Congress is rapidly approaching another fiscal cliff — and many of the nation’s highway, bridge and transit projects could be the major casualties.
The federal law that sets national policy and investment levels for highways, transit and other forms of surface transportation is set to expire Oct. 1. Even before then, however, the highway trust fund that channels this federal aid to states and local governments is expected to run out of money by September.
In February, during an event at St. Paul’s Union Depot, President Obama proposed a four-year extension of the transportation law and funding it with the help of a one-time, $150 billion infusion of revenues from corporate tax reform.
“If Congress doesn’t finish a transportation bill by the end of the summer, we could see construction projects stop in their tracks, machines sitting idle, workers off the job,” Obama told a crowd of about 1,300 at the depot.
Little progress on shortfall, extended law
Thus far, however, neither house has made much progress toward either filling the trust fund’s impending shortfall or extending the soon-to-expire transportation law.
The problem is no surprise to state transportation officials and policy makers. At the start of the last Minnesota legislative session, the Senate and House transportation committees were briefed on the issue by Derrell Turner, head of the Federal Highway Administration’s Minnesota office. He warned that the trust fund is “perilously close to being insolvent.”
“If the balance were to drop low enough, the department might be forced to slow reimbursement payments and make only partial payments to states for road and bridge projects,” Turner said.
Charles Zelle, commissioner of the Minnesota Department of Transportation (MnDOT), said at the time that the state has sufficient reserves to manage cash flow in the short-term “so that projects don’t stop. But we would not be able to sustain that over time without a great reduction in our program.”
Kevin Gutknecht, a spokesman for MnDOT, said this week that the department’s summer construction program — some 308 projects totaling $1.1 billion — would not be affected if the federal trust fund runs out of money. But he said the same might not be true for counties and cities, which may not have the same kind of reserve funds as the state.
No postponed projects — yet
Abbey Bryduck, transportation policy specialist for the Association of Minnesota Counties, said she has not heard of any local projects that have been postponed. But she added: “I do know there is concern and that there are many projects that won’t be able to move forward if the trust fund becomes insolvent.”
Congress established the highway trust fund in 1956 to provide a stable funding source for highways and bridges, and later expanded it to include transit and highway safety programs. It is funded with revenues from the gasoline tax and other user-related fees.
However, the federal gasoline tax — currently 18.4 cents a gallon — has not been raised since 1993. And growth has slowed in recent years with the introduction of more fuel-efficient vehicles and the decline in total vehicle miles traveled. Meanwhile, highway construction costs have increased by more than 70 percent in the last two decades, according to the Federal Highway Administration.
As a result, Congress has been forced over the last six years to transfer $55 billion in general-fund revenues into the highway trust fund just to maintain funding at the levels promised in the federal transportation law.
Federal funding accounts for more than half of the capital transportation budgets in all but 15 states, according to Transportation for America (PDF), a Washington, D.C.-based advocacy group. For Minnesota, the feds are providing nearly $740 million this year in highway and transit funds, or 60.9 percent of the state’s capital budget for these purposes.
Needs outpacing funding
Not surprisingly, transportation advocates say federal funding has not kept pace with the needs. In its latest infrastructure report card, issued every four years, the American Society of Civil Engineers gave low grades to the condition of the nation’s roads (D), bridges (C+) and transit (D).
In Minnesota, MnDOT reports that 50 percent of the state’s highway pavements and 35 percent of its bridges are more than 50 years old, and says the highway system faces a $12 billion funding gap over the next 20 years.
Transportation historically has been a bipartisan issue — and it still makes for some unlikely political allies. Earlier this year, a coalition of 17 governors called on Congress to plug the hole in the highway trust fund and avert a transportation funding crisis. The group spanned the ideological spectrum from Minnesota’s Mark Dayton on the left to Wisconsin’s Scott Walker on the right.
However, with a divided Congress, few issues seem to escape partisan gridlock. Later this month (June 17-19), a group of about 50 members of the Minnesota Transportation Alliance will travel to Washington to press for congressional action. They will include local officials, contractors, engineers and transit advocates.
Margaret Donahoe, executive director of the alliance, said her group would like to see not just another short-term fix of the trust fund, but approval of a new, multi-year transportation law. Formulas and funding typically have been set in law for six years at a time so states and local governments know what to expect in the planning, engineering and construction of projects.
“They keep kicking the can down the road,” Donahoe said. “Congress really needs to come up with a plan instead of these short-term extensions all of the time.”
There’s no money to keep our roads and bridges repaired, but…
“When the Green Line debuts Saturday, East Metro Strong’s informational kiosks will greet passengers at nine stops, urging them to look beyond the new $957 million light rail.
After all, more than two-dozen transit projects of varying scope and intensity are somewhere on the horizon. Their theme: “The Green Line is Just the Beginning.”
http://www.twincities.com/transportation/ci_25934875/after-green-line-host-bus-and-rail-projects
How do you get to “no money”?
Here’s the quote from the article
“For Minnesota, the feds are providing nearly $740 million this year in highway and transit funds”
The issue isn’t that there is no money available. The issue is the highway system as currently built requires more maintenance funds going forward than the gas tax will provide. The sensible thing to do is raise the gas tax that hasn’t been adjusted since 1993. Changing from $0.184 to $0.25 per gallon would take care of most of the shortfall.
The alternative is forcing the states to pay more of the cost or shutting down roads that we have decided we no longer want to drive on. As the saying goes, nobody rides for free.
The difference between a 1993 funding level and today’s need…
…would become more clear to the commenter above if his income were to be reduced to its 1993 level. This might open his eyes.
RE: You can’t go back…
Folks, The money that should have gone to your roads and bridges went instead to stratospheric salaries and gold-plated pensions for every level of state government, new cars and equipment (while you drove your rust-bucket), fancy seminars in exotic locales and layer upon layer of redundancies. Now, these same people want more of your money. Though they’ll be some modicum of improvement to your pock-marked roadways, the bulk will simply line these same player’s pockets. Time to start over!
Moving Forward
So let me see if I get this straight. You’re advocating for an armed revolution simply because you think public employees are compensated too well and you feel you should drive a better car? Because at the end of the day that’s what “time to start over” means. Do you have any facts, figures, and cites to back up your position or is this something that you feel is true because you heard it on the Tee Vee?
I don’t know where you live, but I’m in St. Louis Park and my city, county, and state are very efficiently run. That doesn’t mean that there aren’t areas where things could be improved, but overall we run a pretty good show here. Personally, I don’t mind if public employees get a good pension because the salaries aren’t that good–they could make far more money in the private sector. Plus public employees have to put up with people who are on the low side of the six sigma scale when it comes to intelligence and make half-baked claims about what they do all day at work.
In my opinion giving them a little bump in retirement is the least we can do.
Totally wrong
Mr. Mikkalson is totally wrong. State workers are not making stratospheric salaries and to the extent that they’re retirements haven’t been wiped out it’s because they’ve preserved their Unions instead of joining the ranks of “at will” employees without labor contracts.
Unlike the private sector government wages and salaries only account for around 6% of the total operating budget. The total cost of employee compensation for the executive branch (90%) of the state workforce is $2 billion out of a $29 billion budget. The state contribution to “lavish” retirements comprises .35% of the budget.
Furthermore many of the perks routinely available in the private sector are not available to state workers, such as company cars, tuition reimbursement, or lavish travel expenses, etc. Nor are state workers equipped with the latest and greatest equipment and technology. The on-call phone for the health department is a ten year old Sprint flip phone and the state fleet of cars is 5-10 year old Fords. If and when state workers fly, they fly to essential conferences and they fly coach. State workers don’t even get to keep frequent flyer miles for the tickets purchased in their names.
You can see the actual state worker budget report here: http://www.mmb.state.mn.us/doc/report/workforcereport2012.pdf
Gee, do you think a $700-800 million dollar bridge to nowhere, across a nationally designated Wild and Scenic River, with no provisions for any transit other than motorized, a couple miles upstream from another major highway crossing might be just a little too expensive in light of this information? I note that the entire annual amount MN receives from the federal government is less than or equal to the cost of the bridge project. I wonder how much of that annual amount is going into this subsidy for land speculators and developers in Western Wisconsin. And how much money is being diverted from other needed maintenance and replacements by this oversized boondoggle brought to you by Messrs. Bachmann, Dayton, Franken, Klobuchar, Obama, and all those who “greased” the wheels of government to somehow make this travesty happen?
Trains
Yes, everything we don’t like is a boondoggle and everything we do like should be paved with gold.
Here are a few figures for context. Yes, rails are expensive, but then so are roads.
-Our current road budget is about a billion dollars per year.
-In order to maintain what we have, we need to double that number to two billion dollars per year.
-The above figures just include maintenance–not building new roads.
-Minnesota has the fifth largest miles of paved roads in the nation, even though we aren’t fifth largest in terms of area or population.
Are trains going to serve the needs of everyone? Absolutely not. But then roads, planes, and ships don’t fill everyone’s needs either. We need an ‘all of the above’ approach in order to make our transportation system work. Take any one element out of the mix and the rest of the system suffers because of it.
Just yesterday I was reading an article about tourists to the Twin Cities. We currently get about 29 million visitors and that’s projected to grow to 36 million over the next decade. I’m going out on a limb here, but I’m betting a lot of those people would like to get around without having to rent a car or take a cab. Let’s give them some options to do so.
Gas Tax
Being that the federal gas tax has been locked in at its current rate since the first year of the Clinton administration, is it any wonder its purchasing power has diminished in the last two decades?
A simple answer would have been to have it set to increase a penny or two every year. Considering the wild fluctuations seen in retail gas prices, that penny or two would never have been noticed. A solution like that makes way too much sense however, so of course it would never be considered.
In the meantime, the phrase “deferred maintenance” looms ever larger, to our detriment.
21st Century roads…
This issue is not just how much you spend but how it is spent.
We just completed an almost 2 year rebuild of 694 eastbound between 35w and Snelling Avenue. They kept this major road as a 2 lane road eastbound. The congestion is worse than before the rebuild.
It seems our flat-earth, anti-progress, anti-highway, anti-car officials insist on spending millions with no increase in highway capacity.
Let us use the “gas tax” for highways that are used by cars that burn gas!
I believe most of that congestion is due to the two lane section that they did not yet re-pave between Lexington Ave. and Rice street. That section is scheduled to be expanded to three lanes, which should relieve the congestion somewhat. The west-bound split to hwy 10 also causes some congestion due to “slow” drivers using the left lane (which becomes the right lane after the split). The three lane expansion will probably help to alleviate this also.
Mind you, adding lanes is a temporary fix that encourages suburban sprawl. Five years out, I would wager that all the same congestion will be back again.
Also, using some of the gas tax to pay for transit does provide value even to those that don’t use transit. You know those buses that you see passing you on the shoulder every day? Imagine a few dozen extra cars on the highway instead of that one bus.
Shell Game
Keep your eye on the shell with the pea under it. There is a slight of hand at work here. We have spent hundreds of billions destroying infrastructure in Iraq and Afghanistan. Now we don’t have resources for our own roads. These issues are more closely related than any politician will admit to us.
We have plundered a huge share of our nation’s treasure. The cost of a train pales in comparison to what we’ve spent in the name of “defense”.
Well said, Frank ! Actually, though, it’s trillions.
The money blown on fruitless foreign adventures ($4 trillion to $6 trillion) in recent and future years could have improved our country in lots of ways, and without all the killing.
However, the expenses we have signed up for will not stop anytime soon, regardless of pulling our troops out of the quagmires.
http://www.washingtonpost.com/world/national-security/study-iraq-afghan-war-costs-to-top-4-trillion/2013/03/28/b82a5dce-97ed-11e2-814b-063623d80a60_story.html
And what have we left in Iraq and Afghanistan besides ongoing chaos ??
What else might we have accomplished with $4 trillion to $6 trillion ??
Hey, I agree
Not sure if my post will come through, but, yes, Mr Phelan, I wholeheartedly concur.
Congestion
Here are a few numbers from this week’s City Pages to provide a little context.
-We rank 42 out of 62 cities for congestion.
-Congestion increased 20% in 2013 over 2012 levels.
-Twin Cities commuters spend about two days a year stuck in traffic.
It’s an investment
The biggest lie to have been perpetrated on the American people in the last two decades is that government spending is a economic black hole, a liability rather than an asset.
This economic fallacy has led to reliance on magic tax cuts and deregulation that have only led to recessions, crumbling infrastructure, and policy paralysis.
The American Society of Civil Engineers has been giving the nation’s infrastructure a “D” for years now. Thousands of bridges and miles of roads are in desperate need of repair and replacement, and transit options are desperately needed to the tune of something like $4 trillion.
Those trillions would not be dollars thrown into a black hole, they would be a huge job creating, economic booming, efficiency creating investment that would pay off 5 to 1 at least.
Investing
So what you’re saying is the $4 – $6 trillion we recently spent on a couple of wars would be just the right amount to take care of our road and bridge problem.
I don’t know about the rest of y’all, but I’m thinking we should dial back a bit on the chest thumping and war whoops. Let’s spend a little more time figuring out how we can get a bridge across this creek instead so we can get some wagons to the other side.