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Sen. Patty Murray Increases Transportation Investment in 2014 Budget

So, right now you’re thinking, “God save me, not another post about the budget!”

Sen. Patty Murray proposes $100 billion for transportation in her FY 2014 budget. Photo: Puget Sound Business Journal/Kent Hoover

And you’re to be forgiven. There are two versions of the FY 2013 budget out there right now (House and Senate), for a year that’s half over. There are the budget cuts from the sequester that everyone’s still waiting to feel the full impact of. Rep. Paul Ryan, chair of the Budget Committee, put out his FY 2014 blueprint Tuesday. And Wednesday, Senate Budget Committee Chair Patty Murray (D-WA) rolled out her budget proposal. Considering how dysfunctional every single one of these budget processes is, it’s no wonder we plug our ears at more budget news.

But there is a silver lining: Murray’s budget, which her committee approved yesterday, contains a $100 billion “targeted jobs and infrastructure package” that would focus on transportation.

It includes $50 billion to create jobs repairing “our nation’s highest priority deteriorating
transportation infrastructure” — fixing roads, bridges, and airports, and also “updating”
mass transit systems, which could mean more than just state of good repair. She notes that a 21st century transportation system includes “road projects that make room for bicyclists and pedestrians, bridge projects that include transit as well as cars and trucks, and regional plans that require multiple jurisdictions to work together.” She also mentions that transit is essential, as “building more roads alone will not solve the nation’s congestion challenge.”

Murray’s proposal also creates an infrastructure bank to leverage private sector investment, seeded at $10 billion, as Sens. Frank Lautenberg and Jay Rockefeller recently proposed, and as former Sens. John Kerry and Kay Bailey Hutchison had also proposed.

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Rockefeller, Lautenberg Re-Introduce Infrastructure Bank Bill in Senate

These two men are serious about creating an infrastructure bank before they leave office.

Sen. Jay Rockefeller wants to create an infrastructure fund before he leaves office in 2015. Photo: Sen. Jay Rockefeller's flickr stream

Sens. Jay Rockefeller (D-WV) and Frank Lautenberg (D-NJ) — both titans of the Commerce Committee, both retiring in 2015 — yesterday re-introduced legislation to create such a bank. Their previous bill died at the end of the last Congressional session.

That bill, introduced in May 2011, never went anywhere — but then again, it wasn’t really meant to. It was intended to be rolled into a surface transportation reauthorization, but MAP-21 left behind this and other infrastructure bank proposals. Instead, it expanded the TIFIA loan program, which fills many, but not all, of the same functions that a bank would.

The new American Infrastructure Investment Fund Act, like the old one, would create an infrastructure investment “fund” — they don’t call it a bank — within U.S. DOT, funded at $5 billion a year for two years. Six percent of that goes out in the form of grants, not loans — good news for transit and maintenance projects that have a harder time earning enough revenue to pay back loans quickly. While it leaves open the possibility of funding other forms of infrastructure, the initial focus is exclusively on transportation.

The bill’s introduction comes on the heels of President Obama’s announcement of a plan to rebuild the country’s infrastructure, a plan he says would cost $50 billion but hasn’t offered a way to pay for. The Lautenberg/Rockefeller bill is very similar to the president’s vision for an infrastructure bank.

Though Lautenberg and Rockefeller never signed on any other senators as co-sponsors to their 2011 bill, Rockefeller made it clear today that the idea has traction: “I know several other Senators are interested in this issue,” he said in a statement, “and I have every intention of working with my colleagues as we move forward to develop a robust approach to maximizing the return on our public and private investments.”

The bill could leverage two or three times its outlay in loans and loan guarantees the way it’s currently written.

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What Has President Obama Done to Improve American Transportation Policy?

With the election just days away, it’s a good time to reflect on what the Obama administration has done with transportation policy – and what a Romney administration might have in store. Streetsblog does not endorse candidates. This is an overview of their respective records and a look back at what we know of these two men. We’ll start with President Obama in this post and move on to Mitt Romney in the next one.

High-speed rail could have been President Obama's signature achievement. Photo courtesy of Obama for America.

Perhaps the best thing President Obama did for transportation policy was to nominate Ray LaHood as U.S. DOT secretary. Sure, LaHood reportedly wanted to be Secretary of Agriculture, not transportation. And yes, Obama’s main motive for nominating the moderate Republican congressman was to make friends across the aisle, a goal that for the most part went woefully unmet. Nonetheless, LaHood has proven to be a genuine reformer.

We knew LaHood was a keeper when he stood on a tabletop and declared that bicycles were on an “equal footing” with cars, announcing “the end of favoring motorized transportation at the expense of non-motorized.”

The administration’s creation of the Partnership for Sustainable Communities has created valuable new links between federal transportation, housing, and environmental policies, demonstrating how government can eliminate barriers between agencies. It’s a model that some state transportation agencies have begun to take note of, as they approach local governments to craft land use and transportation decisions that make sense in tandem.

Even the Republican House of Representatives’ ire toward the Partnership can’t destroy the essential piece of it: that agencies are breaking down siloes and communicating more effectively with each other. The smart growth ethic that infuses the Partnership has permeated the three agencies involved – and many more.

Another signature achievement of this administration has been the TIGER program. TIGER has awarded more than $3 billion to more than 200 transportation projects based on their ability to meet strategic objectives, bucking longstanding policies (which continue in the current transportation bill) that fund transportation based on formulas and a singular focus on making sure every state gets their piece of the pie. While TIGER has some geographic criteria and a set-aside for rural areas, it has rewarded cities, regions, and towns that are innovating, and the program has prioritized bike/ped infrastructure, streetcars, freight rail, maintenance of existing roads, and other measures that advance sustainable transportation and smart growth. And by the way, that rural set-aside isn’t a bad thing: It’s helped jump-start transit access in a lot of small towns and tribal areas.

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Brookings: Revive State Infrastructure Banks to Stretch Transpo Dollars

In these days of stagnant gas taxes, state and local governments are scrambling for new ways to finance infrastructure. Rahm Emanuel has his $7 billion Chicago Infrastructure Trust, and Antonio Villaraigosa has his America Fast Forward. Even John Kasich in Ohio is trying to sell advertising at rest stops to shore up ODOT.

In a new report, the Brookings Institution offers another potential answer: state infrastructure banks. These financing agencies offer local governments low-interest loans for important infrastructure projects, and they can attract additional private capital.

“With Washington gridlocked and retrenching, the new state banking models offer a hopeful counterpoint to national dysfunction,” said Brookings’ Mark Muro in a press release.

State infrastructure banks aren’t a new tool. The first ones were created with an infusion of federal cash in the early 1990s. Today, 33 states have an infrastructure bank or a state revolving fund. These institutions have financed about $9 billion in infrastructure spending for 1,200 projects. About 88 percent of the total spending, however, went to road projects.

Republicans wanted to include federal funding to recapitalize SIBs in the transportation reauthorization, but MAP-21 did not offer any changes to the way these institutions are structured. The bill didn’t include a national infrastructure bank either, which Republicans oppose.

Robert Puentes, director of Brookings’ Metropolitan Infrastructure Initiative, emphasized that while SIBs can address some funding problems, they are no substitute for a national infrastructure bank. SIBs can be inappropriate funding mechanisms for projects of truly national significance or that cross state lines.

“They are similar in name only, ” Puentes said. “They would fulfill very different functions.”

Indeed, SIBs vary greatly in their effectiveness. Of the existing 33 SIBs, 10 are inactive. The major factors that determine success, according to Brookings, are pretty simple: The SIBs must have sufficient capital, and they have to apply market discipline when selecting projects, prioritizing those that offer multiple benefits and strong economic returns.

Many times, however, the most competitive projects are toll roads. It’s often hard for transit to compete when the overriding interest is in direct return on investment from users, rather than public benefit.

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A New Bill Passes, But America’s Transpo Policy Stays Stuck in 20th Century

The House of Representatives approved the transportation bill conference report this afternoon by a vote of 373 to 52. [UPDATE 4:00 PM: The Senate has also approved the bill, 74-19.] This is a bill that’s been called “a death blow to mass transit” by the Amalgamated Transit Union, “a step backwards for America’s transportation system” by the Rails-to-Trails Conservancy, “a retreat from the goals of sustainability and economic resiliency” by Reconnecting America, “a substantial capitulation” by Transportation for America, and “bad news for biking and walking” by America Bikes.

Remember the empty highways that symbolized the House Republicans' vision of America's transportation system? The final transpo bill might as well have the same unfortunate cover.

After more than 1,000 days of waiting since the last transportation bill expired, the nation’s new transportation policy is a grave disappointment to people seeking to reform the current highway-centric system.

The fact that the House GOP tried and, for the most part, failed to reverse the progress made under presidents Reagan and Bush the elder offers a small degree of consolation. “Some of the worst ideas pushed initially by House Republicans went nowhere – funding the highway system with new oil drilling revenues, taking transit out of the highway trust fund, de-federalizing transportation funding – to mention some of the most radical proposals that were seriously being put forward,” wrote Deron Lovaas of NRDC this morning. “But… that pretty much exhausts the good news.”

So what does the bill actually do? Overall, it doesn’t change a whole lot, and the most significant changes tend not to benefit livable streets or sustainable transportation. Here’s a breakdown.

Length and funding. The bill lasts a year longer than the Senate bill would have, expiring at the end of September 2014. That gives states, cities, and the construction industry substantially more stability and allows them to move forward on projects that have been delayed for years because of the uncertainty surrounding federal funding. It maintains funding levels at around $54 billion a year, as did the Senate bill, which is roughly current levels plus inflation.

While some have criticized the complex funding mechanisms that prop it up and its departure from a user-pays model, the Congressional Budget Office reported this morning that the bill actually reduces the deficit by $16.3 billion.

Everyone seems to understand that Congress won’t be able to pull this kind of magic for long and will soon have to deal with the long-term insufficiency of current Highway Trust Fund revenues to cover the nation’s transportation needs. However, the gas tax was not raised, and at the same time the House passed this bill, it also approved an appropriations bill that prohibits even studying the possibility of moving toward a VMT fee.

Non-transportation-related items. The Keystone XL pipeline and the EPA’s ability to regulate coal ash as a hazardous substance, introduced into the transportation negotiations by the House Republicans, were stripped out of the bill. The RESTORE Act to spend BP oil spill fines on Gulf Coast restoration is included.

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McCaskill-Collins: Tax Cuts With a Side of Infrastructure, but Hold the Transit

Congress has already delayed their holiday recess by a week, and members are hoping another delay won’t be necessary. Among the yet-unfinished business: an extension of the payroll tax cut. House Speaker John Boehner plans to hold a vote today on his bill, which marries an extension of the payroll tax cut to the controversial Keystone XL pipeline. While expected to sail through the House, such a partisan bill is unlikely to pass the Senate. Enter Senators Claire McCaskill (D-MO) and Susan Collins (R-ME).

Senators Collins, left, and McCaskill at their press conference. Image: STLtoday

Last week, McCaskill and Collins introduced the ambitiously-named Bipartisan Jobs Creation Act. The bill begins with the payroll tax cut and wraps it in additional tax cuts, deregulation measures, and a $35.8 billion infrastructure investment program. The whole thing would be paid for by eliminating some subsidies for oil companies and by instituting a surtax on millionaires’ income—though exceptions will be made for small business owner-operator “job creators.”

The two senators are generally touting this bill as a tax relief bill first, and a pay-your-fair-share bill second—infrastructure gets third-stringed at best, but the provisions are still worth looking into.

The McCaskill-Collins infrastructure plan [PDF] includes $10 billion to capitalize state infrastructure banks and $25 billion for highways and bridges—just highways and bridges. Out of $25 billion—about half an average year’s transportation spending by the federal government—not a dime goes to transit.

By promoting state infrastructure banks, McCaskill and Collins are throwing their weight behind the Republican vision for infrastructure spending and against the President’s. The President and a number of other prominent figures have advocated to no avail for the creation of a National Infrastructure Bank, and Politico reports that they’ll try again next year—to the familiar tune of $10 billion. Meanwhile, House Transportation Committee Chair John Mica has included support for state infrastructure banks—not a national one—in his reauthorization bill. The senators opted for state I-banks in this case because they are an existing program that could be expanded, while “there is no consensus yet on how to address a National Infrastructure Bank,” according to Senator McCaskill’s press secretary, John LaBombard.

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Two Infrastructure Jobs Bills Die in Senate

Two competing versions of a transportation-related job creation bill went down yesterday in the Senate. The first, the Rebuild America Jobs Act (S.1769), was a Democratic proposal, modeled on President Obama’s job creation bill, to invest $50 billion for infrastructure and another $10 billion as seed money to create a new national infrastructure bank.

Bills to put unemployed construction workers back on the job keep going down in Congress.

Given Republican opposition to what they consider a repeat of a failed stimulus – and to an infrastructure bank they say is unnecessary at best and politicized at worst — the failure of the bill is no surprise. The bill garnered a slim majority — 51-49 — but not enough to overcome the threat of a GOP filibuster.

Meanwhile, the Republican proposal would have pushed back many health, safety, and environmental regulations that corporations consider onerous. Defeated in a 47-53 vote, the bill also would have extended SAFETEA-LU for two more years — nearly matching the length and spending levels in the bipartisan EPW proposal — without funding the shortfall such spending would cause to the Highway Trust Fund. The bill wouldn’t have been a “clean” extension of current law, though, since it eliminated the “set-aside” for bike and pedestrian infrastructure, making it the fourth attempt in less than two months by Senate Republicans to eliminate or weaken TE — and the fourth failure.

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Today: Senate Debates Infra Bank, Transpo Funding, Regulations, and More

This morning, the Senate is debating two transportation-related bills: the Rebuild America Jobs Act (S.1769) and the Long-Term Surface Transportation Extension Act (S.1786).

Sen. Hatch makes yet another attempt to "give states the authority" to kill bike/ped spending.

The Rebuild America Jobs Act is a piece of President Obama’s jobs bill that was broken off in hopes that it could pass on its own. It would invest $50 billion on infrastructure projects and another $10 billion in seed money for an infrastructure bank, to be paid for with a 0.7 percent surtax on incomes over $1 million.

Taxing the rich and increasing government spending — now there’s a recipe for some partisan rancor.

So far Democratic Leader Harry Reid and Republican Leader Mitch McConnell have traded barbs that each is just engaged in election-year sloganeering. Reid said 76 percent of the American people approve of the plan to tax the “top two-tenths of one percent.” But McConnell said those 76 percent might change their minds if they knew that “four out of five of those high-income individuals are actually business owners.” They haven’t talked much about the merits of infrastructure investment.

Note that not all of the big players who lined up behind increased investment and an infrastructure bank favor this bill. Bruce Josten of the U.S. Chamber of Commerce, for instance, said yesterday in a letter to senators [PDF] that the Rebuild America Jobs Act “fails to provide the multi-year funding certainty and fails to establish the policy and program reforms sorely needed to create jobs and support economic growth” and “only continues to delay and frustrate the serious and much needed debate on the sustained long-term investment required to address America’s infrastructure crisis.”

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Why Create an Infrastructure Bank When We Could Just Expand TIFIA?

There’s been a lot of adulation heaped upon the TIFIA loan program lately. Both houses of Congress are ready to increase funding for the program nine times over, from $100 million to $1 billion a year – despite warnings from outside groups that there may not be enough eligible projects to use up all that money.

The Staten Island Ferry has gotten some TIFIA funding. Some say an expanded TIFIA would do everything an infrastructure bank would do, but others say it wouldn't allow for large-scale community planning. Photo: SI Ferry

The TIFIA program has been around since 1998 but money pressures have led to a steep uptick in applications over the past few years. Some have criticized it for its lack of transparency in decision-making and suggested that it might be more effective housed outside of USDOT and functioning independently.

“Is TIFIA the first perfect federal program?”

Nevertheless, Congressional Republicans have thrown their full support behind the program, mainly as a counterweight to the president’s proposed infrastructure bank. Consistent with their desire to limit the growth of the federal bureaucracy, they resist the idea of creating an entirely new entity, even though the bank would be independent from the government, a la the Export-Import Bank.

There are two competing infrastructure bank bills in the Senate and a new one introduced earlier this week in the House. The Senate is planning to vote next week on a bill to spend $50 billion on infrastructure with another $10 billion in seed money for a bank – pieces of President Obama’s jobs bill, which has been dismembered for separate votes. Next week’s bill isn’t expected to pass. Indeed, many members think TIFIA is the way to go.

At a House Transportation Committee hearing earlier this month, nearly every Republican present spoke out in favor of expanding TIFIA instead of creating a new bank. Chair John Mica asked why a bank was needed when “we have a successful example” in TIFIA.

One of the things that the infrastructure bank can do is enter into long-term relationships with people who have decade-plus-long plans. They’re trying to finance a plan. What Washington knows how to do is finance a segment of a project. The current TIFIA process does not allow us to do that.

- Roy Kienitz

Highways and Transit Subcommittee Chair John Duncan (R-TN) went as far as to ask, “Is TIFIA the first perfect federal program?” He noted, “Everyone has had glowing comments about TIFIA, and it’s a program that I support as well.”

Geoffrey Yarema of Nossaman LLP (a law firm specializing in public-private partnerships for infrastructure projects) told Duncan TIFIA wasn’t perfect but that it did have 12 years of solid experience. He suggested it be “right-sized” by adding staff and he wants to “change it from a discretionary decision-making process that has the potential for being politicized – and some would say the reality of being politicized – to a first-come-first-served program.”

That change, however, would eliminate the part of TIFIA reformers like most: The fact that it has the power to encourage innovation and goal-oriented, performance-based strategic transportation planning.

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Mica Won’t Say Where Transpo Funding Will Come From; LaHood Defends TE

House Transportation Committee Chair John Mica (R-FL) said this morning that getting permission from Republican leadership to find more revenues to fund the transportation bill was a “major breakthrough” but still won’t say where the money will come from.

Rep. John Mica won't be specific about where additional transportation funding could come from. Photo: 13 News

Mica told an audience at a Washington Post-sponsored forum on transportation that passing yet another extension of the surface transportation reauthorization persuaded leadership that there would not be consensus on a long-term bill until the spending levels were raised. “There wont be a gas tax increase,” Mica said, “but our leadership has asked us to look for other sources of revenue, and we’re on that mission now.”

“Speaker Boehner has really opened the door to us to look for any responsible means” to fund the bill, Mica said, adding that a gas tax increase is still off the table. “There’s also the possibility of doing away with it; adopting something else.” He wouldn’t specify what the replacement fee could be.

Nor would he say what he thinks of a Republican proposal to fund the bill with revenues from new oil drilling except to say, “We’re looking at it. We have some scoring issues. And then we have to make sure we have the votes.”

Mica said he was confident that a long-term bill would pass in March. “Don’t let anybody talk about a two-year transportation bill; that’s criminal,” he said. His counterpart in the Senate, Barbara Boxer, has proposed a two-year bill, but could be willing to go along with a longer-term bill if funding levels were raised.

Mica also reiterated his support for state infrastructure banks, saying he prefers them to a national bank. He said the way Washington works is: “the biggest gorillas get the most bananas.” Instead of having big guys compete for big loans from a big national bank, he said, “the best way to prioritize projects is to have them evolve from local level, get local and state participation, and then assist them.”

Transportation Secretary Ray LaHood also addressed the Washington Post gathering. He said he was confident that, despite current gridlock, there was enough pressure on Congress to create jobs that they’ll pass some form of transportation bill this year.

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