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Copyright 2002 by Primedia Business Magazines & Media Inc. All rights reserved.

Sunday, September 1, 2002

Volume 105; Number 9; ISSN Number 00105368

DOT: Strengthen TEA-21

At an ARTBA/AASHTO/U.S. Chamber of Commerce Conference on
Transportation in Washington, D.C., U.S. Department of Transportation Secretary Norman Mineta addressed the need to reauthorize the Transportation Equity Act for the 21st Century (TEA-21) legislation next year:

While I expect key elements of the Administration's
reauthorization proposal will seek to preserve and build upon the
programmatic reforms of ISTEA and the financial reforms of TEA-21,
we have an opportunity to do more. I have directed DOT to achieve
several goals in the reauthorization process. We must continue to
assure adequate and predictable funding for investment in the
nation's surface transportation system. We must preserve funding
flexibility to allow the broadest application of funds to the best
transportation solutions identified by State and local partners. We
must build on the intermodal approaches of ISTEA and TEA-21. We
must expand and improve the programs of innovative financing, so as
to encourage private sector investment in the transportation
system, and look for other inventive means to augment existing
revenue streams. We must re-emphasize the security of the Nation's
surface transportation system, providing the means and the
mechanisms to perform risk assessment and analysis, incident
identification, response, and when necessary, evacuation. And, we
must continue to make substantial improvements in safety *
particularly work zone safety.

Enacted June 1998, TEA-21 is the most recent authorization act
for the federal-aid highway program. Reauthorization bills take
time to formulate and pass. Accordingly, DOT officials reviewed
their timetable for the highway bill reauthorization:

March * July, 2002: Prepare the fiscal 2004 budget
August 2002: Clear through OMB/Release the biennial
and Performance Report
January 2003: Provide Congress the USDOT bill
February 2003: Engage in the congressional hearing process
October 2003: Anticipate passage of a new surface
transportation act

Concurrently, the House and Senate conferees reached agreement
on a $28.9 billion supplemental spending bill. The bill stipulates
that FY 2003 funding for the federal-aid highway program be set at
$27.7 billion, restoring some $4.4 billion of the $8.6 billion
reduction proposed in the Bush Administration budget. The final
version includes spending of $28.9 billion, just slightly higher
than the $28.8 billion level that the administration had urged
Congress to approve.


As a means of outreach to the traveling public and all users of
the nation's surface transportation system, the DOT is establishing
a new surface transportation reauthorization page at and
make available a brochure on this subject. This outreach through
the web page and the brochure is intended to stimulate public input
and comments concerning the Department's proposal for
reauthorization of the surface transportation programs, which will
succeed TEA-21, due to expire at the end of September 2003. The web
page and the brochure will also provide a description of the
Department's approach to the reauthorization of TEA-21, the
principles stated therein representing the Department's current
position and included as a means of stimulating public comment, not
intended to be exclusive of other ideas.

As transportation officials advance their agenda, counterparts
in water/wastewater remain focused on legislation equivalent to
TEA-21 for supply, distribution and treatment infrastructure.
Seeking to secure additional cosponsors for H.R. 3930, the
bipartisan Water Quality Financing Act of 2002, the Water
Infrastructure Network (WIN) has advertised in Roll Call,
Capitol Hill's premier publication. To date, more than 60
cosponsors have pledged their support for H.R. 3930, which would
increase the authorization level of the clean water state revolving
fund to $20 billion over five years.

This year's WIN effort appears to depend on a possible lame-duck
session after elections in November that should end before the
Christmas holidays. Reviewing the history of EPA/SRF, Congress
created the SRF program in 1987 under which monies used by local
governments for the construction of wastewater treatment facilities
are repaid to states to create a "revolving" source of
assistance for other communities. Funding authority for the SRF
program, which expired in 1994, needs to be renewed in order to
assist local communities in obtaining the capital necessary to
rebuild America's wastewater infrastructure. An estimated funding
gap of $23 billion a year has been identified between current
investments in infrastructure and the investments that will be
required annually over the next 20 years to replace aging and
failing pipes and meet mandates of the Clean Water Act and Safe
Drinking Water Act.

This level of investment is unprecedented and would face
significant competition within local budgets from operating and
maintenance costs that are escalating by 6 percent a year above the
rate of inflation. Current federal contributions provide nominal
help as they have declined by 75 percent in real terms since 1980
and now represent only about 10 percent of total capital outlays
for water and wastewater infrastructure and less than 5 percent of
total water and wastewater outlays. Clearly, new solutions are
needed to obtain what amounts to nearly a trillion dollars in
critical water and wastewater investments over the next two
decades. Not meeting the investment needs of the next 20 years
risks reversing the environmental, public health, and economic
gains of the last three decades.


The House Transportation and Infrastructure Subcommittee on
Highways and Transit heard testimony aimed at increasing the amount
of federal money available for financing roads and transit. The
American Road and Transportation Builders Association
(ARTBA) proposed raising the federal gasoline tax by two cents,
increasing the highway program to $60 billion and the transit
program to $14 billion annually by FY 2009.

ARTBA based its proposal on figures released by the
Transportation Department citing $60 billion as the annual minimum
needed to maintain current structural, safety and traffic
conditions. ARTBA also proposed shifting highway revenues to a
"pay-as-you-go" approach, where revenues would only
need to cover outlays instead of obligations. Under this plan, if
revenues and outlays fell out of balance, the motor fuels tax would
be adjusted accordingly, resulting in more stable and predictable
funding estimates from year to year. The Subcommittee also heard
testimony from the American Association of State Highway and
Transportation Officials (AASHTO) who advocated increasing the
funding to a minimum of $41 billion for highways over the next
authorization cycle. AASHTO also proposed the creation of a
Transportation Finance Corporation (TFC), a federally chartered,
nonprofit corporation that would provide increased investment
resources through the leveraging of existing resources. TFC would
sell long-term tax credit bonds where bondholders receive federal
tax credits in lieu of cash interest payments.


"'It's little wonder congestion is increasing nationwide. States have not been able to invest enough in new capacity to keep up with traffic growth. Our population grew by 31 million people since 1990, and the miles traveled on our highways grew 30 percent."
* John Horsley, AASHTO

/1/02 Am. City & County 18
2002 WL 10487651



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