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 & Engineering News Roundup

Engineering Week

We’re in the middle of Engineers Week 2013. Unfortunately, it is not uncommon for IW to miss taking not of this week. We encourage you to visit the Web site of the National Engineers Week Foundation. We’ve been tweeting about Engineers Week, and if you use Twitter you can also promote the profession this week with an #EWeek2013 hashtag.

Mayors Support Texas Water Resources Development Plan

The Texas Legislature is considering a proposal to spend $2 billion from the state rainy day fund to pay for projects in the state water resources plan. The mayors of Dallas, Mesquite, Midland, and San Antonio expressed support for the bill (find about this in the Dallas Morning News and the Houston Chronicle).

NAE Honors Engineers

The National Academy of Engineering recognized several engineers with prizes for their contributions to the profession, engineering achievements, and advancements in engineering education. The Draper Prize is especially prestigious, and is sometimes called the “Nobel Prize of engineering.” The Washington Post web site has a very good blog post about the prizes and winners.

National Infrastructure Bank Proposed

Another infrastructure bank proposal has been introduced. This one comes from Rep. John Delaney (MD). His bill would create an Office of Infrastructure Investment in the Department of Treasury. The office would oversee an American Infrastructure Fund and act something like a bank, loaning money to states and guaranteeing state and local bonds. The new release from Rep. Delaney’s office suggests that public-private partnerships will be encouraged by the office, but provides no specifics about how this would work.

In Brief

Fix-It-First

An analyst for the Brookings Institute reminded us that the term “Fix It First” previously appeared in a report from that organization calling for a reorganization of transportation funding priorities (find more about the Hamilton Project here→).  Others have expressed skepticism about President Barack Obama’s seriousness relating to expanding infrastructure investment.

Funding Transportation

The New York Times looked at alternatives to fuel taxes to fund highway maintenance and improvements.  Vermont officials are considering an increase in the state fuel tax.

House Passes Hydropower Bill

The House of Representatives passed the Hydropower Regulatory Efficiency Act of 2013 (H.R. 267).  The bill is intended to promote the development of hydropower projects, primarily by modifying permitting authority and programs of the Federal Energy Regulatory Commission.

Next Transportation Secretary?

Speculation about who will be the next Secretary of Transportation continues.  Railway Age considers several potential candidates including Sen. Chuck Schumer (NY), former Rep. Steve LaTourrette (OH), former Michigan Gov. Jennifer Granholm, Rep. James Clyburn (SC), former Rep. Jim Oberstar (MN), former Pennsylvania Gov. Ed Rendell, and NTSB Chair Debbie Hersman.

Partnership to Rebuild America

In the State of the Union, the president called for a “Partnership to Rebuild America” that would use private investment to partly fund public infrastructure.  A Forbes contributor expressed disappointment that the president did not address the use of tax-exempt bonds.

In Congress

Bill Introduced to Create National Infrastructure Bank for Water

Sen. Jeff Merkle (OR) introduced the Water Infrastructure Finance and Innovation Act of 2012 (S. 3626).  The bill would permit the Environmental Protection Agency to make loans or loan guarantees directly to certain entities for improvements to drinking water, wastewater, and stormwater systems.  Presumably this program would not complete with existing state revolving fund (SRF) programs because it is aimed a large projects (minimum financing of $20 million).

This may seem like a boon to big cities, but considering that most of us live in urban areas that are served by large drinking water and wastewater utilities, it makes sense.  While they’re at it, Congress could increase funding to the SRFs and raise the allotment for private activity bonds, may be even targeting a portion of it for water improvements.

Senate Signals Interest in Tackling Energy Policy

Senators Ron Wyden (OR) and Lisa Murkowski (AK) indicated that the Senate Energy and Natural Resources  Committee will likely be looking at several pieces of legislation next year aimed at updating the nation’s energy policy.

Related posts and articles

Top Senate lawmakers see chance to revamp U.S. energy policy

Whatever is unfinished in our system of public credit, cannot be benefited by procrastination

“Indeed, whatever is unfinished in our system of public credit, cannot be benefited by procrastination; and, as far as may be practicable, we ought to place that credit on grounds which cannot be disturbed, and to prevent that progressive accumulation of debt which must ultimately endanger all governments.”
-George Washington

Our founding fathers were amazingly far sited, as demonstrated by this quote from Washington. Politicians and constituents have for a long time responded to short-term needs or immediate gratification, growing deficits and accumulating debts as if there would never be a price to pay or the revenue would easily materialize when it would be needed. Let us pray that our leaders today will see the folly of that path and put in place policies now that will put us on secure footing for the future.

More Quick Hits

Transportation Measures Mostly Successful
IW previously noted that infrastructure initiatives, referendums and bonds mostly passed during the last election. The American Road and Transportation Builders Association breaks it down.

View of Likely Transportation and Infrastructure Chair
We also noted that the new Congress will see a new head of the House Transportation and Infrastructure Committee, likely Florida Republican Rep. John Micah. The Transport Politic and Tampa Bay Online have analyzed his views on transportation issues, especially high speed rail.

Quick Hits

My blogging in IW has been pretty lazy lately. It’s going to be that way today, too. There is just too much interesting stuff going on in the world of infrastructure to wait until I have time to write about it, so here are some quick hits.

Oberstar Leaving House
Longtime Democratic Representative Jim Oberstar, of Minnesota, lost his bid for reelection last week. He chaired the House Transportation and Infrastructure Committee, so his departure could mean a change in the direction in federal infrastructure priorities, though the ranking Republican committeeman indicates that infrastructure is an investment he and his party can support.

8th District: Cravaack rode GOP wave past Oberstar
Mica Statement on Midterm Elections and the 112th Congress
Oberstar Says Goodbye, Mica Promises Rail and a Long-Term Bill
Oberstar says the people have spoken, bids goodbye
Transportation Lobbyists Vow They’ll Work with the Winners

Infrastructure Measures Did Well On Ballots
We previously mentioned that many infrastructure-related measures were on the ballot in various states and municipalities. It looks like most of them were successful.

2010 Ballot Measures
Big Construction Bonds at Stake this Election
Proposition 1, the Transportation Bond, Approved in Austin
The Silver Lining: 73 Percent of Transportation Ballot Measures Win

Water Groups: Include Water in Infrastructure Bank
Infrastructure bank proposals are still rolling around, but none are likely to pass in the last couple of months of the 111th Congress. Water groups want to make sure that water infrastructure isn’t overlooked in infrastructure bank proposals that might be taken up by the next Congress. There may even be public support for improving aging (and expensive) water infrastructure.

Aging water infrastructure wastes 1.7 trillion gallons a year
Bill Watch--111th Congress
Can We Save America’s Crumbling Water System?
The Corrosion of America
EPA to Survey Community Water Systems to Estimate Capital Investment Needs
Groups Urge Inclusion of Water in Proposed Infrastructure Bank
ITT's Value of Water Survey Reveals That Americans Are Ready to Fix Our Nation's Crumbling Water Infrastructure
The New Oil
Saving U.S. Water and Sewer Systems Would Be Costly
The Value of Water

Missouri: New Transportation Director, High-Speed Rail Funding
The Missouri Highways and Transportation Commissions has appointed Keith Kevin as Director of the Department of Transportation (MODOT). Kevin is a department veteran who served as chief engineer and has been the interim director for the last few months. MODOT also announced it received $4.1 million from the Federal Railroad Administration for high-speed rail projects.

Kevin Keith Named Director of MoDOT
Missouri Gets Another $4.1 Million for High Speed Rail Development
MoDOT Veteran Named New Director

P.S. IW previously mentioned that a St. Louis-area project was in the running for recognition from the American Society of State Highway and Transportation Officials. It won the grand prize.

A Winning Team
Missouri Transportation Infrastructure Draws Attention

Big Construction Bonds at Stake this Election

Bond issues in 12 states will decide the fate of a potential $4.8 billion in bonds for construction. Bonds of this type may not find a welcoming market as bond investors are becoming more concerned that rating agencies are not adequately considering water availability in their evaluations.

Related posts and articles:
Bonds on The Ballots
Government Accountability Office Issues Report on Tax-Exempt Bonds
Water Scarcity a Bond Risk, Study Warns

Missouri Wastewater Financial Assistance Draft Plans Available

The Missouri Department of Natural Resources has made available a draft of its intended use plan for the clean water state revolving fund. In addition to the plan for this federally-funded program, the document also includes the agency’s plans for state-funded financial assistance to wastewater projects. The plan is in draft form and may in affected by public comment or enactment of a federal economic stimulus bill. You can view the plan here.

Bill Introduced to Provide Funding for High Speed Rail

Representative James Oberstar (Minnesota) has introduced the “Rail Infrastructure Development and Expansion Act for the 21st Century” (H.R. 6004). The bill would create a tax exemption for bonds that fund high speed rail projects.

Other high speed rail proposals:
Bill Introduced to Consider High Speed Rail Projects

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.

Ways to Help Low-Income Customers of Water Systems

The affordability of utilities, especially of essential utilities like water, is a concern of much discussion among utility operators, regulators, policy makers and financial assistance providers. It is particularly difficult to balance the need to have rates that support the full cost of the service while still providing essential services to low-income persons. There is upward pressure on water rates because of inflation, especially in construction materials prices, new regulations and aging infrastructure. Here are some strategies for dealing with this issue.

Missouri General Assembly Clears Way for Design-Build-Finance-Maintain Contracts for Highway Projects

The Missouri General Assembly recently closed a special session in which it approved changes to bonding requirements for highway projects. These changes would make it easier for the state highway department to used design-build-finance-maintain contracts. See this post for more information.