Transportation Funding Becoming a Big Concern for our Nations Failing Infrastructure

Proposed Transportation Funding Increasing by Over 25% in 2014│So Where is the Industry Heading?

Many truck and construction industry organizations have lobbied long and hard for more funding to repair and maintain the country’s roads and bridges, many of which are becoming decrepit due to persistent lack of transportation funding. By now, everyone in these industries is acutely aware that the Federal Highway Trust Fund is about to run dry.

Any new funding approved by Congress would mean more work for the construction industry and safer roads and highways and bridges for commercial trucks and passenger vehicles.

What’s been proposed?

Back in March, when the FY 2015 budget proposal was announced, the Obama Administration recommended spending $90.9 billion for transportation infrastructure improvements. That represents a 25.7% increase of $18.6 billion over FY 2014.

The President’s proposal would combine the federal passenger rail program with highway, transit and safety programs to create a single surface transportation authorization, funded mostly by the current Highway Trust Fund (HTF). To help, the Administration proposed adding $150 billion in “transition revenue generated from pro-growth tax reform.”

• Specific dollar allocations recommended within the President’s transportation funding package include:$199.2 billion for Federal Highway Administration (FHA) programs, an 18% increase amounting to $30.8 billion over four years. However, $25.4 billion of that would go toward investments in new operations other than the core highway program already authorized in MAP-21. $10 would be allotted to a multi-modal freight program, and $2 billion would fund a new competitive program called FAST (Fixing and Accelerating Surface Transportation), which the Administration says is aimed at incentivizing “transformative programmatic reforms that improve transportation outcomes.” In other words, thinking up new programs that would generate better results.
• $13.4 billion to fund something called CIIP (Critical Immediate Investments Program). This money would go to the nation’s most desperately needed projects to “reduce the number of structurally deficient Interstate Highway System bridges, target safety investments and support a state of good repair on the national Highway System.”
• $72.3 billion for federal transit programs over four years, including $10.8 billion to pay for transit capital grants. This amount represents a 63% increase in overall funding and a 33% increase for the transit grants. The new FAST program would get $2 billion from this allocation to support its transit projects.
• $19 billion for passenger rail systems, which would be part of this authorization due to incorporating the Federal Railroad Administration into the surface transportation bill.
• Additional smaller amounts for loan and loan guarantee programs and highway and motor carrier safety programs.

The President’s recommended budget would reduce funding for airport capital projects and would give preference to projects at smaller commercial and general aviation airports because they are least able to raise money on their own. To help larger airports pay for needed work, the administration proposed increasing the Passenger Facility Charge now added to every airline ticket purchase, from $4.50 to $8.

As always, the problem is money.

The President’s proposals have languished for months while Congress argues over potential funding sources. Some in Congress have agreed that revenue generated by tax reform could be used, but there’s little hope that tax reform itself will be approved.

President Obama recently went on the road to draw attention to the Federal Highway Trust Fund’s impending bankruptcy and the rapid deterioration of the nation’s highway infrastructure. To illustrate the problem, he pointed to the I-495 bridge at the Port of Wilmington in Delaware has been closed indefinitely because four of its supports are tilting. This bridge is a critical artery that carries traffic through downtown Wilmington, on average 90,000 vehicles per day.

The President called upon private sector investors to work with state and local governments to create new funding partnerships, which could be supported with federal credit programs. Meanwhile, there’s hope that Congress will pass yet another temporary funding measure as a stop-gap to keep current construction projects working.