Obama Transport Funding

By Yonah Freemark

In the Twin Cities this week, President Barack Obama announced his proposal for funding the federal government’s investments in infrastructure. With revenues from the gas tax far from covering the costs of all of the highway and public transportation improvements our nation needs, President Obama proposed a reformed business tax structure that would add significantly to federal revenues. This bold proposal would provide ample new funding for transportation, and contributes significantly to the critical discussion that Congress is engaged in currently and that the Metropolitan Planning Council (MPC) is addressing in its work.

The President’s proposal (which is not in the form (paywall) of a formal bill) would dedicate $302 billion to ground transportation infrastructure over the next four years, providing a reauthorization of the MAP-21 transportation funding bill passed in 2012, which allocated $105 billion to similar investments over two years and which expires in September 2014. The new proposal would increase funding for transportation by an average of about 38 percent per year.

The proposal was applauded by several influential groups, including Building America’s Future and Transportation for America.

President Obama made the announcement at St. Paul’s Union Depot, which recently reopened after a $243 million renovation and which was partially funded through the U.S. Dept. of Transportation’s TIGER program. TIGER is a competitive grant that funds innovative transportation improvements around the country, including such Chicago-area projects as the CREATE rail improvement program and the Chicago Riverwalk, and is an example of the performance-based decision-making for which MPC is advocating. MAP-21 provided additional funding for TIGER.

While in the Twin Cities, the President also visited the maintenance facility of the soon-to-open light rail Green Line, a $957 million link between Minneapolis and St. Paul. Half of the project’s costs were covered by Washington.

If passed, the four-year Obama reauthorization proposal would make many more such investments possible, thanks to a 70 percent increase in funding for public transportation, a $19 billion allocation for intercity rail, $9 billion for TIGER and similar grants. In addition, the proposal would dedicate $10 billion for freight improvements and $4 billion for the TIFIA reduced-cost loan program, which is an example of an innovative financing source.

But the proposal focuses on fixing it first, also an MPC priority. The President noted, “We’ve got more than 100,000 bridges that are old enough to qualify for Medicare,” and he is right to ensure that most public resources are dedicated to keeping our existing infrastructure in good condition.

The business tax reform that the President has proposed is similar to the bill introduced this week by House Ways and Means Committee Chairman Dave Camp, who proposes dedicating more than $120 billion in business tax changes to support transportation through the Highway Trust Fund, saving it from insolvency.

The fates of both the President’s proposal and Rep. Camp’s bill remain to be addressed. Senate Committee on Environment and Public Works Chairman Barbara Boxer is currently planning to introduce a new transportation funding bill in April that she hopes will provide dedicated revenues for five or six years. Throughout the process, MPC will be advocating for dedicated, long-term transportation revenues that ensure appropriate performance measures and prioritize sustainable mobility for our region.

Photo Credit: Transportation Funding/shutterstock