LEGISLATIVE UPDATE – MARCH 2010

Between the shutdown of Washington, D.C., due to the blizzards on the east coast, and the break for President’s Day Week during the month of February, not much was accomplished in the halls of Congress last month. The ongoing focus on health care reform and the job stimulus bill and its subsequent defeat has dominated just about everything else. Worth watching has been the mass exodus of Democrats and Republicans retiring – some out of sheer frustration with the politics in Washington.

FY 2011 Budget Released on February 1

The President is required by law to submit his annual budget proposal for the next fiscal year to Congress by the first Monday in February and President Obama delivered on that requirement.

With a focus on creating jobs and restoring our nation’s economic strength, President Obama released his Fiscal Year 2011 Budget on February 1, 2010. The $3.8 trillion federal budget included a $100 billion jobs package, more education spending, higher taxes on families earning more than $250,000 a year, and deficit controls. The following is a brief overview of the aspects of the Department of Transportation provisions in the FY 2011 Budget that pertain to the rail industry.

The core mission of the Department of Transportation is to promote safety, increase mobility, and support the development of infrastructure that will underpin job creation in the years ahead. Transportation Secretary Ray LaHood states, “President Obama’s FY 2011 budget request reflects his vision for the future of transportation in America. His plan sets the stage for bold, new, innovative thinking and provides solutions to complex problems…. We will invest in our Nation’s infrastructure—creating jobs in support of the economy while delivering projects that can best leverage our federal investment. In addition, the Department will improve the livability of Nation’s communities by joining forces with the Department of Housing and Urban Development and the Environmental Protection Agency to make transportation a more integral part of our communities.”

The Department’s FY 2011 request of $79 billion, a nearly $2 billion or 2% increase, targets the Administrations three key transportation priorities: improving transportation safety; investing for the future; and promoting livable communities.

The budget includes $1 billion for high speed rail, on top of the $8 billion in stimulus funds awarded last month to 31 states for high speed rail projects. The 2011 request supports President Obama’s five-year, $5 billion pledge in the 2010 budget. The Administration is dedicated to working with States and other project sponsors to support high speed rail projects that provide the greatest transportation, social, and environmental benefits, while maximizing the return on taxpayer dollars.

Also included in the budget is $4 billion to create a National Infrastructure Innovation and Finance Fund to invest in projects of regional or national significance. The creation of such a fund marks an important departure from the Federal Government’s traditional way of spending on infrastructure through grants to specific States and localities. The Fund will directly provide resources for projects through grants, loans, or a blend of both, and will effectively leverage non-Federal resources, including private capital. Resources will be allocated based on demonstrable merit and analytical measures of performance.

A total of $2.9 billion is requested to support the Federal Railroad Administration (FRA) and Amtrak, including the $1 billion for High Speed Rail, $1.6 billion for Amtrak, and $244 million for the FRA’s safety and operating programs. This is a 35% decrease from the FRA’s 2010 budget allotment. The FY 2011 budget request proposes a railroad safety user fee to help offset the costs associated with railroad safety inspectors and their activities, with an anticipated total of $50 million to be collected under this fee. $4.5 million is requested to support the hiring of 31 full-time employees to support the requirements of the Railroad Safety Improvement Act, the Passenger Rail Investment and Improvement Act, and expanded grant program activities. The budget also requests a change in the FRA’s account structure, dividing the Safety and Operations account into two new accounts by establishing a separate Federal Railroad Operations account which will focus on operational expenses, and a Railroad Safety account to be focused solely on rail safety program activities.

The new budget will allow for the establishment of a new Federal Transit Safety Program. Rail transit services, including metro area subways and light rail systems, are currently not overseen by Federal safety regulators. Instead, they are subject to review by various State safety organizations. However, recent deadly accidents in some major U.S. metropolitan areas have underscored the need for common nationwide safety standards and for Federal enforcement of such standards. The budget includes $30 million to establish a Federal transit safety oversight program within the Federal Transit Administration (FTA), thereby allowing the FTA to hire new staff and implement a comprehensive safety oversight strategy, as proposed in the “Public Transportation Safety Program Act of 2009.”

The request for the Surface Transportation Board is $26 million, to be financed by appropriations and the offsetting collection of user fees.