While the design and construction community has been offering proposals promoting comprehensive infrastructure initiatives (see, CIRT’s Strategic Vision on Infrastructure), it has also urged passage of more traditional vehicles like a transportation bill. To that end, before leaving on summer recess the Senate Environment & Public Works (EPW) Committee approved a five-year surface transportation reauthorization bill. While the overall proposal ramps-up spending, it does not offer any increase in user-tax revenue. As a result, the bill calls for spending $287 billion over five years, a 28 percent increase over the previous authorization without any clear revenue enhancements or increases. [To be clear, in the Senate the Finance Committee is where tax increases must come from; but, it has been no sign of any coordination between EPW and Finance on this subject, nor have any serious revenue proposals been floated or discussed to date].
As in most massive pieces of legislation, the bill is a combination of improvements, non-starters, and missing elements. The Reasons Foundation points out the EPW Committee’s proposal suffers from these same maladies. As they note:
(a) Good Elements. The bill: (1) expands current federal efforts to encourage states (and groups of states) to do pilot programs testing how to implement mileage-based user fees (MBUFs) to replace declining fuel tax revenues in coming decades; (2) it includes innovative financing, expands the categories of projects eligible for TIFIA loans and includes some attempts at much-needed streamlining; (3) a section would codify Exec. Order 13807, which established the One Federal Decision program to speed federal approvals for major projects; (4) another would provide a new congestion relief program for urban areas, offering grants for projects that would toll all lanes of a congested Interstate (Pricing required to be consistent with the Interstate Commerce Clause of the U.S. Constitution); and finally, (5) Section 1507 would require states that do Design Build Finance Operate Maintain (DBFOM) public-private partnership (P3) projects to report to the United State Department of Transportation (US DOT) on the terms of the deal, which sounds harmless to me, and the increased transparency could reduce the hesitancy of some legislatures and DOTs to embrace this important procurement method.
(b) Not So Good Elements. The bill: continues the ongoing trend of making the federal highway and transit program ever-more detailed and focused on every level of government (federal, state and local), disregarding the sensible principle of allowing each jurisdictional level to concentrate and/or be left to do what it prioritizes and is best suited to do. For example, it (a) increases spending on “transportation alternatives” that draw money away from basic needs to fund such options such as – local infrastructure for bikeways, recreational trails, sidewalks, etc. including expansion of the “Safe Routes to School” program for high schools; (b) would divert highway user tax revenue to waterway projects (Sec. 1115, the Congestion Mitigation and Air Quality (CMAQ) program would now include projects to modernize a lock, dam, or marine highway, and the new National Highway Freight Program (NHFP) would be able to do likewise); and (c) the new climate-change provisions in Sec. 1401, there are grants for EV recharging and alternative fuel services along designated “alternative fuel corridors,” but none are located on the Interstates, where these services are most needed.
(c) Missing Elements: The bill does not include: (a) Private Activity Bonds (PABs) -- the $15 billion cap that Congress legislated over a decade ago is nearly used up, and the program is no longer an experiment. The cap should be removed, making surface transportation PABs comparable to those used for other infrastructure, such as airports and seaport facilities, for which there is no cap. [In addition, as recommended last year by the White House infrastructure proposal, PABs should be made applicable to P3s to rebuild and modernize existing infrastructure, rather than just for new (greenfield) P3 projects]. (Note: the Senate Finance Committee, may take this up as part of its jurisdiction); (b) Tolling flexibility: With nearly a dozen states discussing or considering toll-financed projects to rebuild aging Interstate highways and bridges, removing the 1956 ban on using toll financing on these facilities is missing, and (c) P3 incentives: Both the White House proposal and ARTBA’s recommendations for the 2020 reauthorization bill include various federal incentives for states to enact workable P3 enabling acts and to actually use them for much-needed projects.
