INVESTING IN INFRASTRUCTURE: TRANSPORTATION GRA Annual Policy Conference July 28, 2009

Emilia Istrate, Senior Research Analyst, Brookings Institution Janet Oakley, Director of Policy & Government Relations, American Association of State Highway and Transportation Officials (AASHTO) William Millar, President, American Public Transportation Association (APTA) Panelists

Discuss how the American Recovery and Reinvestment Act has impacted the country’s transportation infrastructure needs and impacted the prognosis for new Federal transportation authorization legislation. Discuss key points of contention surrounding new Federal transportation bill and how those might be resolved. Contemplate how a new Federal transportation bill might affect state and local infrastructure needs and issues. Review the various options for addressing transportation funding needs at the federal, state and local level as well as likelihood of a major transportation finance overhaul. Purpose

29% of the nation’s bridges are either structurally deficient or functionally obsolete. More than 22% of citizens over age 65 have a transportation “disability”, i.e. they reduce their travel, need rides from others or limit driving to daytime; population over age 65 will comprise roughly 21% by 2050, or double today. About one-third of metropolitan growth since 1980 has been in rural counties on urban fringe. Transportation Facts

Of the $145 billion spent annually on highways and bridges, only 57% ($83 billion) is attributable to highway user charges. Federal and state gas tax growth reached a plateau in the late 1990s. Highway Trust Fund will reach a negative balance without prompt action by Congress. 39% of capital funding for transit comes from the federal government, 13.9% from states, 18.2% from local governments, 28% raised directly by transit systems. Transportation Facts

“The Intermodal Surface Transportation Efficiency Act of 1991…establishes a new vision for surface transportation in America...The (bill) will create jobs, reduce congestion, and rebuild our infrastructure. It will help maintain mobility. It will help state and local governments address environmental issues. Finally, it will ensure America's ability to compete in the global marketplace of the 21st Century.” – U.S. DOT Secretary Samuel Skinner Landmark Federal Transportation Legislation: ISTEA

Passed year after 1990 Clean Air Act and in many respects a response to that Act. Transit capital improvements are eligible for use under the STP program. Previous law only allowed the Federal-aid Urban Program funds to be used for transit capital. The metropolitan planning organization (MPO) is responsible for developing, in cooperation with the State and affected transit operators, a long-range transportation plan and a transportation improvement program (TIP)for the area. The planning process must now include additional considerations such as land use, intermodal connectivity and methods to enhance transit service. ISTEA – Special Features

 The Transportation Equity Act for the 21st Century (TEA- 21) was signed into law by President Clinton in June authorized highway, highway safety, transit and other surface transportation programs for the next 6 years.  Per USDOT, “TEA-21 builds on the initiatives established in ISTEA… (it) combines the continuation and improvement of current programs with new initiatives to meet the challenges of improving safety as traffic continues to increase at record levels, protecting and enhancing communities and the natural environment…and advancing America’s economic growth and competitiveness.” TEA-21

 The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was signed into law by President Bush in August 2005, authorized programs through  “With guaranteed funding for highways, highway safety, and public transportation totaling $244.1 billion, SAFETEA-LU represents the largest surface transportation investment in our Nation's history.”  SAFETEA-LU builds on the “firm foundation” of ISTEA and TEA-21. SAFETEA-LU

National Surface Transportation Policy and Revenue Study Commission created by SAFETEA-LU to “conduct a comprehensive study of the current condition and future needs of the surface transportation system.” 12 members, including USDOT secretary and appointees of leaders from both parties of Congress. Calls for increased expenditures from all levels of government, criticizes “TEA era” for lots of spending but little focus on results. “The Commission concludes that the current Federal surface transportation programs should not be ‘re- authorized’ in their current form. This New Beginning is the dawn of the third era in the modern history of the Federal surface transportation program.” The National Commission

 The National Surface Transportation Infrastructure Financing Commission authorized by SAFETEA-LU to analyze options and recommend changes for policymakers to consider in funding the national transportation system. Preliminary observations: System demands are outpacing investment. System maintenance can be so costly and necessary that it becomes difficult to address necessary expansion of the system. The fuel tax, which has been the key federal funding source for our system, is no longer sufficient at current rates. More direct user charges should be explored. Financing Commission

 House Transportation and Infrastructure Committee Chairman James Oberstar introduced the Surface Transportation Authorization Act of 2009 in June.  Provides funding of $450 billion over six years. Includes: $337.4 billion for highway construction investment, including at least $100 billion for the National Highway System (including the Interstate System) and the nation’s bridges. $87.6 billion from the Mass Transit Account of the Highway Trust Fund and $12.2 billion from the General Fund for public transit investment. $50 billion for Metropolitan Mobility and Access. $50 billion to develop 11 authorized high-speed rail corridors linking major metropolitan regions in the United States. Latest Developments

 Obama Administration proposed an 18-month extension of SAFETEA-LU to “provide Congress the time it needs to fully deliberate the direction of America's transportation priorities.”  Will be paid for by borrowing $20 billion from the general fund, as opposed to a gas tax increase or other supplementary funding approach.  Oberstar and ranking Republican John Mica oppose the delay, arguing that the Administration’s “business as usual approach” will harm states by freezing long-range planning and simply delay the problem unnecessarily.  Senate leaders support an 18-month extension; bill marked up by Senate Environment/Public Works and Banking Committees on July 23. Latest Developments