WEDNESDAY, JULY 1, 2009 – 1:30
P.M.
Earlier today, the U.S. Department of
Transportation sent to Congressional committees a two-page document containing
an outline of the Obama Administration’s proposal for what it called the “Stage
I Reauthorization” of federal surface transportation programs.
The memorandum outlined what the
Administration wants to see accomplished in the eighteen-month extension of
federal highway, transit, and highway and trucking safety programs that it wants
Congress to pass and send to the White House by the end of this
month.
The proposal calls for a transfer of $20
billion from the general fund of the Treasury to the Highway Trust Fund to
prevent both the Highway Account and the Mass Transit Account of the HTF from
running out of cash before March 31, 2011. The Administration calls for that
$20 billion to be offset by undefined spending cuts and revenue increases – but
over a ten-year period, not over the eighteen months covered by the
legislation. This makes it easier for the offset to be a tax increase that does
not kick in for several years. The proposal acknowledges that “international
tax enforcement” proposals made by the Administration could be used as the
offset.
Beyond that, the memorandum includes some
minor reforms that the Administration wants included in the eighteen-month
extension, including “investing for performance” – improving state and MPO
planning capacity (costing $300 million over eighteen months) and improving
project assessment tools (costing $10 million over eighteen months) – and
“regional access and livability initiatives” which are not particularly
well-defined in the memorandum.
The full text of the memorandum follows.
(The Administration also sent up a broad outline of its plans for a National
Infrastructure Bank today, which downscales the FY 2010 request for the NIB from
$5 billion to $2 billion, as reported in Transportation Weekly
yesterday.)
ADMINSITRATION PROPOSAL FOR STAGE I
REAUTHORIZATION
This document outlines the Administration’s
proposal for the first stage of surface transportation reauthorization,
consisting of an 18-month plan to address the Highway Trust Fund shortfall and
implement discrete, leading-edge capacity-building measures that a long-term
reauthorization should expand upon. The following are the Administration’s core
principles for this proposed 18-month reauthorization, which should be
considered “Stage I” of the broader reauthorization process:
·
A general fund transfer to the Highway Trust Fund is necessary to
maintain its solvency.
·
The general fund transfer should be paid for. The Administration will
work with Congress to identify revenue-raising measures that will reimburse the
general fund for the transfer over ten years.
·
Stage I reauthorization should include State and MPO capacity-building
measures. These measures are a “downpayment” on longer-term improvements in
data-driven decision making, transparency, and accountability.
·
As appropriate, the Stage I reauthorization should include measures to
improve regional mobility and access and enhance the livability of all
communities.
HIGHWAY TRUST FUND SOLVENCY
Analysis by the Department of Transportation
shows the Highway Trust Fund running short of cash in late August or early
September of this year. To extend the program 18 months at the baseline funding
level will require $18 billion for the highway account and $2 billion for the
transit account. Legislation to address the HTF shortfall should pass before
August recess to avoid disruptions to state cash management and further strain
on state budgets.
The Administration believes this transfer should
be repaid to the general fund over the next ten years. A revenue measure that
repays the general fund contemporaneously (i.e., over the two year period) is
not feasible given the economic situation and the pressing needs of the
transportation system. Instead, the Administration would support a range of
options, including international tax enforcement proposals the President
included in his budget.
DOWNPAYMENT ON REFORM
Although an extension of the HTF is urgent, the
Administration believes that this opportunity can be used to put in place a
limited set of carefully thought-out reforms that can form the basis for further
reforms in a full six-year reauthorization.
Investing for Performance
The Administration strongly supports improving
investment decisions at the federal, state, and local levels of government.
Establishing performance goals and basing project selection on merit criteria
will increase returns to transportation investment, which have fallen
precipitously in recent decades. The following are concrete reform proposals
with 18-month costs:
Improving state and MPO project evaluation
capacity (Cost: $300 million). The Administration proposes funding to help
states and localities build capacity for collection and analysis of data on
transportation goals. States and MPOs that choose to participate would be given
funding to establish project evaluation infrastructure, including information on
usage or ridership, accidents and fatalities, average speeds and travel times,
and environmental impacts. This voluntary program would provide participating
entities the opportunity to integrate analysis into investment decisions and
prepare for improved accountability standards and merit criteria in the
long-term reauthorization.
Improving project assessment tools (Cost: $10
million). As states and localities build informational and analytic
capacity, the federal government must work to refine assessment tools and
develop standards for cross-modal comparisons of projects. The Administration
proposes funding for USDOT to develop performance goals and establish guidelines
for states and localities on project evaluation.
Increasing transparency in state and local
public reporting (Cost: Low). The Administration also proposes stronger
requirements for tracking and reporting on the projected and actual outcomes of
transportation investments that use federal dollars. These requirements would
include information on project costs, timelines, and selection process as well
as expected and actual outcomes of individual projects. Improved reporting
requirements would increase the transparency of transportation spending and
improve state and local decision-making. These requirements would also lay the
groundwork for further accountability reforms in the long-term
reauthorization.
Regional Access and Livability
Initiatives
The Administration supports efforts to improve
regional access and mobility and enhance the livability of communities. Possible
reforms in Stage I reauthorization could include: