Photo courtesy of Summit County, Ohio
Summit County, Ohio public works crew resurfaces county
road. The Clinton Administration proposal for transportation funding, NEXTEA,
keeps intact key programs of importance to counties, such as the Surface
Transportation Program.
On March 12, before a select audience of transportation officials, including representatives from NACo, President Bill Clinton, Vice President Al Gore and Secretary of Transportation Rodney Slater announced the Administration's proposal for the future of the nation's surface transportation system.
Titled the National Economic Crossroads Transportation Efficiency Act, or NEXTEA, the proposal is the successor to ISTEA, or the Intermodal Surface Transportation Efficiency Act. The measure contains $175 billion in funding for a six-year period, up 11 percent from the $157 billion six-year authorized level of ISTEA. Using a familiar theme, President Clinton called his proposal "the bridge to the 21st century."
While the NEXTEA plan recommends some changes and a few new programs, it looks very much like the current ISTEA program, enacted in 1991, which did usher in a new era of how the federal surface transportation program was to operate.
"We are very pleased that the Administration has accepted NACo's recommendation that the basic structure of ISTEA be retained," said NACo Executive Director Larry Naake. Added Naake, "While NACo does not agree with everything in the bill and Congress will no doubt make changes to this proposal, it is a good place to begin." (See sidebar below for NACo recommendations.)
The core highway programs remain in place, including programs that provide funds to counties and which NACo supports, such as the Surface Transportation Program (STP), the Bridge Program, and the Congestion Mitigation and Air Quality (CEMAQ) Program. No major changes are made in these programs. The National Highway System (NHS) and the Interstate Maintenance Program are also extended.
Regarding funding levels, the proposal recommends a six-year investment of $35 billion for STP, up from $24 billion in ISTEA; $15.976 billion for the Bridge Program, down from $16.1 billion in ISTEA; $7.8 billion for CEMAQ, up from $6 billion; and $26.5 billion for the NHS, up from $21 billion.
The formula for distributing the STP and NHS funds is changed, while the formula for the Bridge and CEMAQ programs remain essentially the same. While almost all states would receive more money under this proposal, in terms of relative percentages, about half would get a little more and half a little less.
The transit program would be reconfigured. There would be no general fund contributions to the transit program and all funding would come from the Transit Account of the Highway Trust. The operating assistance category would be eliminated and one large formula grant would be adopted.
However, in areas of less than 200,000 population, the recipients of transit assistance would have the flexibility to use as much of its grant as it wanted for operating purposes. In areas in excess of 200,000, the definition of capital assistance is expanded to include preventive maintenance, something that was previously eligible under operating assistance.
Rural transit assistance is continued, though at a lower funding level. It would have its own authorized level of funding, rather than being a percentage of the formula program. Additionally, the bus program is rolled into the formula program as is the rail modernization program, although the latter will be distributed under the current formula. The new starts rail program is the only Section 3 discretionary program that continues as a separate entity.
The Administration's bill leaves in place most of the existing language and structure for county and other local officials to have input into the planning and project selection process.
In areas of more than 200,000 population, the MPO (metropolitan planning organization) will continue to have the lead role in selecting projects, and in areas ranging from 50,000200,000, the states, in consultation with the MPOs, will select projects.
In those more rural areas under 50,000, the Administration has added language which, while leaving the state in the predominant role in project selection, appears to enhance the position of local officials.
There are several new or expanded initiatives in the NEXTEA proposal, some of which are quite controversial.
NEXTEA would open the State Infrastructure Bank Program to all states, at a cost of $150 million annually. A new $600 million Credit Reform Program would be made available to projects of national significance. A more controversial proposal would make Amtrak eligible for funding from the Highway Trust Fund.
Another change that has attracted some attention would, at a state's discretion, remove the ban from charging tolls on interstate highways. A new work-to-welfare program, called Access to Jobs and Training, would become part of the transit program and would be funded at $600 million to make grants to states, local governments and nonprofit agencies that develop innovative programs to get economically disadvantaged persons to where the jobs are.
The Administration's bill is likely to receive a thorough review by Congress. However, there are three unanswered questions that will determine the final outcome of the debate on the future of the surface transportation program.
The first is what Congress will do about funding for highways and transit at a time when there is a real effort to balance the budget. Recommended funding levels in the Administration's or anyone else's proposal means little if Congress decides that highways and transit must be reduced as part of a balanced budget effort.
However, there seems to be some momentum behind efforts to treat these program differently because they have their own sources of funding from the Highway and Transit trust funds. NACo supports that view.
Higher funding levels could be achieved by taking the trust funds off-budget as proposed by Chairman Bud Shuster (R-Pa.) of the House Transportation and Infrastructure Committee, through a proposal introduced by Senator John Chafee (R-R.I.) of the Senate Environment and Public Works Committee and Senator Chris Bond (R-Mo.).
Their proposal would require an annual funding level for the highway program equal to what is taken in from gas tax revenue; or an increase in funding for the highway program, which was recently suggested in a letter to the chairman of the Senate Budget Committee, and signed by 57 senators.
The second issue concerns the funding formula. This is sometimes referred to as the donor-donee issue and is an issue on which NACo has no policy. A number of states, which believe they have received insufficient highway funds in contrast with their contributions to the Highway Trust Fund, would like to see the funding distribution formula changed. There are and will be a number of bills introduced that would treat certain states and regions of the country in a more preferential manner than under current law.
The third issue deals with the future of the surface transportation program. NACo strongly supports the ISTEA existing structure and would like to see those programs that counties benefit from, such as STP, the bridge program, CEMAQ and transit, continued. This structure, along with more opportunities for local government input in the planning and projects selection process, are the keystones to NACo's position on reauthorization.
In this context, we have urged members of the House and Senate to maintain the current basic structure of the surface transportation program as they work out the formula issue.
Congress should be concluding its hearings on the reauthorization of ISTEA soon. Over the next several months, the House and Senate committees will be drafting their respective pieces of legislation.
County officials are urged to contact their representatives and senators
and let them know how they and NACo feel about the future of ISTEA.
Issue: County officials in rural areas not consulted sufficiently on how Intermodal Surface Transportation Efficiency Act (ISTEA) funds are spent.
Solution: Projects undertaken in areas of less than 50,000 population should be selected by state and local officials. The state, in consultation with local elected officials, should develop a project selection process which provides local elected officials with input equal to that of the state. That process must be subject to a public hearing process, reviewed biennially, and is subject to certification by the U.S. secretary of transportation.
Issue: Under current law, projects in these areas are selected by the states in consultation with MPOs.
Solution: Projects should be selected by MPOs in consultation with the states.
Issue: There is a special funding rule in ISTEA for areas of less than 5000 population that was included in ISTEA to partially compensate for the elimination of the secondary road program. The problem is that the special rule allows the funds to be spent on any road in a rural area, including an interstate highway.
Solution: Limit the special rule to roads not on the National Highway System.
Issue: Currently bridges not eligible for federal assistance, known as off-system bridges, must receive between 15-35 percent of a state's bridge fund apportionment. Given the tremendous number of off-system bridges that are deficient, counties believe the program should be increased.
Solution: The minimum figure for off-system bridges should be increased to 30 percent.
Issue: The U.S. Department of Transportation does not know how states allocate federal highway funds between states, counties and cities.
Solution: Every state must report to the secretary how it has allocated its surface transportation program, its bridge program, and its congestion mitigation and air quality program among state, county and city projects.
Issue: Transit operating assistance is decreasing.
Solution: Additional flexibility should be given to recipients of transit
assistance to determine how capital formula funds are spent, including allowing
these funds to be spent for operating purposes.