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How the GROW AMERICA Act Could Modernize Federal Transportation Policy

Yesterday, U.S. DOT did something it hadn’t done for a decade: submit a surface transportation authorization bill to Congress.

The Indianapolis Cultural Trail is one of many game-changing, innovative projects that the TIGER grant program has helped create. Under U.S. DOT's bill, TIGER would become a permanently authorized program with $5 billion to spend over four years. Photo: ##http://www.urbanindy.com/2010/11/18/pedestrianizing-downtown-indianapolis/##UrbanIndy##

The Indianapolis Cultural Trail is one of many game-changing, innovative projects that the TIGER grant program has helped create. Under U.S. DOT’s bill, TIGER would become a permanently authorized program with $5 billion to spend over four years. Photo: UrbanIndy

And what a bill it is. The $302 billion, four-year GROW AMERICA Act has several major reforms that would shift federal policy in a more multi-modal direction. One big change that we’ve noted before is that transit would get a bigger slice of the pie, but there are several other new proposals worth a look.

Before our overview, a caveat: President Obama’s funding plan — although it may align with that of the head tax man in the Republican House — has already been dismissed as a political non-starter. And Democratic Senator Barbara Boxer has indicated she’s not in the mood for major policy changes this go-round. So, take this bill for what it is: a blueprint of the administration’s vision and a menu of options that, in an ideal scenario, Congress would pick and choose from in crafting the bill.

Here’s some of the best of what the bill does:

  • Changes the Highway Trust Fund into a multi-modal Transportation Trust Fund. The bill would replace the current system’s highway-centric orientation, which shunts transit funding off to the side, with a truly multi-modal trust fund. It would include not just highways and transit but also intercity rail (which has long been marginalized in a separate bill and funded with unpredictable general funds) and the popular TIGER grant program (which has a history of funding innovative, multi-modal projects). The TTF would also include the New Starts/Small Starts transit grant program, which has historically been funded with general funds, separately from the trust fund.
  • Allows tolling — including congestion pricing — on existing Interstate lanes. For highways that are part of the Interstate system, the rule has always been that tolling is only allowed on road expansions, which is one reason you often see agencies widen highways when they implement HOT lanes, for instance. But upkeep of existing highways is expensive and states have struggled to find ways to pay for it. Some states, like Pennsylvania, have been seeking expanded tolling authority for years, to no avail. In this bill, the administration proposes to allow the tolling of Interstates for the purpose of reconstructing them or — and this is the really exciting part — “for the purpose of reducing or managing high levels of congestion.” Each case would still need the sign-off of the U.S. DOT secretary. The bill also explicitly says that toll revenue can be used for transit and for environmental improvements along the highway corridor. “One criticism of congestion pricing has been that it hurts low-income people,” says Kevin DeGood of the Center for American Progress. “Using toll revenues to subsidize transit within the corridor ensures greater equity while also improving performance for drivers and freight carriers.”
  • Makes TIGER permanent and creates a new competitive grant program. TIGER would get $5 billion total over four years and no longer have to fight for its place in an appropriations bill every year. The GROW AMERICA Act also calls for a new program called FAST (Fixing and Accelerating Surface Transportation). FAST seeks to spread what U.S. DOT considers to be “best practices,” including the integration of transportation planning with land use and economic development, as well as funding mechanisms that “convey the full social cost of travel decisions to users” and giving local governments the authority to raise funding for transportation — which some cities have struggled with for years. Indianapolis, for instance, had to fight hard to get authority from the Indiana legislature to go directly to voters for more transportation funding. The FAST program would further these best practices and be funded at $1 billion annually.

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Obama Administration Sends Transportation Bill to Congress

The Obama administration today sent Congress its proposal for a multi-year transportation bill, which it’s calling the GROW AMERICA Act. The bill, based on the budget proposal President Obama released two months ago, relies on corporate tax reform to raise $87 billion to fill the hole in the Highway Trust Fund. The four-year bill would cost $302 billion.

Sec. Anthony Foxx sent a transportation bill to Congress today. Photo: ##http://www.bizjournals.com/charlotte/blog/queen_city_agenda/2013/02/anthony-foxx-jerry-orr-share-a-happy.html?page=all##Nancy Pierce, Charlotte Business Journal##

Sec. Anthony Foxx sent a transportation bill to Congress today. Photo: Nancy Pierce/Charlotte Business Journal

It’s the first time Obama has sent Congress a transportation proposal. He received some criticism for not doing so before the current transportation authorization, MAP-21, passed.

Transportation Secretary Anthony Foxx announced the bill’s submission to Congress in a phone call today with reporters. Foxx recently wrapped up an eight-state bus tour, in which he talked to people about the infrastructure needs where they live.

“Failing to act before the Highway Trust Fund runs out is unacceptable — and unaffordable,” said Foxx. “This proposal offers the kind of job creation and certainty that the American people want and deserve.”

The bill  includes $206 billion for the highway system and road safety over its four year duration, and transit gets $72 billion. That brings the current 80-20 ration for highways and transit to something closer to 75-25. Rail — a new addition to the transportation bill — gets $19 billion, including nearly $5 billion annually for high-speed rail. The proposal also sets aside $9 billion for discretionary, competitive funding, including $5 billion for the popular TIGER grant project.

Foxx noted that he has been “pleased” that members of Congress have already been working in a bipartisan fashion to craft a bill and that he looks forward to “supporting and building on the good work that’s already been done.”

Reporters on the call were most interested in the increased authority the administration seeks for the National Highway Traffic Safety Administration in investigating and penalizing automakers who fail to act quickly on vehicle recalls. The administration seeks to increase civil penalty limits nearly tenfold, to $300 million, so that they would be “more than a rounding error” in the company’s bottom lines.

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EPW Big Four Announce Plan to Maintain Status Quo for the Next Transpo Bill

Sen. Barbara Boxer, together with Sens. Carper, Vitter and Barrasso, announced their agreement to maintain the status quo with the next bill. Screenshot from press conference.

Sen. Barbara Boxer, together with Sens. Carper, Vitter and Barrasso, announced their agreement to maintain the status quo with the next bill. Screenshot from press conference.

Last year, while the House flailed in partisan misery, the Senate passed a transportation bill 74 to 22. When the bill was signed into law, it was considered one of the few real achievements of a deeply divided Congress. Environment and Public Works Committee Chair Barbara Boxer got tremendous credit for enacting legislation three years in the making. And yet, it left a lot of good provisions on the cutting-room floor. While MAP-21 included some modest reforms, lawmakers missed an opportunity to prioritize transit, biking, and walking — modes that are gaining popularity and help achieve national goals like congestion mitigation and air quality improvement.

History appears to be repeating itself. This morning, Sen. Boxer (D-CA) joined with the rest of the “Big Four” of the EPW Committee — Ranking Republican David Vitter (R-LA), Transportation Subcommittee Chair Tom Carper (D-DE) and Subcommittee Ranking Republican John Barrasso (R-WY) — to announce that they had reached agreement on a set of principles to guide the next bill.

While it’s good news to hear the senators are working together and making progress, they’re not proposing any solutions to the nation’s dysfunctional transportation policy, which funnels billions of dollars to wasteful road expansions ever year. Below is a look at the guiding principles (verbatim, in bold) and what they mean:

  • Passing a long-term bill, as opposed to a short-term patch. You won’t find anyone who says they want a short-term bill. There is unanimous agreement that a two-year bill was inadequate and that the next bill must last five or six or even 10 years. The challenge has always been to find enough funding to pay for such a long bill. MAP-21 pulled coins out of the proverbial cushions to piece together a somewhat illusory pay-for to get MAP-21 passed. Even President Obama’s proposal for the next bill is just four years.
  • Maintaining the formulas for existing core programs. Ouch. A primary goal of transportation reformers is to tie more money to performance and merit instead of giving states no-strings-attached funding that tends to get wasted on highway expansion. Reforming the existing formulas could force states to prove that they’re spending money well, using a benefit-cost analysis in their decision making, and thinking smart about the future.

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Shuster “Encouraged” By Obama’s Transportation Funding Announcement

Bill Shuster is still digesting yesterday’s twin funding proposals from President Obama and Ways and Means Chair Dave Camp, but he’s “encouraged” by what he’s heard. Both proposals rely on corporate tax reform to plug the hole in the highway trust fund. Camp’s proposal would raise about $125 billion; Obama’s, $150 billion. Neither has yet released details on how their plans would work.

T&I Chair Bill Shuster wants to "build on" the reforms in MAP-21. Photo: ##http://www.heraldstandard.com/election/shuster-supports-romney-in-gop-primary/article_ba7064fe-de09-5e42-b291-e95983b33a45.html##Herald-Standard##

T&I Chair Bill Shuster wants to “build on” the reforms in MAP-21. Photo: Herald-Standard

“I never thought some of these other ideas were ever going to be in the cards,” the House Transportation Committee chair told reporters this afternoon.

Speaking today at the annual Washington meeting of the American Association of State Highway and Transportation Officials (AASHTO), Shuster said he was hoping to get a surface transportation reauthorization bill done this summer. Sen. Barbara Boxer has put her committee’s timeline at mid- to late-spring, using August as a deadline, when federal highway funds are expected to run out. The current MAP-21 bill expires September 30, and Shuster is using that as his deadline.

Shuster told AASHTO that he’s committed to a “fiscally responsible” bill that doesn’t engage in deficit spending, and that he hopes to “build on the reforms in MAP-21,” some of which haven’t even been implemented yet.

“He kind of implied that we’re done with reform,” commented Joshua Schank of the Eno Center for Transportation after Shuster’s remarks. “I don’t think we’re done with reform by a long shot.”

Schank’s primary objection to the status quo is that too much money is distributed by formula and not by merit. And funding transportation with corporate tax reform could potentially open the system up to more discretionary grant programs, Schank said, which would be a positive development. The most innovative transportation work — TIGER, New Starts — happens with general fund money, he said.

“The problem with destroying the user-pay model is that you potentially put funding in jeopardy all the time and you constantly have to go back and find new sources of funding,” Schank said. “But the benefit is, I think there’s a much better chance of reforming how we spend it — making it more multimodal in distribution — if it’s not just coming from highway users.”

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Will Obama and the GOP Align on Plan to Fund Transpo With Tax Reform?

Today, both President Obama and Republican House Ways and Means Chair Dave Camp unveiled plans to pay for transportation with corporate tax reform. Few details have emerged about exactly how Camp plans to do this, but Politico has heard from Capitol Hill staffers that it would push $100 billion to $125 billion to transportation over an unspecified time frame.

While the revenue stream is still a mystery and appears to be extremely gimmicky, Obama’s spending plan looks good. It would raise the federal investment in transit by 70 percent annually, and also beef up intercity rail and the TIGER program. The Obama plan also calls for an increase in funding for state DOTs, but an outline released by the White House said “fix-it first” protections would be attached to make sure that this goes primarily toward road maintenance, not highway expansion.

The main talking point of Camp’s plan, meanwhile, is that it cuts the top corporate tax rate from 36 percent to 25 percent. The details of how that is going to shake down into a windfall for transportation are still hazy.

While it would seem to be a good sign that both the Democratic president and Republican Ways and Means chair agree on a mechanism to fund a long-term transportation bill, it’s far from a done deal. Sen. Max Baucus, who was gung-ho about tax reform, has left the Finance Committee and the Senate to become ambassador to China. His replacement, Sen. Ron Wyden of Oregon, is very progressive on transportation but not so keen on tackling tax reform just yet. Insiders say that even House Republicans may be hesitant to embrace Camp’s tax reform plan when it has so little chance of going anywhere in the Senate.

Meanwhile, Obama just announced his plan at an event at St. Paul’s Union Depot, where DOT Secretary Anthony Foxx also announced the sixth round of TIGER funding, for $600 million.

Obama’s proposal is progressive and thoughtful — as are all of the transportation proposals he’s put forward in the past five years, all of which have gone nowhere. This plan tacitly acknowledges some of those failures: It renamed the High-Speed and Intercity Passenger Rail Program (which has been belittled for not being high-speed enough) “high performance and passenger rail programs.” Instead of more ambitious Obama priorities such as a National Infrastructure Bank, it leaves funding for the TIFIA loan program at $1 billion a year, where Congress set it in MAP-21.

The president says corporate tax reform would yield $150 billion for a one-time infusion into the Highway Trust Fund — twice what’s needed to ward off insolvency — to help fund his four-year, $302 billion plan. Though the size of the infusion is good news, it gives advocates pause. It’s still a one-time fix and not a real solution to the mismatch between transportation revenues and transportation needs. It totally severs the relationship between the revenue source for transportation investment and what the revenue is spent on.

And it’s all because practically no one on Capitol Hill is willing to call for anything that could possibly sound like a tax increase, even as the economy rebounds.

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Live-Blogging Obama’s Transportation Announcement

obama3:59 p.m.: Obama says funding for these projects is going to be in jeopardy unless Congress passes a new transportation bill. Doesn’t go into details. “God Bless the United States of America,” and we’re out.

3:56 p.m.: People go wild for new Metro green line, which will run through Union Depot. Obama says he just got a look at those “spiffy new trains.” “You’ll be able to get from one end of town to another in 30 minutes. And here’s the best part: Not only have you made a more efficient transportation system… this Depot has also helped to boost economic development. Just across the street, the old post office building is becoming apartments and shops.”

3:54 p.m.: Obama: Infrastructure shouldn’t be a partisan issue. But some Republicans in Congress — it’s not that they don’t like roads; they just don’t want to pay for ‘em. “While Congress is trying to decide what to do next, I’m going to do what I can to create good jobs. And that’s why I came to St. Paul. Because [Union Depot] symbolizes what’s possible.”

3:53 p.m.: Obama: I’m going to send Congress a budget with a four-year transportation budget to pay for investments by simplifying tax codes.

3:49 p.m.: Obama: Put America back to work by repairing America’s infrastructure. Housing bubble burst, construction workers were hit hard. Unemployment in that sector has been cut in half but still too high. 100,000 bridges old enough to qualify for Medicare. Minnesota winters mean potholes.

3:48 p.m.: “We can’t wait. We gotta move.” Obama reiterating new plan to bypass Congress where they move too slow.

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Obama to Propose Four-Year Transpo Bill Funded By “Business Tax Reform”

President Obama will unveil a proposal for a $302 billion, four-year transportation bill during a speech today in Minnesota, according to an announcement from the White House. A fact sheet from the administration indicates the proposal would increase dedicated funding for transit more than funding for highways.

Obama will appear in St. Paul, Minnesota today to announce a new transportation plan he says is part of his "year of action." Photo: PRX.org

Obama will appear in St. Paul, Minnesota today to announce a new transportation plan. Photo: PRX.org

The proposal would represent a 38 percent spending increase over the current $109 billion, 2-year law, known as MAP-21, and is the most concrete long-term transportation bill proposed by the Obama administration, which has never put forward a funding stream until now.

The $300 billion spending plan does not raise the gas tax. Instead, it calls for directing some $150 billion from “business tax reform” to help shore up the Highway Trust Fund, which is set to go broke late this summer. The White House has not released more information about how the funding stream would operate, but the press release calls it “one-time transition revenue,” so the idea seems to be that in four years, a different revenue stream would have to be identified.

The White House announcement said Obama’s proposal “will show how we can invest in the things we need to grow and create jobs by closing unfair tax loopholes, lowering tax rates, and making the system more fair.”

Such a funding method would represent a major break from relying on the gas tax to pay for the national transportation program. The gas tax hasn’t been raised in two decades, and inflation and rising fuel efficiency have eroded its value. In 2012, the federal gasoline tax brought in $35 billion, but the feds allocated $54 billion in transportation spending, with other sources, including general tax revenues, making up the difference.

Obama will also announce the upcoming $600 million round of funding for TIGER, US DOT’s popular competitive grant program for local transportation projects, which has already been approved by Congress. The program has funded $1 billion in city transit projects, nearly as much for intercity rail, and $153 million in biking and walking projects since it was introduced in 2009.

More details about the president’s “vision for a 21st century transportation infrastructure” will be available after the speech today in St. Paul, which will take place inside the city’s restored Union Depot train station.

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The Next Transpo Bill: Can Congress Solve the Funding Problem?

From left to right, Oklahoma Governor Mary Fallin, Catepillar Group President Stuart Levenick, Atlanta Mayor Kasim Reed and Lawrence Hanley, president of the Amalgamated Transit Union, testified before House transportation leaders today. The event kicked off a new transportation bill reauthorization process. Image: ##http://transportation.house.gov/calendar/eventsingle.aspx?EventID=364867## House T&I Committee##

From left to right, Oklahoma Governor Mary Fallin, Caterpillar Group President Stuart Levenick, Atlanta Mayor Kasim Reed, and Larry Hanley, president of the Amalgamated Transit Union, testified before House transportation leaders today. The event kicked off a new transportation bill reauthorization process. Photo: House T&I Committee

It’s that time again. Just 18 months after the passage of the latest federal transportation bill, known as MAP-21, Congress has to get serious about the next one. The first hearing on the bill that will replace MAP-21 took place today in the House Transportation and Infrastructure Committee.

With gridlock the order of the day in Washington, expectations for sweeping policy reforms are low. This round of legislating will focus mainly on how to pay for the federal transportation program. The speakers today, who represented interests ranging from the construction lobby to transit unions, all stressed the need for greater certainty and pushed for a funding mechanism to support a long-term, six-year bill.

Members of the committee heard testimony from Oklahoma Governor Mary Fallin, Atlanta Mayor Kasim Reed, Stuart Levenick of industrial manufacturer Caterpillar, and Larry Hanley of the Amalgamated Transit Union. Those who testified even went so far as to suggest an outright funding crisis would be preferable to another series of short-term extensions, like the endless foot-dragging that preceded MAP-21, which itself lasted barely longer than an extension. A scenario where lawmakers let funding for transportation totally run out would at least add a sense of real urgency to negotiations, the thinking goes.

Wisconsin Congressman Tom Petri (R-Wisconsin) asked the panel which outcome they’d prefer, in the case of another stalemate between Republicans and Democrats in the House.

Reed responded, “I would err on the side of short-term pain.”

Those who testified pressed for bold solutions, including alternatives to the gas tax. “What we need to do is have a conversation in this committee where we put all options on the table,” said Reed.

Hanley suggested Congress consider a tax on financial transactions, the so called “Robin Hood” tax, to fund a 100 percent increase in transit funding, which he said was warranted by growth in major cities and young people’s declining interest in driving.

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Eleven Things to Look for in the Passenger Rail Reauthorization

Will a new rail authorization find a way to help states make needed repairs to keep the whole Northeast Corridor running smoothly? Photo: NJ Transit via Second Avenue Sagas

Now that the surface transportation bill fight is over — at least for the moment — transportation reformers are eying the expiration date of another key piece of legislation later this year. The reauthorization of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) could be a chance to make some needed changes to jump-start progress in the passenger rail system. Or it could be the next partisan battleground, making it a process as unnavigable as the lead-up to the passage of MAP-21.

PRIIA shouldn’t be as contentious as the surface transportation bill for three reasons. First of all, no one’s expecting a seismic shift in rail policy to come with this bill. Second, reauthorizing the passenger rail title doesn’t necessarily require a big conversation about funding (though there are certainly those on both sides of the issue who would like to have one). And third, Rep. John Mica isn’t wielding the gavel anymore.

The new chair, Bill Shuster, headed the Rail Subcommittee before taking over the top job, so he’s likely to take a special interest in shepherding the legislation through. And he’s already proven to be a much more bipartisan — and bicameral — collaborator, so many Democrats are hoping for a less rancorous, more inclusive, process.

Even though PRIIA likely won’t bring a sea change in rail policy, insiders say there are a few areas to watch:

State of Good Repair. The Northeast Corridor Commission released a report in January on infrastructure maintenance backlogs on Amtrak’s most popular line. Speeds can’t increase on the corridor without addressing some choke points and repair needs.

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Suburban Voters Wisely Reject Proposals to Withdraw from Regional Transit

Job markets are regional. So in order to serve a metropolitan region’s workers and by extension the local economy, transit must also be regional, seamlessly serving both central cities and their suburbs, whose share of employment has grown. Almost everyone recognizes that.

Suburban voters in Ohio, Michigan and Maine showed their support for transit Tuesday. Photo: Toledo Blade

That’s why for decades, the nation’s cities have been combining agencies and expanding tax districts to create regional transit systems. It’s gotten to the point now where the only major city in the country that still lacks a regional transit system is Detroit — and officials from the Federal Transit Administration are leaning hard on state and local officials to remedy that.

Which is why a handful of Balkanizing ballot initiatives in suburban communities in Ohio, Michigan and Maine this election were so alarming. Voters in four suburbs in these states were asked if they wanted to opt out of regional transit systems in greater Toledo, Ohio; Grand Rapids, Michigan and Portland, Maine.

Luckily, voters saw through those proposals. All four of those communities rejected the proposals, choosing to remain a part of their regional transit systems — and all by fairly wide margins.

In Walker, Michigan, 73 percent of voters weighed in in favor of remaining in Grand Rapids’ bus system. A similar referendum in Falmouth, Maine failed, with 70 percent of voters electing to remain part of Portland’s METRO.

Meanwhile, in the Toledo, Ohio suburbs, Sylvania and Spencer Townships rejected the idea of withdrawing from regional transit by about a 60-40 margin. That was very good news for Toledo’s regional transit system, TARTA, which lost the suburb of Perrysburg to an identical ballot measure this spring.

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