Steve Heminger Executive Director, MTC February 2008.

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Steve Heminger Executive Director, MTC February 2008

Commissioners Mary Peters Secretary of Transportation — Chairperson Jack Schenendorf Of Counsel, Covington & Burling — Vice Chair Frank Busalacchi Wisconsin Secretary of Transportation Maria Cino Deputy Secretary of Transportation Rick Geddes Director of Undergraduate Studies, Cornell University Steve Heminger Executive Director, Metropolitan Transportation Commission Frank McArdle General Contractors Association of New York Steve Odland Chairman and CEO, Office Depot Patrick Quinn Chairman, American Trucking Association Matt Rose CEO, Burlington Northern Santa Fe Railroad Tom Skancke CEO, The Skancke Company Paul Weyrich Chairman and CEO, Free Congress Foundation

Statutory Mandate Study current condition and future needs of surface transportation system Evaluate short-tem 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 Report to Congress by January 1,2008

Field Hearings September 20-21, 2006Dallas, TX November 15 – 16, 2006New York, NY Memphis, TN February 21 – 22, 2007Los Angeles, CA Atlanta, GA March 19, 2007 Washington, DC April 18 – 19, 2007Chicago, IL Minneapolis, MN

Freight

China was 33% of US imports in 2000 and will be 50% by 2010

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 Increase in U.S. Maritime Trade Volume of trade: 2004 and 2020 Source: U.S. DOTv

More trade means more domestic freight movements West region +65% South region +71% Central region +71% Northeast region +58% U.S. domestic freight tonnage growth forecast, U.S. domestic freight tonnage forecasts by mode, % change %44%39%181%57% 10,700 17,296 2,009 2,891 1,054 1,470 13,772 21, (tons in millions) Source: U.S. DOT

Freight Tons, Value, and Ton-Miles, % 1% 9% 3% 2% 0% 7% 3% 1% 40% 74% 67% 16% 40% 6% <1% 6% 2% 13% 3% TonsValueTon-Miles Percent s Truck Rail Water Air Pipeline Multiple Modes Other/Unknown Modes Source: Bureau of Transportation Statistics and U.S. Census Bureau, “2002 Economic Census, Transportation, 2002 Commodity Flow Survey,” Table 1b. Trucking dominates domestic freight movement; rail is critical to the movement of bulky, lower-value commodities and for heavy shipments moving long distances

0 50, , , , , , , , 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

Metro Mobility

In Congestion for At Least 40 Hours Annually Source: Texas Transportation Institute

Source: America 2050

Metro Areas Greater Than 1 Million Source: U.S. Census

Metros Capture Huge Market Share 10 Megaregions Metro Areas >1 Million 1Share of U.S. Population 68%58% 2Share of Traffic Congestion 92%97% 3Share of GDP 78%61% 4Share of Transit Ridership 93%92% 5Share of Population Exposure to Criteria Pollutants 94%88% Sources: U.S. Census, Texas Transportation Institute, U.S. Conference of Mayors, EPA

U.S. Population Change, 2000 –2050 Source: Woods & Poole 2002; University of Pennsylvania School of Design

Fuel Efficiency (“Energy Independence”)

U.S. Fuel Economy for New Light-Duty Vehicles 1975–2004 Model Years Sales-Weighted Horsepower and MPG

International Fuel Economy Comparison Comparison of fleet average fuel economy and GHG emission standards for new-sale light-duty vehicles Source: UC Berkeley

Source: U.S DOE World and U.S. Greenhouse Gas Emissions Compared WorldU.S. 14% Transportation 28% 17% Industrial 30% 22% Power Stations NA 3% Waste Disposal/Treatment NA 10% Land Use & Biomass Burning NA 10% Residential & Commercial 34% 11% Fossil Fuel Production NA 13% Agricultural Byproducts 8% Sources: US DOE and EPA

Is the Public Ready for Change? Source: The New York Times / CBS News Poll, April 2007

Safety

U.S. and G.B. Traffic Fatalities Per 100 Million VMT Source: Leonard Evans, Traffic Safety, 2004

U.S. Traffic Deaths Far Exceed Casualties of War Source: Leonard Evans, Traffic Safety, 2004

What’s Broken?

Environmental Impact Statement Processing Time (FY 1998 – 2006) Source: FHWA

Length of Time to Complete the New Starts Process Source: Holland & Knight

Street and Highway Construction Costs Have Increased Dramatically Over the Past Few Years Source: AGC

Finance

Projected Highway and Transit Account Balances Through 2012 Source: U.S. Department of the Treasury projections

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)

Major Recommendations 1.The federal surface transportation program should not be reauthorized in its current form. Instead, we should make a new beginning. 2.The federal program should be performance-driven, outcome-based, generally mode-neutral, and refocused to pursue objectives of genuine national interest.

Major Recommendations 3.The 108 separate highway, transit, railroad, and safety funding categories in federal law should be consolidated into the following 10 new federal programs:

4.The various modal administrations of the U.S. Department of Transportation should be reorganized into functional units. Major Recommendations U.K. Model FormerNew RoadCity/Regional Networks RailNational Networks Air International Networks Sea

5.Congress should establish an independent National Surface Transportation Commission (NASTRAC). The new federal commission would perform two principal planning and financial functions as shown below: Major Recommendations Create plans with stakeholders based on standards and outcomes (Lead institutions) Submit plans to USDOT (Lead institutions) Submit consolidated plan to NASTRAC (USDOT) Allocate funds to projects (State and local governments) Act on NASTRAC revenue recommendations (Congress) Approve consolidated national strategic plan and develop revenue recommendations (NASTRAC)

6.The project delivery process should be reformed by retaining all current environmental safeguards, but significantly shortening the time it takes to complete reviews and obtain permits. 7.The annual investment shortfall to improve the condition and performance of all modes of surface transportation — highway, bridge, public transit, freight rail, and intercity passenger rail — ranges between $140–250 billion. Major Recommendations

8.To address this investment shortfall by providing the traditional federal share of 40% of total transportation capital funding, the federal fuel tax needs to be raised by cents per gallon. This rate increase should be indexed to the construction cost index and phased in over a period of years. Fuel Tax vs. Fuel Price National Average Gasoline Price (Dollars per Gallon)

State Gasoline Tax Rates including Sales and Petroleum Taxes Plus Local Option Gas Tax State Cents per Gallon NYCTMINVFLRIINOHMEWVIDORSDMDNDMNIANHDCTXVIMSNMOKNJAK CAILWIPAHIWANCMTNEGAKSUTMADECOARTNALLAVTAZKYMOSCWY Excise MFT Additional MFT Source: American Petroleum Institute As of April 2006

9.Other federal user-based fees also should help address the funding shortfall, such as a container fee for freight projects and a ticket tax for passenger rail improvements. 10.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. 11.The deployment of peak-hour “congestion pricing” on Interstate highways in major metropolitan areas should be permitted, provided that revenues generated by this strategy are restricted to transportation purposes in the travel corridors where the fees are imposed. Major Recommendations

12.Public-Private Partnerships should be encouraged as a means of attracting additional private investment to the surface transportation system, provided that conditions are included to protect the public interest and the movement of interstate commerce. Major Recommendations States with PPP Authority

Cost to Improve by Category Source: Section 1909 Commission

“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

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