DALLAS — The chairman of the House Transportation and Infrastructure Committee on Tuesday said he expects to have a new funding law for highways, ports, bridges and transit in place before the current one expires on Sept. 30, the end of fiscal 2014.
The new infrastructure funding measure, which would replace the current Moving Ahead For Progress in the 21st Century or MAP-21 law, should be out of committee by late spring or early summer, committee chair Rep. Bill Shuster, R-Pa., said during the panel's first hearing on federal transportation spending.
"We hope to take committee action in the late spring or early summer with the goal to be on the House floor before the August recess," Shuster said. "This way there will be time to conference our bill with the Senate's bill."
State and local government officials who testified during the hearing urged committee members to provide long-term stability for funding.
Although they disagreed on some points, they were united in recommending a return to a six-year funding program, similar to the previous law that was replaced by the two-year MAP-21 — the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users or SAFETEA-LU.
The MAP-21 funding law passed by the 2012 Congress provided $105 billion for surface transportation projects but required a $19 billion transfer from the general fund to the federal Highway Trust Fund to keep it solvent.
The Congressional Budget Office said last year that the HTF will not have sufficient resources by fiscal 2015 to meet all its obligations without additional transfers from the general fund. The HTF historically has been funded mostly with revenues from gasoline and other taxes. But those revenues have fallen in recent years because of more fuel efficient cars, inflation, and less travel during the Great Recession or after the 9-11 terrorist attack.
The CBO said it would take transfers totaling $320 billion over the next six years to keep highway funding at fiscal 2013 levels. Revenues from the federal gasoline tax are expected to total only $240 billion during that period.
A short-term funding extension such as the current one is detrimental to long-term planning for new projects as well as regularly scheduled maintenance, said Atlanta Mayor Kasim Reed.
"Nothing is more disruptive than interrupting the flow of resources, a potential outcome this committee must confront if additional dollars are not found later this year for the transportation trust funds," he said.
"We stand ready to support you in any way we can to avert a disruption in the predictable flow of federal transportation resources," said Reed, who was testifying on behalf of the U.S. Conference of Mayors.
There is bipartisan support among nation's governors said that surface transportation requires long-term vision and funding stability, said Oklahoma Gov. Mary Fallin, chairwoman of the National Governors Association and a former member of the House committee.
"States need federal funding stability and certainty to pursue long-term planning and project delivery," Fallin said. "State and local elected officials support federal funding mechanisms designed to maintain reliable, long-term funding certainty."
The capacity of the Transportation Infrastructure Finance and Innovation Act or TIFIA credit assistance program should be expanded in the new funding bill, Fallin said, and the funding tools in MAP-21, including support for public-private partnerships, should be retained.
"The development of new infrastructure projects will need similar innovative project financing options, stable funding sources, intergovernmental partnerships, and multi-state coordination," she said.
The federal tax exemption for municipal bonds must be retained to protect the ability of state and local governments to fund large projects, Fallin said.
"Ending or capping the federal exclusion from income for municipal bond interest would increase the cost of financing infrastructure projects," she said. "This would chill those projects, trigger higher taxes on citizens to cover the increase, or some combination of both."
It is dangerous for Congress to even talk about ending the tax exemption for local and state debt, Fallin said.
"The mere discussion about altering the current tax treatment of municipal bonds injects uncertainty into bond markets and raises concern for investors who will demand risk premiums on future bond issues that finance infrastructure projects," she warned.
