Issue Brief: Surface Transportation Updated May 2012
Background
On August 10, 2005, the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was signed into law (Public Law # 109-59). The Act authorized $286 billion in spending for the six-year period from 2004-2009 for a number of surface transportation programs, including highways, transit, bridge, freight, safety and research, all of which are important to states and localities. SAFETEA-LU expired on September 30, 2009. Congressional Activity
Since initial funding for SAFETEA expired in 2009, the program has been temporarily extended eight times. Most recently, President Obama signed into law the Surface and Air Transportation Programs Extension Act of 2011 (Public Law # 112-30) that extended surface transportation programs through March 31, 2012 at current funding levels.
The Senate Environment and Public Works Committee approved a two-year, $109 billion surface transportation bill (S. 1813) in early November 2011. S. 1813 is awaiting consideration by the Senate Finance, Commerce and Banking committees that share jurisdiction over finance, transportation and infrastructure matters. The Moving Ahead for Progress in the 21st Century legislation (Map-21) consolidates approximately 90 programs to under 30, reduces “core” highway programs from seven to five and provides $1 billion for the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which provides federal loans, loan guarantees and standby lines of credit to finance nationally or regionally significant surface transportation projects. It also encourages state infrastructure banks, creates a national freight network program and mandates state surface transportation performance measurements. It is also noteworthy that S. 1813 is currently short $12 billion of revenues needed to pay for it. This shortfall represents the difference between the cost of the bill ($109 billion) and the projected available funding in the Highway Trust Fund. Senator Baucus (D-MT), chair of the Senate Finance Committee, has pledged to find the needed revenues. On the House side, Transportation and Infrastructure Chairman John Mica (R-FL) has expressed his plans to introduce a longer term - perhaps five years - surface transportation bill in early 2012. Both the House and Senate leadership maintain that a longer term reauthorization for surface transportation is a priority for 2012.
Fitch Ratings recently stated that progress on a longer term reauthorization is necessary to maintain its current ratings on grant anticipation revenue vehicles (Garvees), which are backed by anticipated federal transportation grants. The ratings agency noted that Congress’ failure to adopt a longer term program could cause a downgrade on the ratings on Garvee bonds.
Related GFOA Public Policy Statements Additional Resources: GFOA • Federal Liaison Center • (202) 393-8020 • (202) 393-0780 FAX • Email
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