Joshua SchankPresident and CEO

Eno Center for Transportation

Congress: Gridlocking Towards Gloryor

How I Learned to Stop Worrying and Love General Fund Revenues

Presentation Outline

• Policy Outlook• Current Funding Outlook• Potential Future Options• What can be done about it?

Policy Outlook

Columbia and the ADA

Pre-MAP 21 System

No Performance Measures or Accountability

Inadequate Resources

Modal Silos

Donor/Donee

Spending Under SAFETEA-LU

Equity Bonus17%

Projects7%

Surface Trans-

portation Program

13%Interstate Mainte-nance10%

Bridges9%

National Highway System

12%

Transit19%

Other13%

End of an Era?

Congress Taking What They Can

Formula Funds80%

Dis-cre-

tionary Funds13%

Earmarks7%

SAFETEA-LU

Formula Funds88%

Discretionary Funds12%

MAP-21

Current Funding Outlook

Jonah and the Clock

No Progress on Long-Term Funding

Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Beginning-of-year Balance $14 $8 $4 $4 -$6 -$15 -$24 -$33 -$42 -$52 -$62Revenues and Interest $33 $33 $33 $34 $35 $36 $36 $36 $36 $37 $37Intragovernmental Transfers $2 $6 $10 $0 $0 $0 $0 $0 $0 $0 $0Outlays $42 $43 $44 $44 $44 $45 $45 $46 $46 $47 $47End-of-year Balance $8 $4 $4 -$6 -$15 -$24 -$33 -$42 -$52 -$62 -$72

Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Beginning-of-year Balance $7 $5 $5 $1 -$3 -$7 -$12 -$16 -$20 -$24 -$29Revenues and Interest $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 $5Intragovernmental Transfers $0 $0 $2 $0 $0 $0 $0 $0 $0 $0 $0Outlays $7 $8 $8 $9 $10 $10 $10 $9 $9 $10 $10End-of-year Balance $5 $5 $1 -$3 -$7 -$12 -$16 -$20 -$24 -$29 -$33

TOTAL HTF BALANCE $13 $9 $5 -$9 -$22 -$36 -$49 -$62 -$76 -$91 -$105

Mass Transit Account

Highway Account

Based on CBO Score of MAP-21 (June 2012)

HIGHWAY TRUST FUND PROJECTIONS

Source: AASHTO

Potential Future Options

Max’s SolutionMax’s Solution

Under Consideration

General Funds

• Default policy• Most likely

outcome• Used by

virtually every other developed nation

Gas Tax or Similar

• Still strongly under consideration

• Could move to sales tax or wholesale tax

VMT Fee

• Unlikely to come from feds

• Could have potential at state or regional level

Funding Tradeoffs

Highway Trust Fund

General Funds

No modal battles

Fewer geographic

battles

Not tied to gas tax

Dedicated

Contract authority

What can be done about it?

Congress: Ready to Go

Conclusions

• Current system fails to provide long-term sustainable funding

• There is no evidence that Congress can tackle this problem by increasing user fees

• Congress’ default position has already improved things

• A conscious move to general funds could effectively improve performance, reduce modal siloes, and provide sustainable funding

Jschank@enotrans.org(202) 879-4711

www.enotrans.org