election, has begun to develop its thinking as it moves to submit a FY 2014 budget that covers the last authorized year under MAP-21 and longer-term budget projections for the subsequent period. The Congress is repositioning itself in a post-election process of allocating leadership and key staff positions on the committees. But overshadowing these activities are the negotiations over the “fiscal cliff” and the steps necessary to reverse a long trend of increased deficits and national debt, hopefully without sacrificing national priorities or engendering a new recession. The resolution of these negotiations will have dramatic implications for what kind of a new structure can rise on the foundations laid in MAP-21.
 
At the same time, the ways in which the Administration implements the reforms in MAP-21 will have influence over their durability. One area in which it has moved quickly is the establishment of criteria and management processes for the enhanced TIFIA program. Already, there is a backlog of applications for that program which, if fully funded, would use all the authority granted in MAP-21. If these projects are moved ahead, under the new policy guidelines based primarily on creditworthiness and project readiness, the Administration could set the stage for strong renewal efforts. Similarly, the implementation of performance-based planning and project delivery reform will be a challenge given the short time frame, but perhaps the Administration can show effective progress before a new bill is on the table.  

Over the next few years, the President and the Congress will be revisiting all of the key transportation programs. MAP-21 expires at the end of September 2014. The aviation program authorization extends to the end of 2015. The authorization for Amtrak and intercity passenger rail will expire on September 30, 2013, and there is pressure as well for legislation to amend the Positive Train Control deadline set by the Congress in the Rail Safety Act. There is also need for a new Water Resources Development Act to cover port and waterway authorizations. The outcome of fiscal negotiations will define the boundaries for these investments, and there is no assurance about that outcome. Some frameworks for resolving our long-term financial situation have looked at the need to fund transportation investment. The plans put forward by the Simpson-Bowles Commission and the Domenici-Rivlin group explicitly called for fuel tax increases to assure that the transportation programs were not dependent on general revenues. As noted in our June discussion, there is a potential for hope in a “grand bargain,” but lacking such an outcome, the prospects are somewhat dim. As evident in the current budget discussions, there is not much support for tax increases of any kind, especially at the federal level. Local actions including tax referenda and some state efforts for gas tax hikes show that transportation investment is supported in most cases, especially when specific improvements can be delivered, but this doesn’t translate well to the national level. Without new revenues, it will be hard to sustain even the MAP-21 levels, let alone look to increased investment.

 

As this future debate shapes up, we can begin to see who will be around the table, and it is a hopeful sign that these will be experienced players. With President Obama in office through 2016, Administration policies are likely to remain constant. The President has put forth a call for enhanced infrastructure investment as part of any economic program. While the future is not clear with respect to Secretary of Transportation Ray LaHood, his strong support for Obama Administration initiatives will either be continued or hopefully replaced by someone with similar skills and interests.

On the Congressional side, we still see divided government as a result of the 2012 elections, with Republicans continuing their control of the House with a slightly smaller majority, and Democrats controlling the Senate with a slightly larger majority. As the two bodies organize for the next two years, there will be some continuity and some change. Senator Barbara Boxer (D-CA), who provided strong leadership for MAP-21, will continue as the Chair of the Senate Environment and Public Works Committee (EPW). A bipartisan agreement on policies with then Ranking Republican James Inhofe (R-OK) very much enhanced her strength in last year’s bill. Under Republican conference rules, Senator Inhofe cannot continue in that position, but will remain a member of the committee. He will be replaced by Senator David Vitter (R-LA), who had served as Ranking Republican on the EPW Transportation Subcommittee and who had supported MAP-21.

The two other Senate Committees with transportation jurisdiction will see no change in their chairmen, with Senator Jay Rockefeller (D-WV) continuing as Commerce Committee chair and Senator Tim Johnson (D-SD) as Banking Committee chair, respectively, covering rail and public transit issues. Again, the major changes will be with respect to Ranking Republicans, with Seator Michael Crapo (R-ID) taking over on Banking. The Ranking Republican slot on Commerce had been slated for Senator Jim DeMint (R-SC). With his resignation the position has not yet been filled, but may go to Senator John Thune (R-SD). The interests of these new leaders remain to be determined.

Perhaps the most interesting change will be on the House side. Chairman John Mica (R-FL) was unable to hold the Transportation and Infrastructure (T&I) chairmanship under his conference rules, and the post has been assigned to Congressman Bill Shuster (R-PA). Shuster has been a T&I member throughout his six terms in Congress and played a key role in developing the compromises needed to pass the MAP-21 bill. He was elected to the Congress in 2000, succeeding his father, Bud Shuster, who had been the Chairman of T&I during the passage of the TEA-21 legislation. Nick Rahall (D-WV), a T&I veteran over 18 congressional terms, will be the Ranking Democrat on T&I. Both Shuster and Rahall have benefitted from bipartisan efforts in the past and hopefully can set out on that pattern in the future. In press interviews after his designation as Chair, Mr. Shuster emphasized that virtually everything has to be on the table in order to find solutions to our transportation needs. He was quoted as saying that a vehicle-mile tax, raising the gasoline tax, tolling, and public-private partnerships should all be considered as options for closing the funding gap, although he did rule out a national infrastructure bank. He also expressed a belief that common ground could be found on the contentious issues surrounding Amtrak. Hopefully, his flexibility can become the basis for some significant bipartisan breakthroughs on what were difficult issues in the past Congress. 

The course ahead is not likely to be straight to the finish line on a new bill to succeed MAP-21. But perhaps we can hope that the focus will be on how to consolidate its gains, polish up some of its rougher edges and move forward with a long-term funded plan. Given the timing of MAP-21’s expiration, falling in the middle of the 2014 election season, we may have to endure a short extension, but at least it will be one based on the current agreements. Stay tuned as we repaint the bridge!

 

Image Header Source: Joel Sage (flickr)