The inability to agree on a long-term highway bill led Congress in July to pass a six-month extension of Transportation Department programs that will expire at the end of the month.
Officials from about 20 port authorities made the rounds on Capitol Hill Thursday, lobbying lawmakers and their staffs to include dedicated funding for freight-related infrastructure in a comprehensive surface transportation bill and adequate funding for the U.S. Army Corps of Engineers navigation budget.
Federal Maritime Commission Chairman Mario Cordero echoed that sentiment Tuesday during a visit to the Commerce Department, where the Advisory Committee on Supply Chain Competitiveness held its quarterly meeting.
Cordero, who toured the Port of Norfolk on Tuesday, said that U.S. infrastructure investment pales in comparison to the rest of the world. He noted that global gateway cities expect to make $3 trillion in investment during the next six years and 60 percent of that investment is to come from Asian nations, while the White House proposal for a six-year transportation bill is only $478 billion because of political gridlock in Washington.
The House of Representatives is expected to debate a multi-year transportation reauthorization this month after the Senate passed a six-year transportation bill earlier this summer that is only funded for three years. The inability to agree on funding sources for a long-term highway bill led Congress in July to pass a short extension of Transportation Department programs through Oct. 29.
The DOT, which distributes aid to states for highway and transit construction, has been operating under a series of short-term extensions since the two-year MAP-21 authorization expired in September 2014. Congress has not passed a true long-term transportation bill in a decade. The short-term extensions make it difficult for states to engage in long-term contracting because they can’t be guaranteed reimbursement for the federal share of projects, which transportation experts say dampens construction hiring.
The Senate’s DRIVE Act calls for about $13.3 billion to be dedicated to a national freight program to help states improve freight mobility on the national highway network, with $2.2 billion available each year through a competitive grant process.
Port authorities support a robust transportation bill that would help states invest in freight infrastructure because road and rail transport is necessary to efficiently get seaborne cargo to and from the ports. Of key concern to them is support for connector roads and rails that can improve access to intermodal terminals and interstate highways, often reducing the need for trucks to wind through crowded inner city neighborhoods. Funding for improvements to eliminate congestion on large freight corridors used for regional and national distribution of international goods is also important to ports.
According to a survey of AAPA members earlier this year, 80 percent of ports will require at least $10 million worth of investment in landside connectors through 2025 and 31 percent will require more than $100 million.
“Our message is this needs to be a priority. We recognize there are fiscal constraints,” but infrastructure is a clear responsibility of the federal government and is necessary to support growing trade volumes, including exports of U.S. goods, Kurt Nagle, president of the American Association of Port Authorities, told reporters during a briefing in the Longworth House Office Building. The AAPA’s position is that ports are a $4.6 trillion link in the economic chain that supports 23 million direct and indirect jobs and deserve more funding.
Nagle didn’t identify any particular source of funding to close the projected $90 billion gap over six years between gas tax receipts in the Highway Trust Fund and projected spending needs at the state level. Proposals that have been floated in the past couple years include a bill by Rep. Alan Lowenthal, D-Calif., that would raise $8 billion for multi-modal freight transportation infrastructure through a 1 percent way bill fee, dedicating a portion of the $20 billion in annual Customs revenues for transport infrastructure and business tax reform aimed at repatriating overseas profits at a lower rate for infrastructure purposes.
The AAPA is also urging Congress to meet the spending targets for Harbor Maintenance Tax receipts outlined in the 2014 Water Resources Reform and Development Act. HMT revenues are estimated to be $1.81 billion in fiscal year 2015, ended Sept. 30, and under the law, Congress is supposed to allocate 69 percent of those revenues – $1.25 billion – for maintenance dredging of navigation channels and related repairs. The goal is to get use 100 percent of the receipts for the intended purpose within 10 years.
AAPA also wants Congress to appropriate significant dollars for eight channel improvement projects authorized in WRRDA. The Obama administration’s budget request for fiscal year 2016 only included $81 million for all eight projects, which the association says would take 25 years to complete at that rate.
The navigation channel “is our right of way,” Vanta Coda II, executive director of the Duluth Seaway Port Authority, said. “That’s our highway.”
The port executives met with House Ways and Means Committee Chairman Paul Ryan, R-Wisc., as well as staff for Sen. Charles Schumer, D-N.Y., among others to discuss freight infrastructure issues.
The House Transportation and Infrastructure Committee is still waiting to hear from Ways and Means on funding for its proposed transportation bill. Ryan favors linking an overhaul of international business taxes to infrastructure investment, but Senate Republican leaders say repatriated earnings should not be a source of revenue for a highway bill.
The Senate bill relies on a $47 billion package of offsets from other federal spending areas to pay for three years of highway funding.
House Majority Leader Kevin McCarthy, R-Calif. has expressed support for the repatriation idea and promised to pass a long-term highway bill, but yesterday he withdrew from consideration as House Speaker after John Boehner steps down amid infighting within the Republican caucus. What types of budget cuts can be agreed to in other budget areas to pay for highway infrastructure is unclear given the demands for fiscal austerity from the right-wing of the Republican party, which controls both houses of Congress.
According to the Congressional Budget Office, a $90 billion shortfall is expected between highway user fee receipts and full funding of surface transport improvements over the course of a six-year bill.
The Department of Transportation says there is an $808 billion backlog of investment needs on highways and bridges, including $479 billion in critical repair work.
The DOT recently announced that the Highway Trust Fund is expected to remain solvent through next summer, which removes the urgency of finding an immediate funding fix. But it also increases the likelihood that another short-term extension is in the cards, Hill watchers say. Without a new authorization, the DOT will be forced to stop promising payments for future projects and will have to scale back reimbursements to states for projects already completed.
”We have to find a blend between all modes of transportation to move goods in the most cost-effective manner. And that means we have to invest in the nation’s seaports to some extent, as well as the other infrastructure modes,” Steven Cernak, the director of Port Everglades in Florida, said. “At the end of the day it’s going to cost us one way or another, and the decision that we make will have an impact down the road.”
Port directors visit Capitol Hill to advocate freight investment
