[IMAGE]iS-10202974L-MET-2.jpg[/IMAGE]This past November brought a nearly ­ unprecedented switch in political power in Congress, with Republicans taking over the House and gaining seats in the Senate. To many the message was clear: As a nation, our government is spending over our heads, suffering from staggering unemployment numbers, still reeling from the economic recession and impatient for change.

To find out how this political shift will impact the public transportation industry, as well as the answer to other federal developments, including authorization of a transportation bill, METRO Magazine spoke to three experts — Jeff Boothe, principal at Holland & Knight LLP; Paul Dean, director, government affairs, for the American Public Transportation Association; and Kenneth Orski, long-time industry veteran and editor/publisher of Innovation NewsBriefs — to get their views.

What changes will the new balance of power have on public transportation and an authorization bill?

Paul Dean: We are certainly facing a new dynamic in Congress, with a much more conservative House and Senate. It's no secret that one of the primary goals of the new Congress is to reduce spending, which certainly makes any federally funded entity nervous, going forward. We've seen early efforts by the Republican party in the House to target transportation, and public transportation in particular, for budget cuts. However, we still have a lot of support and are working hard to make the case that these types of investments should not be unfairly targeted, particularly ones that help spur economic development and create jobs.

The President, during the State of the Union address, emphasized infrastructure spending as a priority, and both T&I Committee Chairman John L. Mica (R-FL) and Senate Committee on Environment and Public Works (EPW) Chairman Barbara Boxer (D-CA) are interested in moving forward with a long-term bill so, although the balance of power has shifted somewhat, we're still optimistic that a six-year bill can get done.

Obviously, it's going to be an important year. The new Congress is going to require a lot of education on our behalf, and, I think in the long run, I'm optimistic that we can get our message across that investments in infrastructure and transportation are investments worth making.

Kenneth Orski: The Republican leadership has said that they want to reduce the federal budget by $100 billion during the remainder of Fiscal Year 2011, but not every program is going to suffer equally. Some programs will be cut more severely than others, and we don't know to what extent the transportation program is going to be cut for the remainder of this Fiscal Year.

What we do know is that any unobligated money in the High Speed Intercity Passenger Rail Program (HSIPR) is probably going to be rescinded or reprogrammed. The Senate and the White House will have to weigh in on this, but as far as the House is concerned, they want to rescind any of the ARRA stimulus funds that have not yet been obligated. About one-half of the $8 billion in HSIPR funds have not been obligated, yet.

Jeff Boothe: It's been a while since there's been an effort to cut billions of dollars as is being proposed by House Republicans. I was on the Hill during the Reagan Administration, when there was a similar effort to try to cut spending, and it was partially successful. However, the Reagan Administration found out that those programs had constituencies. For example, the Reagan Administration wanted to shut down the transit program and turn it all back to the states. In response, the industry rallied together and worked hard to build a constituency. They had friends on key committees that were interested in protecting the programs and they were able to do so.

So, I think there's a lot that has to happen between now and actually cutting spending. That doesn't mean the industry shouldn't be concerned. The industry absolutely should be concerned. We are dealing with a Congress, both House and Senate, of whom 45 percent were not in office when SAFETEA-LU passed. There is no minimizing the challenge that faces us, and its going to test our ability to generate support. We also have to hope that we have some friends in the Obama Administration that care about the transit program, that don't want to see it decimated, and will be willing to veto bills or take a position in support of the industry when some of the more egregious cuts are proposed.

New Leadership

Along with the sweeping change in Congress came the end of James L. Oberstar's reign as T&I Committee chairman. He was succeeded by Rep. Mica, who is accompanied by significant shifts in the makeup of all T&I subcommittees.

What will be the impact of losing a long-time leader and staunch advocate as Oberstar and gaining Mica as chairman?

Boothe: The impact of who recently got elected is significant. Looking at the T&I Committee, there are 33 Republican members and, of those, 19 are in Congress for the first time, so he's working with a committee that is a blank slate when it comes to working on surface transportation legislation. Chairman Mica will need to determine how he will coordinate with House leadership to advance legislation and assess how much flexibility he has to develop a bill of his preference? We don't know yet. He's been a friend of transit, a friend of transportation and believes strongly in the program so, in that respect, it's good to have him at the helm of the Committee. Given how many new members he has, it's just unclear to what extent the committee members will follow his lead in putting together a bill. I don't think anybody knows yet.

Dean: There certainly will be differences, no doubt about that. The makeup of the T & I Committee will be much more Republican, much more rural or suburban, which certainly means we have to continue to educate on the benefits of public transportation beyond just the ­urban ­areas.

Rep. Mica, who has long been a supporter of public transportation, certainly recognizes that there is an important federal role in funding the program, but he's also practical. The fact is that unless we can come up with other resources, we're going to have to live within what we have in the Highway Trust Fund, but I expect that public transportation, in the scheme of the whole surface transportation world, will continue to be looked upon favorably under Mica's leadership.

[PAGEBREAK]State, local impacts

Even with the huge shift in federal leadership, public transportation continues to remain popular in state and local elections, with only a few exceptions. In 2010, for example, 44 of 57, approximately 77 percent, of transportation ballot measures were successful, according to the Center for Transportation Excellence. Many of those successful ballot measures involved raising or adding new taxes to pay for transportation programs.

In Ohio and Wisconsin, however, new Governors elected last November won their elections, running on campaigns based partly on ending transportation projects that had earned ARRA monies. The results were the abrupt ending of high-speed rail projects that, prospectively, could have added hundreds of jobs and plenty of new revenues.

With a new shift in cutting "wasteful" spending at the federal level, do the state and local level public transportation ballot victories have any impact on Congress?

Orski: I don't think Congress will be much influenced by the degree of support for transit at the local level, because their objectives are really fiscal more than transportation at this point. The overriding objective of the Republican majority, in the House at least, is to reduce spending and thereby reduce the deficit.

Dean: Overwhelmingly, the general public has demonstrated their support for public transportation at the polls. Typically, those types of initiatives that gain the most support are those that individuals point to as projects in their communities that will directly benefit them. It's important that the lesson we learn from that is each and every advocate out there interested in seeing gains for public transportation needs to make the case to their individual members of Congress, whether they be new or old, about the real direct impact that these investments will make in their community.

Challenges

Since its expiration in September 2009, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) continues to operate under a series of Continuing Resolutions, the most recent set to expire March, 4 2010, as of press time.

How much progress has been made? It would appear not much, since the Highway Trust Fund is still set to run out very soon and Congress and the Obama Administration itself seem unwilling to raise the gas tax.

What are the current hurdles to implementing a new ­authorization bill?

Boothe: I don't want to characterize it as an uphill battle, but it is unprecedented in recent memory. We've been accustomed to a Congress that understands the benefits of the transit program and has supported the program over many years. Even the Bush Administration, during consideration of SAFETEA-LU, supported the transit program. We were funded every year, they weren't trying to target us for huge cuts and they were willing to support New Starts projects, so we had an administration that wasn't trying to tear at the heart of the program.

Where we are now is that we are facing a crisis because of the unwillingness of Congress to raise the gasoline tax. We are now at a point where the other shoe may drop in the form of exhausting the revenues in the Highway Trust Fund and Mass Transit Account. We are in a situation where the impacts are very real in the absence of Congress failing to act. As a result, we are in unchartered waters as we look at our program. I think we're going to be learning as we go how to formulate the strategy, and will need to adjust our strategy as we proceed to determine how to build the case for public transit. It is disconcerting.

Dean: The challenges we had last year at this time remain in place. It seems fairly clear at this point that an increase in the gas tax is likely off the table, and it will be up to the new leadership in the House and the Senate to find ways to generate enough resources to fund a bill at acceptable levels.

I think it's significant that a bipartisan panel of members and former members of Congress that made up this National Debt Commission did recommend that one of the ways to reduce the national debt would be to raise the gas tax to stabilize the Highway Trust Fund, in a way that it will no longer require transfers of General Fund Money to sustain the current levels. I think the Debt Commission saw that by recommending raising the gas tax, rather than recommending cutting overall financing for transportation infrastructure, it recognized the importance that Congress and the Federal government to continue moving forward in funding transportation, at least at the same level it is now. That being said, the political climate is not favorable for an increase right now, and leaders in both parties are saying that we must do more with less. To gain passage of a robust bill, it is imperative that Congress and the Administration find new ways to generate revenue and investment without significantly increasing the national debt.

Possible timeline

While this time last year a new authorization bill took a back seat to important healthcare and climate legislations, this year it's the debt ceiling and, as mentioned, the call for cuts in spending from a revamped Congress. With that, funding the bill is still the paramount obstacle yet to be hurdled, and almost everybody on Capitol Hill is reluctant to even get involved in the race.

Cutting to the chase, will we see a new authorization bill in 2011?

Orski: The consensus in Washington is that unless this happens before October or November of this year, nothing is going to happen until after the next Presidential elections. If Congress does not agree on a multi-year reauthorization, there will be just a series of more extensions lasting through the end of this Congress - in other words through 2012. Once you go beyond late 2011, the Presidential politics takes over and Congress' attention turns off; you cannot enact a serious piece of legislation during a Presidential campaign, especially if the next authorization requires an increase in the gas tax.

Dean: Incoming Chairman Mica has expressed his desire to introduce and move forward with a new authorization bill early in the Congress, as has Sen. Boxer, chairman of the EPW Committee. So, I think you're going to see some early movement and early efforts to try to get a six-year bill, with the recognition that, if that effort doesn't get off the ground fairly quickly as we move into a Presidential election, it's going to become much more difficult.

Congressional committee leaders acknowledge that for a new bill to be enacted it will likely have to be done this year. If not, Congress will need to extend SAFETEA-LU until such time that a new bill can be enacted.

Boothe: Something has to be done by the end of calendar year 2012, because that's when the Highway Trust Fund faces potential exhaustion. Something has to break; we either raise the gas tax, identify some other funding source or we have a severely constrained bill. The Highway Trust Fund lacks the monies beyond 2012 to continue the program at its current spending levels. So far, no consensus has emerged around future funding, and I'm getting pessimistic over that consensus and have braced myself for the possibility that there may be a funding crisis, of some duration, as we sort of test the will of the Administration and Congress on the source of long-term and sustainable funding.

My experience has been that Congress has gotten incredibly creative in times past to avoid dire consequences, so there is a part of me that is hoping that somebody has a creative solution that forestalls the worst case scenario. I am concerned that few in Congress or the Obama Administration have been willing to step up and say we need to raise the gas tax. Raising the gasoline tax is seen as a political liability, and there is no consensus around the funding alternative. We are in a very challenging time, but this is time for leaders to lead. We have pushed this off to the farthest point we can go and, now, the day of reckoning is upon us. We'll see what happens.

 

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