Surface Transportation Authorization

AASHTO Executive DirectorAASHTO Executive DirectorJohn HorsleyJohn Horsley

SCOH Subcommittee on ConstructionSCOH Subcommittee on Construction

Chicago, IllinoisChicago, IllinoisAugust 4, 2009August 4, 2009

President Obama’s Inaugural President Obama’s Inaugural Address, January 20, 2009Address, January 20, 2009

““The state of the economy calls The state of the economy calls for action…We will act, not only for action…We will act, not only to create new jobs, but to lay the to create new jobs, but to lay the foundation for new growth. We foundation for new growth. We will build the roads and bridges will build the roads and bridges that bind us together.”that bind us together.”

Today’s Crisis Today’s Crisis In In TransportationTransportation Funding Funding

Insolvency of Highway Trust Fund: By August Insolvency of Highway Trust Fund: By August provide $27 billion in interim funding or highway provide $27 billion in interim funding or highway program collapses.program collapses.

By September, Cancel $8.7 billion rescissionBy September, Cancel $8.7 billion rescission Skyrocketing construction costs have reduced Skyrocketing construction costs have reduced

program purchasing powerprogram purchasing power Need for Revenue to sustain highway and transit Need for Revenue to sustain highway and transit

programs or they will be cut by 2/3programs or they will be cut by 2/3rdrd in FY 2010 in FY 2010 and beyond.and beyond.

Funding OptionsFunding Options

Accept 35% reduction in Federal Aid and Accept 35% reduction in Federal Aid and reduce State transportation programsreduce State transportation programs by amount of cutback.by amount of cutback.

Accept 35% reduction in Federal Aid and Accept 35% reduction in Federal Aid and increase states taxesincrease states taxes to make up for to make up for Federal cutback.Federal cutback.

Reject Cutback and Reject Cutback and Tell Congress to Tell Congress to Increase RevenuesIncrease Revenues Enough to Sustain Enough to Sustain the Federal Program at Levels Needed.the Federal Program at Levels Needed.

Recovery Act Spending as of Recovery Act Spending as of July 24, 2009July 24, 2009

States had obligated $17 billion in States had obligated $17 billion in highway projectshighway projects

64% of state-apportioned funds had 64% of state-apportioned funds had been obligated, involving over 6,000 been obligated, involving over 6,000 projectsprojects

All 50 states had met the 50% All 50 states had met the 50% obligation requirementobligation requirement

2,400 projects under construction 2,400 projects under construction valued at $6 billionvalued at $6 billion

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AASHTO Recommendations AASHTO Recommendations Regarding Highway Program Regarding Highway Program

Restructure Program to directly Restructure Program to directly address 6 National Objectivesaddress 6 National Objectives

Distribute 90% of Program through Distribute 90% of Program through six programs apportioned to the six programs apportioned to the statesstates

Distribute remainder: approximately Distribute remainder: approximately 2% to Federal lands, 1% to research, 2% to Federal lands, 1% to research, and 7% through National Programs and 7% through National Programs

T&I Chair Draft Bill, Approved by T&I Chair Draft Bill, Approved by Subcommittee, June 24, 2009Subcommittee, June 24, 2009

US DOT Under Secretary for US DOT Under Secretary for IntermodalismIntermodalism

Four Major Programs:Four Major Programs:• Critical Asset Investment: (No highway Critical Asset Investment: (No highway

capacity expansion allowed)capacity expansion allowed)• Interstate MaintenanceInterstate Maintenance• National Highway SystemNational Highway System• BridgeBridge

Highway Safety ImprovementHighway Safety Improvement

T&I Proposal (continued)T&I Proposal (continued)

Surface Transportation ProgramSurface Transportation Program• 10% Transportation Enhancements10% Transportation Enhancements• MPO sub-allocations 80%MPO sub-allocations 80%• Balance of state 20%Balance of state 20%

Congestion Mitigation/Air Quality Congestion Mitigation/Air Quality ImprovementImprovement

Freight Program, formula distributionFreight Program, formula distribution

T&I Proposal (continued)T&I Proposal (continued)

40 national programs eliminated40 national programs eliminated 75 national programs consolidated75 national programs consolidated

Metropolitan Mobility/Access Program Metropolitan Mobility/Access Program $50 billion which would leverage $50 billion which would leverage additional funds through GARVEE additional funds through GARVEE Bonds, Private Activity Bonds, TIFIA, Bonds, Private Activity Bonds, TIFIA, Metropolitan Infrastructure BanksMetropolitan Infrastructure Banks

Projects of National Significance Projects of National Significance $25 billion$25 billion

T&I Proposal (continued)T&I Proposal (continued)

$262.5 billion for highways$262.5 billion for highways $12.5 billion for safety$12.5 billion for safety $100 billion for transit$100 billion for transit $25 billion for projects of national $25 billion for projects of national

significancesignificance $50 billion for metropolitan mobility $50 billion for metropolitan mobility

and accessand access $50 billion for high speed rail$50 billion for high speed rail

T&I Proposal (continued)T&I Proposal (continued)

$250 billion from Highway Trust Fund $250 billion from Highway Trust Fund Revenues/general fundsRevenues/general funds

$150 billion National Infrastructure Bank$150 billion National Infrastructure Bank $100 billion TBD$100 billion TBD Reforms:Reforms:

• 6-year targets for 4 major programs6-year targets for 4 major programs• Annual benchmarksAnnual benchmarks• Annual Reports on progress to DOT, CongressAnnual Reports on progress to DOT, Congress• FHWA: Office of Expediting Project DeliveryFHWA: Office of Expediting Project Delivery Office of Livability, Office of Public Office of Livability, Office of Public

BenefitBenefit

T&I Proposal (continued)T&I Proposal (continued)

70% apportioned to states, 70% apportioned to states, 30% through national 30% through national programsprograms

30% of program to transit30% of program to transit STP suballocations 80% STP suballocations 80% Federally-driven targets, performance Federally-driven targets, performance

measurementmeasurement Rural districts and states get less, Rural districts and states get less,

Metropolitan areas moreMetropolitan areas more Restrictions on new highway capacityRestrictions on new highway capacity

Climate ChangeClimate Change

Requirement to add goals for Requirement to add goals for greenhouse gas reduction in greenhouse gas reduction in transportation planning processtransportation planning process

EPA to issue rulemaking to guide EPA to issue rulemaking to guide planning processplanning process

May or may not allow increases in May or may not allow increases in highway capacity in futurehighway capacity in future

Interim FundingInterim Funding

U.S. DOT June 24 letter, Trust Fund U.S. DOT June 24 letter, Trust Fund Shortfall by early AugustShortfall by early August

Administration has proposed 18-month Administration has proposed 18-month extension funded at $20 billion, plus extension funded at $20 billion, plus reformsreforms

Senate Finance and EPW, House Ways and Senate Finance and EPW, House Ways and Means working on timely solutionMeans working on timely solution

House T&I prefers focus on Authorization House T&I prefers focus on Authorization Now!Now!

The Next StepsThe Next Steps

Keep the Highway Trust Fund solventKeep the Highway Trust Fund solvent Cancel $8.7 billion rescissionCancel $8.7 billion rescission Restore the purchasing power of the Restore the purchasing power of the

transportation dollartransportation dollar Enact 6-year bill as soon as possible.Enact 6-year bill as soon as possible. Timing depends on Congress and Timing depends on Congress and

Administration agreeing on revenue Administration agreeing on revenue solutionsolution