The FAA budget included an impressive 30 percent increase in NextGen funding over 2010 levels. The $1.14 billion for NextGen programs is enough to keep FAA on its current 2025 implementation schedule, but it is not enough to accomplish the Administration’s goal of accelerating the program. While the technology backbone that will make NextGen, a reality, is already in place, there are a number of hurdles to overcome that are slowing down implementation.

With a modest federal investment of about $6 billion for equipping the U.S. fleet, NextGen can generate more than 150,000 jobs. If we want a relatively quick and substantial return on investment, we need to look to NextGen. In addition to the stimulus it will provide to our economy, studies show the public benefits from a federally funded, NextGen-equipped civil fleet – dramatically reduced CO2 emissions, shortened travel time and reduced delays – will more than cover the initial investment in just a few years.

As the Obama Administration moves ahead with plans to create an Office of Livable Communities, we cannot lose sight of the fact that trucks make these communities livable by delivering life’s essentials, like food, clothing, medicine and fuel, and the consumer goods that make life comfortable. America relies on trucks to deliver virtually all consumer goods and economists expect trucks to deliver 71 percent of total U.S. freight tonnage by 2020.

While the Administration has budgeted $42 billion for highways, that’s no excuse to further delay the reauthorization of SAFETEA-LU. We cannot continue relying on extensions to keep the Highway Trust Fund solvent. We must make a long-term commitment to a national transportation policy that repairs and expands our highway system to facilitate the efficient movement of our nation’s freight. Investing in highways is the quickest, most efficient way to create jobs and restore the economy.

A multi-year investment that increases highway capacity at our nation’s worst bottlenecks will put people back to work and improve travel times for commuters and freight haulers. The Texas Transportation Institute's 2009 Urban Mobility Report indicates that congestion creates an $87.2 billion annual drain on the U.S. economy in the form of 4.2 billion “lost hours” stuck in traffic and 2.8 billion gallons of wasted fuel. Infrastructure spending also makes U.S. businesses more competitive. Every dollar invested in the nation’s highway system yields $5.40 in economic benefits as a result of reduced delays, improved safety and lower vehicle operating costs.

It is good to see that the Administration is demonstrating its commitment to public transportation and high speed rail with its proposed transportation budget in these difficult economic times. It is also heartening to see the recognition of the importance of linking public transportation, the environment, economic development and land use. In these difficult times, transit agencies across the nation, old and new, large and small are facing extraordinary financial challenges due to decreased ridership and/or decreased tax revenues. Significant service reductions and/or fare increases have been implemented or are under consideration. Projects to expand systems are being deferred. A number of systems need to be brought to a state of good repair. These reductions and deferrals will result in a loss of ridership and potentially the creation of a downward cycle of service cuts followed by ridership/revenue losses that could in turn lead to further cutbacks in service. . If transit starts to cost the user significantly more and service as well as reliability suffer, then as the economic recovery comes, the public transportation capacity will not be there to support and sustain it. As a first priority public transportation funding must be provided to stabilize budgets at transit agencies and then grow transit sufficient to have transit be a positive force during the coming economic recovery.

President Obama’s 2011 transportation budget request has its bright spots, but still reflects the old highway-centric thinking that has left low income people behind and made the stimulus far less effective than it could have been. If we want a safer, greener, more prosperous and less segregated nation, we owe it to ourselves to invest more in transit.

Funding the Office of Livable Communities is a great idea, though their programs need to be targeted to ensure that regional equity goals are central to their work. Low income communities should be included in all stages of the implementation of the Office's programs, including monitoring the programs and correcting any problems.

It’s disappointing to see the old 80-20 split in highway funding vs. transit funding. The Transportation Equity Network (TEN) believes that a stronger investment in transit is absolutely essential to rebuilding our damaged economy. According to the latest study by Smart Growth America and others, every one billion dollars invested in transit creates 19,299 job-months, compared to 10,493 job-months for every billion spent on highway infrastructure. Transit lets people get to their jobs, and investments in transit create more jobs than investments in any other type of transportation.

This budget request underscores how urgently a new authorization bill is needed, and TEN support’s Chairman Oberstar's call to pass one as soon as possible. Our current system leaves low income people out of MPO/DOT decisions, underfunds transit systems, and leaves disadvantaged businesses and workers out of transit and highway construction. A new transportation authorization bill with a real focus on equity can correct all of this. The sooner we have a new bill, the better it will be for low income people -- and for all our communities.

Two key issues that are the foundation of a good and sound budget for transportation remain unanswered — reauthorization of the Safe, Accountable, Flexible, Efficient Transportation Equity Act and an increase in dedicated revenues for the federal Highway Trust Fund. The former is caught up in the gridlock of Congress. The latter reflects the lack of political will of the American public to face fiscal reality.

Built on this shaking foundation, the proposed budget, not surprisingly, has some strong points and some real weaknesses. The projected reductions in transit and Amtrak funding for 2012 are politically unrealistic and unwise from a policy prospective.

Still, several positive points give promise. The budget reflects continued commitment to transit and high-speed rail, albeit at an insufficient funding level. The $4 billion for the start of a national infrastructure investment bank is a first step to addressing a national crisis. However, this amount is far too limited to make a real dent in addressing the accumulated neglect of our infrastructure. Also, the types of investments coming from this “bank” must be better defined.

The “bank” probably should be considerably larger and address many other infrastructure needs, such as water treatment and supply, and located outside of the Department of Transportation. Or, the funding should be larger and more narrowly defined to meet transportation needs and be located in the Department. In either case, the Obama Administration is correct to start addressing this key need.

It may also be that the Administration is using this fund to start implementing some of the collaborative policy reforms discussed in recent months. Transportation decisions should be considered in light of their impact on housing costs, water quality and environmental needs. What better way to enforce this approach than for one fund or “bank” to serve cross-cutting transportation, housing and environmental goals?

The request for $527 million to create an office of Livable Communities is very important. It is an important step for the implementation of the collaborative Partnership for Sustainable Communities. It is the beginning of the bold policy change that Secretaries Ray LaHood and Shaun Donovan, and Environmental Protection Agency Administrator Lisa Jackson have advanced. The two Secretaries spoke forcibly about the need for the collaborative approach just this past week at the New Partners for Smart Growth Conference in Seattle. Without this funding and other financial support from the EPA and Housing and Urban Development, the collaborative effort would be just words.

On a personal level, as a frequent rider of the Washington Metro, and on behalf of all riders, I am pleased to see the $30 million to start a federal oversight of transit rail safety.

Bottom line, the budget is a statement of commitment to often-repeated Obama Administration goals and to many important reforms. It is and will be incomplete and lacking until the two a priori issues of funding level and reauthorization are addressed.

Updated at 2:44 p.m. on Feb. 17.

I realize this is off-topic, but I wanted to post the link to the list of the 51 TIGER grants that DOT today announced won a share of the $1.5 billion pot of discretionary money it got to award in the Recovery Act. I think it's worth noting that highway projects got less money than multimodal or transit projects -- at least I found that interesting. Anyway, here's the link:

http://www.dot.gov/documents/finaltigergrantinfo.pdf

Those who believe that investment in transport is too important to be left to the vicissitudes of politics obviously prefer expenditures relating to policy — such as establishing a transit safety programme — to expenditures on infrastructure, which should be driven by consumers’ willingness to pay, and thus financed commercially.

Priority should have been given to reforming the ways highways and transit are financed. The statement in the budget that

• “the administration seeks to integrate economic analysis and performance measurement in transportation planning”

is flatly contradicted by the Secretary of Transportation’s recent announcement that less emphasis is to be put on such measurements in the future.

Is not a “National Infrastructure Bank” needed only to fund unsustainable projects?

At a conference in Seattle earlier this month, I had the pleasure of hearing three senior cabinet officials make it clear that this administration is moving the long-term economic, environmental and human health of our communities to the forefront with its sustainability, smart growth and livability initiatives. Now the FY 2011 budget begins to provide the funding to back it up.

The Partnership for Sustainable Communities, a joint effort among the Environmental Protection Agency, Department of Housing and Urban Development and the Department of Transportation, is allocated $830 million.

Also, as Robert mentioned, the $4 billion down payment on a National Infrastructure Fund would mark a substantive segue toward merit-based project selection and can serve as a template for broader reform down the road. The revenue base is relatively small and the scope constrained, but the bank would be a worthy achievement nonetheless.

Lastly, the $1 billion for high-speed rail, on top of $2.5 billion in the current budget and $8 billion in grants from the 2009 American Recovery and Reinvestment Act, will provide critical support to get new corridors moving.

By prioritizing livability and moving toward performance measures for transportation investment, President Obama’s administration has made it clear that they understand the needs of both our economy and our local communities. We must ensure that Congress follows through on funding for FY 2011 and that support persists in future fiscal years, so these important programs are maintained and expanded.

Updated at 4:49 p.m. on Feb. 17.

President Obama’s fiscal year 2011 budget proposal is another encouraging sign of his commitment to transportation. His plan funds highways and transit programs at current levels and makes a small adjustment for inflation. Far more investment is needed but, in the context of the President’s call for an overall spending freeze transportation providers are pleased.

The one exception we would take with the Administration’s budget is whether it is appropriate to include proposals for substantial changes in policy through the appropriations process, rather than asking for action, more appropriately, by the authorizing committees in the House and Senate. Decisions about the creation and funding of a national infrastructure investment bank at $4 billion and a livable communities program at $527 million are policy proposals best dealt with by the Transportation and Infrastructure and the Ways and Means Committees in the House and the Environment and Public Works; Banking; Finance; and Commerce, Science and Transportation Committees in the Senate. We look forward to participating in that debate.

We also stand ready to assist the President and Congress with its efforts to lower the nation’s double digit unemployment rate and boost the economy. Mr. Obama’s call for the inclusion of transportation investment in a new Jobs Bill, will build on the success of current recovery spending for transportation. As of January, highway and transit recovery projects alone, had created or saved 280,000 on-project jobs. Two months ago, the House passed a Jobs Bill that would provide $27.5 billion for highways and $8.4 billion for transit. We encourage the Senate to move quickly to pass similar legislation that the President can sign it into law.

In the next two weeks Congress must also pass yet another extension of current highway and transit authorization for the balance of the year and transfer sufficient resources from the General Fund, to keep the Highway Trust Fund from running out of money.

Once that is accomplished, we will work with Congress and the Administration to craft a new multi-year authorization bill by focusing on reforms to provide greater accountability for results and determining how much funding is needed for highway and transit programs and figure-out how to pay for them.

The time has come to move this critical issue of transportation forward. Hundreds of thousands of workers and businesses both large and small will benefit if we do.

The Obama DOT Budget: Good News Now but Continued Uncertainty

There are many sound policy recommendations in the Fiscal Year 2011 Department of Transportation (DOT) budget including investments in safety, NextGen, livability and the new National Infrastructure Innovation and Finance Fund. The budget proposes to fund these priorities by increasing spending 2% even though the way we typically fund most transportation (through user-based revenues flowing into the Highway and Airport and Airway Trust Funds) is today generating insufficient dollars. Instead, the Administration proposes to fund the increase by tapping what user revenues there are and by significantly increasing the proportion of transportation programs paid for by the nation’s taxpayers.

The DOT budget falls in line with the Administration-wide goals of job retention/creation and economic growth and recognizes that investing in infrastructure is a necessary foundation of that strategy. This message was strikingly clear in the President’s State of the Union Address; for the first time in recent memory the value of transportation infrastructure was given a prominent place among a president’s current priorities. The very next day the President built on this attention by traveling to Florida to announce the high-speed rail grants; the timing was a symbol of transportation’s importance and the role infrastructure investments can play in helping the economy (in the short term by stimulating economy activity and in the longer term by increasing the nation’s wealth and productivity).

This emphasis continues to be good news and shows that within the greater Obama Administration, DOT’s message has taken hold even as the Administration attempts to pivot from a singular domestic policy focus on economic recovery to a dual focus on the economy and deficit reduction. The Administration has wisely recognized it will not serve the interests of the next generation to address the budget deficit only to withdraw spending from the still teetering economy or by neglecting the very transportation infrastructure that the same generation will require.

While the Administration’s recommendations to pay for a larger share of the FAA budget with taxpayer dollars and to transfer billions of dollars of additional general fund revenues into the Highway Trust Fund are well advised this coming fiscal year, these are five reasons why these strategies are unsustainable:

(1) Transportation cannot consistently out-compete other domestic priorities,

(2) Experience shows that annual appropriations without dedicated funding sources often go unfunded or fall short of authorized levels,

(3) Injecting taxpayer money into trust funds breaks the historic link inherent in current programs between how monies are raised and how they are spent,

(4) Transportation providers and federal agencies need a solvent and predictable trust fund regime to plan and invest in multi-year infrastructure projects, and

(5) Current surface transportation and aviation policies require reform and changes need to be linked with new trust fund regimes.

Commissions, policy analysts, and some in Congress understand that we need to put transportation policy on more sustainable ground. One way to reform the system is to follow the recommendations discussed and offered by this blog’s contributors. A second way is to identify dedicated revenue streams such as fuel taxes, ticket taxes, user fees and other sources that provide sufficient and stable funding so that we will plan for and make the investments. Holding revenues from these sources “in trust” has worked before and it will work again if the transportation industry provides the support to those leaders willing to lead and works within the industry and beyond to build a consensus around a set of sustainable reforms.

Nine in ten older people want to stay in their homes and communities for as long as possible. Yet half of older people who no longer drive are stuck at home on any given day because they don’t have a ride where they want or need to go. Making our communities more livable for everyone will make them age-friendly as well.

That is why AARP applauds the Administration’s FY 2011 budget commitment of $527 million to help state and local governments invest in smarter transportation infrastructure. This includes valuable programs that will help people get to work, help states and communities develop forward looking transportation plans, fund livability programs in the highway program and integrate many of these efforts with livability programs in other federal agencies through a new Office of Livable Communities in the Office of the Secretary of DOT.

AARP continues to strongly support the Administration’s commitment to coordinate and plan for livable communities across cabinet agencies. The DOT budget initiatives, together with $150 million in requested funding for HUD grants to facilitate regional and community planning that integrates housing and transportation investments and combined with EPA's requested $5.2 million for Sustainable Communities will give needed impetus to re-envisioning America’s communities.

We believe livability is also enhanced through vital public transportation programs. Of particular interest are Section 5310 Specialized Transportation for Elderly and Persons with Disabilities program and the Section 5311 rural transit program. These programs provide additional transportation options and are lifelines for older people.

Looking at the first Obama transportation budget, I'm pleased that the team at DoT has got some things figured out and have done about as well as can be expected in the overall federal budget climate. Getting even a modest increase in the overall context of a budget freeze shows that transportation is appreciated at the level of the budget decisionmakers.

The specific proposals are in fact tailored around the Administration's priorities for transportation, including key items of safer transportation, livable communities, flexible infrastructure investment, a commitment to a robust New Starts program for transit and an acceleration of NextGen implementation. if you support those priorities, as I do, you can see that the Administration is putting its money where it meets their goals.

Another indicator of apparent success, noted already by Craig Fuller, is that the Administration has dropped the user charge proposal for aviation. That idea was going nowhere, so now perhaps there can be some real dialogue. On the other hand, I wonder where the idea for FRA safety user charges came from, remembering that this hasn't met with any past success.

Finally, on the safety front, there are good indicators of commitment. The Administration took early note of real issues in pipeline and transit safety and has followed through with the resources needed to do a better job.

Of course, we all need to remember that the submission of the President's budget is only the beginning of the annual ritual. You might liken it to throwing out the first baseball, only at a Spring training site. There's a long road ahead before the books close on FY 2011 and we will see how Congress and others react to the Administration. In many cases, it will be hard to get a real reaction. Budgets may be for one year, but the real test for transportation investment is how long and to what depth the commitments are made. The absence of a multi year authorization proposal makes it difficult to evaluate plans such as the reallocation of traditional surface transport dollars into livable communities. It would be easier to sell these ideas if they were in a better context of where all spending is going.

The same may be true about the revamped proposal for a National Infrastructure Fund in lieu of last year's Bank proposal. I think the new plan has some intriguing potential with its mix of planning, and investment through both grants and loans towards significant projects. But one has to ask what Congress will do if there is no concrete legislative proposal--will the $4 billion budget allocation (which as Jeff Davis points out, won't all be spent in FY 2011) just go for alternative Congression priorities? Or will those who want a broader infrastructure bank, as Rob Puentes would prefer, head off DoT's proposal in hopes for something bigger.

Let's plan to talk again about this--I'm sure there will be plenty of opportunity, especially in the likely event of a stalled appropriation process as the year winds on.

Jeff Davis, editor of Transportation Weekly, sent us the following analysis and attached file on the fiscal 2011 DOT budget request:

Aside from the obvious - that the President's 2011 budget once again punts the issue of the surface transportation reauthorization bill down the road by a year - two things from the budget jumped out at me: the National Infrastructure Fund and the budget out-years.

Infrastructure Fund. The request for a National Infrastructure Fund seems both oversized and misplaced. While the budget requests $4.0 billion "to remain available until expended," the detailed budget request for the Fund indicates that DOT does not think the Fund will be able to obligate more than about $2.7 billion in FY 2011 - meaning that Congress could appropriate a little less than $3 billion for the Fund in FY 2011 and not interfere at all with the work DOT plans to do. But more importantly, the White House seems to think that the Infrastructure Fund is not about transportation. We won't know for sure until the draft authorizing legislation is sent to the Hill, but while the Budget requests that the Fund be established within DOT, OMB classifies the Fund in budget function 450 (Community and Regional Development), not function 400 (Transportation). Specifically, OMB puts the Fund in subfunction 452, "Area and regional development," which the GAO Glossary defines as "Grants, loans, subsidies, and related aids for the economic development of depressed areas...Includes transportation facilities developed as an integral part of a community development program (rather than a transportation program)." My sources tell me that OMB hopes to eventually broaden the scope of the Fund beyond transportation into other types of infrastructure. My feeling is that if the Fund is to be housed within DOT, and run by officials who answer to the Secretary, it should be classified under function 400 and forever dedicated to transportation. If the Fund is really going to be about regional economic development and fund non-transportation projects in the long term, it should be classified in function 450 and be established as an independent agency outside DOT. DOT should not be in the business of evaluating and funding drinking water, wastewater, electrical grid, educational, and housing projects.

Out-Years. The Budget's non-binding projections for FY 2012 and beyond show the politically unrealistic assumptions OMB has made to make the out-years of the President's Budget fit under his proposed discretionary spending "freeze" in FY 2011-2013 at the non-emergency FY 2010 levels. I have included a full analysis of the out-years from the latest issue of TW, but in the first place, the out-years completely ignore the possibilty of a surface transportation reauthorization bill providing sizeable funding increases for these programs (as does 2011). The 2011 figures for Highway Trust Fund highway and transit programs are basically frozen at the 2010 levels in 2011, and the budget projects increases of just 1.6 percent in 2012 to stay under the freeze.

The out-years of the budget include a politically absurd 31 percent cut in the Airport Improvement Program in 2012 (when the House has passed a bill with a 14 percent increase). And many general fund programs also take politically unrealistic cuts in the out-years. Transit new starts would see a 4.3 percent cut in 2012 under the budget assumptions, other general fund programs at FTA would see a 4.0 percent cut, Amtrak grants would be cut 4.3 percent, and the salaries and expenses of the Secretary's offices would be cut by 4.8 percent. None of these is politically likely.

These out-year projections are not binding on OMB or DOT, and the real FY 2012 budget request will of course look much different when submitted one year from now, but if the Administration really intends to live by the terms of the spending freeze it has proclaimed, then any increases above these levels for DOT projected in this year's budget must be offset by cuts in other discretionary areas like education, energy, housing, or social services, which will be difficult, since the out-years for those agencies in this year’s Budget are probably just as politically unrealistic.

View the attached article with charts

When it comes to infrastructure, President Obama faces a tricky balancing act. On one side he needs to invest in the kind of infrastructure that the nation needs to remain competitive and put us on the path to a low-carbon future. On the other he has to operate in a constrained fiscal environment with programs that are in fundamental need of reform.

With that as a backdrop the president's proposed 2011 budget is an interesting collection of investments and reforms.

In the former, there is a proposal to create a $4 billion National Infrastructure Innovation and Finance Fund which appears to be this year's iteration of the National Infrastructure Bank idea. The fund would support projects of regional or national significance based on merit. While we have written extensively about the need for such a reformed process, the narrow focus on transportation-only projects is somewhat disappointing.

Other areas of infrastructure investment are worth noting including a bump in loans and grants to connect rural communities with broadband infrastructure, an additional $3.3 billion for the Clean Water and Drinking Water State Revolving Funds, and an additional $1 billion to fund competitive high speed rail projects.

The 2011 budget also proposes to make the Build America Bond program permanent. The popular program would be increased to $3.2 billion, the subsidy level dropped, and expanded to include some operating costs, in addition to capital investments.

But what is striking about the budget proposal is the strong language about reform. Notably, the budget reinforces the administration's desire to extend the current transportation law an additional year. This means not reauthorizing the program at a higher spending level-as many in Congress have proposed to do-but working on key reforms to make smarter investments. It also provides more time to come up with sufficient and sustainable sources of revenue.

The other interesting proposal is to eliminate 353 transportation earmarks from the 2010 appropriations law. In that piece of legislation, these projects are identified as "surface transportation priorities" and include investments such as the Hammond Drive Roadway Upgrades in Sandy Springs, GA, the Edwards County Bone Gap Road in Illinois, and $2 million for something called "Urban Collector Road, MS." The Administration proposes cutting them because the choice of these projects was "not subject to merit-based criteria or competition." Overall, cutting these projects from special funding would save $293 million.

Also slated for cuts is the Army Corps of Engineers. The Corps would see a 10 percent drop in funding for its water and flood programs. But the budget also proposes a new direction for the Corps by incorporating new planning concepts and analytical methods.

The general theme, then, appears to be consistent with the reforms that accompanied last year's budget and the American Recovery and Reinvestment Act (a.k.a. the stimulus bill) which provided a number of avenues for coordinating its various funding streams at a metropolitan level, particularly in new competitive grant programs, and a nudge away from the troublesome formula-driven programs so prevalent today.

A Positive Path For Aviation

The Department of Transportation's Budget charts a more positive path for aviation. We applaud the Administration for dropping a year-old user charge proposal in favor of building a consensus around the important task of modernizing our air traffic control system, developing the nation's airports and enhancing the safety of air transportation. We are very hopeful that the budget proposals encourage the passage of the FAA Reauthorization legislation to provide the certainty of funding for important aviation initiatives. At AOPA, we look forward to working on this important and positive agenda.

When the Obama Administration's Transportation budget request for fiscal 2011 was released on Feb. 1, one proposal that stood out was a new, $4 billion program to fund surface transportation infrastructure called the National Infrastructure Innovation and Finance Fund (NIFF). Half of the NIIFF is programmed as grants for infrastructure, with the remainder dedicated to direct loan subsidies, planning and capacity grants, and administrative costs.

Although the details are still unclear, it appears that the NIIFF would broaden the eligibility of transportation projects to a much wider array of possibilities for freight and non freight-related efforts. Funding eligibility would include multi-modal projects ranging from highway, transit and rail, to aviation, ports and maritime components, greatly increasing the competition for funding among the various modes. In the 2011 budget, the NIIFF appears to supplant other types of discretionary funding programs, including the National Infrastructure Investments program, which passed with the omnibus 2010 appropriations bill and was patterned after the TIGER grants. While freight interests seem well represented in the eligibility listing, it's too early to discern how critically needed freight infrastructure investments might fare.

The President's budget appears to include no funding for the America's Marine Highway Program, which Congress authorized last year with Administration support. This important initiative would support growth of short sea shipping routes along our coastlines and waterways, helping to alleviate congestion on some of the nation's busiest highways.

As the DOT budget is considered up on Capitol Hill, progress must also continue on surface transporation reauthorization legislation, which needs to have a greater focus on freight transportation infrastructure.

Although not part of the DOT budget request, among the most disappointing aspects of the Administration's overall budget proposal related to transportation was a 10 percent cut in the U.S. Army Corps of Engineers' Civil Works Program budget. The federal navigation channels connecting our ports and landside transportation system to international markets are already in a declining state of repair, being available at their authorized dimensions only 30-40% of the time. Such a drastic cut would further compromise the ability of the Corps to adequately maintain these channels, impacting navigation and environmental safety, reducing capacity, and increasing shipping costs. This is particularly troubling when the users of these channels pay twice as much per year in harbor maintenance taxes than what is proposed to be spent.

AAPA strongly applauds the President's goal stated in his State of the Union Address to double U.S. exports within five years. Export growth can be a key driver of job creation and economic recovery and prosperity, however, it is vital to make the investments needed in our freight transportation infrastructure, on the land and in the water, to make US exports competitive in global markets. Federal transportation policy, and its funding priorities, must match our export promotion/trade policy.