NASHTU Conference Back to Basics

1. NASHTU ConferenceBack to Basics Jack Basso Director of Program Finance and Management

2. SESSION QUESTIONS • The authorization challenge in a nutshell: • How much funding is needed? • For what? • What is the Federal Role for the future? • How do we best generate the necessary revenue? April 28, 2009

3. Back to Basics THE FRAMEWORK April 28, 2009

4. The Future of Surface Transportation • The good and bad news • The good news: a high priority given to infrastructure • Authorization is underway and we have excellent Congressional leadership • The bad news: The Highway Trust Fund is going broke • There is no support for increasing user fees • There are many competing goals at the national level April 28, 2009

5. What is the future Role of the Federal Transportation Program? A restructured 21st-century program April 28, 2009

6. Program Structure The National Surface Transportation Policy and Revenue Study Commission recommended that the federal program be consolidated and reformed to address “objectives of genuine national interest.” We support the idea of program and process reform to address the national objectives recommended by AASHTO. April 28, 2009

7. Key Assumptions • Ability to flex highway funds to transit and vice versa • A planning process that looks first at mobility and after weighing alternatives, then decides which modal improvement is best – highways, transit or rail • Maintain eligibility previously established to invest HTF resources in freight rail April 28, 2009

8. Key Assumptions • Restore to 90% the portion of the federal highway program apportioned to the states • The proposed $375 billion Highway program level is based on prior AASHTO policy recommendations to ensure sufficient funding necessary to restore purchasing power April 28, 2009

9. Program Structure • Preservation and Renewal Program • Freight Program • Highway Safety Improvement Program • Operations and Management Program • Transportation System Improvement/Congestion Reduction Program • Environment Program: Air Quality and Climate Change April 28, 2009

10. Preservation and Renewal • $ 28.4 Billion for preservation, including reconstruction and expansion • Maximum flexibility • Expanded transferability when tied to performance • Three subcomponents – • Interstate Preservation • NHS Preservation • Bridge Preservation April 28, 2009

11. Freight Program • $5 Billion apportioned and $2 Billion discretionary • Eligibilities – full Highway Team set, including • Bottleneck improvements • Intermodal access to ports and distribution centers • International gateway improvements • Improve trade corridors • Develop truck only lanes April 28, 2009

12. Highway Safety Improvement Program • $2.6 Billion • Includes – • RR Crossing set aside • Operation Lifesaver set aside • High Risk Rural Roads set aside • Continued funding for Safe Routes to School April 28, 2009

13. Operations and Management Program • $3 Billion • To improve system performance in both rural and urban areas • Encourage but not require the use of funds for low-cost, quick turnaround improvements April 28, 2009

14. Transportation System Improvement / Congestion Reduction Program • $11 Billion • Urban States – with Metros > 200K • Metro Mobility/Congestion Reduction Program: 62.5% to areas based on relative share of population + consultation with locals • Statewide Connectivity: 37.5% to any area in the state + consultation with locals April 28, 2009

15. Transportation System Improvement / Congestion Reduction Program (cont.) • Non Urban States • Transportation System Improvement Program – Funds distributed to any area in the state + consultation with locals April 28, 2009

16. Environment Program: Air Quality and Climate Change • $ 3.4 Billion • Two components • 50% to ozone, CO and PM non-attainment areas • 50% for climate change initiatives • If no non-attainment areas, current eligibilities continue to apply April 28, 2009

17. Performance-Based Program

18. Refocus Program Structure on Ten Objectives of National Interest • Preservation • Freight/Economic Development • Safety • Congestion ( mobility and accessibility in rural and urban areas) • System Operations • Environment • Intercity Passenger Rail • Federal Lands • Research • Consolidated National Programs April 28, 2009

19. Restructure the Highway Program and Revise the Transit Program to Meet the National Objectives • Highway Programs should be restructured into : • Preservation and Renewal Program • Operations Program • Transportation System Improvement / Congestion Reduction Program • Environment Program • Air Quality And Climate Change • Transit Programs should be revised as well April 28, 2009

20. Establish National Goals • National goals should be established in six areas including safety, preservation, congestion, system operations, freight and environment. For safety, the congress should enact the national goal of halving fatalities in two decades. • Authorization legislation should direct AASHTO and APTA in consultation with the MPOs, and the U.S. DOT to establish national performance goals for each of the other five areas by two years after enactment. April 28, 2009

21. Develop a State Driven Performance Management Approach • Each state adopt state developed performance targets for State selected measures in each of the six key national goal areas. • Changes to the eight planning factors to be goal oriented objectives are recommended. • This is all it takes to integrate the concept into the current planning and programming requirements April 28, 2009

22. State Measurements and Reports • Each state will be called on to develop a process to track and report on performance results in each of the six key national goal areas of safety, preservation, congestion, system operations, freight/economic development, and environment. • AASHTO must recommend a process by which states self-define a set of measures and targets that would work in their unique context rather than have measures and targets imposed through some other process including federal statute, regulation or funding distribution. April 28, 2009

23. State Measurements and Reports (Continued) • Establish a Performance-Oriented Pilot Program, similar to what USDOT has recently proposed for those states and metropolitan areas that have established and met performance measures and targets in the six national goal areas that are acceptable to the USDOT. • Regulatory relief and funding flexibility would be provided in terms of planning requirements, conformity requirements, 4(f) requirements, and engineering oversight. • Ten states are eligible in the first two years, an additional 15 in the next two years and no limit on the numbers from then on. April 28, 2009

24. Goals Aligned with Federal Purpose and Performance Areas • Enhance economic competitiveness, interstate commerce and national defense thru an enhanced freight system • Reduce congestion and improve urban and rural accessibility and connectivity using multimodal transportation solutions • Support system reliability, national security, and natural disaster response through enhanced system of operation and management • Enhance the environment and community quality of life April 28, 2009

25. Dedicated Funding for Intercity Passenger Rail • Separate account from highways and transit • Funded from diversified portfolio of revenue sources • Same budgetary protections as HTF • Firewalls • Guaranteed funding • Contract authority April 28, 2009

26. Capital Program for States • Multi-year Federal/State program • 80/20 Federal/State share • $5 billion annually • Grants awarded to States (not Amtrak) for State selected capital projects • Track • Equipment • Stations • Signals April 28, 2009

27. Other Policies • Continue Section 130 Grade Crossing Program • Articulate National Rail policy • Bring NEC to a State of Good Repair • Provide Guidelines for Public/Private – Freight Railroad Relationship April 28, 2009

28. Financing and Funding A Vastly Expanded Funding Proposal

29. Preamble • Federal government must continue to play a strong role in investing and maintaining an integrated and multimodal national surface transportation system • States and local governments should be provided with maximum flexibility to use federal revenues from existing core sources to meet systemic transportation needs • Strong accountability measures must accompany substantially increased funding to ensure resources are spent as efficiently and effectively as possible April 28, 2009

30. Preamble • We need to restore purchasing power • Investment levels over the long-term need to correlate with documented needs • Investments in safety and research remain a compelling need • The impact of inflation on commodities and construction costs must be addressed in setting investment levels April 28, 2009

33. Legislative Recommendations Between 2010 and 2015, in order to invest in a robust surface transportation program to meet significant national needs, Congress should fund a $545 billion multimodal program comprised of: • Highway program funded at $375 billion (2015 level = $75 billion) • Transit program funded at $93 billion (2015 level = $18.5 billion) • Freight program funded at $42 billion(2015 level = $9 billion) • Intercity passenger rail program funded at $35 billion(2015 level = $6.5 billion) April 28, 2009

34. Legislative Recommendations • Maintain the current federal and state shares for highway and transit capital programs. • Eliminate or drastically limit earmarking in federal transportation programs. • Develop policies that support maximum flexibility to allow for use of both conventional and innovative funding and financing tools. April 28, 2009

35. Legislative Recommendations • Create a Commission to recommend to Congress periodic adjustments for revenues necessary to meet program needs. • Adopt a long-range approach to funding the surface transportation system that gradually moves away from dependence on the current motor fuels tax to a distance-based direct user fee such as a fee on vehicle miles traveled. • Assure that any climate change legislation that creates a new revenue source, either through a carbon tax or cap-and-trade, provides substantial funding for transportation. April 28, 2009

36. Future Revenue Collection • The current system relies on fuel taxes • We have seen a marked decline in revenues • Two National commissions have called for short and long-term solutions • VMT collection systems have come to the forefront of options to consider April 28, 2009

37. Future Revenue Collection AASHTO POLICIES • Short-run: increase fuel taxes to fund a robust set of programs • Study the feasibility of alternatives, e.g. VMT fees • SCOFA committee recommended authorizing a series of pilots on VMT options • AASHTO policy adopted last October calls for: • Adopt a long-range approach that moves to a distance based user fee system such as VMT. • Fund concept tests in the next cycle and plan for change April 28, 2009

38. What are the considerations? • Adequate research on new systems • Bridging the gap between the needs today and new systems • Overcoming problems such as perceived privacy issues • Undertake evolution not revolution • Develop communications to prepare for change April 28, 2009

39. Proposed Program Funding Levelsto Restore Purchasing Power

41. Back to Basics QUESTIONS ? Contact: Jack Basso Email jbasso@aashto.org Phone 202-624-3508 April 28, 2009