Policy and Legislative Services

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4-24-2015 Federal Transportation Briefing

FY 2016 Budget

This week, the House and Senate conferees met to reconcile the differences between the two FY 2016 budget bills, H Con Res 27 and S Con Res 11. The two proposals have identical top-line amounts: $1.017 trillion (similar to FY 2015) and both allow for increased transportation spending if additional revenue is found. The major differences lie in the out-year levels (which are non-binding), the amount of military spending, and use of a mechanism to bypass the 60-vote threshold.

Despite passage of the budget bills in each chamber, however, the possibility remains that leadership will reach an agreement to temporarily suspend the strict cap they contain.

FY 2016 Appropriations
The House Appropriations Committee made the decision to work within the $1.017 trillion cited in both bills, and divided it this week between the individual subcommittees (“302(b)” allocations).

Unlike most, the Transportation, Housing and Urban Development subcommittee (T-HUD) would receive an increase over FY 2015. However, the $1.5 billion in additional funds will likely go to HUD. For transportation, discretionary programs such as Amtrak and TIGER will probably be funded at or near FY 2015 levels. The 302(b) allocations do not impact obligation limitation for highway, transit and AIP, since funding for those programs comes mainly from the trust funds.

With their allocations in place, the various subcommittees can now begin writing separate appropriations bills. However, as in years past, some or all of the bills may end up rolled together in an omnibus.

Surface Transportation Reauthorization
Another extension of MAP-21 is a virtual certainty, since the current legislation expires May 31 and little progress has been made on a multi-year replacement.

Senate – Senator Boxer said on April 15 that the Environment and Public Works Committee has nearly completed the highway portion of a six-year bill to replace MAP-21. The Banking Committee has scheduled a hearing for April 29 to discuss the transit portion.

House – no proposal yet from the Transportation and Infrastructure Committee, which writes most of that chamber’s bill.

Highway Trust Fund
The timing and duration of an extension is complicated by the fact that, without intervention, the Congressional Budget Office projects that the Highway Trust Fund faces insolvency by the end of July. As a result, an extension to the end of the fiscal year would require a transfer of about $3 billion from the general fund into the HTF. While there is general agreement on the need for a transfer, issues remain regarding offsets.

Nearly a dozen separate bills have been introduced to create a longer-term solution to this problem. The proposed remedies include funding sources such as: repatriation; taxing the sale of stocks; imposing a fee on the transportation of goods; and increasing the federal gas tax, with rebates to taxpayers with incomes under a certain level.

This week, text was released for HR 1846, which would transfer $16 billion from the general fund to the Highway Trust Fund and deem it a “repayable advance.” At the same time, the gas tax would be indexed, with the increased funds going first to “repay” the general fund. The bill also establishes a commission to find a long-term solution for transportation funding, with a trigger for an automatic increase in the federal gas tax if no solution is put into place. (However, the HTF would still face insolvency in FY 2017.)

Aviation Reauthorization
The Senate Commerce Committee has held three hearings so far this month on aviation issues, and has scheduled a fourth for April 28: “FAA Reauthorization: Aviation Safety and General Aviation.” The House Transportation and Infrastructure Committee has held several hearings as well, including two in March. The current aviation reauthorization bill expires on Sept. 30, 2015.
Funding/authorization expiration dates:
Sept. 30, 2015 – transportation appropriations (HR 83, T-HUD)
Sept. 30, 2019 - water resource and development programs (WRRDA of 2014)
Sept. 30, 2013 - passenger rail and freight safety programs (PRIIA of 2008)
May 31, 2015 - surface transportation programs (MAP-21 extension, in HR 5021)
Sept. 30, 2015 - aviation programs (Air Transportation Modernization & Safety Improvement Act, 2012)

Prepared by:
Office of Policy and Legislative Services
Iowa Department of Transportation