WASHINGTON—By overwhelming majorities in both houses, Congress passed a $305 billion federal transportation bill, which President Barack Obama signed into law on Dec. 4. Reaction to passage of the five-year funding measure, called Fixing America’s Surface Transportation Act (FAST Act), were hailed by both the construction trades and management that the nation finally has a long-term federal transportation funding bill in place.
President Obama, who has proposed a six-year, $478 billion plan earlier
this year, said in a statement prior to signing the FAST Act into law, “This bill is not perfect, but it is a commonsense compromise, and an important first step in the right direction. I look forward to signing this bill right away, so that we can put Americans to work rebuilding our crumbling roads, bridges, and transit systems, reauthorize the Export-Import Bank that helps our companies compete around the world, and give local and state governments and employers the certainty they need to invest and hire for the long term.”
Following the House of Representatives action to pass the bill, U.S. Transportation Secretary Anthony Foxx said, “After 36 extensions, hundreds of Congressional meetings, two bus tours, visits to 43 states, and so much uncertainty, it has been a long and bumpy ride to a long-term transportation bill. It’s not perfect, and there is still more left to do, but it reflects a bipartisan compromise I always knew was possible.”
American Road & Transportation Builders Association President and CEO Pete Ruane said of the FAST Act’s passage, “The overwhelming, bipartisan vote for passage of the FAST Act shows once again that transportation infrastructure is a thread that has the capacity to bind America—whether it is red, blue or purple. We thank Senate Majority Leader Mitch McConnell, Senate Environment & Public Works Committee Chairman Jim Inhofe and Ranking Democrat Barbara Boxer, and House Transportation & Infrastructure Committee Chairman Bill Shuster and Ranking Democrat Peter DeFazio for their leadership in getting the bill done in a very problematic political environment.”
Mr. Ruane said that the transportation construction industry now has five years of funding predictability and less federal red tape for state transportation programs. He praised some of the reforms in the legislation that include “a reporting process that will provide more transparency and accountability. Highway users will now be able to know how and where their federal fuels taxes are being invested in their community.” The bill also creates a framework to start modernizing the nation’s highway freight network. “All that is missing is the money to get that job done right,” he said.
Despite the watershed moment, construction industry leaders pointed out that the new funding measure still does not ensure the federal highway program and the federal Highway Trust Fund operating are on solid financing footing over the long run. The last multi-year federal transportation funding bill expired in September 2009. Since then Congress has passed short-term funding extenders.
Mr. Ruane noted. “Congress and the Obama Administration again sidestepped a golden opportunity to put the federal highway and transit investment program back on solid financial footing for the long-term. Five years goes by fast. In four years, state transportation departments will again be staring at a looming funding abyss.”
He continued, “Congress and the Obama Administration also fell short in providing the level of investment that would result in demonstrable improvement in the overall physical conditions, performance and safety of the system. At best, we will be treading water.”
According to the Washington DC-based public advisor Steve Stallmer, the FAST Act increases the federal investment in New York State’s infrastructure by more than $1.57 billion over current levels. Mr. Stallmer, who is a lead consultant to the New York State Roadway & Infrastructure Coalition, reported that federal funding for roads and bridges in New York State will be: 2016: $1.702 billion, 2017: $1.737 billion, 2018: $1.775 billion, 2019: $1.815 billion and 2020: $1.859 billion. The current federal funding level for roads and bridges in New York State is $1.62 billion.
New York State will also see increases in its federal mass transit funding, which is currently at $1.342 billion (2015). The funding levels for transit will be $1.444 billion in 2016; $1.470 billion in 2017; $1.498 billion 2018; $1.523 billion in 2019; and $1.552 billion in 2020.
Some provisions in the FAST Act will benefit the Amtrak Gateway Tunnel project, Mr. Stallmer noted. For the first time, Amtrak is permitted to reinvest profits generated on the Northeast Corridor in the Northeast. Previously, these profits were used to subsidize revenue losing routes in other parts of the country. In addition, reforms to the Railroad Rehabilitation and Improvement Financing (RRIF) program, a $35-billion federal loan program, will help large projects receive funding. The loans will now be paid back five years after the project is completed—not when the loan is originally disbursed.
The new law also mandates changes to the Capital Investment Grant program, or “New Starts,” to evaluate projects that are both passenger rail and mass transit focused. This change will help a project like the Gateway Tunnel, which provides both mass transit and passenger rail benefits, receive a higher New Starts score and thus more federal funding.
Other notable provisions of the FAST Act include:
* The creation of a $4.5-billion Nationally Significant Freight and Highway Projects Program. Under this new discretionary grant program, major projects throughout New York State will be able to compete for funding to address important transportation priorities.
* The creation of the National Surface Transportation and Innovative Finance Bureau, which will aid state and local governments in securing financing for projects. The bureau will assist in navigating the regulatory process and help the development of public-private partnerships to aid in financing.
* The law designates I-81 through Central New York as a “High Priority Corridor, which recognizes the importance of I-81 to Central New York as well as its importance to the national economy.
* The FAST Act includes a provision that makes off-system bridges eligible for federal funding. There are 7,464 local bridges across New York not on the federal-aid system (“off-system bridges”). These off-system bridges are now eligible to receive National Highway Performance Program funds, which will increase the amount of federal money available.
* The act includes a formula change in the FHWA Ferry Program that will increase funding for the Staten Island Ferry. Changes in the way that certain ferry formula dollars are distributed place a greater emphasis on systems with a high volume of passengers, which will nearly double the annual funding available to the Staten Island Ferry—bringing the total to around $6 million a year.
* The FAST Act restores Section 5340 Bus Funds. During House floor debate, an amendment was passed to eliminate funding for the Section 5340 Bus Program that benefits “High Density States” like New York. This program provides more than $100 million annually to New York State. The FAST Act included the full restoration of the program.
* The Transportation Infrastructure Finance and Innovation Act (TIFIA) was drastically cut—from $1 billion to $275 million—but the threshold for using this loan program was lowered to $10 million to allow better use by smaller communities. TIFIA was used to finance the Tappan Zee Bridge.
* The FAST Act authorizes $95 million to test alternatives to using gas tax revenue to fund transportation projects, such as the Vehicle Miles Tax. This is significant, because the Highway Trust Fund is expected to have a $100 billion hole when the FAST Act expires in 2020.