Jack Basso Chief Operating Officer and Business Development Director

1. Moving Transportation Forward:National Surface Transportation Policy andRevenue Study Commission Findings Jack Basso Chief Operating Officer and Business Development Director American Association of State Highway and Transportation Officials (AASHTO)

2. Statutory Objectives • Created under SAFETEA-LU IN 2005 to examine needs, changes, and future of surface transportation for 15, 30, and 50 years • Recommend alternatives to replace or supplement fuel tax revenue source • 12 members including the Secretary of Transportation as Chair • AASHTO provided 7 reports to help the Commission analyze the issues

3. “A New Beginning” • We need a clear, comprehensive, well-articulated, and widely understood strategic vision • Goals • Facilities are well maintained • Mobility within and between metropolitan areas is reliable • Transportation systems are appropriately priced • Traffic volumes are balanced among roads, rails and public transit • Freight movement is an economic priority • Safety is assured • Transportation and resource impacts are integrated • Travel options are plentiful • Rational regulatory policies prevail

4. Major Future Factors • Extensive population growth • Emergence of mega regions • Environmental and energy realities • Freight transportation growth in a global economy • Aging infrastructure and congestion

5. General Conclusions • Create and sustain the best transportation system in the world • The current form of the program should not be continued • We have outgrown our current system • Current programs and program delivery mechanisms are outdated

6. Recommendations • A strong Federal role • Increased expenditure from all levels of government • Improvements in effectiveness and accountability • Investment strategies targeted at performance outcomes • Institutional program delivery reforms

7. A Strong Federal Role • Surface transportation more than money • Program needs to evolve to meet the national interest • Good maintenance • Appropriate pricing of systems • Freight movement is specifically valued • Rational regulatory policy in place

8. Increased expendituresat All Levels of Government • Make up for years of underinvestment • Address the significant increases needed for future demand • Address needs as assessed by creditable parties • Conclusion • Significant new funding is needed

10. All Levels of Government Must Continue to Fund Their Share National Capital Investment in Highways (billions)

11. Investment Scenarios and Gaps

12. Investment Levels Translated toGas Tax Equivalent Amount

13. Capital Investment by Type

14. Performance-Based Planning Process • Systematic, standardized performance-based approach to programming investments • Top-Down: National performance goals, standards and criteria national strategic plan • Bottom-Up: State & metro/local performance goals, standards and criteria  plans and programs • Merit-based project selection • Accountability for results

15. Ten Point Program Structure • Rebuilding America • Multimodal eligibility (NHS roads, transit assets, passenger and freight rail ) • States/locals/others need to have asset maintenance plans meeting national standards • Freight Transportation • USDOT to develop a National Freight Plan and performance standards • B/C analysis required; target is high cost, high benefit projects • Congestion Relief • Funding for areas greater than 1 million population • National mobility standards and local mobility plans to be developed

16. Ten Point Program Structure • Saving Lives • USDOT to set national safety standards—cut fatalities in half by 2035 as a start • States and metro areas required to meet individual standards (goals) and develop 4 E’s strategies to meet their goals • Connecting America • USDOT developed performance measures for rural and small urban mobility and access—highways and transit • State developed performance standards and economically justified plans to meet the standards • Intercity Passenger Rail • State developed rail plans using B/C analyses to be folded into a National Intercity Rail Passenger Program • State performance measures to meet national criteria in such areas as on-time performance, safety, energy use, etc.

17. Ten Point Program Structure • Environmental Stewardship • Funded at 7% of total federal transportation program spending overall • State allocations based on population • 40% to targeted strategies; 60% flexible • Energy Security • $200 m per year for energy R&D • Federal Lands • Continue the programs • Performance standards and goals to be developed • Research, Development and Technology • Federal funding for targeted knowledge gaps

18. Revenue Recommendations • Increase Investment through enhanced revenue • Continue to Share Funding Responsibility • Percentage Shares • Increase Revenues • Near Term: Fuel Tax Remains Key Source • Toll Revenue • Public Private Partnerships • Long Term: Develop Revenue Alternatives

19. Revenue Recommendations • Dedicate Funding to Freight-Related Transportation Improvements • Assist Rail Freight • Intercity Passenger Rail

20. NASTRAC • A commission to oversee the development of a national strategic plan for transportation investment • Recommend appropriate appropriate revenue adjustments to implement the plan • Derived from other commission models • Designed to take the politics out of decisions

21. Transit Investment • Current investment level from all sources is $13 billion • Ridership to increase from 9 billion trips in 2005 to 18 billion in 2055 • Greater investment levels to maintain and improve transit • “Medium” range - $14B in 2020 to $40 in 2055 • “High” range - $21B in 2020 to $46 in 2055

22. Transit Investment

23. Funding • Gas tax remains viable for 20 years • Take immediate action to keep the HTF solvent • Increase gas tax 5 to 8 cents over the next five years • Index after 5 years to inflation • Increase truck sales taxes proportionately • Create a ticket tax for transit to supplement HTF and GF revenue

24. Funding • Enhance Freight Investment • Tax Credits • Customs Fees • Federal Freight Fee • Intercity Passenger Rail • Ticket Taxes • Highway User Revenues • General Funds • $5 billion Funding Level Per Year

25. Funding • Long-Term (beyond 2025): Develop Alternatives to the Fuel Tax • Possible options include mileage-based user fees • Require a major study of options in the next reauthorization • Surface Transportation Trust Fund • Replaces the Highway Trust Fund as we know it • Retains firewalls and guarantees • Capital costs is the driver of distributions

27. Problem 1: An Immediate Funding Crisis *Obligation level proposed in the President’s 2008 budget request, which includes a suspension of $631 million in RABA funding.

28. Questions? Jack Basso Chief Operating Officer American Association of State Highway and Transportation Officials 444 North Capitol Street N.W., Suite 249 Washington, DC 20001 Phone: (202) 624-5800 Fax: (202) 624-5806 Email: jbasso@aashto.org