FAST Act Summary Part Three: Transit
December 14th, 2015 | By: America's Infrastructure Report Card
This is the third in a series of summaries over the next few weeks on the contents of the newly-passed five-year federal surface transportation authorization law, Fixing America’s Surface Transportation (FAST) Act. The first part explored the law’s funding and the future fiscal health of the Highway Trust Fund. The second part described the highway program elements of the law. The final forthcoming section will focus on the policy changes to federal passenger rail programs. The FAST Act provides $305 billion for highway, transit and railway programs. Of that, $60 billion is for transit, which represents an 18% increase in public transportation funding over the law’s five-year duration. Most of the percentage bump in transit investment will occur in the first year with the program seeing an immediate nine percent increase. Here is what the transit investment levels look like over the life of the bill:- (Pre-FAST Act) Fiscal Year (FY) 2015: $10.7 billion
- (Post-FAST Act) FY16: $11.8 billion
- FY17: $12 billion
- FY18: $12.2 billion
- FY19: $12.4 billion
- FY20: $12.6 billion
- Creates a new Bus and Bus Facility Discretionary grant program to address capital investment. This program is funded at $268 million in the first year, rising to $344 million in the last year. The program also includes a 10 percent rural set-aside and a cap that no more than 10 percent of all grant funds can be given to a single grantee;
- Creates an expedited project delivery pilot program in the Capital Investment Grant program for projects with less than 25 percent federal funding and those which are supported through public-private partnerships;
- Focuses on the need to address resilience in state and local planning by urging a reduction on the natural disaster vulnerability of existing transportation infrastructure;
- Directs USDOT to review the safety standards and protocols used in public transportation. The Secretary will then evaluate the need to establish additional federal minimum public transit safety standards; and
- Makes $199 million available to assist in funding the installation of Positive Train Control (PTC) safety technology.
Infrastructure in the News: States Plan Ahead
December 12th, 2015 | By: Olivia Wolfertz
With the holidays around the corner and a long-term transportation bill signed into law, this week’s headlines have centered on states’ reactions to the funds they have been granted from the FAST Act. In New Mexico, the state delegation announced that more than $11.5 million will be available to rebuild infrastructure damaged by severe storms and flooding, including areas impacted by Hurricane Odile in September 2014. While this funding does not come directly from the FAST Act, it is provided through the USDOT Emergency Relief Program. In West Virginia, the FAST Act will bring in transportation funding over the next five years that will go a long way toward building new roads, repairing existing roads, and fixing dilapidated bridges. In addition to transportation infrastructure, states are looking forward to federal funds being appropriated for recreational trail development across the US. In Oregon, the Oregon Parks and Recreational Department is inviting public comment on a draft plan for recreational trails. But there are still reminders that this bill does not fully address our nation’s transportation needs. In Ohio, the bill was met with mixed reactions — relief that there will be some funding but disappointment that there will not be the level of increase needed to address the current backlog of projects. In Tennessee, TDOT has expressed frustration that their transportation needs won’t be done for 51 years, assuming only a 2 percent funding increase and that nothing new is added to what the Department of Transportation already has on its plate. In Massachusetts, local lawmakers and civic leaders were relieved to get enough funding for critical infrastructure projects, but recognizing that they must take further steps to provide for their investment needs. While the Report Card shows that we still have a funding gap, we are pleased that Congress passed a five-year bill that increased investment.FAST Act Summary Part Two: Highways
December 9th, 2015 | By: America's Infrastructure Report Card
This is the second in a series of summaries over the next few weeks on the contents of the newly-passed five-year federal surface transportation authorization law, Fixing America’s Surface Transportation (FAST) Act. The first part explored the law’s funding and the future fiscal health of the Highway Trust Fund. The next sections will focus on the policy changes to transit and federal passenger rail programs. The FAST Act provides $305 billion for highway, transit and railway programs. Of that, $233 billion is for highways, which represents a 15% increase in road and bridge funding over the law’s five-year duration. Most of the percentage bump in highway investment will occur in the first year with the program seeing an immediate five-percent increase. Below are the highway investment funding levels over the life of the bill:- (Pre-FAST Act) Fiscal Year (FY) 2015: $40.3 billion
- (Post-FAST Act) FY16: $42.4 billion
- FY17: $43.3 billion
- FY18: $44.2 billion
- FY19: $45.3 billion
- FY20: $46.4 billion
FAST Act Summary Part One: The Funding
December 6th, 2015 | By: America's Infrastructure Report Card
This is the first in a series of summaries over the next few weeks on the contents of the newly-passed five-year federal surface transportation authorization law, Fixing America’s Surface Transportation (FAST) Act. The next sections will focus on the policy changes to highways, transit and federal passenger rail programs. The backbone of federal transportation funding is the motor fuels tax, and those revenues are deposited in the protected Highway Trust Fund (HTF). Taxes on gasoline and diesel fuels for cars, trucks and motorcycles, have been levied for many decades, however the last time that the tax rate was raised was in 1993 — over 20 years ago. Since that time, federal spending on highways and transit programs has risen and the purchasing power of those dollars, as a result of rising construction and materials costs, has gone down. While the newly-passed five-year federal surface transportation authorization law, Fixing America’s Surface Transportation (FAST) Act, increased investment, it did not pay for these funding increases through a gas tax hike. Instead, the law relied on a variety of items unrelated to transportation, specifically two large offsets dealing with the Federal Reserve (Fed). OFFSETS The first Fed offset is one that was heavily opposed by banks. The provision would reduce what was a six percent annual dividend paid to banks on Fed stock that they bought when becoming members of the Federal Reserve system. The reduction would impact banks with over $10 billion in assets and cut the stock dividend pay-out to match the interest rate of the highest-yield 10-year Treasury note, which would likely be around two percent. This provision raises nearly $6 billion for the FAST Act. The second Fed-related offset is the largest one contained in the FAST Act and applies to the Feds capital surplus accounts. The Fed regional banks maintain various amounts of surplus cash, which added together amounts to $29 billion. The FAST Act takes $19 billion from this account and leaves a $10 billion surplus cushion at the Fed. However, due to Congressional budget scoring procedures the amount of money actually raised for FAST Act by doing this $19 billion draw-down is about $53 billion because Congress adds up all of the money that would have been in the account over a ten-year budget horizon. Added together, these and other offsets amount to around $70 billion in new money for the HTF over the five-year life of the FAST Act. This means that at the end of the FAST Act the HTF will have received over $140 billion in general fund transfer since it began experiencing fiscal trouble in 2008. This also means that by the end of the FAST Act gas taxes and other transportation-related revenues will only be providing half of the dollars necessary to support investment levels, which could complicate the policy process in numerous untold ways. For example, members of Congress may then ask: “Why should this program only fund roads and transit systems (which has historically been the case) if roads users and transit riders are no longer the funding basis of a large amount of the program’s revenues?” FUNDING LEVELS The FAST Act provides $305 billion for highway, transit and railway programs. Of that, $233 billion is for highways, $49 billion is for transit and $10 billion is dedicated to federal passenger rail. By the end of the bill’s five-year duration, highway investment would rise by 15%, transit funding would grow by nearly 18%, and federal passenger rail investment would remain flat. Most of the percentage bump in investment will increase immediately with highways seeing a five percent jump and transit receiving a nine percent jump in the first year. The funding then sees relatively flat, two percent annual growth. The bill actually provides higher levels of funding than the Senate-passed DRIVE Act would have, by over $680 million cumulative over the life of the bill. The bill also contains a HTF contract authority rescission of $7.5 billion at the end of the bill (September 30, 2020). This rescission would mean that states will have to return a certain amount of unobligated highway contract authority to FHWA. It is likely that states will soon plan their programs accordingly to be able to minimize the impact of this final-year budget cut. Rescissions have become common in surface transportation authorization bills as a way to bring down spending levels at the end of the law, which helps reduce the overall cost of the program for Congressional budget scoring purposes. There will likely be an effort in 2020 to eliminate or delay the implementation of the rescission. The last rescission to take effect was for $8.7 billion in 2009. Here are some funding highlights for highway and transit programs: HIGHWAYS- National Highway Performance Program: annual increases of nearly $500 million;
- Surface Transportation Program: first-year increase of $1 billion and nearly $200 million on top of that annually thereafter;
- Highway Safety Improvement Program: slight increase of $50 million annually;
- Congestion Mitigation & Air Quality Program: $50 million increase in the first-year and slight increase thereafter;
- TIFIA Program: heavy annual reduction from $1 billion per year to $275 million – $300 million annually throughout the bill;
- Highway Research & Development Program: slight increase, however new eligibilities added:
- $15 million annual Surface Transportation Funding Alternatives Studies program; and
- $10 million annual Performance Management Data Support program.
- (NEW) National Highway Freight Program: approximately $1.2 billion annually; and
- (NEW) Nationally-Significant Freight & Highways Projects Program: approximately $900 million annually.
- Formula and Bus Grants: $800 million increase in the first year and $200 million on top of that annually thereafter. Within that:
- $90 million annual increase for Urbanized Area Formula Grants;
- (NEW) $28 million for Research & Development Demonstration and Deployment grant (existing FTA R&D program reduced by $50 million annually);
- State of Good Repair: first-year $350 million increase and $40 million on top of that annual increase thereafter;
- (NEW) Bus and Bus Facility Discretionary program: approximately $300 million annually; and
- (NEW) Fast Growth and High Density program: approximately $550 million annually.
- Capital Investment Grants: Initial $400 million funding increase which sustains for life of the bill; and
- Positive Train Control Grants: $200 million provided in fiscal year 2017.
