March 2, 2009
Commission Report: Increase Investment at All Levels
All levels of government—federal, state, regional, and local—must increase their financial investment in transportation to overcome the current shortfall, and the federal government must take a strong role in the process.
That was the conclusion of Paying Our Way: A New Framework for Transportation Finance, the report released Feb. 26 in Washington, DC, by the National Surface Transportation Infrastructure Financing Commission.
Language in SAFETEA-LU established the commission and charged it with analyzing future highway and transit needs and the finances of the Highway Trust Fund and making recommendations regarding alternative approaches to financing transportation infrastructure. The chair of the 15-member body is Robert D. Atkinson, president of the Information Technology and Innovation Foundation.
The report demonstrates that current investment in the nation’s surface transportation system is only about 35 percent of the necessary level. It also calls for immediate restoration of the purchasing power of dedicated revenue for public transportation and other surface transportation investments to 1993 levels, when those sources were last raised, and for the indexing of these revenue sources to account for future inflation.
Current annual capital investment from all sources is $42 billion for public transit and $131 billion for highways, which translates into annual federal transit and highway spending requirements of $19 billion and $59 billion respectively. Using the baseline forecast of average annual Highway Trust Fund revenues of $32 billion, the resulting annual federal investment gap for transit and highways is $46 billion.
The numbers are even higher for improvements to surface transportation, the report states: total annual spending of $49 billion for transit and $165 billion for highways. The associated annual federal funding requirement would be $96 billion for transit and highways combined, leaving an annual federal shortfall of $64 billion.
The commission points out that a 10-cent increase in the per-gallon gas tax equals one-half cent per mile, $5 per month, $9 per household per month, and $109 per year. In the long term, it recommends an eventual shift away from per-gallon fuel taxes to a Vehicle Miles Traveled (VMT) tax, but not to tie the use of funding to VMT.
The report also includes these recommendations:
* Opposition to any “opt-out” program for states;
* Opposition to any tax of transit tickets or fares;
* Balanced recommendations on public-private practices, citing APTA and the American Association of State Highway and Transportation Officials as groups that should develop standards and best practices;
* Support of transit as an eligible use of toll funding; and
* A new federal discretionary financing mechanism for Projects of National Significance using tax credit bonds.
“The report released today by the National Surface Transportation Infrastructure Financing Commission is sobering, yet it contains strong recommendations to the Congress,” said APTA President William W. Millar. “It warns of the enormous and growing gap between current transportation revenues and the investment levels needed in the nation’s public transportation and highway systems to restore vibrancy to the American economy….Increased investment in transportation infrastructure can and should be the leading way to re-energize the economy with jobs, productivity, growth, and competitiveness.”
More information on the report is available here.