The Road Information Program, a private nonprofit also known as TRIP, provided NASBP with an update on the potential shortfall facing federal funding for highway infrastructure projects in a presentation Sunday, during the association’s Annual Meeting.
The confluence of two major factors poses great uncertainty for such funding, said Will Wilkins, executive director of TRIP. The Federal Highway Trust Fund could run out of money as soon as August, he said. Meanwhile, September is when the Moving Ahead for Progress in the 21st Century Act, or MAP-21, which provides funding for surface transportation projects, is set to expire.
A “perfect storm”
Lawmakers in the past have simply appropriated more money to keep the trust fund from running out, but that’s expected to be more difficult in the currently divided state of Congress, Wilkins said.
Wilkins outlined some solutions that could be considered, emphasizing that TRIP doesn’t lobby, but instead provides information on road infrastructure needs and the implications of not addressing those needs.
But one possibility, raising the gas tax, is also an unlikely step for Congress, and the tax would need to increase from 18.4 cents to 29 cents per gallon to offset the $13 billion shortfall, Wilkins said. Even that would be “basically treading water” because it would only maintain current conditions, he added.
The other alternative is to cut the program by as much as 92% for highway projects, he said.
These factors are creating a “perfect storm” for the Federal Highway Trust Fund, and contractors and sureties are affected as states have recently cut back on their lettings, Wilkins said.
“This is a real threat,” he said.
There is some speculation, however, that Congress may allocate $10 billion to keep the trust fund solvent through the end of the calendar year, then “punt” the future funding decision to Congress in a lame-duck session, he said.
Raising awareness
TRIP has released reports on the importance of reauthorizing long-term surface transportation funding in nine states so far in 2014 and plans to release reports in a dozen more states this year, Wilkins said.
“It’s our hope that by getting out there [and] releasing these reports … that the resulting news coverage will help inform motorists, voters and their elected leaders that their lives are impacted by this every day if Congress fails to act,” he said.
The report and related news conferences in North Carolina, for example, garnered front-page news articles, and they prompted the governor to call on businesses to tell lawmakers “to get unparalyzed.”
In addition to creating an excessively bumpy ride, roads in poor condition contribute to higher vehicle costs, more time spent in traffic congestion and crashes in some cases, he said.
The congestion also creates pollution, and problems with roads have “really become a quality-of-life issue for all American citizens,” said Howard Cowan of Cowan-Hill Bond Agency in Lubbock, Texas, who is a member of NASBP and TRIP’s board.
A long relationship
The relationship between TRIP and NASBP goes back to 1971, when TRIP was founded, Wilkins said, as NASBP has long realized “the importance of public education for funding surface transportation projects.” A healthy market for such projects is good for writing surety bonds, he said.
And TRIP is an invaluable asset because of the “rigorously objective, fact-based” information it provides, Cowan said.
Eric Zimmerman of Propel Insurance in Seattle, also a member of NASBP and of TRIP’s board, said that TRIP works through local chapters of associations and chambers of commerce in a “grassroots” and “behind-the-scenes” fashion. TRIP has a direct impact on surety producers’ public-works client base by producing economic reports that spread the word about of infrastructure projects’ economic benefits by region, he said.