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Expensive properties could see rate increases under new FEMA plan

The Wall Street Journal

By Lalita Clozel

WASHINGTON—The Trump administration said Monday it plans to overhaul government-subsidized flood insurance, in a sweeping proposal that could raise rates on more expensive properties and those in higher-risk areas.

The new system would affect policies for most homeowners who own property in flood-prone areas, where such coverage is required because few private companies offer flood insurance. The Federal Emergency Management Agency, which runs the National Flood Insurance Program, said the plan would start assessing properties…

NJBIZ

By Daniel J. Munoz

The federal government again gave a “medium-low” rating to a proposed trans-Hudson River tunnel and Portal Bridge replacement, a move which makes the project ineligible for the federal funding sought after by proponents of them.

The Federal Transit Administration, in its Friday decision, cited the lack of a local funding commitment for both projects, despite $600 million New Jersey put on the table to finance the $1.5 billion replacement of the century-old bridge in Kearny.

In addition, New Jersey and New York officials have pledged a combined $5 billion of the roughly $12 billion price tag to replace the Gateway Tunnel under the Hudson River, which is over a century old and sustained heavy damage during Superstorm Sandy in 2012.

“We are extremely disappointed that the U.S. Department of Transportation continuously fails to recognize the urgency around the Portal North Bridge and Hudson Tunnel Projects, and the commitment and ongoing work by the local partners to get them done,” Jerry Zaro, chair of the Gateway Development Corp., which oversees the Gateway project, said Friday in a statement.

The Friday move comes days after U.S. Deputy Transportation Secretary Jeffrey Rosen, according to a report from NJ.com, said there would be no federal dollars on neither the tunnel nor bridge because such projects are “local responsibilities,” even though they are both owned by Amtrak, a federal agency.

“These ratings are, sadly, the latest example of how the Trump administration is playing politics with these critical infrastructure projects, which is threatening the safety of passengers from New Jersey and the economic vitality of the entire Northeast region,” New Jersey U.S. Sen. Cory Booker, a Democrat, said Friday in a statement.

Bloomberg

By Christopher Flavelle

Flood insurance premiums could rise and property values fall in the most deluge-prone areas under a plan the Trump administration intends to roll out in coming weeks to change the way risk is calculated under the National Flood Insurance Program.

Instead of simply focusing on whether a home is inside or outside of the 100-year flood plain, the Federal Emergency Management Agency plans to use private-sector data to calculate the real flood threat for each home and set costs based on that data, according to people familiar with the effort and a briefing document obtained by Bloomberg.

Samantha Medlock, North America head of capital, science and policy at insurance broker Willis Towers Watson Plc, said the change “could be the first major advancement to improve understanding of flood risk since the creation of the NFIP itself.’’

The change could also hurt communities with the greatest flood risk. The new policy “is certainly an issue of concern and one we are actively tracking and engaged on,’’ Liz Thompson, spokeswoman for the National Association of Home Builders, said in an email.

The overwhelming majority of American households with flood coverage receive their policies through the National Flood Insurance Program, which covered about 5 million policyholders in 2017. Despite the growing risk of flooding due to climate change, the number of policies under the program has fallen about 10 percent from its peak in 2009.

Flood insurance will get fresh attention this week from Congress. On Wednesday, the House Committee on Financial Services is set to hold a hearing on reauthorizing the NFIP.

Lawmakers have struggled to reform the program. In 2012, Congress passed changes that would impose premiums that reflected the full risk for homes, only to back down two years later in the face of intense public opposition.

FEMA, asked to comment on its plans, offered a statement by David Maurstad, deputy associate administrator for insurance and mitigation, who said the new system “will help customers better understand their flood risk and provide them with more accurate rates based on their unique risk.”

The initiative, which FEMA calls Risk Rating 2.0, comes as climate change places growing pressure on the publicly subsidized flood insurance program. Claims often outpace premiums, saddling the program with a debt that topped $30 billion in 2017. The models that determine those rates ignore certain kinds of flooding, such as intense rainfall. And many Americans at risk of flooding nonetheless don’t buy insurance.

Transparent Costs

The new system is designed to address some of those problems. The agency plans to pair its existing mapping data with “commercial catastrophe models,” as well as the “geographic and structural characteristics” of the home, according to a briefing document presented by FEMA to private flood insurance representatives in October and obtained by Bloomberg.

The goal, according to that document, is more transparent and understandable costs, which will in turn spur more people to get flood protection.

“Policies that are easier to sell and buy = more insurance coverage,’’ the document says.

The document offers the example of two homes in a 100-year flood plain. The first home, at the edge of that zone, faces low risk of flooding from inland flooding or storm surge; the second faces higher risk from both. Under the current system, each home pays the same premium; with the changes, the first home’s premiums would fall by 57 percent, while premiums for the second home would more than double.

Customer Risk

The same document, dated Oct. 17 2018, said that FEMA would first introduce the new risk rating system for states along the Gulf Coast and Southern Atlantic, from Texas to North Carolina. New rates would begin to take effect in 2020.

A FEMA spokeswoman said parts of the document were no longer accurate, but declined to say which ones.

“Our new system will determine a customer’s flood risk by incorporating multiple, logical rating variables –- like different types of flood, the distance a building is from the coast or another water source, or the cost to rebuild a home,” Maurstad said.

The agency said it didn’t yet know what the effect of the new system would be on premiums. But rates are likely to go up in neighborhoods with the greatest exposure to flood risks, which could hurt property values in those areas, according to Michael Berman, a former chairman of the Mortgage Bankers Association who worked on housing issues for the Obama administration and has been briefed on the plan.

Important Initiative

Still, Berman said the initiative was an important one. “Anything that they can do to improve people’s understanding of flood risk compared to binary 100-year flood plain is good for consumers and good for investors in the long run, even if it raises premiums,’’ he said.

Increasing the cost of flood insurance tends to depress home values for two reasons, according to Asaf Bernstein, an economist at the University of Colorado at Boulder whose research includes asset pricing and household finance. Not only do higher premiums raise the cost of owning a home; they also act as a warning to potential buyers about the likelihood that a house will flood.

R. J. Lehmann, director of insurance policy at the R Street Institute, which advocates for market-based solutions to climate change, said that even if FEMA’s new approach caused home values to fall in some areas, the shift was necessary.

Updated Look

“Adapting to climate change is never going to be a cost-free exercise,” Lehmann said in a phone interview. “We absolutely need a more granular and more updated look at what flood risk is.”

A spokesman for the National Association of Realtors, Wesley Shaw, declined to comment on what the change could mean for homes values in areas with the greatest flood risk.

“We need to wait and see what FEMA comes out with before we can evaluate the market impact,” Shaw said by email. “We welcome FEMA’s efforts to modernize and improve the fairness of its ratings methods.”

FEMA said the way the law is written on flood insurance gives it the authority to change the way it sets rates without action from Congress. The agency said it hadn’t yet decided when the new rates would take effect, and how quickly.

“We will take an agile approach to share information transparently about the release of this new system with all stakeholders,’’ Maurstad said.

Government Executive

By Eric Katz

President Trump’s fiscal 2020 budget called for drastic cuts at most federal agencies, reductions that would significantly reorient the work many federal employees do.

The president would outright eliminate many offices and programs, while reprioritizing and restructuring work at a slew of agencies. In some cases, Trump proposed new agencies or called on existing departments to beef up their workforces. Many of the proposals are new, while others have repeatedly been rejected by Congress. In most cases, the details of the recommendations were obscured by the administration’s decision to withhold all the details of the budget until next week.

Here is a look at some of the most significant reform proposals in the new budget blueprint:

• Reprioritizing federal work: The Trump administration plans to refocus agencies across government to ensure they steer their employees away from “low-value work.” The Office of Management and Budget is coordinating these efforts with the General Services Administration and Office of Personnel Management, which will continue to reform “burdensome data collection and reporting requirements.” Trump also budgeted for agencies to hire “evaluation officers” to bolster evidence-based policymaking.
• Census ramp up: The Census Bureau is requesting $7.2 billion as it gears up for deployment of the decennial count, a funding infusion that would nearly double its current allocation. The increase roughly matches the funding allocation the bureau received in 2010 as it prepared for the last count.
• Homeland Security hiring: As he has in each of his budget proposals, Trump continued to ask for a hiring surge at the Homeland Security Department. At Customs and Border Protection, the Border Patrol would see funding for 750 new agents, matching its fiscal 2019 request. While the agency hired more new employees in fiscal 2018 than it lost to retirement or other employers, it boosted its rolls by just over 100 positions and still has thousands of vacancies. Trump also requested 171 new customs officers and additional support staff. Immigration and Customs Enforcement requested funding for 1,000 new agents, down from the 2,000 agents it asked for last year. Both CBP and ICE have struggled to reach Trump’s mandated hiring, which Congress noted in a hearing last week and by repeatedly declining to fund the hires for several years. ICE would receive an additional 538 support staff and 128 prosecuting attorneys, while the Secret Service would see an additional 177 agents and staff.
• Other hiring: The Justice Department’s Executive Office of Immigration Review requested funding for 100 new judge teams. That came just a few days after EOIR told Congress it had to freeze hiring that Congress has already funded due to unforeseen costs. The Labor Department would seek to boost staffing in its Office of Labor Management Standards to investigate misconduct inside labor unions. OLMS’s investigative workforce has dropped by 40 percent over the last decade, the White House said.
• Staffing cuts: As in previous years, Trump proposed massive budget reductions at most federal agencies, most of which would result in staffing cuts. The White House highlighted a couple of its top priorities. The Defense Department would continue to slash its headquarters workforce, which, coupled with other efforts to reduce “management overhead,” the White House said would save $6 billion in fiscal 2019. The Health and Human Services Department plans to trim its Public Health Service Commissioned Corps to make it “leaner” and “more efficient.” Expect to see proposed workforce cuts at the Environmental Protection Agency, State Department and several other agencies when the full budget details emerge next week.
• Eliminating offices and programs: As he has also pitched in the past, Trump suggested doing away with dozens of programs and offices altogether. The Commerce Department would eliminate its Economic Development Administration, while the Education Department would do away with 29 programs it deemed ineffective, duplicative or unnecessary, for a projected savings of $6.7 billion. The Energy Department would eliminate several offices, including divesting its power marketing administrations. The Housing and Urban Development Department would zero out its block grant programs, such as the Community Development Block Grant. The Labor Department would consolidate the 40 workforce development programs across government, while the Environmental Protection Agency would end many of its “voluntary and lower-priority activities.”
• Interior Department reorganization: Interior plans to move much of its workforce out of Washington, D.C., and into western states to bring employees closer to the land and resources they manage. It is also moving forward on realigning the department’s regional structure into 12 new boundaries. The administration promised additional details would be released next week about the “phased implementation” of its governmentwide reorganization plan.
• Veterans Affairs Department reforms: VA requested $8 billion for its implementation of the Mission Act, which will consolidate existing programs giving veterans access to private health care. It also seeks to boost funding for its new Office of Accountability and Whistleblower Protection by 25 percent, which the department said has helped it “more efficiently discipline” its employees.
• Space: Trump budgeted for a new branch of the military, to be housed under the Air Force, to ramp up the military’s presence in space. NASA would also see a budget increase to hasten lunar exploration goals. The administration plans to first send cargo to the moon’s surface, followed by astronauts.

U.S. Chamber of Commerce

Rebuilding and modernizing America’s infrastructure is a major priority for the business community.

“This year, we are calling on our lawmakers to take bipartisan action on a meaningful infrastructure package now,” said U.S. Chamber and CEO Tom Donohue in February at the America’s Infrastructure: Time to Invest event.

On Wednesday, Donohue took that message to Capitol Hill in testimony before the House Ways and Means Committee. He was joined by AFL-CIO president, Richard Trumka and two members of the Chamber-led Americans for Transportation Mobility coalition, Gregory DiLoretro of the American Society of Civil Engineers and Chris Spear of the American Trucking Associations.

In the committee’s first hearing on infrastructure since 2015, Donohue outlined the business case for Congress to stop talking and take action to rebuild our infrastructure.

“Congress must come to grips with the fact that most of this system was built 60-150 years ago,” Donohue said. “The Chamber believes the time has come to enact a federal infrastructure modernization plan to provide every American a 21st century system.”

The costs of inaction for American businesses, workers, and families are piling up.

“According to the American Transportation Research Institute, congestion on the Interstate highway System alone cost the trucking industry nearly $74.5 billion in 2016 and wasted more than 1.2 billion hours,” Donohue explained. In addition, congestion and vehicle repairs due to poor roads cost the average commuter over $1,500, he added.

Last year, the U.S. Chamber led the infrastructure discussion by laying out four pillars of an infrastructure modernization plan. Donohue reiterated the plan to the committee with a main focus on the first pillar – a modest increase in the federal motor fuel user fee:

The user fee was last raised in 1993. Since then, inflation has eroded over 40 percent of the value of the fee. In addition, vehicles are significantly more fuel-efficient than they were 25 years ago. As a result, motorists use less fuel to drive the same number of miles, and there is significantly less revenue to maintain the roads upon which they drive. Raising the gas tax by just 25 cents would generate $394 billion over the next 10 years to invest in our roads, bridges, and transit systems.

The second pillar is encouraging private investment. “There is $100 billion in private global capital looking for investment opportunities in infrastructure, and there will be a lot more private money to invest in infrastructure if we make the kinds of policy changes we are calling for,” said Donohue.

Donohue advised strengthening and expanding federal loans programs “such as TIFIA and RRIF loans, Private Activity Bonds, grants, and other mechanisms to facilitate public-private partnerships, or P3s.”

The third pillar is permit streamlining. “I’ve said this before and I’ll say it again, you can line up all the cash you need, but if the permitting process is slow or broken – there’s no point in doing an infrastructure deal,” Donohue warned. “Any proposal that fails to reform the permitting system won’t have the Chamber’s support.”

The fourth pillar deals with workforce issues. Even with adequate financing and prompt government agency project approvals, unless there are enough workers available to do the work, we won’t be able to build a modernized infrastructure, cautioned Donohue:

Last year, the USG-U.S. Chamber Commercial Construction Index consistently found that a majority of builder have a difficult time finding skilled employees. In October of 2018, the number of unfilled construction jobs hit 323,000 – the highest number of open positions in the sector since the Bureau of Labor Statistics began keeping track.

Let me state it more simply, the American economy is out of workers. Congress, the administration, and the private sector must act to expand our labor force, including the construction workers.

Along with more technical education opportunities and apprenticeships, immigration reforms are needed. “Nearly 100,000 immigrants who are protected under the [Deferred Action for Childhood Arrivals] DACA or [Temporary Protected Status] TPS programs are construction workers,” Donohue said. “We need a permanent solution for Dreamers and TPS beneficiaries so they can stay in their homes and jobs and continue to contribute to our economy.”

One group that would benefit from improved infrastructure investments are small businesses.

The Q1 2019 MetLife & U.S. Chamber of Commerce Small Business Index found a majority of small businesses consider roads and bridges as critical to their success. But 62% said local roads and bridges are in average, poor, or very poor conditions, and 52% said the same about the state of U.S. highways.

“The Index results add to a mountain of evidence that America’s infrastructure isn’t meeting the demands of today’s business owners and today’s economy,” said Neil Bradley, U.S. Chamber Executive Vice President and Chief Policy Officer, about the findings. “This should be a wake-up call to leaders in Washington: It’s time to invest in modernizing our nation’s infrastructure.”

After laying out a proactive course of action, Donohue cautioned lawmakers from reversing 2017’s historic tax reforms to pay for infrastructure, calling it a “non-starter for the business community and for many in Congress.”

Instead, Donohue argued, “we need to build upon tax reform by significantly increasing infrastructure investment to support long-term economic growth and to compete globally.”

He reminded the committee that action on infrastructure is urgently needed: “Without a serious commitment from federal lawmakers, we will not make the kind of progress demanded by the challenges we’re facing.”

Equipment World

By Kerry Clines

It took a while, but a 2019 spending package was finally approved by Congress, signed by President Trump, and enacted February 15. In addition to the $1.375 billion for southwest border barriers, the package also includes full-year 2019 funding levels for important federal infrastructure programs, including the Department of Transportation (DOT) and the Environmental Protection Agency (EPA), the Engineering News-Record reports.

The 2019 package is the second year of a two-year, bipartisan House-Senate budget deal that included a pledge to raise overall federal infrastructure spending by $20 billion over 2017 levels. It sets the federal-aid highway obligation ceiling at $45.3 billion, up $1 billion, or 2 percent, from 2018 and equal to the amount authorized in the 2015 Fixing America’s Surface Transportation Act (FAST Act), which comes from the Highway Trust Fund.

The legislation also contains $3.25 billion more from the general fund for highways, up from $2.525 billion in 2018. A 2019 “bonus” amount includes $2.73 billion for states, up from $1.98 billion in 2018, and $475 million for bridge replacement and rehabilitation, more than double the 2018 amount.

Better Utilizing Investments to Leverage Development (BUILD) grants received $900 million for 2019, down 40 percent from 2018, but it was not discontinued as President Trump suggested. The program was originally called Transportation Investment Generating Economic Recovery, or TIGER.

The Federal Transit Administration will receive $13.4 billion for 2019, down $67 million from 2018, with transit formula grants getting $9.9 billion and capital investment grants receiving $2.5 billion, down from $2.6 billion in 2018. An additional $700 million, down from $834 million in 2018, goes for transit infrastructure grants, which include bus facilities and “state of good repair” projects.

The Federal Aviation Administration’s Airport Improvement Program was frozen at 2018’s $3.35 billion, an amount that comes from the Airport and Airway Trust Fund. Lawmakers also tapped the general fund for an additional $500 million in FAA discretionary airport grants, down 50 percent from 2018.

The EPA’s water infrastructure account will receive $3.6 billion, a 1 percent increase over 2018 levels. Clean Water State Revolving Funds (SRFs) will receive $1.7 billion and Drinking Water SRFs will get $1.2 billion.

Governing

Three governors — two Democrats and a Republican — say the big tax hikes are needed to address their road and transportation problems.

By Daniel C. Vock and Alan Greenblatt

Michigan Gov. Gretchen Whitmer is expected to call for a 45-cent-per-gallon hike in the state’s gas tax in order to pay for a $2 billion road rebuilding campaign. Those tax increases come on top of Michigan’s 26.3-cent fuel tax.

The governor’s plan would gradually increase the gas tax in three 15-cent steps through October 2020, according to the Detroit Free Press. The governor is scheduled to formally announce the plan on Tuesday, March 5.

Whitmer, a Democrat who took office in January, campaigned on the popular promise to “fix the damn roads,” but she had not specified until now how she would pay for that effort. Her plan faces an uncertain future in the Republican-controlled legislature, which was skittish about raising fuel taxes even during the tenure of Whitmer’s Republican predecessor.

The Michigan governor’s bold proposal follows the actions of other governors in the Midwest who have also called for big hikes in state fuel taxes. Ohio Gov. Mike DeWine, a Republican, is asking for an 18-cent increase in the per-gallon rate, while Minnesota Gov. Tim Walz, a Democrat, proposed a 20-cent hike. Wisconsin Gov. Tony Evers, also a Democrat, is calling for an 8-cent-per-gallon increase. 

Original Story:

The prospect of raising gas taxes often makes politicians skittish, whether at the state or federal level. But two Midwestern governors — one Democrat and one Republican — are showing no such qualms. They’re not only calling for gas tax hikes, they’re calling for those hikes to be big.

Ohio Gov. Mike DeWine, a Republican, is leading the charge to raise his state’s gas tax by 18 cents a gallon. That’s on top of the 28 cents a gallon Ohio currently charges motorists, and it’s roughly equivalent to the 18.4 cents the federal government has charged on every gallon of gasoline since 1993.

Minnesota Gov. Tim Walz, a Democrat, is going even further, with a call for a 20-cent hike of the state’s gasoline tax. That’s more than Walz had suggested in his gubernatorial campaign, when he advocated for a 10-cents-a-gallon increase. Minnesota’s gas tax now stands at 28.6 cents per gallon.

Both governors said they landed on the big numbers after reviewing their states’ infrastructure needs and available financing. “We’re in a deep hole,” DeWine, Ohio’s governor, told Governing while in Washington this weekend. “Anything less than that, and our roads are going to start to go downhill.”

Ohio’s transportation troubles are coming fast. DeWine’s predecessor, Gov. John Kasich, patched up the state’s transportation funding system in late 2012 by issuing bonds backed by toll road revenue. But all that revenue is close to running dry; the state won’t be able to use it for new projects in the coming years.

“We start every year by having to pay $390 million for debt service that’s doing us no good now,” DeWine said. “The money that was brought in and passed last bond issue masked the structural deficit we have. That bond money is gone or almost gone.”

The crisis comes on top of the long-standing issues surrounding motor fuel taxes in the state in general. In Ohio, the revenue generated by those taxes is coming in flat, because vehicles are becoming more fuel-efficient. Meanwhile, inflation is eating away at the buying power of the money raised by existing gas taxes. Ohio last raised its gas taxes 13 years ago and has lost its purchasing power since, because the gas tax rate does not vary with the cost of fuel.

Both DeWine and Walz want to index their states’ gas taxes to the rate of inflation.

DeWine commissioned a group of experts to look at his state’s transportation funding woes, and the group issued an 89-page report earlier this month that examined many options for raising new revenues. But ultimately, the group concluded that a higher fuel gas tax was “the only funding mechanism that generated broad consensus.”

In Minnesota, Walz said the state’s unusually large network of roads is one factor that contributes to the state’s transportation upkeep costs. Walz relied on estimates from civil engineers and the state Transportation Department to determine how much money the state would need over the next 20 years to maintain its current systems and adjust for population growth. They estimated it would take $19 billion.

“The number was not an arbitrary number,” Walz said. “We based it solely on what the need was.”

While the increase may seem high, the governor says, most people he talks with about the gas tax don’t know how much they’re paying today. One of his constituents told Walz that Minnesota officials raised the gas tax every year, when, in fact, they haven’t touched it since 2008, and that increase came when lawmakers were under immense scrutiny because 13 people had died when an interstate bridge collapsed in Minneapolis the year before.

(Walz’s predecessor, Gov. Mark Dayton, tried to raise the gas tax four years ago but couldn’t get lawmakers to go along with the idea.)

Part of the problem, Walz said, is the price of gas goes up and down so often. “I tell them this when they say, ‘Tim is going to raise the gas tax:’ Since I’ve been elected, gas has gone down 79 cents,” Walz said. “I’m not taking credit for that, but fluctuation in gas prices happens all the time.”

Of course, neither the Minnesota nor the Ohio proposals have been passed into law, and it’s not clear either will survive in this year’s legislative sessions.

Walz said he has tried to attract support for the idea by including projects such as bike trails and transit in his plan. He has also proposed a tax break for low-income families, to “take the sting out of the gas tax.” Those measures may help Walz build a coalition for the gas tax hike in the House, where Democrats hold a majority. But it’s unclear whether they will convince the Republicans who control the state Senate to sign on.

Republicans control both chambers of the Ohio Legislature, and they’ve made tax relief a major priority in recent years. But legislative leaders seemed at least open to a gas tax hike when DeWine proposed it.

Both DeWine and Walz came to Washington last weekend to meet with other governors as well as  President Trump and other members of the administration, as part of the National Governors Association winter meeting.

Vice President Mike Pence told a group of governors that the administration still plans on passing a major infrastructure deal this year. “I’ll make you a promise — and we’ll ask for your help — that, in this Congress, we’re going to pass historic infrastructure legislation that will rebuild the roads and bridges and infrastructure of America,” he said, according to his office.

Any influx of federal money would clearly help states like Minnesota and Ohio deal with their infrastructure upkeep problems. But getting a big transportation package through Congress quickly would be difficult. So the governors seem more focused on taking care of their concerns at the state level, instead.

“Minnesotans know they get what they pay for,” Walz said. “They’re willing to pay taxes if they know where it’s going and they think it’s fair.”

NJ.com

By Jonathan D. Salant

WASHINGTON — Millions of dollars to keep the Gateway Tunnel project on track is included in the new spending bill.

Just as they did last time to overcome President Donald Trump’s threat to shut down the federal government rather than fund Gateway, lawmakers fattened other transportation accounts to provide money to be spent on the new train tunnel under the Hudson River and the new Portal Bridge over the Hackensack River.

The total amount is expected to be around the same $540 million included in last year’s spending legislation.

“The Gateway Tunnel is the most important infrastructure project in the United States,” said Rep. Tom Malinowski, D-7th Dist., a member of the House Transportation and Infrastructure Committee. “While maintaining this funding at last year’s level is a step in the right direction, this is just a small fraction of what is needed to complete the tunnel.”

Trump took no position on Gateway this time around, and even appeared to soften his position on the project.

“We have the money set aside but we have not decided to use it yet,” Trump told Washington-based reporters from local news outlets. “It’s a very expensive project, very expensive, so we have to see what they’re doing. It’s got to be approved by us.”

The new tunnel is needed so that the existing tubes can be closed to repair damage caused by Hurricane Sandy.

The Gateway money approved Thursday is part of legislation to fund the remainder of the government through Sept. 30.

It ends a dispute that began in December when Trump said he would not sign any spending bill without $5.7 billion in taxpayer funding for a southern border wall that he promised Mexico would pay for. That led to a record 35-day shutdown that most Americans blamed on the president and his congressional Republican allies.

Funding for Gateway will be drawn from transit grants and money earmarked for Amtrak’s Northeast Corridor.

“This funding is vital to moving this critical project forward to ensure the safety and reliability of our infrastructure and the hundreds of thousands who use it each day,” said U.S. Sen. Robert Menendez, D-N.J. “Millions of people and our entire region’s economy hinge on the continued viability of a century-old Portal Bridge that often breaks down and a deteriorating Hudson River rail tunnel that sustained significant damage.”

In addition, Menendez said, the legislation reversed the administration’s decision to prevent New Jersey and New York from counting federal loans as part of their share of Gateway. Transportation Secretary Elaine Chao, defending Trump’s decision to block funding, insisted that the loan money didn’t count, even though the states would be paying it back.

“This legislation codifies in federal law what has been the normal practice of previous administrations, and allows local stakeholders to utilize these important funds to pay their share of the project cost — setting straight yet another failed attempt by the Trump administration to derail Gateway,” Menendez said.

Cincinnati Enquirer

By Hannah Sparling and Jackie Borchardt

We’ve probably all thought it at one time or another: I really wish I could pay more for gasoline.

OK, maybe not.

But here’s the thing: We might need to.

Ohio’s transportation infrastructure – the system of roads and bridges we all use to get around – is in trouble. The state gas tax, one of the primary funding sources for that infrastructure, has been flat since 2005, stuck at 28 cents a gallon.

Highway construction costs are going up, a turnpike bond program is out of money, and vehicles are getting better and better gas mileage. The latter is great for the environment, but it’s bad news for a system of roadways that relies heavily on people buying gas.

If nothing changes, the Ohio Department of Transportation is predicting a $156 million shortfall for road and bridge maintenance in 2020.

By 2030, that shortfall would skyrocket to $780 million.

“More crashes will happen. More people will get hurt. And, more people will die,” said Ohio Department of Transportation Director Jack Marchbanks, testifying during a recent state hearing on infrastructure funding. About one-third of highway deaths can be at least partially attributed to poor road conditions, Marchbanks said.

New Ohio Governor Mike DeWine has made transportation infrastructure funding one of his top priorities, appointing a committee to figure out how to best raise more money. After meeting twice, it seems highly likely that committee will recommend raising the gas tax. 

The Ohio Senate president and other lawmakers have already said they’re not keen on raising taxes, but what else could the state do?

Here are some ideas:

Pay by the mile

A few states have experimented with what might be the fairest system of them all: Treat roads like a utility and charge only for the miles traveled.

It’s pretty simple, really. Strap a GPS or other tracking device on your car, and, instead of paying a per-gallon tax at the pump, pay a per-mile bill later. In Oregon, the charge was 1.5 cents per mile.

The charge typically applies equally to every vehicle, be it a gas-guzzling SUV or a more- eco-friendly hybrid. But, the fee could be adjusted for trucks or other vehicles known to generate more wear and tear on roadways.

Colorado piloted the idea in 2017, and testers said they felt the system was fair. It hasn’t gained much traction for several reasons, though. First of all, tracking mileage with a GPS screams “Big Brother,” and not all drivers want to hand over that information to the government, even with privacy protections in place.

Second, environmental advocates worry drivers may be discouraged from buying electric and hybrid vehicles if, regardless of emissions, everyone pays the same per-mile fee.

Third, none of the states piloting the charge has figured out how to capture mileage for out-of-state drivers. It doesn’t seem fair to make Ohioans pay for every inch they drive while out-of-staters cruise around with impunity.

Charge property tax on vehicles

We already pay property tax on our houses; what if we did the same for our cars?

That’s what happens in Kentucky, where people pay an annual tax based on the value of their vehicles. The state rate is 45 cents for every $100 of vehicle value. There are local vehicle property taxes as well, with those rates set by each local jurisdiction. Together, they raise about $405 million a year.

Put a toll on it

It could be simple: Drive on this road, pay this toll.

Or it could be an optional express lane. Don’t want to sit still during rush hour? Pay a toll, and you can zoom right on home.

Tolls are not exactly known for their popularity, but more and more states are looking to them as one way to bring in extra cash for road maintenance, said Bill Cramer, communications director for the International Bridge, Tunnel and Turnpike Association, which represents toll facility owners and operators.

“We don’t go out and say, ‘You should toll every road there is,’” Cramer said. “We think that there should be a mix of funding options, because for the last three, four, five decades, we’ve pretty much been relying on the gas tax.”

Any new toll would face plenty of opposition, though. Tolls are complicated and costly to run, said Stephanie Kane, communications director for the Alliance for Toll-Free Interstates. Sometimes, as much as one-third of the revenue a toll brings in is used just for operating costs, Kane said. 

She said tolls can slow down first responders, cause wear and tear on secondary roads as people reroute to avoid the fee, and drive up expenses for shipping companies, a burden often passed on to consumers.

Tolls are just “bad policy,” Kane said. “There are so many negative consequences to tolls. The winners, really, are the tolling companies who are operating the toll.”

Make the Prius drivers pay

Roads need repaired because people drive cars on them. The fix-it money comes from the gas tax. But people who drive electric or hybrid cars buy less gas (and thus pay less of that tax).

So, a special fee for such drivers would mean everyone paying his or her fair share. 

Sen. Bill Coley, R-Liberty Township, is pitching a similar idea where Ohioans would essentially pay an annual road-maintenance fee in lieu of the gas tax. Drive a hybrid or a regular gas vehicle, it doesn’t matter – we’d all pay the same fee. 

For those who couldn’t afford the upfront fee or who live out-of-state, they could continue to pay the regular gas tax at the pump, Coley said. 

“As we encourage more and more people to drive eco-friendly vehicles,” he said, “this is a great way to have that happen without penalizing the quality of our roads and bridges.”

The downsides? Again, it might discourage people from buying eco-friendly cars. And, frankly, it’s just not enough.

The Ohio Department of Transportation did a rough estimation that shows a $250 annual fee on electric vehicles and a $75-a-year fee on hybrids would bring in about $2.5 million a year. Next to a $156-million-and-climbing deferred-maintenance deficit, that’s pretty small change.

Just raise the gas tax, already

God forbid you ever have to fill up your tank in Pennsylvania. The gas tax there is the highest in the nation, 58.7 cents per gallon.

It turns out we have it pretty good in Ohio where the tax has been at 28 cents per gallon since 2005. That might be why DeWine’s committee seems so keen on the idea of raising the tax. Perhaps it is time. 

Assuming the legislature is on board (and that’s a pretty big assumption), one solution is a flat tax increase: Pick a new number, vote it into law, and that’s it.

Another solution is a variable increase, one tied to, say, highway construction costs or the price of gasoline. That way, as the market changes – gas prices drop, for example, or construction costs shoot up – the tax would automatically adjust accordingly to still bring in enough revenue.

Minnesota Gov. Tim Walz and Los Angeles Mayor Eric Garcetti both told members of Congress how they campaigned to raise their constituents’ taxes for infrastructure, and emerged victorious.

Governing

By Daniel C. Vock

As the new Congress looks to reignite a national conversation on investments in infrastructure, two politicians — a governor and a mayor — pressed lawmakers Thursday on the importance of raising revenues to fund necessary transportation improvements across the country. Both officials, Minnesota Gov. Tim Walz and Los Angeles Mayor Eric Garcetti, have at points staked their political careers on raising taxes for infrastructure improvements and emerged victorious.

“It’s usually pretty good advice: Don’t run on raising people’s taxes,” Walz told members of the House Transportation and Infrastructure Committee, “except in the case of infrastructure.”

Walz, a Democrat who served in the U.S. House before becoming governor last month, called for raising the gas tax in Minnesota by 10 cents a gallon as part of his campaign. When his opponent ran TV ads attacking him for the proposal, Walz said his own polling numbers actually went up. “People aren’t begging you to raise their taxes, but the way I framed it was, what is your alternative?” Walz said. Voters, he said, “know they’re spending [the money] anyway” in lost time on congested roads and on car repairs.

Congress has struggled for more than a decade to find money to pay for highways, bridges and other surface transportation infrastructure. Both Republicans and Democrats have shied away from raising the gas tax, the traditional way of funding those improvements. Other areas, including locks and dams on rivers, port dredging, and investments in new air traffic control technology, have languished as well.

But industry experts and their allies in Congress hope infrastructure is one area where Democrats, who now control the House, and Republicans, who control the Senate, can find common ground in the new Congress.

President Donald Trump made a similar point during his State of the Union address on Tuesday.

“Both parties should be able to unite for a great rebuilding of America’s crumbling infrastructure,” Trump said. “I know that the Congress is eager to pass an infrastructure bill, and I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting-edge industries of the future. This is not an option. This is a necessity.”

But Trump’s brief mention of infrastructure did not give lawmakers any guidance as to what the president wanted to see in an infrastructure package, or what, if anything, he would accept as a way to fund the new spending. The White House released an infrastructure plan last year that would have relied on states and local governments to pay for the vast majority of its spending, but that idea went nowhere in Congress. Meanwhile, Senate Majority Leader Mitch McConnell has been skeptical of calls from Democrats to pass a major new infrastructure spending legislation.

That leaves the task of fashioning a new infrastructure plan to the House Transportation and Infrastructure Committee. But the most politically dicey question of any new infrastructure plan – how to pay for it – would be up to the House Ways and Means Committee.

How to Rally Voters Around Tax Hikes? ‘Keep It Visceral.’ 

Walz and Garcetti, along with former U.S. transportation secretary Ray LaHood, talked with lawmakers about the nuts-and-bolts of infrastructure concerns, including everything from airport landing fees to state revolving funds to finance local water infrastructure.

But the key to selling the idea to the public, Garcetti said, is to translate all of those policies into real-world changes in people’s lives.

“Keep it visceral. Keep it human,” he urged. “Don’t talk about policies and statistics.”

Garcetti noted that he was re-elected even after pushing a half-cent sales tax hike in 2016 to expand rail lines, fix streets and make other transportation improvements in Los Angeles County. The $120 billion ballot measure was the largest local transportation funding measure in U.S. history. But it very nearly failed.

California law required the measure to pass by a two-thirds vote to take effect, because it called for raising taxes. Polling showed that only about 63 percent of potential voters supported it before the campaign launched TV ads. “It was going to be a tough lift,” Garcetti told U.S. Rep. Greg Stanton, a former Phoenix mayor. (Stanton successfully ran for re-election as mayor on the same day he pushed a tax increase for light rail expansion and road improvements.)

Garcetti said the Los Angeles ad campaign included the “typical” images and arguments in favor of big infrastructure initiatives: new trains, new roads, workers paving streets and people moving around the city. They explained how many jobs would be created and how much time people would save on their commutes. After two weeks and $5 million worth of ads, support for the measure had dipped to 61 percent, Garcetti said.

“I said, ‘Oh no, this thing is going down,’” Garcetti told the committee. “I’d put all my political capital on the line.”

Then his campaign consultant suggested a different tack. He told the mayor to get in the car and drive, while the consultant filmed him on his phone. There would be no script.

Not surprisingly, the mayor ran into traffic on the interstate. “Here we are stuck in rush hour traffic,” Garcetti says in the video. “The only problem is, it’s Saturday afternoon.”

The message intrinsically resonated with voters, he told the committee. “Everybody in Los Angeles got that…. They got being stuck in traffic.” The measure was approved by 72 percent of voters.

Urging Lawmakers to Act 

When it comes to shaping a new federal infrastructure plan, Garcetti encouraged Congress to fund projects that bring in money from a variety of sources, including states, local governments and private investors. He said that programs should reward agencies that innovate, whether by using new technology or creative financing. And the mayor said federal lawmakers should consider paying part of the cost of maintenance for existing infrastructure, to prevent it from decaying further.

LaHood, a former Republican congressman from Illinois who served in the Obama administration, said lawmakers should not settle for little plans.

“It’s got to be big and it’s got to be bold. It can’t be chintzy,” he said. “Everybody knows what the problem is: America is one big pothole.”

To get a new plan signed into law, LaHood urged the House members to get a signal from the White House about what Trump would agree to in the plan. “If President Trump is not with you on this, it will be very difficult to pass through the Senate. [If president is with you] I think he will sell it in the Senate,” LaHood said.

Earlier this week, transportation committee chair Rep. Peter DeFazio told reporters he had not received a commitment from the White House about what it would support. Further complicating matters, many members on the committee from the greater New York area want the plan to include replacements to the century-old rail tunnels between New Jersey and New York’s Penn Station. But Trump has fought the so-called Gateway Program at every turn.

LaHood urged the lawmakers to move quickly with their plans. “We have a very short window,” he said. “If it doesn’t happen this year, folks, it doesn’t happen until after another presidential campaign.”