On February 26, 2014, President Obama outlined the Administration's vision for a four-year, $302 billion transportation reauthorization bill. He also announced the sixth round of the competitive Transportation Investment Generating Economic Recovery (TIGER) grants, which will total $600 million in 2014. In this round of the TIGER program, up to $35 million can be used to support planning grants. Applications for the TIGER program are due April 28, 2014.
The reauthorization bill proposal includes several funding programs as listed below. (Note that, because some are outside the surface transportation authorization, the list totals more than $302 billion.)
- $206 billion for highway improvements and safety.
- $72 billion in transit maintenance and expansion, including $2.2 billion for a new bus rapid transit program.
- $19 billion for rail programs.
- $10 billion for a new multimodal freight program.
- $9 billion for competitive programs, including $5 billion for TIGER.
- $4 billion for the Transportation Infrastructure Finance Innovation Act (TIFIA) program, which supports innovative project financing.
The proposal also incorporates various new policy initiatives, including a "fix-it-first" emphasis on maintenance, accelerated project delivery, encouragement for greater private investment, prioritization of regional coordination and local decision-making, and strengthening of performance incentives to support cost-effective investment. The proposal would also encourage more resilient designs for transportation infrastructure, as well as planning efforts to conserve fuel.
Earlier in February, the Congressional Budget Office (CBO) released its projections for the Highway Trust Fund over the next ten years. CBO projects a $13 billion shortfall by the end of fiscal year (FY) 2015, and a cumulative $61 billion shortfall through FY 2018. To fill this gap and also increase overall spending levels by $90 billion, the Administration's proposal would rely on $150 billion in one-time revenues to be raised from business tax reform. In a similar vein, the U.S. House of Representatives Ways and Means Committee chairman also announced an intention to direct revenues from a proposed tax reform bill to support transportation investments on February 26.
Traditional user fees dedicated to transportation spending, primarily the motor fuel tax, have failed to keep pace with inflation and the rising fuel efficiency of vehicles. The current reauthorization bill, Moving Ahead for Progress in the 21st Century (MAP-21), relied on roughly $19 billion in various General Fund transfers to maintain its two-year spending level of $105 billion. Despite these transfers, spending continues to outpace revenues. In fact, the U.S. Department of Transportation estimates that the Highway Trust Fund's Highway Account will experience a shortfall before MAP-21 expires in September 2014, and its Mass Transit Account will be nearly exhausted by then as well.
In 2009, CMAP adopted reauthorization principles
that emphasize performance-based funding, the use of comprehensive evaluation criteria in selecting projects, adequate investment levels, and an enhanced focus on freight. While the Administration's proposal appears to be consistent with many of these principles, it already falls short on one critical issue -- it fails to provide sustainable revenue sources for transportation investment. A one-time infusion of revenues will not address the nation's structural issues in transportation finance, and the proposed revenue source for this infusion is not consistent with the traditional user-fees system. There is little nexus between reforming the tax code to support the transportation system when compared to more direct mechanisms such as the motor fuel tax, truck fees, or tolling. These user fees have provided the backbone of the federal transportation program for decades.
MAP-21 is set to expire on September 30, 2014. The Administration's proposal helps to kick off the reauthorization process that will continue through the spring. CMAP will monitor this process and advocate for its established policy positions.