DOT Chief Ray LaHood Leaves Agency At Crossroads

Nossaman Partner Geoffrey Yarema was quoted in the Law360 article "DOT Chief Ray LaHood Leaves Agency At Crossroads" regarding U.S. Transportation Secretary Ray LaHood's resignation.

Regardless of who replaces LaHood, the article points out that they will face a national discussion about how to pay for road construction.  According to the National Surface Transportation Infrastructure Financing Commission, the highway trust fund, which is funded by a gasoline tax, is dwindling could be bankrupt by 2020. 

"The gas tax is fatally flawed and dying a quick death," said Mr. Yarema, also a member of the financing commission.  "It has to be replaced over next eight years, and that will be a big part of the new secretary's job description."

The article mentioned that enthusiasm for private investment in public works is patchy and generally higher in Republican-leaning states.  In Virginia and South Carolina, officials have suggested adding new tolls to existing interstates, which is not allowed under current federal law, with narrow exceptions.

Mr. Yarema stated that the new DOT secretary should "consider widening those exceptions to give innovative state officials some room to run."  He continued, "If local officials are brave enough to come out in support of tolling, the federal government needs to meet them halfway." 

The article pointed out that LaHood's successor will also face industry pressure to streamline funds available under the Transportation Infrastructure Finance and Innovation Act (TIFIA), which provides low-cost loans to infrastructure projects.  Mr. Yarema mentioned that "it has been slow to ramp up, and applicants are being told to expect less than the maximum 49 percent available under the program." 

"The administration needs to say loudly that it will do everything to maximize usage of TIFIA," Mr. Yarema said.