Cost and Financing

State transportation officials this week called on Congress to take action by September 30th to extend the 18.4 cents-per-gallon gas tax that funds federal highway and transit programs and to pass a long-term reauthorization of those programs. I also have items this week on the future of infrastructure finance, tolling, public transit, Smart Growth, a model for regional freight plans, Seattle’s new Big Dig and possible restructuring for the South Carolina Department of Transportation following a recent fiscal crisis.

The chances that the federal gas tax, which is set to expire Sept. 30, could be extended improved a bit this week as Grover Norquist, president of Americans for Tax Reform, announced he won’t oppose an extension. Also this week, New York’s Governor gives a boost to bike and pedestrian infrastructure, Georgia prepares for next year’s regional referenda on transportation project funding, and Seattle gives a thumbs up to a tunnel to replace the Alaskan Way Viaduct. Plus, items of note on transportation spending as stimulus, tolling and public-private partnerships, high-speed rail, public transportation, the 2012 presidential election and mileage-based user fees.

With Washington still embroiled in the debt ceiling debate and no momentum for a new transportation reauthorization bill, we get a glimpse this week at the potential cost of doing nothing to improve America’s infrastructure. The American Society of Civil Engineers (ASCE) issues a new report today entitled “Failure to Act: The Economic Impact of Current Investment Trends in Surface Transportation Infrastructure.” The report indicates that not only are American households and businesses absorbing enormous costs today as a result of deteriorating infrastructure, over the next 30 years these costs could further reduce America’s productivity and competitiveness in the world, cause millions of Americans to forgo discretionary purchases in order to pay transportation costs that could have been avoided, cause the U.S. to lose out on creating jobs in high paying services and manufacturing industries, produce a significant drain on wages and productivity and result in the United States losing billions of dollars in foreign exports.

The U.S. Senate Environment and Public Works Committee released a three-page outline of a bipartisan bill to authorize federal transportation programs Tuesday and held the first hearing on the plan Thursday. There is also news this week about state efforts to find new sources of revenue to fund transportation, including public-private partnerships.

The Carnegie Endowment’s Leadership Initiative on Transportation Solvency has a new report out this month that suggests a five percent ad valorem tax on oil up-stream and gas downstream could help cover the cost of transportation in the United States. Meanwhile, reaction to the transportation authorization proposal offered last week by House Republicans continued to pour in this week from transportation stakeholders and other interested observers. Plus there is news this week on Georgia’s regional transportation referendum and an anti-toll initiative in Washington state. And the first post-moratorium public-private partnership transportation project in Texas has attracted a lengthy list of potential suitors.

More than 30 states and Puerto Rico have created a state infrastructure bank, a type of revolving infrastructure investment fund that can offer loans and credit assistance to public and private sponsors of certain highway construction, transit or rail projects. Five states--Florida, Georgia, Kansas, Ohio and Virginia--have established banks or accounts within their banks that are capitalized solely with state funds. These banks were designed with the unique needs of each state in mind and their experiences have varied. The future of state infrastructure banks may depend on the next federal surface transportation authorization and what kinds of federal funding and financing resources may be available to states in the future.

The American Recovery and Reinvestment Act of 2009 provided $48 billion to states for transportation infrastructure projects. States achieved significant successes in 2010 in  meeting deadlines associated with the legislation, starting and completing projects on time and under budget, creating jobs and doing it all with little fraud or waste. Still, some questions have been raised about whether the stimulus could have had a greater impact, which types of projects were funded and which states received the most funding. Despite its political unpopularity in 2010, the Recovery Act proved its worth to state transportation officials around the country.

It appeared to be a promising development last week when Democratic Sens. Barbara Boxer and Max Baucus and Republican Sens. James Inhofe and David Vitter released a joint statement citing “great progress” and “common ground” on a new transportation authorization bill. But there is already significant skepticism that Boxer and her colleagues can deliver a promised six-year bill that would allow state and local leaders around the country to fund long-term transportation projects going forward. And as usual, there is no shortage of opinions on how changes in federal and state policy might help the nation better address its infrastructure needs.

New reports out in recent weeks detail how the United States is falling behind other countries in infrastructure improvement, offer “taxpayer-friendly” solutions for the nation’s transportation challenges, explain how highway infrastructure spending is connected to the larger U.S. economy and examine tax provisions for financing infrastructure. Here’s a rundown.

Last week I blogged about a recent forum in which transportation and infrastructure experts came together to discuss how to move the conversation forward on addressing the nation’s infrastructure needs. One of the consistent themes throughout that meeting involved the need to put greater emphasis on performance metrics to assure the public and their representatives in government that investments in infrastructure are being well spent and having the kind of impact they hope in areas like economic development. Well there’s a new report out today from The Rockefeller Foundation and the Pew Center on the States that assesses the capacity of all 50 states to use those kinds of metrics to identify just what they’re getting for their transportation dollars.

Pages