Approves $11 billion, 10-month extension to Highway Trust Fund
Working to avoid a "highway cliff," Congress passed a 10-month extension and a $11 billion dollar infusion to the Federal Highway Trust Fund.
Approval of the temporary fix came only hours before the federal government was set to reduce payments to states for road projects.
The showdown in Congress was over how to shore-up the fund, set to go broke by the summer's end.
Earlier this month, the U.S. House passed a $10.8 billion short-term extension of federal transportation dollars and extended MAP-21, the authorization spending bill, to May 2015. However, the Senate rejected the House plan and instead approved an amendment (79 - 18) offered by Sens. Bob Corker (R-Tennessee), Tom Carper (D-Delaware), and Barbara Boxer (D- California) that would only provide $8 billion to reimburse states for highway projects through December 2014. It also stripped out a funding mechanism called "pension smoothing," and sunsets MAP-21 on Dec. 19, 2014, forcing Congress to find a long-term solution for highway funding.
But the House rejected the Senate amendments in a 272-150, somewhat heated debate, and sent the bill back to the Senate stripped of the Senate change. In the end, the original House version prevailed.
Last week's vote represents the 10th short-term extension of the program in the past half-decade and what Sen. Corker and others were fighting to avoid - another short-term fix.
Corker, along with Sen. Chris Murphy (D-Conn.) have proposed legislation to raise the gas tax by 12 cents a gallon over two years, and then index the tax level to inflation. The bipartisan proposal would help refurbish gas tax revenues that have eroded over the past two decades and prevent inflation from eating into gas tax receipts in the future.
According to the Congressional Budget Office, at current gas tax levels, the trust fund will fall $13 billion short of its obligations next year and $160 billion short over the next 10 years.
Created in 1956 to finance the new interstate highway system, the Highway Trust Fund relies on a federal gasoline tax of 18.4 cents per gallon and a diesel tax of 24.4 cents per gallon. The taxes have not been raised since 1993, and inflation has eroded their value. Increased fuel efficiency, decreased driving, and the recession have also helped to deplete the trust fund.
The National League of Cities is also calling on Congress to address the long-term challenges facing the federal transportation program and highway funding.
House and Senate members have now left Washington for a five-week August recess. City officials can support the effort for a long-term transportation solution by contacting your congressional delegation during the August recess.
For talking points, access NLC's transportation advocacy toolkit, http://www.nlc.org/influence-federal-policy/advocacy/federal-advocacy-p….
last updated 8/04/2014
In June, both the House and Senate adopted the conference agreement on MAP-21, the federal surface transportation reauthorization bill, which originally expired on Sept. 30, 2009 and had nine short term extensions. The House voted 373-52 and the Senate voted 74-19 to approve a compromise bill that appeared impossible on several occasions. The legislation now goes to the president for his signature.
Conferees extended the length of the original Senate bill to 27 months, providing a slight increase in funding through Sept. 30, 2014, with a slight increase in funding. The final agreement was reached after the House dropped its insistence on including the Keystone pipeline and regulation of coal ash in the bill and the Senate compromises on provisions funding transportation alternatives known as transportation enhancements and efforts to speed project delivery
Under the bill, highway programs will be funded at $39.699 billion in FY13 and $40.256 in FY14 and transit programs at $10.584 in FY13 and $10.701 in FY14Several city supported provisions were included in the final agreement, including direct funding for the off-system bridge program, which has funneled $650 million annually to local bridges not on the federal-aid system, and is expected to help support 80,000 deficient off-system bridges. Conferees rejected proposed changes to the Metropolitan Planning program which would have changed the process for local involvement and eliminated many growing regions. The final agreement gives rural regions new authority in the planning process to work with their state transportation departments.
Lawmakers compromised on some controversial provisions to streamline environmental reviews that hold up federally funded projects, including a broadening of the definition of categorical exemptions and raising the funding threshold for triggering federal environmental review of projects.
The transportation enhancement program is reduced substantially, though metro areas over 200,000 will receive a sub allocation for project selection with 50 percent of the funding. State transportation departments can choose to not spend the rest of their allocation on transportation enhancement programs, a move opposed by cities and a disappointment when so many communities are seeking to fund bicycle and pedestrian walkways. The very successful Safe Routes to School program was eliminated as a separate program but eligible for funding from other programs.
The TIFIA credit and loan program was increased to $750 million in FY13 and $1 billion in FY14 with a special set-aside for rural funding.
The federal transit program keeps its basic structure with some reforms. Areas under 200,000 can continue to use their formula funds for operating assistance. A separate bus program is maintained, funded at a somewhat lower level and changed to a formula program. A Senate provision providing flexibility to areas over 200,000 to use funds for transit operating expenses in times of high unemployment was not included in the final bill.
The New Starts program streamlines the approval process to accelerate project delivery. The Elderly and Disabled and New Freedom programs are consolidated and the rural formula program is maintained with a slight increase in funding.
The final agreement also included the RESTORE Act which provides 80 percent of the Clean Water Act penalty fines from the Gulf oil spill to the five affected Gulf Coast states.
last updated 7/1/2012
U.S. House passes another 90-day transportation extension to Sept. 30
Earlier this month, the House approved another 90-day extension for federal surface transportation programs that included construction of the controversial Keystone XL pipeline, setting up a conflict with the Senate. The extension through Sept. 30, adopted in a 293-127 vote, will allow the House to begin negotiations with the Senate on S.1813, Moving Ahead for Progress in the 21st Century (MAP-21), a two-year, $109-billion transportation program bill passed last month.
The current extension signed by President Obama would fund programs until June 30, the ninth short-term extension since the program expired in September 2009. Senate Environment and Public Works Chair Barbara Boxer (D-Calif.) said in a statement that she was encouraged by the House action and called on the House to quickly appoint conferees in order to get a bill to the President soon.
The House action is the latest in a series of attempts by the leadership to find sufficient votes to pass a fully funded transportation bill with gas tax revenue not meeting current spending levels. House Republicans initially tried to cut transportation programs by 34 percent to ensure that revenues were adequate to meet spending levels. In February, the House was poised to take up H.R. 7, a five-year, $260-billion transportation bill to be funded through expanded oil and gas exploration revenues. The bill also would have severed transit from its current dedicated revenue source, the federal gasoline tax, relegating it to the regular appropriations process.
An outcry from transportation advocates, including NLC and Republicans from suburban districts heavily dependent on transit use, forced the House leadership to back down from that approach, which has been a federal practice initiated by President Ronald Reagan. The newest bill adopted by the House last week is not a "clean" extension since it adds on the Keystone pipeline, previously rejected by the Senate during the vote on S. 1813.
House transportation leaders called their bill an effort to move theprocess forward and suggested that this approach would allow House and Senate conferees to come together to pass a longer term transportation bill funding federal bridge, highway and transit projects.
MAP-21 passed the Senate on March 14 by a vote of 74-22. The bill would consolidate or eliminate dozens of transportation programs and give greater discretion to state departments of transportation on how to set spending priorities. The bill also allows the Secretary of Transportation to decertify Metropolitan Planning Organizations (MPO) between 50,000 and 250,000 in population.
last updated 5/1/2012
Divided Congress resorts to three month extension on highway bill
State transportation officials who worried they might have to delay road construction projects because of a lack of federal money can breathe a little easier, after Congress agreed to keep the money flowing for another three months.Lawmakers sent President Obama the measure on March 29, but nearly everyone involved was disappointed. The Republican-led House and the Democratic-controlled Senate could not agree on a compromise that would last longer, so they gave themselves another 90 days to make a deal. This is the ninth time since 2009 that Congress extended the deadline to find agreement.
There is no guarantee that Congress will do any better in the next three months than it has over the last three years. A bipartisan coalition in the Senate backed a two-year surface transportation bill earlier this month, but it made no headway in the House. In fact, House Republicans have not been able to come up with a package that meets the demands of their own caucus.
The main sticking point in negotiations is over funding. The federal gas tax is no longer sufficient to pay for all of the projects Congress directed to be funded, but lawmakers are loathe to raise the gas tax. Generally, conservatives want to scale back federal spending to match the amount of money generated by the gas tax, while many liberals want to find the money from elsewhere in the budget or through borrowing.
last updated 4/09/2012
The Senate voted March 14 to approve a two-year, $109 billion transportation funding measure, forcing the House to act days before the current program and the gas taxes supporting federal programs expire on March 31. The 74–22 vote for Moving Ahead for Progress in the 21st Century (MAP-21) reflected the efforts of the Senate’s transportation leaders to find a bipartisan path on an issue that has eluded compromise since federal transportation programs expired in September 2009. House action has stalled due to opponents from both parties disagreeing over the direction of the House bill, which financed the program by expanded oil and gas exploration, approval of the Keystone pipeline and funding only highway programs from gas tax revenues. MAP-21 would consolidate multiple federal programs into a few, providing greater flexibility for states in making spending decisions, but giving less authority to local governments and the metropolitan planning organizations that represent them. Senators included a number of amendments that would make the bill more responsive to local needs, including funding for local bridges, support for metropolitan planning organizations (MPOs) and local grants for programs such as Safe Routes to Schools and bicycle and pedestrian walkways.
The bill also extends the tax benefit for transit commuters at the same level as tax breaks for parking and removes wastewater programs from the private activity bond cap.
Concern over impending shortfalls in federal gas tax revenues clouds the future of the federal transportation program. The Congressional Budget Office estimates that federal gas tax funds for highways will run out in 2013 and for transit programs in 2014. Initially, the House proposed a 34 percent cut in funding to ensure the availability of funding over a five-year period, but Senate leaders chose to spend available funding in two years.
Key changes in MAP-21 include:
- Sets national policy goals and performance measures, including congestion, improved access to multiple travel options, support for manufacturing and reducing impacts on the environment and adjacent communities;
- Streamlines project delivery;
- Maintains existing funding levels;
- Holds states accountable for the safe upkeep of roads and bridges;
- Maintains local control over a share of funds and ensures access to funding for safer walking and bicycling;
- Includes emergency provisions to allow transit agencies to avoid service cuts and fare hikes;
- Extends the commuter benefit for transit users, commensurate with parking benefits for drivers;
- Helps communities make plans to meet the growing demand for walkable neighborhoods with access to jobs, services and public transportation;
- Ensures that federal funds support streets that are safe and complete for everyone who uses them, whether motorists, pedestrians, bicyclists, wheelchair users or transit riders.
The House will have to make a decision on a proposal that would gain the necessary votes on a bill before the program expires on March 31. Many observers believe that Congress might be forced to enact another short-term extension until after the elections, due to the level of opposition and lack of consensus in the House.
last updated 3/16/2012
This week (Feb. 27), the Senate will resume debate on S.1813, the two-year surface transportation authorization bill funding federal highway, transit and bridge programs, after a week-long recess. The Senate still must overcome a number of unrelated and highly controversial amendments that will be part of the debate before working on numerous transportation-related amendments.
The Senate will combine legislation from four different committees, which have been working over the recess to resolve remaining controversial provisions and retain the bipartisan support the bill has enjoyed. Senate leaders are working to pare down the number of amendments. NLC encourages city officials to contact their senators to support several local government amendments that will be offered during Senate debate.
Local officials are urged to show their support for the following amendments:
* The Casey-Blunt amendment to Restore Funding for Off-System Bridges: The Senate bill would collapse federal bridge programs into a larger program for states to spend on all transportation programs and eliminate a 15 percent set-aside for off-system bridges, which funds local bridges. The amendment would maintain the set-aside for bridges not on the federal-aid system, which has been in place since 1978 and has been of substantial help to local governments in their efforts to upgrade local bridges. The Casey-Blunt amendment would provide full funding for the 15 percent set-aside to fund local off-system bridges.
* The Cardin-Cochran Additional Activities Amendment: The Senate bill creates a new program called "Additional Activities," which includes a broad range of eligible projects, such as Main Street revitalizations, local street safety improvements, street and boulevard redesigns, bus stop and rail station access improvements, Safe Routes to Schools and Recreational Trails, among many others - including the former programs that invested in safe walking and biking. The Cardin-Cochran Amendment would turn that Additional Activities program into a competitive grant program for local governments, giving local elected leaders more control over how to spend the funds. The amendment would give increased decision-making authority and control to local governments to fund important transportation projects.
* The Shaheen (and others) Amendment to Grandfather Existing Metropolitan Planning Organizations: Current law provides that areas over 50,000 in population are designated as a metropolitan planning organization and have regional planning responsibilities and decision-making authority over transportation and other projects in their region. The Senate bill would change that threshold to 200,000 in population and set up new criteria for remaining an MPO. The Shaheen amendment would grandfather in existing MPOs.
House Republicans announced they will rework the House bill to lower the price tag, shorten the duration and eliminate a controversial provision on transit funding. The $260 billion, five-year bill has drawn criticism from transit advocates as well as fiscal conservatives, who have expressed concern that it wouldn't cut enough from current spending and would diverge from a "user-pays" model.
Concerns over a provision that would end the 30-year dedicated funding for transit programs from gas tax revenues, opposed by more than 600 groups, is a key source of opposition to the bill.
House debate is controlled by the Rules Committee, which must decide what amendments to allow for consideration. The Rules Committee has not yet met to decide on the more than 300 amendments that have been proposed.
udpated 2/27/12
Congress Passes Another FAA Extension
On Jan. 24, , the House passed a 17-day short-term extension of federal aviation programs, funding programs at current levels until Feb. 17. The Senate followed suit on Thursday, and the extension now awaits approval by the President. This marks the 23rd extension of the programs, which were set to expire on Jan. 31, 2012.
Programs key to local governments in the bill include funding for Airport Improvement Grants to municipal airports and the Essential Air Services program which funds airports in small communities that would otherwise not receive commercial air service.
last updated 1/27/2012
The U.S. Congress approved a six-month extension of federal transportation funding, giving states some breathing room and avoiding a shutdown of infrastructure projects around the nation.
President Obama and many state leaders had been urging Congress for weeks not to let transportation funding expire, warning that it would lead to more job losses at exactly the wrong time. The White House released a state-by-state assessment estimating that hundreds of thousands of layoffs would result.
Despite their clashes on other legislation, Senate Democrats and Republicans on Sept. 15 agreed to keep transportation dollars flowing through March 2012 as part of a bill that also avoids a shutdown of the Federal Aviation Administration.
A short-term federal infrastructure funding has been the norm since 2009, the last time Congress agreed to a major rewrite of comprehensive transportation law. Congress has passed seven different temporary funding extensions since then, unable to find agreement on the best way to fund infrastructure on a long-term basis. The differences of opinion have broadened considerably since Republicans took over the House, with many of them calling for far less federal spending on transportation while Democrats who control the Senate have refused to go along.
last updated 9/16/2011
In March, President Obama signed a short-term extension of federal transportation programs-the seventh since the last bill, SAFETEA-LU, expired in September 2009. Transportation programs will now be funded through September 30, the end of the fiscal year, and Congressional and Administration officials are hopeful that this will be the last such extension before a long-term program is enacted.
Recognizing the negative impact of continued short-term extensions on state and local planning, House, Senate, and Administration transportation leaders are promising to work expeditiously on a new bill. A stalemate over identifying sources of revenue for transportation programs has prevented agreement on a long-term bill, and House Transportation Committee Chairman John Mica (R-FL) insists that any new transportation program will have to live within its means.
Last month, the President released his authorization proposal as part of the FY 2012 budget request to Congress, calling for a six-year, $551 billion transportation program focused on consolidating 55 existing programs into five new programs and merging transit programs. The proposal continues strong support for federal transit programs and includes three discretionary programs aimed at cities.
In recent weeks, Rep. Mica and other House Transportation Committee members have been touring the country holding field hearings to gather public input for a new multi-year bill, including a joint hearing with Senate Environment and Public Works Committee Chair Barbara Boxer (D-CA) last month in Los Angeles. Sen. Boxer has been working with Democratic and Republican leadership on her committee and intends to mark up a Senate transportation bill in May, though she has not provided any specifics on what she would like to see in a new bill.
The League will continue to provide updates on federal activity surrounding authorization of a long-term transportation plan as information becomes available.
last updated 3/17/2011
The stalemate over extending the nation’s surface transportation laws continued in Congress and the future remains uncertain.
The Senate Environment and Public Works Committee earlier this month abandoned plans to send a six-month extension of the expired surface transportation bill, which ran out on Sept. 30, to the Senate floor in hopes of reaching an agreement with the House. Instead, transportation funding for state and local governments will be continued through a continuing resolution containing funding for other federal programs through Dec. 18.
Feds rescind $190 million in state highway funds
With Oct. 1 signaling the start of a new fiscal year and many federal departments without approved 2010 budgets, Congress adopted a continuing budget resolution that allows the departments to continue to operate thus avoiding a potential government shutdown.
Included in the resolution was a one-month extension for the SAFETEA-LU authorization bill (Safe, Accountable, Flexible, Efficient Transportation Equity Act ...A Legacy for Users), due to expire Sept. 30. The one-month stopgap measure, however, did not address a rescission provision built into the last transportation bill, that takes back any funds that states have not yet obligated or are under contract. (A total of $8.7 billion nationwide.)
For Tennessee, it means a $190 million loss in highway funds.
Attempts by Congress to repeal the rescission ran up against "pay-as-you-go" budget rules, which meant lawmakers would have to offset the $8.7 billion by either increasing revenues or making equivalent spending cuts in other areas of the budget.
Tennessee Department of Transportation (TDOT) officials, who have been pensively awaiting Congressional action, told the House Transportation Funding Study Committee in a meeting last month, that should the rescission take place, the larger metropolitan areas would be hit the hardest but nearly every community would be impacted.
Paul Degges, TDOT chief engineer, explained that TDOT purposely spends down their accounts, whereas the larger cities may build their funds over several years in order to pay for larger projects. And even though there might be a plan in place for how the money will be spent, that money may not be obligated yet or under a contract, which means it can be rescinded.
He estimates some $78 million will be taken back from the Big 4 cities, which up until now have been exempt from any federal rescissions.
Another $30 million will come out of money for enhancement grants. Enhancement grants are awarded to local governments to build bike paths and sidewalks, improve streetscapes, refurbish historic railroad depots, and for other investments that enhance communities access.
TDOT said that other funds will be taken from:
- Safety programs ($15 million)
- TDEC recreational trails ($1 million)
- Planning ($2 million)
- Safe Routes to Schools Program ($300,000).
"It will have a huge impact in our ability to plan activities," said Degges. "And it will literally hit just about every community across the state with some project or program being impacted."
TDOT says that since 2002, the federal government has rescinded more than $363 million in highway funds.
Authorization Bill
Thus far, the House and Senate cannot agree on the length of a temporary extension until a six-year long-term bill can be passed. The House voted in July to extend the program three months until Dec. 31. The Senate has been working on an 18-month extension, which would allow the Obama Administration and Congress the time necessary to address the estimated $20 billion shortfall in the Highway Trust Fund and to develop a comprehensive surface transportation bill.
The highway trust fund, which provides states about $40 billion each year for infrastructure projects is financed by federal gas taxes - 18.4 cents a gallon on gasoline and 24.4 cents a gallon on diesel - and is redistributed to cities and towns through the states. In the past few years, gas tax revenues have not kept pace with the federal commitments to highway, transit and bridge programs.
Last September, Congress rescued the highway fund with an $8-billion infusion from the general fund. As drivers continued to drive less lowering federal gas tax revenues, and with automakers ratcheting up their production of more fuel-efficient cars, the Highway Trust Fund is in trouble again.
To date, according to the National League of Cities, the only six-year plan currently pending before Congress is House Transportation and Infrastructure Committee Chairman James Oberstar’s, D-MN, $500 billion plan. His authorization measure would nearly double the current transportation program. His bill has been approved by the subcommittee but has not been brought up before the full Transportation & Infrastructure Committee yet because there is no agreement with the House Ways and Means Committee on how to raise the extra revenue needed to pay for it. Both the Obama Administration and members of the House Ways and Means Committee have indicated they oppose any increased taxes to fund transportation.
2009 Legislative Session Tennessee General Assembly
Two revenue-generating measures earmarked for transportation were taken off notice in the state House, with the bills' sponsor citing bad economic times for dropping the two tax increase bills.
Sponsored by House Transportation Committee Chairman Bill Harmon, one funding measure indexes the gasoline and diesel fuel taxes to the Consumer Price Index (CPI); and the other would increases the fuel taxes 1 cent each year for the next five years.
Both were recommended by the Special Joint Study Committee on Transportation Funding, a 20-member committee created by the legislature in 2008 to explore new revenue options for addressing the state's highway and infrastructure needs.
The study committee, which Harmon also chairs, met in April and agreed to send the two funding options to the Legislature for consideration. Both Harmon and Senate Transportation Committee Chair Jim Tracy acknowledged it would be a tough sell in today's economy.
TDOT has projected that over the course of the next 10 years, the department will need an extra $8 billion to cover infrastructure needs.TDOT's Long Range Transportation Plan conducted in 2004-2005 identified a gap between needs and revenues over a 10 year period at $2 billion. But due to revenue shortfalls and increases in construction costs, the gap has widened to $8 billion.
Had the fuel tax rate already been tied to the CPI, TDOT estimates it would have raised $350 million over the past five years. The cost to the consumer would have increased from the current rate of 21.4 cents per gallon on gasoline to 30.8 cents over the five year period. Some states already using indexing include Kentucky, Florida, Iowa, Maine, New York, and North Carolina.
TDOT estimates that a one-cent gas tax increase would generate $30.5 million per year with TDOT receiving some $18 million. Over the five year period, the increase would generate some $87.9 million for TDOT (60 percent), $55.7 million (38 percent) to cities and counties, and $2.9 million (2 percent) to the State General Fund.
A one-cent increase to the diesel tax would generate $11M per year with TDOT receiving $8M. Over the five year period, the increase would generate some $50.2 million with TDOT receiving $36.1million (72 percent); $13.1million (26 percent) to cities/counties; and $1 million (2 percent) to the State General Fund
The current state tax is 21 cent per gallon on gasoline and 18 cents on diesel fuel. The federal tax is 18.4 cents.
Some other funding alternatives that were explored:
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