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By Katie Cross, Associate, Blakey & Agnew
Infrastructure investment needs are well documented: the American Society of Engineers 2017 Infrastructure Report Card found that $3.7 trillion is needed to get all American infrastructure up to a "B" grade by 2025. As it stands, there's nowhere near that amount of money available for investment and various infrastructure stakeholders are scrambling to get their own piece of the existing pie.
Take the fiscal year 2017 (FY17) round of the Transportation Investment Generating Economic Recovery (TIGER) grant program. The U.S. Department of Transportation (USDOT) announced on March 9, 2018 that the Secretary selected 41 projects from across the country to receive a piece of the just-under $500 million awarded. Of those funds, 56 percent went to freight projects. However, transit saw a significant decrease in investment in this round, totaling just 3.6 percent of funding, while, according to the American Public Transportation Association, over 20 percent of funds were awarded to public transportation projects in the previous three fiscal years.
The freight community understandably applauded the high number of awards for the benefits they will have to freight transportation and the U.S. economy as a whole. But the transit community's concerns point to a larger problem: if the funding pie remains the same size despite increasing needs, we are never going to escape the cycle of winners and losers. For example, in the FY17 round of TIGER alone, USDOT received 452 applications, totaling $6.15 billion. That is more than 12 times the $487 million made available for the program.
Focusing solely on transportation infrastructure, the revenue stream from which the lion share of funding comes, the gas tax, has remained stagnant since 1993. More generally, Federal spending, including but not limited to transportation infrastructure investment, has been restricted since passage of the Budget Control Act in 2011. The Act resulted in cuts to both defense and nondefense Federal spending and capped that spending through 2021, commonly referred to as sequestration.
So while industry stakeholders continue fighting for a bigger slice of the pie, the pie in and of itself is not
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growing: there's just not enough to go around.
While each mobility community will continue to tout why they deserve a bigger slice, we can all agree that a bigger pie could help ensure the entire infrastructure system gets the investment it needs. And the bipartisan budget deal passed in February started to take a step in that direction. Under this deal, Congress raised the sequestration spending caps, allowing for an additional $300 billion in spending over fiscal years 2018 (FY18) and 2019 (FY19). Congressional leadership promised that $20 billion of that over the two year period would be spent on infrastructure. Working off the increased Federal spending caps, the FY18 omnibus, passed on March 23, tripled funding for the TIGER grant program – bringing the total amount available to transportation projects through this program up to $1.5 billion for FY18. Meaning, if any mode is neglected and receives just 3 percent of total available funds, 3 percent of $1.5 billion is significantly more than 3 percent of $500 million.
But how do we permanently grow the pie so all can get a more substantial slice? We aren't starving due to lack of proposals, including but not limited to a gas tax increase, a vehicle miles traveled program, increased registration fees, and potential new waybill fees on the movement of goods. But primaries for mid-term elections have already begun and fears around angering constituents just before they go to the polls mean the political motivation to address the infrastructure funding problem just isn't there. The President said in a speech on March 29 that he does not expect an infrastructure bill to pass before the 2018 elections. It may just depend on Congress' appetite.
Blakey & Agnew, LLC is a public affairs and
communications consulting firm based in
Washington, DC.
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