Transportation infrastructure: Leaked copy of Oberstar transportation bill offers clues to new vision for transportation policy
Jeff Berman, Group News Editor -- Logistics Management, 5/11/2009
WASHINGTON—With the highway re-authorization bill—Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)—set to expire at the end of September, various freight transportation industry stakeholders are keeping an eye on the next version of the bill.
And earlier today a report from BNA, a publisher of legislative, regulatory, and economic news publisher, provided a look at some of the main takeaways of a new version of the bill from James L. Oberstar, Chairman of the House Transportation and Infrastructure Committee. Some of the highlights of the bill, which many industry observers have said could require more than $500 billion (compared to the current one of $286 billion), are listed below:
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a call for a change in “transit equity” that would differ from the current set-up in which the federal government pays for 80 percent of highway projects and 50 percent of transit projects, which Oberstar said would “level decision-making factors between highway and transit choices/projects.”;
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a consolidation of the Department of Transportation’s 108 programs into four major programs—critical asset preservation, highway safety improvement, surface transportation program, and congestion mitigation and air quality improvement; and
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create a new undersecretary or assistant secretary for intermodalism that would meet monthly with all modal administrators, among others.
A Reuters report indicated that Oberstar’s proposal would retain current funding sources as well as give more spending discretion to states, as well as make room for private investment in infrastructure programs.
Various sources have indicated that Oberstar would like to formally introduce the bill later this month or in early June. And House Transportation and Infrastructure Committee Spokesman Jim Berard told LM that the committee is planning on rolling out the bill at a time yet to be determined in the coming weeks and would not directly comment on the BN report, citing that it was based on leaked information.
One thing for certain with the next bill, in regards to the “transit equity” component, is that shippers and carriers can expect to be paying more in the form of consumption-based pricing, said Michael A. Regan, CEO of transportation rate analysts TranzAct Technologies.
“Something nobody is talking about is how much shippers’ freight budgets are going to go up with the next highway bill,” said Regan. “Conservatively, it is going to be between three-to-five percent. And the reason is going to be that for those that say the next highway bill will be funded by increased gas taxes is not practical, because usage of that commodity is actively trying to be reduced. If you are trying to reduce a commodity and using the taxing of it as a primary source of funding, that does not seem to make a lot of sense. When Oberstar calls for transit equity, that implies there is currently inequity right now.”
Regan added that two years ago the “big battle” for transportation funding was over tolling existing interstates, and he said that it is hard to imagine that argument will pass muster now. If tolling were to be enacted, he said it would have to be a variable tolling set up that would require users to pay higher tolls earlier in the day, and a vehicle miles traveled tax (VMT) may also be a reality although it is likely there would be myriad privacy and adoption issues, according to Regan.
VMT fees are based on a federal funding system based on user pay charges through a charge for each mile driven and would be based more directly on miles driven and possibly also on time of day, type, of road and vehicle weight, and fuel economy, as opposed to indirectly on fuel consumed, according to the findings
of February’s report from the National Surface Transportation Infrastructure Financing Commission, a bi-partisan commission established by Congress charged with coming up with new financial payment methods to maintain and expand transportation infrastructure takes varying approaches for policy makers to consider.
Another finding of the report included transitioning to a new, more direct, mileage-based user charge system as soon as possible, and deploying a comprehensive system by 2020. And when that system is in place, current fuel and other vehicle-related charges used as the primary funding mechanism for funding the surface transportation system could be eliminated. One other proposal included raising the federal motor fuel tax by ten cents and the federal diesel gasoline tax by 15 cents, coupled with commensurate increases in all special fuel taxes and then indexing those rates to inflation.
“Mr. Oberstar has taken the recommendations of the commission seriously, in terms of needing to simplify the structure of the federal transportation program, although it is hard to tell to what degree without the full bill available at this point,” said Janet Kavinoky, director of transportation infrastructure at the U.S. Chamber of Commerce.
Based on her understanding of the bill, Kavinoky cited two potential DOT policy changes that could result from the Oberstar bill: the first one being community organization and development approach that could make cities and towns working with bicyclists, pedestrians, and transit users in reducing congestion, with the second being intermodalism by having various modes collaborate on projects in effort to solve problems and meet goals rather than having each mode function independently like stovepipes.
But in terms of the main takeaways for the freight industry, Kavinoky said it remains unclear what Oberstar’s freight program looks like at this point.
“It is my understanding he has told a number of audiences that if the freight community wants a real focus [in this bill] on freight, then they better start executing on it,” she said. “The freight community has got to be thinking about these things.”
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