State Transportation Funding Boosts Can't Replace Federal Dollars, Road Builders Say

Dave Bauer, the CEO of the American Road & Transportation Builders Association, says the Trump administration and Congress need to pitch in to help states accomplish their transportation goals.
by | June 25, 2019 AT 4:00 AM
Highway construction outside Little Rock, Ark. (AP/Danny Johnston)

Dave Bauer became the president of a national road building advocacy group at the beginning of the year, when Washington was abuzz with the prospect of a major federal infrastructure funding package passing Congress.

That buzz has died down, especially after President Trump walked out of an infrastructure meeting with congressional Democratic leaders last month.

But Bauer, who served as the top lobbyist for the American Road & Transportation Builders Association before becoming its president and CEO in January, is still excited about the prospects of more infrastructure spending because it’s getting more attention now than it did under Trump’s two predecessors.

“For a long time, people in the infrastructure community would get together in Washington and ask, ‘How are we going to get into the state of the union? That’s not so much a problem right now,” Bauer says. Trump mentioned infrastructure, albeit briefly, in his address to Congress earlier this year, saying, “This is not an option. This is a necessity.”

“[Trump] has tapped into a vein of support on Capitol Hill in Republican and Democratic memberships that has always been there,” he says. “The president has made it OK for Republicans to talk about infrastructure.”

But Bauer recognizes the formidable challenges to getting any infrastructure package through Congress as the next presidential election looms. The biggest obstacle, he says, is addressing the growing shortfalls in the Highway Trust Fund, the federal government’s main source of surface transportation money. It is primarily funded with fuel tax revenues, but the federal gas and diesel tax rates haven’t been raised since 1993.

The continuing shortfalls in that fund -- which are now up to $18 billion a year -- are a “a 50-pound weight that the highway and public transportation programs have been carrying around for 11 years on their back,” Bauer says. Congress needs to shore up those finances as part of any broader infrastructure deal, he adds.

As Congress idles on infrastructure spending, states and localities have been much more active. Thirty states have added new transportation revenues since 2013, including Alabama, Arkansas, Illinois and Ohio this year.

Bauer says those efforts are important, but need to be supplemented with federal funds, because states rely so heavily on them for their transportation programs. In an interview with Governing in Bauer’s office -- which offers views both of the U.S. Capitol and a nearby interstate highway -- he also talked about transparency in federal highway spending, what road builders think of “complete streets” efforts, and the challenges of keeping a united front for infrastructure advocates.

The following are highlights from the interview, which have been edited for brevity and clarity.

 

Tell me about your group’s interest in structurally deficient bridges. You put out a report this year that says it would take more than 80 years to fix all the structurally deficient bridges in the country at the rate we are fixing them now.

We do a bridge report every year. It gets a lot of attention, but I’ll fundamentally tell anybody and everybody, we don’t do that because we think there’s a bridge crisis. We have a bridge crisis, we have a road crisis, we have an airport crisis, we have a public transportation crisis. The bridge report is just data that is available and that we can quantify. It’s symptomatic, but it’s not exclusive to bridges.

Forty thousand [structurally deficient] bridges is a lot of bridges. But if you think 40,000 bridges is a lot, we have just as many lane miles of highway that need work. We have just as many public transportation facilities that need work.

 

President Trump has talked about infrastructure a great deal. But the two infrastructure plans he released -- one as a candidate, and one last year -- went nowhere. How helpful were those plans?

The first one that came out at the end of the campaign that Wilbur Ross and Peter Navarro wrote confused people more than it helped. Even then the candidate never talked about it.

I think that the proposal that the administration actually produced in 2018 had a lot of very positive suggestions.

The response from Capitol Hill about the idea of making the states and localities come up with more revenue wasn’t really well received from either party. But on the regulatory reform front, the components of that plan were as sound as anything that we have seen for the last decade in terms of project delivery, emphasizing the importance of cutting red tape, and doing more with less.

 

The ongoing deficits with the Highway Trust Fund loom over everything when it comes to infrastructure discussions on Capitol Hill. How did that situation get so bad?

When the 2015 [surface transportation funding law] was enacted, the deficit was $14 billion a year. It’s now grown to $18 billion a year. That’s cash flow. When you have an unsustainable underlying situation and you just put a Band-Aid on it, that underlying situation gets worse. And that’s exactly what’s happened. The first trust fund infusion in 2008 [to keep the fund solvent] was $8 billion. Now we’re up to a point where you need $18 billion a year.

The reason why this situation exists is because 15 years ago, when Congress passed a transportation bill in 2005, they set spending levels substantially higher than what revenues could support it. They liquidated a $13 billion balance in the Highway Trust Fund that existed at that time. When that went away, you had a gap.

 

You say that one of the reasons infrastructure funding is a tougher sell in Washington than in the states is because it’s harder to show the public how federal transportation money is spent. Why is that so difficult?

One of the frustrations that we have always had is that the federal government doesn’t want to act like it’s doing anything. To its credit, the Obama administration spent a lot of time and energy promoting the stimulus dollars that were invested in transportation. What was laughable about it, though, was that it was $27 billion on the highway side over a two year period, but at the same time, core investment [through the Highway Trust Fund] was about $85 billion. So the $27 billion got all this attention, but there’s still $85 billion over that same period of time in core highway money that that they acted like wasn’t even occurring.

There were provisions in the 2012 and 2015 [surface transportation laws] that required, or were intended to require, transparency. In effect, they asked the U.S. Department of Transportation to do exactly for core annual highway investment what it did for the stimulus dollars in 2009 and 2010. If you haven’t seen it, it’s because they haven’t done it.

If somebody can figure out why we aren’t promoting what value is delivered from $80 billion to $90 billion a year in federal investment in highway and bridge infrastructure, please explain it to me. It sure seems like, with that amount of money, you should at least be trying to tell people what you’re doing with it. But it’s treated like a black box, [as if it] is state money and it’s not federal dollars.

 

How significant is it that 30 states have raised transportation revenue since 2013? Are states just getting back to the way they used to work before the Great Recession, or is this a surge in interest?

Just anecdotally, that is a surge. For a long period in the 1990s and early 2000s, you had some revenue increases, but they were few and far between. So to a certain extent, I think that some of these [more recent revenue increases] were just a long time coming. In some of the situations, you were going to start seeing consequences if [lawmakers] didn’t take action.

 

Does all that activity at the state level lessen the urgency of doing something in Washington? If so many states are raising money, why is there such a big push with Congress?

State efforts in a vacuum are not going to produce the solutions that they want more of, or that the American people need. [Bauer points to a map showing how much of each state’s road construction budget is paid for by the federal government. It shows the federal share is 70 percent or higher for 14 states.] States in a lot of areas have stepped up and done their part. It’s very fair for them to ask their federal elected officials to do their part now.

 

Road builders are often blamed for opposition to building certain types of infrastructure, like bike lanes and “complete streets.” Do you think transportation money should be spent more on streets and highways than on bike and pedestrian facilities?

Our members can build anything. We’ll build what the project owners ask us to build. Our members are construction companies, but, at the same time, we have other members that are designers. We have multiple county and state transportation agencies that are members of our organization.

We have a segment of our membership that provides traffic signals. Some do the striping and some build signs. You can call it a “complete street,” but you’re still going to put paint on the road and you’re still going to have reflective materials [on the pavement].

What we’re not going to make the mistake of doing is to have a national organization to try to tell states, cities and counties how to meet their challenges.

 

But when states like Ohio raised their gas tax, you heard a lot of complaints from pedestrian and cycling advocates that the mix of projects skewed too heavily toward highways. We’re starting to hear that in Washington, too. Are you worried that the grand coalition of infrastructure advocates is going to start splintering over what types of projects get funded?

I think it’s unfortunate that this happens in policy discussions, when people feel like it’s a lot easier to instigate friendly fire than it is to actually provide solutions. But, you know, if you don’t have resources, you can’t fund complete streets. If you don’t have resources, you can’t build public transportation facilities. If you don’t have resources, you can’t build bike paths.

Frankly, when you are facing a $14 billion or $18 billion revenue shortfall, getting wrapped up in how you’re going to spend a small portion of that, as opposed to dealing with the real problem, is really missing the point.

It’s a lot easier for some people to say, “So-and-so doesn’t think that we ought to spend money the way I like to spend it than it,” than it is to say, “Hey Congress, raise the gas tax.” If you’ve got an $18 billion shortfall and we have to cut highway and transit investment by 40 percent a year, nobody wins.

 

But are you seeing that dynamic affect the infrastructure push in Washington?

One of the most interesting things about the evolution of the infrastructure discussion has been the amount of creativity that some people in Washington have utilized to classify themselves as infrastructure since 2017.

That said, the traditional stakeholders -- be it the construction sector, the users, or state and local governments -- have all been very aligned. There’s an acknowledgement that we obviously want a robust infrastructure program, but there’s understanding that the first step in that is fixing the Highway Trust Fund.

 

The U.S. Senate’s Environment and Public Works Committee is working on a surface transportation bill now, before the current law expires in 2020. Are you worried that the efforts to just focus on the “highway bill” will undercut the more ambitious push for a broader, maybe even $2 trillion, infrastructure bill?

Our view has always been that a Highway Trust Fund fix can and should be the foundation of any infrastructure package.

The fact that the Environment and Public Works Committee is moving forward in a bipartisan manner on a reauthorization bill a year early is in itself notable.

These folks are trying to move early and you know, if that becomes the foundation for an infrastructure bill or, or if it becomes an installment on one, depending on how you want to look at it. Great.

We need to be is moving away from what has occurred in the last two years, which is a bunch of people talking about infrastructure. We need people actually starting to legislate on infrastructure.

 

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