House Transportation and Infrastructure Committee holds hearing on National Surface Transportation Policy and Revenue Study Commission report

Jeff Berman, Senior Editor -- Logistics Management, 1/18/2008

WASHINGTON—The United States House Transportation and Infrastructure Committee held a hearing yesterday, regarding a long-awaited report published by the National Transportation Policy and Revenue Study Commission earlier this week.

The 12-member commission was established in 2005 under the Safe, Accountable. Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU) and charged by Congress to look at highway, transit, and surface transportation needs, to determine what the roles of government should be and how the United States transportation should be financed in the future. The report was approved by a 9-3 vote on December 20, 2007.

The current state of surface transportation in the United States is at a crossroads, the report noted, with a looming crisis coming if steps are not taken to address the myriad needs for improved infrastructure improvements and to meet the expected demand in domestic freight growth in the coming years. The report is comprised of several initiatives geared to augment the current transportation systems in place in the United States.

With shippers reliant on transportation infrastructure on a daily basis, the report is of acute interest. Several of its findings listed below may ultimately have a direct impact on how freight is moved both globally and domestically:

As a nation, the U.S. should be spending at least $225 billion-to-$340 billion per year for the next 50 years on its surface transportation system from all levels of government compared to the less than 40 percent of that figure spent today
an increase in tolling to add interstate capacity;
congestion pricing in metropolitan areas of a million or more people to finance interstate and new capacity initiatives;
implementing a federal freight fee, and having a portion of Customs fees be dedicated to the highway trust fund and;
fix the current highway trust fund shortfall by recommending financial measures such as raising the gas—or federal motor fuels—tax to from five-to-eight cents per year to 25-to-40 cents per gallon per year over the next five years (or 41 to 66 cents per day), which would eventually be followed by a vehicle miles traveled tax until at least 2025.

Other Commission recommendations cited included bringing private capital into surface transportation systems through public-private partnerships (PPP) that can help facilitate international trade with intermodal connections, which relieve congestion that add time and costs to the supply chain.

At yesterday’s hearing, Transportation and Infrastructure Committee Chairman and Minnesota State Representative said the report is a step in the right direction, noting that the report will be seen as the first transformational chapter in transportation policy in the 21^st century.

“This report does precisely what the Commission was instructed to do: It lifts our vision above the horizon; challenges our thought processes with innovative ways of addressing established, vexing, complex problems that seem irreconcilable,” said Oberstar in a statement.

And Peter A. DeFazio, Chairman of the Subcommittee on Highways and Transit added at the hearing that this report outlines in great detail the current lack of investment in our nation’s infrastructure that has brought the country to its current state of transportation congestion.

But while there is strong political support, there are other influential industry stakeholders that argue many components of this report—especially the proposed raising of the gas tax—are not the way to make changes to the country’s transportation infrastructure. Leading this charge is Department of Transportation Secretary Mary E. Peters and DOT Commissioners Mario Cinno and Rick Geddes, whom with Peters, were the three Commission members that did not approve the report.

“Raising gas taxes won’t improve traffic congestion, it will only perpetuate our ineffective reliance on fossil-based fuels to fund infrastructure and send more of Americans’ hard-earned money to Washington to be squandered on earmarks and special interest programs,” said Peters in a statement. She added that states are already using technology such as congestion pricing and high-speed open road tolling to raise revenue and reduce traffic tie ups, and there are billions of dollars in private capital available to transportation officials that could easily be tapped to finance new projects, rather than raising taxes to as the primary method of financing infrastructure improvements.

The issue of financing transportation infrastructure is a topic that is not new. William Schutt, an engineer and bridge expert at MATCOR, a Doylestown, Pennsylvania-based firm that designs and installs corrosion prevention systems and technology that protects infrastructure, assets and investment, says it is important for those paying these proposed increased taxes to have a firm understanding and idea of where and how this money will be spent.

“What is the money specifically going to go towards?” said Schutt. “The issue of needing funds for transportation infrastructure is something we have known about since 1970. “The Senate adopted a $1 billion amendment for bridge repairs, for example, but the Civil Engineering Society has pegged that figure as high as $1.6 trillion.”

In regards to raising the gas tax, Schutt said it is not of huge importance where the money is coming from, because throwing money at a problem will not necessarily solve it. He makes the case that a credible program for making the required transportation infrastructure fixes is needed to have a clear idea of how these issues will be addressed.

On the topic of public-private partnerships, Schutt said the “only way they can work is if rules for monitoring, maintenance, repair, and replacement apply at the highest levels.” He added that regulations pertaining to PPPs need to be stricter than what is currently in place today.