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Obama Budget Proposal Starts Transportation Reauthorization Debate

The Obama Administration offered a starting point for a multi-year transportation reauthorization as part of its FY 2012 budget proposal. The Administration outlined a six-year, $556 billion surface transportation program — one that would radically change the program’s scope and structure, although the budget failed to adequately address how the proposed six-year program would be funded.

According to the American Road & Transportation Builders Association (ARTBA), the Obama surface-transportation program reauthorization plan would include:

New Trust Fund — Create a new “Transportation Trust Fund,” replacing the Highway Trust Fund, and establish four accounts — one for highways, one for transit, one for high-speed rail, and one for the National Infrastructure Bank.

Off-Budget — The transportation programs would be moved “off-budget” and become “mandatory spending” with spending strictly aligned with revenues into the trust fund.

Passenger Rail — For the first time, passenger rail would be a major component of the surface transportation bill, directly receiving $53 billion, or just under 10 percent, of the total six-year authorization. This funding would include “High Speed Rail” initiatives, but the budget made clear that the Administration’s plan to connect “80 percent of Americans with access to High Speed Rail,” means largely “higher than current speed” Amtrak, not “bullet train,” service.

Redirected Highway Program — The existing more-than four dozen federal highway program categories would be reduced to five, with a six-year funding of $332.8 billion, 60.2 percent of the six-year authorization total. Of this, $257 billion dollars would be directed to investments in an enlarged, 220,000-mile “National Highway System.” The NHS investment would be split nearly in half — one for a “fix-it-first” program to rehab existing NHS road surfaces and bridges; the other for a “flexible” program allowing states to direct funds to projects on any eligible federal-aid road. The remaining 20-some percent funding in the Highway Program would be directed to safety ($17 billion), a “livable communities” program ($28 billion), federal lands, tribal roads, emergency relief and workforce development ($10 billion) and research ($4 billion). An additional $17 billion would be available for a new “Transportation Leaderships Award” program of U.S. DOT directed earmarks.

Transit Investments — Almost 22 percent of the six-year program’s total funding, $119 billion, would go to the transit program. The formula program would receive $46 billion for transit expansion and the New Starts program would receive $20.6 billion. A new “Bus & Rail State of Good Repair Program” would be created and funded with $35.5 billion to repair and purchase buses, rail cars and rail transit stations. Transit research, operations and safety programs would receive just over $2 billion. A new “Transit Leadership Award” program would provide an additional $14.7 billion for USDOT earmarks over six-years.

National “I-Bank” — The authorization would create a “National Infrastructure Bank” operating under the umbrella of the U.S. DOT for major infrastructure projects of all types. It would receive $5 billion annually in federal funds to leverage over the six-year authorization.

FY 2012 “Jump Start” —Under the proposal, transportation programs would receive a one-time, $50 billion jumpstart, elevating FY 2012 investments to $128 billion for highway, transit, rail and airport activities. This would be $53 billion more than was authorized for FY 2010.

Absent from the president’s budget are new funding mechanisms. User fees, the most viable option for providing guaranteed, long-term funding for surface transportation, have been dismissed as a non-starter by the president, according to the Associated Equipment Distributors (AED). Instead, Obama’s proposal seeks to find funds by consolidating highway programs and hoping for a congressional bipartisan financing mechanism.

“In sum, the president’s transportation budget document is long on rhetoric, short on the details, and, in some respects, appears divorced from the new political realities in Washington,” opined AED. “For example, despite broad public support for smaller government, Obama has proposed spending increases without making tough choices about how to pay for them. And despite the fact that many Republicans oppose high-speed rail, the administration made it the centerpiece of its transportation program.

“AED shares the administration’s belief that substantial investments in surface transportation are needed to ensure our long-term economic competitiveness. However, we have a clear difference of opinion about priorities. With all that said, keep in mind that this is just the first salvo in a long battle. The highway reauthorization story will continue to develop in the weeks ahead, as the House and Senate hold additional hearings and roll out their own proposals. Stay tuned.”

More information on Obama’s proposed transportation budget is available here.