January 28, 2015

On January 28, Senate Environment and Public Works committee held a hearing titled “The Importance of MAP-21 Reauthorization: Federal and State Perspectives.”

Hearing witnesses made it clear that the states, the Administration, and most EPW committee members do not support devolution and highlighted that it would be challenging for states to fill funding gap that would be left if the federal program were devolved. Transportation Secretary Foxx headlined the first panel, and the second panel featured Governor Bentley (AL) and South Dakota Secretary of Transportation Bergquist, in addition to Governor Shumlin.

Secretary Foxx commented that, “This is a crisis that is worse than most people realize.” He elaborated to say that because the temporary MAP-21 extension continues only until May 31, 2015 states will have to make challenging investment decisions in the months leading up to that drop-dead date. He predicted that in the coming months states will begin to slow or stop projects. The Q&A explored methods to optimize investments, and among other approaches the Secretary suggested a streamlined project review process and cited New York City’s Tappan Zee bridge replacement as an example of how reviews can be streamlined.

When asked about federal credit assistance and public-private partnerships, the lack of certainty in long-term federal aid to states particularly hinders the planning of larger projects that might be eligible for PPP’s and credit assistance.

The witnesses on the second panel, which included two governors and a state DOT secretary, each highlighted the challenges in their state that result from a lack of funding certainty. Governor Shumlin pointed out that Vermont, “re[lies] on the on-going funding stream from the Feds to do [their] work.” He elaborated that due to the low-density nature of his state that options for local revenue streams are limited, and approaches such as tolling would not be effective.

The two governors and state DOT secretary emphasized that even in the context of federal funding, flexibility is essential. There was acknowledgment that there are certain projects where the federal government could play a larger role. Senator Whitehouse and Governor Bentley discussed the need for a competitively selected program for projects of national and regional significance (a PNRS program was authorized in MAP-21, but was given no contract authority nor general appropriation).

One of the purposes served by chairman Inhofe in highlighting the views of governors is to emphasize that governors do not necessarily support the devolution of federal surface transportation programs that has manifested in the form of an amendment proposed last summer and the “Transportation Empowerment Act.”

As was pointed out by at least two Senators, while everyone was in general agreement of the importance of a predictable federal program the “800 pound elephant” in the room was the need for a predictable and consistent funding stream. Senator Vitter (R-LA) noted that the three real options on the table are a gas-tax increase, repatriation, or additional domestic energy production. He threw a wrench in all three options, pointing out the lack of political palatability of a gas tax increase or increased domestic energy production, and the fact that repatriation is a short-term (and not likely in stand-alone legislation) solution that does not address the larger revenue challenges.

Archived video of the hearing can be viewed here.