Interests choose sides as competition heats up for NEXTEA dollars

Railway Age, May, 1997 by William C. Vantuono

NEXTEA, the National Economic Crossroads Transportation Efficiency Act, is supposed to pick up where ISTEA, the Intermodal Surface Transportation Efficiency Act, leaves off when ISTEA expires Sept. 30. Will NEXTEA essentially carry forward existing ISTEA programs (with some modification, as the Clinton Administration has proposed), or will it be radically different?

That will depend largely upon complex political maneuverings that will probably continue up to the 11th hour. The process is not only causing modal interests to choose sides, as expected, but is also forcing states to draw battle lines. It will come as no surprise if Congress is unable to meet the Sept. 30 deadline.

The Administration's NEXTEA proposal is designed, in the words of DOT Secretary Rodney Slater, "to provide adequate resources and sufficient flexibility to maintain and improve our surface transportation system within the context of a balanced budget... We recognize that the federal government alone cannot provide sufficient funds to meet our nation's transportation needs. That's why we propose to expand the successful State Infrastructure Banks program to all states and to establish a federal credit program to supplement current funds and expand opportunities for new public and private capital transportation investment."

That statement most surely means more leeway for states to spend transportation dollars on transit projects, especially if flexible CMAQ (Congestion Mitigation and Air Quality) and STP (Surface Transportation Project) funds are increased as proposed. It also means that transit interests will have to scramble harder for a piece of the transportation pie, as emphasis is shifted away from capital funding to formula funding.

In a nutshell, the Administration's NEXTEA proposal looks like this: It will provide $175 billion for surface transportation over a six-year period, an 11% increase over current ISTEA levels. Core programs such as the National Highway System and "important transit programs," as Slater puts it, will be maintained. President Clinton, with typical feel-good rhetoric, has called the proposed legislation "a bridge to the 21st Century."

That bridge, say transit interests, will carry. a lot of cars, but won't leave enough room for trains and buses. That's because it proposes a 10% increase in highway spending, and a 3% drop in transit spending. "The Administration's NEXTEA funding recommendations could strand us at the crossroads," says American Public Transit Association President Bill Millar. Although the NEXTEA proposal "continues and strengthens the crucial federal-state-local partnership that is so necessary for developing our national surface transportation system, the funding levels recommended do not meet the Administration's own estimates of the minimum level of investment required just to maintain our transit and highway infrastructure, let alone improve it. Public transit riders would be particularly ill-served."

Not those riders in the Northeast, if Senator Alfonse D'Amato (R-N.Y.) has anything to do with it. D'Amato and his Northeast colleagues from both sides of the aisle essentially want to maintain the status quo, which provides all states a minimum return of 90 cents for ever), dollar of federal gas tax paid. In New York State alone, with its heavy dependence on mass transit and aging infrastructure centered around New York City, that amounts to some $2 billion in annual transportation subsidies.

D'Amato, chairman of the powerful Senate Committee on Banking, Housing, and Urban Affairs--through which the mass transit portion of NEXTEA must pass--is expected "to nab for New York a prime slab of federal bacon," as the New York Times reported on April 21. That prime slab is expected to include enough money to construct a long-hoped-for $2.8 billion Long Island Rail Road link to Grand Central Terminal (including a new rail tunnel under the East River).

To some, particularly those who represent western and southern states, D'Amato's prime slab is not bacon, but pork. An alternate program proposed by Sen. John Warner (R-Va.), for example, would return 95 cents per dollar of federal gas tax paid, a boon for states with higher gasoline usage than those in the Northeast. Under Warner's proposal, New York State stands to lose about $300 million in annual subsidies. New York Governor George Pataki, while expressing understanding for those states that want a bigger piece of federal bacon, likened Warner's proposal to "robbing Peter to pay Paul."

Northeast transit interests probably wouldn't think twice about canonizing D'Amato, should he and his regional colleagues prevail.

And then there's Amtrak. Highway interests are opposed to the Administration's NEXTEA proposal for Amtrak: $4.8 billion in capital and operating subsidies over six years, which would come out of the Highway Account of the Highway Trust Fund. But Amtrak, struggling to survive (p. 4), isn't happy with the proposal either. Instead, it's seeking the half-cent of the 4.3 cents of the federal gas tax now going to deficit reduction--a move opposed by both the Administration and the highway lobby.