Your guide to the new federal transportation reauthorization

• By Chrissy Mancini Nichols
• July 2, 2012
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After two-and-a-half years and nine (technically 10) extensions, a new federal transportation reauthorization has passed called Moving Ahead for Progress in the 21^st Century (MAP-21).  

To recap, the House and Senate have been conferencing on the transportation reauthorization for the past two months. The Senate conferenced with its bipartisan bill, the 18-month MAP-21. MAP-21 passed the Senate on March 14 by a vote of 74-22, and the House with an extension of current authorization plus three highly divisive amendments: the Keystone XL pipeline, Coal Residuals Reuse and Management Act, and environmental streamlining.  

MPC's position on MAP-21

MPC supported the passage of the reauthorization because the alternative, another extension, would have been disastrous for metropolitan Chicago and the nation. Further the benefits of MAP-21 will be felt especially in the Chicago region because Illinois highways and transit systems will get a small boost in funding. What's more, changes to how capital dollars are allocated could bring in sizable funding for major capital projects, such as the Chicago Transit Authority (CTA) Red and Purple Line modernization and the CREATE freight transportation enhancement program. The bill offers a stable source of revenue for the next 27 months and will create 3 million jobs across the country.

However, MPC believes Congress missed an opportunity to make significant policy changes by:

• Eliminating the TIFIA competitive funding process;
• Removing a formal role for transit agencies, metropolitan planning organizations, or local governments to work with state departments of transportation to develop performance metrics;
• Eliminating the Express Lanes Demonstration Program or existing capacity pilot programs that permit tolling on select highways to manage traffic congestion and reduce emissions;
• Moving away from a fix-it-first strategy, even though maintaining existing infrastructure investments ought to be job number one, ahead of building costly new highways;
• Undercutting bicycle and pedestrian programs that are cost-effective and provide people with healthy, safe, environmentally friendly, and affordable transportation options; and
• Not including an important benefit for transit riders – parity between pre-tax benefits for people who commute via transit and pre-tax benefits for people who drive to work.

Read MPC’s complete statement on the transportation reauthorization. 

MPC will work with Congress and our partners over the next 27 months to implement these policy changes in the next reauthorization.   

A closer look at MAP-21

Funding

• Extends transportation funding for 27 months, through Sept. 2014.
• Overall funding is set at $118 billion, or $54.6 billion annually (plus an additional three months). Annual funding for the last reauthorization, 2005’s  SAFETEA-LU, was $50.1 billion.
  • Highways/Transit funding split: Remains at 80 percent highway, 20 percent transit
  • Highway funding: FY 2013 $40.4 billion; FY 2014 $41 billion
  • Transit funding: FY 2013 $10.5 billion; FY 2014 $10.7 billion
  • Congress agreed to spend more than what the Highway Trust Fund will collect from motor fuel taxes over the next 27 months. Congress did not increase the gas tax and instead diverts other funds to the highway trust fund to make up the difference.
  • Diverts $18.8 billion from the General Fund
  • Diverts $2.4 billion from the Leaking Underground Storage Tank Trust Fund
    • Congress replaces the $18.8 billion in revenues back to the general fund with an accounting trick called “pension smoothing,” which makes changes to how firms with defined benefit plans use interest rates to base their contributions.  This will allow the government to collect more tax revenue because pension contributions are tax-deductable.  As firms contribute less to their pension plan, the government will take in more revenues.   The bill also makes tax code changes to replace general fund revenues including making “roll-your-own” cigarettes taxable. 
    • Congress will transfer all of the general funds to the Highway Trust Fund during the next 27 months; however the revenues from “pension smoothing” and other transfers to replace the general fund will be collected over 10 years, long after the authorization has expired. 
    • Consolidated 60 programs into four.

Performance measures

• For the first time ever the law requires the establishment of national goals, performance measures, and accountability in planning and funding transportation investments. These goals are centered on air quality, freight movement, safety and state of good repair for both highways and transit. Regrettably there is no formal role for transit agencies, metropolitan planning organizations, or local governments to work with state departments of transportation to develop these metrics.  While the bill requires agencies to incorporate goals into planning, there are no financial penalties tied to performance. 
• MPC supports a performance-based strategy that makes targeted investments that advance coordinated regional goals and a strong national vision that outlines clear priorities for our transportation system. Precisely because there is a limited supply of federal dollars, we must evaluate potential investments based on their ability to reduce hours spent in traffic, curb emissions, and connect affordable homes and jobs, similar to the federal TIGER program. The criteria should not be about how much is spent, but rather whether each investment gets us closer to our goals.

TIFIA 

• Funding is increased from $122 million to $750 million in FY 2013 and $1 billion in FY 2014. 
  • Regrettably what was the greatest strength of the TIFIA program, its strong project selection criteria, has been eliminated under the new federal transportation reauthorization.
  • TIFIA loans will now be available on a first-come, first-served basis instead of through a competitive process. Prior to the new law, loans were given only to the most viable projects of national or regional significance, backed by a dedicated revenue stream capable of repaying the original investment, and senior debts had to gain an investment-grade rating.
  • The maximum size of the TIFIA loan was increased from 33 to 49 percent of total project cost.   

CMAQ

• The Congestion Mitigation and Air Quality (CMAQ) program is funded at $2.26 billion in FY 2013 and $2.28 billion in FY 2014. 

 Bicycle and Pedestrian

• Changes the Transportation Enhancements—which funded projects like bike lanes, sidewalks and crosswalks—to a new program called Transportation Alternatives (TA.)  This new program also consolidates several programs under TA, including Safe Routes to School, recreational trails, and other programs that provide transportation options and choices, as well as—and in a change from the prior legislation—funding for environmental mitigation activities and for the design and construction of roads.  
• Two percent of amounts apportioned to states are set aside for the TA program. 
• Under the consolidate program, funding for bicycle and pedestrian activities is reduced by $300 million annually.
• 50 percent of TA funding is allocated to the State and 50 percent to metropolitan planning organizations based on population. 
• In a change from SAFETEA-LU, states are permitted to “opt out” of funding bike and pedestrian safety projects and can instead transfer their allocation to other programs, including building roads. This is a step back from the original legislation passed in the Senate that included the Cardin/Cochran amendment that would have distributed funding through a competitive bidding process. Funding bicycle and other active transportation activities is the most cost-effective use of funds and provides an affordable, healthy, environmentally friendly option for people to get around. The two percent of total transportation spending has resulted in 12 percent of trips to be taken on foot or by bicycle.
• Complete Streets language that would have created a federal requirement for accommodation of non-motorized road users, which was passed in the Senate, was not included in the final authorization. 

Freight

• Calls for the development of a National Freight Strategic Plan and increases the federal share for projects in the freight network from 80 to 95 percent. Does not include provisions from the Senate passed bill including $2 billion in annual funding for a National Freight Program to make the interstate freight program that carries goods across the country more efficient. 

Commuter Transit Benefit

• An important benefit for transit riders was not included in the bill. The Senate-approved version of MAP-21 restored and made permanent parity between the pre-tax commuter benefits for transit and parking. When the stimulus passed in 2009, it included parity between transit and parking, but due to inaction by Congress, the transit portion was cut in half— from $230 a month to $125—when the measure expired Jan. 1, 2012. Meanwhile, the parking benefit increased to $240 a month to account for inflation. The permanent increase for transit was left out of the final compromise.

Fix-it-First

• Funding dedicated for highway and bridge maintenance and repair, about 32 percent of total funding is gone and can now be used to build new roads. This moves away from a fix-it-first strategy, even though maintaining existing infrastructure investments ought to be job number one, ahead of building costly new highways. 

Transit Oriented Development

• Creates a $10 million pilot program for grants to communities that have received a New Starts Grant to assist in comprehensive transit station area planning. This includes planning for projects that increase economic development, ridership, and accessibility around the station, including mixed-use development, increasing access to transit hubs for pedestrian and bicycle traffic, and partnering with the private sector.

• Projects now can qualify for a categorical exclusion from the environmental provisions of the National Environmental Policy Act, including repair or construction after a natural disaster, “right-of-way” projects sited within property already dedicated to transportation, projects with less than $5 million in federal funding, or those under $30 million with less than 15 percent of federal funding.
• Environmental impact statement preparation is limited to four years.

Projects of National and Regional Significance

• $500 million in FY 2013 for a new competitive grant program similar to the successful TIGER program, but unlike TIGER local agencies cannot apply. 

Tolling

• Expands tolling authority if road capacity is increased, though there must be more free lanes than tolled lanes. The bill does not reauthorize the Express Lanes Demonstration Program or existing capacity pilot programs that permit tolling on select highways to manage traffic congestion and reduce emissions.

Public-Private Partnerships

• Includes language from U.S. Sen. Mark Kirk’s (R-Ill.) Lincoln Legacy Infrastructure Development Act that facilitates the implementation of transit public-private partnerships (PPP), including the development of policies and procedures to address impediments to transit PPPs.  The bill also requires the Secretary to coordinate, promote and provide technical assistance to public transportation PPPs and to promote greater transparency on federal assistance involving PPP agreements.

New Starts

• The New Starts transit capital program is renamed the Fixed Guideway Capital Investment Grants. Funded at $1.9 billion in each fiscal year. Projects under $100 million can utilize an expedited review process if they meet the standard "highly qualified." Expands eligibility for funding of projects in existing systems that would increase ridership by 10 percent. This allows project funding to upgrade older transit systems such as the Chicago Transit Authority. Allows the Federal Transit Administration to provide up to three Bus Rapid Transit (BRT)  per year that could recieve an 80 percent federal share of total costs.

Contentious issues set aside for now

To get to an agreement, lawmakers set aside three of the most contentious issues: 

1. The approval of the northern part of the Keystone XL pipeline that would transport oil produced from Canadian tar sands to Port Arthur, Texas; 
2. The coal ash amendment that would prevent the federal government from regulating the hazardous waste that results from producing energy from coal and instead reserve that right to the states; 
3. An increase to the Land and Water Conservation Fund, created in 1965 that uses fees from oil and gas leasing in federal waters to conserve open space for recreation at national parks across the country. The LWCF collects $900 million annually but that money is regularly diverted to deficit reduction. 

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