Transportation Directions: Where Are We Heading? (Jack Basso) - ULI Fall Meeting 102611

Jack Basso
American Association of State Highway and Transportation Officials
PRESENTATION FOR THE URBAN LAND INSTITUTE FALL MEETING FEDERAL SURFACE TRANSPORTATION AUTHORIZATION AND FUNDING

AGENDA
The status and expectations for reauthorization
Status of the House and Senate progress on reauthorization
U.S. DOT: where would the Administration like to go?
Funding issues
P3s who and what?

Discussion Topics
America at a crossroads in transportation
The current climate
Status of reauthorization
The Federal budget and revenue is a driving force in future decisions on transportation funding
The financial backbone of the Federal highway and transit programs is in critical condition
Key questions affecting funding:
What is the Federal government’s role going to be in the future?
How will the Federal government best generate the required revenue for investment?

The Current Climate:
Discussing the Issues

The Current Climate
Currently the Federal Highway and Transit programs are operating on a short-term extension
The Administration has outlined a long-term reauthorization proposal with the budget release in February 2011
However, they have no revenue options identified
The Highway Trust Fund has required Federal General Fund supplements
The President called for immediate action to extend the surface transportation programs and has offered a jobs proposal including funding for infrastructure for job creation
There is no support for increasing user fees (gas tax)

The View From Congress
Facing difficult choices
Transportation and Infrastructure Committee of the House of Representatives has developed an outline of the new legislation
The Senate counterpart (EPW) has also released an outline but continues to look for additional revenue
Budget cuts are the order of the day
The road ahead is at best unclear

The Administration’s Views
The Administration called for a $550 billion program in the budget released last February
However, no revenue options were forthcoming
No bill has been sent to Congress
The Secretary ahs just called for action on a long-term bill and the next few months will be critical

The Scenarios
The Dooms day option
Fund the program long-term for six years 35 percent cut in funding
The Two year Fix
Authorize the program for two years at current funding levels: requires $12 billion in new revenue
The Big Deal
Do a full blown bill at current funding with major policy changes: requires $75 billion in new revenue

Where We Are Now
Congress acted to keep the Trust Fund Solvent
September 2008: $8.017 billion General Fund transfer to the Highway Trust Fund
August 2009: $7 billion General Fund transfer to the Highway Trust Fund
September 30, 2009: SAFETEA-LU expired
March 1, 2010: Highway Trust Fund shutdown for two days
March 18, 2010 : $19.5 billion in foregone interest payments credited to the Highway Trust Fund
December 31, 2010 : Current SAFETEA-LU extension expires
Fiscal Year 2012 : Highway Trust Fund projected to become insolvent

Actual Estimated

Future Needs and Funding Options

Needs
Nationally, meeting only about 1/3 of roughly $200 billion required each year to maintain and improve the system
At federal level, also meeting only about 1/3 of needs – we face a $400 billion federal funding gap over next 6 years under current policies and revenues

Some Possible Revenue Sources
Categories
Direct revenue-user fees and general tax revenue
Includes a variety of transportation related fees
Bonding and credit programs
Includes tolls and special taxes
PublicPrivate partnerships

WHERE THE STATES STAND
The States are operating on an extension at current funding levels
The Congress is moving on the appropriations front and a cut of 35 percent could happen
This uncertainty will cause the States to act more carefully
This could slow things down in the spring when the numbers are settled.

Future Revenue Collection
The current U.S system relies on fuel taxes
We have seen a marked decline in revenues
Two National Commissions have called for short and long-term solutions
VMT collection systems have come to the forefront of options to consider

Legislative Principles
Maintain the current federal and state shares for highway and transit capital programs.
Eliminate or drastically limit earmarking in federal transportation programs.
Develop policies that support maximum flexibility to allow for use of both conventional and innovative funding and financing tools.

PublicPrivate Partnerships
Innovative Financing is playing a major funding gap role
Tolling and concessions
TIFIA Funding
GARVEE Bonds
Private Activity Bonds
State Infrastructure Banks

Summary Considerations
We are at a crossroad
Congress and the Administration face difficult choices
State and local governments will be affected by funding choices
The nation will either benefit from our actions, or be changed in negative ways
The future is really now

QUESTIONS ?
Jack Basso
Email: jbasso@aashto.org
Phone: +1-202-624-3508

Transportation Directions: Where Are We Heading? (Jack Basso) - ULI Fall Meeting 102611

by Virtual ULI on Nov 08, 2011

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Transportation Directions: Where Are We Heading? (Jack Basso) - ULI Fall Meeting 102611 Presentation Transcript