From Funding to Infrastructure, New Transportation Secretary Faces Major Problems
Tuesday, November 25, 2008
The next transportation secretary will walk into an agency that oversees an outdated air traffic control system; congested roads, rails and skies; crumbling highways and bridges; and a financing system teetering on collapse.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.
A key problem is the Highway Trust Fund, which generates about $50 billion annually for road, bridge and transit projects. The vast majority of this money -- about 82 percent -- goes to roads and bridges, while 15 percent goes to transit and 3 percent toward highway safety.
The fund dates from 1956 and relies on the federal gasoline tax, which has not been increased by Congress in 15 years. The tax is not indexed to inflation, so it remains steady at 18.4 cents per gallon, despite the rise in gas prices.
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.
The result is that the highway fund is becoming an increasingly unreliable source of transportation dollars. In the past fiscal year, the fund was taking in less revenue than it was paying out to states. It was headed for insolvency in September when Congress stepped in with an $8 billion emergency transfer from the general fund. Without that, hundreds of transportation projects underway across the country would have slowed or stopped.
Some think that the infusion is not enough to keep the highway fund afloat.
"It won't get us through the year," said John Horsley, executive director of the American Association of State Highway and Transportation Officials.
What's more, the federal deficit has grown to the point that the general fund cannot be relied upon to keep bailing out the highway fund, according to an analysis by the Government Accountability Office.
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.