Congressional update - what's up with federal transportation funding?

Today the Safe Routes to School National Partnership released an update on progress in Congress in renewing the federal transportation funding.  Congress passes an overall transportation bill every six years that sets the direction and outline for transportation funding and policy.

The renewal legislation was due in 2008--but here we are in 2011 and renewal is still in the uncertain future.The difficulty is that over the past few years the federal fuel tax--which is not linked to inflation and so loses 2-3% in buying power each year--has stopped producing enough money to fund the federal transportation program.

That leaves legislators in a quandary--they must either raise taxes to recover some or all of the lost buying power, or slash funding to a point far lower than it has been in recent U.S. history.

The situation is similar to--but, because of revenue shortfalls, even more dire--than with the renewal of the previous federal transportation bill, known as SAFETEA-LU.  That bill was due for renewal in 2002 but not taken up and passed by Congress until 2005.

Highway Trust Fund revenue decreasing, lead to large funding shortfall
The fundamental problem is that the main source of funding for the transportation bill is the Highway Trust Fund, which is funded by fuel taxes.  Those taxes are set per-gallon, not as a percentage of price.  The result is that the fuel taxes lose buying power each year just by dint of inflation.

That's only 2-3% per year, typically, but the federal fuel taxes haven't been increased in almost twenty years.  Twenty years of "automatic tax cuts" of 2-3% each year add up over twenty years.  Add to that the increases in gas mileage and a major slowdown in the amount of miles Americans are driving, and the result is that the Highway Trust Fund is now nowhere near to covering the amount of transportation spending the U.S. is now doing.

Declining Highway Trust Fund revenue leaves legislators with unpleasant choices
That leaves policy makers with two options--neither pleasant:

Part of the problem here is that a vast majority of Americans falsely believe that gas taxes are automatically increased every year or so--only a small minority know the truth--that federal gas taxes have remained unchanged since 1993, without even an adjustment for inflation

Similarly, the last Missouri fuel tax increase was passed in 1992 and phased in through 1996. Amendment 3, passed in 2004, did not increase fuel taxes at all, but diverted a small amount of funding from the state's general fund to MoDOT and gave MoDOT a large amount of additional bonding authority.

This misconception has a dramatic affect--our idea of how much funding our roads, highways, and transportation system receive is far different from the reality.

The two graphs below show the real story--first the fuel tax rates, and then rates as adjusted for inflation.

The inflation adjusted rates--or "real dollars" as economists call them--shows that we are paying a very moderate amount in fuel tax, and that it's going down--not up--each year.



To keep the same buying power as the fuel tax had in 1993, we'd need to raise it from 18.4 cents per gallon to 28.7 cents per gallon.  So every time we fill up, we're enjoying an automatic tax cut of 10 cents per gallon, thanks to the fact that gas taxes are set per gallon rather than a percentage of the price.

As the graphs above and below show, the overall amount the federal government has been spending on roads, highways, and other infrastructure has been decreasing pretty steadily since about 1980.

What is happening in Congress today
With that background, here is the Safe Routes to School National Partnership's summary of the current situation in Congress:

In the Senate, the Senate Environment and Public Works Committee released a short outline of its transportation bill, which is called Moving Ahead for the 21st Century (MAP-21). The Senate approach is for a two-year transportation bill, at current funding levels. While the outline does not mention bicycling and walking, at a July 21 hearing on the outline, Chairman Boxer (D-CA) indicated that Safe Routes to School, “bike paths” and “recreational trails” are included in MAP-21. This is promising news—but we need to see the details before we know that the integrity of Safe Routes to School is maintained, that these projects won’t be competing against expensive highway projects and that the funding level is sufficient. 

Because the federal gas tax is no longer enough to fund current transportation spending levels, the proposed Senate bill would require an infusion of approximately $12 billion. Right before Congress left for the August recess, news reports indicated that Sen. Baucus (D-MT) has identified a funding source to fill the $12 billion gap. If reports are accurate, and the funding source is acceptable to Republicans, this could help jumpstart consideration of the Senate transportation bill in September. Because Congress will be spending much of the fall working on major spending cuts related to the debt limit deal, a transportation bill must move in early fall or risk getting caught up in the larger debt debate. 

In the House, there was no further movement on the transportation bill subsequent to the early July unveiling of the 20-page summary of the House draft. Chairman Mica (R-FL) spent much of his time in July wrangling with the Senate over extending the Federal Aviation Administration (FAA). Much like the surface transportation bill, the FAA has been extended repeatedly over several years. Because Congress could not come to agreement on another extension, the FAA shut down for nearly two weeks before an emergency extension was passed. 

Rep. Mica has indicated he will play hardball with the surface transportation bill and extension as well. With the current surface transportation extension plus the bulk of the federal gas tax expiring on September 30, it does raise concerns about prospects for an extension. If Congress does not come to agreement either on a long-term transportation bill or another extension by September 30, it would shut down the flow of funds to state departments of transportation for a wide range of transportation programs, including Safe Routes to School. 

Clearly, September will be a pivotal time for the transportation bill.

Why federal transportation funding is vital for bicycling and walking
A common question we are asked is, "Why does the federal government need to fund bicycling and walking facilities at all?  Why isn't that a job for local cities and states?"

The reason is, that for better or worse in the United States we have decided to have a major part of our roads and highways funded by the federal government. 

Local neighborhood roads usually have no federal funding.  But many of the main roads going through our cities and towns are partially or completely funded by the federal government.

This includes everything from interstate freeways to federal highways to state highways and even major arterial roads in cities and towns--all receive some, a little, or a lot of federal funding.

Why is it important for these main roads to be planned and designed for bicycling and walking?

  • Bicyclists and pedestrians must cross these roads, even if they don't want to, or can't, bicycle or walk on them.
  • In many cases these main roads are the only possible route to reach key destinations, or alternative routes are much longer and less convenient.  For instance in rural areas, often a state or U.S. highway is the only possible route to many destinations.
  • Our cities and towns are criss-crossed by these highways and major roads.  Even if every other road and street in town is bicycle and pedestrian friendly, gaps in the system created by the main roads and highways mean a city can never be completely bicycle or pedestrian friendly.
  • Even more important, these major roads and highways attract business, commerce, shopping, jobs, schools, libraries, parks, public buildings, and every other type of destination someone might bicycle or walk to.

All these factors are all very important if you want to a community that is inviting and accessible for bicycling and walking.  

To make a community truly bicycle and pedestrian friendly, we must created a complete, seamless, connected network of bicycle and pedestrian routes, and we must seamlessly connect people with their destinations.

The map above illustrates this problem, as seen in a typical city or town.  The red and green lines are U.S. and state highways. The red dots indicate points of interest--shopping, restaurants, job and commercial centers, schools, parks, and so on.

Notice how these so-called "traffic generators" tend to cluster along the highways.  Other main roads that show up as clusters of dots are typical main arterial roads in the city--which are also built to a large degree with federal funding.

If we make all the green and red roads, and other major roads, inaccessible for bicycling and walking, we have just cut the city into tiny little sections and cut off bicyclists and pedestrians from all the destinations they would like to travel to.

The biggest lesson learned: Bicycling and walking must be built into the system--and its funding
The major lesson we learned in the 75 years of federal highway funding prior to 1991, was that funding major roads and highways in complete disregard of the needs of bicyclists and pedestrians means that our entire country becomes unfriendly for bicycling and walking.

In 1991 Congress passed ISTEA, the first comprehensive, multi-model federal transportation bill, putting bicycling, walking, and other modes on a far more equal footing.

Twenty years later, we are just starting to see the nation start to turn around from the previous 75 years of neglect of its bicycle and pedestrian system.

And in times of tight budget, building bicycling and walking facilities gives the biggest bang for the buck of any of our transportation dollars.  And, just as a little bonus, they create more jobs--46% more--than other construction projects.

Everything in the transportation realm is expensive when compared with our household budgets.  But bicycle and pedestrian transportation facilities typically cost 1/4 to 1/1000 the cost of equivalent facilities for motor vehicles.

Those add up to big savings and even bigger benefits for communities.

What do you think?
What do you think about federal transportation funding? Should the U.S. raise fuel taxes? Fund transportation from general revenue? Slash transportation spending? Some combination or something else?

Take our online poll and let us know what you think.