Federal transportation package signed into law

On Dec. 3, the U.S. Congress approved and sent to the White House a five-year, $305 billion Highway and Transportation bill, known as the Fixing America’s Surface Transportation Act (FAST Act).
 
President Barack Obama signed the bill into law the next day, hours before funding was set to expire.
 
FAST is the first transportation funding bill lasting more than two years to emerge successfully from Congress since 2005. The 1,300-page bill passed by large margins in the House (359-65) and Senate (83-16).
 
The law is funded through a combination of gas tax revenue and $70 billion in “offsets” from other areas of the budget.
 
The gas tax, the primary source of revenue for the federal Highway Trust Fund, was last raised in 1993. The federal government spends approximately $50 billion on transportation annually, while the gas tax provides only $30 billion in revenue.
 
Congress filled the funding gap with several budget tactics, including a transfer of $53 billion from the Federal Reserve Bank’s capital account to the Treasury’s General Fund, a reduction in the dividends received by large banks from the Federal Reserve, tying airline customs fees to inflation, and selling 66 million barrels of oil from the Strategic Petroleum Reserve (though sales won’t start until 2023).
 
The final bill provides more funding than the version the House passed in November, but it falls far short of the $478 billion transportation plan outlined in the Obama administration’s fiscal 2016 budget proposal. The administration says that the government must spend $400 billion over the next six years just to maintain the current transportation system; to improve the system would take an additional $78 billion.
 
The bill appropriates $205 billion to highway work and $48 billion on transit projects over the next five years. This amounts to a 15 percent increase in highway spending, and an 18 percent boost in transit spending, including $10 billion over the five-year period for Amtrak, $12 billion for mass transit, and $1 billion for vehicle safety programs.
 
Massachusetts will see a growth in federal resources from the new bill. The Commonwealth received $586.1 million in 2015 from the 2014 stopgap bill, and will see that rise to $616 million for 2016, $628.7 million in 2017, $642.3 million in 2018, $656.8 million in 2019 and $672.6 million in 2020. The total is $3.2 billion over the five years, a $57 million per year increase over the last transportation bill.
 
Of particular concern to municipal governments in the Northeast was a provision in the House bill that would have eliminated the formula used to allocate transit funds to states with high-density urban areas. This would have resulted in a cut estimated at several million dollars per year for the Boston metro area, as well as cuts of nearly $263 million over the course of the program to the seven Northeastern states that account for half the nation’s transit users.
 
Sens. Elizabeth Warren and Ed Markey were able to work with Sen. Chuck Schumer of New York to restore the funding formula, amounting to an additional $1.6 billion in transit aid for the seven Northeastern states. This includes $200 million dedicated to aiding commuter railroads as they install “positive train control” safety systems.
 
Under FAST, the Transportation Infrastructure Finance and Innovation program, which provides loans for qualified projects of regional and national significance, is considered transit-oriented development, a change that makes it easier to finance construction of housing, shopping or office development at mass-transit hubs.
 
The law also gives local governments new flexibility on street design. In the past, metro area planners had to follow the design standards used by state planners, particularly for projects that involved federal funding. If a municipality wanted to narrow the lanes of a particular road from 12 to 10 feet, for instance, it often could do so only with the state’s blessing.
 
Under FAST, for federally funded projects where municipal officials are taking the lead, planners will be able to use a street manual that differs from the state’s official road design publication, provided that manual is approved by the Federal Highway Administration. Theoretically, this frees cities and towns from the conventions of car-first street standards and lets them design streets more friendly to bikes, pedestrians and transit users – such as the celebrated Urban Street Design Guide put out by the National Association of City Transportation Officials.
 
The law also changes the federal TIFIA financing program, which offers local governments credits or loans for transportation projects at favorable interest rates. Under previous statute, the project threshold for a TIFIA loan was $50 million, a figure that limited the program to major public works efforts in large cities. FAST reduces the threshold to $10 million. Projects that involve transit-oriented development are now eligible for TIFIA financing as well.
 
The Safe Streets Act, essentially a federal version of “complete streets” policies that are becoming more common at the state and local level, was rolled into the FAST bill. This means that transportation projects receiving federal dollars must consider all users, not just drivers.
 
One of the biggest programs left out of the FAST Act was the Transportation Investment Generating Economic Recovery (TIGER) grant program, which provides incentives for the most efficient transportation projects.
 
Several attempts at structural reform did not make it into the bill, including an effort to change the inefficient system through which federal funds go through state transportation departments rather than directly to municipalities.