[IMAGE]Oberstar.jpg[/IMAGE]When you combine the nation's economic slump and the inability to find a new funding mechanism to bolster the Highway Trust Fund, it can safely be said that the stalled effort to pass a new transportation bill is caught up in a "perfect storm."

The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which was signed into law by President George W. Bush on Aug. 10, 2005, expired as of Sept. 30, 2009. Although Congress is supposed to begin work on a new six-year authorization this year, there are many factors outside of the two aforementioned problems, including healthcare and climate legislation, that have also contributed to gumming up the works.

"It was our original intention to complete work on the authorization by the end of September. Certainly, the House Committee on Transportation and Infrastructure was ready to do just that," explains Congressman James L. Oberstar (D-Minn), chairman of the House Transportation and Infrastructure Committee. "However, we could not move our bill until the Committee on Ways and Means was ready to move the revenue title, but that committee was tied up with several other pieces of major legislation. At the same time, the Administration and the Senate were urging an 18-month delay in the process, leaving the authorization stalled in our Committee."

Currently, federal surface transportation legislation is working on an extension of SAFETEA-LU until Congress is prepared to address the funding issues, which could possibly not happen until after the healthcare and climate legislations are put to bed.

So, where does that leave the hopes of seeing a reauthorization in 2010? While many are still optimistic that a new bill will emerge in 2010, some are coming to terms with the reality that extensions of SAFETEA-LU will be applied possibly until March 2011, which is 18 months later than the bill was supposed to be completed and is the time period suggested by the Obama administration and Senate that Chairman Oberstar mentioned.

Monumental opportunity

Most agree that this surface transportation bill is a monumental opportunity, since it is not only the chance to fund much-needed infrastructure improvements, but also shape the nation's transportation system as it gears toward a population predicted to escalate to more than 400 million by 2040.

"In our view this is an historic opportunity - a moment akin to 1956 when the Interstate Highway Act was passed," says David Goldberg, communications director for Transportation For America (T4America), a broad coalition of organizations that support a better transportation system for Americans. "We've built the interstate and sprawled out about as far as we could. We have a vastly different energy picture and a vastly different real estate picture, in terms of where the demand is. We have changed demographics. We are very different than the Ozzie-and-Harriet era that our current system is based on."

Goldberg adds that the U.S. has a huge need to move toward a clean energy future that also includes cleaner forms of transportation for a different part of the nation's population.

"Eighty percent of our population lives in metropolitan areas now. Sixty-five percent of the population lives in just the 100 largest metro areas, but we have a transportation program designed for interstate travel, which doesn't address urban transportation very well at all," he says.

Proving Goldberg's point, according to a study conducted by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, only 54 percent of American households have access to public transportation of any kind.

The aforementioned population growth, as well as the U.S. Census Bureau's prediction that the number of Americans 65 and older will double to more than 70 million by 2030, makes it abundantly clear that this federal transportation bill is of the utmost importance, says Chairman Oberstar.

"This will be a transformative authorization bill," he says. "It not only will invest more money in our national transportation infrastructure, it will reform the way our federal surface transportation programs are conducted. It will reduce red tape and require more coordination and cooperation among the various modal agencies within the Department of Transportation."

With the renewed interest in public transportation and the benefits it brings both economically and environmentally, there is no doubt that many feel now is the time to push for the extra funding in the wake of recent victories, such as the American Recovery and Reinvestment Act ARRA) investment, which included a large investment in high-speed rail systems.

"Under President Eisenhower in the 1950s came the construction of the Interstates. While regarded as a system crucial for our national defense during the Cold War, it helped build out our nation and also connect it within," says Robert Puentes, sr. fellow/director, metropolitan infrastructure initiative, Brookings Institution, metropolitan policy program. "For Senator Pat Moynihan and his colleagues in the 1980s and 1990s, the vision was to modernize the program and better connect roads, transit, rail, air and other modes. The challenge for us today is to recognize that transportation is a means to an end, not the end in and of itself."


Investment falls short

"We recommended $123 billion over the course of six years for public transportation, which would essentially amount to a 20-percent-per-year growth in federal investment," says Paul Dean, director, government affairs, for the American Public Transportation Association (APTA), who adds that the association also supports Chairman Oberstar's proposal for $50 billion for high-speed rail, which would be financed through an infrastructure bank. The dollar amount recommended by APTA would essentially double SAFETEA-LU's public transportation investment, while Oberstar's $50 billion proposal would separately fund President Obama's vision for a high-speed rail network in the U.S.

"TEA 21, passed in 1998, was $215 billion over six years. SAFETEA-LU in 2005 totaled $286 billion over six years, an amount $89 billion short of what was actually needed. The Committee's bill, as it now stands, totals $500 billion over six years," says Oberstar, $99 billion of which will go toward mass transportation. "Our calculations are based on the findings of two special commissions charged with identifying our national transportation infrastructure needs and determining the means to meet them."

That $99 billion investment falls short of what APTA asks for, and thus, inevitably falls short of the amount of an investment that is necessary for public transportation to operate effectively, given the recent economic woes many transit agencies are feeling due to the economy, which has forced them to cut services, raise fares and pare down staff.

On a positive note, the $99 billion proposed for public transportation is more than $30 billion more than

SAFETEA-LU. Many with a vested interest also point to the jobs that were both created and sustained as a result of ARRA funding and stress that further investment will only yield greater results.

"$1 billion in investment supports and creates 36,000 jobs in the economy," says Dean. "So, continued investment along those lines is very important."

A Supportive Administration

Nobody doubts that the change in administrations has greatly benefited public transportation, and many hope that the renewed focus and investment will continue as promised. To date, it appears as if President Obama and his administration truly recognize the benefits public transportation brings, including reducing traffic congestion and cutting greenhouse gas emissions.

"The administration recognizes [public transportation's importance]. Transportation infrastructure, including public transportation, was an important component of the American Recovery and Reinvestment Act, and plays a similar role in the pending Jobs for Main Street Act," explains Oberstar. "The administration has strongly supported both initiatives. Further, I expect the administration to support the higher funding levels for surface transportation in the new authorization bill, once we are ready to move that piece of legislation."

Adds APTA's Dean: "They certainly recognize the importance of connectivity with other modes of transportation and, in creating a livability initiative, understand the sustainability benefits of public transportation. To this point we certainly are optimistic about the signs we are seeing out of the administration."


What's the holdup?

Already nearly six months late, the surface transportation funding bill appears to be somewhat low on the priority list on Capitol Hill, with Congress struggling to find a consensus on two vital pieces of legislation - healthcare and climate change. The latter includes funding for green modes of transportation. Also, it seems the Jobs for Main Street Act has now taken precedence over both of the aforementioned bills.

Many feel that until these issues are resolved, authorization of a new transportation bill will have to wait; however, finding a way to fund the bill seems to be the crucial sticking point and may continue to be for some time.

"Trust fund revenues have not kept pace and the House, Senate and White House all want an increase in federal surface transportation. The question is how to fund it, so they keep putting off the decision," says Cliff Henke, sr. analyst, Americas transit market, Parsons Brinckerhoff (PB). "Yes, those other things get in the way, but they wouldn't if this key question were resolved."

Adds Chairman Oberstar: "There is nearly universal agreement on the needs, but little consensus on the means. The House Budget Committee estimates that current revenue sources for the Highway Trust Fund, primarily the federal tax on motor fuels, can provide $325 billion over the next six years," he says. "That means we must find at least $125 billion in additional revenues to meet the investment levels called for in the new authorization bill."

Although there have been many suggestions for ways to find the money to make up the difference, including congestion pricing and raising the fuel taxes, Congress seems to be stymied.

"Dick Gephardt tells a great story about how if he knew how difficult it would have been for them to get the small fuel tax increase they got in the early 1990s, he would have strove for a dollar increase instead," says Brookings' Puentes.

"Raising fuel taxes when the nation faces a deep recession and near-record fuel prices, or drawing from the general fund during a time of record budget deficits, may not be politically feasible," says Chairman Oberstar. "So, my colleagues and I are doing what we can to identify possible revenue sources to supplement the motor fuel taxes. Several ideas have been discussed, but no consensus has formed around any particular option."

Chairman Oberstar also adds that progress on the authorization will not be made until the revenue question is solved.

However, Puentes says that the importance of getting a bill passed isn't solely about money.

"If our transportation program is going to achieve critical national objectives in an era of fiscal constraints, it is going to need to focus and prioritize. The nation should settle for nothing less than evidence-based, values-driven decision-making," he says. "To echo a common theme articulated by the national transportation policy and revenue commission - as well as several others - we need a new beginning."

Infrastructure slowdown

So, what will the impact be on the public transportation industry, as a whole, if a transportation authorization bill continues to be pushed aside?

"Any time that you have a situation where you don't have a full-term authorization in place, the uncertainty of the federal funding streams causes a major slowdown on the development of the capital infrastructure," says APTA's Dean. "It also makes it much more difficult to get bonds or private financing if you don't have that sort of long-term funding stream guaranteed."

Subsequently, he adds, all of this has a negative impact on the transit business interests because if the orders aren't coming in, it can begin to slow down the manufacturers, suppliers and the thousands of businesses that rely on the federal government.

"What concerns not just us but a lot of the industry groups that follow this stuff is that when the stimulus funds end, things come to a screeching halt absent the promise of ongoing funding," says T4America's Goldberg. "The likelihood is that SAFETEA-LU will just continue to get extended. It's extended for now through the end of February and will get extended again. But, if it's extended on a 60-day, 90-day basis, people can't really get contracts on that instability."

Dean adds that the length of time the impact on the public transportation will be felt, if an authorization bill is not passed soon, is difficult to imagine.

"If you have an extended period of time where you don't have an authorization in place, the impact on the transit industry continues to grow and be much longer term," he says.

Will it happen in 2010?

With all of the factors mentioned before, including the critical need to find a way to fund the larger bill - which everybody agrees is necessary - the hopes of getting a transportation authorization bill finished in 2010 is beginning to look bleak.

"My optimism that it's going to happen in 2010 is different from my optimism on sort of the overall policy picture," says Dean. "One of the things that the administration has not really offered a lot on at this point in time is how we're going to fund the new bill, which really is the sticking point."

Many are hopeful that things will calm down after the mid-term election and that a new bill will be passed either in a lame-duck session, as the first dedicated transit gas tax was in 1982, or soon after in the next Congress.

Says T4America's Goldberg: "We would still like to see it done this Congress. It's an uphill climb, but stranger things have definitely happened. It may be that it comes to be understood that a clear, stable funding program for transportation is a key piece of economic stability."

It may be that public transportation just has to weather the "perfect storm" and be hopeful that the Obama Administration and Congress can weather the choppy waters. One hopeful point to note is that, despite being in a woeful recession, voters approved more than 70 percent of tax increases at the state and local levels in 2008.

"Our nation is facing an infrastructure deficit. Our roads, bridges, and transit systems are deteriorating due to years of underinvestment. This deterioration will not wait for us to act, it will only worsen. Therefore, it is important for us to act sooner rather than later," concludes Chairman Oberstar. "My preference, of course, is to move the authorization bill as soon as possible. However, I also know that Congress needs time to act. The Jobs for Main Street bill, which I supported, provides an extension of current transportation programs and funding through the end of September. I would hope that another extension will not be necessary."