Moving Ahead for Progress?

Last summer, just before adjourning for campaign season, Congress finally adopted a new law setting funding levels and policy priorities for federal investment in highways, bridges and public transportation. It was nearly three years overdue; the last law, known as SAFETEA-LU, expired in September 2009. The new one, dubbed Moving Ahead for Progress in the 21st Century — MAP-21 for short — lasts only two years, versus the usual six or so.

And for the first time, the bill was passed amid a swirl of partisan rancor and controversy. Since the Interstate Highway Act created the modern transportation program in 1956, the so-called “highway bill” has been one of the few measures that members of Congress term a no-brainer: Because it delivered billions of dollars to every state and Congressional district, it very rarely engendered much in the way of partisan wrangling.

But this time was different, for a variety of reasons. At the root of it, perhaps not surprisingly, was money. Since the 1950s the transportation bill has been a matter of divvying up an ever-growing pie, a trust fund fed by the federal gas tax. But in the last few years that pie has stopped growing. Part of it is the long economic downturn: Fewer people working means fewer people commuting, lower paychecks lead people to cut corners, and higher gas prices have added even more incentive to conserve. In addition, said Darren Smith, NAR’s policy point person on transportation, “The 18-cent federal gas tax has not changed in two decades, is not adjusted for inflation and is a per-gallon tax. So more efficient cars mean less fuel consumed, and less revenue for the trust fund.”

In fact, the trust fund took in about $30 billion less than expected over the five-year life of SAFETEA-LU, a shortfall that had to be made up from the general fund — the same pot of money that funds the rest of the federal government, runs a deficit and is the subject of intense partisan debate. When the last law expired in 2009, Congress had only recently passed the American Recovery and Reinvestment Act in response to the 2008 financial meltdown. They were not eager to take up a multi-year transportation bill that needed billions more in revenue; neither raiding the general fund nor raising the gas tax seemed to be palatable options. Rather, they began a series of short-term extensions.

Then in 2010 a wave of freshmen arrived, eager to cut spending. One proposal was for a budget that would hack transportation by one-third, in line with what the current gas tax is expected to earn. But that idea proved deeply unpopular with state and local officials of both parties, who argued that the country needs to spend more, not less, to fix crumbling infrastructure and keep up with population growth. With neither party willing to propose a gas tax hike during the downturn, the Senate pressed successfully for a two-year bill, funded at the current $53 billion a year plus inflation, which needed a relatively modest general-fund infusion of $12 billion.

The result was a mixed blessing, Smith said. “We wanted a new authorization because the uncertainty around shortterm extensions was not helpful to the communities trying to build projects and plan their growth. We wanted a bill that was mode neutral, that didn’t tilt the playing field toward highways or transit. We wanted to make sure communities could get what they need to do smart growth.”

So how did it come out? “A three-year extension of SAFETEA-LU would have been preferable to what we ended up getting, although it’s better than continued three-month extensions.”

NAR was part of a large, national coalition called Transportation for America (T4America), an unprecedented alliance of transportation user groups, including everyone from real estate developers and metro chambers of commerce to the American Public Health Association and a range of transportation and other organizations. T4America argued that, 20 years after completion of the Interstates, the federal program should shift from a primary emphasis on building large highways to maintaining existing roads and bridges, while filling out the network with better rail and bus systems and more options for safe travel by foot or bicycle. The coalition also pushed for greater accountability in how money is spent, by requiring aid recipients to measure their performance in indicators such as getting more people to work on time, broader access to jobs, household transportation costs and energy savings.

Here are some key provisions of the bill:

Highways and Bridges

The authors of MAP-21 set out to reduce the overall number of programs and give states greater flexibility to move money among accounts. They reduced the total number of programs from 90 to about 30. Congress also ended the practice of member-specific earmarks and took away much of the discretionary funding that the U.S. DOT could use to award competitive grants aimed at spurring innovation. As a result nearly all the money is apportioned to states by formula.

As has been the case for 30 years, 80 percent of the federal bill — about $38 billion a year — will go to accounts devoted to highways and about 20 percent to transit. For highways, the law puts heavy emphasis on the National Highway System, which is the Interstates plus key state highways and other routes, representing about 5 percent of the total road miles in the United States. As a result, it reduces the funding available for other roads and bridges, at a time when state and local budgets are deeply stressed. In the name of flexibility, the law also eliminates dedicated pots of money for bridge repair and other maintenance. Under SAFETEA-LU about a third of highway dollars were devoted to maintaining roads and bridges. Advocates for better-maintained roads, noting that nearly 70,000 bridges are rated structurally deficient, have expressed alarm that spending money on repair is now discretionary.

The bill’s authors say that states will have some incentive to make responsible choices under a new system of performance measures, mostly to do with maintenance and operations of highways and transit. In the near term, however, that system does not have the enforcement teeth advocates would like, because in most cases the states don’t stand to lose money as a result of failure to improve performance.

Transit

In the biggest battle of the authorization debate, some House Republicans pushed to end the dedicated federal support for public transportation that began under President Reagan in 1982. That move provoked an enormous outcry from communities across the country. Transit ridership is at an all-time high in the face of rising gas prices and a growing urban population, and many communities are trying to preserve and grow transit options. The push to end federal support ultimately died when Republican members of Congress who represent parts of metro areas reliant on transit refused to vote for the measure.

In the end, transit funding will remain at previous levels. The New Starts program, which funds construction of new rail and rapid bus lines, will continue at $1.9 billion a year. Local agencies still get funding for capital and operations according to the same formula. One provision that was cut during last-minute negotiations would have allowed large systems to use some of their capital funding to prevent service cuts in the event of severe economic hardship.

On the positive side for transit, MAP-21 sets new standards for the state of repair of transit systems and creates a pot of money to help with that. It also includes a small pilot program of grant assistance to help communities plan for development around their rail stations. Such “transit-oriented” developments help to increase ridership on the system while meeting the rising demand for more walkable neighborhoods.

“It shouldn’t be any easier for a highway project to get funded than a transit project,” Smith said. “The new authorization doesn’t change the equation very much — the status quo being that highway projects are easier because matching and other requirements aren’t as tough. And highway projects don’t compete against each other the way that transit projects compete for New Starts money.” MAP-21 does expand a federally subsidized loan program known as TIFIA, so that transit projects are eligible for what is now a larger financing pot.

“Active” Transportation

In a close second after transit for most bitterly contested provision, MAP-21 eliminates three popular programs used primarily to provide safer conditions for walking and biking: Transportation Enhancements, Safe Routes to School and Recreational Trails. It creates a new set-aside called Transportation Alternatives that funds some of the same projects, but lowers available funding by a third, from about $1.2 billion to $808 million. For the first time, half of that money is directly allocated to metro areas to program as they see fit, without the state being able to withhold or reprogram the money. 

However, the other half is left to the state’s sole discretion, meaning that some states can “opt out” of funding safe walking and biking.

“The Transportation Alternatives program, on net, is a loss,” Smith said, “because while it does sub-allocate to metro regions, it reduces the overall amount,” and expands the types of projects eligible for funding so that “there are more things competing for less money.”

Smith also was disappointed that a “complete streets” policy included in the bipartisan Senate version of the bill was stripped out in negotiations with the House. That policy would have directed states to make sure the needs and safety of all users of a road — motorists, bicyclists, pedestrians, transit riders — were provided for, in ways appropriate to the setting of the street in question. “A complete streets policy combined with greater flexibility for states, and greater accountability — that could have made it OK.”

Money, Again

Regardless of the policies in MAP-21 today, the bill officially expires in September 2014 — less time than it took to reauthorize the program this time around. That affords the possibility that disappointing aspects can be fixed. More importantly, though, it sets a time clock for Congress to begin a much more serious discussion of the infrastructure needs of a rapidly changing America, and how to fund them, Smith said.

“The law doesn’t do anything to bolster the highway trust going forward,” Smith said. “It doesn’t do anything to resolve the long-term challenge of matching revenues to actual infrastructure needs, thanks to declining purchasing power.

The existing funding level wasn’t adequate to begin with, so maintaining it at that level is not much of a victory.

“We will be working to make the next authorization better and make sure it doesn’t stand in the way of local communities being able to provide the types of neighborhoods that people tell REALTORS® that they want.”