The National Study Commission and 2009

1. The National Study Commission and 2009 Francis X McArdle

2. The Current System of Federal Financing Is Broken • The Highway Trust Fund cannot support current levels of federal spending authorizations • The ‘federal funds’ factor is adding 40% to project cost as it adds 4 years to project duration • Current federal support is not buying system performance • Congestion is up in most major cities • Logistics costs for businesses are now rising again

3. The rationale for a national program is being lost • There are no national performance standards for our transportation systems • The ‘donor guarantee’ is driving decision making • Construction inflation is rapidly eroding the buying power of federal funds

4. What did the Commission learn • There is no systematic federal approach to transportation investment. • The federal government has ignored almost completely the linkages between the economy, the creation of jobs, and transportation • The federal government has created very few linkages between the job creators and the transportation investment decision makers

5. Furthermore • There has been consistent underinvestment in the existing transportation elements over the last 35 years, perhaps by as much as $ 50 billions per year • There can be very little future growth in the United States economy unless funds are provided for transportation investment to support growth

6. How much do we need? • The Commission assumed the continuation of ‘normal growth’ over the next 50 years. • That adds 150 million people over the next 50 years and doubles per capita GDP • That effectively doubles the demand side of the transportation equation

7. The total needed • To maintain the existing investments • And to provide for 150 million more people • The Commission estimates that we should increase overall transportation spending • From the current $ 80 billion per year in all funds • To $240 billion to $320 billions per year

8. How Do We Get The Most for Our Money? • National performance standards to guide end state objectives for the system • Local, state, and regional program planning to achieve standards compliance, resolving both existing system deficiencies and accommodating new growth • Federal capital support for 80% of compliance and development investments

9. And, in addition, • The ‘ funding silos’ have to be eliminated to give local decision makers freedom to invest in compliance with national standards as they see fit • The ‘ federal funds’ factor, that additional cost of using a federal dollar, has to be substantially reduced, if not eliminated

10. How Should We Pay for This? • The Commission majority agreed that the user fee system should be maintained • The user fee system should be managed by an independent body, subject to Congressional oversight. • It will take an increase of $ 1 per gallon ,at all levels, to fund what is needed

11. How Can We Afford To Do This Now? • If we don’t start now, we will fall further behind in our management and maintenance of the existing transportation elements • We will not have provided for growth • And jobs for our children and grandchildren will go elsewhere.

12. 2009 is a critical inflection point • If the Congress merely fixes the current deficit, the long term viability of the program is lost. Construction inflation will erode the buying power of the federal dollar to almost nothing in 10 years and nothing will have been done to provide for growth. • If the ‘ donor guarantee’ continues as the central program focus, then there is no logical reason to send dollars to Washington just so the ‘federal factor’ can further erode your buying power by 40%