In this issue:

Surface Transportation Commission Releases Report
SUGGESTS EVENTUAL MOVE TO VMT TAX BY 2020

The 2005 federal surface transportation authorization, SAFETEA-LU, created two commissions to study financing options for surface transportation programs. The first commission report, released in January 2008, suggested a 40-cents-per-gallon increase in the federal gasoline tax over the next five years. The second commission, a 15-member panel representing local government, industry, and finance groups, released its findings late last month. The report suggests an immediate 10-cents-per-gallon tax increase and indexing the tax to inflation. The federal gasoline tax was last increased in 1993.

Both suggestions are acknowledged to be short-term solutions to the solvency of the federal Highway Trust Fund. The commission's long-term recommendation was to shift financing from a per-gallon tax to a tax on vehicle miles traveled (VMT) by 2020. It recommends funding for research and development of a mileage-based system in this year's reauthorization bill. The report says that while a 0.9-cent per mile tax would maintain the nation's transportation system, two cents per mile would actually fill the investment gap. Last year, Congress had to provide $8 billion from the general fund to keep the trust fund solvent. Finance issues are likely to dominate the coming debate on surface transportation authorization.

Transportation Secretary Ray LaHood recently said that the administration would not support a gasoline tax increase while the economy is in recession, but he did support VMT-based taxes. The White House later stated that it is not currently considering taxing based on vehicle miles traveled.

Immediately following the new commission report, U.S. Rep. Earl Blumenauer (D-Ore.) weighed in with a broad new infrastructure financing proposal. Blumenauer, a member of the House Ways and Means Committee, called for raising and phasing out the gasoline tax, expanding use of a VMT-based tax, dedicating a portion of cap-and-trade revenues from climate-change legislation to transportation, and establishing a per-barrel excise fee to establish a floor on oil prices.

White House Releases FY 2010 Budget
NEW ADMINISTRATION BOOSTS KEY PROGRAMS

President Obama sent Congress a $3.6 trillion budget on February 26 that proposes costly efforts to expand health care coverage, address global climate change, and rein in swelling deficits. The budget provisions include full backing, at $4.5 billion, for the Community Development Block Grant (CDBG) program and enactment of statutory reforms to modernize the program. Reforms include a more effective formula, changes to incentives and accountability measures, and a new Sustainable Communities Initiative.

The budget also creates several new programs but does not specify their funding levels. They include an Energy Innovation Fund in partnership with the Department of Energy and a Choice Neighborhoods Initiative to identify and support interventions in poverty-stricken neighborhoods. It also eliminates two duplicative programs, the Section 108 Community Development Loan Guarantees Program and the American Dream Downpayment Initiative. Activities related to the former program will continue under CDBG.

The Environmental Protection Agency receives $10.5 billion, a 34 percent increase over the likely FY 2009 level. The budget proposes the reinstatement of excise taxes starting in 2011 to collect over $1 billion for Superfund programs. The president's budget request also assumes that revenues from a cap-and-trade program to reduce greenhouse gas emissions will be invested in clean energy programs starting in FY 2012.

The president continues his commitment to investing in high-speed rail beyond the $8 billion included in the economic recovery package. The FY 2010 budget request includes $5 billion to fund a five-year state grant program for high-speed rail. This budget also changes the way transportation program resources are displayed by putting both budget authority and outlays under the discretionary funding category.

Omnibus Bill Passes House, Sent to the Senate
FUNDING DEADLINE FOR AGENCIES DRAWS NEAR

The U.S. House was able to pass a $419 billion FY 2009 spending bill last week, moving the process to the Senate for consideration. Because the bill combines nine unfinished appropriations bills from last year, a number of agencies currently are supported by a continuing resolution that maintains FY 2008 funding levels. The continuing resolution is set to expire on March 6, putting pressure on Congress and the new administration to complete work on the bills promptly. On Wednesday, Senate leaders filed a motion to invoke cloture, which would effectively pass the bill as early as today, but it was unclear whether the requisite 60 votes were in place for the measure. House leadership has stated that if the bill is amended in the Senate and sent back for approval, they are likely to pass a continuing resolution for the remainder of FY 2009 rather than pursue a compromise.

The package under debate would provide $410 billion in discretionary spending — about $31 billion, or 8 percent, more than the total funding in the FY 2008 versions of the nine bills in the package and $19 billion more than former President Bush requested for FY 2009.

Surface Transportation Authorization in Development
LEGISLATION EXPECTED FROM HOUSE COMMITTEE BY MEMORIAL DAY

SAFETEA-LU was approved in 2005 and authorized $286 billion for surface transportation programs for 2005–09. It will expire in September.

The House Transportation and Infrastructure Committee announced plans to mark up its portion of a surface transportation reauthorization bill by Memorial Day. The Ways and Means Committee, which has jurisdiction over the bill's tax and finance provisions, will also play a significant role in the process. A schedule for action on the House floor has not been set, but Rep. James Oberstar (D-Minn.), chairman of the Transportation and Infrastructure Committee, has urged the House to take action in the summer.

In coming weeks, legislators will introduce a variety of bills aimed at influencing the authorization bill, including several that are significant to planners. Rep. Doris Matsui (D-Calif.) and Sen. Tom Harkin (D-Iowa) have announced plans to introduce "Complete Streets" legislation in early March. Sen. Tom Carper (D-Del.) and Rep. Blumenauer plan to reintroduce legislation from the last Congress known as CLEAN-TEA. The bill focuses on incorporating climate-change planning into transportation planning. Rep. Ellen Tauscher (D-Calif.) has in mind two measures. One would establish new planning processes modeled on the California blueprint initiative and the other would create a metropolitan mobility program.

Vacant Properties Bill Introduced
HELP FOR COMMUNITIES WITH ABANDONED HOUSING

The Community Regeneration, Sustainability and Innovation Act, H.R. 932, was introduced in the House in early February. It would target cities and metropolitan areas experiencing large-scale property vacancy and abandonment stemming from ongoing employment and population losses.

Last week Sens. Charles Schumer (D-N.Y.) and Sherrod Brown (D-Ohio) introduced companion legislation in the Senate, S. 453. The legislation would create a competitive program, administered by HUD, that would start or expand land banks to support public control and reuse of vacant property. The act also encourages environmentally sustainable practices for reusing property, green infrastructure, open spaces, and preservation of historically and culturally significant structures. Where possible, the act supports the creation of renewable energy sources including wind, solar, and geothermal power.