Transportation Regulation: Oberstar unveils plan for surface transportation authorization
With an eye on freight, the Chairman calls for improving economic productivity by facilitating international trade and relieving congestion at major trade gateways and corridors. How this will be funded remains a mystery.
By Jeff Berman, Group News Editor -- Logistics Management, 7/1/2009
WASHINGTON —
WASHINGTON—House Transportation and Infrastructure Committee Chairman James L. Oberstar formally rolled out his plan for a new approach to surface transportation authorization last month.
In his whitepaper, “The Surface Transportation Authorization Act of 2009: A Blueprint for Investment and Reform,” Oberstar outlines myriad ways to remedy the nation’s transportation system. “While once the envy of the world, [the U.S. transportation system] is losing its battle against time, growth, weather, and wear.”
What is needed now, according to Oberstar, is a National Transportation Strategic Plan that is intermodal in nature and national in scope. A major theme of his plan calls for a national transportation policy, as opposed to the Department of Transportation’s (DOT) current policies that are administered by separate departments—each of which focuses on a single mode of transportation.
“Since completion of the Interstate Highway System, our national transportation policy has lacked strategic focus,” notes Oberstar. “Although States and metropolitan regions are required to develop long-range transportation plans for highway, transit, and rail investment, there has been no attempt to aggregate these plans and establish a National Transportation Strategic Plan.”
Some of the main objectives of the Surface Transportation Authorization Act of 2009 include:
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consolidating the majority of highway funding in four core formula categories designed to bring our highway and bridge systems to a state of good repair;
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improving highway safety;
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reducing congestion and greenhouse gas emissions and improve air quality;
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creating a National Infrastructure Bank to better leverage limited transportation dollars.
“This plan restructures programs within the DOT…and moves from a highly prescriptive program to a performance and outcomes-based surface transportation program,” said Oberstar.
In terms of funding, the plan is calling for $450 million over six years. According to Oberstar, that’s the minimum amount needed to stop the decline in the U.S. surface transportation system, make improvements, and restore the country’s mobility and economic productivity. This proposed funding level represents 38 percent over the current funding level of $326 billion and 57 percent more than the original level granted by SAFETEA-LU.
The ways in which this plan would be financed appear to be the biggest obstacle so far. As Logistics Management has previously reported, the Highway Trust Fund (HTF) is on the brink of insolvency, with a $5 billion to $7 billion shortfall predicted by the time the current bill expires.
The Oberstar plan notes that the current user fees supporting the HTF are not enough to maintain existing infrastructure—coupled with the fact that the motor vehicle fuel tax has not been raised since 1993. The Obama administration has repeatedly stated raising the gas tax is not an option at this point.
The current user fees generate only enough revenue to finance $35.1 billion of investments from this year’s $53 billion funding level; and without additional revenues a six-year surface transportation authorization bill could fund only $236 billion in highway, highway safety, and transit investment—that’s $90 billion less than the current investment level over the next six years ($326 billion), according to the plan.
“The major point here is to come up with a way to reach that funding target,” said Payson Peabody, a tax attorney with Washington, D.C.-based law firm Dykema Gossett PLLC. “Oberstar recognizes a short-term fix is not necessarily going to solve the short-term problems we have.”
Peabody added there are really only two choices: a broad-based tax increase or tolling and expanded use of public private partnerships.
With an eye on freight, the bill calls for improving economic productivity by facilitating international trade and relieving congestion at major trade gateways and corridors. It notes this could be done by having the DOT, in conjunction with the National Infrastructure Bank, providing grants, loans, and other financial tools to States to finance projects of national significance.
“At this point, we are looking at this bill schematically and saying a lot of the right pieces are there,” said Janet Kavinoky, director of transportation infrastructure at the U.S. Chamber of Commerce. “We are pleased to see freight projects of national and regional significance mentioned. But we need to use caution, because it is not until we see legislative language to understand what the actual focus is of the programs, as well as how the resources are allocated. Right now, it looks promising, and the U.S. Chamber is pleased that a lot of the principles we asked for were included.”
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