The transportation community is trying to figure out what, exactly, this month's election means. MAP-21, the highway and transit bill Congress passed this summer, isn't set to expire until 2014. But state and local transportation officials, along with other stakeholders and advocates, continue to stress that they're already looking at how to make their case for a robust bill.
That approach is probably a wise one, considering it took Congress two-and-a-half years to pass a highway bill after MAP-21's predecessor expired. So as 2012 comes to a close, Governing's FedWatch explores six questions worth asking with a new Congress and a second Obama administration around the corner.
Is the gas tax still untouchable?
Back in 2011, when Transportation Secretary Ray LaHood spoke at a conference of state DOT directors, he urged the crowd to ask him some tough questions. One of them took him up on his offer and asked what the plan was for dealing with the increasingly unsustainable gas tax. “Well,” LaHood replied, “we’re not doing anything about it.”
By now, everyone in the transportation community is familiar with the dilemma: the 18.4 cent/gallon gas tax hasn’t been increased since 1993, so it has diminished in purchasing power. Meanwhile, vehicles are becoming more fuel efficient, which means less gas tax is being paid for each mile driven. In short, the way we pay for roads and transit is broken. In MAP-21, the surface transportation bill approved by Congress earlier this year, lawmakers got away with skirting the issue, largely by using accounting gimmicks to ensure level funding without increasing the gas tax. They may not be able to do that in the next bill.
In a bitterly divided Congress, one thing that lawmakers of all stripes seemed to agree on was that increasing the gas tax wasn’t a real option. That’s probably because many faced an even more pressing issue: re-election. Could the outlook for addressing the gas tax change? It’s hard to say, but finally having the 2012 election in the rear-view mirror certainly doesn't hurt the chances of increasing it, indexing it to inflation, or coming up with some other method of generating new transportation revenue.
What does new committee leadership mean?
House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) will be out of that role when the new session begins. He's set to be replaced by Rep. Bill Shuster (R-Pa.) -- son of former committee chairman Bud Shuster. He knows transportation policy and has already had leadership positions at the subcommittee level.
The switch could be interesting. Under Mica’s leadership, the committee passed a highway bill on a divided, party-line vote -- a stark contrast from Senate Environment and Public Works Committee, which passed its highway bill unanimously. In the House, the process of passing a highway bill was messy, and disagreements among House Republicans prevented the chamber as whole from ever really passing its own comprehensive highway bill.
At one point, House Speaker John Boehner took Mica off the bill, and made none other than Shuster the point man on the legislation. Having a committee chairman who's closer to the leadership could help the chances of passing a transportation bill in the next two years. The policy implications, and specifically what it means for a MAP-21 successor, are less clear.
On the Senate side, James Inhofe (R-Okla.) is out as the ranking member on the EPW committee and will likely be replaced by Sen. David Vitter (R-La). Sen. Barbara Boxer (D-Calif.) remains at the helm of the committee. With shakeups in the leadership on both committees, stakeholders will have to develop new relationships with committee staff members, who play a pivotal role in crafting legislation.
Is Ray LaHood in or out?
The president was re-elected, but it’s still unclear whether LaHood will stay on for the second term, part ways, or stick around for a little while. The transportation community has been trying to guess who his replacement might be (more on that topic here). Whoever's in the slot will face the difficult task of trying to dealing with the topic in a Congress that remains bitterly divided. Indeed, LaHood – a Republican himself – often expressed never-ending frustration dealing with his former GOP colleagues on transportation legislation.
Depending on his or her style, a new DOT secretary could be a major player in the debate – or remain on the sidelines pushing the administration’s agenda and rhetoric. Indeed, while LaHood has gotten credit for helping to implement innovative programs like TIGER grants and executing better coordination between DOT, HUD and EPA, he didn't offer much in the way of solutions on transportation legislation and instead emphasized the administration's budget, which called for a six-year $556 billion surface transportation bill without offering much of a funding plan.
Can states continue to pick up the slack?
The election didn’t change very much for the transportation debate at the federal level – Obama kept the White House, Republicans kept the House, and Democrats kept the Senate – but there were plenty of votes at the state and local level that generated interest among the transportation community.
According to an analysis by American Road & Transportation Builders Association, 68 percent of state and local ballot measures to increases funding for roads, highways and transit passed on Election Day this year. In Arkansas, voters signed off on a half-cent sales tax to fund a $1.3 billion highway improvement bond. Alaskans approved $453.5 million in bonds for a variety of infrastructure projects.
While the role of states has become a salient topic lately as the feds discuss potential budget cuts, states have actually been increasingly finding innovative ways to pay for infrastructure for more than 10 years, says David Parkhurst, the infrastructure expert at the National Governors Association. Meanwhile, some state lawmakers have already started talking openly about the possibility of state gas tax increases or other methods to shore up funding for transportation projects. And in recent years, many states have expanded their ability to pursue public-private partnerships. In many cases, states just don't have the option of relying on Washington and are finding they have to become more self-reliant. Expect that trend to continue.
Could tax reform be troublesome for infrastructure financing?
The election didn’t provide any more clarity on how lawmakers will address the looming fiscal cliff. But there’s a growing concern in infrastructure circles that whatever steps Congress takes to address it could involve mucking around with the municipal tax exemption, which has allowed municipalities to issue debt at lower interest rates than they’d otherwise be able to.
If tax reform is on the table in 2013, which it almost certainly will be, that opens the door to Congress considering caps on that exemption. And if that happens, state and local transportation officials say it will become more expensive for them to finance projects -- and in some cases, it may make them prohibitively expensive. If the exemption is cut, "there are things that will not get done," says Timothy Firestine, chief administrative officer for Montgomery County, Md.
Does the White House take a lead on infrastructure?
There’s been some frustration in the transportation community that President Obama, who has a reputation as someone who appreciates the value of investing in infrastructure, didn't do enough to support a robust surface transportation bill as lawmakers crafted and debated the legislation in 2011 and 2012.
Indeed, for an infrastructure proponent, the record has come up shy in some regards. His plan to pay for infrastructure with war savings was panned by many transportation experts as a gimmick and not particularly constructive. He supported efforts to cap tax exemptions -- including the municipal bond exemption -- which could make financing projects more expensive.
His American Jobs Act, which called for $50 billion in infrastructure spending, wad dead on arrival. And during the presidential campaign, infrastructure was barely topic of discussion, except for when Mitt Romney attacked Obama for comments he made in a speech on the role transportation infrastructure in supporting the economy.
If the president wades deep into the world of transportation policy -- as opposed to introducing bold but vague plans -- the process of developing a MAP-21 successor could be very different than it was in 2012.