Transcript Freight Possibilities in Surface Transportation

Legislative Update
July 15, 2011
Chris Hundt
Michigan Department of Transportation
July 15, 2011
Overview
• State Issues
– Fiscal & political
environment
• Federal Issues
– Fiscal & political
environment
– Reauthorization
proposals
State Transportation Revenue
Down $224 Million Since 2004
$2.10
$1.90
$1.80
$1.70
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Billions
$2.00
MDOT Match Issue
FY 2012-15 Annual Shortfall
State Revenue Shortfall
$120-$160 million/yr
Federal Aid Lost to MDOT
Highway Capital Program
$700 - $800 million/yr
Match Problems Not Exclusive to MDOT
“Sadly, there are county road commissions
in Michigan that are being forced to turn
down millions of dollars in federal road funds
for which they are eligible, because they
simply cannot provide the required local
match.”
Michigan’s Roads in
Crisis – Highway, Roads and
Bridges CAC Report July 2008
MDOT Reinvented
• 15% reduction in staff since 2009
• Closing or consolidating eight facilities
• Organizational changes and process
improvements
• Debt restructuring
Better, faster, cheaper, safer, smarter
Legislative Activity
• FY 2012 state budget
• NITC
• Match Issue
– SB 351/HB 4521 – sales tax diversion
• Consolidation of government services
Other Planned Legislative Activity
Special message to the legislature on
infrastructure in October
• Transportation funding continues to be
inadequate for state’s needs
• Structural problem that directly affects
Michigan’s economic vitality
• Permanent solution for matching federal
transportation funding is needed
Recalls Add Uncertainty
• Approved recall language
– Representatives Damrow, Johnson, Jenkins,
Potvin, Pscholka, and Speaker Bolger
– Senators Booher, Emmons, Green, Jansen,
Marleau, Nofs, and Major Leader Richardville
• Awaiting clarity hearing
– Representatives Cotter, Jacobsen, Scott,
Shirkey
– Senators Caswell, Kahn, Meekhof, Moolnaar,
Proos, Schuitmaker, Warren
Federal Reauthorization 2011
• SAFETEA-LU extended
through 9/30/11
– Originally expired 9/30/09
– Currently on 7th extension
History of Overdue Bills
Number of Days Authorizing Legislation Was Overdue
800
680
600
400
275
252
200
79
98
37
-L
U
TE
A
SA
FE
EA
-2
1
TE
A
AA
R
ST
U
IS
T
87
82
A
ST
A
ST
A
A
78
0
Recap of Key Milestones
•
•
•
•
•
•
•
August 2005 – SAFETEA-LU signed
September 2008 - $8.017 B GF to HTF transfer
August 2009 - $7 B GF to HTF transfer
September 2009 – SAFETEA-LU expires
March 2010 – HTF shuts down for two days
March 2010 - $19 B transferred from GF to HTF
September 2011 – 7th extension of SAFETEALU expires
Federal Fiscal Environment
HTF is Broke
$60
$40
20
17
20
15
20
13
20
11
-$20
20
09
$0
20
07
Billions
$20
-$40
-$60
-$80
Revenue
Outlays
Ending Balance
Federal Fiscal Environment
• Little/no apparent support for increasing
user fees
Infrastructure Needs Are Dramatic
Maintain Scenario
Improve Scenario
300
$262
250
2008 $ in Billions
$214
200
150
$194
$189
Policy
Commission
C&P
$172
$134
100
50
0
C&P
Financing
Commission
Source: Report of the National Surface Transportation Infrastructure Financing Commission
Financing
Commission
Policy
Commission
Infrastructure Needs Dramatic in Michigan
Business
as Usual
Estimated
System
% of
Needs Met
MI
Transportation
Plan
$37 billion
$81 billion
46%
TF2
$2.3 billion
$7.2 billion
32%
Administration’s Proposal
• Obama Administration released broad
outline of reauthorization in February
– $551 billion over six years (2012-17)
• This includes $50 billion in up front funding
– Assumes $231 billion in new revenue
Administration’s Proposal
SAFETEA-LU
Admin
Proposal
Percent
Increase
Highways
$228 B
$336 B
48%
Transit
Safety
$53 B
$7 B
$119 B
$12 B
126%
87%
Rail
-
$53 B
-
Infrastructure
Bank
Total
-
$30 B
-
$286 B
$551 B
93%
Administration also proposed one-time funding of $2 billion
for TIGER grants and $3 billion for airports
Administration’s Proposal
• Significant program consolidation to
result in:
– 6 highway programs
– 6 transit programs
– 2 rail programs
• Expands HTF to TTF and include
passenger rail
Administration’s Highway Proposal
(Billions)
2012-17 Annual Avg.
National Highway
$253.3
$37.6*
Safety
$17.5
$2.9
Livable Communities
$27.5
$4.6
Research, Tech, and Ed.
$4.5
$0.8
Federal Allocation
$8.9
$1.5
$17.1
$2.9
$328.9
$50.2
Transportation Leadership
TOTAL
Administration’s Transit Proposal
(Billions)
2012-17 Annual Avg.
Formula Grants
$43.1
$7.2*
Bus & Rail State of Good Repair
$28.0
$4.7*
Expansion & Livable Communities
$19.6
$3.3*
$1.2
$0.2
$14.7
$2.4
$1.1
$0.2
$107.7
$17.9
Research & Technology Deployment
Transportation Leadership
Operations & Safety
TOTAL
Proposed Planning Changes
?
House Rule Change
• House procedural rules
• “Cut-as-you-go” instead of
PAYGO
• Easier to reduce
transportation spending
• More difficult to increase
revenue
• Impact on firewalls and
funding guarantees
House Budget Resolution
• Fiscal year 2012 budget resolution calls
for big cuts
• $30B per year from transportation
• Does not allow for a “reserve fund” to bring
in additional revenue for reauthorization
House Reauthorization Proposal
• Chairman Mica’s priorities:
– Stabilizing the HTF (spending w/in its means)
• $230 billion over six years
– Reform federal program
– Increase flexibility and accountability
– Maximize private funds leveraged
– Accelerate project delivery – 437 day plan
Senate Activity
• Agreement among transportation leaders
– Fund program at current levels
– Eliminate earmarks
– Consolidate programs
– Strengthen TIFIA
– Expedite project delivery
• Likely to be a two year bill
Alternative Scenarios
HTF Investments in Highways,
Transit, and Safety
Six Year Total
(2012- 2017)
Annual
Average
Administration Proposal
$467 billion
$77.8 billion
Senate Transportation
Leaders (current funding)
$339 billion
$56.5 billion
House Budget Resolution
$230 billion
$38.3 billion
Immediate Concern is FY 2012
• House budget and reauthorization plan
could:
– Reduce highway program by 30%
– Eliminate transit new starts
– Cut funding for Amtrak
• Impact to Michigan’s highway funding
depends on where reductions are made,
but estimated reduction ranges from $175
million to $360 million per year
Other Complicating Factors
• Congress has not been willing to
juggle transportation with other
priorities
– Federal budget deficit
– Trade Deals & TAA
– Appropriation bills
Questions?