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Transportation Officials Seek Flexible Federal Infrastructure Funding

State and local transportation officials told Congress on Wednesday they don’t just want more federal dollars for infrastructure but also increased spending flexibility.

Testifying before the House highways and transit subcommittee, Metropolitan Transportation Commission Executive Director Therese McMillan said the San Francisco Bay Area relies on flexible funding from two key federal programs.

Money from the Surface Transportation Block Grant, or STBG, and Congestion Mitigation and Air Quality, or CMAQ, programs has been used to prod Bay Area cities and counties to build more housing near existing transit stops and transportation services. The projects improve mobility access, encourage use of modes other than cars and curb congestion, McMillan said.

Now the Association of Metropolitan Planning Organizations, which McMillan belongs to, wants Congress to invest more funds in STBG and allocate block grants on a regional basis— restoring the local distributed share to 62.5 percent if not higher, she said.

“Directing more dollars to metropolitan areas serves all of our interests,” McMillan said. “The Bay Area and other metro areas continue to drive national economic output, and in these areas new innovations are most often made and new technologies are being developed and deployed.”

About 20 percent of Washington state’s transportation budget comes from federal funding, but most of it goes toward infrastructure preservation “because it’s not a particularly flexible form of funding,” said Roger Millar, the state’s transportation secretary.

About 40 percent of trips Washington residents take are less than a mile, he said, and 60 percent are made by car.

“And the reason people drive a car is it’s the only safe way they can make that trip because we haven’t invested in the pedestrian infrastructure, we haven’t invested in the bicycle infrastructure and we haven’t invested in the transit infrastructure to make that possible,” Millar said. “That kind of flexibility would be very helpful to us.”

The Trump administration released a $4.7 trillion budget plan Monday that included a familiar proposal for $200 billion in infrastructure investment over 10 years, beginning with $5 billion in fiscal year 2020. A long-term reauthorization of the Fixing America’s Surface Transportation, or FAST, Act that addresses the solvency of the Highway Trust Fund is also proposed.

Currently, the trust fund is only partially covered by the federal gas tax with the remainder having to be borrowed.

“The fuel tax—because of the more efficient vehicles we have, because of alternative fuels coming onto the market—is a flat funding source, and it does not have a sustainable future,” Millar said. “The alternatives to the motor fuel tax are all unpopular, but how many popular taxes do you know? Whether it’s a road user charge or congestion pricing or some other way of funding the transportation system, I think what all of us agree on is that it should be user-based; it should be a fee for service.”

Lawmakers last reauthorized the FAST Act—the first full authorization in a decade—in 2015, but it didn’t increase infrastructure funding and the law expires in 2020.

The uncertainty of reauthorization has made it hard to for state and local governments to draw up 40-year infrastructure plans, McMillan said, and they’ve had to fill in federal revenue gaps.

In 2017, California passed a transportation funding package with a wide array of user fees—including increasing the gas tax 12 cents to 41.7 cents a gallon and indexing it to inflation—generating an estimated $5 billion annually.

A year earlier, Washington State increased its gas tax 23 cents to 37.5 cents a gallon. But the state still has a $700 million-a-year unfunded infrastructure preservation backlog, Millar said.

“We have a bit of cognitive dissonance this week,” said U.S. Rep. Peter DeFazio, an Oregon Democrat and chairman of the full House transportation committee. “We have the president’s budget, which again proposes cuts pretty much across the board in transportation, on one hand, but then talks about the fairy dust of leveraging $200 billion of federal money into $1 trillion of investment—something we all know is impossible.”

DeFazio called the proposed combination of asset recycling, privatization and tolling “fanciful” but said the fact the House Ways and Means committee held its first substantive infrastructure funding meeting in almost a decade last week was “progress.”

Some Republicans defended Trump’s infrastructure proposal dating back to last year as, at least, a starting point.

“I understand the outcry at the local and the state level over the White House’s plan, which increased the financial burden on states and local governments. But I also think the intent behind it is one that we shouldn’t reject out of hand,” said Rep. Mike Gallagher, a Wisconsin Republican. “To the extent I understand it, and I don’t speak for the White House, it was to force us at the state and local level to prioritize projects and think, on a 30-year time horizon, about how we maintain projects effectively or fix the projects that are crumbling now.”

San Antonio is the seventh-largest and fastest-growing city in the U.S., and its Connect SA program intends to integrate all infrastructure investments into first- and last-mile transportation technology and a bus rapid transit network spanning its 500 square miles.

A regional rail line along the corridor connecting the city to Austin “holds enormous promise,” said San Antonio Mayor Ron Nirenberg, especially because his city is anticipated to grow by 1 million people between now and 2040.

“We have a menu of local revenue options to fund this investment, but a federal partnership is absolutely necessary for success,” Nirenberg said. “Our cities are rapidly growing, and we have to provide more transit choices to alleviate traffic congestion and to grow our economy. The U.S. is now the most congested developed nation in the world.”

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