Transportation Bill Moves Forward

2 Dec

IMG_2390Note: When I originally wrote this post, I used the name for the bill that had formerly been used in the Senate– the DRIVE Act. However, the conference committee deal has been renamed the Fixing America’s Surface Transportation (FAST) Act.

Various media (WSJ, Politico) are reporting that the Congressional conference committee for the so-called FAST Act has reached a deal to let the bill move forward to the House and Senate for a vote.

The FAST Act, per the compromise reached in conference, will extend the authority for the Highway Trust Fund for another 5 years, provide $305 billion in expenditures over that period, and will replace the current transportation program authorization law, MAP-21. The current authority expires this Friday, 2015-12-05. Congress may have to pass another short-term extension if they aren’t able to get everything done by Friday.

The Highway Trust Fund supports the federal aid highway system, which provides grants to states for highway projects, including Interstate Highways. States then provide some of this funding to local governments for highway projects as well. I-69, the 45-46 bypass improvements, Fullerton Pike improvements, Vernal Pike improvements, and the part of the Karst Farm Greenway that has already been completed, among many other projects, are all federal aid projects (as administered through INDOT Local Public Agency programs) in our area.

Successes and Failures

The main success of the bill is, well..meh…maintenance of the status quo for 5 years. The FAST Act largely maintains the programs in MAP-21, with a couple of additions: a discretionary grant program for major projects of high importance and a formula-based program for freight corridors. There are also a number of minor changes to programs. It maintains existing formula programs, including the Transportation Alternatives Program (TAP) that MAP-21 created that consolidated the Transportation Enhancements, Recreational Trails, and Safe Routes to School programs, and that funds many active transportation projects, including our own Karst Farm Greenway.

The big failure of the bill is the failure to put the Highway Trust Fund on a sustainable footing. Funding for the Highway Trust Fund is supposed to come primarily from gas and other fuel taxes (as well as several other motor-vehicle excise taxes). In other words, it is supposed to approximate a user fee for roads. However, in recent years the gas tax (18.4 cents per gallon for gasoline) has fallen short of expenditures, and has required various bailouts (transfers from the General Fund — over $53 billion from 2008-2014) in order to remain solvent. This bill uses various temporary gimmicks (including selling oil from the strategic petroleum reserve, redirecting some customs taxes, spending down a Federal Reserve surplus, and reducing the dividend paid to Federal Reserve shareholder banks) to plug the gap. Raising or indexing the gas tax to a sustainable level was never even on the table.

While these funding gimmicks may be good policy in their own right, it is symbolic of the desire of our Federal elected officials to simultaneously demand better infrastructure yet shirk the hard decisions needed to fund them properly.

One odd postscript: in a manner that seems typical of Congress these days, the FAST Act also reauthorizes the completely unrelated but highly controversial Export-Import Bank.

References

 

 

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