In Brief

AIR & WATER

Deposition of Air Pollutants Pollutes Water

Though our pollution control laws are structured around different media, such as air and water, pollutants can move around and have different effects to different degrees in different parts of the environment. The Government Accountability Office (GAO) describes in a report how deposition of air pollutants can affect water quality. In addition, it shows how the media-specific approach to pollution regulation makes it difficult for the Environmental Protection Agency to address this issue.

ENERGY

Coal Here to Stay

GAO published a study of changes coming to coal-fired electrical power generation. Though aging facilities and environmental regulations will be changing it, coal is expected to remain part of the American energy portfolio.

Coal energy is an issue that demonstrates that politics is local. President Obama has faced opposition from his own party for Congressmen and Senators that represent areas that benefit from burning coal for energy (see this article from The Daily Caller).

Senate Committee Hears Navy Energy Nominee

The Senate Armed Services Committee questioned retired Vice Admiral Dennis McGinn as a nominee for Assistant Secretary of the Navy for Energy, Installations and Environment. Naval alternative energy programs were one of the issues of concern.

Related artice: Navy Energy Chief Likely to Be Confirmed After Smooth Hearing (Tracy, R., Wall Street Journal, July 25, 2013)

TRANSPORTATION

Government Looks at Milage Fees

IW has posted several items about the dwindling Highway Trust Fund. One idea that has been floated for raising revenues for highways is to switch from fuel taxes to fees on miles driven. GAO studied the concept for Congress. It’s report includes a review of milage fee program in several countries and pilot programs in the United States.

Google

New Briefs

It’s been a while since I’ve had to post anything on this blog, so some of this news is old. I appreciate those of you who still follow this blog. I hope I can continue to make something worthwhile for you.

Foxx Sworn in As Transportation Secretary

Anthony Foxx has been sworn in as Secretary of Transportation. Foxx was mayor of Charlotte, NC, and has had a career as an attorney and politician.

GAO Critiques Nonpoint Source Program

The Government Accountability Office (GAO) published a report that critiques the Environmental Protection Agency’s (EPA) 319 program. This program (named for the section of the Clean Water Act that authorized it) provides grants to states to undertake activities to reduce nonpoint-source pollution, including subgrants to organizations to implement improvements. They found that the program sometime failed to produce desired results and that EPA’s oversight of the program sometimes was inadequate or produced unintended undesirable results. In addition, a complementary program of the Natural Resources Conservation Service introduces practices that, by themselves, can decrease water quality because their primary intent is soil conservation.

I-5 Bridge Collapse

At this time, IW has no news to add to what has been reported on the I-5 bridge collapse. The collapse of a bridge on I-35 was one of the events that prompted the launch of this blog. IW sends it’s condolences to those affected by this event and wishes the National Transportation Safety Board a fruitful investigation.

Many Highway Projects are Categorical Exclusions for NEPA

GAO published a report on expediting highway projects. One of the interesting things was that many highway projects were considered categorical exclusions for the purpose of review under the National Environmental Policy Act (NEPA). Categorical exclusions are classes of projects that, individually or collectively, have been determined by rule to have no significant environmental impact. These projects receive no or limited NEPA review.

New Appointees to Advisory Committee on Construction Safety & Health

Acting Labor Secretary Seth D. Harris appointed or reappointed eight members to the ACCSH. The new members are

-Sarah M. Coyne of Arizona Construction Training Alliance and

-Jerry Rivera of the National Electrical Contractors Association.

OSHA Extends Deadline for Crane Operator Certification

The Occupational Safety and Health Agency announced its will extend the deadline for certification of crane operators to November 10, 2017. The original rule that was finalized in 2010 established a deadline next year.

Report on Rural Water Infrastructure

The GAO published a report on programs that fund drinking water and wastewater infrastructure in rural areas. In Missouri, agencies that administer the State Revolving Fund (a state-administered EPA-overseen program), Water and Waste Disposal Program (U.S. Department of Agriculture), and Community Development Block Grants Program (a state-administered program overseen by the Department of Housing and Urban Development) coordinate their water funding efforts.

Google

In Congress

Balancing Act

The Balancing Act (H.R. 505) has been referred to several committees of the House of Representatives. The bill is intended to delay sequestrations, improve efficiency, reduce tax loopholes, and extend some programs. Some of the infrastructure related highlights of the bill include

-elimination of several tax breaks related to fossil fuels,

-immediate appropriations for air and surface transportation,

-create an infrastructure bank called the American Infrastructure Financing Authority,

-extending certain tax exemptions on bonds.

If Congress would like to put this blogger to work, it should end this ongoing threat of sequestration and agree on a budget.

Congressional Budget Office Releases 4Q2012 Recover Act Report

The Congressional Budget Office (CBO) released a report on the economic impact of the American Reinvestment and Recovery Act (ARRA) for the last quarter of 2012. During that period, ARRA funded 113,000 full-time-equivalent jobs (FTEs), though this figure does not necessarily correlate to increased jobs in the economy. CBO estimates the economic impacts for the reporting quarter to be

-0.1 to 0.6 percent increase in gross domestic product (GDP),

-0.1 to 0.4 percentage point decrease in unemployment, and

-increased the number of people employed by between 0.1 million and 0.8 million.

Fix It First

President Barack Obama’s Fix-It-First proposal has received some fairly gentile criticism from House Transportation and Infrastructure Chairman Bill Shuster (PA). The plan would provide an additional appropriation of $50 million to transportation projects ($40 million to transportation programs and $10 million to capitalize an infrastructure bank). Rep. Shuster says the proposal fails to address the long-term issue of transportation funding. Current transportation funding sources bring in $35 billion annually, but Congress has approved spending of more than $50 billion annually. You can read more about this issue at The Hill.

Infrastructure & Environment Roudup

Drinking Water Supplies Threatened by Dry Weather

The Associated Press put together a nice, short summary the problem of shrinking water supplies.  You can read it at the NBC News site and see video of a related story.

Earthquake Preparedness: The Great Shakeout

February 7 will be the Great Central U.S. Shakeout.  If you’re a fellow Missourian, find more information at the Missouri Division of Geology.  If you live elsewhere in the central United States, check out the Shakeout Web site (participating states are Alabama, Arkansas, Illinois, Indiana, Kentucky, Oklahoma, Mississippi, and Tennessee).

Highway Trust Fund Out of Money by 2015

The Congressional Budget Office (CBO) has released projections of funds available in the Highway Trust Fund.  They expect it to have insufficient funds to meet obligations by fiscal year 2015.

The Highway Trust Fund is the primary source of money for the federal-aid highway system.  Revenues to the fund come primarily from the federal gas tax.

You can see the CBO projections here→.

Related posts and articles

Highway Trust Fund Running Out of Money (Infrastructure Watch, Feb. 9, 2012)

Hydropower Bill Reported Out of Committee

The Hydropower Regulatory Efficiency Act of 2013 (H.R. 267) was reported out of the House Committee on Energy and Commerce.  The bill would expand hydropower development.

Mississippi River Affected by Drought

We’ve been following stories about the effects of the prolonged drought on the Mississippi River.  Our posts have mostly related to barge traffic and the effort to keep the river open downstream of St. Louis.

NPR has posted an article about the effects at the mouth of the river.  One of the issues is salt water intrusion, which as the potential to change the water quality in that part of the river and has already reached the intake of one drinking water system in Louisiana.  Of course, barge traffic is an issue for New Orleans, too, because the port there is where goods move from river barges to ocean-going vessels.

Recently, barge traffic has been back up by an oil spill on the river, too.  Cleanup of the spill near Vicksburg, Mississippi, continues.

Related posts and articles

Mississippi River barge backup shrinks, oil cleanup continues (Plume, K., Reuters, Feb. 1, 2013)

Rock clearing on drought-hit Mississippi River nears completion (Plume, K., Reuters, Jan. 29, 2013)

Work to Keep Mississippi River Open Continues (Infrastructure Watch, Jan. 29, 2013)

New Staff Leader Announced for Senate Environment & Public Works Committee

Sen. Barbara Boxer (CA), chair of the Senate Committee on Environment and Public Works, announced that Jeremy Symons will join the committee staff as Deputy Staff Director. He will focus on environmental issues, including clean water, air quality, wildlife, and climate change.  Symons currently serves as the Senior Vice President for Conservation and Education at the National Wildlife Federation (NWF). Previously, he was Executive Director of NWF's Climate Change Campaign, held positions in the Environmental Protection Agency's Office of Air and Radiation, and served in Sen. Ron Wyden's (OR) office.

You can read the original news release here→.

Secretary Chu Leaving Energy

Energy Secretary Steven Chu announced he will be resigning his post.  Other officials who announced their resignation include Transportation Secretary Ray LaHood and EPA Administrator Lisa P. Jackson.

Related posts and articles

Outgoing Energy Secretary Warns Of Dangers Of Climate Change (Shogren, E., NPR, Feb. 1, 2013)

Recovery Act Review

Economic Impacts of ARRA 

The Congressional Budget Office (CBO) reports quarterly on the estimated economic impact of the American Reinvestment and Recovery Act of 2009 (ARRA).  In its report for the third quarter of 2012, it estimated that ARRA funded more than 135, 000 jobs (full-time equivalents, or FTEs).  It expects 90 percent of ARRA’s budget impacts will be realized by the end of the year.  It projects that ARRA will increase they budget deficit by $833 billion by 2019, up from its original estimate of $787 billion.

Cleanup Projects

 The Department of Energy (DOE) received $6 billion from ARRA for the cleanup of DOE-managed sites that produced nuclear material.  According to a Government Accountability Office (GAO) report, ARRA-funded jobs peaked in the fourth quarter of 2010 at about 11,000 FTEs.  They reduced the footprint of managed sites by 70 percent; that is they cleaned up more than 650 square miles.

Beginning with ARRA, DOE implemented a project management approach that broke down projects into more manageable pieces.  GAO found that this practice may have allowed the agency to classify projects in a way that may have allowed them to avoid certain review processes.  In addition, inconsistencies in developing project scope, schedules and targets, along with variability in documentation, makes it difficult to accurately assess and compare project and program performance.

State and Local Management of ARRA

State and local governments had significant responsibilities in managing ARRA funds as recipients.  GAO reported findings related to their review of state and local management.  Some of those findings include:

-The emphasis on obligating ARRA funds resulted in delayed obligation of other funds.

-Recipient expertise effected the management of ARRA funds.  Particularly, state agencies tended to have more success in managing their ARRA projects that local agencies because of greater familiarity with federal requirements.

-Unclear guidance caused problems for various projects.

-Internal controls of some recipients were not adequate, at least at the start, for monitoring compliance with ARRA requirements.

Related posts and articles

American Reinvestment and Recovery Act New (Infrastructure Watch, Dec. 4, 2012)

Coverage of Infrastructure Economic Stimulus (Infrastructure Watch, May 14, 2009)

Economic Stimulus Funds 2000 Transportation Projects (Infrastructure Watch, Apr. 14, 2009)

Government Accountability Office Watches Recovery Act Implementation (Infrastructure Watch, Aug. 23, 2010)

Infrastructure & Stimulus News (Infrastructure Watch, June 17, 2010)

Missouri Top State in Wastewater Stimulus Funding Use (Infrastructure Watch, Mar. 28, 2010)

News about the American Reinvestment and Recovery Act (Infrastructure Watch, Sept. 14, 2011)

Recovery Act Infrastructure Criticism (Infrastructure Watch, Sept. 18, 2012)

Recovery and Stimulus News (Infrastructure Watch, Mar. 25, 2011)

Reviewing the Recovery Act (Infrastructure Watch, Aug. 2, 2011)

States Obligate All Highway Stimulus Funds (Infrastructure Watch, Mar. 10, 2010)

Summary of Transportation Stimulus Oversight Findings (Infrastructure Watch, Sept. 27, 2009)

Reviewing the Recovery Act

Infrastructure Watch has been following the American Reinvestment and Recovery Act (ARRA) since it was enacted. While infrastructure accounted for a relatively small amount of the total supplementary appropriations provided by ARRA, tens of billions of dollars is noteworthy in any industry. Much of the money that went to infrastructure has been spent and ARRA will begin a slow wind-down from the perspective of infrastructure. It seems like a good time for a review of the program and it effects so far.

INFASTRUCTURE INVESTMENT

ARRA committed only a fraction of its supplementary appropriations to infrastructure. Even so, the $62 billion appropriated to transportation and water infrastructure was significant considering that federal spending in this area had been declining. In 2009, this resulted in a $6 billion increase in federal infrastructure spending, of which $4 billion was directly from ARRA.

The Congressional Budget Office (CBO) estimates that 90 percent of these funds will be spent by 2013. The Government Accountability Office (GAO) had reported that 90 percent of the highway funds had been obligated by February 2010 and about a quarter of that had been paid out to state transportation programs. The clean water and drinking water state revolving fund (SRF) programs had drawn almost 80 percent of the funds by June 2011.

The author and others working in these industries are already looking for what projects or business lines might have the potential to bring in revenues as the ARRA well runs dry in a few years. The prospects aren’t entirely gloomy. Generally, the federal government accounts for only 25 percent of the spending on transportation and water infrastructure. The rest comes almost entirely from state and local governments.

Though federal funding is a minority of the investment in infrastructure, it is a significant portion of the capital investment, with relatively little going to operations and maintenance. This trend continued with ARRA. Smart Growth America criticized ARRA because to much went the construction of new transportation assets and too little to repairing existing infrastructure. They thought the extra appropriation would have been better spent and had a greater economic stimulus if more of it had been spent on the repair of existing infrastructure.

Maintenance of Effort
Though states are already a significant contributor to spending on transportation efforts, ARRA required states to continue funding transportation at the level they would have without the extra funding. Congress wanted to increase spending on transportation infrastructure, not give states a way to shift money to other areas.

The requirement has proven problematic. States are facing losses of revenue that may have forced them to cut transportation spending anyway. In addition, ARRA didn’t require to report what there level of effort would be until several months after they began to use the funds. States may not have, strictly speaking, circumvented the maintenance of effort requirement, but it has become difficult to say they have continued funding as they would have anyway.

JOBS CREATION
ARRA recipients reported more than 580,000 full time equivalent (FTE) jobs in he last quarter of 2010. The way jobs are reported by recipients makes it difficult to determine the exact impact of ARRA on jobs.

ARRA recipients report work-hours that were paid for out of the ARRA funding. In the case of an infrastructure project, these work hours might involve construction trades, construction management, engineering design and oversight, and other services (legal, environmental, and more). The nature of these jobs means that the people may be working part-time on ARRA projects while working part-time on other projects, or temporarily work full time on an ARRA project. It is easy to add up the hours and calculate an FTE. It is difficult to know if any of these jobs were created ARRA, or if they might have ended except of ARRA, or might not have been affected.

This type of reporting has a built-in decline as ARRA money is spent down and projects end. Reported ARRA-related jobs is already declining in the SRF programs. ARRA-related jobs reported from SRF programs peaked in the Spring of 2010 and have declined since. Some foresaw a post-stimulus jobs drop even as it was just getting off the ground.

The author is an example these features of jobs reporting, ARRA work having accounted of about a quarter of an FTE in relation to him over the last 19 months. It’s impossible to say what, if any, other work the author may have done if not involved in ARRA projects; he’s glad to have good projects from wherever they come. When he transfers his effort to other work, hopefully, over the next year or so, his hours reported for ARRA will decline and end.

In addition, only some of the ARRA-funded programs are required to report jobs. Those that report jobs only have to trace them so far, to primary contractors and their subcontracts. It is a practical impossibility to count the jobs created or retained by such a program.

Even so, CBO made a go at estimating it. They estimate that ARRA increased the number of people employed by between 1.3 million and 3.5 million in the last quarter of 2010.

CONSTRUCTION COSTS
In the years before ARRA, construction costs had been rising more rapidly that prices the rest of the economy. Bucking that trend, GAO reported that many ARRA-funded projects were receiving bids that were lower than expected. The author has heard from water utilities and state revolving fund programs that a similar trend is occurring in drinking water and wastewater projects.

The thought is that the recession has made the environment very competitive and more bidders are going after each job. In response, contractors are taking minimal profits in order to get projects and stay afloat until the economy recovers. The Associate General Contractors of America has even suggested that contractors have bid projects at less than cost for that purpose.

This drop in bid prices is a reflection of the economic environment, not a response to ARRA. The touted “bid savings” that have ostensibly allowed the ARRA dollars to stretch farther have provide the same benefit to all the other money spent on construction.

MACROECONOMICS
CBO estimates that ARRA increased the gross domestic products (GDP) by between 1.1 percent and 3.5 percent in the last quarter of 2010.

FEDERAL DEFICIT
CBO estimates that the ARRA will increase budget deficits by $821 billion between 2009 and 2019. They estimated 70 percent of that, approximately $575 billion, was realized by the end of September 2010.

REFERENCES
The following references were used in the preparation of this review of ARRA.

Congressional Budget Office (CBO). Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2010 Through December 2010. Washington, DC: CBO, 2011.

-----. Public Spending on Transportation and Water Infrastructure. Washington, DC: CBO, 2011.

Cooper, M. Companies pretty up prices to win stimulus projects. New York Times. March 28, 2009.

Farley, R., & Grabell, M. ProPublica and PolitiFact test Obama claims on stimulus. ProPublica. Nov. 10, 2010.

Fields, G. Job cuts loom as stimulus fades. Wall Street Journal. Dec. 1, 2009.

Government Accountability Office (GAO). Recovery Act: Funding Uses for Transportation Infrastructure Projects, but Some Requirements Proved Challenging. Washington, DC: GAO, 2011.

-----. Recovery Act: Funds Supported Many Water Projects, and Federal and State Monitoring Shows Few Compliance Problems. Washington, DC: GAO, 2011.

-----. Recovery Act: One Year Later, States’ and Localities’ Uses of Funds and Opportunities to Strengthen Accountability. Washington, DC: GAO, 2010.

Smart Growth America. Recent Lessons from the Stimulus: Transportation Funding and Jobs Creation. Washington, DC: Smart Growth America, 2011.

The following references are offered for those interested in additional information on ARRA.

Infrastructure Watch (blog). Coverage of infrastructure economic stimulus. May 14, 2009.

-----. Coverage of infrastructure in economic stimulus. Apr. 14, 2009.

-----. Government Accountability Office watches Recovery Act implementation. August 23, 2010.

-----. Infrastructure & recovery news. Oct. 8, 2010.

-----. Infrastructure & stimulus news. June 17, 2010.

-----. Infrastructure economic stimulus in the news. July 1, 2009.

-----. Infrastructure stimulus. Jan. 27, 2011.

-----. Recovery Act and infrastructure in the news. Jan. 26, 2010.

-----. Recovery Act and infrastructure in the news & elsewhere. Aug. 1, 2009.

-----. Recovery Act and infrastructure news. May, 11, 2010.

-----. Recovery & stimulus news. Mar. 25, 2011.

-----. Show me the money: Stimulus & infrastructure news. July 7, 2010.

-----. Summary of transportation stimulus oversight findings. Sept. 27, 2009.

-----. USDOT redirects high-speed rail stimulus away from slow states. Dec. 21, 2010.

McNamar, T. Profiles from the recession. Blueprint America (blog). Sept. 15, 2010.

Government Accountability Office Watches Recovery Act Implementation

The Government Accountability Office (GAO) has monitored the implementation of the American Recovery and Reinvestment Act (ARRA)and issued several reports. Some of the issues raised by the GAO are summarized below.

Jobs Reporting
ARRA requires assistance recipients to report on jobs created and retained by their projects. GAO found that there were inconsistencies in guidance and the calculation of full time equivalents (FTEs) that might affect the reported figures and the aggregation of jobs. They believed that recipients were making a good faith effort to report correctly.

Federal Requirements Effect Project Timing, Selection, Starts
GAO found that federal agencies and states reported that federal requirements related to ARRA affected the timing, selection, and starts of projects. The requirements that seemed to have the most effect were Davis-Bacon and Buy American.

The Davis-Bacon Act requires contractors on federal projects to pay local prevailing wages to laborers and mechanics. Generally, it applies to direct contracts with the federal government. It applies to all projects that are funded with ARRA funds. Timing of some projects was effected by this requirement. It seems likely that this is because these requirements are new to 40 programs because of the attachment of the requirement to ARRA funds.

The ARRA Buy American requirements are new to all the affected programs. The selection and start of some projects were effected by this requirement.

Though some projects were affected by federal requirements, it appears they have caused few significant problems for overall program implementation. Only a few agencies surveyed by GAO reported major problems.

The information for this post was draw from these GAO reports:
Officials’ Views Vary on Impacts of Davis-Bacon Act Prevailing Wage Provision (
GAO-10-421)
Project Selection and Starts Are Influenced by Certain Federal Requirements and Other Factors (GAO-10-383)
Recipient Reported Jobs Data Provide Some Insight into Use of Recovery Act Funding, but Data Quality and Reporting Issues Need Attention (GAO-10-223)

GAO has also issued these reports on ARRA:
One Year Later, States’ and Localities’ Uses of Funds and Opportunities to Strengthen Accountability (GAO-10-437)
California’s Use of Funds and Efforts to Ensure Accountability (GAO-10-467T)
Clean Water Projects Are Underway, but Procedures May Not Be in Place to Ensure Adequate Oversight (GAO-10-761T)
Contracting Approaches and Oversight Used by Selected Federal Agencies and States (GAO-10-809)
Factors Affecting the Department of Energy's Program Implementation (GAO-10-497T)
Increasing the Public’s Understanding of What Funds Are Being Spent on and What Outcomes Are Expected (GAO-10-581)
Recipient Reported Jobs Data Provide Some Insight into Use of Recovery Act Funding, but Data Quality and Reporting Issues Need Attention (GAO-10-224T)
States’ and Localities’ Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability (GAO-10-604)
States’ Use of Highway and Transit Funds and Efforts to Meet the Act’s Requirements (GAO-10-312T)

Check out these posts and articles for additional information on ARRA:
Infrastructure & Stimulus News
Recovery Act and Infrastructure in the News
Recovery Act and Infrastructure News
Show Me the Money: Stimulus & Infrastructure News
States Obligate All Highway Stimulus Funds
What’s Up in Congress

Summary of Transportation Stimulus Oversight Findings

The Government Accountability Office (GAO) has been watching the use of transportation funds provided by the American Reinvestment and Recovery Act (ARRA). Here are some of their major findings.

-Bids for projects have often come in lower than expected because of the number of contractors looking for work.

-State selection of distressed areas to receive priority for stimulus projects may be based on criteria other than those specified in ARRA.

-States are emphasizing pavement rehabilitation and repair because these projects require less design work and environmental review.

-States are modifying their systems to track stimulus funds.

-States are concerned about the ability of other funding recipients to track stimulus funds.

-States may have trouble complying with the requirement to not reduce their levels of effort in areas covered by ARRA because of fiscal constraints (and the temptation to not put money where you have money).

-States vary in how they intend to assess the impact of stimulus funds, but many are concerned about hot to assess the impact on jobs.

You can find out more about these findings from these GAO reports:
Recover Act: Initial Results on States’ Use of and Accountability for Transportation Funds (GAO-09-597T)
Recovery Act: States’ and Localities’ Current and Planned Uses of Funds while Facing Fiscal Stress (GAO-09-831T)
Recover Act: States’ Use of Highway Infrastructure Funds and Compliance with the Act’s Requirements (GAO-09-926T)

Government Accountability Office Summarizes Shipments on the Missouri River

The Government Accountability Office (GAO) has issued a report (GAO-09-224R) to members of Congress summarizing the shipments of materials on the Missouri River in the four states that are served by barges and other vessels on it. Most of the shipments were in Missouri (83 percent) and were of sand and gravel (84 percent). Of the sand and gravel shipments, most (54 percent) were transported 1 mile or less.

All the data used in the report are based on tonnage. It does not address the value of materials (which include chemicals, farm products and manufactured goods) or the economic impacts of shipping and barge traffic on the river.

Government Accountability Office Reports on Need for Water Infrastructure Investment

In a report on drinking water lead compliance and other water infrastructure needs of the District of Columbia Water and Sewer Authority, the Government Accountability Office also addressed water infrastructure needs nationwide. Estimates of water infrastructure needs in the U.S. range from $485 billions to $1.2 trillion. About three-fourths of the existing infrastructure is underground pipe (about 800,000 miles of drinking water lines and nearly as many miles of sewers).

Funding for this infrastructure is a major issue. The revenues of many utilities are not sufficient to keep up with infrastructure needs. Funding for the largest federal drinking water and wastewater infrastructure programs have be flat or declining.

The full report is available here.

Government Accountability Office Issues Report on Surface Transportation Programs

The Government Accountability Office (GAO) has issued a report (GAO-08-400) on the state of federal surface transportation programs. The report dealt with both the effectiveness of programs and the sustainability of present funding schemes.

GAO found that, as federal involvement in highways has grown since the 1950s, the government has produced a hodge-podge of programs with vague goals and uncertain federal roles that are sometimes contradictory (the agency put it somewhat more gently than that). The result is programs that don’t effectively address current issues like congestion and heavy freight traffic. They recommend that Congress undertake creating more clear definitions of the role of federal transportation agencies, desired results of programs, and outcomes expected from recipients of federal aid.
GAO also addressed projected shortfalls in federal transportation trust funds. Deficits in some of these funds may begin as early as next year for the major federal highway fund. (Last fall, the Congressional Budget Office issued a report on this shortfall.)

Government Accountability Office Issues Report on Tax-Exempt Bonds

The Government Accountability Office has issued a report on the growth and uses of tax-exempt bonds. The report discussed both government and private activity bonds. These bonds are a major source of financing for public works. Something we found interesting was that, in recent years, transportation, utilities and environmental projects combined accounted for just over 23 percent of the tax-exempt bonds issued. The largest single category of projects was education (including elementary, secondary and higher education) accounted for almost 33 percent. You can find the full report here.

Government Accountability Office Reports on Federal Utility Oversight

The Government Accountability Office (GAO) issued a report on the Federal Energy Regulatory Commission’s (FERC) regulation of mergers since the enactment of the Energy Policy Act of 2005. This act reduced restrictions on the types of companies that could hold and interest in electric and natural gas utilities.

The major concern of the report is prevention of cross-subsidization. Large interstate holding companies may have interests in utilities, services to utilities and other businesses. The holding company may provided common services (like legal and administrative services) to the businesses the own. In cross-subsidizing, a holding company would disproportionately charge these costs to the utilities, overcharging them an leading to higher utility rates, and using that to subsidizes its other businesses.

GAO suggests that FERC does not adequately consider the risk of cross-subsidization in its review of mergers and subsequent oversight. FERC has responded that it has the rules in place and expertise to enforce the requirements of the law.

The report includes an overview of the history of federal energy regulation. It is worth skimming the report for that. You can view the full report here.