Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
17 PLENARY SESSION 2 Policy Provocateurs Tough Questions, Tougher Answers? David Seltzer, Mercator Advisors, LLC (Moderator) Nancy Richardson, Iowa Department of Transportation Steve Lockwood, Parsons Brinckerhoff William Ankner, Transportation Solutions David Seltzer of Mercator Advisors, LLC, moder-ated a panel discussion of transportation indus-try leaders serving as provocateurs to debate the policy dynamics of future surface transportation finance. Mr. Seltzer stated that the panelists were there to elicit ideas and stimulate discussion and not represent any specific organizations or agendas. He canvassed the provocateursâ perspectives on the following issues: the Highway Trust Fund, other federal programs, federal statutes, and tolling of untolled highways. The provocateurs included ⢠Nancy Richardson, Director of the Iowa Depart- ment of Transportation; ⢠Steve Lockwood of Parsons Brinckerhoff; and ⢠William Ankner of Transportation Solutions. The moderator posed a series of questions to the pan- elists to solicit their perspectives and opinions. Moderator Seltzer: The Highway Trust Fund is half a century old and has been used to fund the construction of more than 42,000 miles of the Interstate highway sys- tem. Policy makers are unwilling or unable to raise taxes to meet system preservation needs. Given the lack of a current common vision, is the notion of having a High- way Trust Fund still relevant? Mr. Lockwood: Compared with what? The fund is important for purposes of predictability for legislative planning and procedures. However, the revenue-gener- ating potential of the trust fund is eroding because of improvements in vehicle efficiency and the use of alter- native energy sources. The real question for the future is where the fund is going to get its money. In addition, what should it be funding? If it is going to be limited, should it refocus and fund 100 percent of something crit- ical to national needs? Should it fund programs rather than projects? Mr. Ankner: The trust fund is dead. We should create a new way to fund our transportation needs. The trust fund has silosâthat should not be continued. Mr. Lockwood: On one hand, there are national needs and investments that are hard to implement locally. What if the fund focuses on national interest investments and then lets the rest of the national program end to be taken up locally? Nonrenewable consumption is what is currently funding our Highway Trust Fund, and now we are locked into a death spiral. We should use the general fund with a performance standard driving it to set up a new funding program that is based on performance. Ms. Richardson: Regardless of which fund is used and what it is called, we still need revenue. The United States is better served with the trust fund because it is dedicated to transportation and not available for other needs. Citizens understand the concept of the Highway Trust Fund. There are five or six proposals on the table to bundle a new structural federal-aid program. These could include (a) a $0.40 per gallon federal gasoline tax, (b) continuing the existing gasoline tax and indexing it to inflation, (c) present choice extended with the gen- eral fund enhancing the Highway Trust Fund (which is probably the most likely outcome), (d) instituting a car- bon tax on fuel, (e) instigating a European-style open fuel tax on all modes, and (f) going into debt to fund
18 FINANCING SURFACE TRANSPORTATION IN THE UNITED STATES the trust fund so that future generations can make the choice to raise taxes. Moderator Seltzer: Why have states and local govern- ments failed to step up and take care of local needs? Ms. Richardson: The United States needs to look at what should be funded nationally. From a research per- spective, we need to determine what needs our current revenues could actually cover. Moderator Seltzer: Why not implement a vehicle miles traveled (VMT) tax? Would it be hugely complex to administer? Mr. Lockwood: The United States has a tradition of a narrowly focused federal-aid approach. We do not have the congressional votes necessary to approve a VMT tax. Moderator Seltzer: When will reauthorization occur? Mr. Lockwood: December 2014. Ms. Richardson: March 2013. Mr. Ankner: May 2013. When the audience was asked for its opinion on the same question, some suggested that it would not come until after the next presidential election when the result- ing administration is in place. Moderator Seltzer: Some of the money in the Trans- portation Investment Generating Economic Recovery (TIGER) program is being used to support transit proj- ects. Are efforts to use grants to support livability consis- tent with other transportation goals? Answer: Yes, there are small regions and megare- gions. The concept of sustainability recognizes the need to develop projects for these different contexts. The gen- eral fund does not come with the same strings attached as dedicated programs like the TIGER grants. There are many rural states with two major Interstate highways intersecting at some point. Under this scenario, how would the federal government promote livability, since the transportation needs they serve are not just within their own borders? Mr. Lockwood: Livability issues are important, but they are at the fine-grained local level. Should not deci- sions about local issues be made at the local neighbor- hood scale? Most people would not want to see the federal government doing this. State departments of transportation do not want to be caught in this type of situation, either. Comments: Federal involvement in the area of sustainabil- ity is disingenuous. The United States has underinvested in this area, but there is a need for good demonstration projects and research. This would be an appropriate role for the federal government. Some contend that it would be risky to make many funding decisions on the basis of obscure definitions of livability and sustainability. Mr. Lockwood: The federal definition of sustainabil- ity is incomplete. Moreover, it is not possible to develop a one-size-fits-all federal program for funding on the basis of livability. This type of approach would not be balanced. Mr. Ankner: It is a matter of balance. How far down into the decision-making process should federal program rules apply? Comment: The United States generally does not have people pounding down the door for bike lanes and pedestrian bridges. We have moved to suburbs. Sustain- ability is a cultural issue: we need to redefine the Ameri- can dream. Ms. Richardson: The problem is that land use deci- sions that are made at the local level do not necessarily support environmental sustainability. It would be inap- propriate for federal funding decisions to be based on local policy. Moderator Seltzer: Can tolling play a larger role in fund- ing our transportation needs? Tolls currently represent 6 percent of transportation funding. What percentage of systemwide revenue could be generated by tolling? Mr. Ankner: Tolling could generate 10 to 13 percent of transportation revenue. The United States needs a regional approach for the use of tolling rather than hav- ing states attempt it alone. Ms. Richardson: Iowa has no non-Interstate facilities that could generate enough toll revenue to be self-financ- ing. An interesting piece of research would be to examine how much of the Interstate system is currently not tolled and identify parts that could be. Mr. Lockwood: Parsons Brinckerhoff recently surveyed all toll activity undertaken since the imple- mentation of the Intermodal Surface Transporta- tion Efficiency Act in 1992 for the Federal Highway Administration. While the 6 percent of transportation funding currently generated by toll proceeds does not seem to be a large number, when one considers the high-growth Sunbelt states that are dependent on tolls for new construction, anywhere from 25 to 50 percent of new-capacity projects are funded with tolls. In terms of private investment in road development and finance, the current contribution is small and involves one or two projects a year. Nevertheless, there is a need for tolling to be unleashed as a revenue source. Generating 10 to 11 percent of all transportation funding by toll- ing is feasible, but that really needs to be doubled to roughly 20 percent. Ms. Richardson: States should be permitted to toll existing Interstate highway capacity and allowed to use any excess toll revenues for other Title 23 purposes.
19POLICY PROVOCATEURS: TOUGH QUESTIONS, TOUGHER ANSWERS? All three provocateurs agreed with these last two points. The audience was polled, and a large majority agreed with both points. Moderator Seltzer: To what extent do you believe that long-term concessions represent a long-term solution? Ms. Richardson: Publicâprivate partnerships (P3s) are not relevant to Iowa. They are not a major part of the solution. Perhaps they could be used as a mechanism to increase tolls. Mr. Ankner: P3s are an important tool with sev- eral caveats. They are a way to get important projects advanced sooner than they would have been otherwise. Mr. Lockwood: There is a need for education. The ability of owners to deal with P3s has been solved by some recent projects that have developed standardized procedures to reduce the soft costs of one-off approaches. Long-term P3 arrangements of 99 years are troublesome, though. One cannot know what highways will look like 99 years from now. There should be more opportunities for recompetition with long-term concessions.
