Transportation Finance: Meeting the Funding Challenge Today, Shaping Policies for Tomorrow (2005)

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7Conference Summary In October 2002, approximately 350 people assem-bled in Chicago, Illinois, to participate in the ThirdNational Conference on Transportation Finance. The conference brought together individuals from the transportation, finance, and public policy communities at national, state, and local levels and from both the public and private sectors. The public sector was rep- resented by federal, state, and local government offi- cials and managers of transportation assets such as airports, seaports, and toll roads. Private-sector partic- ipants included investment bankers, financial advisors, design and construction professionals, attorneys, developers, credit analysts, journalists, and consultants in the transportation sector. OVERVIEW OF CONFERENCE AGENDA As the third in a series of national transportation finance conferences sponsored jointly by the Transportation Research Board of the National Academies and the Federal Highway Administration, the conference contin- ued the dialogue on the challenges of financing the nation’s transportation systems and provided a forum to exchange perspectives on what has worked, what has not, and what might be tested. Given the timing of the conference—as proposals were being developed to be part of the reauthorization of the federal surface trans- portation and aviation programs—special attention was paid to considering new approaches. The Third National Transportation Finance Conference had two primary objectives: 1. To educate federal, state, and local officials regard- ing new financing mechanisms for transportation infra- structure and operations, their structure, and the benefits and costs of implementing such techniques; and 2. To explore the development of new funding mech- anisms and sources. The conference program was designed to maximize the exchange of information and perspectives among conference participants. By the close of the conference, participants not only had collected a significant amount of information but also had exchanged perspectives and built a dialogue for the upcoming legislative debates at the national level. PRECONFERENCE WORKSHOPS It is important that a conference of this nature meet the needs of all its participants. To address the varied knowledge about transportation finance, conference planners took two actions. First, the Conference Committee commissioned four papers to provide a con- text for the meeting and made them available before the conference. Second, the committee built on past suc- cesses with preconference workshops. Those four workshops gave participants at all levels a chance to brush up on the state of the practice of transportation finance. The two introductory level workshops were • Highway Finance 101: A Primer on Highway Funding and New Financing Techniques and

• Transit Finance 101: A Primer on Public Trans- portation Funding and New Financing Techniques. The two advanced workshops were • Conversations with Capital Market Experts and • Advanced Transportation Finance Roundtable. GENERAL SESSIONS The general sessions for the Third National Transporta- tion Finance Conference were designed to take full advantage of the breadth of participants at the confer- ence and to home in on financing issues that would be the focus of upcoming reauthorization efforts. To this end the general sessions included formal addresses and informal roundtable discussions by high-level adminis- tration officials and a U.S. senator (Senator James Jef- fords of Vermont), a panel of key congressional staffers, and a culminating roundtable of individuals from a wide range of transportation organizations. Together, these general sessions provided conference participants with a tremendous opportunity to hear the most current thinking on finance-related issues from a wide spectrum of perspectives and, just as important, to help shape the debate on these matters. A more detailed synopsis of the conference general sessions is provided in the subsequent section of this report. FOUR TRACKS The agenda for the Third National Conference on Transportation Finance was developed around four substantive tracks. Each of the four tracks featured four sessions, each including three to four presentations. The format for each of the 16 standard panel ses- sions included a discussant, whose sole function was to energize the question-and-answer period and to spur discussion following the panel presentations. Two gen- eral sessions were devoted to recapping the highlights of the panel sessions and further stimulating the exchange of views among conference participants. The four tracks and their associated sessions are outlined below and discussed in later sections of these proceedings. Track 1: How to Finance the Next Transportation Program—Reauthorization and Beyond Track 1 focused on providing an overview of reautho- rization and ideas about how to augment traditional fund- ing with alternative revenue sources and about what is being considered for reauthorization and as a foundation for the future. Track 1 panel sessions consisted of the following topics: • Present and Future Core of Federal Funding: Will Trust Fund Revenues Be Enough? • Examining Current and Potential Use of Tax Incen- tives in Promoting Surface Transportation Investment, • Tapping Alternative Revenues at the Regional and Local Level: What Is and What Could Be? and • User-Pay Techniques: Toll Roads and Beyond. Track 2: Tools and Techniques to Deliver More Projects Faster Track 2 focused on providing a macro-level view of the state of innovative finance, including an assessment of what is working, what is not, and what the future holds. Track 2 panel sessions included the following topics: • Characteristics of Strong Financial Planning: What It Takes to Have Good Discipline, • Innovative Financing to Advance State and Local Transportation Programs and Projects, • Tools and Techniques to Meet Project Funding Challenges, and • Quantifying and Communicating the Benefits and Costs of Innovative Finance. Track 3: Structures, Institutions, and Partnerships to Deliver More Projects Faster and Cheaper Track 3 sessions concentrated on the institutional and structural elements in implementing alternative approaches to project delivery and financing to deliver projects in the most cost-effective and expeditious manner feasible. The sessions in this track addressed the questions, What has worked? What has not? What does the future hold? and, finally, How much of a cultural shift has occurred and how much more is needed? Sessions in Track 3 were organized around the fol- lowing topics: • Public–Private Partnerships: Taking the Mystery Out of the Three Ps, • Public–Private Partnerships: A Matter of Survival, • Privatization and Outsourcing of Transportation Functions: Impact on Finances of the Transportation Organization, and • Innovative Contracting and Implications for Transportation Finance. 8 TRANSPORTATION FINANCE

Track 4: New Transportation Initiatives and Demands on Financing The final track, Track 4, centered on the anticipated impacts of new transportation initiatives on the overall demand for financing and considered the question, Will the current tools, techniques, and structures fit the bill? The context for this track included the focus on new security-related transportation investments and mount- ing concern about the capacity to finance large-scale multimodal transportation projects. Track 4 panel session topics included the following: • Challenge of Intermodal Projects: Keeping Them from Falling Through the Cracks of Financing Programs, • Financing Marine Transportation Systems, • Intercity Passenger Movements: Degree and Form of Public Subsidy, and • Emerging Funding Challenges. Together, the four tracks and related speakers at the general session focused on the most critical finance issues facing transportation stakeholders today and in the future. Collectively the sessions drew particular attention to the mounting realization that new funding structures should be considered to maintain and enhance the nation’s transportation infrastructure and that now is the time to evaluate alternative structures and develop new approaches to funding transporta- tion. A synthesis of conference themes appears at the conclusion of this report. 9CONFERENCE SUMMARY