Home | Text of Recommended Actions Adopted by the AASHTO Board of Directors October, 2007 (continued)

Text of Recommended Actions Adopted by the AASHTO Board of Directors October, 2007 (continued)

Revenue Options

table 3
Note: Funding gap closure estimates for the three scenarios reflect the percentage reduction in the annual funding gap between 2007 and 2015. The 2007 gap ($27B for highways and $7B transit) is defined as the difference between 2007 SAFTEA-LU spending levels ($41.7B for highways(not including NHTSA and FMCSA) and $8.9B for transit) and the federal capital spending share of estimated needs to “improve” the system in 2007 ($68.9B for highways and $15.8B for transit).

VI-5. Continue to Examine and Refine Longer-Term Revenue Options

VI-6. Transportation Revenue Advisory Commisssion
Assure an objective review and implementation of revenue options. The current political climate makes it difficult to contemplate any tax increases at the Federal government level without an impartial method to evaluate costs and benefits of such action. An action to accomplish a permanent national commission called the Transportation Revenue Advisory Commission (TRAC) should be created as soon as practicable.

Under this concept, the TRAC would submit user fee recommendations to Congress and recommendations would automatically go into effect unless Congress voted to reject them. The TRAC approach would build on the work of the SAFETEA-LU commissions.

Funding and Financing Principles

Federal Investment Level. Maintain at least the current Federal share (45 percent) of total capital investment in the highway and public transportation portions of the national surface transportation system. At the same time, state and local governments must at least maintain their current transportation investment levels (33 percent and 21 percent, respectively).
Highways. Reaffirm and increase Federal, state, and local investment in preserving, modernizing, expanding, and operating the National Highway System (NHS) and non-NHS Federal-aid highway system routes in order to insure the continued mobility, reliability, safety, security, and performance for an efficiently and effectively functioning total network.
Public Transportation. Reaffirm and increase Federal, state, and local investment in preserving, modernizing, expanding, and operating integrated public transportation systems, including rural and intercity systems, that are coordinated, connected, and enhance personal mobility.
Budgetary Firewalls. Continue to protect the Federal highway and transit programs with budget firewalls.
Intercity Passenger Transportation. Federal policy should establish a national intercity passenger rail and bus system (similar to the NHS), funded from the General Fund (or another new dedicated funding source), to preserve high priority travel corridors and travel connectors.
Freight Transportation. The Federal government should be responsible for the “national” benefits share of investment resulting from trade agreements, international ports, border crossings, major national freight gateways, and substantial security requirements mandated for freight facilities.
Safety Funding. Ensure that highway safety funding is used for safety purposes and that the spending is based on data driven, state-developed Strategic Highway Safety Plans. In addition, broaden the flexibility of highway safety funding programs and simplify the grant application processes.
Security. Provide funding from the Transportation Security Administration and/or other General Fund sources for all modes of transportation to support the role of state DOTs, public transportation agencies, and other transportation entities in emergency and security preparedness and response activities.
Emergency Relief. Continue to fund highway Emergency Relief program costs above $100 million per year from the General Fund. This ensures that Federal financial support to address emergency highway needs will not threaten the financial viability of the Highway Account of the HTF and funding for the Federal-aid highway program.
Environmental Stewardship. Federal policy should recognize the environmental benefits that can come from increased investment in all surface modes.
Funding Flexibility. For all modes, maximize funding flexibility by providing broad funding eligibility, expanding transferability among funding categories, and consolidating programs. In addition, the Federal government should reduce the constraints of “modal silos” when considering development of policies and funding approaches.
Funding Earmarks and Allocations. Limit funding levels for earmarks to no more than the 1991 ISTEA levels (5 percent of the total program) and reduce set asides for narrowly defined programs. Require earmarked projects to be derived from long-range transportation plans and capital improvement programs.
Innovative Financing and Management. Encourage state flexibility in financing and highway management mechanisms, including public–private partnerships and use of managed lanes and pricing.
Program Efficiency. Further streamline the environmental process, reduce the regulatory burden associated with federally funded projects, and mandate coordination by all Federal agencies involved in transportation projects.
Project Delivery. Support and encourage the use of new technologies, advanced materials and design, and alternative contracting/construction methods. Reduce barriers and liberalize the use of Federal funds to facilitate more efficient project development and implementation.

Funding and Financing Policy Considerations

AASHTO supports assuring dedicated, stable, and predictable revenue streams for surface transportation and endorses increased investment at all levels of government to meet the nation’s surface transportation needs. The development and selection of proposed Federal funding options should recognize issues presented by the political climate and consider the following funding principles:

Inflation Neutrality—Revenue sources should either be inflation neutral (revenues naturally rise in rough proportion to transportation construction cost inflation) or include methods such as indexing revenues to the Producer Price Index (PPI), the FHWA Construction Cost Index, or another appropriate inflation index to correct for losses in purchasing power due to inflation.
Broader Base—Revenue sources should be explored that expand and diversify the scope of HTF funding sources; Federal limitations on the ability of state and local governments to raise revenues should be removed.
User-Pay Correlation—Approaches should avoid diluting the strong user-pay philosophy of current HTF revenue sources, which provides a strong argument against diversion of HTF resources to non-transportation purposes.
Administrative Ease and Efficiency—Approaches should generate a significant magnitude of funding (i.e., they are worth the effort) and avoid creating overly burdensome or inefficient collection requirements.
External Impacts—The effects of revenue approaches on the transportation system, the economy, individual industries, the environment, energy policy, and social equity should be as positive as possible.
AASHTO supports the notion that transportation needs can only be met through a combination of increased transportation funding and improved program delivery. Specifically, additional revenues must be complemented by efforts to reduce “the cost side of the equation” through aggressive application of the following management principles:
Administrative Efficiency—The Federal government, State DOTs, and other transportation providers must continue to streamline project delivery processes to save time, avoid waste, and stretch limited resources.
Appropriate Project Scoping—Agencies must expand their efforts to avoid “gold plating” and address needs through viable alternatives that cost less.

VII. Federal Program Recommended Actions

Prerequisites to Reauthorization. Three steps need to be taken for the reauthorization of the next highway and transit program to succeed: first, development of a compelling vision of the surface transportation system needed for America’s future; second, development of a “reform agenda” to restore a sense of purpose for the federal transportation program; and, third, development of bold goals that define the country’s transportation needs.

VII-1. A Call for Action

We are a vast nation that has overcome the tyranny of distance through wise investments in transportation that tied our communities together and linked us to the world.
We have built a modern transportation system that is the foundation for the strongest economy on earth.
Our nation has benefited from a transportation system that is safe, reliable, efficient, affordable and secure.
Americans have enjoyed expanded opportunities for jobs, places to live, time with family, education, healthcare, recreation and other services because of a world-class transportation system. Businesses have realized a competitive advantage and productivity growth.
Our generation inherited the world’s best transportation system made possible by the commitment of the last two generations to invest in the country’s future. We have spent that inheritance.
The 21st century is an increasingly competitive world where countries such as China and India have set their sights on overtaking America as the preeminent economic power. Our prosperity and way of life are at stake. America must respond.
Only immediate bold action to invest in transportation will sustain our national competitiveness and personal opportunities. It is time to marshal the will and the resources needed.

VII-2. Federal Purpose
“Support the National Vision and funding for a national surface transportation system that improves America’s economic competitiveness; strengthens the National Defense; gives the states the opportunity to provide needed mobility and improves safety, energy efficiency and environmental compatibility.”

VII-3. Reform Agenda

Increase Percentage of Funding Delivered Through Core Highway Programs—Apportioning federal assistance to the states to be delivered through core programs is a sound approach and should be retained. It will help restore public confidence to know that the funds apportioned to the states and distributed through these programs are systematically programmed by states and local governments, who are in the best position to determine priorities that give taxpayers the best value for their dollars.
Nationally Significant Needs—Increase apportioned funds to states, so that nationally significant needs in a state or in multi-state areas are addressed through cooperative efforts using state apportioned federal funds or an additional source of federal funds. Do not fund projects of “national significance” through congressional earmarks or nationally allocated funds from the Highway Trust Fund.
Minimize Administrative Cost and Delay—Reduce the time required for project review and approval of federally funded projects. State DOTs are already responding to community and environmental concerns through more flexible designs, environmental stewardship, and context sensitive solutions, making it appropriate that regulatory relief be provided.
Simplify Program Categories and Increase Flexibility—States and localities can get more value for the federal dollar and produce improvements faster if the complexity of federal highway and transit programs is reduced, and if state governments are given more flexibility in how to put those dollars to work.
Public Transit Programs—Reduce the number of public transit program categories and increase the states’ flexibility in the use of federal resources.

VII-4. Bold Goals

Performance—The American transportation system must provide superior performance to keep us globally competitive. Constantly changing demands are being placed on this system. Ultimately, evaluation of success must be in terms of what the system can deliver in condition, safety, and performance.
Federal Revenues—Restore the purchasing power of federal user fees to levels that enable the federal government to sustain its historical share of needed funding of highway and transit programs, through a National Commission with the authority to adjust revenue to meet program needs, subject to Congressional disapproval.
Supplement State and Local Revenues Through Alternative Financing Options—In order to make broader use of tolling and public–private ventures, eliminate federal restrictions and give states the option to adopt supportive policies. Over the next ten years, this could double the percentage of highway revenues generated by tolling from 4.5 percent to 9 percent and triple the amount of highway capital investment financed by public–private ventures from under $2 billion to $6 billion, annually. Support the development of potential alternative revenue sources to fuel taxes.
Safety—Reduce annual highway fatalities by 10,000 each decade through safer vehicles, advanced technology, improved occupant protection, safer roadways, and driver behavior modification, and by supporting state initiatives that may include stronger state laws, stronger enforcement, and faster assistance to crash victims.
Reduce Congestion and Energy Consumption; Improve Air Quality—The strategy to minimize congestion, energy consumption and improve air quality should include measures that enable states to: a) double transit and substantially increase intercity rail passenger ridership; b) improve system performance through technology and better management of operations; c) manage demand; and d) construct new facilities to address growing traffic and promote efficient movement of vehicles.
Preserving What We Have Built—Preserve and improve the system built over the last 50 years so it meets America’s needs for the next 50 years.
Initiate the Next Phase of the Interstate Highway System—To accommodate impending growth in population and traffic over the next thirty years and to sustain our economic competitiveness, significantly expand the capacity of today’s Interstate Highway System by initiating the next phase of the Interstate System (sometimes referred to as the “Corridors of Commerce”), adding new routes on new alignments, adding lane-miles on existing corridors, correcting bottlenecks, improving intermodal connections, upgrading interchanges, creating exclusive truck lanes, provide for maintaining the system and improving performance.
National Highway System (NHS)—Increase the proportion of core federal program funding dedicated to the NHS.
Establish a National Rail Transportation Policy—Intercity passenger and freight rail are critical components of the nation’s surface transportation system. States are developing intercity passenger rail corridors to ease congestion, improve air quality and provide improved personal mobility options. Freight-rail capacity has decreased over the past 20 years while demand for freight capacity in all modes has increased dramatically. Freight shippers in many states have expressed serious concerns about their transportation options which may seriously compromise the system’s ability to support our national economic growth. Current rail capacity is not sufficient to meet passenger or freight needs.

It is imperative that the commission develop a national rail policy that addresses institutional roles, passenger and freight capacity and new, non-Highway Trust Fund funding and financing options. This policy must be developed in partnership with federal and state governments and the railroads.

VII-5. Need for Federal Policy and Funding Role
To meet the Nation’s surface transportation system needs, the federal government must continue to play a leadership role in developing national policies and fund its historical share of the needed highway and transit improvements. In highways, this is achieved through a federally assisted, state administered system. In transit, it is achieved through federal assistance directly to state and local agencies.

VII-6. FHWA Role and Relationship with State DOTs
FHWA’s role should include advocacy for the nation’s highway system, policy and research leadership in the delivery of the Federal-Aid Highway Program, and stewardship focused equally on state accountability and action by FHWA to facilitate the delivery of service by state governments. FHWA should focus its efforts on program delivery, delegate project delivery to the states, and treat state DOTs as their governmental partners.

VII-7. Government Responsibilities—Federal, State, and Local
To meet national needs, funding of highways and transit must be increased. All levels of government – federal, state and local – should continue to fund their historical share of the needed funding level. The responsibility for transportation planning and project delivery should remain with state departments of transportation and local governments in cooperation with local planning organizations. Federal highway assistance should be focused on a strategic network of nationally significant highways that meet national goals, including the Interstate System, the National Highway System, and a limited system of arterials and collectors. Federal transit assistance should meet the needs of both urban and rural areas. Limit federal oversight to projects receiving direct federal assistance. Program categories for federal highway and transit funding should be made more flexible so that each state and its local governments can use the resources to best meet the needs of their communities.

VII-8. Private Sector
Federal policies should enable and encourage the capitalization of highway and transit improvements through public–private ventures supported by tolls and other revenues. There is a federal interest in sustaining the ability of the private-sector truck and rail freight system to meet national freight needs. Our national competitiveness requires us to ensure the trucking industry has access to a highway system with the safety, capacity, and reliability needed. Other transportation modes, such as rail and river freight complement the highway network. Federal policies should assist these modes by preserving the current eligibility of freight rail for funding assistance through federal programs and should expand assistance through concepts such as investment tax credits to facilitate capital improvements. A strong federal funding role is needed to sustain a national intercity passenger rail system. Limited government assistance may be required to sustain regular intercity bus service in some rural markets.

VII-9. Program Structure
The federal highway program should continue to be apportioned to the states and then distributed predominantly through core programs: Interstate Maintenance, Bridge, National Highway System, Surface Transportation Program, Congestion Mitigation/Air Quality, and Safety. The percentage of funding delivered through core Highway Programs should be restored to the level established in ISTEA. The programs’ funding guarantees and firewalls should be retained. There is a legitimate need to continue some National Programs, such as the Federal Lands Program. However, the program of nationally significant needs should be funded through cooperative state efforts, using funds apportioned to the states, rather than through Congressional earmarks. Program categories for the transit program should be consolidated and flexibility in their use increased.