Colorado Senate Scheduled to Vote on Highway Robbery

By a vote of 38 to 27, the Colorado House of Representatives voted on April 2 to approve HB 10-1387, which seeks to annually divert approximately $20 million ̶ $200 million over the coming decade ̶ away from the Highway User Tax Fund (HUTF), which pays for bridge and highway repairs, to the Department of Revenue for administering/issuing driver’s licenses and associated examinations, renewals, permits, and State identification cards.

The Colorado Senate is scheduled to debate the bill on Second Reading tomorrow, Thursday, April 8, on the Senate floor.

“When legislators and Governor Ritter approved last year’s vehicle registration fee increase (SB 09-108 or the so-called “FASTER” bill), they did so recognizing that the State of Colorado owns $500 million in annual unfunded deferred maintenance backlog. That vehicle registration fee increase is a vital step toward repairing the State’s 128 structurally-deficient bridges and hundreds of miles of deteriorating highways,” said Colorado Contractors Association Executive Director Tony Milo.

“How do the Governor and those who voted for FASTER honestly tell their constituents that the number of structurally-deficient bridges and poor highways required a vehicle registration fees increase last year, but then turnaround this year and divert tens of millions away from those same structurally-deficient bridges and high-priority highway projects,” Milo continued. “Do legislators really believe the public and media will endorse diverting $20 million per year ̶ $200 million over the next decade ̶ away from road and bridge projects after they just approved FASTER? It’s fiscally reckless and wholly unnecessary,” said Milo.

“We respectfully, but in the strongest possible terms, urge every Senator and Governor Ritter to reject HB10-1387,” Milo concluded. “Approving that bill in any form will exacerbate Colorado’s challenges in addressing the state’s structurally-deficient bridge and highway maintenance.”

Senate Gives Final Approval to 9-Month Extension, $19.5 Billion for Highway Trust Fund

The Senate gave final approval Wednesday morning to a bill known as the “HIRE Act” containing seven transportation provisions including an extension of authorization for federal highway and transit programs through Dec. 31 as well as providing $19.5 billion to the Highway Trust Fund. Today’s vote to concur with House amendments sends the legislation to President Barack Obama.

“Hundreds of thousands of construction workers and state department of transportation employees from across the country are breathing a collective sigh of relief today now that the Senate has approved the Hiring Incentives to Restore Employment Act,” said AASHTO Executive Director John Horsley. “We are delighted that Congress has passed this significant piece of legislation. It’s a win for the economy and for the communities that will benefit from the transportation projects funded by this measure.”

A video statement from Horsley:

The measure approved by the Senate 68-29 and sent to the president today would:
1. Extend surface transportation authorization until the end of this calendar year. The current extension of the 2005 surface transportation authorization law known as “SAFETEA-LU” is scheduled to expire March 28.
2. Deposit $19.5 billion into the Highway Trust Fund to reimburse the trust fund for interest payments not received since 1998. This will ensure the trust fund’s solvency into next year.
3. Restore in this fiscal year $8.7 billion in highway contract authority to the states that had been rescinded at the end of Fiscal Year 2009.
4. Fund the federal highway program’s contract authority for FY 2010 at $42 billion, up from $30 billion, returning the program to its FY 2009 funding level.
5. Provide $4.6 billion in additional federal subsidies for Build America Bonds, a program created by the American Recovery and Reinvestment Act of 2009. The bonds allow states and municipalities to finance infrastructure projects with an interest subsidy from the federal government. State and local governments have issued $78 billion worth of Build America Bonds during the program’s first year.
6. Allow the Highway Trust Fund in the future to collect interest on its deposits, as all other federal trust funds are authorized to do.
7. Restructure fuel-tax exemptions for government vehicles currently paid out of the Highway Trust Fund so future payments come out of the General Fund rather than the trust fund, increasing money available for highway and transit projects in future years.

Senators voted 61-30 on Monday evening to close debate on the bill, HR 2847, with the final vote occurring this morning. The House first passed the bill Dec. 16 with much greater funding including $37.3 billion in stimulus money for transportation projects. (see Dec. 18 AASHTO Journal story) The Senate stripped most of the funding out of the bill and approved the scaled-down measure Feb. 24. (see Feb. 26 AASHTO Journal story) The House passed the measure a second time March 4 after nearly doubling additional federal subsidies for Build America Bonds from $2.5 billion to $4.6 billion and making some other changes unrelated to transportation. (see March 5 AASHTO Journal story)

Prior to today, Congress had approved four short-term extensions of SAFETEA-LU, which expired Sept. 30, 2009.

“For more than five months, state transportation departments have been in a difficult situation — going month to month, unable to make long-term financial commitments for projects that create hundreds of thousands of American jobs with a purpose,” Horsley said. “Now that we have this nine-month extension, states will have certainty for the remainder of this calendar year. This gives Congress ample time to complete the complex negotiations necessary to approve a full six-year authorization bill, which we strongly encourage the House and Senate to complete action on before year’s end.”

RTD's E Line light rail pulls up to Denver Union Station's passenger platform while a 16th Street Mall shuttle waits to depart. Inside Lane photo.

By Kevin Flynn
Inside-Lane.com

RTD’s sales tax revenue for January retreated slightly after two months of gains, even as Colorado’s statewide sales tax collections for January retail sales went up two percent.

Figures from RTD (page 59 of this document) and from the Colorado Department of Revenue show a split between metro Denver, where RTD collects sales taxes to subsidize its bus and light trail service and it FasTracks rapid transit expansion program, and the rest of the state.

The Department of Revenue’s February report, issued on Friday and reflecting sales tax returns for retail activity in January, showed a 2-percent uptick over the same month a year earlier. Sales tax collections statewide totaled $138.35 million in February, for January sales, compared with $135.6 a year earlier.

For the same time frame, RTD showed a decline of eight-tenths of a percent. It collected $27.724 million versus $27.951 for the same month in 2009.

While that’s within spitting distance of breaking even year over year, RTD had budgeted for a projected increase in January to $29.232 million, and that’s falling 5.2 percent below the target. To the extent revenues fail to meet projections, RTD faces hard choices in trimming its spending.

Sales tax revenue is the lifeblood of RTD’s budget, supplying about 60 percent of RTD’s total revenue. RTD collects a total one-penny tax on each dollar of applicable retail sales in all or parts of eight counties – a service area that, at 2,348 square miles, is more than twice the size of Rhode Island.

Of that penny tax, six-tenths goes to RTD’s current operations and four-tenths to the FasTracks program.

On the plus-side of the ledger, RTD’s fare collections in January were 2.5 percent higher than in the same month of 2009. That was in spite of a drop in ridership for the month. RTD collected $7.772 million in fares in January compared with $7.531 million in January 2009. That was 1.8 percent higher than what the RTD budget projected.

LaHood again ruled out a gas tax hike to boost construction upgrades, saying the Obama administration and Congress must shift away from traditional funding mechanisms.

Go to Reuters to see the entire article.

The House of Representatives approved an amended job-creation bill Thursday afternoon that would extend Highway Trust Fund authorization until Dec. 31, deposit $19.5 billion of general revenue into the Highway Trust Fund, restore this fiscal year’s highway funding to $42 billion from $30 billion, and offer additional federal support for states and localities that wish to issue Build America Bonds to finance infrastructure construction.

By a vote of 217-201, the House sent the measure (HR 2847) back to the Senate. Senators had approved the bill last week by a vote of 78-19 after overcoming a Republican filibuster. The Highway Trust Fund’s authority lapsed Sunday after the House did not act on the 10-month extension last week and after Sen. Jim Bunning, R-KY, held up a separate bill extending authorization by 30 days. Federal Highway Administration reimbursements to state transportation departments ceased Monday and Tuesday and the U.S. Department of Transportation furloughed some 2,000 employees until the Senate was able to clear the measure and President Barack Obama signed it late Tuesday night.

The jobs measure approved today by the House would be the fifth short-term extension of the 2005 transportation authorization law known as “SAFETEA-LU,” which expired Sept. 30, 2009. Under the fourth extension approved Tuesday night, Highway Trust Fund authorization now lapses March 28. Work continues in Congress on a full six-year surface transportation authorization, which has been delayed over funding concerns.

Today’s House version of the jobs bill includes $15 billion worth of payroll tax breaks for small businesses that hire new workers and Build America Bonds financing support for state and local infrastructure projects. The House amendment adopted today includes a few minor changes from the version passed last week by the Senate. Those changes include reiterating existing federal law requiring state DOTs to award at least 10 percent of their contracts to “small business concerns owned and controlled by socially and economically disadvantaged individuals.” This provision was added to address concerns of the Congressional Black Caucus, CQ Politics reported. Some CBC members had been withholding their support for the measure over concerns it doesn’t do enough to address job creation for minorities.

Another change adopted by the House would add a year to the date of implementation of the worldwide interest allocation tax break — which would begin in 2020 rather than 2019 under the Senate bill — to offset the cost of the measure’s tax cuts and bond provisions.

“At the end of a tumultuous week, which included the unprecedented shutdown of federal highway, transit, and safety programs, the House has now acted to put transportation back on a sound footing for the remainder of the year,” said AASHTO Executive Director John Horsley. “Enactment of HR 2847 will allow states to move forward into the spring construction season, creating jobs and rebuilding aging highways, bridges, and transit systems. In addition, the bill restores the federal highway program to the levels achieved last year, repairing the $1 billion a month cut that has been in place since last September. It ensures sufficient funds for the Highway Trust Fund to keep federal programs running. Finally, it provides enough time for Congress to develop and enact the multiyear highway and transit authorization that is needed for America’s economic recovery and job restoration. We urge the Senate to speed this legislation to the president for signature.”

What enabled the legislation to move forward in the House was an agreement struck among House Transportation and Infrastructure Committee Chairman James Oberstar, D-MN, House Speaker Nancy Pelosi, D-CA, and Senate Majority Leader Harry Reid, D-NV, regarding funding formulas for two discretionary highway categories: Projects of National and Regional Significance and the National Corridor Infrastructure Improvement Program.

Oberstar said on the floor this afternoon that the agreement is to modify the two highway formulas in future legislation to distribute the funds more equitably to all states. Oberstar urged representatives to approve the amendment and return the bill to the Senate.

“What we are doing here is restoring stability to the highway, bridge, safety, and transit programs, providing certainty for states so they can award bids, they can advertise bids, and keep contracts going,” Oberstar said. “I hope we can correct this measure and I will do everything I can to correct it to ensure fairness for all 50 states in the distribution of the funds they send to Washington. … We’ll restore the funding formulas to the way it is intended in SAFETEA-LU.”

In addition to the 10-month authorization extension, $19.5 billion in interest payments for the Highway Trust Fund, restoring FY 2010 highway levels to $42 billion, and extra support for Build America Bonds, the bill also would change federal law to ensure the trust fund receives future interest payments and to shift the burden of paying for motor-fuel-tax exemptions to the General Fund.

He would not say if the principles will contain recommendations for a revenue source to pay for a multi-year program.

A gasoline tax increase and a mileage tax have risen to the top of the debate over revenue options, but the administration has said it does not support either of those options right now.

Go to The Bond Buyer to see the entire story.

Go to PBS to see this report on how transportation funding legislation works at the federal level.

Castle Rock Construction Co. is doing CDOT's $12.5 millon concrete reconstruction of nearly nine miles of U.S. 40/287 near Boyero, part of the Ports-to-Plains Corridor. It is funded with stimulus money. CDOT photo.

By Kevin Flynn
Inside-Lane.com

If Sen. Jim Bunning had not balked at the end of his far-from-perfect game on the floor of the U.S. Senate, the Colorado Department of Transportation and the team of contractors out in the field on numerous federal-aid highway projects stood to lose an average of $1.76 million in reimbursement per workday.

In the current Colorado budget year that began July 1, 2009, the Federal Highway Administration has sent nearly $303.7 million to CDOT to cover the federal share of state highway projects. That’s nearly $38 million a month, or $1.76 million for each workday.

That’s a lot of dirt-moving, concrete, asphalt and steel.

CDOT spokeswoman Stacey Stegman said the transportation department could have handled a week or so of stalled federal reimbursements, but if Bunning’s stall tactic had gone on longer, Colorado would have been forced to look at suspending work on projects, as several states had already done.

Bunning – a Baseball Hall of Fame pitcher with a perfect game in his record with the Philadelphia Phillies in 1964, agreed to end his holdout late Tuesday. It came in exchange for a vote on his proposed amendment that the $10 billion total cost of the various extensions in the bill be paid without increasing the deficit – the same proposal he rejected last week. It lost on a procedural point, and the bill itself then was passed 78-19.

Colorado was somewhat prepared to weather the delay thanks to the influx of new highway revenue from last year’s FASTER increase in vehicle registration fees. Dedicated to repair and replacement of poor-rated bridges and highways, the money is programmed this year to pay for projects just now going out for bids.

“Most the projects we’re advertising right now are state-funded FASTER, so they aren’t impacted,” Stegman said.

SEMA Construction Inc. is working on CDOT's stimulus-funded $11 million replacement of I-76 bridges over the Union Pacific Railroad in Adams County. CDOT photo.

“The biggest issue is that we can’t bid new projects with federal funds as we can’t obligate the dollars” without assurance of being repaid, Stegman said. The federal aid is important to CDOT’s cash flow and to keep contractors paid – and the road workers employed.

Federal highway aid is paid as reimbursement for up-front state outlays on eligible project costs. CDOT pays its contractors and submits the expense to the U.S. Department of Transportation for reimbursement. Not all projects are federally aided, and not all portions of a federally aided project are eligible for reimbursement.

CDOT had not begun to discuss contingency planning because the agency was confident that the Senate would resolve the situation quickly. More controversial than holding up the extension of transportation funding authorization was that Bunning’s tactic – being the sole senator objecting to unanimous consent to move the bill forward – had allowed unemployment and medical benefits extensions for the nation’s unemployed to expire.

“It isn’t the first time it has happened,” Stegman said of the lapse in highway payments. If it had continued into next week, CDOT planned to have serious discussions on specific projects to suspend and other moves.

Sen. Jim Bunning (R., Ky.) again blocked a $10 billion bill that would have extended unemployment benefits and other programs after halting its progress last week. And on Monday, the impact of his blockade started biting, with the expiration of benefits to 100,000 people and the suspension of 41 transportation projects across the country.

Go to The Wall Street Journal to see the entire article.

Concerned Transportation Officials Address Federal Program Shutdown
AASHTO President and VP Lead Call for Immediate Congressional Action

Washington, D.C. – Following an emergency meeting today to discuss the impact of the current shutdown of federal highway and transit programs, state transportation officials called the action “a bad situation and it’s only going to get worse.”

At a news conference held in conjunction with the annual Washington Briefing of the American Association of State Highway and Transportation Officials (AASHTO), leaders from across the country spoke out on the issue.

“If you do the math, we’re talking about more than $153 million a day in lost reimbursement payments for highway projects to the states,” said Larry L. “Butch” Brown, executive director of the Mississippi Department of Transportation and AASHTO president. “Congress has to move quickly to correct this by passing legislation and getting it signed into law. This is a bad situation and it’s only going to get worse.”

On Sunday, February 28, the current extension of the surface transportation program expired, leading to a shutdown in reimbursements to states for highway projects and transit programs administered by the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA). According to FHWA, the shutdown means that $768 million in highway outlays and $157 million in transit outlays for the week ending March 5th could be affected. On Tuesday, March 2, an estimated 4,000 federal highway, transit, and safety personnel at FHWA, FTA, NHTSA, and the Federal Motor Carrier Safety Administration must be furloughed, putting a halt to federal project approvals, safety enforcement, and transit starts.

“The timing could not be worse for a lot of reasons,” said Susan Martinovich, director of the Nevada Department of Transportation and AASHTO vice president. “States need every dollar they can get to improve our aging roads and bridges and put people to work. My home state of Nevada has the nation’s seventh-highest unemployment rate at 10.4 percent. We should be awarding contracts for spring construction right now, but instead many states are forced to delay, and in some cases cancel, projects.”

“This crisis is just the latest example of why states need either a long-term extension of highway and transit programs or a multi-year authorization bill,” said Pete Rahn, director of the Missouri Department of Transportation. “If Missouri and other states aren’t able to plan major, long-term projects, then contractors can’t hire workers or purchase new equipment. The result will be higher unemployment and more economic stagnation. Going from one extension to the next and one crisis to another is not the answer,” Rahn said.

The action could also cause states to lose some unspent recovery funds, since March 2nd is the deadline set by the American Recovery and Reinvestment Act for the redistribution of any highway funds not approved by the FHWA. To date, there have been three short-term extensions of SAFETEA-LU, the highway and transit authorization bill that expired September 30, 2009.

The AASHTO officials were joined by more than 200 state transportation leaders from 36 states and Washington, D.C. at the AASHTO Briefing, held in Arlington, Virginia, from March 1-3.

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The American Association of State Highway and Transportation Officials (AASHTO) is the “Voice of Transportation” representing state departments of transportation in all 50 states, the District of Columbia, and Puerto Rico. AASHTO is a nonprofit, nonpartisan association serving as a catalyst for excellence in transportation.