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14 T R A N S P O RTAT I O N F I N A N C E KEYNOTE ADDRESS unless one assumed a significant reduction in travel, a substantial increase in funding would be needed just to Herbert London maintain system condition and performance. 4. What are the alternatives? Yarema offered several In his keynote address, Herbert London of the Hudson options, including enhancements to fuel excise taxes, Institute focused on two themes: (a) homeland security implementation of financing through the tax credit bond and (b) performance-based pricing. He identified three approach, and broader use of user tolls and alternative challenges or barriers: (a) political barriers to raising user revenue sources. fees, (b) the unpredictability of revenue streams, and (c) the ability to link user taxes to specific improvements. He noted the lack of a visible link between the gas tax and Track 2: Tools and Techniques to Deliver specific use of the system and commented on the sub- More Projects Faster stantial free-rider problem. London called for the deploy- ment of automatic vehicle identification equipment and Sharon Greene the use for innovative finance approaches. London emphasized the link between transportation Sharon Greene presented the second resource paper, security and investment and noted that security demands which she wrote with Michael Schneider, and focused on would drive both the needs and the solutions. He con- the tools and techniques needed to deliver projects faster. cluded with a famous line, "The future is not what it Her presentation concentrated on impediments to proj- used to be," offered as inspiration for the conference. ect delivery, including environmental, institutional, political, and jurisdictional barriers. Greene first defined "innovative finance" as "mov- INTRODUCTION OF CONFERENCE TRACKS ing the traditional transportation funding process from a single strategy of federal aid through grants to state, The conference agenda was buoyed by four resource regional, and local authorities to a more diversified papers prepared before the conference and updated approach involving increased utilization of capital mar- afterward. The resource paper authors presented their kets and the private sector." She then highlighted a papers as an introduction to the four tracks of the con- number of key accomplishments, including ference agenda. These papers in full follow in a later section of this report. State infrastructure banks, with 32 participating states and $4.06 billion in loan agreements; GARVEE bonds, with six states issuing $2.3 billion Track 1: How to Finance the Next in bonds; and Transportation Program-- TIFIA credit assistance, with 11 projects with Reauthorization and Beyond agreements in place in nine states, for a total of $15.4 billion in investment. Geoffrey S. Yarema The author described the need for greater certainty Geoffrey S. Yarema summarized his paper and focused about project schedules, costs, and revenue streams on four issues: when capital market approaches are deployed. She con- trasted this need with the current project development 1. What should the goal of reauthorization be? To process with its attendant uncertainty in the timing and address this first question, Yarema highlighted the need cost of project delivery. to improve safety, maintain system conditions, and Greene described four attributes of projects that maintain current performance levels. facilitate faster delivery: 2. What has TEA-21 activity achieved? The author noted that even maintaining system performance is a Stability, distant reality. He argued that while conditions have Predictability, been maintained, performance has not. Continuity, and 3. What does future investment need to be to main- Acceptability. tain condition and performance? Referring to Haw's Conditions and Performance Report and Bottom Line She then described common impediments to project Report (American Association of State Highway and delivery, including environmental clearance and statu- Transportation Officials), Yarema explained that tory requirements, institutional issues and stakeholder experts varied in their opinions. He continued that involvement processes, and political and jurisdictional