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For New Transportation Secretary, a Hard Road Ahead

By Lyndsey Layton
Washington Post Staff Writer
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The next transportation secretary will walk into an agency that oversees an outdated air traffic control system; congested roads, rails and skies; crumbling highways and bridges; and a financing system teetering on collapse.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.

The Clinton administration experimented with some of these initiatives, but the Bush Transportation Department has embraced them, particularly toll roads and public-private partnerships.

Under Bush, the department has been shrinking the federal role in road building and public transportation and opening the sector to private investors who assume the risks of building the projects in exchange for profits from tolls and fees.

Congressional Democrats and some Republicans, along with transit advocates, have accused the department of rationing good road transportation to those who can afford fees, tolls and taxes. In some cases, the public-private partnerships have lacked adequate protection of the public interest, according to reports by the GAO.

"We need to look at all kinds of alternatives," said William Millar, president of the American Public Transportation Association, an industry group that represents transit systems. "Tax credit bonds, public-private partnerships, tolling, user fees -- we should be looking at it not from an ideological standpoint but from a very practical standpoint. . . . There may be places even in public transit where you could charge more for certain services."

New leaders at the Transportation Department will also have to address the country's ailing intercity passenger rail network, Amtrak. A recent GAO analysis found a dysfunctional system in which the players -- Amtrak workers, freight railroads, and state and federal governments -- hold divergent views about the purpose of rail service, the federal role and appropriate funding. The GAO found a system in "poor financial shape" and hobbled by a structure "that doesn't effectively target federal funds where they provide the greatest public benefits, such as transportation congestion relief."

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.

In addition, the new secretary will have to try to jump-start a stalled plan to create a state-of-the-art air traffic control system that uses satellites to allow pilots and controllers to see the exact location of an aircraft, making takeoffs and landings safer. It also would make them faster, easing delays that are plaguing air travel. The legislation, which would also reauthorize the Federal Aviation Administration for five years, is in limbo in the Senate.

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