Authorization of a New Federal Authorization of a New Federal Transportation ProgramTransportation Program

AASHTO Executive DirectorJohn Horsley

Subcommittee on DesignAlbuquerque, New Mexico

July 15, 2008

Collapse of I-35W Bridge in Minneapolis Collapse of I-35W Bridge in Minneapolis Raised National Awareness of Need to Raised National Awareness of Need to

Invest in InfrastructureInvest in Infrastructure

The Gathering Crisis The Gathering Crisis In In TransportationTransportation Funding Funding

Shortfall in Highway Trust Fund could Shortfall in Highway Trust Fund could reduce federal aidreduce federal aid

Skyrocketing construction costs Skyrocketing construction costs erode purchasing powererode purchasing power

Golden Gate Bridge, CA

$41.8 $43.4 $29.9

0

5

10

15

20

25

30

35

40

45

2008 2009

SAFETEA-LU Extended to 2009 Reduced Highway Program

$13.5 Billion Cut in Federal Highway Program Problem 1: Funding Shortfall FY2009$13.5 Billion Cut in Federal Highway Program

Obligations if Congress Takes No Corrective Action

*Obligation level proposed in the President's 2008 budget request, which includes a suspension of $631 million in RABA funding.

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Problem 2: U.S. Construction Costs Problem 2: U.S. Construction Costs Will Increase by at least 80 percent, Will Increase by at least 80 percent,

1993-20151993-2015

AsphaltAsphalt ConcreteConcrete SteelSteel Construction Construction

MachineryMachinery PetroleumPetroleum

$20.9

$35.2 $36.0 $36.9$37.7 $38.6

0

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014 2015

$13.5 Billion Cut in Federal Highway Program Reduced Highway Program Levels Beyond 2009$

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$10.4

$5.8 $5.9 $6.1 $6.2 $6.4

0

2

4

6

8

10

12

2010 2011 2012 2013 2014 2015

$13.5 Billion Cut in Federal Highway Program Reduced Transit Program Levels Beyond 2009

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Alternatives in FY2009 for Federal Alternatives in FY2009 for Federal Highway and Transit ProgramsHighway and Transit Programs

Accept 33% reduction in Federal Aid and Accept 33% reduction in Federal Aid and reduce each state’s transportation reduce each state’s transportation program by amount of cutback.program by amount of cutback.

Accept 33% reduction in Federal Aid and Accept 33% reduction in Federal Aid and increase taxes to make up for Federal increase taxes to make up for Federal cutback.cutback.

Reject cutback and tell Congress to Reject cutback and tell Congress to increase revenues enough to sustain the increase revenues enough to sustain the Federal Program at levels needed.Federal Program at levels needed.

Transportation Vision Summit, Transportation Vision Summit, Maryland, May, 2007Maryland, May, 2007

A multi-modal A multi-modal approach is needed approach is needed which:which:• Preserves what has Preserves what has

been built to datebeen built to date• Improves system Improves system

performanceperformance• Adds substantial Adds substantial

capacity in capacity in highways, bridges, highways, bridges, transit, rail, airports transit, rail, airports and seaportsand seaports

Penobscot Narrows Bridge, ME

New Dynamics RequireNew Dynamics RequireNew SolutionsNew Solutions

Global CompetitivenessGlobal Competitiveness

Global competition Global competition from China, India from China, India and Europeand Europe

Aggressive foreign Aggressive foreign investment in investment in freight systems and freight systems and high speed railhigh speed rail

Need to invest in Need to invest in projects of national projects of national significancesignificance

Yangpu Bridge, Shanghai, China

New Dynamics Require New Dynamics Require New SolutionsNew Solutions

Metropolitan Mobility StrategiesMetropolitan Mobility Strategies Intercity passenger rail in mega-Intercity passenger rail in mega-

regionsregions Double transit ridership by 2030Double transit ridership by 2030 Advanced ITS technologies and Advanced ITS technologies and

aggressive managementaggressive management Fix bottlenecks, add highway capacity, Fix bottlenecks, add highway capacity,

HOT lanes and dedicated truck lanesHOT lanes and dedicated truck lanes

New Dynamics RequireNew Dynamics RequireNew SolutionsNew Solutions

Connect Rural Areas to Global NetworkConnect Rural Areas to Global Network

Better Connections to Recreation FacilitiesBetter Connections to Recreation Facilities Connect rural areas to Global MarketsConnect rural areas to Global Markets Maintain National Freight Network Across Maintain National Freight Network Across

Rural AreasRural Areas Dedicated Truck Lanes on National Dedicated Truck Lanes on National

CorridorsCorridors Improve Transit ServicesImprove Transit Services

New Dynamics Require New New Dynamics Require New Solutions: Global Climate ChangeSolutions: Global Climate Change

Double the fuel efficiency of the light Double the fuel efficiency of the light duty automotive fleet by 2020 duty automotive fleet by 2020

Cut the rate of growth in VMT by Cut the rate of growth in VMT by 50%, increase it from 3 trillion today 50%, increase it from 3 trillion today to 5 trillion, instead of 7 trillion by to 5 trillion, instead of 7 trillion by 2055.2055.

Increase percent who walk, bike, and Increase percent who walk, bike, and work at homework at home

Funding levels needed to sustain purchasing Funding levels needed to sustain purchasing power of highway and transit,power of highway and transit,begin to help freight and rail:begin to help freight and rail:

1993-2015 Construction costs +80%1993-2015 Construction costs +80% Grow highway program from $43 billion in 2010 to at Grow highway program from $43 billion in 2010 to at

least $75 billion by 2015least $75 billion by 2015 Grow transit program from $10.5 billion in 2010 to at Grow transit program from $10.5 billion in 2010 to at

least $18.5 billion by 2015least $18.5 billion by 2015 Increase investment in national freight networkIncrease investment in national freight network Increase investment in intercity passenger rail serviceIncrease investment in intercity passenger rail service

How to achieve $500 billion funding How to achieve $500 billion funding level in next authorization? level in next authorization?

Highway Trust Fund Revenue:Highway Trust Fund Revenue: $256 billion$256 billion General Fund Support for TransitGeneral Fund Support for Transit $ 19 billion$ 19 billion Tax Credit Bonds Tax Credit Bonds $ 65 billion$ 65 billion New Highway Trust Fund Revenue from New Highway Trust Fund Revenue from

highway use fees, oil excess profits highway use fees, oil excess profits taxes, or fuel tax hikestaxes, or fuel tax hikes $ 90 billion$ 90 billion

Cap and trade revenues for $ 55 billion Cap and trade revenues for $ 55 billion transit, land use, ITStransit, land use, ITS

Critical Commerce CorridorsCritical Commerce Corridors $ 25 billion$ 25 billion Total HIGHWAYS AND TRANSITTotal HIGHWAYS AND TRANSIT $500 billion$500 billion

Challenges which will make this bill Challenges which will make this bill the toughest challenge ever.the toughest challenge ever.

Gas prices at over $4 per gallonGas prices at over $4 per gallon Insolvent Highway Trust Fund Insolvent Highway Trust Fund New Administration which takes New Administration which takes

office eight months before bill office eight months before bill expiresexpires

States facing financial crisis because States facing financial crisis because of troubled economyof troubled economy

Requirements for SuccessRequirements for Success

Financial Crisis of dramatic reductions in highway and transit Financial Crisis of dramatic reductions in highway and transit funding may cause Congress to pass bill needed funding may cause Congress to pass bill needed

States need to communicate that we are delivering value to States need to communicate that we are delivering value to the taxpayers with the dollars we have been given over last the taxpayers with the dollars we have been given over last ten years.ten years.

We need to describe a reform bill which will deliver needed We need to describe a reform bill which will deliver needed improvements and accountability for results improvements and accountability for results

All Levels of Government Must All Levels of Government Must Continue to Fund Their ShareContinue to Fund Their Share

20102010 20152015 FundingFunding Increase Increase Needed Needed

New Toll New Toll RevenueRevenue

Net Net RequiredRequired

FederalFederal $43 $43 billionbillion $75 $75 billionbillion $32 $32 billionbillion $32 $32 billionbillion

State/State/LocalLocal

$52 $52 billionbillion $95 $95 billionbillion $43 $43 billionbillion $8 $8 billionbillion $35 $35 billionbillion

TotalTotal $95 $95 billionbillion $170 $170 billionbillion $75 $75 billionbillion $8 $8 billionbillion $67 $67 billionbillion

National Capital Investment in Highways

Increase Highway and Transit Increase Highway and Transit Capital Investments: Capital Investments: We’ve Done It BeforeWe’ve Done It Before

19811981 20052005

HighwayHighway $19.7 billion$19.7 billion $75.0 billion$75.0 billion

TransitTransit $ 3.4 billion$ 3.4 billion $14.2 billion$14.2 billion

TotalTotal $23.1 billion$23.1 billion $89.2 billion$89.2 billion

Overall IncreaseOverall Increase 285%285%

Thank YouThank You

http://www.transportation.orghttp://www.transportation.org

John HorsleyJohn Horsley

Executive DirectorExecutive Director

AASHTOAASHTO