Consultants Addressing Growing Role of Mobility, Technology
METRO spoke with several consultants who not only discussed the nation’s growing infrastructure needs and the current funding challenge, but also the growing popularity of other transportation options, such as ride-hailing, microtransit, and bike-sharing, and how they may work together with public transit. InfraStrategies' Managing Principal, Jeffrey Boothe shares his thoughts on transportation infrastructure project funding.
We are definitely the beneficiary of the Fiscal Year 18/Fiscal Year 19 budget agreement that provides more than $60 billion in additional domestic spending, with the transit program being a beneficiary of that increase. Congress will still have to reach a budget agreement for future fiscal years beyond 2019, though. Programs, like the Capital Investment Grants program, still face uncertainty in Fiscal Year 2020 and Fiscal Year 2021, as to the program funding levels. Further, the overall transit program faces substantial funding issues due to future projected Trust Fund deficits. To prevent those deficits, Congress must either increase the gas tax or find an alternative to the gas tax. It is incumbent upon Congress to identify a source of dedicated funding, because I don’t think anybody believes that the surface transportation program will receive further General Fund transfer in the next surface transportation bill.
With Congress adopting a $1.5 trillion tax bill and increased deficit spending through increasing the budget caps for FY 18 and FY 19, the reality is this is a General Fund commitment that, unless the economy does incredibly well, will squeeze future General Fund investments. Thus, while transit received a nice bump up in funding for FY 18 and FY 19, the long-term need for dedicated and sustainable funding to stabilize the surface transportation program has not been addressed.
I’m not trying to be pessimistic, but it is the fiscal reality for the next surface transportation authorization bill. At present, there seems to be no agreement on Capitol Hill. There is no consensus on the source of funding to sustain the surface transportation program. There is a general recognition of the need for dedicated federal funding, but House and Senate leadership have not stepped up to take the necessary political step to propose a solution.
The additional funding in FY 18 and FY 19 will greatly assist projects in the Capital Investment Grants pipeline and advance projects to construction. The Capital Investment Grants Working Group and the Community Streetcar Coalitions are very appreciative of the additional funding for projects, but I do see storm clouds on the horizon. Starting with this next session, Congress will have to take the step of trying to address the long-term financial situation of the Trust Fund. It will be challenging since there will be an election in November 2020 that will make it very difficult to resolve this issue. Due to the reluctance to address a tax increase prior to the 2020 election, I am concerned that the surface transportation program will limp into 2021 with uncertainty about what the future of the program and the lack of dedicated funding. This next session of Congress will have to focus on trying to identify a politically accepted source of long-term funding and then develop the political will for long-term, sustainable funding for the Highway Trust Fund and Mass Transit Account.
Does that long-term solution still involve raising the gas tax, or have we moved beyond that? At this point in time, of all the solutions, it is the easiest to implement because it’s already in place. Having said that, is it the long-term solution? No. At some point in time, we have to address the impact of autonomous vehicles (AVs) and electric vehicles (EVs), such as the wear-and-tear they cause on the highway system, their impact on land use, the role of transit, and the fact that AVs and EVs don’t pay into the Trust Fund because they don’t consume gasoline.
Therefore, there’s been talk of proposals ranging from a vehicle miles traveled fee to a carbon tax. But to date, there is no consensus on an alternative to the gasoline tax and if that alternative would supplement or replace the gas tax. There is recognition that additional revenues are needed, but there’s been no agreement on the revenue source. This uncertainty looms for the next Congress. It is highly unlikely it gets taken care of this Congress. Presumably then, it has to get done in the next Congress because that’s when the FAST Act authorization bill expires.
As funding continues to be an issue, do you feel state and local referendums will continue to be popular? Yes. There is growing need for funding for surface transportation that is not being met with federal funding commensurate with the need. That’s not to say we need to dismantle the federal program, it’s just that the federal program has not caught up with the demand and need for transportation solutions around the nation. Moreover, federal funding plays a very important role for capital projects, such as bus rapid transit, light rail, commuter rail, and streetcar projects. Because of that, localities have to look for alternatives to address their surface transportation needs. Consequently, localities are taking their future in their own hands and finding success at the ballot box. As a result, localities with success at the ballot box are moving ahead with their transportation projects and not relying on federal funding to address all of their needs.