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Federal Update

Federal Update. July 25, 2014. FY 2014 Federal Update. Highway Trust Fund (HTF) C ashflow problems Highway Trust Fund Long Term Solvency FY 2015 Appropriations MAP-21 Reauthorization FY2014 State Legislative Session Highlights. HTF Cashflow Update.

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Federal Update

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  1. Federal Update July 25, 2014

  2. FY 2014 Federal Update • Highway Trust Fund (HTF) Cashflow problems • Highway Trust Fund Long Term Solvency • FY 2015 Appropriations • MAP-21 Reauthorization • FY2014 State Legislative Session Highlights

  3. HTF Cashflow Update • Highway Account cannot fall below $4 billion cash reserves • This cashflow issue is estimated to occur in mid-August • FHWA cash management process announced to begin on August 1 • U. S. Congress goes on recess for the entire month of August, a legislative solution needs to be passed by the end of July

  4. HTF Legislation Update • The House passed a bill that provides a $10.8 billion HTF “patch”, and a MAP-21 extension until May 2015 (8 months) • The Senate has to decide what to do next – do they put the House bill to a vote on the Senate Floor? Do they make amendments to the House bill and send an amended bill to the Senate floor? At the moment, they have not decided. • While the HTF “patch” amount is the same in both the House bill and Senate amendments, one particular Senate amendment has the MAP-21 extension until the end of December 2014. • The difference in the length of the extension is connected to the November elections. Democrats want to work on the MAP-21 reauthorization bill during the lame duck period.

  5. HTF Longterm Issues • Currently, HTF outlays are $16 billion/year more than revenues • Since 2008, over $50 billion in general funds have been transferred to keep the HTF solvent • Current gas tax revenues cannot support MAP-21 funding levels ($629 million FHWA funding for FY 2014 ) • Steady loss of the purchasing power of the gas tax due to decreased fuel consumption and inflation • No Congressional appetite to increase revenues

  6. FY2015 Appropriations • MAP-21 formula funding levels used in both Senate and House bills • Senate bill contains funds for TIGER, Amtrak and New Starts, that the House bill does not contain • HTF cashflow crisis must be resolved for Appropriations to proceed • Not on schedule. FY 2015 begins on October 1, 2014, and we still do not have an appropriations bill

  7. Transportation Deadlines • Four key interrelated deadlines requiring legislation: Problem Expiration Date Highway Trust Fund runs out of Money                                                                        Mid-August, 2014 MAP-21 Programs and Contract Authority Expire September 30, 2014 Trust Fund Permission to Pay Claims ExpiresSeptember 30, 2014 Current Law HTF Taxes Expire                                                                      September 30, 2016

  8. Surface Transportation Reauthorization • MAP-21 ends on September 30, 2014 • Obama Administration and Senate Environment and Public Works Committee released proposals in 2014 • Additional funding or revenue ($16 billion/year) needed merely to meet current funding levels. • MAP-21 Implementation (Rulemaking) is incomplete

  9. 2014 State Legislative Session Transportation Highlights • $31.5 million for Corridors of Commerce • $30 million for winter maintenance costs • $23 million to support operations and maintenance (including LED lighting, innovations in pavement repair, accelerated replacement cycle for snow plow fleet • $54 million for local road upgrades • $33 million for local bridges • $4 million for at-grade rail crossings, and two additional statewide rail track inspectors based on concerns with the hauling of Bakken Crude Oil by freight rail through the state

  10. Questions? Serge Phillips, Federal Relations Man651-366-3075 Email: sergius.phillips@state.mn.us Serge Phillips, Federal Relations Manager MnDOT Office of Government Affairs Ph: 651-366-3075 Email: sergius.phillips@state.mn.us

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