Categories
Congress DOT Finance Infrastructure President

At long last, a transportation budget that pays for itself—and recognizes the climate

6816943450_9496fd16a6_k

» One last proposal from President Obama stakes a big claim in favor of improved public transportation instead of highway infrastructure, but given the Congressional environment, hopes for passage are slim.

If Congress’ hostility to President Barack Obama hadn’t already been apparent, the death of Supreme Court Justice Antonin Scalia certainly pulled back the curtains. Suffice it to say that the administration has very little hope of making significant policy change over the next year.

The administration has taken this opportunity to emphasize the importance transportation plays in contributing to climate change.

Nonetheless, the Administration revealed its big budget proposal last week, and with it a major plan for increased investment in surface transportation. Unlike the FAST five-year bill passed in December by Congress, Obama’s budget would substantially increase funding for transportation infrastructure over the current levels.

As the following chart shows, while budget outlays for highways, transit (Federal Transit Administration), and railroads (Federal Railroad Administration) have remained roughly flat since 2010, Obama proposed major increases for FY 2012, 2014, 2015, and 2016* that matched funding or were even higher than the amount dedicated to these types of infrastructure in 2009, during the economic stimulus.

Obama’s budget this year does the same, increasing funding quite substantially for transportation. But what makes the 2017 recommendation so different from those of previous years is that it proposes no net boost in highway infrastructure even as it proposes dramatically expanding funding for alternatives. The Federal Transit Administration would receive about $20 billion next year, compared to $11.8 billion in 2016, with larger formula and capital grants being joined by a “Rapid-Growth Area Transit Program” designed specifically for bus rapid transit in sprawling cities. The Federal Railroad Administration would receive about $6.3 billion, compared to $1.7 billion this year, renewing President Obama’s call for a better intercity rail network.

Budgets-Over-Time

This is a remarkable focus on transit that diverges from previous Obama budgets, which emphasized transportation investment as an example of a way for everyone to win. In this budget, highways definitively would not—at least to the degree they normally do.

What’s exciting is that the administration has taken this opportunity to recognize the importance transportation plays in contributing to climate change. Rather than simply reinforcing norms about what types of transportation get funding, the budget accepts that increasing spending on highways doesn’t do the environment much good. “To address the challenges of the 21st Century,” the budget notes, “the Nation needs a transportation system that reduces reliance on oil, cuts carbon pollution, and strengthens our resilience to the impacts of climate change.”

It does so by reducing the ratio of highway to transit investments from about four to one to two to one.

Major investments identified in the budget include not only the large increases in formula and capital construction funding for the agencies noted above, but also billions in additional funding for climate-sensitive solutions to be implemented by metropolitan areas and states. $6 billion would be distributed to regions focused on transportation and land use efforts to reduce greenhouse gas emissions; $1.5 billion would go to competitive grants for transit-oriented development; $1.7 billion would go to states whose transportation plans specifically mitigate air pollution; and $750 million would go to bolster climate resilience.

This is an amazing commitment to a cleaner transportation system, the likes of which no sitting president has ever proposed. It is also so different from actual Congressional appropriations to transportation, which continue to be heavily focused on increasing highway construction.

Also unlike the bill passed by the U.S. Congress, the Obama budget would actually pay for itself using transportation user fees—a first for this administration. A $10.25-per-barrel oil tax phased in over five years would, in effect, add $0.238 per gallon in new federal taxes on top of the $0.184 Americans already pay per gallon. It’s an appropriate measure that specifically taxes the major cause of transportation-related carbon emissions.

If this proposal had come earlier in the administration and the president had lobbied hard for it, there would be more to say about its prospects. But with a Congress that hasn’t increased the gas tax since 1993, despite the dramatic shortfalls in revenue that have occurred in the years since, it and the expenditures associated with it won’t happen, at least this year.

New transit projects receive a boost

As a complement to the 2017 budget, the Federal Transit Administration released its proposed funding recommendations for major new public transportation projects. The capital investments include not only the major projects that already have what are referred to as “full funding grant agreements”—including rail systems such as the first phase of Los Angeles’ Westside subway extension and Honolulu’s elevated line—but also future projects that the executive branch has endorsed for federal support.

Projects selected for funding include the second phase of L.A.’s subway; San Diego’s Mid-Coast Corridor; a streetcar line in Santa Ana; Maryland’s Purple Line light rail; Minneapolis’ Green Line light rail extension; TEX Rail between Fort Worth and DFW airport; and a northern extension of Seattle’s light rail. The project list also includes 14 other projects that are either renovations of existing lines or smaller projects, primarily BRT. They can all be mapped using Transit Explorer.

In spite of joyous news articles and press releases from cities around the country hailing a federal commitment to funding their relevant projects, the list of investments proposed by the FTA is far longer than will likely be funded. Whereas the 2016 budget for major transit capital expenditures was $2.2 billion, this list includes federal commitments for the $3.5 billion corresponding to the increase in funding the president is proposing for transportation overall—in other words, far more than Congress is likely to approve.

Take this list of federal commitments with a grain of salt: Many of these projects are not going to be approved for support this year.

What does this budget suggest about the future?

The administration’s on-and-off plans for big transportation investments have become something of a joke in policy circles; while exciting for those with active imaginations, this year’s budget, like those of previous years, isn’t much to write home about because it won’t happen. Nonetheless, the Obama Administration is offering one way to actually fund an increased investment in the American transportation system, and it wouldn’t be hard for his successor to adopt these ideas and offer them up as his or her own. Assuming a more willing Congress, these proposals could provide a framework for a new way of thinking about federal transportation spending that is more respectful of the climate and less focused on highway building.

A willing successor, though, would probably have to be one of the two Democrats in the presidential race, both of whom have supported new transportation investments and claim to care deeply about the climate. GOP candidate and Florida Senator Marco Rubio has proposed cutting the federal gas tax by 80 percent and eliminating transit funding; Ohio Governor John Kasich has a similar plan; Texas Senator Ted Cruz wants to eliminate federal New Starts funding; as governor, Jeb Bush destroyed a Florida high-speed rail plan. Donald Trump has made infrastructure investment, including in transit, one of his campaign’s slogans, but he, like all of the rest, seems to believe climate issues are irrelevant.

No matter what, the next president won’t have it easy: Cities and states are desperate for new transportation funding and will continue to ask the Congress to devote more to highways and transit. And mounting evidence of coming economic malaise suggests that new government stimulus of some sort may, in the end, be an important component of a future recovery plan. Perhaps Obama’s last budget will set the tone for something even better.

* To be clear, the administration’s first budget was for FY 2010, since President Obama entered office in January 2009. The stimulus was attributed to FY 2009.

Photo at top: University Link light rail under construction in Seattle, from Flickr user SoundTransit (cc).