In a “normal” year, when the huge federal surface transportation reauthorization program (aka “the highway bill”) is up for reauthorization, it is a high-profile issue that warrants significant media attention, as well as fierce debate among lawmakers looking to protect their share of federal dollars for road, bridge and highway improvements. However, This year — when America is fighting two wars, attempting to recover from the worst economic climate in decades and attempting to overhaul the nation’s entire health care system — it seems that the pressure to move highway legislation has lost some steam. This is despite the fact that the unemployment rate in the construction industry exceeded 21 percent only months ago and the Highway Trust Fund (HTF) is facing bankruptcy. Unfortunately, the only real debate on highway reauthorization right now centers on when, not how, to address these growing infrastructure problems.

Status Quo Not Cutting It

When Congress finally gets serious about highway reauthorization, the debate will center on how to pay for future projects currently funded by the HTF. Currently, these projects are mainly paid for by the 18.4-cent per-gallon “user fee” on gasoline. The fact that the gas tax has not been increased since 1993 has inevitably led to the current deficit facing the HTF. Considering the increase in fuel-efficient vehicles and the fact that people are generally driving less due to the bad economy, we simply will not be able to count on fuel taxes as the only long-term financing solution to our rising transportation needs.

One alternative that will be on the table is the establishment of Vehicle Miles of Travel (VMT) tax. Simply put, this involves installing a Global Positioning System (GPS) receiver and antenna, a mileage counter unit and a short-range-radio-frequency antenna in vehicles to track how far drivers are traveling. While the general idea is favored by some, there are currently more concerns than support. Tracking when and where American citizens are going will doubtless spark “Big Brother” controversy, since many Americans would resent the idea of the government tracking information about where and when they travel.

Additionally, there would be scores of policy issues with which Congress would have to grapple. That said, considering the tremendous needs facing our highway infrastructure and the large number of jobs that are created with funding transportation projects, it is clear that these are issues that must be debated, and sooner rather than later.

Do the Work vs. Kick the Can

We weren’t far into the 111th Congress before it became clear that something had to be done to address yet another HTF shortfall in 2009, with lawmakers estimating in July that there would be a $5 billion to $7 billion deficit this year.
Because a similar shortfall in 2008 was addressed through an $8-billion transfer from general (tax) revenues, conservatives on the Hill were quick to criticize the concept of another direct transfer from general revenues, labeling the action a mere “Band-Aid” for a much bigger problem. Almost immediately, the White House, Congress and industry drew their battle lines over the best ways to reauthorize the program, and more importantly, when.

While gas tax advocates in Congress and in the private sector maintained that increases in gas and diesel taxes, along with indexing them for inflation, would provide a much needed boost for the HTF, the White House called the idea a non-starter almost immediately. The VMT concept was also considered D.O.A. by Obama officials. At that point neither a gas tax increase nor establishment of a VMT was strongly supported by a large group of lawmakers.

Therefore, the idea of moving a six-year, $500-billion reauthorization bill, as supported by longtime infrastructure champions such as House Transportation and Infrastructure committee Chairman Jim Oberstar (D-Minn.), as well as the TCC, was temporarily forced to take a back seat.

Timing was everything.

The HTF was set to expire at a rapidly approaching Sept. 30 deadline, and to make matters worse, it became clear that the shortage of available funds would make the HTF defunct even before the date of expiration. Therefore debate quickly turned to what short-term “fix” would be appropriate. Although all key players agreed that a fix was needed, as always, the fight was over the money. In a race before the annual August recess, lawmakers worked furiously to agree on the short-term fix. In the end, a $7-billion transfer from the general fund to the HTF won the day.

With the $7-billion fix taken care of through September, the debate turned to how long the next extension using current funding levels should be until a full reauthorization could be worked out. Advocates looking to move a full reauthorization bill wanted as short an extension as possible to exert pressure on Congress to move a comprehensive bill. The House overwhelmingly passed a three-month extension.

On Sept. 30 (date of expiration of the last highway bill), Senate leaders who initially advocated an 18-month extension were working furiously to develop their own three-month bill. The expectation at press time was that if an agreement was not reached, Plan B would be the inclusion of a one-month extension of current HTF funding in a broader “continuing resolution,” which keeps federal programs (whose appropriations bills have not passed) running after the fiscal year.

Transportation Appropriations Update

All in all, 2009 was a good year for transportation infrastructure. Appropriations funding for the HTF was $40.7 billion, and surface transportation received an additional $27.5 billion in “economic stimulus” funding provided in the American Recovery and Reinvestment Act. The FY 2010 transportation appropriations bill passed in the Senate on September 17, providing $42.5 billion for the federal highway program, a 4.4 percent increase over this year’s level. The bill must now be reconciled with House legislation, passed earlier this year, which would provide a less generous $41.1 billion in FY 2010.

NUCA works actively on highway legislation because it is estimated that three to five percent of federal highway dollars end up funding utility location projects (storm drains, traffic signals, dry utility, etc.). Increased funding benefits your bottom line, and that’s what we’re all about.

Eben Wyman is NUCA Vice President of Government Relations.