States will miss TEA-21: the federal transportation act has poured billions of dollars into highway, transit and alternative modes of travel projects. What should its reauthorization look like?

In booming Montgomery County, Md., where the population--a white-collar spillover from Washington, D.C., and environs--has jumped by nearly 30 percent in the past two decades, Carol Petzold admits she is grateful for the Transportation Equity Act for the 21st Century.

The act, which has drastically transformed the nation's transportation infrastructure, is up for renewal this year, a renewal that could bring with it a funding loss as new committee chairmen critical of some aspects of the federal legislation universally referred to as "TEA-21" have taken the helm in the U.S. Senate.

"It's been good for us," the Maryland state delegate says of the federal legislation.

"It has provided Maryland with quite a few federal dollars for our transportation projects," continues Petzold. "In fact, for the last four years, we have received about $530 million per year--and have used it well."

Not only well, but with imagination: Maryland has used tens of millions in TEA-21 funds for road, highway and transit construction since 1998.

Through TEA-21's enhancement funding in 2001, Montgomery County was given $3.1 million more for construction of a bridge that state officials said would provide the "crucial missing link" for the county's extensive system of bike paths and trails that span busy Interstate 270.

"More than 50 percent of our capital transit and highway programs have been funded through TEA-21," says Petzold. "So you could very much say that if we hadn't received this money, up to 50 percent of our transportation projects in Maryland would not have been completed."

In southern California, officials with two of the West Coast's largest ports at Los Angeles and Long Beach celebrated the opening last spring of the Alameda Corridor, a $2.4 billion rail cargo expressway connecting the two.

"This is the kind of project that is creating thousands of jobs and moving billions of dollars in trade between the ports," says Senator Betty Karnette.

"That corridor could not have been completed without TEA-21 funds," she says. "How can you find a better example of using combined federal and state money?"

Even in fiercely independent Alaska, where anything with ties to faraway Washington, D.C., is viewed with suspicion, Senator Lyda Green--who numbers herself among the big government skeptics--points to a series of road construction and maintenance programs, including the building of the Glenn-Parks Interchange in her native Matanuska-Susitina borough, as projects that could have been undertaken only with TEA-21 money.

"We are really a virgin state when it comes to highway construction," she explains. "But the highways we have are long and well-traveled. To keep them up requires a vast amount of money, money we do not have by ourselves at the state or borough level."

A POPULAR PROGRAM

Rare is the Washington program that wins almost unanimous plaudits from the states, especially more than a decade after its beginning.

But TEA-21, and its parent--the Intermodal Surface Transportation Efficiency Act of 1991, otherwise known as ISTEA or Ice Tea--is different and perhaps all the more popular because it provides states with a certain amount of funds for their transportation needs. This was something that was sorely lacking before when transportation budgets were often determined by how much money was in the overall state budget or approved or denied by voters via referendums.

And as TEA-21 faces reauthorization, many of the states worry that budget constraints caused by a weakened ecomony may limit the money once available under ISTEA and TEA-21.

"There is no telling with any accuracy what is going to happen," says Art Guzetti, director of policy at the American Transportation Association.

"Right now Washington is full of talk about tax cuts and reducing revenue, which is not a great climate in which to be pushing a major spending bill."

The states may also be confronting another funding problem: their own ability to raise money for TEA-21 matches. "The gas tax, at the state level, is becoming less and less of a generator for transportation revenue all the time," says Peter Van Doren, a policy analyst at the Cato Institute.

"As vehicles become more energy efficient, they naturally use less fuel," he says. "In the end, the states are seeing less and less revenue from gasoline taxes per driven mile, while the maintenance needs per mile stay the same."

Matters are made even more difficult by the reluctance of voters in many states to approve referendums increasing gasoline taxes, even when big publicity campaigns explain why such money is needed for infrastructure construction and maintenance projects.

Such was the case last fall in Washington state. Virtually every labor, education and civic group had come out in favor of Referendum 51, which was designed to raise more than $7.7 billion through a 9-cent increase in the state's 23-cents-a-gallon gas tax.

But on Election Day, the referendum failed by a large margin.

"I hate to say this, because I very much believe in representative democracy," says Washington Senator Mary Margaret Haugen, the former chairwoman of the Senate Transportation Committee, "but the people who truly understand transportation issues in any given state are fairly limited in number. Most people just get uncomfortable seeing money being spent, and they are definitely not for taxing themselves."

All of which, she says, underlines the importance of the states getting their transportation money from a different source. "Once the funding formula for your state is worked out," says Haugen of TEA-21, "you know you will get that particular amount. It is something that the state can bank on."

Since its passage as the successor to ISTEA in 1998, TEA-21 has poured more than $217 billion into state highway, transit and alternative modes of travel projects across the country.

It is by far, in dollar amount, the largest federal-state partnership in recent history.

"It has been a huge national program, and one that is unusual in that it has largely accomplished what it set out to do," says James Corless, a policy coordinator with the federal Surface Transportation Policy Project.

"For the states, TEA-21, and ISTEA before it, have also been unusual in that they have been federal programs that the states have not only liked, but very much looked forward to participating in," he says.

"Over the last 10 years, America has reaped the benefits of record-level funding for surface transportation," says Nancy Singer, a spokesman in the Federal Highway Administration's office of public relations.

Singer lists the legislation's results:

* Investment of more than $217 billion in surface transportation over the past six years alone.

* Highway and transit funding of $198 billion, up from $155 billion during the ISTEA years.

* An additional $20 billion to rehabilitate and replace old bridges.

* An additional $8 billion for what is called "congestion mitigation" and air quality improvements.

* An additional $42 billion for transit development.

TRANSIT, TRUCKS AND AUTOMOBILES

And don't forget intermodalism, that early 1990s buzzword that policy wonks liked to bandy about. Intermodalism means simply a bringing together of the nation's varied forms of transportation, a concept that never really gained currency until the passage of ISTEA.

"The various modes--automobiles, trucks, transit, rail, ferry, bicycle and walking--were all challenged to become truly intermodal," said John DeStefano, the mayor of New Haven, Conn., in hearings last fall before the House Transportation and Infrastructure Committee.

"We began to pursue the vision of creating a seamless, uninterrupted system to accommodate the need to efficiently and equitably serve our communities by transporting both people and goods," he added.

TEA-21 will officially expire this September, prompting a debate that will inevitably reach into every state capitol across the country.

The question is not whether the legislation should be renewed. Indeed, that seems a given. Even as early as 2001, Bush administration officials were meeting with a variety of congressional and state leaders, trying to formulate, as Transportation Secretary Norm Mineta later put it, a "successor statute--the legislation that will reauthorize our surface transportation programs over the next several years."

What is unknown is the kind of transportation legislation that may come out of Washington: Should TEA-21 remain largely intact? What, if anything, should be changed? And what are today's and tomorrow's transportation challenges, after more than a decade of massive government spending?

For Jennifer Gavin, a spokesman for the American Association of State Highway and Transportation Officials (AASHTO) in Washington, D.C., the last 10 years have been a godsend: "We don't have complaints," she says. "TEA-21 was a strong and necessary infusion of resources into our infrastructure."

And, according to the association, there are still plenty of new roads and highways across the county that need to be built, and even more that are in need of constant maintenance and rehabilitation.

Although worried about the effects a national recession may have on TEA-21's successor, Gavin also says the recent economic downturn is, in fact, a compelling reason for Congress to vote out a muscular reauthorization. Her group would like to see a bill with highway funding at no less than $45 billion per year, and transit funding at $11 billion annually.

"We hope that Congress will recognize the potential that work on roads and transit can have on lifting the nation out of its current economic doldrums," Gavin says. For every $1 billion in highway and transit spending, 42,000 new jobs are created, she says.

INWARD NOT OUTWARD

But Maryland's Petzold, surveying the increasingly dense landscape of Montgomery County, has become convinced that the next decade of transportation growth should move inward. The opposite direction has been the traditional pattern of highway development going back to the days when President Eisenhower signed the Federal Highway Act into law.

"Transportation has to be responsible to the places where people already reside," says Petzold. "If you do it the other way, you are only encouraging sprawl."

Along with a growing group of lawmakers, most of whom represent areas where traffic congestion is an issue, Petzold has signed on to what is known as the "smart growth" movement. It contends that development patterns in place since the 1950s needlessly carve up decreasing acres of the nation's wilderness.

Petzold's enthusiasm for smart growth policies, in turn, has led her to support what is known as "infill development." This promotes developing such things as vacant lots in urbanized areas, the redevelopment of underused buildings and the rehabilitation of historic buildings-all for new uses.

"In the past we have always had transportation projects that were spokes in a wheel, feeding the center city," explains Petzold.

"But in the past 15 years or so, we have seen job centers opening up along those spokes. Now we need connections to those spokes, so that it looks more like a spider web."

KEEPING TRANSPORTATION AGENCIES ON TRACK

Jacky Grimshaw, vice president for policy and community development with the Center for Neighborhood Technology in Chicago, believes that in many cities and suburban areas around the country "people have been satisfied that ISTEA and TEA-21 have answered their basic transportation needs."

But those same people, Grimshaw thinks, "are frustrated that they have not been offered more choices in transportation alternatives that affect their communities."

Grimshaw also is an advocate of what is known as "performance measures" that can be used "by anybody, a government or a citizen, to determine whether or not the money and investment is meeting the needs of the local community."

But some lawmakers wonder how receptive state transportation departments will be to such requests: "It's very difficult for anyone to get numbers from them," remarks Alaska's Green of her state's agency.

"You want to ask them, 'Can you show us the initial forecast and what happened after that?' But that's easier said than done," she says.

"It's easy for them to flimflam a person," she says. "My district is the size of the state of West Virginia. It's hard to keep track from year to year of which roads were supposed to be built where and why they are being built in the first place."

Officials with the various state transportation departments, however, think the idea that they are unresponsive to community input or indifferent to local needs is incorrect.

"That is not the way things are done today," says AASHTO'S Gavin. "Maybe in the 1960s or '70s state transportation agencies did not ask for input, but today they very much do. They are much more broadminded about the communities they deal with."

"The truth of the matter is that the range of problems state highway departments deal with is much broader than it used to be, and so, too, must be the responses," she says. "The end result is that for the vast majority of state transportation departments, no one today regards any one mode of transportation as superior to another. We are just trying to solve problems."

THE GREEN FACTOR

Meanwhile, environmentalists have expressed satisfaction that TEA-21 has "institutionalized" the idea that transportation in contemporary America can mean many things.

In an overview of TEA-21, for example, the Natural Resources Defense Council notes: "Although the large amount of funding authorized by TEA-21 could be used largely to pay for projects that increase automobile dependence and degrade the environment, the majority can be used for a variety of measures--from high occupancy vehicle lanes to bike trails--that reduce air and water pollution, create sustainable land use patterns and enhance communities."

At the same time, some of the loudest complaints against TEA-21 have also dealt with environmental concerns, specifically the requirement that all projects must undergo an environmental evaluation before being given the green light to proceed.

"The concern has been the amount of time it takes for the various environmental studies and the potential negative effect that can have on a project," explains Katherine Siggerud, who handles physical infrastructure issues for the Federal Highway Administration.

In testimony last fall before the Senate Environment and Public Works Committee, Siggerud said it took two to three and a half years to complete a study where the environmental impact of a project was thought to be insignificant or unclear.

But "projects with significant environmental impacts" took much longer--often as much as five and a half years.

Yet Siggerud added that a survey of some 33 state transportation departments conducted by AASHTO showed that "91 percent of federally funded roadway projects have no significant environmental impact, and, in another 6 percent of the projects, the initial impact was unclear."

Michael Replogle of Environmental Defense says that environmental laws often become scapegoats for project delays when other program administrative failures are really to blame.

NO COMPLAINTS ON FUNDING

Perhaps the biggest surprise, one decade since the launching of ISTEA, has been the lack of complaints on a far thornier issue: how the program is funded.

States, depending upon the amount of money they send to Washington, D.C., through gasoline taxes, are either "donor" or "donee" states--although everyone gets something back, usually no less than an average of 92 cents for every dollar sent.

ISTEA and TEA-21 also have offered a wide array of other funding mechanisms designed to address virtually every state economic need.

"The majority of highway projects continue to rely primarily on grant-based funding," says Singer with the Federal Highway Administration. "But some may benefit from measures that enhance flexibility and maximize resources."

Among the most popular options have been grant anticipation revenues, otherwise known as GARVEEs, that allow states to issue bonds secured with the pledge of future federal aid, a feature that did not exist under the old ISTEA. But given the uncertainty of the reauthorization in the current budget climate, states could get in trouble depending on future funds.

State infrastructure banks (SIBs) also provide assistance through a variety of low-interest loans, loan guarantees and other credit enhancements. But they are available to only four states. There's a push to expand eligibility for SIBs so all 50 states can take advantage of this innovative finance tool. Meanwhile the Transportation Infrastructure Finance and Innovation Act (TIFIA) provides credit assistance to large-scale projects of national or regional significance that could be delayed due to risk, cost or complexity.

"A very small number of projects are able to secure private capital financing without any governmental assistance," adds Singer.

"These projects may be developed in high-volume corridors where revenue from user fees is sufficient to cover capital and operating costs."

But lawmakers still worry that the vagaries of state budgets, particularly during recessions, may make it difficult to someday come up with matching funds.

"TEA-21 has been good for the states because you get back twice what you put into it," says Washington's Haugen. "But the day could come when a state may not be able to meet their match, that's how bad budgets are at the state level."

For that reason, Haugen wants to make certain that TEA-21's reauthorization brings with it "as many of the funding formulas as possible because each state is going to be dealing with a different economic situation."

Corless of the Surface Transportation Policy Project, however, believes that whatever policy changes are enacted in the TEA-21's reauthorization, the basic mission of the historic legislation has fundamentally changed-and that may prove to be a good, if challenging, thing for state lawmakers.

"The massive and impressive interstate highway system has been built," says Corless. "Now the question is going to revolve around more local subjects, such as moving around within a metropolitan area, moving freight and building or expanding airports."

And those projects, he says, will only naturally demand the attention of officials far removed from Washington: metro planning districts, transit districts, city and county officials.

"And yes, very much, state lawmakers, who may end up being an even larger part of the transportation equation than they were in the last decade," Corless says.

Garry Boulard is a free-lance writer from New Orleans. He is a frequent contributor to State Legislatures.