Ten things you should know about the federal transportation bill

There is a pretty good chance you haven’t heard that Congress recently passed and the president signed a national transportation bill. The same week that the Supreme Court ruled on the Affordable Care Act (aka ObamaCare) and Congress voted to hold U.S. Attorney General Eric Holder in contempt, they somehow managed to come to an agreement on a surface transportation bill that determines federal policy and funding for roads and transit systems in this country.

Shockingly, the transportation bill didn’t receive the same coverage. These days the tried and true adage “if it bleeds, it leads” could be replaced by “political strife is our life.”

While passage of a transportation bill may not cause the visceral reaction some may be looking for, it is an extremely important issue for businesses in Wisconsin. One only need look at the recent CNBC poll “America’s Top States for Business” to understand the impact. Wisconsin jumped from 25th to 18th. The area Wisconsin most improved in? Infrastructure and transportation. It is no coincidence that the number one overall state was Texas, which placed first in infrastructure and transportation, while Rhode Island was 50th and placed 50th in infrastructure and transportation.

So here are the top 10 things you should know about the recently passed federal transportation bill:

  1. There is one. Congress passes authorizing legislation, usually in six-year periods, in which policy and funding levels are set for the 50 states. These federal funds currently make up about 25% of Wisconsin’s overall transportation budget and fund about 45% of our major highways.
  1. The primary funding source for federal transportation is the federal gas tax. It is currently 18.4 cents a gallon. This is the same amount it was 20 years ago when gas was around $1 a gallon. Ah, the good ol’ days.
  1. The name of this bill is Moving Ahead for Progress in the 21st Century, or MAP-21. I think the same people who come up with the titles of these things are also writing the directions and diagrams for putting together furniture.
  1. This bill will cover two years rather than the traditional six. Why? Because they had to scrape together funds from other sources, and that was the best they could do. The additional funding is derived largely from projected revenues from the Pension Funding Stabilization initiative and a transfer from the Leaky Underground Storage Tank (LUST) fund. (See? You thought this was going to be boring and here I am talking about lust in capital letters.)
  1. There are no earmarks.
  1. Wisconsin will continue to receive roughly the same amount for the next two years as we have received for the past several.
  1. Regulations were streamlined to speed up the process. When you are talking about major transportation projects, the dollars associated with additional months and years can really add up. MAP-21 sets a four-year deadline for project approval and exempts more categories of projects from environmental assessments.
  1. The Keystone Pipeline was not included in the bill. Republicans had attempted to use this bill to force another showdown over the Keystone Pipeline. In the end they agreed to pull it from the bill in order to get concessions on streamlining regulations and other things.
  1. The bill allows expanded authority to toll new capacity on interstates so long as the current toll-free lane capacity is not diminished.
  1. While MAP-21 makes some positive policy changes and finds creative ways to fund the next two years, it does nothing to address the unsustainability of the nation’s transportation program moving forward.

As I mentioned earlier, the federal gas tax is the primary funding source for our federal transportation program. Since the rate is the same 18 cents a gallon it was 20 years ago, it has lost significant purchasing power. The revenue stream, therefore, has not been sufficient to meet even current obligations. This is why it took so long to get this bill passed – the last bill expired over two years ago. Elected officials were faced with deciding between slashing investment in our transportation infrastructure or raising taxes. For us non-elected folks, that’s like giving us the option between a root canal or a colonoscopy … without anesthesia.

So rather than passing a new bill, Congress kept extending the old program several months at a time and infusing money from the general fund – aka deficit spending. However, with our growing deficit woes, that option quickly became about as appealing as having both of the previous two procedures done at the same time.

Instead, Congress found a fourth way. This bill doesn’t slash investment, deficit spend, or increase taxes on motorists. Our legislators ultimately found what are known in D.C. as “pay fors” to allow the programs to continue at current levels for two more years. “Pay fors” simply mean you took the money from some other area of the budget. (The main “pay fors” were mentioned under No. 3).

In the end, however, we are going to have to come to grips with the fact that our current user fee – the gas tax – is based on gas consumption, which will continue to diminish as cars become more fuel efficient or run on something other than gas. Simply applying the same amount per gallon as 20 years ago to vehicles that are using fewer gallons is quite simply not going to work.

MAP-21 was probably as good as we were going to do in the short term. Seven of Wisconsin’s eight congressmen and one of two senators voted for the bill. They did the right thing. But “pay fors” cannot be the future. We need to use these next two years to have a national conversation about what we want from our transportation network and how we are going to pay for it. There are many ideas … but that’s for a future post.

Sign up for the free In Business Wisconsin Report – your weekly resource for local business news, analysis, voices, and the names you need to know. Click hereIf you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.