AMOTIA WASHINGTON UPDATE - FALL 2016

The AMOTIA Washington Update is distributed
to keep membership informed of
the federal legislative landscape and
​other relevant issues impacting transportation.

Congress Averts Funding Shut Down – Election Looms

While Washington, DC and the nation focus on the upcoming November election, Congress managed to avoid a government shutdown at the end of September by completing action on an important stopgap spending measure known as a Continuing Resolution (CR). The proposal succeeded, but not before the usual partisan wrangling. Initially, Senate Democrats effectively blocked a Republican resolution to continue government funding that included relief for flood-ravaged Louisiana, but did not contain funding for the water crisis in Flint, Michigan. Ultimately, the dispute was resolved with an agreement by House and Senate Republican leaders to provide funding to Flint later this fall as part of the Water Resources Development Act (WRDA). This funding is expected to take place during the lame duck session of Congress after the November election.

Following congressional passage, President Obama signed the CR into law on Thursday, September 29th. The legislation extends government funding until December 9th, when lawmakers are expected to return to work in Washington for a post-election lame duck session.

The inability of Congress to pass a regular appropriations bill over the last several years has resulted in the regular use of continuing resolutions to avoid government shutdowns. This practice has become the rule rather than the exception in terms of congressional procedure. The current short-term measure gets Congress through the political rigors of the Presidential election, but leaves plenty of housekeeping items on the table to be dealt with before the next funding deadline of December 9th.

This eases the situation short term; however, Congress still carries the burden of following up with additional legislation in December to keep the government funded, likely in the form of another extension. A number of Senate Republicans are already on record as favoring an additional CR, which would push the funding issue into spring of 2017. The benefit of such action is that it relieves a new administration of making significant funding decisions right out of the gate following the election. The downside of a longer term CR is the negative impact it will have on federal agencies that must continue to function at the same funding levels for the previous fiscal year. Unfortunately, dealing with the CR is only one side of a fiscal double-edged sword that will be faced by lawmakers.

Another looming financial issue that is sure to vex Congress is the expiration of the federal debt limit, currently scheduled for March 15, 2017. The debt limit must be raised periodically to ensure that the federal government can continue borrowing money to pay its financial obligations. At the same time, the issue has become yet another political lighting rod in debates regarding overall government spending and fiscal responsibility. The likely partisan hand-wringing over the debt limit will be further complicated if Congress does pass another CR in December, thus pushing both issues of funding and the debt limit into early 2017. This may invoke memories of the so-called “Fiscal Cliff” from the budget negotiations of 2012. The “Fiscal Cliff” resulted in a new level of political brinksmanship before a last minute deal was struck to avoid a government shutdown. To be sure, these issues will be among the first high profile challenges faced by whomever wins the presidency this fall.

As the presidential election heads down the home stretch, congressional legislative activity slowed considerably in 2016. This is generally a routine reality every four years during the presidential cycle, as most members of Congress are required to spend a majority of time on their own reelection efforts or campaigning for others. Despite the focus on the election, some activity did proceed at the federal level in 2016.

Earlier in the year, Congress celebrated “Infrastructure Week” (May 16th-23rd) as overdue public attention was focused on the 21st century infrastructure needs of the United States, and the impact of these needs on the economy. At a Highways and Transit Subcommittee meeting, Chairman Sam Graves (R-MO) discussed efforts by Congress and other policy allies to support House Ways and Means Committee efforts to produce a long-term fix for the Highway Trust Fund. "We do have to find a long-term solution to keep the Highway Trust Fund healthy for a long time to come," Graves said. "So we are asking the Ways and Means Committee to come up with those ideas." The action precedes expected work by Ways and Means on a “blueprint” for broad-based policy to address tax reform through a legislative vehicle in 2017.

The range of funding options include "everything from tolling to Vehicle Miles Traveled (VMT), we've heard, tire tax," he said. "There's a variety of different things, and we are looking at those alternatives,” said Graves.

Graves said he thought taxing VMT "probably has the most promise," but "we're trying to figure out how to do that." He noted that VMT ideas range from GPS tracking to other options for those concerned about driver privacy, such as paying a flat fee or a yearly tax based on the difference in odometer readings. In addition, there will likely be numerous similar proposals offered from other members of Congress. Congressman Graves is a prominent member of the House Transportation and Infrastructure Committee, and is one of the top candidates to become the next committee chair when Chairman Bill Shuster’s (R-PA) term expires.

Presidential Election and Transportation Funding

Despite the increase in verbal sparring evidenced by the three debates of the presidential campaign, the two respective nominees both support infrastructure development and investment. Republican nominee businessman Donald Trump said, during the announcement of his candidacy, that he would "Rebuild the country's infrastructure — nobody can do that like me, believe me. It will be done on time, on budget, way below costs, and way below what anyone ever thought. I look at these roads being built all over the country and I say, 'I could build these things for one third.' We have to rebuild our infrastructure: our bridges, our roadways, our airports."

Trump has put forth few specifics about any such plan, but there are mentions in his recent book “Crippled America: How to Make America Great Again.” Channeling his inner Franklin Roosevelt, Trump said, "If we do what we have to do correctly, we can create the biggest economic boom in this country since the New Deal, when our vast infrastructure was first put into place."

Former New York Senator, US Secretary of State, and Democratic nominee Hillary Clinton has called for increased federal spending of $275 billion over the course of her first five years in office. In addition, Clinton has stated that during the first 100 days of her administration, she would send a comprehensive infrastructure plan to Congress – “the biggest infrastructure plan since Dwight Eisenhower’s Interstate Highway System.”

Congress would have to put their stamp on any such proposal from either future President, but at least throughout all the vitriol that has occurred – and is yet to come – the candidates find something to agree on.

Action in the States

With the attention of Congress squarely focused on national electoral politics, many states have been leading with their own efforts during 2016 to increase funding for their own local projects and infrastructure priorities. Earlier this year, South Carolina approved a bill that would permanently allocate revenue from state vehicle sales taxes and motor vehicle fines to the state highway fund. The action is expected to result in $200 million in increased annual funding for the state’s roads and bridges. Indiana established a matching grant program that would provide a 50-50 funds match to city and county governments for road projects for localities throughout the state. In addition, Hawaii announced a statewide mileage-based user fee concept as a potential revenue source that could replace fuel taxes statewide.

States are also considering numerous transportation-related ballot measures that will be judged by voters on November 8th. These proposals present an opportunity for policy makers to gauge the public’s appetite for funding options ranging from bonds, sales tax increases, and tolling. A number of these ballot initiatives are highlighted below.

Alabama

  • Approval for bond debt in Baldwin County to finance a tolling authority.

Arizona

  • A sales tax increase to benefit road funding in Coconino County.
    Approval for bond debt to fund various road projects in Surprise, Arizona.

California

  • A .5 percent increase in the sales tax to benefit funding for road and transit projects over the next 30 years in Sacramento.

Colorado

  • An increase in property taxes for 15 years to finance roads and bridges in Boulder County. (Similar proposals in La Plata County and Lafayette.)

Florida

  • A one cent increase in the sales tax for road improvements in Broward County.

Georgia

  • A sales tax increase of .75 percent for road and highway improvements in Fulton County.

Louisiana

  • Property tax increases to benefit roads and bridges in Bossier, St. Helena, Natchitoches Parishes.
    A sales tax and a bond measure for road funding in Tangipahoa Parish.

Maine

  • A $100 million general obligation bond with $80 million dedicated to road projects, and $20 million for harbors, freight, and bicycle and pedestrian trails statewide.

New Jersey

  • A statewide measure to determine whether to dedicate all state gas tax revenue to finance only transportation projects, rather than a majority, which is the current law.

Ohio

  • Property tax increases are under consideration in numerous townships for road improvements.

Oregon

  • A division of some revenue from the sales tax on legal marijuana sales to road funding.

Where Do We Go From Here?

This coming January, we will have a new President and many new members of Congress. The question is whether these new leaders will forge a new path, or if the political gridlock that has gripped Washington, DC in this century will continue to rule the day. Despite bold rhetoric, we haven’t seen any tangible action to provide sufficient transportation funding to states. In the next Congress, it is possible that members of Congress and the new administration will negotiate a large tax bill that could include increased funding for transportation programs. While we await the political changes in Washington, states are taking the lead in finding solutions to address America’s infrastructure challenge. This fall, voters in about half of the 50 states will have the opportunity to vote for increased transportation funding on a local, regional, or state level. The results of these ballot initiatives could begin to change how elected officials address transportation funding nationally.