This past year saw a number of advances in federal transportation policy, most notably the passage in July of the Moving Ahead for Progress in the 21st Century (MAP-21) Act, authorizing federal surface transportation programs through Fiscal Year (FY) 2014, and the extension of the transit commuter tax benefit and the alternative fuels tax credit in the recent Fiscal Cliff legislation. The coming year, those issues and more will be in play once again as Congress works to address myriad issues affecting transportation policy and the country at large.
Debt Ceiling, Sequestration
The 113th Congress, sworn in earlier this month, immediately will be pressed to find solutions to the debt ceiling and sequestration issues. The debt ceiling—the congressionally established limit on the amount of public debt accruable by the Treasury—was breached in the final days of 2012 but, through emergency borrowing measures, the Department of the Treasury has been able to continue funding the federal government. However, some estimates show the Treasury unable to issue additional debt to pay outstanding federal obligations as early as mid-February.
At the last moment, Congress delayed the sequestration cuts set to take effect on Jan. 1 of this year. Those cuts were postponed for two months, until early March, giving Congress little time to find a solution to prevent large, across-the-board cuts to all discretionary programs. While the Highway Trust Fund is exempt from sequestration, General Fund programs such as New Starts would be subject to the across-the-board cuts.
FY 2013 Appropriations
A further complication to the beginning of the 113th Congress is the unfinished FY 2013 appropriations process. The federal government has been operating under a Continuing Resolution (CR) since Oct. 1, 2012, which largely continued funding at FY 2012 levels and leaves certain components of MAP-21 unfunded, such as FTA’s Emergency Relief program. The CR expires March 27, 2013. It is widely believed that Congress will adopt an omnibus funding measure, wrapping all the appropriations bills into one large package, prior to March 27, to fund the federal government through the current fiscal year, which ends Sept. 30.
Congress will also continue debating emergency appropriations for relief from the destruction caused by Superstorm Sandy. Funding is crucial as public transit agencies continue to struggle to repair damaged systems, as well as hardening assets in preparation for future storms, and both the House and Senate are scheduled to vote on relief in January.
The year-end Fiscal Cliff compromise that extended some of the Bush-era tax cuts and delayed sequestration also extended a number of tax provisions, two of which were welcome news to the public transit industry. It restored the Commuter Tax Benefit to parity with the parking benefit at $240 per month and extended the Alternative Fuels Tax Credit, giving public transit agencies incentive to continue investing in alternatively fueled vehicles. However, while both of these credits were retroactively applied to 2012 and extended through 2013, they are not currently extended to 2014 or beyond. APTA will be working diligently throughout the year to ensure these important tax provisions are continued.
PRIIA and RSIA
Farther down the road, Congress will need to address the Passenger Rail Investment and Improvement Act (PRIIA) and the Rail Safety Improvement Act (RSIA), both of which expire in September. The legislation calls for implementation of a high-speed rail program, improvements in intercity passenger rail services, and safety enhancement initiatives. Most notably, it requires installation of a nationally interoperable Positive Train Control network on all passenger and certain freight trains by Dec. 31, 2015. APTA has long advocated extending this deadline to 2018 and for additional federal funding to ensure that commuter railroads can successfully implement the mandate.
APTA has established a task force to examine current law and develop recommendations for the next authorization of federal surface transportation programs. While it may seem as though MAP-21 is still brand new, Congress will likely begin the process of debating successor legislation late this year or early next year. There is debate to what extent the authorizers will alter the program structures found in MAP-21, and there will inevitably be debate about how to finance public transit and highway programs. APTA intends to have industry recommendations for all relevant components ready to assist Congress in the legislative process.
Separately, APTA will monitor opportunities to address the long-term solvency of the Highway Trust Fund, which finances most of the federal public transit program and the entire federal highway program. It is possible that Congress will attempt to address the shortfall this year—current tax revenues do not pay for even existing transit and highway spending—in the context of long-term deficit reduction bills considered apart from the next authorization bill.