DOT Budget Proposes $4 Billion for New Infrastructure Bank

This story appears in the Feb. 8 print edition of Transport Topics.

The Obama administration last week proposed a $4 billion “down payment” on a national infrastructure bank to supplement traditional highway funding, as part of its $78.8 billion budget proposal for the Department of Transportation.

The bank, which could grow to $25 billion, would provide “grants and loans for innovative multimodal projects,” Transportation Secretary Ray LaHood said, and would sidestep spending from the Highway Trust Fund.

Aside from the infrastructure bank proposal, the administration’s 2011 budget calls for essentially flat spending on highways and calls for further delaying reauthorization of the highway program because of concerns about how to fund it.

Creating the new National Infrastructure Innovation and Finance Fund fulfills a campaign promise by President Obama to create an infrastructure bank, LaHood told reporters Feb. 1 during a news conference.

“It gets pretty close to what the president talked about during the campaign,” LaHood said.

In DOT’s budget request, the $4 billion is called a “down payment” on a $25 billion commitment to a bank.

The Obama administration proposed an infrastructure bank in its budget last year, but Congress rejected the plan.

LaHood said he thought the bank’s “prospects are good” this year, because “there’s a great deal of interest in this concept in the Senate.”

LaHood’s budget plan proposed $42.1 billion for the Federal Highway Administration in 2011, down slightly from the $42.8 billion it got in 2010 for road and bridge construction.

The FHWA budget request also included a plan to spend $200 million for the administration’s program “to assist states, local and tribal governments in integrating transportation, land use and conversation of natural resources.”

Tim Lynch, senior vice president of American Trucking Associations, told Transport Topics that with “a flatline budget, there’s not a lot to get excited about.”

“Until and unless they resolve the highway reauthorization process, we’re not likely to see anything much different,” he said.

In the latest budget, the administration reiterated its call for a delay in the authorization process until March 2011.

In January, LaHood said he ex-pected a deal on a new highway bill before the end of 2010 (click here for previous story). Congressional transportation leaders have been pushing for highway reauthorization with ramped-up spending.

LaHood backtracked his earlier statements, telling reporters that what he had previously said about the highway bill was, “ ‘We’re going to work with Congress this year.’ ”

“The president has asked the Congress for an 18-month extension . . . Our goal has always been the 18-month extension” of current transportation legislation, he said.

LaHood said “the biggest dilemma for all of us here is finding 400 to 500 billion dollars, given the fact that the Highway Trust Fund is insufficient to fund all the things we want to do.”

To maintain highway spending until March 2011, the administration’s target date for an extension, DOT’s chief financial officer said Congress would need to transfer money to keep the trust fund solvent.

“The assumption is that there will be a transfer to the Highway Trust Fund in 2010 and in 2011 so that we can have the 18-month extension that we’ve proposed,” said finance official Chris Bertam.

The budget does not specify how much will be needed to shore up the trust fund. Since 2008, Congress has dedicated more than $15 billion of general revenue to the trust fund, which is mainly supported by fuel taxes.

The budget also called for in-creases in safety programs. LaHood said safety “has been and will continue to be one of our very, very top priorities.”

Part of that is a request for $50 million for the National Highway Traffic Safety Administration to issue grants to help states combat distracted driving.

In addition, LaHood said the budget requests funds for 66 new NHTSA safety inspectors and for “118 additional motor carrier safety personnel” at the Federal Motor Carrier Safety Administration.

Overall, the request included an additional $20 million for FMCSA, for a total of $570 million.

DOT requested “nearly $13 million . . . to allow FMCSA to fully deploy Comprehensive Safety Analysis 2010,” of which $7 million would be for 59 new inspectors.

The FMCSA request also included $7.3 million for upgrades to the agency’s information technology systems and $8 million for improvements to the nation’s commercial licensing systems.