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Magazine » August 2010 » Columns » FUNDING & POLICY

Transportation prospects dire while funding stuck in mire



The prospects for the national transportation system are dire. The federal reauthorization process, now nearly one year late, is mired because, without additional revenue, it is impossible to pay for the existing program with the Highway Trust Fund, let alone an expanded one.

Some even pessimistically estimate that 2013 will be the soonest Congress can pass a bill. The problem: Few in Congress can publicly support an increase in fuel tax. It is common knowledge that the fuel tax has a limited lifespan with increasing vehicle fuel efficiency and alternative fuel options developing faster than predicted. Even so, in the short run the fuel tax is the best means of paying for our nation’s critical transportation infrastructure.

The last time Congress voted to actually pay for infrastructure was in 1983 — 27 years ago. The 1993 gas tax increase was passed to balance the federal budget — not pay for infrastructure — although it was eventually moved to the Highway Trust Fund. Inflation has eroded the value of a 1993 dollar to only 64 cents today.

The Surface Transportation Authorization Act (STAA), being crafted by the House Transportation and Infrastructure Committee, is heavily focused on metropolitan areas with a particular emphasis on transit. More investment in transit is obviously needed. But the next bill should be balanced with significant increases to both highways and transit. STAA does not accomplish this.

What is ironic is that the federal interest in transportation is based on the interstate commerce clause of the U.S. Constitution, but STAA as it stands lacks a meaningful way to address the country’s freight needs. This is more than unfortunate because global competitiveness is real. Other nations are making smart investments that are eroding the United States’ traditional advantage in transportation logistics. While this argument may seem esoteric, it has consequences to everyday Americans.

STAA has not been introduced yet, but has become the basis for the markup of an Environment and Public Works Committee (EPW) version of reauthorization in the Senate. There appears to be agreement within the EPW committee leadership that a fiscally sustainable program needs to be passed. However, more funding is not the only solution; a smaller program supported by existing revenues also can meet this test.

A federal program that continues at lower or current levels will extend a 25-year underinvestment in our nation’s transportation system. What was once the envy of the world is now clogged, cracked, and potholed.

If we remain on this course, states cannot depend on the federal government to provide for a national transportation system that allows them all to have equal access to global markets. Cash-strapped or distant states will suffer the most economically from a patchwork of inefficient and pitiful highways and bridges. One would hope this is not our fate.

But, hope is not a plan. States are cannibalizing their state road funds, and deferred maintenance will create even greater needs in the near future. Americans are losing billions of dollars in productivity due to congestion. Recent highway fatality declines are a significant improvement, but we can do much more. Economic opportunity is eluding large regions of our nation.

The makings of a successful reauthorization should include significantly increased investment in all modes of surface transportation and a means to pay for it with indexing to preserve the purchasing power of the revenue stream. It must provide the funds and tools to attack congestion. It must address transcontinental freight corridors. It must be serious about highway traffic safety with meaningful sanctions. And it must be long-term to allow for the efficient planning and construction of the system.

Will this happen? Certainly, Congress will eventually pass a reauthorization bill, but will it be what America needs? Without a means to pay for it, it will not. This is the time to create a Federal Fuel User-Fee Rate Commission, like the Postal Rate Commission and the Defense Base Closure and Realignment Commission. This has worked in the past when the subject was just too politically sensitive for Congress to act, yet everyone knew action was needed.

Delay in passing reauthorization also creates a real risk to the special status of the Highway Trust Fund. Without a sufficient and dedicated revenue source, the likelihood of moving transportation funding out of a trust fund and into the general fund grows exponentially. Highways and transit will not compete well against entitlement programs and emotionally touching causes. Every American will be worse off if general-fund-dependent transportation funding occurs. Let’s work together to make certain that doesn’t happen.

Pete K. Rahn is the National Transportation Practice Leader at HNTB Corporation.

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