Streetsblog New York City

Rep. John Mica’s proposed transportation bill would take a machete to federal transportation spending, cutting overall transportation funding by a third and entirely eliminating dedicated funds for pedestrian and bike infrastructure.

In New York, the effects would be especially dire. Statewide, the total cuts would inch up to 37 percent, according to calculations by the Democrat-controlled Senate Banking Committee (thanks to Ya-Ting Liu at the Tri-State Transportation Campaign for compiling these numbers).

While nationwide, Mica would maintain the 80/20 split between highway and transit spending, New York and its neighbors flex some of their highway dollars to support transit. In the tri-state region, cuts to federal “highway” spending translate into cuts to transit spending as well. Under the Mica proposal, federal highway spending in New York would fall by $568 million a year from current levels, while transit spending would be cut by $646 million. Those austerity levels would be locked in for six years.

At a time when the MTA is already facing a $10 billion deficit in its capital plan through 2014, those cuts could be devastating.

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When President Obama announced his push for a long-term transportation bill on Monday, he introduced a report by his Council of Economic Advisors and the Treasury Department analyzing the economic impact of infrastructure investment [PDF]. At face value, the numbers in the president’s plan might not look so impressive. It calls for rebuilding 150,000 miles of roads, laying and maintaining 4,000 miles of railways, and the restoration of 150 miles of airport runways.

If you’re hoping for an all-out push for sustainable transportation and livable streets, you may be wondering whether this signifies much of a change to the highway-centric status quo. Look at the underlying message, and it does.

The headline numbers sit on top of a broad strategy that groups including Transportation for America, the Environmental Defense Fund, the Transportation Equity Network, and U.S. PIRG have all applauded. There are still few specifics in the administration’s plan, but here’s a quick cheat sheet to the elements of the report that transportation reformers find so encouraging.

It emphasizes the need to provide American families with a range of transportation options, not just driving.

The report calls attention to the heavy burden that high transportation costs place on the middle class. “The average American family spends more than $8,600 a year on transportation, one-third more than they spend on food,” it states, pointing out that the wealthiest 10 percent spend only 9 percent of their income on transportation, while everyone else shells out 16 percent of our income to move from point A to point B.

The report links high transportation costs to car dependence and makes the case for increasing access to transit and other transportation options, asserting that “[t]his burden is due in large part to the lack of alternatives to expensive and often congested automobile travel. Multi-modal transportation investments are critical to get American families moving again without wasting their time and their money sitting in traffic.”

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At a networking event for young transportation professionals yesterday, a member of the Department of Transportation’s policy team offered insight into the Obama administration’s strategy as it attempts to reset the nation’s transportation polices.

Federal lawmakers usually set transportation policy by authorizing a major spending bill every five or six years. The last of these bills — known as SAFETEA-LU — expired in 2009, but lawmakers’ efforts to agree on a reauthorization bill have languished in Congressional committees due to disagreements about how to pay for it.

Since SAFETEA-LU expired, Congress has passed stopgap spending measures to keep the system functioning; however, the lack of a coherent, long-term vision has left state and city transportation departments adrift and has made it challenging for them to plan strategically.

On Labor Day, President Obama put transportation near the top of his agenda by calling on Congress to tackle stagnant job growth by repairing and upgrading infrastructure. He asked Congress to ramp up investment in roads and rail, create a federal infrastructure bank that would help fund large and complex projects, reform the Balkanized structure of federal transportation spending programs, and make the nation’s transportation system safer and more livable. Advocates for shifting away from the highway-centric effects of current federal policy were encouraged by Obama’s use of the word “reform,” and the lack of any mention of expanding highways.

However, in many ways, Obama’s Labor Day proposal lacked specificity. Most notably, it offered little insight into how the administration expects Congress to pay for the next reauthorization. At yesterday’s event, the deputy assistant secretary for transportation policy at U.S. DOT, Beth Osborne, made clear the lack of specificity was by design. “I’ll be very honest. There aren’t a lot of details beneath what we put out to the public,” she said. “We really want to go at this in cooperation with Congress.”

And that process, she warned, won’t necessarily be a smooth one. While the last several authorizations have had plenty of funding, the program is broke this time around due to the dwindling power of the gas tax. “It’s not going to be as easy, but just because it’s hard doesn’t mean it’s not worth doing,” she said.

One of the administration’s priorities, she noted, will be to improve the livability of the nation’s cities and towns. Critics in Washington, she said, have told her that livability is hard to define, but that the concept has proven easy enough to grasp for people outside of politics:

Interestingly, I really only hear that inside the Beltway. When you travel with the Secretary nobody thinks it’s hard to define and nobody needs it defined. They know exactly what we’re talking about. And it is remarkable. This is not a regional thing, this is not a big community versus small community thing. People really get what you’re talking about. What we’re talking about with livability is a community that has transportation choices, different types of housing, and destinations close to your home. That’s it. Not a terribly complex concept.

At an event billed as a “town hall” held at USDOT headquarters yesterday, top department officials answered questions about the future of the nation’s road, rail, bus, and bike networks -- even as the prospects of passing a comprehensive transportation reauthorization bill anytime this year appear as dim as ever. Already, reauthorization of the transportation bill is nearly a year overdue, as lawmakers have failed to muster the will to pay for it.

A plenary session that focused on the Mid-Atlantic region prior to the town hall provided a few glimpses of how the continued legislative deadlock is plaguing local agencies and preventing the evolution of transportation planning beyond the car-based status quo.

The head of the District Department of Transportation, Gabe Klein, called the current moment one of the scariest times in transportation history. He warned that lawmakers have difficult and uncomfortable decisions ahead about how to pay for the reauthorization bill.

Klein emphasized the need for diversified sources of funding for transportation investment, despite the political challenges. He noted, for example, that local jurisdictions, like DC, should have the latitude to explore congestion pricing as a way to raise revenue.

During the same panel, Richard Sarles, the interim general manager of the Washington Metropolitan Area Transit Authority (WMATA) explained that his agency is spending much of its funding on efforts to improve the safety of its system after a catastrophic Metro collision last summer. With little clarity about what the future holds, Sarles warned that there simply aren’t funds available to address large expected increases in ridership on city transit systems in the coming years.

Reform-minded lawmakers, most notably House Transportation and Infrastructure Chair Jim Oberstar (D-MN), have made it an urgent priority to reauthorize the 2005 Safe, Accountable, Flexible Efficient Transportation Equity Act (SAFETEA-LU, or, more commonly, the transportation bill). But with revenues from the stagnant gas tax flagging, lawmakers can’t agree on how to raise the funds needed for the bill, and they’ve postponed dealing with the problem by passing a series of emergency extensions.

The frustration was evident among attendees at yesterday's conference. "There’s no innovation right now," said Faramarz Mokhtari, a planner at the Maryland-National Capital Park and Planning Commission. "The status quo is continuing."

The transit industry's leading D.C. lobbying outlet today joined the umbrella group for state DOTs and two major construction groups to protest the Senate climate bill's failure to set aside all of the revenue from its proposed new fuel fees for infrastructure projects -- specifically, to the cash-strapped highway trust fund that is generally split, 80-20, between roads and transit.

American Public Transportation Association (APTA) chief William Millar told reporters that while the local transit agencies he represents are "very supportive of legislation to address climate change and energy issues," the Senate bill's diversion of all but about $6 billion of its fuel revenues for purposes unrelated to transportation is a matter of serious concern.

"This is one of those cases where we really can't even talk about the merits of any portion of the bill because the fundamental position is flawed," Millar said.

Referring to the legislation's promise of funding for the clean transport and land-use grants known as "CLEAN TEA" and TIGER, he added, "Many of those are very good ideas … but you can't make those ideas work if there's no significant funding to make them work, and this bill would aggravate the funding situation for public transit."

John Horsley, executive director of the American Association of State Highway and Transportation Officials (AASHTO), was more direct in outlining where state DOTs want to see the Senate climate bill's fuel revenues directed. "Channel[ing] every dollar through the highway trust fund," he said, would help the industry break through a congressional stalemate and win passage of a new six-year federal transport bill.

Stephen Sandherr, CEO of the Associated General Contractors, and Pete Ruane, president of the American Road and Transportation Builders Association, echoed Horsley's interpretation of the new fuel fees in the climate bill -- which are imposed on oil companies and refiners but are likely to be passed along through higher gas prices -- as a de facto "user fee" on drivers.

The climate proposal, Ruane said, does "nothing more than finance a lot of goals, which are enviable in part, on the backs of transportation users."

It remains to be seen whether the transportation industry's combative stance against the partial diversion of the bill's transportation revenue, billed as a "call for a rewrite" of the climate legislation, will help force senators into restructuring the measure. Ruane said he "like[s] the odds" facing the four groups.

But one congressional source was befuddled by APTA's move to "bit[e] the hand that feeds them" by criticizing a climate bill that stands to give broad, lasting benefits to rail and bus systems.

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To a certain extent, hope springs eternal in federal transportation circles. Even as state DOTs and metropolitan planning organizations operate under the latest in a series of extensions of the 2005 law that governs road, transit, and bike-ped spending, few are willing to envision a future in which new legislation doesn't pass by next year.

After all, even the Obama administration -- which last spring called for an 18-month delay in taking up House transport committee chairman Jim Oberstar's (D-MN) infrastructure measure -- has signaled a willingness to begin talks on broader policy changes by next spring.

But that outcome assumes that Congress and the White House can reach an agreement by early 2011 on how to find as much as $200 billion to pay for a significant six-year investment in infrastructure.

Right now there remains only two practical options on the table: paying for a new transport bill with general Treasury money, which would amount to deficit spending at a time when White House aides profess mounting concerns about the nation's red ink; and raising the federal gas tax, which the president has flatly ruled out.

What would the worst-case scenario look like? It is rarely mentioned on the record by Washington infrastructure watchers, but former Transportation Secretary James Burnley IV outlined it neatly in an interview this week with D.C. Velocity:

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Eight Democrats yesterday joined nearly the entire transportation universe, from road-builders to transit advocates, to warn the three Senate authors of a new climate bill against raising gas taxes without using the money for infrastructure. Their message, translated from the often impenetrable language of Washington: Imposing new fuel fees that are not routed to transport projects could torpedo the next long-term federal bill -- which is already on life support.

The climate measure being crafted by Sens. John Kerry (D-MA), Lindsey Graham (R-SC), and Joseph Lieberman (I-CT) is not expected to hit the street until Earth Day later this month. But with Graham indicating that a significant portion of the legislation's new gas fee would be repaid to consumers via rebates, the group of eight senators questioned the effectiveness of adding new fuel charges without attempting to make the nation's existing infrastructure more efficient.

"While we support your work to develop comprehensive legislation," the eight Democratic senators wrote to Kerry, Graham, and Lieberman, "we are concerned that your approach may not result in sufficient emission or oil consumption reductions from the transportation sector and may inadvertently hinder our efforts to pass a surface transportation authorization bill this year."

Many details of the Kerry-Graham-Lieberman approach remain unclear, including how much of the revenue raised by the new fuel fee would be rebated back to taxpayers rather than set aside for other uses. But one Hill source familiar with the issue said that the very act of raising gas taxes for non-transportation purposes would be a very bad sign for future federal reform efforts.

"Raising the gas tax and not putting it towards transportation will be debilitating to the transportation bill," the source told Streetsblog Capitol Hill. "At what point is it less debilitating than not? That's hard to say ... We're not going to raise the gas tax 15, 20 cents through this linked fee and turn around six months later to [raise it to] pay for transportation. It's just not going to happen."

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For several weeks last fall, as members of the House infrastructure committee pushed for passage of a new six-year federal transportation bill as a strategy to rouse the economy from recession, a proposal to pay for the legislation with a small tax on oil futures trades attracted a healthy crop of Democratic cosponsors and some vocal pushback from Wall Street.

But the tax proposal has since lost steam in Washington transportation debate, getting little notice from lawmakers who strongly support taking up a new six-year infrastructure bill in 2010 even as it remains a magnet for progressives looking to rein in financial industry excesses.

What happened to the idea of using an oil futures transaction fee -- set at 0.02 percent in a December bill offered by Rep. Pete DeFazio (D-OR) and Sen. Tom Harkin (D-IA) -- to fund long-term federal transportation projects?

Jim Berard, spokesman for the House infrastructure panel, explained in an interview late last week that the Congressional Budget Office (CBO) had conducted a preliminary analysis that found the transaction tax would raise less money than lawmakers had initially hoped. The reason for the lower-than-expected revenue, Berard said, was the rationale hinted at by House Speaker Nancy Pelosi (D-CA) in November: a tax levied only on domestic futures would end up pushing trades overseas.

"What sounded like a really good solution six months ago turned out to be not as good as we thought, and just not as viable," Berard told Streetsblog Capitol Hill.

That leaves federal transportation policymakers essentially where they were at this time last year, searching for a politically feasible stand-in for a gas tax increase that the White House and congressional Democratic leaders have both ruled out for now.

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House infrastructure committee chairman Jim Oberstar (D-MN), facing steep political odds in his push to pass a new six-year federal transportation bill this year, has begun to pitch an outside-the-box solution to the financing shortfall that is still stalling congressional action: Treasury bonds.

Oberstar's proposal would plug the hole in anticipated highway trust fund revenue for the next transport bill with top-rated Treasury debt securities. Those bonds, the Minnesotan explained on Friday, would "be repaid with revenues from the highway trust fund out into the future. And we would delay the repayment for the first perhaps four years, giving the economy time to recover."

In order to repay the Treasury for its up-front bond issue, Congress would ultimately need to raise the gas tax -- a step lawmakers have been unwilling to take since 1993, and one that the White House has ruled out for the time being.

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At an event in Minneapolis today, House transportation committee chairman Jim Oberstar (D-MN) announced his support for giving urban transit agencies more flexibility to spend federal transportation formula money on operating -- a change in the current law that has already won the backing of Transportation Secretary Ray LaHood but has split the transit industry.

Oberstar appeared at an event marking Minneapolis' move to join the National Association of City Transportation Officials (NACTO), founded 14 years ago by then-New York City Transportation Commissioner Elliot Sander to counterbalance the influence of state DOTs' voice in D.C., the American Association of State Highway and Transportation Officials.

Oberstar's specific remarks on transit operating aid were unavailable as of press time. But transport committee spokesman Jim Berard said the Minnesotan supported "in principle" the concept of allowing transit agencies from areas with populations greater than 200,000 to use their federal transportation formula grants on operating expenses.

Under current law, urban transit agencies are restricted to spending federal formula money on capital expenses, such as purchasing new rail cars or laying track for an expanded line.

Congress agreed last year to give transit officials the freedom to redirect 10 percent of their federal stimulus aid to operating budgets, underscoring that the change was a temporary response to the recession.

The American Public Transportation Association (APTA), the transit industry's chief lobbying group for more than a century, has opposed the use of formula grants for transit operating, preferring that already-scarce highway trust fund dollars be reserved for capital spending on rail and buses. APTA did not return a request for comment by press time on the growing support for changing the existing rules governing transit operating funds.

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