That existing law, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy For Users (SAFETEA-LU), was enacted in August 2005.

The post-Interstate era (1992-) has provided unprecedented increases in the levels of federal funding each year, in 2008 “emptying” the Highway Trust Fund, actually exceeding the amount taken in via federal excise taxes at the gas pump and elsewhere. The flow of federal funds to states was disrupted and amid industry pleas and consternation, that difference was made up in September 2008 with an $8 billion transfer from the U.S. General Fund into the Highway Trust Fund.

The existing SAFETEA-LU authorized $286.5 billion in federal investment for the highway, public transportation and highway safety programs from fiscal years (FY) 2004-09, representing a nearly 39 percent increase from TEA-21's $207 billion over six years. Now SAFETEA-LU expires Sept. 30, 2009, and new authorizing legislation must be enacted by then or else the federal surface transportation program will expire.

SAFETEA-LU's predecessor, the Transportation Equity Act for the 21st Century, or TEA-21 — expired Sept. 30, 2003 after six years of phenomenal growth in federal highway spending. Over the duration of TEA-21, federal investment in highways and transit rose nearly 40 percent: highways were guaranteed at $171 billion and transit at $36 billion. Its successor bill, informally called TEA-3, had to be enacted by Oct. 1, 2003 to prevent serious disruption in roadbuilding funds.

Instead, the program was allowed to expire, and road construction had to be kept on life support systems by state and local spending, private sector funds, and the periodic infusion of capital via the record 12 TEA-21 funding extensions, which continued disbursements under the existing program.

Oberstar seeks 57 to 75 percent increase

With the economy likely in the midst of a recession, surface transportation legislators and industry lobbyists alike hope to avoid a repeat that near-worst-case scenario in fall 2009. And at the late October Chicago annual meeting of the American Road & Transportation Builders Association, U.S. House Transportation & Infrastructure Committee Chairman Jim Oberstar (D-Minn.) gave a glimpse of the bill he’s been working on with other committee members.

“We are entering a transformative period in surface transportation,” Oberstar told ARTBA. “We have been judging the usefulness of SAFETEA-LU and the new bill can’t be business as usual.” Instead, he said, the new bill will tackle 21st century transportation needs, be accountable to stakeholders with benchmarks, rely on multiple streams of funding, and provide a “vast increase in funding.”

The bill’s funding level would be from $450 billion to $500 billion over six years, a 57 to 75 percent increase over SAFETEA-LU, but would introduce new elements into the surface transportation program.

Oberstar’s bill would restructure the existing act to be project outcome-based, and require that performance benchmarks – validated through interagency cooperation, such as between the Environmental Protection Agency and the Federal Highway Administration –  be established for continued project funding.

“We will get all agencies together [in one room] and they will get on the same page,” Oberstar said. “We will bring all the assistant secretaries of transportation in one room to foster intermodalism. We will have benchmarks and they will be met or we will run over you!”

And Oberstar drew cheers from the road contractors when he said that enhanced environmental streamlining would be part of the bill. “The long waits [for projects] are not serving the people,” Oberstar said.

Frame bill as jobs creator

The extraordinary size of his funding level would be justified in part by framing the bill as a creator of jobs during a recession that’s hit construction especially hard. Oberstar underscored this at a hearing Oct. 29, titled Investing in Infrastructure: The Road to Recovery.

“Investment in public infrastructure has created and sustained jobs in difficult economic times, and it can do so again today,” Oberstar said as the panel opened. “Nearly a million construction workers are on the bench; the construction industry is suffering the highest unemployment rate of any industrial sector; and construction firms are operating on the margin or worse.”

There, in testimony before Oberstar's Transportation & Infrastructure Committee, Dr. William Buechner, ARTBA vice president of economics and research, noted that “U.S. construction workers have, so far, borne the brunt of the current economic crisis.”

Noting that the unemployment rate in the construction industry during September was 9.9 percent — almost four percentage points higher than that for the economy as a whole — Buechner said ARTBA’s quarterly survey of transportation construction contractors found 60 percent reported they had fewer employees in the third quarter of this year than during the same quarter in 2007.”

The roadbuilding industry has the capacity to take on additional work immediately," Buechner said. "Our latest market conditions survey found only three percent of respondents operating a full capacity during the third quarter. Thirty six percent report they are now operating at 75 percent of capacity or less. This is up from 27 percent in the second quarter and the highest in the history of our survey."

Buechner emphasized the industry’s ability to immediately address transportation needs and create jobs. “With a properly structured program, thousands of transportation construction projects across the nation are ready to go," he said. "This includes work like milling, resurfacing and overlays, safety striping, guardrail and sound wall installations, signage repair and replacement, and investments in new lighting and safety appurtenances.”

Bridge investments could also play a large role in an economic recovery and jobs program, Buechner added. "Bridge deck repairs, sealing, resurfacing and preservation work can be put into motion quickly," he said. "So could accelerated bridge inspection, scraping and painting programs.”

Oberstar himself noted that in January 2008, a survey of state departments of transportation by the American Association of State Highway and Transportation Officials identified 3,071 ready-to-go highway and bridge projects with a total cost of $17.9 billion that could be under construction within 90 to 120 days.

Similarly, he said, an October 2008 survey of public transportation agencies by the American Public Transportation Association identified 559 ready-to-go transit projects at a total cost of $8.03 billion.
 

Paying for the funding boost

How to pay for the funds increase is another matter. Even without the recession, vehicle miles traveled had been declining, and this is impacting money streams in the Highway Trust Fund.

“The last time manna came down from Heaven was 3,500 years ago, and God ain’t doing that any more,” Oberstar quipped. “Our funding sources have been on autopilot since 1993 [when the last gas tax increase was enacted], and that was for deficit reduction. For the first time we have seen a reduction in VMT, yet the Highway Trust Fund and the gas tax must remain the cornerstone of the surface transportation program.”

But in addition to the gas tax, Oberstar said fees based on VMT and vehicle weight could be considered. Such fees also could be indexed to the cost of construction. Congestion pricing is an option which could help reduce traffic jams while generating fees, he said. He added ethanol needs to be subjected to a user fee with its exemption ended.

Of all the legislation undertaken by Congress, surface transportation funding is by far the most bipartisan, with a united Congress often sparring with a recalcitrant president over higher funding levels. How the new president will react to major reauthorization as Oberstar painted in October remains to be seen.