WASHINGTON INSIGHT

TEA-21 extension provides short-term relief, uncertainty

Jim Fahey
Director of Government Relations
APWA Washington office

Passage of a five-month extension of TEA-21, the Transportation Equity Act for the 21st Century, at the end of September came as welcome news to the transportation community, ending the possibility that federal surface transportation funds to state and local governments would be cut off. But despite the uninterrupted flow of federal funds, the extension has done little to alleviate concerns among state and local officials over the impact of not having a multi-year authorization enacted into law.

President Bush signed the Surface Transportation Extension Act of 2003 (HR 3087) on September 30, 2003, the day TEA-21 expired, averting a shutdown of federal transportation programs. Without an extension, the Federal Highway Administration, for instance, would have had no authority to approve new projects or to allow states to incur new obligations of contract authority beginning October 1, 2003.

The temporary extension will keep the federal highway, public transportation and safety programs funded and operating through February 29, 2004, the date the temporary extension expires.

Delays are not new to the transportation reauthorization process. TEA-21 was more than eight months overdue when enacted in June 1998, and its predecessor, ISTEA, was more than two months late when signed into law in December 1991. But this time, the prospect of when Congress will pass a bill seems especially uncertain, and no one is making any predictions.

One reason why is that the key components of the legislation, the highway and transit titles, have not yet been introduced, and no dates have yet been set for their introduction. Difficult funding issues and several policy questions remain to be worked out at several levels.

With no firm timetable for moving legislation, and a limited number of legislative days when Congress returns next year, it remains unclear at this time whether a bill will be passed before the end of February. Lack of legislation before the deadline could generate any number of possible responses, ranging from additional short-term extensions to possibly a two-year extension, an option that has already been raised as a possibility.
 
Although the current extension provides stopgap funding, absence of a multi-year authorization presents challenges to state and local governments in planning, programming and implementing projects.

Extensions create uncertainty about the future, and an extended period without predictable funding streams can result in billions of dollars in project delays, additional burdens on state and local governments, and significant job losses. Ultimately, the impact is felt by the traveling public and the local economy.

The temporary extension was passed to give Congress more time to work on reauthorization and to address particularly the unresolved funding issues. Most of the legislation has been drafted in committee, but consensus has not been achieved on ways to finance increased investment. Options under consideration include raising the federal motor fuels tax, indexing it, using bond financing, or utilizing some combination of these or inventing other means.

There are basically three broad reauthorization proposals currently in the mix. The leadership of the House of Representatives' Transportation and Infrastructure Committee supports a six-year authorization providing $375 billion. That plan includes both increasing the federal motor fuels tax and indexing it to the Consumer Price Index to maintain its purchasing power.

The Senate has a different blueprint. It has targeted $311 billion over six years, but has been somewhat less specific on approaches to financing a new bill.

The Bush Administration, which released its $247 billion reauthorization proposal, the Safe, Accountable, Flexible and Efficient Transportation Equity Act of 2003 (SAFETEA) in May 2003, opposes increasing or indexing motor fuels taxes. TEA-21 authorized $218 billion over six years.

APWA's TEA-21 reauthorization priorities, developed by the APWA TEA-21 Reauthorization Task Force, call for increased federal investment in highways, bridges and public transportation to enhance safety, security and mobility. They also call for maintaining the integrity of the Federal Highway Trust Fund by preserving guaranteed funding and retaining a funding firewall mechanism; streamlining the regulatory and project delivery process; and enhancing flexibility to address local and regional transportation priorities and needs.

The next few months will be critical in determining what will happen by the end of February. With state and local government budgets tight, completion of a long-term, multi-year authorization with increased investment will be essential to avoid the impacts of project delays and other disruptions.

For more information about APWA's priorities for TEA-21 reauthorization, visit www.apwa.net/govtaffairs.

Jim Fahey can be reached at (202) 408-9541 or at jfahey@apwa.net.

The Surface Transportation Extension Act of 2003
Signed into law September 30, 2003, the Surface Transportation Extension Act of 2003 extends funding authority for federal highway, public transportation and safety programs until February 29, 2004. The extension does not change TEA-21's structure or programs, and it retains the TEA-21 "firewall" that protects federal transportation funding. Funding levels, prorated on the basis of the 2004 budget, are authorized at $14.7 billion for federal highway programs and $3 billion for public transportation over the five-month period. Flexibility is provided to allow temporary transfers among core highway programs, but transferred funds must be restored once reauthorization legislation is enacted.