Tumultuous Week in Lansing, Washington Provide Budget Uncertainty for Infrastructure
Friday, October 2, 2009
With the close of the fiscal year looming on Wednesday, the U.S. Congress and the Michigan Legislature were scurrying to complete their work on the fiscal year 2010 budgets.
After much political wrangling, the legislature passed a transportation budget (SB 254) that had been bogged down in disputes over whether to continue pursuing a new Detroit River International Crossing (DRIC). The overall transportation budget numbers were not in dispute because they are based off of revenue projections from the gas tax and vehicle registration fees that cannot be spent on other areas of the state budget.
The overall state transportation budget decreased from about $4.5 billion to about $3.2 billion—largely due to one-time stimulus dollars.
Congressional Action Still Needed on Transportation Spending
On the federal level, Congress passed a one-month extension of SAFETEA-LU, which is the multi-year transportation spending plan. There has been significant talk about an 18-month extension, but that will not be accompanied with a much-needed revenue increase. The dwindling revenues from the federal gas tax are far short of current federal transportation spending. So without new money, Congress will be forced to spend general fund dollars in order to continue investing at current spending levels. As a result, transportation advocates, including MITA, oppose the 18-month extension.
There was an obscure section of the SAFETEA-LU law called “rescission” that required states to pay back the federal government if the revenues did not match the spending targets. With no congressional changes this week, Michigan may be forced to send money back to Washington. MITA has been in contact with the Michigan congressional delegation to push for a repeal of the rescission requirement. Certain federal and state book keeping processes can limit the negative impact of this rescission if Congress acts promptly.
Federal Revolving Fund Increases in the Pipeline
One encouraging piece of news on the federal front, the Senate joined the House in approving the 2010 State Revolving Fund Appropriations Bill by a vote of 77-21.The funding is approximately three times that of recent years.
Senate Funding House Funding
Wastewater $2.1 billion Wastewater $2.307 billion
Drinking Water $1.39 billion Drinking Water $1.44 billion
The bill now goes to a Senate/House Conference Committee that resolves the differences in the amounts. This is usually done quickly, and conferees most often split the differences in the amounts of funding.
If you have any questions or comments, please feel free to contact Mike Nystrom at firstname.lastname@example.org or Keith Ledbetter at email@example.com or call the MITA office at 517-347-8336.