Meeting Highway Users’ Needs

For the American Dream Coalition

By Greg Cohen, PresidentAmerican Highway Users Alliance

April 18, 2009

American Support for Federal Infrastructure Investment

• 94% of Americans are concerned about the condition of our nation’s infrastructure

• “Roads and bridges” rank #2 in top things the public supports

• 84% support spending more; • 81% are willing to pay 1% more in taxes for it• Strong majorities among both Dems &

Repubs.

Government Accountability is the Voters’ Single Highest Priority

• 61% of Americans concerned about accountability

• How can Congress address this concern?– CLEAR NATIONAL PRIORITIES– REFORMING THE OUTDATED “TEA” PROGRAMS– FINANCIAL INCENTIVES FOR RESULTS– INCREASING ACCOUNTABILITY FOR FAILURES

REAL NATIONAL PRIORITIES 2009 Authorization Bill

• CONGESTION RELIEF– Creation of a $3 billion “core” congestion relief

program for the National Highway System. – States that achieve benchmarks on NHS routes

receive bonus funds and greater program flexibility

• ECONOMIC GROWTH / FREIGHT – New Freight Fund firewalled from the Highway Trust

Fund– Truck-specific user fees would be spent on highway

freight capacity, operations, and traveler information systems.

REAL NATIONAL PRIORITIES 2009 Authorization Bill

• Safety– Save 200,000 lives over the next 20 years by

cutting annual fatalities in half– Spend 10% of FHWA funds on safety– Provide safety programs with a separate

“obligation limit”– Every state must meet its proportional share

of lives saved over a four-year period or face higher obligation requirements.

– Tax incentives for purchasing commercial vehicle safety equipment

REAL NATIONAL PRIORITIES 2009 Authorization Bill

• Aging National Hwy System Roads– Pavement Management System– Bridge Management System– Currently 25% of bridges obsolete or stucturally

deficient– Our target for 2020

< 2% deficient< 5% obsolete

REAL NATIONAL PRIORITIES 2009 Authorization Bill

• ENVIRONMENTAL STREAMLINING & STEWARDSHIP– Congestion relief projects should be recognized for their air

quality benefits– Firmer, shorter deadlines for interagency project reviews– DOT accountability for timely advancement of projects

coordinated with other agencies– Expand streamlining pilot programs

• FUNDING & THE AILING HIGHWAY TRUST FUND– Increase transparency, accountability– Reduce waste & diversion of both traditional highway user fees

and new revenue sources– Protect revenue generated by taxes, tolls, congestion pricing,

and all user fees – spend these only on critical highway needs

Signs of TroubleRoads were about 3.5% of the

stimulus bill’s cost

– Many people believe roads were a major piece of the stimulus. They weren’t!

– If stimulus doesn’t work, people may believe that much-ballyhooed road investments were not successful in growing the economy

– If public support for highway then falters, it could doom the use of highway investments as economic solutions.

FY2010 Budget:

Obama-Administration Budget Framework:• Eliminates “contract authority”, an 87-year old

budgetary treatment for hwy programs that helps fund multi-year projects

• No mention of the President’s supposed support for roads & bridges from campaign speeches.

• Little room for growth in highway funding• High speed rail boondongle sucking all the

oxygen – “downpayment” of $13B just the beginning

Longer-term issues• Obama team focused exclusively on “high speed” rail

and “livable communities” – (Smart growth). This focus could turn the highway bill into the “anti-highway bill”.

• Many in Congress are unaware of the long-term solvency problems and think the trust fund was “fixed” with the $8 billion in restored user fees in September ‘08

• A number of challenges (time, money, staff burden, policy changes, competing interests) likely to doom 2009 authorization bill.

Obama’s High-Speed Rail

• $13 billion “down payment” is just the nose under the tent

• No cost-estimates for completion• No alternatives analysis – i.e. buses• No examination of subsidy per pass.mile• Displacement of freight rail much worse

environmental policy than addition of train passengers

Potential disasters for mobility•Clean Air Act Endangerment Finding for Greenhouse Gases

•How onerous will the Clean Air Act be to control GHG emissions?•Will highway funds be withheld if states want to build roads?• Who will have more leverage: DOT or EPA?

•Cap-And-Trade legislation•Waxman In; Boxer remains leading Senate force -- What does that mean for:

•Mandatory VMT-reduction proposals? * (chart next)•EPA exercising new duplicative authority over State and Metro Plans?•Opportunities for hwy projects to compete with transit for cap-and-trade funding?

•Streamlining project reviews over? More planning requirements?•Will the new DOT support current efforts to streamline reviews?•Will the Bush Executive Order on streamlining priority projects be kept in place?

Correlation of VMT to GDP• 0.9942 R-squared correlation since 1950• Weakest correlation is during recessions

but it is still over 0.96

Other Moving PartsFunding and Financing Issues• Highway Users Fee Increases: Leadership needed. Support depends on avoiding new diversions.

• Competing bonding proposals vs. traditional user “pay-as-you-go” user fees.

•Is transition to debt-financing the sign of the times?

• National Capital Infrastructure Bank• Obama-endorsed plan for large project financing – funding source unclear. More debt certain.

• Public-Private Partnerships and Tolling and Pricing• Use of revenue – diversion?• Benefits or harm to motorists?• Impact on interstate commerce?

Key Facts

• In 25 years, we’ve added only 4% new road miles while driving has increased 100%. We’re NOT investing in congestion relief.

• Outdated, inadequate roads lead to more than 13,000 lost lives each year.

• 1/2 of our roads are not in “good” condition

• 35% of major urban roads are congested

More Key Facts• Freight to Double by 2035

• Trade will account for 35% of GDP by 2020 (up from 13% in 1990)

• Congestion reduction reduces wasted fuel and carbon emissions by 77% at major bottlenecks

• Congestion reduction could be achieved in medium-sized urban areas through changes in planning priorities. But 24 out of 26 areas planning to make congestion worse!*

* See upcoming join AHUA & Reason Foundation study by Dr. Hartgen - UNC

"Federal Share" of Highway Investment (assumed to be 45% of total needs)Current Law HTF/HA Revenues extended through 2030

Note: Annual Revenue / VMT growth assumed to slow from 2.2% in 2007 to 0.7% by 2030.Note: Nominal Federal gasoline tax rate assumed to remain at 18.4 cents through 2030.

0

20

40

60

80

100

120

140

160

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Year

$ B

illio

ns

"Improve" Target "Maintain" Target HTF/HA Baseline Revenues

The Looming Crisis

36.3 36.9

42.0 41.843.4 44.4

25.2

42.6

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2005 2006 2007 2008 2009 2010

Year

Billi

ons

$18 billion cut in Fed Hwy Program if Congress takes no corrective action

This Conference Is Critical• Grassroots organization is critical for

political will to improve and reformed transportation programs.

• Transit advocates and bicyclists are better organized, more passionate and much better funded than mobility advocates

• Right now, it looks like Congress will either fail to act or create something horrific – and yet the fiscal crisis may force people to swallow really bad policies

Targets: Politicians & Media

• Rural Democrats who will not benefit from shifts from highways to transit & bikes

• Senators in States that lose funding under a higher transit to highway split

• Those frustrated with highway project delays caused by NIMBYs

• Sunbelt growth States.• Swing states

Thank you! You can make a difference!

Success requires YOUR personal involvement and actions from YOU, YOUR FRIENDS, YOUR EMPLOYEES, & YOUR RELATIVES

For more information:gregcohen@highways.org

www.highways.org