Presentation to NJTPA Joseph M. Giglio, Ph.D June 26th, 2008

2 The Current State of U.S. Transportation  Insufficient Capacity  Lack of revenues  Need for capital investment  Current state of disrepair  Insufficient Capacity  Lack of revenues  Need for capital investment  Current state of disrepair

3 Bureaucratization of the Highway program  Government Monopoly;  No incentives for innovation or risk;  Lack of user pricing to differentiate service;  Uniformly mediocre products;  Perpetual shortages;  User satisfaction not a consideration;  The construction industry Primary customer;  Unachievable long range plans; and  Local hoarding of resources  Government Monopoly;  No incentives for innovation or risk;  Lack of user pricing to differentiate service;  Uniformly mediocre products;  Perpetual shortages;  User satisfaction not a consideration;  The construction industry Primary customer;  Unachievable long range plans; and  Local hoarding of resources

4 Innovative Finance: Net New Resources  Need to develop Net New Resources;  Not simply shifting monies from one time period to another;  Net new resources are funds that would otherwise not be available;  Resources do not only include money;  Resources also include savings from the provision of more efficient services with less cost; and  The basic criteria for determining an innovative source of funding is the addition of new funds to transportation  Need to develop Net New Resources;  Not simply shifting monies from one time period to another;  Net new resources are funds that would otherwise not be available;  Resources do not only include money;  Resources also include savings from the provision of more efficient services with less cost; and  The basic criteria for determining an innovative source of funding is the addition of new funds to transportation

5 Cumulative Highway and Transit Needs Compared to Cumulative Highway and Transit Revenues, * Funding Gap *Data is Pre-SAFETEA-LU Legislation Source: Cambridge Systematics based on FHWA and AASHTO data. AASHTO C&P Improve AASHTO Maintain $1.9 trillion gap $1.4 trillion gap $1.0 trillion gap $600 billion gap $100 billion uncertainty in MFT yield C&P Maintain $5.3 trillion $4.8 trillion $4.4 trillion $4.0 trillion $3.3 trillion

6 A Pricing Framework Strategic Pricing Program Price Objectives Price Strategy Price Structure Price Levels Risk assumptive vs. Risk-averse Flexible vs. Standardized Market based vs. Cost based Proactive vs. Reactive Price Promotions

7 The Arrival of Technology  Finance, manage and integrate all modes of surface transportation  Enhance safety, mobility, efficiency, the environment and other social benefits; and  Market pricing for highways  Finance, manage and integrate all modes of surface transportation  Enhance safety, mobility, efficiency, the environment and other social benefits; and  Market pricing for highways

8 Vehicle Infrastructure Integration Connecting Vehicles and Infrastructure Enabling on-the-go communication infrastructure

9 Component Parts Roadside readers Onboard transponders integrated with vehicle Public and private applications

10 Conclusion 1.Transportation Finance Transportation investments must be financed from a comprehensive set of revenue sources that are sustainable and reflective of customer choice; 2.Mobility Management The U.S. must establish a transportation system where all modes operate as one in a Mobility Management environment; and 1.Transportation Finance Transportation investments must be financed from a comprehensive set of revenue sources that are sustainable and reflective of customer choice; 2.Mobility Management The U.S. must establish a transportation system where all modes operate as one in a Mobility Management environment; and

11 Conclusion 3.Technology The U.S. must advance the rapid deployment of technology in all aspects of its transportation system to achieve optimal safety, security, and operational benefits into the future and promote market based pricing; 3.Technology The U.S. must advance the rapid deployment of technology in all aspects of its transportation system to achieve optimal safety, security, and operational benefits into the future and promote market based pricing;