In this issue:
The Trade Corridor Bulletin
Volume 15 – No. 4 | April 2021
CAGTC Members Briefed by Federal Lawmakers During 2021 Annual Meeting
By: CAGTC Staff
On April 6, members of the Coalition for America’s Gateways and Trade Corridors (CAGTC) met virtually for the association’s 2021 Annual Meeting to hear from federal policymakers and industry insiders. The topics du jour, of course, were the imminent surface transportation reauthorization and the Biden-Harris Administration’s American Jobs Plan.
Paul Hubler, CAGTC Board Chairman and Director of Government & Community Relations for the San Gabriel Valley Council of Governments and Alameda Corridor-East Project, kicked off the meeting by remarking upon the goods movement industry’s critical importance during the COVID-19 pandemic. Despite major supply chain disruptions, the freight sector rose to the occasion to meet consumer demands and deliver essential goods. He emphasized that this year’s surface transportation reauthorization and economic recovery legislation offer unprecedented opportunities for investment in multimodal freight infrastructure. As these ambitious proposals advance, CAGTC looks forward to continuing its work with Congress and the Biden-Harris Administration by advocating for robust federal investment in our national freight infrastructure system.
Christopher Coes, Acting Assistant Secretary for Transportation Policy for the U.S. Department of Transportation, spoke to members about the Biden-Harris Administration’s recently unveiled American Jobs Plan. He said that “investing in infrastructure, particularly freight infrastructure, is critical for America to have sustainable economic growth,” stressing that the Administration’s proposal seeks to both rebuild the nation’s infrastructure and create millions of good-paying jobs. Coes also noted that securing the domestic supply chain, protecting vulnerable populations, mitigating the effects of climate change, and ensuring equal access to discretionary grant programs are top priorities for Secretary of Transportation Pete Buttigieg. He added that USDOT hopes to collaborate with other federal agencies to accomplish the Administration’s infrastructure policy priorities. Finally, Coes told CAGTC members that as USDOT works with lawmakers to develop legislative language, the Department welcomes input from freight stakeholders.
Next, Senate staff provided an “off the record” perspective on key themes and objectives for inclusion in a forthcoming surface transportation reauthorization proposal. Following remarks, CAGTC members raised questions on a variety of topics, including discretionary grant programs and prospects for Highway Trust Fund solvency.
Closing out the meeting, Jeff Davis, Senior Fellow with the Eno Center for Transportation and Editor of Eno Transportation Weekly, provided the group with a detailed analysis of the American Jobs Plan. He discussed the complex relationship among the infrastructure proposals Congress is likely to consider this year – which include the American Jobs Plan, FAST Act reauthorization, and fiscal year 2022 appropriations. Davis also spoke about several issues not addressed in the White House’s outline, such as questions related to state and local matching shares, megaprojects, earmarks, and the timeline for spending.
During the meeting, CAGTC also conducted its annual Board elections, electing two new industry leaders and re-electing four. Fran Inman, Senior Vice President of Majestic Realty Co., and Ray Traynor, Chief Planning & Innovation Officer of the San Diego Association of Governments, both longtime CAGTC members, were elected to serve their first term on the Board. Those reelected to serve another term are: Erin Aleman, Executive Director of the Chicago Metropolitan Agency for Planning; Paul Anderson, President & CEO of Port Tampa Bay; Shant Boyajian, Partner at Nossaman LLP; and Rachel Vandenberg, Senior Vice President of Dewberry. Read CAGTC’s press release here.
Biden-Harris Administration Proposes Unprecedented Infrastructure Investment in the American Jobs Plan
By: CAGTC Staff
Consistent with his campaign promise to develop a plan to “Build Back Better,” President Joe Biden in late March announced the American Jobs Plan and Made in America Tax Plan, proposing a $2.3 trillion investment to support job creation and a wide range of infrastructure improvements. In addition to existing federal funding and programs, the Biden-Harris Administration urges Congress to provide $571 billion for transportation infrastructure, including: $115 billion to improve roads and bridges; $80 billion to support passenger and freight rail; $17 billion for inland waterways, coastal ports, land ports of entry, and ferries; $20 billion for highway safety improvements; and $44 billion to accelerate “transformative projects” through research and competitive grant programs. The American Jobs Plan also addresses the Biden-Harris Administration’s climate and equity priorities, directing funds to vehicle electrification and initiatives to assist vulnerable communities.
The Biden-Harris Administration’s proposal outlines proposed investments made over the next five to eight years, offset by tax reforms intended to pay for these investments within the next 15 years. The Made in America Tax Plan proposes to increase the corporate tax rate from 21 percent to 28 percent along with several other provisions to disincentivize the offshoring of jobs overseas and ensure large corporations “are paying their fair share.”
The Administration is working with Members of Congress to craft legislation based on the American Jobs Plan. Though the President has stressed that he hopes to pass an infrastructure bill with bipartisan support, lawmakers on both sides of the aisle have voiced opposition to aspects of the American Jobs Plan. Republicans in Congress have taken issue with the plan’s overall price tag, climate provisions, and corporate tax increases. Several GOP lawmakers have also objected to the proposed investments in areas that have traditionally not been considered infrastructure, such as caregiving services and schools. Senate Minority Leader McConnell (R-KY) said of the American Jobs Plan, “It’s called infrastructure, but inside the Trojan horse is going to be more borrowed money and massive tax increases on all the productive parts of our economy.” Progressive Democrats argue that the plan does not go far enough to combat climate change, while moderates from states with high tax rates, such as New York, New Jersey, and Connecticut, oppose any changes to the tax code without a repeal of the state and local tax (SALT) cap. Democrats also have disparate views on the corporate tax rate, with Sen. Sanders (I-VT) advocating for a 35 percent rate and Sen. Manchin (D-WV) indicating that he supports a more modest increase to 25 percent.
Given Republicans’ staunch opposition to the size and scope of the American Jobs Plan, it appears unlikely, in its currently proposed form, to garner the ten GOP votes required to break a filibuster. Democrats may seek to sidestep the filibuster and pass the bill through budget reconciliation, which requires only a simple 51-vote majority. The Senate Parliamentarian recently determined that the Senate budget rules allow Congress to use the reconciliation process multiple times during one fiscal year. Nonetheless, there are limitations on the provisions that can be included in reconciliation bills. Transfers from the General Fund of the Treasury to the Highway Trust Fund and earmarks, for example, would likely violate Senate rules. Multiple Senate Democrats, including Senate Majority Leader Schumer (D-NY) and Sen. Coons (D-DE), have predicted that Democrats will rely on reconciliation to pass elements of the Administration’s proposal. However, achieving unanimous support for tax legislation from Senate Democrats, particularly moderates, could prove challenging.
Senate Republicans, led by Environment and Public Works Ranking Member Capito (R-WV), released a $568 billion counterproposal to the American Jobs Plan on April 22. The smaller, more targeted package is focused primarily on what is considered “traditional” transportation infrastructure, allocating $299 billion for roads and bridges, $62 billion for transit, $20 billion for rail, $44 billion for airports, $7 billion for water ports, and $13 billion for transportation safety agencies. The Republican framework also includes funding for broadband, drinking water and wastewater infrastructure, and water storage. In contrast to the Biden-Harris Administration’s package, the Republican proposal includes current baseline funding levels in its recommended surface transportation investments. The proposed funding sources also differ, with Senate Republicans calling for improving the solvency of the Highway Trust Fund, rather than corporate tax increases. The proposal calls for user fees that account for electric vehicle drivers to ensure all road users contribute to HTF revenue, though further details have not yet been announced. Republicans also suggest unused funds from COVID relief legislation be repurposed for infrastructure investments. Ranking Member Capito emphasized that Republicans are willing to compromise, stating, “I think we see this as an offer that is on the table and deserves a response.”
House Problem Solvers Caucus Issues Bipartisan Policy Recommendations for Infrastructure Investment
By: CAGTC Staff
On April 23, the House Problem Solvers Caucus (PSC) released a framework to improve the nation’s infrastructure. Established in 2017, the PSC is a group of 58 lawmakers – equally divided between Republicans and Democrats – that promotes bipartisan cooperation on key policy issues. The group is led by Co-Chairs Rep. Gottheimer (D-NJ) and Rep. Fitzpatrick (R-PA). The document was developed by the PSC’s Infrastructure Working Group, co-chaired by Rep. Lamb (D-PA) and Rep. Katko (R-NY), with input from industry and governmental stakeholders. According to the framework, the PSC created its Infrastructure Working Group to foster dialogue on the backlog of deferred maintenance in the United States and the need for significant infrastructure investment.
The report, titled “Rebuilding America’s Infrastructure,” offers policy solutions to rebuild and invest in American highways, roads and bridges, transit and railways, ports and airports, water and sewer systems, energy systems and the power grid, and broadband and communications networks. The framework highlights areas of bipartisan agreement on transportation and infrastructure issues. Consensus priorities include providing stable, long-term funding for infrastructure, encouraging Public Private Partnerships, ensuring that rural communities have opportunities to compete successfully for funding, and expediting project completion without compromising on environmental and safety protections.
In the report, the PSC offers several key recommendations that align with CAGTC’s policy priorities. For example, the report urges Congress to increase funding eligibility for multimodal infrastructure, noting the FAST Act requires that 90 percent of INFRA Grant program and Freight Formula Program funding must be spent on highways, roads, and bridges, and suggests altering these programs to enable the selection of more multimodal projects. The group also points to recommendations made by the Government Accountability Office (GAO) to ensure that competitive federal grant programs are administered in line with Congressional intent and that funding is awarded transparently. Additionally, the report calls on Congress to invest in highway, transit, and freight projects of regional and national significance that cannot otherwise be funded through existing discretionary programs.
Other proposed financing reforms include raising the private activity bond state volume cap for all infrastructure categories, increasing Transportation Infrastructure Finance and Innovation Act (TIFIA) program funding, incentivizing use of the Railroad Rehabilitation and Improvement Financing (RRIF) program, and appropriating the authorized funds for the Regional Infrastructure Accelerator (RIF) Demonstration Program.
Finally, the report recommends imposing alternative user fees in order to stabilize Highway Trust Fund (HTF) solvency and ensure that the costs of maintaining and constructing transportation infrastructure are distributed equitably among the system’s users. To address declining HTF revenue, the Caucus proposes a handful of revenue mechanisms, such as implementing electric and hybrid vehicle fees (and funding additional pilot project testing for mileage-based user fees). It also encourages Congress to consider a user fee based on the value of truck freight assessed through waybill taxes.
Read the full report here.
U.S. Secretary of Transportation Pete Buttigieg Announces Availability of $1 Billion to Modernize and Create New American Infrastructure
On April 13, the U.S. Department of Transportation (DOT) published a Notice of Funding Opportunity (NOFO) to apply for $1 billion in Fiscal Year (FY) 2021 discretionary grant funding through the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants. RAISE, formerly known as BUILD and TIGER, has awarded over $8.935 billion in grants to projects in all 50 states, the District of Columbia and Puerto Rico since 2009.
“In communities across the country, there is tremendous need for transportation projects that create high-quality jobs, improve safety, protect our environment, and generate equitable economic opportunity for all Americans,” said U.S. Secretary of Transportation Pete Buttigieg. “With RAISE grants, we are making those needed investments in our communities' future.”
Projects for RAISE funding will be evaluated based on merit criteria that include safety, environmental sustainability, quality of life, economic competitiveness, state of good repair, innovation, and partnership. Within these criteria, the Department will prioritize projects that can demonstrate improvements to racial equity, reduce impacts of climate change and create good-paying jobs.
Read the full release here.
Polly Trottenberg Joins U.S. Department of Transportation as Deputy Secretary
Polly Trottenberg was sworn in as the Deputy Secretary of Transportation by Secretary of Transportation Pete Buttigieg in a private ceremony on April 13, following her Senate confirmation.
Trottenberg brings more than 25 years of public sector experience across all levels of government to the role. Most recently, she served for seven years as the Transportation Commissioner for New York City, where she headed an agency of nearly 6,000 employees responsible for the safe, efficient and equitable operations of New York City’s transportation network. As Commissioner, she also led the New York City Department of Transportation (NYCDOT) through COVID-19 response and recovery, prioritizing transforming City streets to promote livability, sustainable transportation and economic recovery.
U.S. Secretary of Transportation Pete Buttigieg said, “We could not be more delighted to welcome Polly Trottenberg back home to the U.S. Department of Transportation as Deputy Secretary. She earned a reputation here and as Commissioner of NYCDOT as a brilliant, thoughtful, effective public servant whose work improved the lives of millions of travelers. Her passion and skill arrives at a critical moment as we work to transform our infrastructure, create millions of good jobs, advance safety and equity, and combat climate change.”
Read the full release here.
White House Releases State-by-State Fact Sheets to Highlight Nationwide Need for the American Jobs Plan
The White House released state-by-state fact sheets on April 12 that highlight the urgent need in every state across the country for the investments proposed by President Biden in the American Jobs Plan. The fact sheets highlight the number of bridges and miles of road in each state in poor condition, the percentage of households without access to broadband, the billions of dollars required for water infrastructure, among other infrastructure needs.
These fact sheets are the latest in a series from the White House highlighting the benefits of the American Jobs Plan for communities. Additional issue-based fact sheets will be released in the coming days and weeks. Fact sheets on how the American Jobs Plan Advances Racial Equity and the American Jobs Plan Supports Rural America have been released in recent weeks.
The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.
Read the full release here.
Port Tampa Bay Welcomes Plans for Celadon Paper Fiber Manufacturing Plant
On March 23, the Port Tampa Bay Board of Commissioners approved an agreement with Celadon Development Corporation to lease 37 acres for the construction and operation of a paper fiber manufacturing plant. The plant will have significant economic and sustainability benefits generating up to 20,000 export containers per year (40,000 TEUs), creating approximately 100 jobs and involving a capital investment of $160 million during Phase One of the project. The facility will receive and process mixed paper, corrugated cardboard and plastic products sourced in Florida to produce paper fiber sheets for export to Asia. Environmental and sustainability benefits include increased recycling, water re-use and reduction of greenhouse gases, saving over 1.8 million tons in carbon dioxide emissions. Phase Two of the project will see the addition of a second production line that will double the plant’s capacity, increasing the output to 40,000 export containers per year (80,000 TEUs), resulting in a total capital investment approaching $400 million. The site which is on Port Tampa Bay’s Hooker’s Point property is located alongside the Port’s container terminal which is also undergoing a significant phased expansion and is operated by Ports America under a long-term lease. The site is adjacent to the City of Tampa’s wastewater treatment plant with plenty of capacity to accommodate the project’s use of reclaimed water and wastewater needs.
“We are delighted to welcome Celadon to the Port Tampa Bay family,” stated Paul Anderson, Port Tampa Bay President & CEO. “This project will have hundreds of millions of dollars in generational economic impact. In addition to the job creation and diversification it offers our maritime community, Celadon and its partners are global leaders in environmental sustainability and will use cutting-edge technology to create a new recyclable product. The benefits span our entire community and region. We would like thank all of our partners, including the City of Tampa, Hillsborough County and the Tampa Bay Economic Development Council for helping to make this happen."
Read the full release here.
Metro Board Approves Metrolink CEO Stephanie Wiggins as Next CEO of LA Metro
Mayor Eric Garcetti announced on April 8 that the Metro Board of Directors voted to appoint Stephanie Wiggins to be the next Metro Chief Executive Officer. Wiggins, currently the CEO of Metrolink, will be the first woman, and first Black woman, to serve in this role at Metro. She will succeed retiring CEO Phil Washington.
“Metro is in the midst of a generational transformation that will mean more jobs for local workers, more growth for our economy, and more ways for Angelenos to move around our region — and nobody is better prepared to carry the torch of progress than Stephanie Wiggins,” said Metro Board Chair and Los Angeles Mayor Eric Garcetti. “Stephanie’s career makes her ideally suited to lead this agency at this moment: she’s experienced, determined, committed to equity, and steeped in L.A.’s transportation history, and she is the perfect candidate to carry Metro into its next chapter.”
As Metro’s CEO, Wiggins will manage a budget of nearly $7 billion, oversee up to $20 billion in capital construction projects, and oversee an agency with 11,000 employees that transports more than a half-million boarding passengers daily on a fleet of 2,200 buses and six rail lines.
Read the full release here.
Rebuild with Purpose: An Affirmative Vision for 21st Century American Infrastructure
Policymakers, practitioners, and the general public increasingly agree that our infrastructure systems are under pressure. Storm surges and coastal flooding continue to wreak havoc on our cities and towns. A lack of world-leading digital infrastructure has made it harder for businesses and people to compete in the global information economy. Outdated pipes and streets impact the health and safety of too many people.
Simply repairing our outmoded infrastructure systems with the same traditional policies, technologies, and designs is not enough. Americans are ready for a grand reimagining of and reinvestment in our infrastructure to revitalize the transportation, water, energy, and broadband systems that power our economy.
Brookings' new report, Rebuild with purpose: An affirmative vision for 21st century American infrastructure, serves as the foundation for a new federal vision for American infrastructure. The report crafts an integrated plan to address four cross-cutting forces of change, and recommends a three-part framework to guide Congress and federal agencies’ strategic direction.
Read the full report here.
Public-Private Partnerships (P3s) in Transportation
Congressional Research Service
Public-private partnerships (P3s) in transportation are contractual relationships typically between a state or local government, which are the owners of most transportation infrastructure, and a private company. P3s provide a mechanism for greater private-sector participation in all phases of the development, operation, and financing of transportation projects. Although there are many different forms P3s can take, the two types of agreements that generate the most interest and discussion are design-build-finance-operate-maintain (DBFOM) contracts and long-term leases.
P3s have emerged, in part, because of the growing demands on the transportation system and
constraints on public resources. To date, the number of transportation P3s in the United States is
relatively small, as is the amount of long-term private financing provided. Among the reasons for
this are the availability to state and local governments of tax-preferred municipal bonds; the need
for some kind of revenue stream, such as a toll, fare, or tax, to provide funding; and the fact that
many states have very limited experience with P3s. Most transportation P3s to date have been in
highways or marine cargo terminals; only a few have involved public transportation, intercity
passenger rail, or airports.
Read the full release here.