Highway Funding 2009 and Beyond: The States’ Perspective

1. Highway Funding 2009 and Beyond: The States’ Perspective AASHTO Executive DirectorJohn Horsley Pacific Northwest Waterways Association Washington, D.C. March 2, 2009

2. President Obama’s Inaugural Address, January 20, 2009: The state of the economy calls for action…We will act, not only to create new jobs, but to lay the foundation for new growth. We will build the roads and bridges, that bind us together.”

3. National Transportation Visions Over the Last Century

4. New Dynamics RequireNew SolutionsGlobal Competitiveness • Global competition from China, India and Europe • Invest in national freight network to keep U.S. globally competitive • Deal with Global Climate Change Yangpu Bridge, Shanghai, China

5. New Dynamics Require New Solutions: Metropolitan and Rural Mobility • Preserve current system • Double transit ridership by 2030 • Advanced ITS technologies, improve system operations • Fix bottlenecks, add highway capacity in urban areas • Connect rural communities to opportunities • Reduce Highway Fatalities

6. Today’s Crisis In Transportation Funding • Insolvency of Highway Trust Fund: Temporarily Patched with $8 billion transfer • Skyrocketing construction costs have reduced purchasing power • Need for Economic Stimulus Investment in Transportation Infrastructure Golden Gate Bridge, CA

8. Funding Options • Accept 30% reduction in Federal Aid and reduce transportation program by amount of cutback. • Accept 30% reduction in Federal Aid and increase taxes to make up for Federal cutback. • Reject Cutback and Tell Congress to Increase Revenues Enough to Sustain the Federal Program at Levels Needed.

9. Economic Recovery Bill Transportation Provisions • $27.5 billion for highways. Port and Rail projects eligible for funding • $1.5 billion discretionary for highway or transit • $8.4 billion for transit. • $1.3 billion for intercity rail. • $1.1 billion for airports • $8 billion for high speed rail.

10. Funding levels needed to restore program purchasing power 2010-2015 • Highways $375 billion • Transit $ 93 billion • Freight* $ 42 billion • Intercity Passenger Rail* $ 35 billion • Total $545 billion *(Sources outside Highway Trust Fund) Call for Top to Bottom Reform.

11. Menu of revenue options • Current Trust Fund Revenues $240 billion • General Fund for Transit $ 20 billion Options: • Diesel 13 cent increase $ 36 billion • Gas Tax 10 cent increase $ 90 billion • Freight Fees $ 42 billion • Tax Credit Bonds $ 50 billion • Mileage Fees $100 billion • Transportation Share of Climate Change Cap and Trade or Carbon Tax $100 billion Oregon VMT Tax dependent on GPS, at least 10 years away. $2.00 gas reopens viability of fuel tax increase.

12. AASHTO Goals for the Next Authorization Legislation Major reforms Multimodal solutions Accountability Increased federal funding with national performance standards 12

13. Highway Program Preservation and Renewal Interstate Preservation NHS Preservation Bridge Preservation Safety Improvement Transportation System Improvement/ Congestion Reduction 13

14. Highway Program Freight Freight tonnage will Double by 2040 Bottleneck improvements Improve Trade Corridors Better Connections to Ports 14

15. Highway Program Operations and Management Environment: Air Quality and Climate Change 15

16. 2009 – A Critical Year Economic recovery bill Solvency of Highway Trust Fund Authorization of six-year legislation 16