The Washington Post had an article yesterday previewing transportation issues in the incoming administration of President-elect Barack Obama, For New Transportation Secretary, a Hard Road Ahead. The beginning of the article is all too familiar to those of us in Texas, and Central Texas, in particular.
The next transportation secretary will walk into an agency that oversees an outdated air traffic control system; congested roads, rails and skies; crumbling highways and bridges; and a financing system teetering on collapse.
Transportation experts, both parties in Congress and the current White House agree that the traditional ways of easing congestion and funding transportation are not working and that a fundamental overhaul is needed.
The use of the phrase “traditional ways” means the gas tax. The article goes through the usual rigamarole of explaining the problem with the traditional funding and moving on the the the non-tradtional funding options – toll roads, public-private partnerships (PPP’s), and congestion pricing.
As the nation’s transportation needs have grown, gas tax revenue has not kept up, largely because of two factors: Cars and trucks have become more fuel-efficient, and gas prices have soared, leading motorists to drive less.
Meanwhile, the costs of maintaining the country’s transportation network and expanding it to accommodate growth are soaring. Transportation spending at federal, state and local levels totals about $90 billion annually. But the nation needs to spend about $225 annually for 50 years to create a highway and transit system that can sustain economic growth, according to the nonpartisan National Surface Transportation Policy and Revenue Study Commission, chartered by Congress.
The commission recommended gradually increasing the federal gas tax to 40 cents a gallon, a move that the Bush administration and many in Congress have opposed. President-elect Barack Obama has not said whether he favors raising the tax.
Other ideas to raise revenue include expanding toll roads, increasing public-private partnerships and using congestion pricing, a system in which motorists or transit passengers pay more during peak travel periods. Another idea, which is being tried in Oregon, is to charge motorists a tax based not on the gas they buy but on the number of miles they drive.
The Clinton administration experimented with some of these initiatives, but the Bush Transportation Department has embraced them, particularly toll roads and public-private partnerships.
But whether intentional, or not, one of the main arguments mentioned in the article, (we’re driving less), against raising the gas tax is also a bad sign for toll roads too. Less driving means less tolls/taxes paid on those roads. With the first Winter holiday of the year approaching we usually hear from AAA about how many more people will be taking to the highways and byway this year as opposed to last. Well not this year, Thanksgiving travel to decline slightly.
The AAA said it expects 41 million Americans will travel 50 miles or more this Thanksgiving, down by about 600,000, or 1.4 percent, from last year. Of that number, 33 million are expected to drive, and 4.5 million will fly, according to a news release.
But it’s not just Thanksgiving travel Americans are just driving less overall, Americans driving less, unmoved by lower gas prices.
Americans are driving less despite falling gas prices, reflecting the deepening recession and signaling a shift in lifestyles and driving habits that could outlast the current turmoil.
Drivers logged 10.7 billion fewer miles in September than they did the same month a year earlier — a 4.4% decline, according to data issued Wednesday by the Federal Highway Administration.
The data reflect the effects of the worsening economy.
“With the unemployment rate going up, people are just not driving,” says Fred Milch, division planner for the East Central Florida Regional Planning Council, in the South Atlantic region that saw the biggest year-to-year driving decline (5.7%). “They just don’t have the money to go on leisure trips and don’t have money to go shopping. … People get in the habit of not having to drive.”
Since the beginning of the year, the nation lost 1.2 million jobs — 284,000 in September alone and another 240,000 in October, according to the Bureau of Labor Statistics.
Gas prices peaked around $4 a gallon July 4 and had dropped 12% by the end of September. They have tumbled even more since, slipping under $2 a gallon in many states.
With Americans driving patterns changing, our much neglected infrastructure needing repair, and our economy needing just this kind of stimulus, it’s an optimal time to effect the kind of change we need to our transportation system and how we finance it. And from the WaPo article it appears the new transportation chief and President-elect Obama will have that opportunity.
The new secretary also will have to quickly craft a proposal for Congress to reauthorize the nation’s five-year transportation spending plan, which expires in September. The law gives $286 billion to transportation projects. Most observers say reauthorizing the same amount will not be enough, considering the country’s needs. Last year, for example, the Federal Highway Administration declared 72,000 bridges, or 12 percent nationwide, to be structurally deficient.
During the campaign, Obama proposed creating a national infrastructure bank, an independent bank that would disburse $60 billion over 10 years and determine the level of federal investment based on factors such as location, project type, regional and national significance, and environmental benefits. The idea is to make more rational decisions about spending, removing some of the politics. Critics say $60 billion doesn’t come close to addressing needs.
Yesterday QR went so far as to speculate that the next stimulus package could bail out TxDOT and Gov. Perry for all their miscues:
There’s a bit of irony in the idea that incoming Democratic President-Elect Barack Obama’s impending economic stimulus package might be substantial enough to rescue the Texas Department of Transportation from its growing funding woes.
Obama has put no price tag on his economic stimulus package – only saying it would focus on infrastructure – but some Democrats have pegged the price as high as $700 billion, a number substantial enough to restore confidence in the economy. In turn, Texas has about $5 billion in road projects ready to go to contract, according to agency officials.
To the larger question of how we will fund these projects in the future, it should be obvious that for now the gas tax – at the federal and state levels – should be increased and indexed to inflation. There has been no other worthwhile alternative conceived yet. While a mileage fee could be a possibility in the future, it’s not there yet. While it’s true the gas tax may not be as robust as it once was with Americans driving less, Americans driving less does nothing to make toll roads a more viable option, even with PPP’s being taken into consideration. Because with Americans driving less, it will make corporate toll roads less profitable. As the roads are driven less, the tolls would be increased, causing the roads to be driven less, and so on, and so on.
What we should be trying to do is find the least expensive, and broad-based way, to tax drivers, all across the country, for building new roads and maintaining our currents ones. Our highways are still one of our most needed economic development projects in our country. All of that must be done while not neglecting air travel, as well as trying to put in place more mass transit to lessen the need for more roads. And individually we should be looking at changing our own travel patterns.
Our President-elect is asking us to do something we haven’t’ been asked to do in quite some time by our president, Obama’s Call for Sacrifice.
“If we are going to make the investments we need,” Obama told reporters at a press conference Tuesday in Chicago, “we also have to be willing to shed the spending that we don’t need.”
If the message sounds strange coming from the White House — that’s because it isn’t. But Obama acknowledges that he has had to step boldly into the public arena during the transition. He is trying to fill the vacuum created by a White House that has grown all but irrelevant in the face of public distrust and the dire financial crisis.
Obama’s call for sacrifice marks a stark departure from the White House message over the last eight years.
Walk or ride, to a place you used to drive. But also if infrastructure spending is what we need, for jobs and renewed economic success, then other things will have to wait. This all comes full circle to our local transportation issues and how they should be financed in the future. All the toll plans need to be seriously rethought, and alternatives to toll roads be given a fair hearing.
P.S. As if on cue, while finalizing this post state Senators John Carona (R-Dallas) and Kirk Watson (D-Austin) have an Op-Ed in today’s AAS on transportation funding, Time is now to fix transportation. It sounds promising but many of these options, unfortunately, aren’t likely with our current governor and Speaker of the House.