By David Bauer, senior vice president of government relations, ARTBA

U.S. Transportation Secretary Elaine Chao June 15 told members of the House Transportation Appropriations Subcommittee that the Trump administration’s budget “challenges all of us to rethink the way we are setting our priorities.” She also discussed the administration’s infrastructure initiatives.

Chao said the budget requests funding levels for the highway and public transportation programs are consistent with the Fixing America’s Surface Transportation (FAST) Act surface transportation reauthorization law.  She added the administration is not requesting new funding for new projects under the transit Capital Investment Grant program, which supports light rail and other transit infrastructure projects. Following the administration’s recommendations would lead to a $900 million reduction in transit construction activities in FY 2018—contrary to the FAST Act.

While Chao touted the budget’s support for the FAST Act in FY 2018, she did not discuss the administration’s proposal to hold highway and transit investment at FY 2018 levels in FY 2019 and FY 2020—an approach that would forgo nearly $4 billion in FAST Act authorized and funded surface transportation investments. Her testimony also sidestepped the administration’s plan to cut Highway Trust Fund (HTF) spending by $95 billion from FY 2021 to FY 2027 as a result of constraining spending to what existing revenues could support.  While the House has approved budget resolutions in the past that included a similar concept, lawmakers in both chambers have routinely approved legislation to stabilize the trust fund and prevent devastating cuts to highway and public transportation investment.

Chao’s testimony also expanded on her past public statements regarding the Trump administration’s infrastructure initiative.  She told subcommittee members that while transportation will be a component of the package, “the entire initiative will encompass other Federal programs as well.”  She added that the plan would:

  • “Make targeted Federal investments on the most transformative projects…that will change the nature of how infrastructure is designed, built and maintained.”
  • “Encourage states, localities, and tribes to take their own action to improve their infrastructure.”
  • “[M]ake Federal and state dollars stretch further by leveraging, and we can tap into the management benefits offered by the private sector, such as procurement methods, market discipline, and long-term maintenance protocols.”
  • “[L]ook for opportunities to divest from certain functions that the private sector can do more effectively.”

Much of the questioning from members of the subcommittee focused on the president’s $1 trillion infrastructure proposal.  While Chao did not provide funding specifics, she did say the administration is addressing concerns that reliance of on private sector investment would shut out rural communities from benefiting. Chao also told representatives that, as of now, the administration is not looking to tie funding for an infrastructure package to tax reform.

When asked about what the future revenue source for the Highway Trust Fund, the Secretary said multiple times “nothing has been taken off the table,” including motor fuels tax increases. The Secretary also stated that the $1 trillion plan, which is still being formulated, would be rolled out in the fall of 2017.