National Transportation Debate
Intensifies in Washington

Rep. Oberstar (DFL-MN), Chair, US House & Transportation Committee, and Rep. Mica (R-FL), Ranking Member, unveil the The Surface Transportation Authorization Act of 2009

The national transportation discussion is heating up in Washington as lawmakers prepare to review competing plans to address the impending expiration of the nation’s highway maintenance and construction program, and how to correct its dwindling funding source.

The debates focus on the expiration of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU),  which covers federal surface transportation programs for highways, transit, safety and other transportation activities, and its funding source, the Highway Trust Fund (HTF), which has experienced declining revenue funding over the past several years. This summer, HTF reached a shortfall and prompted Congress to authorize an $8 billion infusion of emergency funding just to keep it operating through the end of the fiscal year.

“With impending shortfalls in the Highway Trust Fund, and the current surface transportation authorization act set to expire on September 30, 2009, we have critical decisions to make – decisions that will shape the future of surface transportation in the United States,” said Rep. James Oberstar, Chair of the House Committee on Transportation and Infrastructure.

Short-term Fix vs. Long Term Planning

Competing plans to overhaul or extend the programs are being touted around Washington. At the forefront of the debate is whether to apply a short-term fix for SAFETEA-LU – a simple extension - or opt for more long-term planning that shapes the way transportation policy will play out over the next several years.

Senator John D Rockefeller, (D-WVA), who chairs the Senate Committee on Commerce, Science and Transportation, says it’s time to correct the shortcomings in the existing Act to prepare the nation’s transportation system for the 21st century and insure that people’s mobility remains accessible, efficient and affordable.

 “We must set far-reaching goals and objectives that span across individual modes and develop reliable standards and methods for attaining them,” said Rockefeller. “We must take a holistic approach to solving our transportation challenges, especially furthering the connection to our rural communities, in order to remain competitive in a global economy, reduce the consequences of climate change and maintain safety and efficiency in our daily lives.”

HTF has been in financial jeopardy primarily due to decreasing funds that are collected from fuel taxes. This is a trend that is expected to continue and places HTF in jeopardy of facing even great shortages in the future. The gas tax is set at 18.3-cent-per-gallon and has produced fewer revenues over the years as automobiles become more fuel efficient. According to Oberstar, gas tax revenues represent a 34-percent decline in this year’s $53 billion funding level. He said that current user fees have lost 33 percent of their purchasing power over the last 15 years and generate only enough revenue to finance $35.1 billion of Federal highway, safety and public transit investments for FY 2010.

“Unless the funding and revenues for the Trust Fund are increased substantially, the Trust Fund will be unable to support even current investment levels for highway, highway safety, and public transit in fiscal year 2010 and the coming years,” he said.

In response, Members have split into two factions over how to proceed, backing either a short-term extension of the existing program as a way to bide time to develop a new approach or supporting a proposed long-term solution that reworks the program to integrate a more intermodal approach to transportation and match it with the right level of funding.

House & Senate Propose Funding Measures

In the House, Oberstar and his Committee have developed The Surface Transportation Authorization Act of 2009, which would allocate $500 billion over the next six years for highway, transit and high-speed rail. The expenditure breakdown includes:

* $337.4 billion for highway and bridge maintenance and construction
* $99.8 billion for public transit maintenance and development
* $12.6 billion for motor carrier safety
* $50 billion to develop 11 high-speed rail corridors

This summer, Oberstar presented his plan at the House Hearing on Surface Transportation, and said that the plan’s $450 billion for transportation and transit is the minimum needed “to stop the decline in our surface transportation system, begin to make improvements, and restore and enhance the nation’s mobility and economic recovery.” He said that the House Committee on Ways and Means will need “to undertake the difficult task of identifying the revenue to finance this bill.”

The other major plan is moving through the Senate. It’s an 18-month extension of SAFETEA-LU, which is supported by Transportation Secretary Ray LaHood and President Obama. Supporters say the extension would continue to fund the transportation programs at 2009 funding levels and would give legislators more time to reassess how the nation should address present-day needs of highways and public transportation systems.

While introducing the bill before the Senate Environment and Public Works Committee, Senator Barbara Boxer noted that the needed monetary supplement to fund the projects is $41 billion in 2010 and $20.5 billion for the last six months of its tenure in 2011.

“Of course there are policy changes we each would like to make. Most of us believe the next surface transportation bill should and must be transformational, to reflect the need for more sustainable communities, cleaner air, and more transportation options for the American people. This will lead to a stronger economy, jobs and a better quality of life for our families,” said Boxer.

LaHood Eyes Long Range Impact

Secretary LaHood recently weighed in and says it’s time to rethink the transportation policy direction in light of present-day transportation usage and collection of taxes to fund the network. He said that by the year 2050, transportation demands will have increased by two and a half times.

“The question is how will we respond to this demand if we are unable to double the number of lane miles of highways,” he said. “We can anticipate that highway capacity will not keep up with transportation demand if we continue to invest our transportation dollars as we have in the past.”

Since 1970, the amount of vehicle miles traveled has quadrupled in relation to the rate of population growth (173-percent increase in vehicle miles traveled with 47-percent increase in population), said Transportation Secretary LaHood earlier this year before the Commerce, Science and Transportation Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security.

LaHood said that changing the direction of how we view and fund transportation is already occurring. He cited allocations in President Obama’s stimulus plan – the American Recovery and Reinvestment Act with $8 billion included for passenger rail investment and $8.4 billion for transit capital improvements.

The Highway Trust Fund was established in 1956 to provide an ongoing means of federal funding for the construction and maintenance of highways and bridges. Revenue for the Fund is generated from various excise taxes placed on motorists, such as fuel taxes and toll taxes.  In April 2006, the U.S. Government Accountability Office (GAO) reviewed the financial mechanism of the Fund and projected that it would face revenue shortfalls due to outlays that exceed receipts. In August 2009, that prediction became a reality as HTF expenditures outweighed the structured funding.
      
The impending debates will begin at a time when the administration of HTF expenditures have come under fire for falling outside of the scope of its intended purpose. A report released by the GAO in June, “Highway Transit Fund Expenditures on Purposes Other that Construction and Maintenance of Highways and Bridges During Fiscal Year 2004-2008,” has led to controversy about the appropriateness of some of the transportation expenditures in times of dwindling funding.

The transportation debate on the way the nation funds its highway programs and determines what to spend the money on will take center stage in Congress starting this month.