WASHINGTON INSIGHT

The race to bring transportation reauthorization to the finish line

Jim Fahey
Director of Government Affairs
APWA Washington Office

Early this year, the process to reauthorize TEA-21 began again for the second time in two years. Efforts to finalize a multi-year surface transportation bill stalled last year in a House-Senate Conference Committee when conferees and the Administration were unable to reach agreement on a total funding level for a six-year bill.

By January of this year, after a new Congress had convened, lawmakers and Administration officials pledged their commitment to making reauthorization a top priority. In February, the Bush Administration made the first move by recommending an increase in the funding level it supported last year, $256 billion, to $284 billion for a six-year bill covering the years 2004 to 2009.

Adopting the Administration's number, the House of Representatives on March 10 overwhelmingly passed a $284 billion, six-year bill, the Transportation Equity Act: A Legacy for Users (TEA-LU), by a vote of 417-9. It was similar to the one the House passed last year but provided an additional $4.5 billion.

Then in late April, the Senate began debate on its version, the Safe, Accountable, Flexible and Efficient Transportation Equity Act (SAFETEA), funded at the same level as the House bill but less than the $318 billion level passed last year in the Senate. But before a final vote was taken, the bill was amended to increase total funding to $295 billion. Attempts to strip the additional funding were defeated, and the bill passed the Senate by an overwhelming vote of 89-11. From a programmatic standpoint, the bill was similar to the one the Senate passed last year.

As it had last year, the Bush Administration issued veto warnings against provisions in both the House and Senate bills. As the Senate prepared to debate its bill, the Administration threatened to veto a bill that would exceed $284 billion over six years. The Administration also opposes a provision in the House bill known as the "re-opener," which would cut off highway funding from October 1, 2005 through August 1, 2006 unless Congress provides sufficient funds for each state to receive a minimum return of 95 percent on its highway revenues paid to the Highway Trust Fund.

By late May, when this article went to press, both bills were being prepared for a conference committee to reconcile their $10 billion funding difference and their 2,000 pages of policy and program details. The Bush Administration will play an influential role in conference negotiations.

Total funding and concerns over state minimum funding guarantees and state allocations remain a key issue this year. Donor states, which receive less from the federal highway trust fund than they contribute, have been pressing for a minimum 95 percent return on their share of highway trust fund contributions in the next reauthorization. TEA-LU did not raise the current minimum return of 90.5 percent. That is expected to be increased when the bill is negotiated in the conference committee. The Senate bill's higher funding, however, allows for some increase. It would boost the minimum return to 92 percent by 2009. The bill the Senate passed last year would have provided a minimum 95 percent return.

TEA-LU included about $11 billion for more than 3,600 high-priority project earmarks. The House approved an amendment requiring that the projects be counted in the state formula allocation, meaning that about 93 percent of the bill's funding would be drawn from formula funds, which is current law.

Overall, TEA-LU authorized $225.5 billion for federal highway programs, $52.3 billion for federal transit programs and $6.1 billion for safety programs. Total funding includes $86 billion already committed for 2004 and 2005. The House defeated an amendment to increase total funding to $318 billion when the bill was debated on the floor.

SAFETEA authorized $233.8 billion for highway and bridge programs, $53.8 billion for transit and $5.3 billion for safety programs (safety funding was authorized for four years).

Comparative Funding Table
    
                         TEA-21 (Actual)     SAFETEA     TEA-LU
Highways           $182.8                     $233.8            $225.5
Transit                $41.0                       $53.8              $52.3
Safety                 $2.4                         $5.3*              $6.1
Six-Year Total    $217.8                     $295               $283.9
* Authorization for four years

Consistent with APWA's reauthorization position, both House and Senate bills retain TEA-21's basic programmatic structure and principles. They also add new programs and make modifications to existing programs. The Senate bill creates a new safety program, the $6.3 billion Highway Safety Improvement Program, replacing the Hazard Mitigation Program and the Surface Transportation Program (STP) safety set-aside. The House bill establishes a new $590 million High Risk Rural Road Safety Program and a new $6 billion Projects of National and Regional Significance program to assist states in paying for high-cost projects.

In addition, the House bill includes language requiring states to spend a portion of their highway funds on congestion relief. The two bills include innovative financing, bonding and tolling provisions. TEA-LU increases funding for rural public transportation by 60 percent to $2 billion, and SAFETEA provides about $2.5 billion rural public transportation. Both bills establish a nine-member national commission to examine and recommend future revenue sources to support the Highway Trust Fund.

The House and Senate bills contain several specific provisions supported by APWA, including language to continue transportation's guaranteed funding and its budgetary firewalls (which ensure that transportation revenues are invested in state and local transportation programs) and provisions to streamline the environmental review and project delivery process (although policy changes vary in the two bills).

The House and Senate bills differ in a number of areas. Unlike the House bill, the Senate bill includes a two percent set-aside of STP funds for stormwater mitigation and a provision to increase the metropolitan planning funding from one percent to 1.5 percent of core highway programs. The Senate bill does not include a "re-opener." The House bill increases the off-system bridge program minimum set-aside from 15 percent to 20 percent, while the Senate removes the 35 percent ceiling. The Senate bill contains no projects, but as in past years, Senate-sponsored projects are expected to emerge from conference.

At the end of May, the House and Senate approved the seventh temporary extension of TEA-21, which expired on September 30, 2003. APWA continues to urge Congress to act quickly to pass an adequately funded, multi-year authorization which secures an enhanced role for local decision-making and places needed emphasis on flexibility, intermodal goals and on addressing local and regional needs.

Jim Fahey can be reached at (202) 218-6730 or jfahey@apwa.net.