Despite Bold Budget from Obama, Future for Rail Remains Uncertain

anthony-foxx-president-obama.png


On March 4th, President Obama revealed his $3.9 trillion fiscal year 2015 budget proposal, which included a $302 billion, four-year reauthorization of the surface transportation bill, MAP-21. The reauthorization plan would provide a quick fix for the rapidly diminishing Highway Trust Fund with a one-time infusion of cash generated from closing loopholes in the corporate tax code. The trust fund is near insolvency mainly because the current federal gas tax, which has not seen an increase since 1993, is unable to sustain the fund. As the trust fund's balance approaches zero, the federal government will be forced to abandon its support of infrastructure projects across the country with devastating impacts on our economy. Our infrastructure is too important to be left to last-minute fixes that imperil us from year to year, we need a long-term solution that will improve our assets, build our economy and secure our future.

As the trust fund dwindles, the federal government will no longer be able to support States in their transportation maintenance and expansion projects. In the near term this will result in a loss of American jobs, while in the long term our infrastructure will continue to crumble, and congestion and delays will worsen, all of which will strangle the economy. The most straightforward way to shore up the fund would be to raise the gas tax. The tax has not been raised since 1993. Since then, a combination of inflation, increased fuel efficiency and reduced levels of driving has greatly diminished the value of it as a source of revenue to support the trust fund. Despite the importance of finding a long-term solution, the fear of political backlash from raising taxes has crippled most policymakers. Even if consensus can be reached on corporate tax reform this year, transportation programs would only be funded until 2018, at which point we would need to revisit this issue yet again.

At least one member of Congress is not willing to wait until 2018 to talk about the long-term funding solutions that are needed. Representative Earl Blumenauer has introduced two bills; one would raise the gas tax by 15 cents, almost double its current value, to be phased in over 3 years. This would provide a significant boost to the trust fund, and alleviate the need for general fund transfers to fill its funding gaps. This would ensure that our transportation infrastructure is well supported until 2025, when the second bill would repeal the taxes and replace it with a new vehicle miles traveled tax, which charges vehicles based on their use of roadways, as opposed to the gallons of gas they consume. This would be an important change as cars continue to become more fuel-efficient, rendering the gas tax obsolete. This is a practical solution that addresses the needs of the Highway Trust Fund beyond the length of a single reauthorization.

Despite the lack of a long-term funding solution in the President's Budget plan, there is some good news for passenger rail and the Northeast Corridor. The proposed four-year reauthorization of MAP-21 includes $302 billion dollars for the U.S. Department of Transportation, which would be an enormous increase. Nearly $20 billion would go to the Federal Railroad Administration. The fiscal year 2015 budget for the U.S. DOT is part of this four-year reauthorization. In 2015, the FRA would have $4.7 billion to spend on two new spending categories, "Current Passenger Rail Service," and the "Rail Service Improvement Program," all meant to support the "National High-Performance Rail System." Portions of these funds would be dedicated to the operations and capital improvement grants Amtrak has relied on in the past. The funding includes:

Current Passenger Rail Service - $2.5 billion

  • $1 billion for a Fix-it-First initiative
  • $550 million for the Northeast Corridor
  • $225 million for State-supported corridors
  • $850 million for Amtrak's long-distance routes
  • $475 million for Amtrak's national assets, legacy debt and PTC compliance
  • $350 million for station ADA compliance

Rail Service Improvement Program - $2.3 billion

  • $1.3 billion to develop high-performance passenger rail networks
  • $825 million for commuter railroad PTC compliance
  • $125 million for local rail facilities and safety improvements
  • $75 million for planning and workforce development

Additional $185 million for FRA safety and operations programs

Additional $35 million for FRA research and development

Congress is missing a huge opportunity to reform transportation funding this year as they reauthorize MAP-21. Our infrastructure is far too important to leave it with such an uncertain future. The President's spending plan is consistent with his commitment to bringing our nation's rail infrastructure into the 21st century, but the lack of a long term funding solution imperils the Northeast Corridor, the national rail network and our entire transportation system.

A coalition of business and civic leaders committed to improving passenger rail in the Northeast.
Become a Member

Chair

Leadership Council

Members

Join our mailing list

* indicates required