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Long-Awaited Transportation Bill Passes

Monday, December 7, 2015

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Transportation funding advocates, federal agencies and even elected officials might agree that the final passage of a long-term highway bill is a Christmas miracle.

Both Houses of Congress have passed a five-year, $305 billion highway bill that becomes the first long-term funding solution for federal highway projects and state reimbursements longer than two years in more than a decade.

The Senate clinched the deal Thursday (Dec. 3) in a widely bipartisan vote after the House—in an equally impressive bipartisan nod—had sent it to them earlier in the day, according to The Wall Street Journal.

President Obama is expected to sign the bill—known as the Fixing America’s Surface Transportation (FAST) Act—into law this week.

Bipartisan Satisfaction

The new bill is packed full of compromises but also sets the tone for developing and paying for much-needed infrastructure over the next several years. Among the provisions, ferries would receive money and seven Northeastern states—who fought hard to keep their provisions—will get to keep a $1.3 billion pot (an earmark, so to speak) for their mass transportation systems that includes rail service, the WSJ reported.

Architect of the Capitol

The five-year surface transportation is the first of its kind since the mid-2000s. It includes $305 billion for highway projects and mass transportation.

Most of the objections in the 83-16 Senate vote and the 359-65 House vote came from Republicans who did not like a provision that renews the Export-Import Bank and to the tactics used to help fund the transportation projects, the business journal said. But ultimately, it was House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) who got the job done.

It’s a monumental shift away from the struggle lawmakers have had in getting a long-term transportation bill on the books.

As previously reported, Congress has passed at least 35 short-term patches to keep the Highway Trust Fund from running dry. The surface transportation authorization known as MAP-21 went through a 36th patch just before Thanksgiving so that lawmakers could finalize the details after the holiday.

But unlike earlier deals—some of which suggested six-year plans and only three years of guaranteed funding, or authorizations would stop until they did—the new plan provides funding all the way through. It does so with a series of what some are calling “gimmicks” to keep the gas-tax flat and the money rolling in for transportation, multiple reports suggest.

Packed Full of Compromises

Although still mostly financed through the 18.4-cent-per-gallon gas tax that has remained the same since 1990, Congress used a number of taxes to fill the loopholes cause by deflated gas revenue as a result of inflation.

Washington State Department of Transportation

The bill is full of compromises, but does not raise the gas tax and provides funding for all five years, unlike earlier versions of proposed six-year plans.

For example, leaders built support for the measure through the use of funds from the Federal Reserve account, the WSJ reported. The $53.3 billion that will add to the transportation coffers allowed negotiators to settle disputes by distributing money to many districts rather than having to choose among them, the business journal said.

That measure didn’t sit well with Fed chairwoman Janet Yellen, who testified on Capitol Hill that “…financing federal spending by tapping the resources of the Federal Reserve sets bad precedent and impinges on the independence of the central bank.”

The provision takes money from a Fed surplus account that acts as a cushion to help the bank protect against potential loss, the business newspaper reported.

But a crop-insurance subsidy had been cut to offset costs of a two-year budget deal. Former House Speaker John Boehner (R-OH) said he promised to reinstate the federal support, and Ryan agreed to honor the pledge.

Other maneuvers, the WSJ noted, included selling oil from the Strategic Petroleum Reserve and hiring private debt collectors to get people to pay up on overdue taxes.

Experts Who Like the Plan

Despite the give and take, others celebrated what they considered to be a victory for transportation projects.

“It is a tremendous relief to know that with the FAST Act, state departments of transportation will have some reasonable long-term certainty regarding the levels of federal investments for surface transportation,” Paul Trombino, American Association of State Highway and Transpiration Officials (AASHTO) president and Iowa Department of Transportation director said in a statement released by the association.

Anthony Quintano via Flickr

"We know that it was not always easy to see a path forward, but we believe the nation will benefit from the fruits of this legislation," said AASHTO Executive Director Bud Wright.

“We have long said that states, which are the primary implementers of the federal program, need a long-term federal commitment in order to plan for and invest in the kind of transportation projects the nation needs now and well into the future to support our quality of life and economic prosperity.”

AASHTO Executive Director Bud Wright also thanked Senate and House leaders—and the conference committee members; federal officials; and rank-and-file Congressional members who Ryan and McConnell included in the action—for negotiating a bipartisan agreement.

“We know that it was not always easy to see a path forward, but we believe the nation will benefit from the fruits of this legislation,” said Wright.

Other industry experts agreed.

“After so many near misses and close calls, so many cans kicked down the road and so many cliffs narrowly averted, we finally have long-term, fully funded highway legislation,” Brian McGuire, Associated Equipment Distributors president, said in a statement provided to The Hill.

“The FAST Act is the culmination of more than a decade’s worth of effort by AED and its industry allies,” McGuire continued. “This is more than a philosophical victory. Equipment dealers, manufacturers and their customers can now once again plan for the future.”

©iStock.com / TommL

“It’s very difficult to plan work when you don’t know how long the funding is going to last," said Bob Kogler, a coatings consultant engineer and former member of the FHWA.

Those thoughts were echoed by Bob Kogler, a consultant coatings engineer who formerly worked for the Federal Highway Administration and is a contributing editor to the Journal of Protective Coatings and Linings (JPCL).

“We had a similar problem between 1996 and 2006 where we were working with short-term 'bridge' contracts because we didn’t have a long-term transportation funding bill,” Kogler told PaintSquare News on Friday (Dec. 4). “It’s very difficult to plan work when you don’t know how long the funding is going to last.”

For private coating contractors, Kogler said, the difference between having a long-term federal transportation funding bill and the short-term plans can mean the decision to do only private sector work instead of work in the public sector.

“It’s equally difficult to write specifications and policies for certain projects when the policymakers do not know how long they will have funding available,” he said.

“The approach is very different, and for a lot of people, this is what they have been doing,” said Kogler. “It’s like working with corrosion. We are trying to make things that last a long, long time…we are trying to be innovative.

“But for the engineer in the public sector and the private sector, who are trying to work at night and on accelerated projects, the approach has been, ‘Let’s sit around and wait for legislation,’” continued Kogler. “I think a lot of good contractors get scared away because there was no long-term vision, no forecast of what might come next.

“It discourages innovation and doing things right,” said Kogler. “And while this is a great plan, the financing doesn’t seem as though it’s all fixed. We were used to six-year plans, now we have a five-year plan. Hopefully this is the new normal, and it’s more like the old normal.”

…And Others Who Don’t

But not everyone was so keen on the way the bill came to light.

©iStock.com / seraficus

Money for ferries is included, but some argue that the overall bill does not address the underlying financial problems of transportation funding resources.

“While there has been much bipartisan fanfare regarding this ‘long-term’ bill, the proposal is fiscally irresponsible and was dubiously crafted,” Heritage Foundation research associate Michael Sargent wrote in a blog post on the group’s website.

“The bill does not include any meaningful reforms to address the structural problems in highway funding, while making many of the problems worse by increasing spending out of the deeply troubled Highway Trust Fund that has already required $73 billion in bailouts since 2008,” Sargent continued.

“FAST should be regarded as yet another bailout of the Highway Trust Fund that would leave federal highway financing even worse off when the bill’s money runs out.”

Highway, Ferries, Rail, Safety

The bill itself puts $207.4 billion—the bulk of the funding—into highway projects. An additional $48.7 billion would be reserved for mass transit, the WSJ said.

Funding for ferries is included, and the first-ever grant program guaranteeing financing for large-scale freight projects also found its way into the bill. That could help loosen bottlenecks in Chicago’s railyards or build an underground freight tunnel in New York, the WSJ noted.

The bill also includes funds that don’t have “official” uses yet. An example is money for Amtrak, which will get roughly $8 billion out of the new bill.

And while the “windfall” for the rail industry is a welcome addition, the provisions in the bill come with a degree of responsibility, too.

©iStock.com / scanrail

Amtrak and other rail carriers also receive money. But provisions also call for more transparency about the conditions of rail bridges and what the cars are carrying.

“This legislation provides the transparency we’ve been begging and asking Canadian Pacific railroad for,” Michael Murphy, Milwaukee Common Council President, said during a news conference Wednesday that was attended by city’s metro daily, the Journal Sentinel. “It isn’t too much to ask a company that is using our public right of way to let us know if their bridges are safe and secure.”

The JS was writing about a topic it knows well. Not only were the provisions championed by Sen. Tammy Baldwin (D-WI), the city it serves is on a rail line that carries crude oil from North Dakota’s Bakken fields to refineries in Chicago and elsewhere. Critics have been concerned about the condition of the bridges that Canadian Pacific uses while pulling its oil tankers.

In the bill, rail companies would have to provide real-time reporting when a train is carrying hazardous materials so that communities know what to prepare for. It also would allow community officials and engineers full access to the rail company’s bridge reports, the JS reported.

Other provisions in the bill include increasing the civil penalty for automaker motor-safety violations of $105 million per incident from $35 million per incident and give whistleblowers an incentive to report by allowing them to receive 10 percent of those penalties for cases exceeding $1 million, the WSJ reported. Congress added that after a wave of deadly auto-safety recalls in recent years.

The National Highway Traffic Safety Administration funds also would increase, with almost $1 billion for safety programs over five years.

Job Finally Done

In the end, it was one of the best compromises that could have come out of the years of negotiation that went into it, several lawmakers have said. One of the proudest statements came from Bill Shuster (R-PA), the House Transportation Committee Chairman who has worked feverishly on getting a bill passed.

“It proves to the American people that we can get things done,” Shuster told Reuters.

   

Tagged categories: Bridges; Federal Highway Administration (FHWA); Government; Institute for Highway Safety; Marine; Mass transit; North America; Program/Project Management; Public Transit; Rail; Roads/Highways

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