Calling for a “new beginning” to reform the nation's transportation programs, the bipartisan National Surface Transportation Policy and Revenue Study Commission unveiled a plan to increase investment, expand services, repair infrastructure, demand accountability, and refocus federal transportation programs, while maintaining a strong federal role in surface transportation.
The commission said policy changes, though necessary, will not be enough on their own to produce the transportation system the nation needs in the 21st century — significant new funding also will be needed. One of the recommended changes is an increase in the federal gas tax of 25-40 cents (5-8 cents per gallon, per year), with the rate increase indexed and phased in over time.
Congress created the 12-member bipartisan Commission in 2005 and charged it not only with examining the condition and operation of the surface transportation system, but also with developing a conceptual plan and specific recommendations to ensure that the system serves the needs of the nation now and in the future. After a fact-finding program that included hearings in 10 cities across the country, the Commission released its report to Congress, called Transportation for Tomorrow, at a news conference at the National Press Club in Washington, D.C.
Commissioner Patrick Quinn, co-chairman and president of U.S. Xpress Enterprises Inc — the fifth-largest publicly-traded truckload carrier in the United States — said the Commission reached the consensus that to continue to move freight without bottlenecks and delays, and with an estimated 70% growth in tonnage and another 120 million people over the next 50 years, there are not a lot of alternatives to truck and rail.
“(They) move in conjunction with each other,” he said. “You need both to get the job done. I think there is a misconception that if you put trucks on rail, highway congestion will disappear. But a vast majority of shipments — 85% of the tonnage — moves less than 600 miles, which is generally not conducive to that. So we have to have the ability to move goods and services both in conjunction to and from rail points and for short-haul movements on our nation's highways.
“I'm looking forward to the Department of Transportation beginning a national freight transportation plan, which will have performance standards that include hours of delay, the ability to transport heavier and larger vehicles — perhaps in separate lanes — and freight quarters where trucks would be separate from cars along major corridors.”
Commissioner Frank McArdle, senior advisor of the General Contractors Association of New York, said the report will change the nation's approach to energy.
“Right now, our transportation system is 97% dependent on petroleum,” he said. “We use, in transportation, two-thirds of all the petroleum used by the U.S. That is 16% of the world's oil production. That is what we do now, and that is simply not sustainable over the long term as our production drops and we expand our economy.
“We focused on two critical issues, one of which is encouragement to Congress that we expand the amount of money we spend in alternative-fuel research so we can find those days when that petroleum dependency rapidly drops. The other thing we have to do is provide incentives, tax credits and other things to encourage fleet turnover and the installation of the infrastructure necessary to support alternative fuels. The alternative fuels that are out there are not well-supported, and leave very few drivers willing to take the chance that if they switch to e85, they will be able to find fueling stations.”
Bill Graves, president and CEO of the American Trucking Associations, commended the effort of the Commission.
“As the Commission report makes clear, trucking is, and will remain, the dominant mode of freight transportation,” he said. “Consequently, the trucking industry is acutely aware of the magnitude of the problems facing the nation in maintaining the world's pre-eminent transportation and infrastructure network.
“The national economy is directly linked to freight transportation. Therefore freight transportation must be an essential part of infrastructure design and planning. Through its report, the Commission acknowledges the need for a new and improved investment strategy — a strategy that supports not only the health of our highways, but the health of our future economy, one that includes a combination of steps designed to ease congestion, alleviate bottlenecks, and repair aging infrastructure.
“ATA is particularly pleased that the Commission recognizes: the need to address freight movement; the important role that goods movement plays in the overall health of the U.S. economy; the need to reform the program to ensure a more performance-based system; and the need to maintain a user-fee based system.”
The key recommendations in Transportation for Tomorrow include:
Significantly increasing investment in surface transportation, including investing at least $225 billion annually from all sources (federal, state, local, and private) for the next 50 years to upgrade to an advanced surface transportation system capable of sustaining strong economic growth.
Accelerating the time between conception and delivery of major transportation projects to reduce costs while still addressing environmental concerns. Many federally funded projects take between 10-13 years to complete after they are proposed, largely due to lengthy approval processes. Given the high rate of construction inflation, for example, simply reducing the time between conception of projects and delivery could save billions of dollars as well as bringing new facilities online more rapidly.
Retaining a strong federal role in transportation, while depoliticizing investment decisions. Keeping the promise to citizens for effective expenditures by building accountability into the new program structure. Money will be spent through outcome-based, performance-driven programs supported by cost/benefit evaluations rather than political “earmarking.”
Replacing over 100 current transportation programs with 10 programs focused on the national interest. This structure will target infrastructure facilities, crippling congestion, unacceptable safety consequences, missing intercity passenger rail options, underutilized transit options, environment linkages and the synergy between transportation and energy policy. This new structure will address the needs of urban, suburban and exurban areas, small towns, and rural areas.
Creating a new National Surface Transportation Commission (NASTRAC) to perform two principal planning and financial functions. Modeled after aspects of the Postal Regulatory Commission, the Base Closure and Realignment Commission, and state public utility commissions, the NASTRAC would act as overseer of a stakeholder-rich planning process whose goal would be to develop national strategic plans for each of the program areas. The NASTRAC would establish the cost to finance the plan and recommend a federal fuel tax or equivalent federal mechanism to fund the federal share, subject to Congressional veto.
To fund the necessary investment, the Commission recommends new revenue strategies, including increasing the federal gas tax between 25-40 cents (5-8 cents per gallon, per year), with the rate increase indexed and phased in over time. The fuel tax was the primary recommended user fee in the near term since it will continue to be a viable revenue source for surface transportation for some time to come. The most promising alternative user fee revenue measure is a vehicle-miles-traveled-fee, provided that substantial privacy and collection cost issues can be addressed.
The Commission believes other user-based fees also should help address the investment shortfall, such as tolling, the deployment of peak-hour “congestion pricing” on federal-aid highways in major metropolitan areas, a freight fee for freight projects, and ticket taxes for passenger rail improvements. It believes tax policy also can provide incentives to expand intermodal networks, and governments on all levels should encourage public-private partnerships as a means of attracting additional private investment to the surface transportation system, provided that conditions are included to protect the public interest and the movement of interstate commerce.