As the federal government downshifts its funding of freight transportation infrastructure, state, local and private sources are taking the wheel.
Federal funding of transportation remains important, but “is stagnant and in real terms is declining,” said Emil Frankel, director of transportation policy at the Washington-based Bipartisan Policy Center.
“This means that states and transit agencies and ports are going to have to do more … There’s going to be less emphasis on grants and more emphasis on leveraging federal money, creating local revenue streams and private-public partnerships,” Frankel said.
Frankel spoke at the annual Newport, R.I., trade and transportation conference of the Coalition of New England Companies for Trade, along with John Horsley, who recently retired as executive director of the American Association of State Highway and Transportation Officials.
Horsley said no-new-tax pledges in Congress have made it difficult to secure funding for necessary maintenance and improvements to transportation infrastructure, and that states, localities and private sources must carry more of the load.
“For the foreseeable future, the next seven to 10 years, I wouldn’t expect to see increased investment coming from Washington. New financing tools, yes, but additional cash, I don’t think so. We’ll be lucky to sustain the cash levels we’re getting,” Horsley said.
States, however, are showing increased willingness “to stand up and take the tough vote to capitalize transportation at the state level,” Horsley said. He cited initiatives implemented or proposed in Virginia, Massachusetts, Maryland, New York, Connecticut, Michigan and other states.
Horsley and Frankel said the Miami harbor tunnel project that President Obama highlighted with a recent visit is an example of the new world of transportation infrastructure financing. The project is being funded as a public-private partnership.
The Miami project illustrates the federal shift “from funding to financing” of transportation, Frankel said. “Federal funds, even as they become scarcer and more constrained, are being used increasingly to leverage greater investment of other public and private resources,” he said.
State and local funding is complicated by the short-term nature of the surface transportation reauthorization bill, which last year was extended for only 27 months through September 2014.
The reauthorization bill “did not deal with the issue of long-term, sustainable funding for federal transportation programs and investment,” Frankel said. The reauthorization, he noted, added to the necessity to draw on the federal government’s general funds to fill shortfalls in the highway trust fund, which is supported by fuel taxes.
“If federal funds are constrained, it’s more important that they be used effectively to leverage other resources,” he said. “The key is the role of the federal government in project financing.”
It’s often said that freight doesn’t vote, and freight transportation frequently takes a backseat to bike paths and other projects in the planning process.
Companies must educate public officials about the importance of freight infrastructure to their communities and the economy, Horsley said. “I was a county elected official for 20 years,” he said. “I didn’t have a clue about how freight was moved in my county or my region. I wasn’t stupid. I was ignorant.
“It’s your job to educate city officials, county officials, state legislators, governors, etc.,” he told CONECT members. “They don’t understand your business. They don’t understand how freight comes from abroad into our markets. They don’t understand regional distribution networks, and they don’t understand how vitally their economies depend on what you do. So your job is to educate them.”
Companies also must be persistent, Horsley said. “You have to be at the table on a sustained basis to influence investment decisions,” he said. “You have to get your project in line and hammer away for 10 years before it will actually be built.”