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Breaking down the federal funding challenges for transportation · Talking Michigan Transportation

• 0:07
  Jeff Cranson: Hello, welcome to the Talking Michigan Transportation Podcast.
• 0:10
  Jeff Cranson: I'm Jeff Cranson.
• 0:11
  Jeff Cranson: I'm going to be speaking today with Zach Rable, who is a federal policy analyst for the Michigan Department of Transportation, and he talked with me about the need to reauthorize which is something Congress has to do every four or five years a federal transportation plan so that the states have some certainty I shouldn't just say states, obviously states, cities, counties, localities have some certainty about how much federal funding they'll be getting and they can plan their projects accordingly.
• 0:49
  Jeff Cranson: He's recently had the opportunity to talk to some members of the US House Transportation and Infrastructure Committee and their staffs about what they see coming and what changes in the administration might mean to federal funding.
• 1:03
  Jeff Cranson: So he had some good insights and a lot of interesting things to say and I hope you enjoy the conversation.
• 1:09
  Jeff Cranson: So again, Zach Rable, who is a policy analyst specialist for MDOT and really has taken a deep dive these last few years in his job into what various federal funding proposals mean.
• 1:25
  Jeff Cranson: Zach, thank you for taking time to do this.
• 1:29
  Jeff Cranson: Let's talk first about reauthorization.
• 1:33
  Jeff Cranson: It's a common term in DOT circles.
• 1:35
  Jeff Cranson: Everybody knows what it means, but I suspect a lot of people don't know what it means.
• 1:40
  Jeff Cranson: So give me your Aunt Shirley breakdown on reauthorization.
• 1:46
  Zach Rable: Right, Thanks for having me on Reauthorization.
• 1:50
  Zach Rable: So when we go and purchase gas at the pump, we pay a federal gas tax.
• 1:56
  Zach Rable: That federal gas tax eventually goes to what is called the Highway Trust Fund.
• 2:02
  Zach Rable: The Highway Trust Fund is a dedicated transportation funding source that is unlocked and allows state DOTs to do their work when Congress reauthorizes or authorizes the use of those funds out of the Highway Trust Fund.
• 2:22
  Zach Rable: So really, the reauthorization process is a way for Congress to take the dollars that we are putting into the system via the gas tax and then setting policy guidelines surrounding how we might spend those federal dollars on our transportation networks.
• 2:42
  Zach Rable: So that, I think, is reauthorization on its most simple, basic terms.
• 2:48
  Zach Rable: We are currently operating underneath the bipartisan infrastructure law, which is an authorization that does much more than just surface transportation, but, you know, produce programs that allowed us to focus on highways, bridges and a number of other things as well.
• 3:09
  Zach Rable: So that's reauthorization.
• 3:13
  Jeff Cranson: Yeah, so yeah, that's good.
• 3:15
  Jeff Cranson: That's a good explanation.
• 3:15
  Jeff Cranson: I think that confuses things a little bit.
• 3:20
  Jeff Cranson: To the fact that the feds use these different terms, it was called the bipartisan infrastructure law BIL, as it made its way through both chambers of Congress.
• 3:25
  Jeff Cranson: And to the fact that the feds use these different terms, it was called the bipartisan infrastructure law vil, as it made its way through, uh, both chambers of congress into the president's desk.
• 3:30
  Jeff Cranson: Once it was signed, it became an act, the infrastructure investment jobs act, iija, and they're basically the same thing, right they are indeed the same thing.
• 3:42
  Zach Rable: Yes, there are.
• 3:43
  Zach Rable: Uh, you know the federal government uses a number of different terms.
• 3:47
  Zach Rable: They've called it the bipartisan infrastructure law.
• 3:50
  Zach Rable: Iija might be a term you've heard thrown out.
• 3:54
  Zach Rable: They are the same thing transportation programs.
• 4:00
  Zach Rable: But it also does a number of things to focus on airports, waterways and transportation modes that aren't necessarily on the surface, you know, depending how you might define that.
• 4:13
  Jeff Cranson: So I want to get back to the difference between the IIJA and the previous authorization, the FAST Act, and what that did.
• 4:22
  Jeff Cranson: But before that you touched on the Highway Trust Fund authorization, the FAST Act and what that did.
• 4:26
  Jeff Cranson: But before that you touched on the Highway Trust Fund.
• 4:27
  Jeff Cranson: You know, I like to remind people that the federal gas tax hasn't been raised since 1993.
• 4:35
  Jeff Cranson: That's a really long time and it's no wonder that the Highway Trust Fund is broke and that they need general fund to bail them out.
• 4:44
  Jeff Cranson: A lot of experts on both sides of the aisle and people who study this would say that for more than a hundred years our country funded roads and bridges, infrastructure, transportation infrastructure with user fees.
• 4:59
  Jeff Cranson: User fees was a good model.
• 5:00
  Jeff Cranson: You know, the people that use the roads pay for the roads and and a gas tax and a registration fee pretty much do that.
• 5:08
  Jeff Cranson: Road user charges and tolling would be a more modern way to do that and be even more direct in terms of those kinds of fees.
• 5:14
  Jeff Cranson: But the Highway Trust Fund is necessarily broke because feds have failed to raise the gas tax and we understand why that's so difficult.
• 5:24
  Jeff Cranson: Feds have failed to raise the gas tax and we understand why that's so difficult.
• 5:27
  Jeff Cranson: This week you were meeting with some of our congressional members on michigan's delegation and their staffers, all asking really good questions about these things, and you you know one of the priorities that you cited was the highway trust fund and long-term solvency.
• 5:44
  Jeff Cranson: I know nobody can say for sure how that can happen or whether it will happen, but what did you feel was the reaction when you talked to the members about that?
• 5:56
  Zach Rable: Yeah, I think that the members understood, certainly, that having a consistent and stable funding source is really important to us as a DOT and all our other partner DOTs across the country, and I think their reaction is that, you know, there's a number of ways to grow the pie here, and I think I'm hopeful that Congress will find a way of growing the pie so that folks are not feeling like this is a increase in tax on them, but a way of making sure, like any other utility that we have to support, that transportation can be a utility that is supported in a meaningful way.
• 6:43
  Zach Rable: And so, you know, the purchasing power of the federal gas tax has been dwindling for quite some time.
• 6:52
  Zach Rable: Everyone knows it, it's no secret, and so I'm hopeful that the members will continue to look at propping that up.
• 7:04
  Zach Rable: You know, like you said, I can't predict the future, so I don't know what it might look like, but I am hopeful.
• 7:11
  Jeff Cranson: Yeah, well, you touched on, you know, one of my favorite themes and that's the idea that roads are a public utility.
• 7:16
  Jeff Cranson: And you know we don't have a public utility commission to set the rates.
• 7:22
  Jeff Cranson: We rely on lawmakers, and that seems to make it much more difficult.
• 7:26
  Jeff Cranson: I wonder if we, right from the beginning, had treated them more like a utility, like something we need.
• 7:33
  Jeff Cranson: We don't ask lawmakers to keep the lights on, so maybe that would be a better model.
• 7:40
  Zach Rable: So let's, get back to reauthorization.
• 7:44
  Jeff Cranson: Very positive response from committee members on both sides of the aisle that they understand that we need that certainty that you know transportation projects take a long time in planning and in building and you can't plan ahead if you don't know what the money is going to be like.
• 8:02
  Jeff Cranson: The IIJA was a huge boost over the previous authorization.
• 8:07
  Jeff Cranson: Talk about the difference, I guess, between the FAST Act and the IAJA.
• 8:13
  Zach Rable: The FAST Act, you know, really provided state DOTs at that time a good source of long-term funding for many different transportation needs.
• 8:28
  Zach Rable: A lot of that came through formula programming.
• 8:32
  Zach Rable: When I say formula programming, I'm saying dollars that are apportioned to state DOTs via a formula that was set within the law itself and so state DOTs know, based on the formula, what they're going to be receiving each year.
• 8:55
  Zach Rable: What's different with IIJA is that Much of the new funding is flowing to state DOTs or our MPO partners or other local partners via discretionary grant programs.
• 9:14
  Zach Rable: The difference between a discretionary grant and a formula program is that the discretionary grant process is competitive.
• 9:22
  Zach Rable: You produce an application or a proposal proposal and you submit that to the federal government for review.
• 9:30
  Zach Rable: There are some noted priorities guidelines.
• 9:35
  Zach Rable: They produce a bit of a rubric for states to follow, giving them an idea about how they might be scoring projects or weighing out what they're looking for.
• 9:44
  Zach Rable: But it's much less uncertain than a formula program where, like I said previously, the formula is known to everyone.
• 9:53
  Zach Rable: It's a known amount that state DOTs will be receiving and with the grants, you know you spend a lot of time developing the proposals and the applications and submitting it and you, after spending all that time very well may not be selected to receive any money, and even if you are selected, sometimes you get less money than you asked for.
• 10:20
  Zach Rable: So it's a good way for states to get wins.
• 10:25
  Zach Rable: It's a good way for states to accomplish projects that maybe wouldn't have fit within their normal highway programming, but it's much less uncertain, and so that was something new in the IIJA.
• 10:51
  Jeff Cranson: And you know the fervent hope would be that another reauthorization continues, at least that level of funding, ideally even more funding, and I guess talk a little bit more about that and how you laid that out as a priority in your discussions.
• 10:59
  Zach Rable: Yeah.
• 10:59
  Zach Rable: So it's important for the funding to continue at a higher level because of a number of things, one of them being inflation, which has chewed away at the purchasing power of the money that was flowing to states from the IIJA.
• 11:19
  Zach Rable: And so the reality is states haven't been able to produce as many projects as they once hoped because, you know, their ability to accomplish those was reduced.
• 11:31
  Zach Rable: They're needing to spend more domestic products all the way through the construction cycle, which is great, except for this is becoming more costly, particularly for goods that haven't fully been integrated into the domestic manufacturing.
• 12:10
  Zach Rable: That's something you know.
• 12:13
  Zach Rable: There's growth industries that need to occur there, and so when I was speaking with the members, I was telling them that for those reasons, it's important to keep the funding levels where they are, or even above where they are with the IIJA, so that states can continue to produce good transportation projects, continue to grow the programs, and you know, without that it would be a real cut to what we've been accomplishing right now.
• 12:44
  Jeff Cranson: Yeah, and I think that that's a really important point.
• 12:48
  Jeff Cranson: It sounds really good on the surface to do the Build America, buy America provisions.
• 12:53
  Jeff Cranson: Yeah, that sounds like a good thing, that's something we should be for, but a lot of times it's a lot more complicated than that, and that's what you know, you heard from across the country.
• 13:05
  Jeff Cranson: This isn't just a Michigan thing.
• 13:06
  Jeff Cranson: This is, you know, every DOT, 50 states and Puerto Rico and the District of Columbia all wrestling with those things.
• 13:15
  Jeff Cranson: Can you talk more specifically about what some of those challenges might be?
• 13:35
  Zach Rable: Yeah.
• 13:35
  Zach Rable: So the challenges, as I understand them, are that many of the goods that go into completing any construction project you know, from nails all the way to concrete to steel.
• 13:41
  Zach Rable: You know, the smaller the item like a nail, the harder it is to trace back its sourcing.
• 13:47
  Zach Rable: And if there's a requirement to make sure that 55% or greater of all even those smaller items like a nail, like I said, is being domestically made, it becomes costly to oversee, it becomes costly to find the source product in America, and so from an administrative standpoint it's complicated.
• 14:14
  Zach Rable: From a sourcing standpoint it becomes complicated, and so you know, the reality is it's something that the construction industry is grappling with, but it does increase the price typically on any project at the moment.
• 14:29
  Jeff Cranson: We will continue the conversation right after a quick break.
• 14:33
  MDOT announcement: In Michigan, safety Safety comes first on the roads.
• 14:35
  MDOT announcement: To combat distracted driving, Michigan passed the hands-free law.
• 14:39
  MDOT announcement: The law makes holding or manually using a cell phone or other mobile electronic device while operating a vehicle a primary offense.
• 14:47
  MDOT announcement: This means an officer can stop and ticket you for violating the law.
• 14:52
  MDOT announcement: This can include, but not limited to, sending or receiving a call, sending, receiving or reading a text or email, accessing, reading or posting to social media sites or entering locations into the phone GPS to social media sites or entering locations into the phone GPS.
• 15:09
  MDOT announcement: With this law in place, drivers are encouraged to stay focused, keeping their hands on the wheel and their attention on the road.
• 15:15
  MDOT announcement: Drive smart drive, safe drive hands-free Michigan's hands-free law, making the road safer for everyone.
• 15:23
  Jeff Cranson: So the other part of this is that some of those grants that you talked about earlier, those discretionary grants that were awarded under the IIJA, have not been obligated yet.
• 15:35
  Jeff Cranson: Obviously, it's not uncommon when we change administrations for the priorities to differ, and so the new administration has put those on hold while they sort through.
• 15:49
  Jeff Cranson: You know what they're for and how they fit with their priorities, and it's been frustrating to tell reporters now for a few weeks and to tell lawmakers and other interested parties that we don't know what we don't know.
• 16:12
  Jeff Cranson: But that was a pretty common theme coming out of those meetings.
• 16:14
  Jeff Cranson: Just Michigan alone has some major projects across the state that are in limbo until then.
• 16:20
  Jeff Cranson: Did you feel like, as you had those discussions, that people understood everybody's looking for answers, but they understood why we can't just say what's going to happen?
• 16:34
  Zach Rable: Yeah, I really do.
• 16:35
  Zach Rable: You said it best we don't know what we don't know, and I think there's a lot of uncertainty surrounding this at the moment, but also an eagerness.
• 16:46
  Zach Rable: There's a lot of uncertainty surrounding this at the moment, but also an eagerness I think we heard this from everyone we spoke to an eagerness to come to a solution that's reasonable, so a way to make sure that important transportation projects that were awarded to us via the discretionary process can go forward, because it really, you know, in the minds of the folks we spoke to, doesn't matter if the bridge or the road or whatever it may be, is in a blue or red district.
• 17:14
  Zach Rable: It's an important transportation project and folks of you know any political persuasion would be benefiting from them being completed.
• 17:24
  Zach Rable: So I felt like we were heard and I felt like the folks are taking it seriously about wanting to find a solution here.
• 17:37
  Jeff Cranson: What was your takeaway from hearing from some of the high-level members of the House Transportation and Infrastructure Committee about reauthorization?
• 17:47
  Jeff Cranson: I know Representative Rauser of North Carolina was bullish on getting a reauthorization even sooner than when it really needs to be done, which is next year.
• 17:58
  Jeff Cranson: Talk a little bit about that.
• 18:01
  Zach Rable: Yeah, so you know, the main theme we always hear from the policy writing committees, particularly from the House Transportation Infrastructure Committee, which is the main policy writing committee in that chamber for transportation, is that they like to work together in a bipartisan manner and that spirit, you know, sort of emanates from both sides when they go up and speak to us every year, and that was certainly true again this year.
• 18:31
  Zach Rable: You know, representative Rausser was quite bullish, as you mentioned, and did indeed say he'd like to get a reauthorization bill done this year, one year ahead of schedule.
• 18:42
  Zach Rable: I'm not certain if that's a possibility, but we would certainly welcome that.
• 18:49
  Zach Rable: It's good to have things done ahead of schedule.
• 18:52
  Zach Rable: That helps with our ability to plan and program.
• 18:58
  Zach Rable: It's that stability we are often seeking for funding.
• 19:03
  Zach Rable: Overall, my general takeaway is that and folks on both sides, the leadership on both sides, want to work together to produce an important transportation package that funds, you know, of course, roads and bridges, but also can fund other multimodal needs, and we heard that from both sides.
• 19:27
  Zach Rable: So that was really positive and I think at the end of the day we will get a bipartisan bill.
• 19:34
  Zach Rable: I'm not sure it will be this year, but that would be nice.
• 19:38
  Jeff Cranson: Yeah, that would be.
• 19:39
  Jeff Cranson: I think, what I found, I guess, a little bit satisfying, or giving us hope at least, was that that bipartisan sense that we need to do this sooner rather than later because of that planning.
• 19:55
  Jeff Cranson: They seemed to all get that.
• 19:57
  Jeff Cranson: It takes time to get these things even if they're already in a state's plan and if it's in a transportation improvement plan and they've already identified it as a priority.
• 20:10
  Jeff Cranson: That doesn't mean that once you get the money you can just start breaking ground right.
• 20:15
  Jeff Cranson: You've still got a lot of things to do.
• 20:17
  Jeff Cranson: So that was a lot of the conversations.
• 20:20
  Jeff Cranson: Did you come away feeling, I guess you know, more positive than you thought you might after talking to so many different people?
• 20:30
  Zach Rable: Yeah, I think I did.
• 20:32
  Zach Rable: You know we've talked a bit about the uncertainty and you know that remains, but I think what was hopeful is, as we mentioned, a lot of people seeking to find sensible solutions in a bipartisan manner to make sure that state DOTs are given the space to produce good transportation projects, are able to prioritize things that are important to them individually as states, and that's good, that's what we seek, and so, yes, I did come away more positive than I thought I would.
• 21:10
  Jeff Cranson: Yeah, I guess, when you think about it, your job analyzing these things and really trying to understand them and explain them to people.
• 21:18
  Jeff Cranson: It was a lot to get your brain around the IAJA compared to things you've done previously, and I know I relied on you a lot.
• 21:28
  Jeff Cranson: I came to you often to get a breakdown of what it really meant, both at the state and local level.
• 21:35
  Jeff Cranson: So are you looking forward to the challenge of deciphering another reauthorization?
• 21:42
  Zach Rable: Yeah, why not?
• 21:43
  Zach Rable: You know you have to be in the policy field because you enjoy the policy itself, right?
• 21:49
  Zach Rable: There's something fun about seeing new legislation and getting to analyze and best understand how it will impact us as a state DOT, and you know our local partners and everyone else, and so I'm excited for that.
• 22:04
  Zach Rable: There's certainly an energy around the production of a bill that makes it exciting too, because you both both sides as they're coming together feel like they're accomplishing something good, and you know those.
• 22:18
  Zach Rable: Those are rare wins, right, when you get a bipartisan bill through Congress these days.
• 22:22
  Zach Rable: So, um, that's that's also a nice thing to be a part of.
• 22:27
  Jeff Cranson: Yeah, plus uh.
• 22:28
  Jeff Cranson: You will finally get to say that you know, I do know something and you don't have to just say I don't know what, I don't know, right.
• 22:35
  Zach Rable: That's very true too.
• 22:37
  Jeff Cranson: Yeah, well, thanks, Zach.
• 22:39
  Jeff Cranson: Uh, anything else you want to add about this and, uh, you know, the ongoing push for a longer term funding solution.
• 22:48
  Zach Rable: No, I don't think so.
• 22:49
  Zach Rable: I think that you know reauthorization comes around once every four or five years and we talk about these priorities with members of Congress and you know it feels like you get little wins in each one of those bills.
• 23:10
  Zach Rable: One of those bills and so um stacking.
• 23:12
  Zach Rable: The little wins I think are really important to us, to other state dots, our local partners, and I'm hopeful that in the long term one of those little wins will be a bigger win with a longer term funding solution for the highway trust fund.
• 23:28
  Jeff Cranson: Yeah, we'll see yeah, well, I, I really, I really like that way of framing it stacking those wins, that's a good way to put it.
• 23:38
  Jeff Cranson: We'll look forward to that.
• 23:39
  Jeff Cranson: So thank you again, as always, for sharing your insights and talking about what you've learned as you've listened and talked to so many different people that are working hard on these things.
• 23:54
  Zach Rable: Yeah, absolutely.
• 23:55
  Zach Rable: Thank you so much for having me, Jeff.
• 23:57
  Jeff Cranson: I'd like to thank you once more for tuning in to Talking Michigan Transportation.
• 24:01
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• 24:05
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