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The Ryan Budget and Transportation

August 16, 2012 By Conrad deFiebre, Transportation Fellow

This week Minnesota leaders studying transportation policy alternatives for the next 20 years learned that expected revenues will cover less than half of the state's needs to reduce traffic congestion, maintain roads and bridges and drive economic competitiveness.

Gov. Mark Dayton's Transportation Finance Advisory Committee, made up of bipartisan state and local officials, were told that projected funding of $18 billion would fall $26 billion short of statewide mobility infrastructure needs.

"Everyone sees that there's a cliff—a point where projected revenue and projected cost start to divert pretty dramatically," said Ken Buckeye, Minnesota Department of Transportation planning director, according to Finance & Commerce. "We want to avoid that cliff."

Solutions discussed include raising the state fuel tax, which is constitutionally limited to "highway purposes" and constantly loses buying power to inflation, imposing tolls, increasing public-private partnerships and devolving more tax-and-spend decisions to local governments, especially for transit and nonmotorized travel improvements.

Without action of some kind, MnDOT officials warned, more than 4,000 miles of state highways and 20 percent of bridges would fall into poor condition by 2032, while system expansion would practically grind to a halt. Charlie Zelle, chairman of the Minneapolis Regional Chamber of Commerce, said failure to boost investments in transportation, particularly transit, would discourage businesses from locating in Minnesota.

If there's a deus ex machina in this dilemma, don't expect it to come from Washington, D.C., especially now that Mitt Romney has chosen spending ultra-hawk U.S. Rep. Paul Ryan of Wisconsin as his running mate. In Congress, Ryan has provided a reliable vote to cut back federal transportation outlays in nearly all cases.

One exception was his support in December 2008 for a $14 billion federal bailout of the auto industry, an economic mainstay in Ryan's congressional district around Janesville, Wis. But he also has backed cutting Amtrak subsidies, eliminating dedicated transit funding and zeroing out federal grants for bicycle and pedestrian projects.

His fiscal year 2012 budget, he wrote, "will help focus every dollar on pursing a targeted and cohesive national transportation policy." But according to Yonah Freemark at the Transport Politic blog, "targeted and cohesive ... in this case appears to mean roads-only."

By contrast, Freemark reports, President Obama would increase federal expenditures for transit and rail from 22.9 percent of transportation funding in 2013 to 35.7 percent in 2018. "Under Mr. Ryan's budget, they could decline to almost nothing," Freemark added. "His budget would be a death blow to many millions of Americans who rely on transit to get around everyday because they have no other options," as well as millions more who have options but take transit, thereby cutting congestion and pollution.

Transportation, so vital to the nation's economy, wouldn't be the only loser to Ryan's hopes, and Romney's, too. Ryan wants to slash federal discretionary spending, including defense and transportation, by more than two-thirds, from 12.5 percent of gross domestic product to just 3.75 percent. Romney's proposed budget, which like Ryan's also cuts Medicare and Medicaid entitlements, is even more parsimonious, shrinking non-defense discretionary spending from 3.9 percent of GDP to between 1.1 percent and 1.6 percent, according to the Center on Budget and Policy Priorities.

This, of course, is aimed at conservative wishes for smaller government and lower taxes. "But in a time when the state of the nation's built infrastructure is miserable, a negotiation over cuts is entirely the wrong discussion," Freemark said. "The argument should be ... how much federal spending on transportation should expand."

Back in Minnesota, transportation advisory panel members say a lack of new revenue will bring uncertainty over risks to the transportation network, slowing economic activity. In transit, the Metropolitan Council predicts decreased services, less ridership and higher fares without more revenue.

"In an era of need for expansion, we have a very constricted model," said Ramsey County Commissioner Toni Carter. If Ryan and Romney get their way, the model will get even more constricted.

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