Streetsblog Capitol Hill

Last week, we reported that Sen. Max Baucus (D-MT) had mused aloud at a committee hearing that perhaps a two-year transportation reauthorization was a better option in the current political and economic environment than a six-year bill. “We don’t have a lot of money here,” he said.

Sen. Max Baucus favors a two-year reauthorization bill. Photo:Ghanbari/AP#

And at the current rate, under a six-year program, the number of dollars spent per year [would be] reduced. If we take the six years at the current funding level, annual funding payments would [go down] approximately from current $42 [billion] down to $28 [billion] — unless we find new revenue. [Ed. note: that number is just for highways.] I don’t think we want to be in that position where it’s only 28. That’s a huge blow to our country. Which raises the question of a six-year versus a two-year bill. And I raise that because if we can’t find revenue for a full six-year bill, might be better to go for a shorter [one] which is fully funded for at least those two years.

State DOT officials quickly interjected that they didn’t think it was a good idea.

Indeed, most political and industry leaders have strongly supported a six-year bill. Transportation Committee Chair John Mica told state DOT officials last month, “Anyone who talks about anything less than a six-year bill, I’ll take you outside and beat the crap out of you.”

Some people are lining up to take that beating.

In addition to Baucus, Robert Puentes of the Brookings Institution took an opportunity to reiterate his previous support of a two-year bill.

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As transportation advocates adapt their messaging to a new, more conservative Congress, the language of fiscal conservatism has become the mother tongue of the movement. Smart Growth America and the Bipartisan Policy Center have recently used the fiscal responsibility argument to urge policymakers to invest more strategically, especially as infrastructure budgets shrink.

Robert Puentes. Photo courtesy of the Brookings Institution.

Now the Brookings Institution jumps into the mix with its new report, “State Transportation Reform: Cut to Invest in Transportation to Deliver the Next Economy.” In it, author Robert Puentes, Senior Fellow at Brookings’ Metropolitan Policy Program, blames state fiscal crises on poor policymaking in addition to diminishing resources.

The Brookings report, along with the SGA analysis, focuses on state decision-making around transportation funding. Puentes says that the focus on poor strategy at the state level is really an “indictment at the federal level that the federal government has abdicated responsibility to the states and doesn’t have much oversight on how federal transportation dollars are spent at the state level.”

Despite the importance of the transportation sector, which employs more than 4 million people in this country, Puentes says the process for allocating resources is “sadly out-dated”, taking a “peanut butter” approach, spreading money evenly (and thinly) across a state, rather than making “strategic, targeted investments.”

He highlights the “recent dust-up over high speed rail” to illustrate two points. First, “states and governors are still in the driver’s seat when it comes to transportation decisionmaking and project selection.” And second, federal money often comes with “on-going maintenance demands are more than [states] want to bear.” Sort of like a free puppy, he says. But whether it’s operational costs or anything else, federal money does come to states with responsibilities attached, and the states should prove that they’re capable of spending those dollars wisely.

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We couldn’t put a bow on 2010 until we’d thanked those who contributed to the cause of sustainable transportation and smart growth last year and shaken our fist at those who’d done their darnedest for sprawl and highways. Check out our first two installments of national, state and local Streetsie winners. Here are our parting thoughts and your final votes. Then we can really move into 2011.

Ray LaHood stands on a table to thank bicyclists for working with him to reduce car dependency. Photo: Jonathan Maus

Happiest Occasion: 2010 did have its winning moments. It’s hard to debate that LaHood’s “Tabletop Speech” at the Bike Summit in March was one of the best – along with his subsequent declaration that “this is the end of favoring motorized transportation at the expense of non-motorized.” It still gives me chills.

LaHood literally jumped on a table in front of hundreds of cyclists and said that people around the country “want out of their cars; they want out of congestion; they want to live in livable neighborhoods.” And then he thanked the cyclists for hanging in there with the DOT as it transitions to being an engine of sustainability. “I’m very, very grateful!” Nearly 40 percent of Streetsblog readers agreed that this was the highlight of the year.

Good stuff, indeed. And we have LaHood to thank for some of the other bright spots last year, like two rounds of TIGER grants, providing over $2 billion to states for innovative transportation projects.

Some a-ha moments at the federal level won us over. For one, the feds are taking big strides on bringing health and environmental impacts, as well as performance metrics, into consideration when they make grants (instead of just looking at costs). And they’re realizing that transportation reform is health reform – Michelle Obama’s obesity task force even made the connection between active transportation options and healthy kids. Federal funding of bike/ped projects dipped from 2009’s all time high, but it’s still at impressive levels.

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So longtime chair James Oberstar is gone from the House Transportation and Infrastructure Committee, and the Republicans in charge now are unlikely to take up a transportation bill as expansive as the one he proposed last year. That doesn’t mean transportation advocates should take the next two years off. In “Moving Past Gridlock: A Proposal for a Two-Year Transportation Law” [PDF], Robert Puentes of the Brookings Institution’s Metropolitan Policy Program argues that there’s a lot to do even in the absence of a long-term reform bill.

With incoming Transportation Chair John Mica refusing a gas tax increase, reformers can still make progress in the next two years. Image: Orlando Sentinel

The House recently approved a sixth extension of the current transportation law, this one lasting for nine months. Incoming Chair John Mica (R-FL) says he wants to work on a new six-year reauthorization, but there’s no reason to believe it’ll proceed smoothly without a robust financing mechanism in place. For now, lawmakers can’t agree on a way to stabilize the highway trust fund and adequately finance transportation.

If a long-term reauthorization proves impossible, Puentes argues for a deficit-neutral, short-term reauthorization rather than continue with endless extensions. He calls it SAFETEA-TWO.

Why a two-year bill? For one thing, it’s hard for construction projects to move forward with certainty under these short-term, temporary extensions. Contractors and states are timid about undertaking ambitious projects when the future of federal funding isn’t firm.

Another reason boils down to timing. Rep. Jim Oberstar (D-MN) introduced his reauthorization bill to great fanfare in June 2009, but there was no agreement on a funding mechanism, as lawmakers refused to get behind a gas tax increase. They haven’t made any progress on that yet. Puentes hopes that in two years, with the 2012 presidential campaign season behind us and, one hopes, a stronger economy, a gas tax increase might gain traction.

So what can transportation advocates do in the next two years? And what can a SAFETEA-TWO accomplish? Here’s what Puentes recommends:

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Our report yesterday on transportation financing may have left you with a few more questions. We started with a look at TIFIA, which provides credit assistance for infrastructure projects. Many observers see the program as limited by its position inside the DOT and its opaque decision-making process.

Bike facilities that pay returns in better health and environmental impacts might not be candidates for funding from the NIB, which demands returns in cold hard cash. Photo: One More Cyclist

But what about a National Infrastructure Bank, you ask? Transportation reformers are pushing — along with President Obama — for one to be established. Would such a bank be a more effective way to finance infrastructure projects than the TIFIA program? And would it lead the country to build better, more sustainable transportation systems?

Unburying Infrastructure Financing

In his testimony before Congress in May, Robert Puentes of the Brookings Institution’s Metropolitan Policy Program said a National Infrastructure Bank would lead to:

• A better selection process with fewer federal dollars going to wasteful projects
• More accountability for funding recipients
• A focus on maintenance and fix-it-first for highway projects
• Better delivery of infrastructure projects

But when asked why the choice of financing mechanism has an impact on outcomes, he admitted that, mainly, “it matters because of the ability to move the stupid bill through.”

He also said two factors would help a National Infrastructure Bank achieve better outcomes.

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TIFIAs and TIGERs and NIBs — oh my! The alphabet soup of infrastructure funding mechanisms can be alienating even to committed transportation advocates. But with the power of the gas tax diminishing and elected officials refusing to raise it, other financing options are taking on increasing importance. If you’re interested in reforming our transportation system for the 21st Century, it pays to know the differences between them.

A $50.5 million TIFIA loan helped finance the largest public works project ever undertaken in Northern Nevada, the Reno Transportation Rail Access Corridor. Image courtesy of the city of Reno

Robert Puentes of the Brookings Institution’s Metropolitan Policy Program says the current system is “both broke and broken,” meaning dramatic changes to the financing system are essential to get the kind of transportation system we want. “Minor tweaks are just not going to be enough,” he said. “You could triple the bike program and that’s great, but it’s not going to solve the major challenges we’re facing as a nation. It’s all got to be run through an economic lens.”

Puentes favors a National Infrastructure Bank, promoted by President Obama in his Labor Day speech, as a way to channel transportation investments strategically.

One person who will have a large role in shaping an infrastructure bank is California Senator Barbara Boxer, chair of the Senate Committee on Environment and Public Works. In a hearing this fall, Boxer challenged the idea of a National Infrastructure Bank, saying she’d prefer to see current financing programs strengthened. The program that Boxer wanted to see strengthened, instead of establishing a NIB, is known as TIFIA (Transportation Infrastructure Finance & Innovation Act).

So, you’re probably wondering whether using TIFIA or a NIB to pay for infrastructure makes a difference. Is one mechanism better suited to building a safer, more efficient, and sustainable transportation system than the other?

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The first phase of the lame duck ends today. Has Congress done the heavy lifting of finding consensus on extending tax cuts, or unemployment benefits, or Medicare physician payments, or the surface transportation authorization, or the federal budget?

It's nice that Michele Bachmann thinks transportation funding is important, but does it need to go through earmarks? Photo: Huffington Post

No. But they named a few post offices. And they re-elected their same leaders to keep on leading them. And the emboldened Republicans have made it clear they’re steering toward a ban on earmarks, a sign to the electorate that they’re going to tackle the “wasteful spending” they lambasted during the campaign. (Their effort to start by eliminating funding for NPR was quickly disposed of today.)

Tea Party darling Michele Bachmann (R-MN) has taken a hard line against earmarks in her second term, after getting nearly $4 million in earmarks her first term. “It’s all bad, as far as I’m concerned,” she told Fox News this spring. “All this pork is bad.”

This week, she told the Minnesota Star Tribune that she wants to redefine earmarks so that they don’t include transportation earmarks. Meaning, she wants an absolute ban on earmarks, except the ones she really, really likes. “Advocating for transportation projects for one’s district, in my mind, does not equate to an earmark,” she said.

Actually, that’s exactly what an earmark is, and that’s why they’ve been so controversial. They’re one of the primary ways that the legislative branch exercises control over spending. Many lawmakers see them as indispensable, since, they assert, they know better what the needs are in their districts than federal bureaucrats in Washington.

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At one point midway through yesterday's Brookings Institution forum on metropolitan planning, moderator Chris Leinberger quipped that Portland was deliberately not represented. It's not that Portland isn't a model of sustainability, he explained, but that "we all have Portland fatigue" -- that urban policy thinkers are eager to expand the models of local development beyond Oregon.

The Uptown development in Oakland, cited as a success story yesterday. (Photo: SF Chronicle)

And the forum fulfilled that objective. Planners from Salt Lake City, the Twin Cities of Minnesota, and Sacramento's Area Council of Governments (SACOG) shared successes and setbacks while attempting to forge a way forward for Washington's often uncertain relationship with metropolitan planning organizations (MPOs).

Leinberger, an experienced land use strategist, described the core question as: "What kind of built environment do we want? Over the past 50 years, it has been imposed by a bureaucracy, either in D.C. or by the state capitals."

But as more planners and local residents come to the (non-partisan) conclusion that "it's time to be conscious about what kind of development our transportation choices spark," as Leinberger put it, what can the federal government do to help local success go national?

Michael McKeever, executive director of the SACOG, and Peter McLaughlin, a commissioner of Minnesota's Hennepin County, agreed that the upcoming congressional climate change bill is essential to achieving land use reform.

If the climate bill "does some fairly simple things and requires ... high quality [MPO planning] to be done as a pre-condition of getting federal funds," local development can become a more transparent and rational process, McKeever said.

He warned, however, that the legislation should not "go so far as mandating, 'these are exactly the kinds of savings you should achieve" in terms of reductions in carbon emissions and congestion. "I think, if localities are required to do that kind of high-quality planning, they'll figure it out on their own terms."

In fact, language to that effect was included in both the House and Senate climate bills. How much aid Washington would provide to help MPOs become more environmentally aware remains to be seen, though; the Senate's first climate draft has restored language stricken from the House bill that sets up a grant program to help MPOs, but the provision's fate in the House leaves it at risk of falling out of the Senate measure.

Without using the phrase "grant program," McKeever underscored the importance of incentivizing changes to MPO decision-making by funneling less federal money through state DOTs.

"If some reasonable pot of money is given out based on performance, not some kind of a fair-share formula," MPOs will respond, he said, quipping: We are easy to bribe ... chasing money is a non-partisan American value."