Think Regional/Act Local

President Obama gave his State of the Union Address this past week and in it he focused on a variety of important issues – transportation being one of them. The President emphasized high-speed rail, rebuilding roads and bridges, connecting the entire U.S. population to the digital age, increasing clean energy infrastructure, and making sure these projects are supported by private investment.

The President also rather emphatically said that he would not sign any bill that contained earmarked projects. This is not a new issue for Congress to debate – it comes up all the time. The entire script of the speech can be found at www.whitehouse.gov/the-press-office/2011/01/25/remarks-president-state-union-address.

What exactly is an earmark? It’s a specific project with a specific amount of money tied to it identified in a proposed piece of legislation. Many people think that an earmark is money an area receives in addition to its regular funding – so it amounts to extra money to build some project. This is not always the case – especially as it relates to transportation funding. Most times, an earmarked transportation project only serves to prioritize money an area is already receiving from formula funds – it serves to have Congress prioritize funds that local elected officials would normally prioritize! Many times a project that has not been prioritized high enough in the local process gets submitted for “congressional” funding and is funded in this manner.

In addition, you almost never get all the money you need through the earmarking process to do the project. This means that an agency then has to find other funds to supplement the congressional earmark it has received. This often takes several years to accomplish and many times additional dollars are never found. This is one reason that many earmarked funds are never actually spent.

I can say, though, that certain projects – important projects of regional significance – have a much better chance of being funded through the use of earmarks than through the use of formula funds. Transit capital projects are often funded through the use of congressional earmarks and they do represent additional dollars coming into an area that otherwise wouldn’t be there.

It will be difficult for Congress to develop legislation without earmarked projects and equally difficult for the President to veto otherwise good legislation that contains some earmarked projects. Can’t wait to see what happens!

Governor Rick Snyder gets it. The Detroit River International Crossing isn’t just about traffic, isn’t just about accommodating existing traffic volumes between the US and Canada – it is a lot more. It includes addressing safety and security risks through redundancy, it puts people to work, it provides for the current and future growth of trade between the US and Canada and the rest of the world. These are all concepts Governor Snyder spoke of in his State of the State address as he urged the legislature to support the project.

If these weren’t good enough reasons to approve the project, he had one more surprise for us all. The Governor indicated that he and MDOT Director Kirk Steudle had managed to secure an agreement with the Federal Highway Administration that will allow Michigan to count the $550 million that Canada has offered to spend in support of the DRIC project as the state's match for federal highway funds. This would allow the state to match all of the available federal transportation funding for the next couple of years without the legislature having to increase the gas tax or shift the money from some other place in a very tight budget. Attractive? You bet! You get all the long-term benefits for a new border crossing, the short-term benefits of putting people to work, and even more immediate benefits of matching all available federal aid. Sounds like a win, win, win to me!

Now, anyone who thinks that it will happen easily hasn’t been following this project for very long. Much needs to be done including working cooperatively with the Ambassador Bridge representatives if this project is ever going to get done and the benefits realized. It is a step forward – a significant step. Now, let’s finish the job, secure the needed agreements, and look for ways to bring all parties – including the Ambassador Bridge – on board.

I am getting tired of writing it and you must be tired of reading it. What is it? The condition of our transportation system is bad and it is getting worse. It is still true, things are not getting any better, but the message isn’t having the impact some thought it would. That is, it hasn’t impacted legislators to increase revenues (read increase taxes). Governor Snyder and many members of the legislature have already indicated they will not support increasing taxes at this time. So, we can either continue banging our heads against the wall or try to develop an approach to address as many of our needs as possible until the calvary – additional funds – show up. My head hurts from all the banging, so I think we need a new plan – at least for now.
 
I think the strategy has several components including:

• Use asset management principles to ensure we are investing our scarce transportation resources in the most efficient manner possible.
• Look for investments that can be shared with other departments or communities.
• Look at the possibilities of being more efficient in providing maintenance activities such as snow removal, trash pick-up, and mowing, or decreasing the frequency of such activities to a bare minimum.
• Maintaining as safe an environment as possible to minimize liability and lower costs.

You get the picture. Will implementing these activities solve the problem? No. Will they result in a better transportation system? Yes, they can help – they should be part of the everyday business plan of any public agency. Investing in these types of strategies should put us in good stead for the time in the hopefully not- too-distant-future when our economy will be growing and new investments will be looked upon differently.

Happy 2011to all! I hope 2011 is a good year for all of us. Unfortunately, it has not started off to be a good year from a transportation funding point of view. Last year was a year marked by no increase in transportation funding, no new federal transportation funding bill, and no new budget – just a continuation of SAFETEA-LU and another continuing resolution. You would have to say that the long-term future of transportation funding is unknown. Well, now it is further unknown.

One of the first actions of the new Congress was to pass an amendment to the so-called House Rules pertaining to obligation limitations for highway and transit funding. The previous rule, in effect since 1998, said that annual spending limits for highways and transit could not be below the levels for that year as set forth in the relevant transportation authorization law. Any attempt by a member to reduce spending below those levels in the appropriations process would require approval by a supermajority vote, a very difficult hurdle.

The new action undoes this rule by allowing highway and transit funding to be treated as any other appropriations category and be subject to amendments to limit annual spending below the authorized levels. Such amendments, under the new rule, would require a simple majority vote only, making it much easier to reduce such spending.

All this does is insert additional uncertainty into an uncertain situation. It will be increasingly more difficult for transportation agencies and local units of government to be comfortable going forward with significant projects. Look for smaller, less costly projects to be advanced instead of larger multi-year projects – not as good for the economy or for addressing the major needs of our system. But even more important than this, can someone please tell me what our strategy is? What are we hoping to accomplish? What are our priorities? I don’t see them and I don’t think we have any – not sure where we are trying to go. This is not a good way to start the year!