Obama’s 2012 budget proposes $556 billion for transportation

President Obama on Feb. 14 submitted his budget for FY 2012, which includes the Administration’s plans for transportation reauthorization.

In the budget, the president proposes a $556 billion six-year proposal to improve the country’s highways, transit, and rail infrastructure and to ensure their safety, according to a Feb. 14 special legislative update from the National Stone, Sand & Gravel Association (NSSGA).

By proposing over half a trillion dollars, NSSGA says that the Administration is “recognizing the burgeoning needs of America’s transportation network.”

According to the NSSGA report, budget highlights are as follows:

• Renaming the Highway Trust Fund the Transportation Trust Fund;

• Shifting all general fund transit programs, Amtrak and high-speed rail, TIGER-type grants, and the new National Infrastructure Bank to being funded out of the Trust Fund via contract authority, thus largely removing the Appropriations Committees from control over the programs (at least on a detailed basis; the proposal would continue to let appropriators set annual obligation limitations on total spending amounts, but that doesn’t give them much room to make year-to-year programmatic changes at agencies);

• Shifting all Trust Fund budget authority and outlays to the mandatory side of the budget;

• Increasing spending above baseline levels out of the Trust Fund by $115 billion in outlays over the six-year FY 2012-2017 period; and

• Finding increased tax revenues or other “financing” to deposit in the Trust Fund equal to $20 billion in FY 2012 and $110 billion over the six-year FY 2012-2017 period.

Although this new budget request cannot be directly compared with prior years because the budget “proposes sweeping changes in transportation funding,” according to NSSGA, significant highlights the association has “gleaned” so far from the President’s budget request are as follows:

Six-year DOT Surface Transportation Reauthorization Proposal: Over six years, the Budget requests $336 billion in funding for road and bridge improvements and construction, a 48 percent increase relative to the $227 billion enacted in SAFETEA-LU. The proposal puts forth a plan to “simplify the highway program structure and establish a performance-based highway program.” Additionally, the President’s proposal funds transportation projects that improve quality of life in both rural and urban areas, provide users with enhanced transportation choices, and improve air quality in large metropolitan areas.

• The president is requesting $70.5 billion in FY 2012 to invest in our nation’s highways and bridges. This is a $29 billion increase over the FY 2010 enacted funding level. For highways and bridges, this represents the first-year of a six-year $336 billion proposal. The President’s request proposes to replace over 55 SAFETEA-LU highway programs with five core programs.

•  “Up-front” $50 Billion Economic Boost: $27.65 billion funds an “Up-front” economic boost to the highway program intended to jump-start job creation and progress on highway and bridge projects. This amount is broken down as follows:

•  $25 billion funds investment in critical highway infrastructure;

•  $2.2 billion funds support of significant improvements at land ports of entry (LPOEs) facilities, which link directly to the transportation infrastructure at boarder crossing locations.

•  $450 million funds the growing demand for highway credit assistance through the Transportation Infrastructure Finance and Innovation Act (TIFIA)

• The president’s proposal treats highways and all surface transportation spending as mandatory and funding will be subject to “PAYGO” provisions, to ensure spending does not exceed its dedicated revenue.

Changes to the Highway Trust Fund (HTF): The president’s proposal will convert the current HTF into a new Transportation Trust Fund (TTF) with four accounts – one for highways, one for transit, one for high-speed passenger rail, and one for the National Infrastructure Bank. However, exiting revenues will continue to be dedicated to highways, highway safety, and transit programs.

National Highway Program (NHP): $32 billion funds the new performance-based highway program, which targets investment to maintain roads critical to the national interest while also providing flexibility to the States for making transportation investment decisions on the larger system of Federal-aid eligible highways.

Highway Infrastructure Performance Program: $16.8 billion funds a formula-based program designed to improve the infrastructure condition and performance on an expanded National Highway System. This 220,000-mile network includes the Interstate System, all principal arterials, intermodal connectors, and other roads important to mobility, commerce, national defense, and intermodal connectivity.

Flexible Investment Program: $15.6 billion funds a formula-based program that provides flexibility to the States to invest in infrastructure preservation, congestion mitigation, or performance improvement projects on any Federal-aid eligible highway.