Frittered away

| September 01, 2006

“Once the interstate highway system was declared complete, the Highway Trust Fund didn’t go away, but the idea for what could be eligible became broader and broader until any interest group that had anything to do with transportation wanted money from the program,” says Greg Cohen, president and CEO of the American Highway Users Alliance.

Too much funding gets diverted to projects such as light rail, Cohen says, in an effort to relieve congestion by focusing on commuters. But commuters make up only about 11 percent of vehicle miles traveled. “Light rail is a terrible drain on the Highway Trust Fund,” Cohen says. “It’s paid for almost entirely by truckers and other motorists.”

With a shrinking financial pie and a growing number of projects clamoring for a slice, transportation experts are seeking creative solutions. Presenting his National Strategy to Reduce Congestion on America’s Transportation Network in Washington, D.C., in May, then-Transportation Secretary Norman Mineta called for more private investment in transportation. He highlighted such projects as the $1.8 billion, 99-year lease of the Chicago Skyway and the $3.8 billion, 75-year lease of the Indiana Toll Road as examples of private – and sometimes offshore – partnerships that can fund roadway improvements.

While such investments often are met with skepticism and even legal challenges, “our members want discretionary authority to engage in these partnerships,” says AASHTO’s Basso, whose association represents state transportation officials.

Private investment, though, is no silver bullet, he adds. “If you have a $50 billion gap, public-private partnerships aren’t going to close that gap,” he says, because toll roads represent only about 5 percent of annual revenue and investment activity. “One way or the other, we’re going to have to ramp up revenue coming into the Highway Trust Fund if we want to close the gap.”

That was the conclusion of the National Chamber Foundation’s 2005 report, which outlined strategies for investing in transportation systems. The most immediate recommendation is indexing federal motor fuel taxes to inflation.

Of the approximately 60 cents per mile that an average citizen pays for all costs related to operating a car, only 1 cent goes toward the Highway Trust Fund. “Paying an additional half-cent per mile into the fund would currently fully fund the federal share of needs to maintain the nation’s highway and transit systems,” the report says.

Long-term recommendations from the chamber include: closing exemptions to the Highway Trust Fund so that revenue dedicated to transportation is spent on transportation; collecting a vehicle fee to capture payments from alternative vehicles; and implementing a mileage-based transportation fund, to keep fuel efficiency from starving road-building.

These strategies would require strong government leadership and public buy-in, experts say. Any new funding plans must be understood and accepted by the public, transportation consultant Alan Pisarski told state transportation officials in June at an AASHTO meeting. If the public knew it was getting a benefit of $6 for each dollar spent, he said it would beg to have taxes raised.

“It’s an opportunity by the end of the decade to have a new plan in place with policy that is hopefully nearly as easy to understand as building the interstate system,” says Cohen of the American Highway Users Alliance. “We’ll probably have to accept a bump up in fuel tax along the way. But for truckers and others to accept a few pennies more in taxes, there has to be a comfort level that it will be spent on projects that will benefit those who pay this tax.”

“Transportation investments must be wise investments,” the FHA’s Capka told the surface transportation commission. “Whatever we do, a significant portion of the nation’s wealth will be wrapped up in it.”

- Andy Duncan contributed to this article.


POTENTIAL HIGHWAY FUNDING SOLUTIONS

  1. Increasing the number of toll roads.

  2. Indexing federal motor fuel taxes to inflation.
  3. Ending non-highway use of Highway Trust Fund spending.
  4. Collecting a vehicle fee to make up for lost fuel taxes from alternative vehicles.
  5. Implementing a mileage-based revenue system, so that fuel efficiency doesn’t starve roads.

PORK CHOPS: GROUPS LOOK TO CUT EARMARKS
Think the transportation bill funds only transportation projects? Not so. How about $2.3 million to enhance landscaping along the Ronald Reagan Freeway in California? Or $1.5 million for a University of Michigan auto crash notification system? Or $5.6 million for a pedestrian walkway in New York’s Hudson River Park?

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