Two Major Commissions, No Major Law Steve Heminger Executive Director Metropolitan Transportation Commission March 2011

2 Policy Commission — December 2007

3 Statutory Mandate Study current condition and future needs of surface transportation system Evaluate short-term sources for Highway Trust Fund revenues and long-term alternatives to replace or supplement fuel tax Frame policy and funding recommendations for 15-, 30-, and 50-year time horizons

4 Major Recommendations: The 3 R’s

5 1. Reform

6 The federal surface transportation program should not be reauthorized in its current form. Instead, we should make a new beginning.

7 The federal program should be performance-driven, outcome-based, generally mode-neutral, and refocused to pursue objectives of genuine national interest.

8 2. Restructuring

9 The 108 separate highway, transit, railroad, and safety funding categories in federal law should be consolidated into the following 10 new federal programs:

10 Freight

11 Move the Goods Article 1, Section 8 “To regulate commerce with foreign nations, and among the several states…”

12 1,437 6,165 (TEUs in thousands) Houston 13,101 LA/LB 1,010 2,152 Miami 2,043 3,382 Oakland 4,478 15,835 NY/NJ 1,809 5,566 Virginia 1,860 6,639 Charleston 1,662 9,420 Savannah 1,798 4,396 Tacoma 1,776 2,557 Seattle 59,420 Forecast figures based on 10-year linear regression Dramatic Increases Forecast in U.S. Maritime Trade Volume of trade: 2004 and 2020 Source: U.S. DOT

13 Change in TEUs at 10 Largest US Ports Los Angeles Long Beach New York/ NJ OaklandNorfolkHoustonSeattle Charleston TacomaSavannah

, , , , , , , , Class I Railroads Track-Miles Owned Sources: L. Thompson/World Bank and American Association of Railroads Rail Network Today Today’s rail network has been rationalized and downsized to a core network that is descended directly from the 19th Century design

15 Metro Mobility

16 Source: America

17 Keep the Engines Primed Key IndicatorMetro Areas > 1 million 1Share of U.S. Population58% 2Share of GDP61% 3Share of Traffic Congestion97% 4Share of Transit Ridership92% 5 Share of Population Exposure to Criteria Pollutants 88% Sources: U.S. Census, Texas Transportation Institute, U.S. Conference of Mayors, EPA

18 3. Reinvestment

19 Annual National Funding Gap Current Spending (2006) Cost to Maintain (2055) Cost to Improve with Pricing (2055) Source: Section 1909 Commission Cost to Improve without Pricing (2055)

20 To address the investment shortfall by providing the traditional federal share of 40% of total transportation capital funding, the federal fuel tax needs to be raised by 25–40 cents per gallon.

21 The fuel tax continues to be a viable revenue source for surface transportation at least through Thereafter, the most promising alternative revenue measure appears to be a vehicle miles traveled (VMT) fee, provided that substantial privacy and collection cost issues can be addressed.

22 Financing Commission — February 2009

23 Financing Commission Key Recommendations: Increase federal gas tax by 10 cents per gallon, and index to inflation thereafter Transition to a mileage-based usage fee by 2020 Authorize state and local governments to deploy tolling and congestion pricing on widespread basis Encourage greater use of private investment

24 Bipartisan Policy Center Key Recommendations: Center the program around national goals Align federal funds to suite of performance metrics Consolidate federal programs into two focus areas: preservation (formula) and expansion (discretionary) Begin planning for new national user-based funding mechanism

25 Is Anyone Listening Out There???

26 “Under my plan, no family making less than $250,000 a year will see any form of tax increase” — Barack Obama, 2008 “Read my lips: no new taxes” — George H. W. Bush, 1998

27 Issue: Tax Politics “We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled.” — Ray LaHood, 2009 “The policy of taxing motorists based on how many miles they have traveled is not and will not be Obama administration policy.” — Robert Gibbs, 2009

28 Would A Gas Tax By Any Other Name … Smell As Sweet?

29 1. Windfall Profit Tax Source: The Wall Street Journal and Consumer Watchdog (oilwatchdog.org) Note: Conoco Phillips' $17 billion net loss in 2008 was a result of having to write down $34 billion in previous acquisitions.

30 2. Sales Tax on Gasoline Source: © 2011s GasBuddy.com

31 3. Carbon Tax, Cap and Trade Source: Bureau of Transportation Statistics, 2010 U.S. Carbon Dioxide Emissions From Energy Use:

32 4. General Fund by Default Source: Transportation Weekly, Federal Transit Administration

33 How Can We Pay for Freight Infrastructure? Container Fee Customs Revenue Public Private Partnerships

34 “Our unity as a nation is sustained by free communication of thought and by easy transportation of people and goods... Together the unifying forces of our communication and transportation systems are dynamic elements in the very name we bear — United States. Without them, we would be a mere alliance of many separate parts.” — Dwight D. Eisenhower, 1955

35