VMT Fee Should Replace Gas Tax, ULI Report Suggests

Congress should consider initiating a vehicle miles traveled fee to replace the gasoline tax currently funding federal highway and transit programs, an infrastructure report issued by the Urban Land Institute and Ernst & Young recommends. The report also calls for boosting transportation investment through other sources.

This report is the fourth in an annual series. (Inside Lane note: Read and download the report here.) It focuses on the pressing need for long-term and integrated investments in transportation and other infrastructure.

“Investing in infrastructure — done well and strategically — can help ensure increasing prosperity and the rising standards of living that Americans have come to expect,” the report contends. “Many countries around the world — China, India, and those in Europe — understand the infrastructure investment imperative and are working to build the transportation, water, and energy systems that will grow their economies for future generations.”

There have been a few hopeful steps towards an adequately funded transportation system nationwide, the report notes. It highlights several transportation and finance programs in the American Recovery and Reinvestment Act such as those for high-speed rail, discretionary multimodal grants, and Build America Bonds.

The document includes examples of a few transportation-oriented public/private partnerships currently underway in the United States, and notes how these can offer “guideposts” for similar efforts elsewhere. These examples include the Florida Department of Transportation’s agreements for constructing a $2 billion tolled expressway expansion along Interstate 595 and a $1 billion tunnel for the Port of Miami, and the collaboration between the Texas Department of Transportation and a private operator for building High Occupancy/Toll lanes as part of a $4 billion widening and upgrade for Interstate 635.

One means of further encouraging those partnerships, the report suggests, is a national infrastructure bank based on Europe’s model for financing and attracting private capital. “A federal infrastructure bank could help establish procurement protocols and standards, facilitating the bidding process,” the report states.

The 102-page report, “Infrastructure 2010: An Investment Imperative,” is available at the Urban Land Institute website.

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.”

Statement by John Horsley, Executive Director, On Senate Approval the 30-Day Extension of Highway and Transit Programs

“We are pleased that the Senate has approved a 30-day extension of the nation’s critical highway and transit programs and that the President has moved swiftly to sign the measure into law. This action jump-starts hundreds of idled projects and puts thousands of workers back on the job at highway construction sites and several federal agencies.

“The bad news today, however, is that the uncertainty remains. This marks the fourth short-term extension of SAFETEA-LU, the highway and transit authorization act that expired on September 30, 2009. It is essential, therefore, that the House of Representatives quickly passes a separate Senate bill that would extend SAFETEA-LU through the end of this year and transfer funds to the highway trust fund to keep it solvent.

“Cash-strapped states that are struggling in this down economy can ill-afford to be subjected to continued month-by-month extensions and the risk of another shutdown. The ultimate goal is a multi-year bill, but, in the interim, we need to remember that we’re talking about real projects, real people, and real paychecks that circulate money throughout the economy. House passage of the Senate H.I.R.E bill will be the first step toward reassuring states that they can make the long-term commitments necessary to run their programs.”

Statement on the Impending Expiration of Federal Highway and Transit Programs by John Horsley, Executive Director

Because of the impending expiration of the Federal Highway and Transit Programs at midnight on March 1, the Federal Highway Administration will be required to suspend Federal-aid payments to the States. These federal reimbursements of funds already expended by the states amount to roughly $800 million a week. The Federal Transit Administration, National Highway Traffic Safety Administration, and Motor Carrier Safety Administration would also suspend payments. On Tuesday personnel of the FHWA, FMCSA parts of NHTSA will be sent home causing FHWA and FMCSA to shut down.

“We are deeply concerned about the severe impacts to state and local transportation programs of this disruption of the federal highway and transit programs,” said John Horsley, AASHTO executive director. “We commend Chairman Oberstar, Speaker Pelosi, and Majority Leader Reid for reaching an agreement that will enable the House to pass the Senate version of an extension of the highway and transit programs, with the understanding that a later legislative fix will revise how highway discretionary funds are to be distributed. We hope Congress can move this legislation as early in the week as possible so reimbursements to the states can resume.”

1st Anniversary Report on Recovery Act Prompts Call for Jobs Bill
New Report Released In DC & Four US Regions; Highlights States’ Success

(Washington DC)- As the Senate debates the merits of a Jobs Bill, a new report — Projects and Paychecks: a One-Year Report on State Transportation Successes under the American Recovery and Reinvestment Act — finds that more than 280,000 jobs were created and more than 12,250 transportation projects are underway as a result of the jobs bill signed into law one year ago.

The comprehensive study, released today by the American Association of State Highway and Transportation Officials (AASHTO) in conjunction with state transportation departments (DOTs) in Nevada, Michigan, Georgia and Rhode Island, finds that one year after its passage, state DOTs have set an amazing record of speed and efficiency, putting 77 percent of the $34.3 billion provided for highways and transit out to bid on 12,250 transportation projects. The 9,240 projects under construction total $20.6 billion. One hundred-fifty of these projects are profiled on the companion website at: recovery.transportation.org. As a result of the Recovery Act, 280,000 direct, on-project jobs have been created or sustained across the country.

“That’s a lot of projects and paychecks,” said Larry “Butch” Brown, AASHTO President and Executive Director of the Mississippi Department of Transportation. “U.S. unemployment in the construction trades has surpassed 20 percent. Recovery dollars are helping to rescue thousands of workers like Frank Anzenberger, a 30-year construction veteran who’d been unemployed for more than six months before he was called back to work on a recovery project in Michigan.”

With bids running as low as 30 percent below estimates, the study finds that states stretched federal dollars even further, creating more jobs and more miles of improvements. California, Georgia, and Texas awarded more than 90 percent of their highway contracts below original cost estimates.

The report, which includes data from the states, House Transportation and Infrastructure Committee, and the Federal Highway Administration, also found an impressive list of completed projects. As of January 7, 2010, 1,125 bridges had been improved or replaced, 21,400 miles of pavement had been resurfaced or widened, and 1,700 safety traffic management projects had been put into place.

“Projects and Paychecks proves just how big a role stimulus is playing to keep Americans working,” said John Horsley, AASHTO executive director. “In January, state DOTs identified more than 9,800 additional “ready-to-go” projects worth $79 billion. Congress needs to move quickly to pass another Jobs Bill. This study proves transportation projects can deliver hundreds of thousands of jobs for America,” Horsley said.

Today as states await action on a jobs bill, the list of ‘ready-to-go’ state infrastructure projects has surpassed the 9,800 mark. These projects, valued at more than $79 billion, will give state departments of transportation the resources necessary to put hundreds of thousands of people back to work, on projects that will improve travel and boost the economy.

(Inside Lane editor’s note: The AASHTO list shows Colorado as having 100 such projects with a cumulative value of $1.4 billion.)

In 2009, the transportation sector received just 6 percent of economic recovery funds, yet spending on state highway, bridge, transit, port, rail, and aviation projects has accounted so far for more than 24 percent of the jobs created. According to the House Transportation and Infrastructure Committee, at least 250,000 direct, on-projects jobs, as well as hundreds of thousands of indirect jobs, were the result of 7,900 highway and transit projects that have broken ground across the country.

“Since we first released our survey back in December 2009, states have identified 300 additional ‘ready-to-go’ projects that can be approved for funding within 120 days,” said John Horsley, executive director of the American Association of State Highway and Transportation Officials (AASHTO). “States continue to turn recovery dollars into real jobs and paychecks.”

In December, AASHTO officials were joined by Sen. Barbara Boxer (D-CA), chairman of the Senate Environment and Public Works Committee, House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN), and House Subcommittee on Highways and Transit Chairman Peter DeFazio (D-OR) at a Capitol Hill news conference releasing the original state project survey.

Since then, the House of Representatives has approved the Jobs for Main Street Act of 2010, which would provide $37 billion for transportation projects – $27.5 billion for highway infrastructure projects, and $8.4 billion for public transportation. Based upon the record demonstrated under the Recovery Act, such funding could potentially create or support 1.1 million jobs.

“This survey illustrates the growing need for a significant investment in transportation infrastructure projects,” Horsley said. “The benefits are guaranteed and long lasting. Instead of the unemployment line, we’ll give hundreds of thousands of Americans the lifeline they need to stay in their homes, pay taxes, and rebuild our economy.”

You can find the updated survey online at http://downloads.transportation.org/Ready-to-Go.pdf.

AASHTO is the American Association of State Highway Transportation Officials, a powerful lobbying force for greater federal spending on highways, especially, and rail. Horsley said Brown’s election this month to succeed Sen. Edward Kennedy has prompted a seismic shift in the Capitol.

“The other shoe has finally hit,” said Horsley. “Deficit reduction and concern over debt is almost as powerful a dynamic now as stimulating and job creation has been. There will be another round of jobs creation legislation, but it will be followed shortly by a freeze in spending. It is my view that this will freeze it in its tracks the highway re-authorization bill.”

The federal legislation that authorizes highway spending expired last year, but has been extended by a series of temporary bills while Congress and the administration focused on other priorities. Without any funding changes, the federal gas taxes will fund about $250 billion in spending over a five-year bill. But Democrats in Congress – and a host of outside voices, too – have called for a big expansion of that program.

Go to the Dallas Morning News to see the entire article.

“President Obama continues to show his strong support for infrastructure investment to provide good-paying jobs for Americans and to rebuild the transportation foundation that supports our economy.

“It was truly fitting that Rhode Island contractor Enrico DiGregorio was in the audience for the State of the Union address. The owner of DiGregorio Construction tells AASHTO that were it not for the recovery-funded projects his company has been involved with in his home state, he would not have been able to retain his current 100 employees and hire the 30 additional workers he added to the payroll last year.”

“It’s a gratifying feeling to be able to tell someone they can come back to work,” DiGregorio said. “The tough job is telling people hungry for work that you can’t hire them. Stimulus dollars have created real jobs that are helping real people.” (See DiGregorio’s interview at www.transportationtv.org.)

“Like DiGregorio, we urge Congress to keep the momentum going and invest in America’s transportation system. States are ready. Currently states have identified almost 10,000 additional transportation projects at a value of $79 billion that are waiting for the green light, if additional funds are provided.

“Through projects like these, state transportation departments have clearly led the way in creating good-paying jobs quickly under the economic recovery act. We’re prepared to go back to work again to support the economy and our way of life.”

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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.

(Washington, D.C.)-This week, the Associated Press released a flawed analysis of the results of the economic stimulus spending on roads and bridges.

Its authors overlooked the 210,000 direct on-project transportation jobs the House Transportation and Infrastructure Committee determined were created by stimulus. And it argues that the 6,333 highway recovery projects under construction in America, valued at $15.2 billion, have had “no effect on local unemployment and only barely helped the beleaguered construction industry.”

The American Association of State Highway and Transportation Officials (AASHTO) strongly disagrees. In Texas, for example American Recovery and Reinvestment Act funding is providing nearly one-fourth of the $1 billion needed for the critical, 8.4 mile, Dallas-Fort Worth Connector project.

150 direct planning and engineering jobs, including designers, construction engineers, and oversight engineers and technicians, are now employed on the project and approximately 400 additional direct jobs will be added next month, when construction begins. Are these jobs insignificant? Won’t they help to reduce the local unemployment rate and support hundreds of other jobs as workers make purchases and pay down mortgages? This is just one of 6,333 examples.

In its report, the AP concluded that money for road construction offers little relief to most contractors because they don’t work on transportation projects. U.S. Secretary of Transportation Ray LaHood’s corrected that in his blog posting this week titled “AP Misses the Transportation Stimulus Jobs Forest for the Trees.”

Sec. LaHood states that the highway and road construction industry totals about 258,000 jobs nationwide. “When we drill down to the transportation construction industry, the most appropriate basis for analysis, we find Recovery Act spending making a real difference in people’s lives,” LaHood said.

The construction sector is beleaguered. However a through analysis of stimulus spending on roads and bridges makes the case for greater infrastructure investment, not less.

States have identified 9,500 ‘Ready to Go’ transportation projects worth almost $70 billion that, if funded, will put thousands of additional construction workers back on the job. Every single job counts and when you add it up, investing in roads and bridges makes good sense.