The U.S. Senate this week adopted a sweeping $1 trillion infrastructure bill that includes $550 billion in new revenue for roads, water systems, electric vehicle charging, broadband, rail, and transit. Lloyd Brown, the former chief spokesperson for the American Association of State Transportation Officials (AASHTO), now with HDR, Inc., joins the conversation to share national perspective.
Later, Niles Annelin, policy section manager at the Michigan Department of Transportation (MDOT), breaks down what will be Michigan’s share of the funds, provided the bill clears the House.
Industry groups from the Blue-Green alliance to myriad contractors associations to AASHTO issued supportive statements for the bill.
Brown cites the certainty contractors will gain from a five-year commitment of additional federal funding.
But he also addresses the lack of a user-fee model in the pay-for components and some questions from organizations long advocating for putting the cost on users, pointing to continuing research for a mileage-based user fee national pilot project.
Annelin joins later to talk about the breakdown of new funding for transportation programs in Michigan. The White House issued a fact sheet outlining those investments.
Michigan would see about a 30 percent increase in federal aid to roads over the five-year period.
Annelin also talks about the funds for electric vehicle charging opportunities for more equity in deploying the technology.
Podcast image by MotionStudios from Pixabay.
The U.S. Senate this week adopted a sweeping $1 trillion infrastructure bill that includes $550 billion in new revenue for roads, water systems, electric vehicle charging, broadband, rail, and transit. Lloyd Brown, the former chief spokesperson for the American Association of State Transportation Officials (AASHTO), now with HDR, Inc., joins the conversation to share national perspective.
Later, Niles Annelin, policy section manager at the Michigan Department of Transportation (MDOT), breaks down what will be Michigan’s share of the funds, provided the bill clears the House.
Industry groups from the Blue-Green alliance to myriad contractors associations to AASHTO issued supportive statements for the bill.
Brown cites the certainty contractors will gain from a five-year commitment of additional federal funding.
But he also addresses the lack of a user-fee model in the pay-for components and some questions from organizations long advocating for putting the cost on users, pointing to continuing research for a mileage-based user fee national pilot project.
Annelin joins later to talk about the breakdown of new funding for transportation programs in Michigan. The White House issued a fact sheet outlining those investments.
Michigan would see about a 30 percent increase in federal aid to roads over the five-year period.
Annelin also talks about the funds for electric vehicle charging opportunities for more equity in deploying the technology.
Podcast image by MotionStudios from Pixabay.
[Music]
Jeff Cranson: Hello. This is the Talking Michigan Transportation podcast. I'm Jeff Cranson, director of communications at the Michigan Department of Transportation.
[Music]
Cranson: As you no doubt know, the U.S. Senate this week adopted a sweeping $1 trillion infrastructure bill that includes $550 billion dollars in new revenue for roads, water systems, electric vehicle charging, broadband, rail, and transit. It seems appropriate today to put it in context and explain what it all means, provided it clears the House of Representatives, of course. So, first for some national perspective, I’m speaking with Lloyd Brown, formerly a spokesman for the association lobbying for state DOTs in Washington D.C. Later, I’ll talk with Niles Annelin, policy section manager at MDOT, about what the bill could mean to Michigan.
[Music]
Cranson: As promised, I'm here with Lloyd Brown, who was formerly my counterpart at the American Association of State Highway and Transportation Officials and very recently left that role after about 11 years to go into the consultant world. Lloyd, thanks for taking time to talk with us.
Lloyd Brown: Always a pleasure, Jeff.
Cranson: So, you were following what is now the IIJA in various incarnations very closely when you were still in Washington D.C., and obviously, as someone working in transportation, you're still very interested in what this means. So, give me kind of your take on it and what you think it means, whether it's enough new money to really make a dent. We keep hearing, and there's probably an editorial statement here, but we keep hearing about “Largest Investment Ever in This,” and “Largest Investment Ever in This Component.” The little bit of skeptic in me that wants to push back, while I think this is good overall, is that if you wait so long to make any investments when you finally do it's always going to be the largest.
Brown: Well, I think one of the significant parts of this is that it is an estimated $550 billion in new investments. Now, not all of that goes into highways and bridges or the facilities that state DOTs maintain but, you know, a good portion of that does. The other part that the bill delivers, which I think is really significant from a state DOT perspective, is the stability of a five-year bill. For some of the major investments that are called for in this legislation to really get out to the states, the states have to have the knowledge, or the certainty, that the money is going to be coming. So, a five-year commitment is really important for planning purposes and for lining up contracts and for the consulting world and for the contracting world, the builders. That's a significant part of this bill, the certainty and stability of five years. The other is that the bill ultimately settled on using the formula process to get funds out to states and into the economy quickly and efficiently. That formula-based approach to distributing funds out to states has proven to be the best way of making sure that federal dollars get out to the states and get into the economy the way it was intended by congress. So, those are two significant things and that I think that you see out of this bill.
Cranson: So, talk about that a little bit because I could see where someone not really familiar with this would think, “Okay it's, you know, $1.2 trillion dollars, so just divide that by 50 and every state gets their share.” So talk about the formula.
Brown: Well, I'm not an expert on how the math breaks down, but basically, it's apportionment by states based on a bunch of factors, the size of the state in terms of population and different things of that nature. It's an agreed-upon formula that helps states understand that when, let's say, $110 billion dollars for highways and bridges that's included in this additional $110 billion for highways and bridges in the spill that, you know, if you're in Rhode Island, you can pretty much pencil out what that means for additional dollars for your state for highways and bridges. Then it's processed that way. Another approach that has been used more and more over the last several years is to do more of a block grant approach, which is—or even like with the some of the programs that came out during the Obama administration and the Trump administration where it's actually the USDOT handing out dollars through a competitive process. Those are less efficient. States spend a lot of money state and, really, local and regional government spend a lot of money applying for these kinds of grants. If you are not successful, then that money that you put into the applications is really just lost money, lost time, and energy and your projects don't move forward.
Cranson: And what assurance do we have that the decisions about those grants aren't highly politicized?
Brown: Well, that's always a good question. One of the things that you see, for instance, during the Obama administration, some of that granting was really focused more on urban areas that favored multimodal projects, especially transit-based projects. During the Trump administration, it was more of a rural focus that emphasized freight movement and economic development in rural areas. In the Biden administration, that seems to have come back a little bit more toward an urban focus. Yeah, each administration has its own emphasis area and base that it tries to support. Even though it's a competitive process and it's supposed to be seamless, there are some decisions that simply come down to what does the administration prioritize and what does it want to emphasize most?
Cranson: I guess I didn't tell you that there would be math, but you're doing a pretty good job of talking through those points.
Brown: [Laughing] That’s the former journalist in me.
Cranson: Right. So, I guess I think that when we look at this you talked about the new money for highways alone and it's significant. Certainly, that's why all of the contractors associations and your former enterprise, AASHTO 201, gave, you know, full-throated support and maybe with a caveat here or there about something that, you know, they would have liked to have seen or maybe trying to send a bit of a smoke signal to the House that something could still be added in that they like, but, for the most part, strongly supportive. I think in a large part because of that that certainty. But, you know, part of the pushback from some folks is that we're still not getting back to a user fee-based system, which a lot of people think is the most sustainable method that we have to establish something that involves user fees, whether it's fuel taxes, tolls, vehicle miles traveled. So, what do you think about that criticism?
Brown: Well, I think there's a couple of things in this bill that are pretty important that could point a direction toward more of a user fee approach to supporting the Highway Trust Fund. What you're pointing to, or what you're suggesting, is what we've known for a long time that the amount of dollars, or funds, that we collect through the gasoline tax and some other smaller fees on truck tires and sales of new, heavy trucks doesn't support what we're spending out of the Highway Trust Fund. So, there's been these series of, really, the transfers of dollars from the general fund into the Highway Trust Fund for a series of bills now, so it isn't any longer much of a user-based trust fund. Within this bill are a couple of things, one is there's some continuing research and funding for a mileage-based user fee national pilot. So, the idea is that we're ultimately, as alternative fuel vehicles move into the marketplace, you know, Biden’s calling for half of all vehicles to be electric powered within a number of years, so, therefore, that's going to significantly impact the collection of gasoline taxes at the pump because electric vehicles don't use gasoline, so how are we going to how are we going to pay for the Highway Trust Fund? Well, we're going to basically look at can we charge people by the mile that they drive, how many miles they drive per year on the system? So, if you're paying, you know, a couple of pennies per mile, you will effectively be using or paying for the system as you use it. That's a direct user fee, so more research into that, a national pilot study.
The second is there's seven and a half billion dollars for deployment of electric vehicle charging stations in this bill, and just the deployment and construction and distribution of electric vehicle charging stations is anticipated to help overcome some of the intellectual barriers people have to purchasing and investing in electric vehicles. If you live in an apartment building, you don't have the ability to plug in your car every night then maybe you're not going to purchase an electric vehicle. But if you know that there's an electric vehicle charging station for you to use and if you drive to, you know, say, the college football game that's 100 miles away or, you know, a couple hundred miles away and you're going to have electric vehicle charging stations then you're going to use those more and you're going to be more likely to invest in electric vehicles. So, those two things I think are going to lead us toward more of a user pays system, ultimately, than what we have now.
Cranson: I think there's a real equity component to that in terms of EVs. You're right, if you're in a demographic that doesn't have a garage, there needs to be a workaround for that, and this does largely address that, whether that's people in apartments in urban areas or people in rural areas that does offer some opportunities, so that's a good thing. What do you, in terms of EVs and, you know, adoption now that you're back operating in the sun belt, sunny Phoenix, what are you seeing there in Arizona where, you know, people can drive long stretches of desert without a lot of resources along the way? What's going on with charging there?
Brown: I think that there's a significant interest in charging out here in Arizona but also all around the country. I just was fortunate to hear a really interesting and detailed analysis on electric vehicle infrastructure from the Florida Department of Transportation, and one wouldn't necessarily think about electric vehicles in Florida. It's more of a driving place, but it's a very thoughtful and informative electric vehicle deployment report and I highly recommend it. But a lot of states around the country are doing similar types of things where they're not just looking at what system they have in place currently, but they're looking at where are the gaps and where do the charging stations need to be located generally, what state resources are available in terms of land or existing facilities, where charging stations could be deployed, and not only that, what kinds of chargers need to be deployed and what are the barriers for people to use different kinds of chargers, fast chargers, slow chargers and then, you know, it goes on and on. Lots of really detailed analysis and thought is going into this whole process, which really encourages me that I think that the promise of electric vehicles is really not as far off as maybe some people might lead you to believe.
Cranson: Yeah, well, obviously in Michigan we've got a lot invested in that, both from the jobs standpoint and from a policy standpoint, so we hope that's where things are going. So, going back to the mileage-based fees and VMT, it seems that, you know, the Reason Foundation and some other, like, free market groups that have long advocated for tolling and, you know, for sustainable user fees knowing that the gas tax was a diminishing return, they seem open to VMT mileage-based user fees as long as they're a replacement and not an addition to fuel taxes. Do you think that we're going to get over, you know, some of what has been kind of an instinctive reaction to that and largely based on, you know, privacy concerns as people realize that they carry one, two, or three electronic devices with them that already track their whereabouts?
Brown: Well, the polling and the research into acceptance of mileage-based user fees has evolved through the years. Ten years ago when we were looking at this issue it really was a flat out no. The consumers, the people on the end that would be actually plugging devices into their vehicles or some other method for tracking their travel to evaluate the number of miles that they travel were so against it that it really was a political non-starter. So, to see something in a bill of this kind in a national deployment really shows that things have evolved. And, you know, I’ll point to a couple of things when it comes to the privacy issue alone. One is that we carry a telephone around with us. We call it a telephone, but it's really a small computer and tracking device. Your smartphone is giving out more information about where you go and what you do and what you like and what you read than anything else in the world. Even if it doesn't necessarily track back to you as an individual with your social security number, it's providing a great deal of data and information. So, I think people are generally comfortable with that idea because they're carrying around a device like that. Second, the big push with insurance companies these days is to plug in a device into your car and evaluate whether or not you're a safe driver. So, you know, literally thousands and thousands of these devices have been plugged in, and people then get a discount on their car insurance based on how they drive. Most of the mileage-based user fee programs at this point, out in the west, especially and there's another one up on the I-95 corridor, are using similar kinds of devices where you simply plug it into your vehicle, and it just sits in there and reports out how many miles you travel. It's really not that much different than what you're already providing to your insurance company.
Cranson: How dare you try to make me a safer driver.
Brown: [Laughing]
Cranson: So, thinking in terms—I mean you've been a progressive on transportation issues coming from Washington state, Washington D.C. where you were a very multi-modal guy, you know, rode your bike often, obviously, took the metro, hearing that some of the advocates like T For America and other organizations that advocate for the other modes and, you know, for what they think is a way to lower our carbon footprint, this doesn't go far enough for a lot of them, but what do you think, I mean, taking the long view about this?
Brown: Right, so some of the argument is that by investing so much in your highways and bridges that actually will encourage expansion of the of the highway and bridge system rather than just maintaining it and improving and caring for it. So, therefore, people will drive more, and emissions will go up and that's bad for our climate. But I think that buried within that argument is a fatal flaw. It's an assumption that we're going to continue to use a carbon-based fuel, and whether it's hydrogen or electric vehicles we still need good roads. We still need safe bridges, so by investing in EV charging stations, by investing $7.5 billion in electrifying school buses, by adding another $21 billion in the bill for resiliency for infrastructure, both for roads and bridges and other infrastructure, to make them more resistant to the effects of climate change and severe weather, I just think that there's a lot in this bill that points toward and recognizes climate change as a serious risk. You know, the other thing that you see in this bill is it's the largest growth and investment in transit that the federal government has ever made. So, you know, I really hope that some of our aspirational and political goals for climate change don't end up derailing what is really, you know, a much-needed five-year bill that invests in the kinds of infrastructure that we really need.
Cranson: Well, and you're hearing people, whether they want to get into any real discussion about what's causing it or not, acknowledge that something's going on with the climate. Republicans like, you know, Senator Bill Cassidy in Louisiana, a coastal state that's obviously been greatly affected by water levels and by volatile weather. This week, I mean, the very time that the Senate bill is was being voted on, Detroit was bracing for more torrential rains, another 100-year event, which 100-year events seem to happen like every three weeks now. You know, the freeways are flooded sure enough this morning and something has to happen, and I think you're starting to get that realization. It’s probably one of the reasons why 19 Republican senators signed onto this and didn't push hard against those resiliency components.
Brown: Yeah, well, I think it's the flooding in the coastal areas. I think it's, you know, making some tough decisions about moving roads in even places like Colorado where you've seen wildfires and wildfires then turn into mudslides when the rains come, so therefore, a route may need to change. It may need to move away from a river. It may need to move out of a particular canyon or along another alignment to make it more resistant to the effects of severe weather and natural disasters. That's happening all around the country, and, you know, state DOTs are really focused on the kinds of resiliency strategies and techniques that were going to hopefully help the infrastructure, the roads and bridges, resist the worst effects of climate change. But, you know, I don't think that means that by investing in roads and bridges that we're going to be contributing to greater greenhouse gas emissions. I think ultimately that comes down to the fuel source and not necessarily the desire for people in the economy to move around the country.
Cranson: Okay, anything else you want to touch on concerning this far-reaching and, you know, broad bill?
Brown: Well, there's a couple of other things. I think it's worth noting and coming from Michigan I’m sure you saw the $55 billion for water in the bill. There's another $65 billion for broadband and another $65 billion for the power grid, and you can go on and on. This is a trillion-dollar five-year investment in infrastructure writ large, and I think that our nation as a whole has sort of lacked that great desire to invest and shore up. But when you see the power grid start to fluctuate in places like Texas during the severe cold snap or when you see during the pandemic that people in the middle of the country don't have access to high-speed internet, these kinds of investments become very real and called for in places where you wouldn't necessarily expect it.
Cranson: Oh, yeah, absolutely. In our older urban areas upgrading those water systems is paramount. I think, yeah, also broadband is a huge issue in rural areas of Michigan and getting that kind of equal access to everybody, no matter where they live, is a tremendous thing. It is all infrastructure, you know, whether it's transportation infrastructure or not, it's all infrastructure, so I agree with you that's a big deal.
Brown: Absolutely.
Cranson: Well, thanks, Lloyd. I’m going to be back in a minute to talk with Niles Annelin, a policy analyst at MDOT who will give a breakdown on the numbers from Michigan. So, thanks again, Lloyd.
Brown: My pleasure. Thanks, Jeff.
Narrator: Did you know that most work zone crashes are caused by inattentive motorists? It only takes a split second of distraction to dramatically change lives forever. The Michigan Department of Transportation reminds you to slow down, follow all signs, and pay attention when driving through work zones because all employees deserve a safe place to work. Work Zone Safety: We're All in This Together.
Cranson: So, welcome back. For the second segment today we're going to be talking with Niles Annelin, who is the manager of the policy section at MDOT. He and the people who work with him have been taking a close look at the infrastructure bill, still a lot to be learned, a lot going on with it. Obviously, 2,700 pages is a complicated thing to analyze, but Niles has agreed to come on and at least give us kind of a high-level overview of what it means to Michigan. So, thank you, Niles, and, you know, go ahead and tell me, you know, what your high-level view is.
Niles Annelin: Yeah, thanks, Jeff. Thanks for inviting me today. As you mentioned, there's a lot in this bill and our staff with some assistance from AASHTO have been really digging into, you know, what this might mean for Michigan and for MDOT. So, as many people may have seen there is, you know, the expectation that over the course of a five-year period there will be $7.9 billion dollars in total funds. Notice that's total funds, which is in comparison to the previous authorization bill, which was the FAST Act, which had approximately $5.5 billion in total coming to Michigan. So, there's about a, you know, $2.4ish billion-dollar difference there but, you know, as you dig into the details you can see that through the formula program this gets distributed, you know, widely throughout the state of Michigan. So, if we're looking at only new money coming to Michigan, we've calculated that that'll be approximately $1.7 billion dollars, again, over the course of a five-year period. Using the existing formulas, assuming those don't change, we're expecting that to be about $255 million dollars in new money coming to the Department of Transportation.
Cranson: So, that's each year over those five years, and that's for the state highway program, right?
Annelin: Yeah, and that's just if you do a straight average. That's just the general assumption of how much new money would be expecting to receive.
Cranson: Well, so, beyond, you know, roads and bridges which get a nice bump in funding, and you talked about the formula and there's several formulas, right? There's a federal formula for disbursement to the states, and then within the state we have our own breakdown for how the money goes to state trunk lines versus roads that are owned by cities, villages, and counties. So, could you talk about those formulas?
Annelin: Sure, so with a federal, you know, the rough estimate is when the federal funds come to the state, it approximately is generally 75% goes to trunkline, or MDOT, roads and 25% goes to local federal aid roads, or you can also think of them as major city and county roads. So, that's the traditional split of funding that comes in at the federal level. Then that 25% then gets distributed through the Act 51 formula which is how this state distributes the share throughout different agencies around the state, transportation agencies around the state. As I think you've talked about in the past, that's a very complicated formula using the, you know, total funds that we're seeing in the Senate bill that roughly would break down to, again, over the course of five years, $5.9ish billion for trunk line and almost $2 billion for local roads.
Cranson: And that is said in an act that dates back to 1951. It's been revised since then, but as you and I have discussed and lots of people discussed, there's often an appetite, especially when new legislators come in to start tugging at that. But then the more veteran legislators and other policy makers around Lansing say, “You know, once you pull that thread, it's like a sweater that's really going to come unraveled in a hurry.” So, well, let's talk about some of the other things that are for Michigan. Most of the media has been very interested in what it means to roads for obvious reasons. We've put a lot of emphasis on roads and fixing roads and bridges the past few years. But we also know, as I talked to Lloyd Brown about earlier, that a big part of this is resiliency. It's about trying to support where automakers are going with electric vehicles and charging. You know, you observed the other day because of your role kind of developing policy and analyzing what's going on in the electric vehicle charging world that funds for people who don't have garages, don't live in traditional environments but might have an electric vehicle need a way to charge that too. There's truly a social equity issue at play there. Can you talk about that a little bit?
Annelin: Yeah, absolutely. There's a component of this legislation that really helps them try to get at, you know, broadening the market for electric vehicles to more than folks that can just, you know, charge them in their private garages. So, this program sends approximately $110 million dollars to Michigan to help develop an electric vehicle charging program with the intent of making that more equitable and approachable for everybody to consider buying an electric car in the future.
Cranson: Well, go over some of the other numbers that your staff has broken down and how it relates to other programs in Michigan, other modes.
Annelin: Yeah, absolutely. So, in addition to the program, there's an additional $700 million that's going to specific new programs in Michigan. One is a bridge replacement, rehab, and preservation fund. That's set to receive around $563 million. There's also a new program funded around $9 million that goes towards passenger ferry programs. So, that kind of really gets to some of our you know existing needs. I was excited to see there's possibility of $1 billion in new funding coming to Michigan transit programs. Now, the details of how that's all going to be distributed and, you know, where that ends up in the final bill is still yet to be known, but it was still interesting to see such a market increase in transit funding.
Cranson: Well, yeah, I mean regardless of how that breaks down in urban versus rural agencies, we're going to see, yeah, significantly more investment.
Annelin: Yeah, and they're also, again to some of the conversation you and Lloyd were having, there are at least two new formula programs geared towards adapting to climate change and resiliency. Included in those is a $110 million dollar program for carbon reduction and a $194-million-dollar program for Michigan for resilience funding. That resilience funding, on my initial read of the bill, can really go a long way towards at least starting to address the problems that we're seeing with urban freeway flooding, damage to our infrastructure due to fluctuations of the levels of the Great Lakes, and, you know, just flooding in general. I think is a place where we can really make some progress using those funds.
Cranson: Yeah, you're absolutely right about the fluctuating in the Great Lakes and what we've seen on the shorelines largely, you know, Lake Michigan and the western side of the state and all those shoreline communities, but also in the thumb area and, you know, what we've seen on M-25 on Lake Huron and some of the inland lakes and inland waterways, too, yeah.
Annelin: Absolutely. When the water levels change so dramatically it makes, you know, decision making around how best to protect their infrastructure for that much more challenging.
Cranson: Yeah. Well, what else would you want to highlight from this that you think, you know, specifically applies to Michigan?
Annelin: Let's see, there is a variety of new discretionary grant programs, which, again, are, you know, challenges and opportunities for the department. They can either bring in additional funding to the state or as you—
Cranson: Or they can bring great disappointment when you don't get it.
Annelin: Yes, absolutely. They can bring great disappointment as well because, as you mentioned, it is a lot of effort to put together those grants. I do think that they're targeted towards, you know, problems that we are facing, so I think there's some potential there.
Cranson: Yeah, well, thanks, Niles. That's helpful. I think I’ll be talking more with you and your staff as this makes its way through the House and no doubt gets amended at least a little. There'll still be some hard work in sorting out the specifics to Michigan. Overall, you can't, I guess, overstate the significance of what this investment is going to mean and, as Lloyd pointed out, the certainty that it brings the industry at least for five years.
Annelin: Yes, absolutely. Yeah, there's a lot of potential riding on these pieces of legislation, right?
Cranson: Yeah, absolutely. Well, thank you again.
Annelin: All right. Thank you.
Cranson: Thank you again for listening to this week's edition of the Talking Michigan Transportation podcast. I would like to thank Randy Debler and Corey Petee for engineering this week's podcast. To subscribe to show notes and more, go to Apple podcasts and search for Talking Michigan Transportation.