Talking Michigan Transportation

Will congress move quickly on a highway bill?

• Michigan Department of Transportation • Season 7 • Episode 221

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Congressional leaders of various infrastructure committees have shown some interest in adopting a multi-year surface transportation reauthorization bill, offering departments of transportation and contractors some certainty, well ahead of the current act’s expiration in 2026. 

Susan Howard, policy and government relations director for the American Association of State Highway and Transportation Officials (AASHTO), returns to the podcast to share what she’s hearing in conversations on Capitol Hill. 

Late last month, House Transportation and Infrastructure Committee Chairman Sam Graves released a budget reconciliation proposal. 

Howard explains what that means, where the conversations will move from here and what the reduction in work force at the Federal Highway Administration (FHWA) and other U.S. Department of Transportation agencies could mean.

Jeff Cranson:

Hello, welcome to the Talking Michigan Transportation Podcast. I'm Jeff Cranson. There's a lot going on in Congress right now with discussions about another reauthorization act. That means a bill to fund transportation, hopefully for a good number of years, so that the people who depend on these funds can make long-term decisions and have some certainty about what they're doing, which is what everybody talks about. I was happy to invite back to the podcast Susan Howard, who is the Director of Policy and Government Affairs for the American Association of State Highway Transportation Officials, or AASHTO, and she shared her thoughts on the discussions and the chances that we'll actually get a reauthorization sooner in the cycle than we have in the past, and what she's hearing from members that she talks to on the Hill and pretty much everything else related to federal transportation funding and policy. So I hope you enjoy the conversation, Susan Howard of AASHTO. I explained her background in the introduction. Susan, thank you for taking time to be here and talk about everything that's going on in DC right now as we push for transportation funding.

Susan Howard:

Of course. Thanks for the invitation.

Jeff Cranson:

So let's start with where we're at with reauthorization and maybe just break that down for the uninitiated, since everybody just kind of refers to reauthorization now, like we should all know what that means.

Susan Howard:

Right right. So the last reauthorization bill which was a lot more than just reauthorization of surface transportation programs, but that was its core the Infrastructure Investment and Jobs Act will expire on September 30th of 2026. Because of the unique way that transportation is funded at the federal level, you have to have a reauthorization bill on time. A lot of other federal programs can kind of go year to year with appropriations and be fine without authorizing legislation, but because we are dependent upon the federal gas tax to support the Highway Trust Fund, we really need either a bill or an extension by September 30th of 2026. The way things, what's happening right now?

Susan Howard:

The House and Senate committees are gearing up. They have expressed a desire for a very aggressive timeline. They would like to have legislation drafted and moved through their committees by the end of the calendar year. So that would be unusual. I mean, that would be a good maybe nine months to a year before the bill actually expires. And there's a few reasons for that sense of urgency I think that I can get into. But right now we're at a point where the House Transparency and Infrastructure Committee has solicited input from stakeholders. The deadline for that was last week. The Senate is doing a similar process Senate Environment and Public Works Committee. I should say there's a lot of jurisdictional things going on in the Senate with surface transportation, but the primary committee that drives the process is the Senate Environment and Public Works Committee. They're doing a member request meeting for members of the Senate. So by May 23rd is the deadline for senators themselves to submit their own priorities for surface transportation reauthorization.

Jeff Cranson:

So do you feel, based on what you're hearing and the mood, somewhat confident that, given the separate discussions about the broader budget and continuing resolutions and those negotiations, having both transportation and infrastructure and EPW get somewhere on this is a possibility?

Susan Howard:

I think they're certainly going to try. I do think it's a possibility. They could hit a point, jeff, where they just can't go any further. I think the big issue is going to be floor time in the Senate and then competing priorities next calendar year with tax cut, expirations and a lot of other issues when it comes to, you know, the rest of the federal budget piece. So they're definitely going to make an effort and I think they could get potentially pretty far, particularly in committee, and then it becomes sort of a leadership discussion. When can this come to the floor? Do we have the votes? They certainly would have the votes to pass something in the House, but the Senate is a little trickier because of the 60 vote threshold. So whatever reauthorization legislation emerges from the Senate, committees of jurisdiction will have to be have enough Democratic support to get to get passed in the Senate. What do you think about, or what are you hearing, I guess, in terms of feedback on the Secretary's proposal discussion about some kind of you for electric vehicles and hybrid vehicles. It ranges in its amount, you know, from $100 to. I think the largest one is around $350 a year.

Susan Howard:

This discussion about possibly having a national fee has emerged in the last few months it's really most prominently been discussed by the House Transportation and Infrastructure Committee as part of their budget reconciliation package.

Susan Howard:

Last week, house Transportation and Infrastructure Committee did include a national fee for both electric vehicles and hybrid vehicles. It's really an attempt, I think, to look at ways to make up some of the challenges that we have with the Highway Trust Fund based on that user pay principle. So for folks who drive gasoline-powered vehicle, you pay the gas tax when you fill up your tank and it goes into the Highway Trust Fund. These states that have enacted state EV or hybrid fees have been going under the philosophy of despite what type of fuel or energy your car uses, you use the roads. The roads themselves need to be maintained. We need to levy some kind of fee for those vehicles to capture some of that revenue. It's not a surprise that folks are looking at this at the national level too. We'll see what happens with what was included in budget reconciliation if it sticks, but I kind of see it as perhaps a look forward about what other mechanisms for funding Congress might look at for the next bill.

Jeff Cranson:

Yeah, it's a good conversation starter, that's for sure, I think and Michigan, by the way, is one of those states. Back in 2015, as part of a road funding package, added a surcharge on EVs and hybrids for registration, and much to the surprise of people who still think that they're not paying their fair share, some studies from the Department of Treasury have showed that those surcharges do make up for the gap in fuel taxes, but what I'm curious about is how, on one hand, they're pulling the plug, so to speak, on National Electric Vehicle Infrastructure Program and other things to incentivize a charging network which would obviously support more electric vehicles. It seems like pretty low-hanging fruit or small ball to think that doing this is going to really move the needle on these big funding needs.

Susan Howard:

Yes, it is. I mean it won't, I don't believe it'll move the needle. Electric vehicles are still a pretty small percentage of the overall fleet in the United States. It will grow. It'll probably grow whether or not we have a national electric vehicle infrastructure charging program. I think states will continue doing that work even if there's not a federal formula program for them to utilize. But it will not solve the whole problem. It is more of a, I think, a principled, as I mentioned earlier, trying to get at that user pay principle where we're capturing some revenue from those users. But I agree, I mean it's not going to be the thing that moves the needle to full highway trust insolvency. There simply aren't enough electric vehicles compared to gasoline-fueled vehicles to make that transition.

Jeff Cranson:

So what else are you hearing about? You know we've heard that that got some coverage when Secretary Duffy announced that, but what else are you hearing about administration priorities?

Susan Howard:

Not too much so far. I think they have really been focused a lot on air traffic control issues, a lot of aviation issues across the board. You know we've had the tragedy in Washington DC at National Airport tragedy in Washington DC at National Airport. We've had since then a few more close calls at my home airport, at DCA Ronald Reagan National Airport. So there was a big announcement today about those sort of plans for revamping, revising air traffic control. They have not yet articulated publicly what they're thinking on reauthorization. There may be conversations going on behind the scenes. They may be talking to the Senate and the House. You know committee leadership but it's a little hard to tell at this point.

Jeff Cranson:

Yeah, speaking of air traffic control, if you get a chance, listen to the New York Times the daily podcast that posted early this morning about what's going? On in Newark and it's, it's pretty terrifying.

Susan Howard:

Yeah, yeah.

Jeff Cranson:

So, yeah, that's understandably, that's taken up a lot of oxygen, but we know that you're going to be still watching closely on the surface transportation aspect of this, transportation aspect of this. Have you heard about USDOT reorganization efforts? And you know, because we know, federal Highway lost 25% of its staff from the deferred payment reduction no-transcript we do.

Susan Howard:

That seems to be the rumor, mel, that they're looking at reorganizing. I don't have an office for NEPA or environmental project delivery issues. That's not mode specific right. So it all goes through the same kind of funnel or channel, regardless of the fact that it's a Federal Highway funded program or a FTA funded program. So I think there has been discussion about that.

Susan Howard:

There are definitely going to be changes in the workforce because of how many folks have been taking the deferred retirement, early retirement, and I think that, as a result, there may need to be some reorganizations to make sure that whatever functions federal USDOT holds on to will need to be. You know, those functions won't go away. They could do a lot of deregulation. They could do a lot of passing things over to the states. That does take time and in the meantime we have a program that we have to run. So I think there will need to be some nimbleness there and what we see down the road when it comes to, you know again, more being over of duties to the states or deregulation, we may see that down the road.

Jeff Cranson:

So it's interesting you mentioned NEPA, because you're probably hearing what I am at the state and national level and that's people asking questions about, you know, the permitting process and expediting things, really coming from both sides of the aisle. What do you think about that? Is there a real chance to kind of streamline some things?

Susan Howard:

I do. I think we've reached the point where the stars may be aligned for this. There was a Senate Environment and Public Works Committee hearing a couple months ago maybe back in February on this topic and you would be amazed how similar the conversation was coming from both sides of the aisle. There is a commitment there to do something.

Susan Howard:

Most of the environmental streamlining and permitting streamlining issues that Congress has dealt with in the past couple years have been really heavily energy focused. It hasn't quite trickled down yet to transportation, but I think the surface transportation bill provides an opportunity, as well as all that's going on at the federal level with NEPA and changes that agencies are going to be making to their processes, as well as just general interest and support and prioritization in Congress. Again, it's a multi-jurisdictional issue. Again it crosses over a lot of different committees, but the House Resources Committee, for instance, and we've started having conversations with them because this is just a small. It's kind of like a small piece of their pie in terms of the transportation part of it. But again everyone's looking at kind of everything within their own jurisdiction to figure out how some improvements might be made to deliver projects on time and on budget.

Jeff Cranson:

Yeah, so do you think because there's some bipartisan agreement? We always say you know transportation infrastructure, you know shouldn't be a partisan thing, but everything is these days. But do you see some common ground on transportation policy?

Susan Howard:

Particularly, I would say particularly well in both sides of the aisle. I mean both sides of the Congress. The House of Representatives, the T&I Committee, the Transportation Infrastructure Committee, is really leaning on the success that they had with both the FAA authorization bill and the Water Resources Development Act, which were very quote unquote member-driven processes and very bipartisan. So they you know, the philosophy of Chairman Sam Graves is sort of we get the member buy-in and then it's a lot easier for everybody to vote. Yes, it doesn't have to become partisan. There will be policy differences in a lot of different areas.

Susan Howard:

I'll be curious to see how those get negotiated in the House and, as I mentioned earlier, in the Senate it's even more. Has to even be more bipartisan or at least collaborative, because of the fact that to stop debate and actually vote in the Senate you need 60 votes. The margins are very, very slim in the Senate. Senate, you need 60 votes. The margins are very, very slim in the Senate. So you're going to always have to count on having a broader tent to bring along those seven, eight Democrats that you need to get anything passed. So you kind of have to look at it that way as what can we get? How can we get buy-in from all of these different members and their individual perspectives?

Jeff Cranson:

Stay with us. We'll have more on the other side of this important message.

MDOT Message:

Even with the best planning, backups and traffic congestion can occur during road construction. This can pose hazardous situations for both motorists and construction workers, particularly when drivers are distracted. Motorists are more likely than workers to be killed or injured in work zone related incidents. Additionally, the leading causes of all work zone related crashes are distracted driving and speeding. So it's crucial to do your part in ensuring the safety of both drivers and focusing on your most important task safe driving. Slow down and stay focused.

Jeff Cranson:

Talk a little bit about Chairman Graves. He's obviously a congressional veteran. Seems to really want to get into and understand transportation policy. Can you talk a little bit about his?

Susan Howard:

background and what he brings to this. Absolutely, chairman Graves got a very rare exception to remain chairman of the House Transpiration and Infrastructure Committee in this Congress. Usually, under the Republican caucus rules or Republican leadership, you you have your term limited, so to speak, for committee leadership positions, for committee leadership positions, but Chairman Graves made it the case and it was met with positive response that he was able to deliver these two big pieces of legislation last conference the FAA authorization bill and the Water Resources Development Act on time with bipartisan support Again that member-driven process and he said let me have a shot at reauthorization driven process. And he said, let me have a shot at reauthorization. And I think people have a lot of faith in him to be able to deliver it on time. So he's been very focused. He's held quite a few hearings across a lot of different areas over the last few months to kind of set the stage.

Susan Howard:

Keep in mind too, the House Transportation and Infrastructure Committee is really large and a lot of folks for whom this reauthorization bill will be their first.

Susan Howard:

So a lot of this too is kind of laying the groundwork, educating members on some of these programs and what they mean to their districts. Just a couple weeks ago there was a hearing with a NASHTO board member, executive Director Carlos Perceras of Utah DOT, on the Highway Trust Fund, again trying to educate members on why this is important, how transportation funding works. And then just earlier this week, nashto President, connecticut DOT Commissioner Gary Euclid was a witness at a hearing on rail infrastructure Because again, there was a very big rail title in the IIJA and I think folks are wanting to ensure that it continues to be a part of the surface bill. It hasn't always been, but because of the robust funding and IJA, I think people want to see that continue. So he's you know he's well positioned to be the one to shepherd this through and I think that's part of the reason that he was granted this reprieve and an extension to continue as chair, because folks have seen how he can work to really deliver solid pieces of legislation.

Jeff Cranson:

Yeah, that's good to hear, I think, speaking of the trust fund and looking at ways to augment it and certainly one of those things that they're talking about, as we mentioned earlier with the, you know, some kind of registration fees at the national level that could make a small dent. But are you hearing other ideas to augment this? And I don't know, tell me if you ever use this line with members when you're on the Hill. But what else costs the same now that it did in 1993?

Susan Howard:

Exactly. We have a really good chart that shows all of the inflationary increases of things from 1993. The cost of a movie ticket, the cost of health insurance, cost of college tuition I graduated from high school in 1993. So things have changed quite a bit since then. One of the big well, the big discussion.

Susan Howard:

So we had the discussion around a fee, a national registration fee for electric vehicles and hybrid vehicles. There's also a desire to look at a national registration fee for all vehicles. That got dropped from the reconciliation package that the House Transportation and Infrastructure Committee was looking at last week. It did raise some eyebrows. It was probably, perhaps maybe a little not ready for prime time yet, but I believe that Chairman Graves is still interested in exploring the idea. I mean, if you look, and what that would probably mean is some kind of phase out where we go away from the gas tax and we go on a flat fee, a per vehicle, just annual fee, so it's no longer tied to consumption of gasoline, it's not even a vehicle miles traveled fee, it is just a flat fee, regardless of what type of vehicle.

Susan Howard:

Again, as it's conceptualized now, that could change. Of what type of vehicle? Again, as it's conceptualized now, that could change. Obviously, I think a lot of people would want to do some things there with vehicle size or weight or fuel efficiency to incentivize those. You know, use those other kind of thinking of those other sort of policy levers. So we'll have to see how that shakes out. I mean, I don't think a gas tax increase is on the table and BMT I don't know. I mean there was a little bit of progress made in the IJA with studying road usage charge at the national level, but it's not really come to anything yet formal. That really seems like it's like what's the next step for the next reauthorization bill. So we'll have to see how that goes.

Jeff Cranson:

Do you sense much of an appetite for that from members? Michigan has in the governor's budget recommendation for fiscal year 26, a pilot, a road user pilot, and we've got a champion in our Senate Appropriations Transportation Committee who's really pushing for it to separately put it in their budget proposal. I get mixed reactions, obviously from lawmakers here. But what do you hear on the hill?

Susan Howard:

Still, I think, a steep hill to climb. So lots of concerns about the impact on rural drivers, issues with data, you know, concerns about data security, all things that have been, you know, tested and looked at at the state level pilots They've really served as laboratories and really gleaned a lot. We've been able to glean a lot of information from those level pilots They've really served as laboratories and really gleaned a lot. We've been able to glean a lot of information from those state pilots. And now we have four operational programs in four states where it's a voluntary road use discharge but you can opt into that option.

Susan Howard:

So there's just been a lot more at the state level and the needle has moved very, very slowly at the federal level in wanting to try anything nationally. So I am not sure I think it gets mixed reviews. It's certainly known about, regarded as a logical next step in terms of it is a user-based fee. Next step in terms of it is a user-based fee. It would be quote-unquote fair in terms of the you pay for what you use, that user pay principle. But again it's just sort of been slow to take off and really have the federal piece kind of arms wrapped around.

Jeff Cranson:

Yeah, I think what I hear and I'm sure you hear the same thing is that progressives always have concerns about low-income people and how it would hit them, and there are ways to mitigate that and some creative things. And, interestingly enough, this is where some people on the left align with libertarians and organizations like the Reason Foundation, who are really pushing this hard and have lobbied for this at the state level in Michigan and, I'm sure, every other state.

Susan Howard:

Yeah, it can be strange bedfellows sometimes. For sure, I think that, yeah, the concept is solid and, again, if you look at some of the things that have been tested at the state level, you can start to knock down some of those fears or concerns, but it still would be a big shift and a big change in terms of administration, in terms of ease, and those are things I think that have so far been stumbling blocks at the federal level, despite all the sound research and experience that states have demonstrated through their pilot programs.

Jeff Cranson:

Sound research and experience. Well said, Susan. Thanks, as always, for the update. I wanted to do this ahead of the AASHTO spring meeting, where a lot of these things will be top of mind for people and will be discussed, so the timing is good. Is there anything else you want to add to the conversation?

Susan Howard:

I don't think so I really appreciate the opportunity to talk with you and, yeah, appreciate it and love the podcast.

Jeff Cranson:

Thank you, Susan. I'd like to thank you once more for tuning in to Talking Michigan Transportation. You can find show notes and more on Apple Podcasts or Buzzsprout. I also want to acknowledge the talented people who help make this a reality each week, starting with Randy Debler, who skillfully edits the audio, Jesse Ball, who proofs the content, Courtney Bates, who posts the podcast to various platforms, and Jacke Salinas, who transcribes the audio to make it accessible to all.