Federal Highway Funding

1
Federal Highway Funding

• A Special Presentation for the
• NORA Annual Summer Meeting
• Prepared by
• Jay Hansen
• Vice President Government Affairs

2
National Asphalt Pavement Association

• Asphalt Pavement Industry
• 20 Staff
• Engineering
• Environmental
• Legislative
• Marketing
• Membership

3
Asphalt Pavement Market
4
Asphalt Mix Market

• How big is the highway market for the asphalt
  industry?
• 65
• What is the Federal share of the asphalt highway
  market?
• 44

5
Highway Program

• Total highway spending 70b
• Every 1B 4-5 million tons HMA
• System rehabilitation 50
• Important market for HMA industry
• Drives State and local spending

6
Funding for Highways Under TEA-21 SAFTEA-LU
STEA-LU 3.7/Year
TEA-21 8.5/Year
7
18.3 Does Not Buy As Much
8
HMA Tons Produced in US Million Tons
estimated
9
Impact on NAPA

• Overall Budget Cuts
• Reduced Association staff by 25
• Government Affairs
• Increased legislative portfolio
• Highway funding
• Sustainability issues
• Increased competition from concrete

10
Asphalt Pavement Market 2009

• Market conditions very poor
• Publically Funded Highways - down 4  
• Residential - down 34
• Office and Stores - down 29
• Manufacture - down 5
• Economic Stimulus Bill
• Very disappointing so far

11
Challenging Political Environment

• Bush Administration
• Low agency activity
• Divided government
• Associations
• Period of prosperity
• Little government intervention

12
Challenging Political Environment

• Obama Administration
• High agency activity
• Unified government
• Associations
• Declining budgets
• More government intervention
• Washington matters

13
New Legislative Agenda

• Economy
• Housing, Banking, Auto
• Health Care Reform
• Climate Change
• Deficits
• Transportation Reauthorization Bill

14
Short Term Market Issues

• Economic Stimulus
• FY 2009 Appropriations

15
2009 Construction Season
16
Kentucky Highway Funding

• 2008 562 million
• 2009 568 million
• 421m stimulus
• Total 989 million

17
Medium Term Market Issues

• FY 2010 Appropriations
• Highway Trust Fund Crisis
• Transportation Reauthorization

18
FY 2010 Appropriations

• Impacts next construction season
• Slight Increase proposed
• Highway funding depends on HTF fix
• Need about 17 billion total
• Highway funding also depends on Reauthorization
  Bill

19
Highway Trust Fund Shortfall
Need 7 billion to get through 2009.
20
Highway Funding 2010No New Revenues
Need 10 billion more for 2010.
21
Short-Term Problem Long-Term Issue
Highway Trust Fund
Flat Highway Spending
CBO HTF Balance Forecast
22
Kentucky Highway FundingNo New Revenues

• 2009 568 million
• 2010 366 million
• Difference -202 million

23
Highway Reauthorization
Funding Levels
? ? ? ? ? ?
HMA Market Outlook
24
Annual Investment RequirementsHighways Bridges

• Strong Federal Role
• Today 70 billion
• Maintain 185 billion
• Improve 276 billion
• Increase Funding
• 25c to 40c fuel tax increase
• Indexing, VMT Tax
• Tolling, Bonding, PPPs, etc

25
Political Challenges

• Low Priority for Administration
• Leadership on the Hill
• Opposition to gas tax increase
• Rising gas prices
• Poor economy
• Cap Trades impact on
  energy cost
• No sense of a common plan

26
Environment Challenges

• New Office of Livability
• Push Rail, Bikes, Paths
• Highway/Transit Split Change
• HTF Funding for Transit Operations
• Shift Highway Planning to EPA
• Greenhouse Gas Reductions
• Reduce VMT by 16 over 20 Years
• Green Construction
• RAP, WMA
• Greenhouse Gas Modeling for Paving

27
Concrete Challenges

• ACPA Testimony June 2008
• Called for stronger federal position on pavement
  selection.
• Roll Call Newspaper 2/4/2009
• "The concrete lobby is urging lawmakers to
  include vague qualifiers in the bill's language
  that will instruct local and state governments to
  use concrete for bridge, tunnel and road
  projects."
• Pavement Neutrality Rejected by Concrete
  Industry.

28
Oberstar Bill

• No Allocations, Formulas, Earmarks
• Not Your Fathers Bill
• Livability, Sustainability, Mode Neutrality,
  Intermodal
• Promises 350 billion for highways
• Only 100 billion dedicated exclusively to
  highways
• Remaining would be flexible to spend in
  mode-neutral ways

29
Program Consolidation

• Critical Asset Investment Program
• National Highway System
• Interstate Maintenance
• Bridge
• Will these types of projects compete for funding?

30
Emphasis on Transit

• Mass transit share 18.3 ? 22.2
• New authority for MPOs to shift highway funding
  to transit
• Highway funds can be used to buy buses
• Climate Change Bill
• States must submit transportation plans that
  meet EPA targets to reduce greenhouse gas
  emissions
• disincentive for new highway capacity

31
Office of Livability

• Support policies that advance livable
  communities, modal choice, and sustainable modes
  of transportation
• Federal land-use planning
• Requires metropolitan plans reduce trips in
  single-occupant vehicles
• Encourages Comprehensive Street Design policies

32
Office of Public Benefit

• Review and approve tolls and Public-Private
  Partnerships on Federal-Aid Highways
• Significant barrier and may help keep interstates
  toll-free

33
Latest Status

• Oberstar proposed 6-yr, 500b bill
• No plan to pay for bill
• LaHood proposed 18m extension
• Wants reforms in extension
• Wants it paid for
• No details yet
• Sen. Boxer endorsed 18m extension

34
Items of Interest

• Don James, Vulcan Materials testimony before the
  Senate Environment and Public Works Committee on
  the Impacts of Expected Highway Trust Fund
  Insolvency
• John Keating, Oldcastle Materials testimony
  before a House Transportation Infrastructure
  Committee on the "American Reinvestment and
  Recovery Act 120-Day Progress Report for
  Transportation Programs"
• House Ways and Means Committee hearing on
  "Highway and Transit Investment Needs"

35
Grassroots

• Web Site - Legislative Active Center
• http//legislative.hotmix.org
• Alerts
• Reports
• State-by-State Data
• Legislative Blog on Stimulus Bill

36
Grassroots

• Web Site - Legislative Active Center
• Alerts
• Reports
• State-by-State Data
• Legislative Blog on Stimulus Bill

37
Thank You!Jay HansenVice President
Government Affairsjhansen_at_hotmix.org