Good morning. My name is Edward Wytkind. I am the Executive Director of the Transportation Trades Department, AFL-CIO (TTD), whose 29 affiliated unions represent several million workers employed in all sectors of the transportation industry and thus have a unique and direct stake in the reauthorization of ISTEA. I have attached to my statement a list of our affiliates which include all the public and private sector transit unions such as the Amalgamated Transit Union and the Transport Workers Union.
I am pleased to have the opportunity to express the views of transportation labor on the future of ISTEA and the federal mass transit program. Mr. Chairman, I want to commend you and this Committee for holding this hearing and for inviting all interested parties to share their views and concerns about the future of transportation policy. It is particularly timely since ISTEA is due to be reauthorized by September 30, 1997, in what we hope will be an effort to bring us into the next century with a well balanced, truly intermodal transportation policy blueprint for the nation's long-range surface transportation capital and operating needs.
While many who will appear before this Committee will bring different opinions about certain aspects of ISTEA, I think we can, or at least should, agree that ISTEA has been extremely successful in developing long-term transportation infrastructure planning to the benefit of American communities -- large and small, urban, suburban and rural. The original landmark Act, which was a broad bipartisan effort, authorized $155 billion for highways, bridges, and bus and rail transit systems. It created millions of good paying jobs, inspired economic development, brought planning decisions to a more localized level, and provided the nation with increased and safer transportation choices.
Transportation labor is hopeful that Congress will again act in a bipartisan manner to build on the successes of ISTEA and the transit program by maintaining the essential framework and focus of this landmark surface transportation legislation. To that end, there are a number of issues that I will highlight as Congress and the Administration move toward ISTEA reauthorization.
The Federal transit aid program, the subject of today's hearing, lies at the core of ISTEA's success. It is a program whose long-term viability is dependent upon Congress' continued commitment. At a time of growing budget constraints, we must work together to ensure that federal budget objectives do not obstruct our goal of maintaining America's national transit network, which serves millions of passengers and employs more than 250,000 workers. Already, the dramatic decline in transit funding is having severe consequences across the country.
Operating assistance cuts, for example, have caused transit operators to increase fares by 20 to 30 percent. Unless reversed, these cuts will force smaller operators to institute additional fare hikes of up to 125 percent, causing declines in ridership of 30 to 50 percent. Due to cuts in FY96, more than one in two transit systems raised or will raise fares, almost half will slash service, and almost $2 billion in capital improvements will be canceled or deferred. These facts defy the very essence of ISTEA, which made a bold and necessary statement about the role of transit in America. We therefore strongly urge this Committee to reaffirm the need for a well financed Federal transit investment program and to fight for a reversal of the current downward spiral in funding that is literally strangling transit systems, passengers and employees.
Both the House and the Senate Appropriations Committees have further reduced operating subsidies in the FY98 spending bill by a staggering 50 percent. A cut to $200 million in operating assistance will wreak havoc on our nation's transit systems and the communities they serve. Congress must make a real commitment to transit in this year's rewrite of ISTEA to reverse the consequences of an underfunded system. Mr. Chairman and Senator Sarbanes, transportation labor appreciates your leadership in this regard, as you have been among the most vocal and forceful Members of the Senate in expressing the critical importance of the mass transit program to our economy, to our cities and towns, and, yes, to the economy and jobs.
As we all know, the 1991 Act granted states and localities added flexibility in administrating transportation programs - a policy that transportation labor supported so long as federally established labor standards and worker protections were not undermined in the process. Fortunately, the 1991 legislation insisted on the maintenance of these basic protections. I cannot underscore how important these protections are to working men and women in New York and across the nation.
Laws like Section 13(c) of the Federal Transit Act and the Davis-Bacon Act have been instrumental in allowing workers to earn a living wage. If we eliminate these protections in the name of "reform" or try to waive their application in certain instances, we threaten the basic rights and jobs of workers. In this and the previous Congress some have tried to attack programs like Section 13(c) and Davis-Bacon despite their indispensable role in guarding against the use of federal dollars to bring down the wages and standards of living in communities or to strip workers of their basic collective bargaining rights.
Some in Congress have called for sensible reform of these and other programs. Others, unfortunately, seek their outright repeal. Transportation labor will fight any and all efforts to use ISTEA to attack longstanding worker protections. Transportation labor is strongly committed to advancing the ISTEA legislation this year, but we will vigorously commit ourselves to defeat any measures contained in ISTEA that would harm working men and women.
We continue to evaluate the impact of innovative financing mechanisms, such as the State Infrastructure Bank (SIB) pilot program, and seek to ensure that these proposals don't compromise worker rights or allow federally assisted entities to avoid compliance with various statutes designed to protect the public interest. As currently constructed, SIB's - which exist solely because of federal capitalization - are intended to provide new monies for transportation infrastructure investments but when funds are recycled and federal dollars are no longer in direct use, the projects may not be required to comply with basic federal standards such as those designed to protect workers, the environment, the disabled and civil rights, to name a few.
Any expansion of this program in ISTEA must require that all projects supported by SIB funds meet federal standards. Our organization supports sensible innovative financing proposals such as SIB's or credit enhancement initiatives, but not if they are implemented at the expense of vital federal standards which may negatively impact workers and the overall public interest. Attached please find a policy resolution adopted in February by our 29-member Executive Committee which further discusses our position on innovative finance.
Ensuring that vital worker protections are secured in innovative financing programs has an added benefit. There are large pools of private capital which could supplement traditional federal and state infrastructure funding and the largest such pool of capital is contained in our nation's private and public sector pension funds. These hundreds of billions of dollars worth of worker retirement money are administered through large institutional investors such as public employee funds and joint labor-management funds. In fact, there are billions of dollars in multi-employer pension plans which could provide a ready source of infrastructure capital investment so long as the appropriate market risk/return criteria are followed.
Labor union pension funds could seek to invest a portion of their assets in infrastructure projects for three basic reasons; 1) the potential for strong investment returns for plan participants and beneficiaries; 2) the prospect of creating job opportunities for plan participants and all workers, and 3) the promise of a more efficient transportation system and the greater economic productivity it supports. Multi-employer pension funds invest in programs that have a proven track record in various types of construction financing such as ULLICO's "J for Jobs" and the AFL-CIO's "Housing Investment Trust and Building Investment Trust," along with other instruments that can support infrastructure investments.
As Congress considers various innovative financing mechanisms to leverage limited federal funds, it should adopt policies which would enhance the attractiveness of these investment opportunities for the most likely sources of potential capital. For this reason, the Administration recognized in its NEXTEA proposal that SIB's and credit enhancement mechanisms should comply with various federal requirements, including Section 13(c) and Davis-Bacon. Without these minimum labor protections, any innovative financing provisions which Congress ultimately enacts in the reauthorization bill may not achieve their intended purpose of attracting sufficient private capital and will not receive our support.
I also want to touch on the critical role that the federal government must play in ensuring that all modes of transportation are safe. Workers employed in the bus, motor carrier and rail industries are increasingly confronted with a dangerous and unpredictable workplace. In its zeal to deregulate, Congress has been all too willing to advance legislative measures that had the net effect of narrowing the margin of safety for workers and the general public.
During last year's debate over the critically important National Highway Systems (NHS) legislation, for example, Congress attached a provision that exempted some 2 million trucks from record-keeping, hours-of-service, safety inspections, insurance requirements, the National Driver Register - which tracks repeat traffic violators -- and other safety-related requirements. Under this so-called "pilot" provision, delivery trucks weighing between 10,000 and 26,000 pounds would be exempt from major safety requirements even though they account for 50 deaths and 1,000 injuries per month, at a cost of $500 million annually. This is the type of policy that undermines transportation safety and that we will vigorously oppose in reauthorization.
For workers in the transit industry, improving safety and security in the workplace is also a major priority. For example, drivers, other employees and passengers continue to face significant security risks such as assaults and incidents of harassment. Congress must combat these risks by committing resources for labor-management training programs directed toward the unique safety and security issues in the transit industry. In the transit and intercity rail and bus sectors, federal funding decisions must reflect the industry's requirements to meet the costs associated with compliance under the Americans with Disabilities Act and federal drug and alcohol testing requirements.
As all of us know, there has been increased attention placed on the role the private sector should play in the delivery of transportation services. While transportation labor recognizes the longstanding role of private sector participation in our industry, we want to emphasize that decisions relating to public or private control of the transportation infrastructure, and particularly transit service, should be left to local authorities.
Congress recognized the wisdom of this policy during consideration of the original ISTEA bill when it included specific protections against the use of federal transportation grants to force privatization on communities ill-prepared for or disinterested in this type of service option. We recognize the need to encourage private investment in our transportation infrastructure and the desire to develop new ways to finance important investments, but we warn against heavy-handed policies that would permit, or in fact promote, the irresponsible sell-off of our transportation network in the name of cost savings that have usually proven illusory.
I must emphasize that we ultimately believe that transportation facilities should continue to primarily serve the public interest and not be dedicated to generating profits for private interests. At the very least, these decisions should be left to local authorities who are better equipped to make transportation decisions based on their local needs. To that end, transportation labor wants to state our continuing support for President Clinton's recision of transit privatization rules born in the 1980s that placed undue pressure on local grant recipients to explore privatization options at any and all costs. Those policies distracted attention and resources from providing vital services to the traveling public and harmed workers and communities. Transportation labor is committed to preserving current privatization policies governing the federal transit grant program and will combat any proposals in ISTEA to needlessly turn back the clock.
Under current law, a wide array of interests including labor organizations are permitted to receive, review, and comment on the annual and long-range transportation investment programs developed by Metropolitan Planning Organizations (MPOs) before final approval is granted for these plans. As this Committee is well aware, workers are directly affected by MPO spending and policy decisions and thus their unions offer a unique perspective to assist MPOS in developing workable and efficient plans.
The role of workers and their unions at the planning table is to help ensure that employee issues are not merely cast aside when core planning decisions are made. While we support the MPO program design embodied in ISTEA 91, we believe a mandatory role for union representatives should be reaffirmed and, to the extent possible, strengthened in the reauthorization bill.
ISTEA has represented an historic shift in transportation policy for this country. Thousands of communities, businesses and workers have benefited greatly from Act 1991 Act. As this Committee works with the Environment and Public Works Committee to complete ISTEA reauthorization, we know you will fight for the maintenance of a strong federal transit assistance program. Some, as you know, want to collapse ISTEA into a hodgepodge of state initiatives, a move we believe would decimate the very essence of the national, multi-modal transportation policy ISTEA represents, force states and cities to fend for themselves and expose workers to unfair attacks on their jobs and rights.
Mr. Chairman, we are prepared to work with you to make sure ISTEA builds on the successes of the '91 legislation and, in particular, supports the mass transit needs of American cities and communities whose mobility needs pose significant funding and policy challenges in the 21st century. We look for your leadership to help craft a bill that meets the nation's surface transportation needs by building on the successes of ISTEA, and thank you again for the opportunity to share our views.
The National Highway System Designation Act of 1995 provided a number of innovative financing mechanisms, including the creation of a State Infrastructure Bank (SIB) pilot program for up to 10 states. The SIBs are intended to complement the traditional federal aid program by providing enhanced flexibility in funding certain transportation investments. In addition, the Department of Transportation (DOT) appropriations for FY91 provided $150 million for the pilot program and lifted the IO state limit. As Congress prepares to reauthorize the Intermodal Surface Transportation Efficiency Act or ISTEA. there may be attempts to further expand the SIB program.
Not unlike a savings bank. a SIB requires equity capital to get started- which is provided by the Federal Government. Once capitalized. the SIB may Offer a range of loans and credit options. such as low interest loans, loan guarantees, or loans allowing delayed repayment of principal. For example. through a revolving fund scenario, an SIB would tend money to public or private sponsors of a transportation project. Revenues generated from the project (such as tolls) or general revenues (such as dedicated taxes) would be used to repay the loan with interest. These repayments replenish the fund so that new loans can be supported. The SIB program is part of a broader innovative financing effort being led by the DOT in an attempt to attract new capital at a time when federal resources have dramatically declined.
When federal transportation dollars are involved. compliance with all important federally established standards is required. Those include standards that safeguard the rights of workers, the disabled, the elderly and others and protects national environmental, public safety civil rights and other standards. The vigorous enforcement and application of basic federal standards over many decades has ensured that our national transportation investment priorities are consistent and compatible with federal policies designed to protect the general public interest. SIBs, while designed to achieve notable financing objectives. unfortunately threaten these basic standards unless structured property,
Some have claimed that as SIBs are currently structured. at a certain point the federal dollars used to capitalize the banks may no longer be in direct use. and a pool of fends available for new projects may involve non-federal monies. thus calling into question the continued applicability of federal standards. Since the objective in crafting the SIR program is to unlock a new source of transportation investment dollars. not to harm the rights of workers and others protected by such standards. changes should be made to the program to ensure that basic federal standards apply. Moreover. the billions of potential dollars in union pension fund would be reluctant to provide investment capital for transportation infrastructure projects where federal labor standards are inapplicable.
For workers in the transportation and building & construction trades. federal protections like Section 13(c) of the Federal Transit Act and the Davis-Bacon Act offer workers a measure of I I economic job security. The SIB program unfortunately sacrifices these protections. and in their place a hodgepodge of state laws and standards as they relate to basic worker rights and public protections would apply. Although federal labor and other standards will not apply under the SIB program, it is our understanding that requirements under Tides 73 and 49 of the United States Code, which set federal standards for infrastructure and transportation policies, will continue to be enforced, This represents a double standard that must be eliminated if the SIB program is to deserve the support of Congress.
It is the view of transportation labor that the SIB program is indeed a federal program and should be treated as such under the law. It is very clear that but for the federal dollars that are responsible for the original and continued capitalization of the banks, the banks would not exist as they are undeniably dependent on the initial federal -infusion of capital. Since SlBs require federal assistance for their inception, they are and will always remain federal entities.
The legislation establishing the pilot program directs DOT to report to Congress by March L 1997 on the financial condition of each infrastructure bank. Yet, a year before this report was due, an expansion of the program was funded in the FY97 transportation spending bill- Aside from the March reporting requirement. it is clear that a full review of the program is in order- including an evaluation of the program's successes and failures and its potential effects on federal standards before a further expansion of the program is considered. or additional funds are appropriated.
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