kathy ruffalo ruffalo and associates, llc. topics status of highway trust fund – short and long...
TRANSCRIPT
Kathy RuffaloRuffalo and Associates, LLC
TOPICS
Status of Highway Trust Fund – short and long term
Interim report of Financing Commission
Status of Reauthorization
“Today’s problems cannot be solved by thinking the way we thought when we created them.”
- Albert Einstein
Transportation today
Steady increase in congestion rates Continued loss of life on our highways Freight tonnage moving by truck and rail increasing Transit ridership is increasing Global competitors have aggressive transportation
policies Continued need to balance economic development,
environmental, social and consumer demands
Short-term funding shortfall
CBO and Treasury estimate a shortfall to the Highway Trust Fund in FY 2009
Shortfall means federal highway obligation limitations will be reduced if steps are not taken soon
Short-term solutions
Senate Finance Committee has passed “fixes” for the short-term – but only through 2009
House has yet to pass
2010 remains a real concern
Congress created two commissions
Congress is searching for long-term solutions to the growing funding gap and its consequences
National Surface Transportation Policy and Revenue Study Commission
National Surface Transportation Infrastructure Financing Commission
National Surface Transportation Infrastructure Financing Commission
15 Commissioners- appointed by Congress or Secretary of Transportation
Began work in April 2007 Recently released interim report Two years to release final report
Commission required to examine:
Current Highway Trust Fund (HTF) revenues Project how HTF revenues may change Alternatives for funding the HTF Highway and transit needs for HTF funds State “opt-out” program
Preliminary observations
System demands are outpacing investment
Preliminary observations
System maintenance costs can make capacity expansion difficult
Preliminary observations
Fuel tax, at current rates, is not sufficient
Preliminary observations
More direct user charges should be explored
Preliminary observations
Not only need more investment, need more intelligent investment
Funding vs. Financing
Fuel tax Vehicle fees Direct user fees Indirect user fees General Fund or other
sources
General obligation debt Grant anticipation
borrowing User fee revenue
bonds Federal credit
assistance Toll road concessions Asset leases
Format for evaluating funding and financing mechanisms
Use of criteria to make objective observations
Provide Congress with “pros” and “cons” for each mechanism
If possible, make recommendations on the type of funding or financing that can best meet particular transportation objectives – emissions, congestion, freight needs, transit, etc.
Evaluation criteria
Revenue potential Sustainability Political viability Ease/cost of implementation Ease of compliance Ease/cost of administration Level of government
Evaluation criteria – cont’d
Promotes efficient use Promotes efficient investment Promotes safe and effective system
operations/management Addresses externalities Minimizes distortions Promotes spatial equity
Evaluation criteria – cont’d
Promotes social equity Promotes generational equity
Status of reauthorization
Hearings held on commission report House and Senate authorizing committees have
begun hearing process “Top-tier” issues – congestion, freight movement,
public transportation, safety, project delivery and environment
Finance – Ways and Means will be more engaged What to do with earmarks?
Timetable
House and Senate hope to have draft bills ready by Spring of 2009
House wants to complete floor action by May Senate will take longer New Administration will want to weigh in Extensions will be painful
So…….what do we do?
Need a national transportation policy Need a bi-partisan solution Modal fights will only ensure failure Historic opportunity to revolutionize federal
transportation programs Cannot wait for someone else to fix the
problem – need to address head-on Business as usual is not going to work and
doing nothing is not an option
Conclusion
Ancient wisdom says that when you discover you are riding a dead horse, the best strategy is to dismount.
Too often, in government, we try other strategies – such as:
Cont’d
Buy a stronger whip Change riders Appoint a committee to study the horse Arrange a visit to other sites to see how they
ride dead horses Provide additional funding to increase the
horse’s performance Study alternative uses for dead horses….and
My personal favorite…….
Promote the dead horse to a supervisory position