Governments at All Levels Must Fund Their Share of Transportation Investment
Transportation investment in highways and transit needs to increase significantly to meet national needs. To achieve this, governments at all levels—Federal, state, and local—must continue to fund their share.
AASHTO supports giving all states all the options possible to use tolling, public–private partnerships, and innovative financing tools. It is the hope that the Commission will be supportive of tolls and public–private ventures as a way to supplement traditional sources of transportation revenues. In most cases, however, the contribution from tolling and public–private ventures will be limited.
In 2005, $7.7 billion was generated through tolls which represented 5 percent of highway revenues nationally. Over the next 10 years supportive Federal and state policies could make it possible to increase that percentage to 9 percent of the total.
Federal highway assistance, which provides nearly half of capital spending, could be in crisis as early as 2008. Unless a solution is found, the program may have to be cut as much as $11 billion in FY2009. Toll funding cannot offset such a cut. It will take the equivalent of a 3 cent Federal fuel tax increase to sustain the Federal program at the levels approved by SAFETEA-LU.
Meanwhile, because of rapidly escalating construction costs, the purchasing power of the Federal program will have been cut by over one half since the fuel tax rate was last adjusted in 1993. Restoring the purchasing power of this important program will also require a fuel tax increase or its equivalent.
We hope:
The Commission will analyze the importance of the Federal government continuing to fund its share of the highway and transit programs and how this can be funded.
Second, that you will analyze the challenges and successes of state and local governments in increasing their transportation revenues.
And third, that you will take a hard look at to what degree, toll-based funding and public–private ventures can help state and local governments fund their share of the increase in investment needed.”
Testimony of Victor Mendez
AASHTO President and Director of the Arizona
Department of Transportation
National Surface Transportation Policy and
Revenue Study Commission Forum
Portland, Oregon
October 27, 2006
