Transcript Slide 1

Reauthorization of Federal
Transportation Programs:
Impact on the States
CSG 2009 Annual Conference
La Quinta, California
Janet Oakley, AASHTO
November 12, 2009
Presentation Overview
• Provide a status update on today’s “crisis
environment” and the extension of current
surface transportation programs
• Offer views on the future of transportation
infrastructure, the role of the Federal
Government, and the House T & I Committee
authorization bill
• Discuss some of the critical issues that will
affect the direction of programs and funding
Today’s Crisis
In Transportation Funding
• FY 2008 Highway Trust Fund shortfall = $8 billion transfer of
general funds
• FY 2009 Highway Trust Fund shortfall = $7 billion transfer of
general funds
• FY 2009 Contract Authority Rescissions = $8.7 billion +
$3.15 billion
• FY 2010 Continuing Resolution = FY 2009 levels
• FY 2010 Program Extension = new contract authority,
extension of HTF + ARRA
• FY 2010 Highway Trust Fund shortfall = $6 billion
• FY 2011 = Need for Additional/New Revenue to Sustain
Program for the next six years.
Continuing Resolution
Program Extension
 1st CR extended Highway and Transit Program
31 days – but 33% below current levels
 2nd CR extends Highway and Transit Program
through December 18 – also at the reduced level
 Next extension –3 months, 6 months, 18 months,
2 years??
 Funding options – front-load with general funds,
index gas tax, increase gas tax, bonds??
Transportation and ARRA
• Delivered on Jobs,
jobs, jobs
• Bids – 5% - 40% under
estimates
• Periodic Reporting of
economic impact of spending
• Maintenance of effort
• Equity – geographic,
economic, DBE
• Local public agency project
delivery
The Future of Transportation
• We are at a critical
crossroads in
transportation history
• Available resources are
at a low point
• The nation as a whole
has been investing only
about forty percent of
what is necessary to
meet needs
• Needs on all fronts are
growing
President Obama’s Inaugural
Address, January 20, 2009
“The state of the
economy calls for
action…We will act,
not only to create new
jobs, but to lay the
foundation for new
growth. We will build
the roads and
bridges, that bind us
together.”
Reduced Highway and Transit Program Levels
Highways
Transit
50
45
41.0
40
($ billions)
35
43.1
42.8
37.0
36.3
34.2
30
25
19.8
20
15
10
8.3
8.6
2004
2005
9.9
9.0
2006
2007
9.5
10.3
10.4
5
0
2008
2009
Note: Baseline projection from FY 2010 Budget using CBO Summer 2009 baseline receipts estimates
2010
Decline in Purchasing Power of Motor Fuel Taxes
(Based on Inflation since 1993)
100
90
80
60
50
40
30
20
10
Year
15
20
14
20
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
0
19
Percentage
70
Funding Options
• Accept an 54% reduction in Federal Aid and
reduce each state’s transportation program
by amount of cutback.
• Accept 54% reduction in Federal Aid and
increase state taxes to make up for Federal
cutback.
• Reject Cutback and Tell Congress to Increase
Revenues Enough to Sustain the Federal
Program at Levels Needed.
In a nutshell
• We are in a crisis mode and immediate actions are
required
• The Highway Trust Fund – both the Highway and Transit
Accounts – are running out of money
• Needs continue to grow while inflation has dramatically
eroded purchasing power
• The need for job creation may help change the political
climate for user fees increases
The Big Picture
Federal Transportation Program
 What needs to be
done?
 How much funding is
needed?
 For what?
 What is the Federal
Role in surface
transportation for the
future?
 How do we best
generate the
necessary revenue?
What Needs to Be Done and
What Will It Cost?
AASHTO Bottom Line Report:
Trends
• VMT increase
 2.4 trillion miles in 1993
 3+ trillion miles in 2007
 2.9 trillion miles currently
• Population increase
 305 million in 2005
 420+ million 2050
• Truck freight expected to increase by 100%
by 2030
AASHTO Bottom Line Report:
Needs
• Highway Investment Requirements
 Passenger vehicle demand parallels population growth (1%
per year)
 Truck freight demand parallels economic growth (2 to 3% per
year)
 Growth in VMT will at least equal population growth
• Current spending is $78 billion
Growth Rate of VMT Per
Year
Cost to Improve Highways
(2006 Dollars)
1.4 percent
$166 billion
1.0 percent
$132 billion
AASHTO Bottom Line Report:
Needs
• Transit Investment Requirements
 In 2006 Annual Passenger Miles reached 52.15 billion
 Between 1995 and 2007, ridership increased from 7.8
billion to 10.3 billion trips
• Current spending is $13.3 billion
Annual Growth in Ridership
Cost to Improve System
Performance and Condition
(2006 Dollars)
2.4 percent
3.5 percent
$46 billion
$59 billion
Surface Transportation
Critical Issues
• Climate Change &
Energy
• Preservation
• Congestion
• Sustainability
• Livability/“Choice”
• Sea change in views on
investments
• Some groups opposed
to new highway
investment
• General view that the
programs are broken
and need much greater
accountability
AASHTO Goals for the Next
Authorization
• Program Structure
and Process Reform
• Restructure Program
to directly address
National Objectives
• Accountability for
Results
• Multimodal solutions
19
AASHTO: Program levels needed to
restore program purchasing power
2010-2015
•
•
•
•
•
Highways
Transit
Freight*
Intercity Passenger Rail*
Total
*(Sources outside Highway Trust Fund)
$375 billion
$ 93 billion
$ 42 billion
$ 35 billion
$545 billion
House Surface Transportation
Authorization Act of 2009
20 Areas of Agreement
• Overall Funding
• Intercity Passenger Rail
Funding
• Increase Transit
Funding
• Increase Safety
Funding
• Refocus, consolidate &
Streamline Highway
Programs
• Freight Corridor
Coalitions
• Projects of National
Significance
• Establish National
Objectives &
Collaboratively Determine
Performance Measures
• States and MPOs set
GHG Reduction Targets
STAA Reform Focus
• New Program Eligibility
and Performance
Requirements +
• New Distribution
Formulas and
Criteria?? (Maybe) +
• New Plans, Models,
Methodologies +
• Performance Targets,
Monitoring, Measuring,
Reporting
=
New and
Expanded Data
Collection,
Monitoring,
Analyses,
Reporting
STAA of 2009
•
•
•
•
•
Formula
Critical Asset Investment
Program
Highway Safety
Improvement Program
Surface Transportation
Program
CMAQ
Freight Improvement
Program
Discretionary
• Metropolitan Mobility
• Projects of National
Significance
STAA of 2009
• Specific authorizations are not included in the
bill nor are the apportionment formulas
• While the top line numbers are in the bill there is
no specific breakdown by category and no
formulas or runs that would show state shares or
return on contributions
• There is no revenue title to be bill yet
STAA of 2009: Funding
$500 Billion
$337.4 billion for Highways
 $100 billion for Capital
Asset Improvement
(NHS, IM, Bridge)
 $50 billion for
Metropolitan Mobility and
Access (MMA)
 $25 billion for Projects of
National Significance
 $162.4 billion for other
FHWA-administered
programs (e.g. Highway
Safety Improvement,
Surface Transportation,
CMAQ, Freight, etc)
$99.8 billion transit
 $87.6 billion from HTF
 HTF share was 15.2% in
SAFETEA-LU; it is
increased to 19.5% in
STAA
 $12.2 billion from GF
 $50 billion high speed rail
corridors
 $12.6 billion Motor Carrier
Safety
 $50 billion High Speed
Rail
FUNDING
SAFETEA-LU
(6 Years)
STAA (6 Years)
Increase
$6.2 billion
$12.6 billion
100%
n/a
$50 billion
n/a
$52.7 billion
$99.8 billion
89%
n/a
$124.8 billion
137%
$227.5
billion
$287.4 billion
26%
If MM @ 50% for Highways
n/a
$312.5 billion
37%
If MM @ 100% for Highways
n/a
$337.5 billion
48%
$286.4
billion
$450 billion
57%
Category
Safety
Metro Mobility (Mode Neutral)
Transit
If MM @ 50% for Transit
Highways (Assumes 100% of
PNS fund highways)
TOTAL
STAA of 2009
Issues
• Proportionate Funding Increases
in Highway and Transit
• Address Capacity in Addition to Preservation
• Distribution of funds to
Rural and Urban Areas
• Increased Revenues
• Performance – Objectives, Measures and
Targets
STAA of 2009
Issues
• Shifts Decision making from States to MPOs
• Shifts the Program from a federally-funded,
state-administered program to a federallyfunded and administered program
• Creates New Planning Requirements
• Creates New Climate Change Planning
Requirements
• Requires the Planning and Programming
Process to become Performance-Based and
Outcome-Driven
How do we best generate the
necessary revenue?
Where to get the revenue needed?
Current revenue would not even support the
SAFETEA-LU program level
To support a $450 billion Program
• $250 billion from current revenue sources
• At least another $140 billion needed in new revenues
• Options
 Increase fuel taxes
 Consider an oil per barrel tax (opposed by such groups as the U.S.
Chamber)
 Bond for the interim period to enhance revenue or use some other
borrowing method
 Freight Fees
 Tolls & Public Private Partnerships
 Front Loading Option
Current State of Play
• House Extension (HR
3617)
 Duration: 3 months (to 31
December 2009)
 Maintains FY 2009 prerescission spending level $13.144 billion; $10.735
billion for FHWA
 No repeal of $8.708 billion
rescission of contract
authority
 Passed House
• Senate Extension
 Duration: 6 months (to 30
April 2010)
 Maintains FY 2009 prerescission spending level
 Restores $8.708 billion in
contract authority
 “Hot lining” for unanimous
consent failed
Current State of Play
Now Operating under a 2nd Continuing
Resolution (HR 2996)
Duration: 1 ½ months (to 18 December 2009)
Provides FY 2009 POST-rescission spending
level – 33 percent below current levels or
$1.02 billion per month and $2.6 billion to date
No restoration of rescinded $8.708 billion
contract authority
Current State of Play:
Administration
From Down Payment on Reform to Jobs Bill
 Duration: From 18 months to 2 years, 3 years
 From $20 billion General Fund transfer to Front
Loaded General Funds ($80 billion??)
 Policy Quid Pro Quos
 Down
Payment on Reform
 Sustainability/Livability Fund
 Contract Authority/Firewalls !!!
Current State of Play
• There is great uncertainty right now
• It is important to pass the six-year
authorization bill soon, as state DOTs and
contractors depend on long-term
investment time horizons
• Any action should not reverse the
progress made through the stimulus
legislation
Political Roadblocks Ahead?
•
•
•
•
No New Taxes
“NAAH” = Never Again Another New Highway
Proportionately less funding for highways
Program shift from rural areas and states to
metropolitan areas and urban states
• Management shift from a federally-funded, stateadministered program to a federally-funded and
administered program
• Need for a practical and workable approach to
reform and accountability
The future of Surface Transportation
Questions?
Janet Oakley
[email protected]
202-624-3698