Ready for a New Era of Transportation Finance?

by Mariia Zimmerman


In just the first two months of 2013, we’ve seen a surprising array of ideas being advanced by Governors seeking to overcome the most pressing transportation challenge of our time: how to pay for the system we have and the system we need? Each day a new story appears describing infrastructure funding proposals being pursued in states such as Virginia, Michigan, Oregon, Pennsylvania, Washington, Massachusetts and Minnesota. Debate has even begun to surface from conservative and liberal corners as to the continued value of maintaining a federal transportation program. Taken together, we seem to have turned a corner in transportation policy and finance.

For the past four years considerable attention has focused on trying to push for new federal transportation funding. An impressive array of voices as diverse as the US Chambers of Commerce to public health and safety advocates to road builders and transit workers have all been relentlessly calling on Congress to increase transportation funding to meet the growing needs of our transportation system.

We hear the numbers and they are staggering:

  • Traffic fatalities kill people more than gun violence – Thanks to aggressive safety measures being promoted by US DOT and safety advocates traffic fatalities on our roads have fallen to historic lows. Still, in 2009 93 people died each day, on average, on America’s roads.
  • Congestion stabilizing but still costing billions – According to the latest Texas Transportation Institute’s (TTI) congestion study, the total financial cost of congestion in 2011 was $121 billion, up one billion dollars from the year before and translating to $818 per U.S. commuter.
  • Trillions needed to upgrade our infrastructure – The American Society of Civil Engineers estimates that over $2 trillion is needed over the next five years to make our nation’s infrastructure safe and reliable. The FTA has estimated a $60 billion price tag to make needed safety and modernization improvements for just the 7 largest transit operators in the country.
  • We’re making greenhouse gas much, much worse: According to the latest TTI study, congestion adds 56 billion pounds to the ozone annually – about 380 pounds of carbon per car commuter.

And yet, lack of political will has prevented much of anything from moving forward. The MAP-21 bill passed last summer does not include significant new revenues, continues to be supplemented from the government’s general fund, and only provides two years of funding.  It did, however, include new requirements for performance measurement, safety, and asset management.

Federal rigor mortis is pushing the transportation fiscal canyon to states and localities. It also lends credibility to questioning the continued existence of a federal program or user pay model if it is insufficient to the task, and is more burden than benefit in terms of adding regulatory requirements that come without the funding to pay for them.

The gasoline tax has its merits, but given the lack of political will to raise it significantly, and the wide range of needs, it’s time to begin thinking of  infrastructure as a basic government function that can, and should be, funded the full range of available revenue sources. Our global competitors, after all, have recognized this for quite some time, and are moving ahead of us in building a 21st century infrastructure. – DC Streetsblog

It will be fascinating to see how individual state funding proposals fare in the months ahead. And, will the new US DOT Secretary be allowed to publicly push for finding a way to pay for the transportation system needed to maintain America’s economic competitiveness? Will the federal gas tax be increased from the current 18.3 cents or will some other proposal take its place? Is there a future for a Federal Infrastructure Bank?

Despite the temptation to wait and see how these decisions play out, local officials, planners and engineers should remain engaged in the debate and work to ensure they are prepared for what the next era of transportation funding may bring.

Are you ready for what a burst of new state funding means for planning and implementation? What are the implications for your local sales tax measure if the state now also is using sales tax for transportation projects? Are you positioned to leverage new resources to access private or federal capital available through loan programs such as TIFIA?  What communications and outreach is needed to garner  public support for locally-funded tax or bonding measures? What is the public willingness to pay for transportation through a growing collection of tolls and local/state taxes that are felt more directly than at the federal level? Will the next generation of transportation finance tools maintain the false split between transit and highways, between cars and trucks, and with bicyclists and pedestrians or can we find a path forward that supports investments in a complete system?  

Let’s see what the year ahead brings in finding answers to these questions. As Rob Puentes at Brookings likes to say, "Now that we're out of money, it's time to think."