Highway Funding 2009 and Beyond: The States’ Perspective

AASHTO Executive DirectorJohn Horsley

Pacific Northwest Waterways AssociationWashington, D.C.

March 2, 2009

President Obama’s Inaugural Address, January 20, 2009:

The state of the economy calls for action…We will act, not only to create new jobs, but to lay the foundation for new growth. We will build the roads and bridges, that bind us together.”

National Transportation Visions Over the Last Century

1915 Get Farmers Out of the Mud

1956 Coast to Coast Without a Stoplight

1991 ISTEA: Safe and Intermodal

2008 and Beyond

New Strategy Which Goes Beyond What Has Been Done Before

New Dynamics RequireNew Solutions

Global Competitiveness

Global competition from China, India and Europe

Invest in national freight network to keep U.S. globally competitive

Deal with Global Climate Change

Yangpu Bridge, Shanghai, China

New Dynamics Require New Solutions:

Metropolitan and Rural Mobility Preserve current system Double transit ridership by 2030 Advanced ITS technologies, improve

system operations Fix bottlenecks, add highway

capacity in urban areas Connect rural communities to

opportunities Reduce Highway Fatalities

Today’s Crisis In Transportation Funding

Insolvency of Highway Trust Fund: Temporarily Patched with $8 billion transfer

Skyrocketing construction costs have reduced purchasing power

Need for Economic Stimulus Investment in Transportation Infrastructure

Golden Gate Bridge, CA

$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

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

Bil

lio

ns

Funding Options

Accept 30% reduction in Federal Aid and reduce transportation program by amount of cutback.

Accept 30% reduction in Federal Aid and increase taxes to make up for Federal cutback.

Reject Cutback and Tell Congress to Increase Revenues Enough to Sustain the Federal Program at Levels Needed.

Economic Recovery Bill Transportation Provisions

$27.5 billion for highways. Port and Rail projects eligible for funding

$1.5 billion discretionary for highway or transit

$8.4 billion for transit. $1.3 billion for intercity rail. $1.1 billion for airports $8 billion for high speed rail.

Funding levels needed to restore program purchasing power 2010-2015

Highways $375 billion

Transit $ 93 billion

Freight* $ 42 billion Intercity Passenger Rail* $ 35

billion Total $545

billion*(Sources outside Highway Trust Fund)

Call for Top to Bottom Reform.

Menu of revenue options

Current Trust Fund Revenues $240 billion General Fund for Transit $ 20 billion

Options: Diesel 13 cent increase $ 36 billion Gas Tax 10 cent increase $ 90 billion Freight Fees $ 42 billion Tax Credit Bonds $ 50 billion Mileage Fees $100 billion Transportation Share of Climate

Change Cap and Trade or Carbon Tax $100 billion

Oregon VMT Tax dependent on GPS, at least 10 years away.

$2.00 gas reopens viability of fuel tax increase.

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AASHTO Goals for the Next Authorization Legislation

Major reforms

Multimodal solutions

Accountability

Increased federal funding with national performance standards

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Highway Program

Preservation and Renewal • Interstate Preservation• NHS Preservation• Bridge Preservation

Safety Improvement

Transportation System Improvement/ Congestion Reduction

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Highway Program

Freight

• Freight tonnage will Double by 2040

• Bottleneck improvements

• Improve Trade Corridors

• Better Connections to Ports

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Highway Program

Operations and Management

Environment: Air Quality and Climate Change

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2009 – A Critical Year

Economic recovery bill

Solvency of Highway Trust Fund

Authorization of six-year legislation