federal landscape: transportation funding
TRANSCRIPT
National Rural Transportation Conference
Kathy Ruffalo
December 5, 2014
Topics
• Election results
• Lame duck session
• Key dates in 2015
• Authorization efforts
• Funding and financing update
Know your audience……….
• Or at least know what people think of your audience………..
Opinion of Congress*
Favorable - 13%
Unfavorable – 83%
*Gallup – March 2013
Congress MORE popular than*
- Fidel Castro
- North Korea
- Meth labs
- The Kardashians/Lindsey Lohan
- Lobbyists
*Public Policy Polling
Things MORE popular than Congress*
- Lice- Used car salesman- Root canals- Carnies- Cockroaches- Colonoscopies- NFL replacement refs
*Public Policy Polling
Election results
Most expensive election in US history
• Estimated that $4 billion was spent
• NC Senate race was $100 million
• Low voter turnout nationwide – 36.6%
• What will this mean for 2016?
Source: National Journal Research; CNN Election Center; New York Times.
Republicans Win Record Majority in House
Analysis• Republicans won a total of at least 244 seats in the House, their largest majority since 1928• An expanded GOP majority in the House means that Speaker Boehner will have an easier time passing legislation in the House without
Democratic support, and Republicans will also have an easier time holding on to their majority in future elections
Control of the 113th House (2012-2014)
Democratic
Republican
Vacant
Undecided*
Control of the 114th House (2014-2016)
AK
Total SeatsDemocrats: 188
Republicans: 244Undecided: 3
188 244
* Races not called as of 11/13/2014; includes runoff elections to be held in LA-5 and LA-6
3
AK
Total SeatsDemocrats: 199
Republicans: 233Vacancies: 3
199 233
Source:
Demographic Profiles of the 113th and 114th Congresses
113th Congress 114th Congress
House Senate House Senate
D R All D R All D R All D R All
40 and Under
7% 9% 8% 0% 0% 1% 10% 9% 9% 0% 4% 2%
Women 30% 8% 18% 30% 9% 20% 34% 8% 19% 33% 11% 22%
Black 20% 0% 9% 2% 2% 2% 23% 1% 10% 2% 2% 2%
Latino 13% 3% 7% 2% 7% 4% 13% 4% 8% 2% 6% 4%
*Results calculated with Senate races still pending in Louisiana and Alaska, as well as 7 House races; projected winners in pending races not accounted for in this tallySource: National Journal Research
AnalysisThe share of members age 40 and under, as well as the share of women and members who identify as black or Latino
all increased in the 114th Congress
Source: National Journal Research; CNN Election Center; Associated Press; NBC News.
Republicans Win Solid Majority in Senate
OH
WV VA
PA
NY
ME
NC
SC
GA
TN
KY
IN
MIWI
MN
IL
LATX
OK
ID
NV
OR
WA
CA
AZNM
CO
WY
MT ND
SD
IA
UT
FL
AR
MO
MS AL
NE
KS
VT
NHMA
RICT
NJ
DEMD
AK
HI
Control of the 114th Senate (2015-2017)
AK
2 Democrats
2 Republicans
1 Democrat + 1 Republican
1 Democrat + 1 Independent
1 Republican + 1
Independent
Undecided/Runoff
Democrats: 44
Republicans:
53
Independents: 2
Undecided: 1Runoff election will be held on December 6,
2014
Senate changes
Current Senate
- 55 Democrats*
- 45 Republicans
* Includes 2 Independents
New Senate*
- 53 Republicans
- 46 Democrats**
* LA set for run-off on 12/6
** Includes 2 Independents
New Senators
Alaska – Dan SullivanArkansas – Tom CottonColorado – Corey GardnerIowa – Joni ErnstGeorgia – David PerdueMichigan – Gary PetersMontana – Steve DainesNebraska – Ben SasseNorth Carolina – Thom TillisOklahoma – James LankfordSouth Dakota – Mike RoundsWest Virginia – Shelley Moore Capito
Control of Senate After 2014 Elections
Projected Control of SenateAfter 2016 Elections
Projected Control of SenateAfter 2018 Elections
1”Presidential performance” is a candidate’s margin of victory in a particular state’s popular vote results, and is a useful indicator for measuring state party leanings in 2014 and 2016 Senate electionsSource: National Journal Research analysis.
Obama +5 or greater
Obama +4.9 to Romney +4.9
Romney +5 or greater
2016 Senate Races by 2012 Presidential Performance1
Control of Senate May Seesaw Back to Democrats in 2016
Senate
?
Obama +5 or greater
Obama +4.9 to Romney +4.9
Romney +15 or greater
Democrat Senator (21)
Republican Senator (15)
2014 Senate Races by 2012Presidential Performance1
Democrat Senator (10)
Republican Senator (24)
2018 Senate Races by 2012 Presidential Performance1
Obama +5 or greater
Obama +4.9 to Romney +4.9
Romney +5 or greater
IndependentSenator (2)
Democrat Senator (23)
Republican Senator (8)
Projected Control of the Senate, 2016 and Beyond
Lame Duck
Only Urgent Issues Likely to be Addressed in
Lame Duck Session
Sources: National Journal Research, 2014; Billy House, “Election Uncertainty Complicates Budget Decisions,” National Journal, August 20, 2014; Robert Longley, “Lame Duck Sessions of the U.S. Congress,” About News,
2014; Billy House, “As Bills Pile Up, Congress Starts Contemplating a Lame Duck Session,” Government Executive, June 18, 2014;
Potential Lame Duck Session Legislative Productivity (113th Congress)House Senate
White House
Analysis
•Expect legislators to pass only
necessary, short-term bills and an
omnibus budget bill in the lame duck
session
•The lame duck session will likely be
more productive than the September
session; necessary legislation that was
not passed before the election may be
taken up in the lame duck session, and
controversial votes are easier for
members to take without electoral
pressure
•Because Dems will lose control of the
Senate in January, they may attempt to
push legislation and appointments
through while they still have control;
•However, the limited duration of the
lame duck available, and the fact that
several major issues (government
funding, tax extenders, TRIA) will
expire in December, may mean that
there will be no opportunity for non-
essential legislation
Congress most likely
to focus on must-pass
legislation in the lame
duck
Once Republicans Control the Senate, Expect More Bills
(and More Vetoes)
Sources: National Journal Research, 2014; Rebecca Kaplan, “3 big issues Congress will likely punt for now,” CBS News, July 29, 2014; Billy House, “Election Uncertainty Complicates Budget Decisions,” National Journal,
August 20, 2014; Phillip Bump, “Yes, the Senate is ignoring hundreds of bills passed by the GOP House. But it’s always been that way,” The Washington Post, August 8, 2014.
Potential Post-Election Legislative Productivity With Republican Senate (114th Congress)House Senate
Analysis
•When Republicans formally take
control of the Senate in January,
expect legislative productivity to
go up, since Congressional
gridlock will be less of an obstacle
to lawmaking
•However, there could still be
disagreements within and
between chambers: Senate
Republicans will still have to
address concerns of moderate
Democrats in order to pass
legislation, so Senate bills are
likely to be more moderate than
House versions
•Even if Congress does pass more
Republican-backed bills, Obama
will likely veto highly partisan
legislationWhite House
Republican-controlled
congress will likely be
highly productive
White House will
veto highly
partisan bills
Lame Duck Session
• Leadership priorities:– NSA surveillance (failed)– Terrorism Risk Insurance Act– Defense Authorization bill– Tax Extenders (transportation funding vehicle?)– “Cromnibus?” – combination of an omnibus for some
agencies; CR for others– For Dems - nominations
- Want to recess for Thanksgiving – and “hopefully” finish close to 12/11 date
Key dates for 2015
• February – President’s budget released
• March/April – Budget resolutions and budget reconciliation
• March (with possible extension) – debt ceiling
• May 31st – MAP-21 extension expires –funding at the same time – Earlier? Later?
• June/July – Appropriations (don’t forget sequester!)
Authorization Status
• “New” Senate Chairman of EPW Committee• “New” Ranking Member of T&I• Key policy issues
– Local input– Freight/goods movement– Implementation issues
• House and Senate Committee leaders express desire to move a bill in early Spring
• Despite will to move quickly and before May 31st
– funding shortfall will remain obstacle
Funding
• May 31st is key date – but understand it could be sooner (or later)
• Will authorization bill be constrained to “flat funding plus inflation”?
• Will tax reform be the vehicle?– Both sides still have different goals
– Repatriation getting attention – not necessarily support
• Same list of options being discussed*
Transportation’s fiscal cliff
Just five months ago……..
• Congress extended MAP-21 policies through May 31, 2015
• Congress also transferred $10.8 billion into the Highway Trust Fund to maintain current funding levels – “estimated” to last until May 31, 2015
Two problems
• What happens after May 31st next year?
• “Longer” term shortfall
Fuel Taxes Power Fund
Joseph Kile, “The Highway Trust Fund and Paying for Highways,” Congressional Budget Office, May 17, 2011.
Analysis• 90% of the Highway Trust Fund’s revenue comes from fuel taxes (imposed at the federal level but collected by state retailers), and gas
taxes comprise 75% of fuel tax income• The fund’s relative dependence on a small number of sources makes it vulnerable to revenue and consumption fluctuations
25
History
• Since 2000, Congress has spent more from the Highway Trust Fund than revenue collected
• Congress has transferred funds from the General Fund to the HTF to keep spending at current levels– Approximately $65 billion transferred
– Some transfers “paid” for
HTF outlook
• In order to keep current funding levels, need revenue from “somewhere”……….
• Current funding gap – roughly $15 - $18 billion needed annually to maintain current funding levels
Funding vs. Financing
Funding
• Collection of taxes, fees, and other charges and the allocation of these revenues for transportation purposes
Financing
• Leveraging or upfront monetization of revenue streams
Choices
• Reduce spending
• Go to the General Fund – again
• Raise current taxes or fees
• Create new funding mechanism
Examples of financing methods
– National Infrastructure Bank or Fund
– TIFIA Expansion
– Private Activity Bonds
– Tax credit bonds
– Tax exempt bonds
States taking the lead
• Sales taxes
• Indexing transit fares and fuel taxes
• Moving taxation to wholesale level
• Internet sales tax revenue
• Oil and gas impact fees
• Vehicle miles traveled
• Tolling, managed lanes
• Lottery proceeds
• Raising DL fees, titling, registration, emission
• Alternative fuel vehicle fee
• Regional congestion relief fees for real estate
• Rest stop sponsorship
Patience and Wisdom
