Monday, October 19, 2015

Surface Transportation House Markup Falls Far Short

Congress will undoubtedly come up with a short term patch to end the impending crisis when federal highway trust fund spending authority ends October 29. There is still no long term solution in sight, however, and both the Senate’s three year bill passed there July 30 and the House Transportation and Infrastructure version slated for markup today fall far short of the customary six year authorization legislation which would enable state and local governments to plan rationally for infrastructure maintenance, repair, replacement and growth. Gaping revenue shortfalls in the Highway Trust Fund loom just over the horizon, and neither the House nor the Senate version contemplates funding beyond the next three years. Furthermore, both proposed measures are about $30 billion under the projected three year needs.

No Congressman or Senator up for reelection is willing to propose increased motor fuel taxes, and there is no viable source of alternative or supplemental revenue on the table to fill that gap, much less provide any dollars at all for years four, five and six. The House bill being marked up today provides for blocking all funding in 2019 through 2021 unless Ways and Means can come up with an additional $40 billion in those years.

The House committee markup bill allocates $261 billion for highway construction, $55 billion for public transit, and $9 billion for highway safety improvements over the six year authorization period totaling $325 billion. The Senate version passed earlier is $25 billion richer, for a total of $350 billion. Neither bill, however, comes the least bit close to indicating where all that cash will come from. So, next week’s punting of this problem into the 2016 legislative sessions will be followed by a “hail Mary” pass play which could fall halfway short of the goal line for America’s roads, bridges, rails and waterways.

Exelon Drops Nuclear Plant Closure Threat – For Now

In a curtsey toward the truth that threats as lobbying tactics provide little leverage, Exelon has promised to continue operating its nuclear power generating plants, at least for a few more years, in the face of inaction by the Illinois legislature on the company’s proposed $300 million rate hike for generating carbon free electric power. Exelon promises to continue operating the Quad Cities reactor facility through May, 2018, and the Byron facility through May, 2019, though it equivocated on the future of the Clinton reactor.

In making the announcement dropping the threat of imminent reactor closures, Exelon CEO Chris Crane said: “Policy reforms are still needed to level the playing field for all forms of clean energy and best position the state of Illinois to meet EPA’s new carbon reduction rules.” Opponents of the company’s bill say no bailout of reactors is needed, because Exelon profited $1.6 billion in 2014.

The true cause of the legislature’s failure to vote on the proposal this year, though, is the overriding gridlock over the state’s budget crisis, rather than ratepayer opposition to the legislation. Expect to see similar measures introduced next year, once Governor Rauner’s tiff with legislative leaders over his fiscal reforms has finally been resolved.

GOP House Leadership Dustup Drops Highway Funding Bill Into Another Abyss

John Boehner’s announcement of his resignation as Speaker, and Kevin McCarthy’s abrupt withdrawal from the race to succeed him, have plunged into limbo once again all hopes for resolution of the Highway Trust Fund’s long term funding issues before the current patch expires on October 29, 2015. Look for another short term bill to keep funds flowing to road and bridge construction projects around the nation while Congress once more punts the problem into the 2016 legislative session.

House Transportation and Infrastructure Chairman Bill Schuster (R-Pa.) has scheduled his full committee’s markup of the House version of a three year Highway Trust Fund appropriation bill for 10:00 a.m. October 22, in Room 2167 of the Rayburn House Office Building, just one week before the current authorization expires on October 29. That leaves clearly insufficient time for action on the House floor, and a conference committee resolution of differences with the Senate’s three year, $50 billion bill passed 65-34 by the Senate on July 30.

Announcing the markup session, Chairman Schuster said: “Our nation’s economy depends on a safe, efficient surface transportation system … Next week, the Committee will move forward with the policy and authorization provisions of a bill to improve America’s surface transportation infrastructure, reform programs, refocus those programs on national priorities, provide more flexibility and certainty for state and local partners, and welcome innovation.” He neglected to explain how he proposes to fill the cash gap between shrinking motor fuel tax revenues and growing repair and replacement needs for roads, bridges, rails and waterways which move our nation’s citizens and cargo.

Drinking Water Loan Program Locks Up $1.1 Billion Slated For State And Local Systems

Tax dollars appropriated, but unspent, in the Drinking Water State Revolving Fund totaling about $1.1 billion could be deployed to repair and improve the nation’s drinking water supply systems, but poor management, project delays and administrative difficulties have prevented use of the money for its intended purpose. Twenty percent of the cash set aside for repairing and replacing leaking pipes and water mains, century old storage tanks, and decaying treatment plants gets spent for paying the salaries of state water employees, while lack of matching funds and inability to repay loans from the Revolving Fund with inadequate water ratepayer revenue have slowed applications for funding to a crawl.

Systems around our nation suffer 700 water main failures every day. Political inertia blocks water rate increases which could pay for system maintenance and improvements, and more frequent and more disruptive failures will continue if the locked up funds remain unspent, according to American Society of Civil Engineers past president Greg DiLoreto: “Americans have to understand that if they want this system, they are going to have to be willing to finance it.”