Obama, Foxx Press for Higher Transportation Funding; FAST Act Draws Caveats

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AASHTO Journal – 12/11/15

President Obama and U.S. Transportation Secretary Anthony Foxx urged Congress to find additional funds for infrastructure investments, as the widely praised FAST Act drew mixed reactions about what its funding levels will achieve for the nation’s surface transportation system.

A number of transportation investment advocates also said Congress needs to identify a sustainable source of new revenue for the Highway Trust Fund, something this legislation did not achieve as it relied on unrelated funding. Without sustainable revenue provisions, the trust fund will face looming shortfalls again as the money in this measure runs out.

The new law, formally the Fixing America’s Surface Transportation Act, has been lauded by states, transit agencies and passenger rail supporters for providing five years of program authority at higher funding levels. That assures enough long-term certainty about the federal support that state departments of transportation and others can now proceed with more long-term infrastructure projects.

However, even before signing the five-year FAST Act on Dec. 4, Obama issued a statement calling it an “important first step in the right direction” but adding that “we should also recognize that we still have work to do.”

He said Congress should pass something like his proposed “Grow America Act” that would increase highway, transit and rail funding considerably more than under the new law, “one that supports even more jobs and invests even more in our roads and highways.”

Foxx followed with a Fast Lane blog post that said: “We should celebrate this milestone, but members of Congress should also understand that more needs to be done and should strive to pass a bill like the Grow America Act.”

He said the FAST Act increases overall surface transportation funding by 11 percent over five years, while the administration’s plan would grow funding by 45 percent. The new law, said Foxx, “is a down-payment for building a 21st century transportation system, though it is still far short of the amount needed to reduce congestion on our roads and meet the increasing demands on our transportation systems.”

Some major industry groups have taken a similar position.

In a Dec. 2 letter to members of Congress as they neared votes to pass the bill, the U.S. Chamber of Commerce commended congressional leaders who negotiated a five-year bill that “provides meaningful certainty to states and communities across the country to begin to address the backlog of much-needed transportation and transit projects.”

But the Chamber also said “the FAST Act is an incomplete solution for addressing critical transit and surface transportation priories. Once the FAST Act is law, the Chamber urges Congress to undertake a rigorous examination of long term funding options to increase investment for America’s surface transportation program.”

House Transportation Chairman Bill Shuster, R-Pa., has said that once the FAST Act was signed into law he planned to quickly enlist stakeholders to begindiscussions toward agreeing on sustainable funding measures for the Highway Trust Fund.

His ranking member, Peter DeFazio, D-Ore., emphasizes that the FAST Act includes a provision to automatically allocate any additional funding Congress might find for the trust fund over its five years, without needing new authorizing legislation.

At the American Road & Transportation Builders Association, CEO Pete Ruane said some good things about the new law are that it will “help maintain employment, assists the public and private sectors to plan ahead, and it will speed up project delivery.”

But he was sharply critical about its funding levels. “Congress and the Obama administration also fell short in providing the level of investment that would result in demonstrable improvement in the overall physical conditions, performance and safety of the system,” Ruane said. “At best, we will be treading water.”

Officials at the American Association of State Highway and Transportation have emphasized the certainty and stability the long-term bill provides state DOTs, and the increased funding after a long period of flat-level extensions.

An AASHTO staff analysis shows the bill’s highway programs will see an overall funding increase of about 5 percent the first year and 2 percent annually after that. But that analysis also points to a sizable cut looming for state DOTs’ highway funding in the final year of the FAST Act.

As a longer-term budgeting provision, the law locks in a $7.6 billion rescission of unobligated contract authority on July 1, 2020, and requires the state agencies to apply their cuts proportionally across certain program categories while exempting others.

Unless that provision is removed in coming years, state DOTs will face contract authority cuts midway through the summer construction of 2020, said Joung Lee, AASHTO’s policy director, and that could severely impact their entire fifthyear of project planning under the bill.

“If this were to happen, at best there would be a major reduction in states’ flexibility to manage their highway programs; at worst, it could lead to cuts in federal funding for vital projects all over the country” for that year, Lee said.