August /
September 2011

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Federal Transportation Bill

The most recent federal transportation bill – SAFETEA-LU: Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users – expired in 2009. The expired bill has been extended multiple times. Most recently, the Surface Transportation Extension Act of 2011 passed in March and extends programs through the end of fiscal year 2011 (September 30). The lack of a bill has made long term planning difficult. A new federal bill will allow states to plan transportation projects with more certainty of how much funding is needed.

Following the spring recess in May, the U.S. Congress renewed efforts to write and pass a transportation bill. The key issue that has slowed new legislation is how to fund transportation needs. There is consensus in both the House and Senate that the federal government should not raise the existing gas tax. They also agree that we will not spend money on projects beyond what funds are now being collected by the Highway Trust Funds. Since it is universally acknowledged that neither tax income nor the trust fund is adequate to preserve the highway system and bridges, other funding options are clearly needed. Proposals include a fee based on vehicle miles traveled (to replace or augment the gas tax which declines as vehicle mileage improves), or the sale of bonds through an independent transportation finance corporation. There is also discussion about not raising new money at all and significantly reducing federal funding levels by 30 percent or more. Another option would be increasing the required share of state and local matches for project funding, which generates the question of where the state and local funds would come from.

TMACOG members and other partners in our region have identified the business of moving goods as a cross-cutting industry that affects all sectors of our economy. To maintain and to improve our system, funding challenges affecting transportation must be addressed at every level – local, state, and federal.

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