CSG Transportation Policy Academy 2012: Highlights & Resources

The Council of State Governments hosted the 2012 CSG Transportation Policy Academy June 26-28 in Washington, DC just as Congressional negotiators were reaching final agreement on a new federal surface transportation bill. Eight state legislators from seven states and representing all four of CSG’s regions attended the academy. The group included five legislators who chair transportation committees in their respective states. The policy academy agenda included visits to Capitol Hill and the U.S. Department of Transportation, a bus tour of regional transportation construction projects hosted by the Virginia Department of Transportation and briefings on such topics as the state of the nation’s infrastructure, the importance of infrastructure investment to the economy, the future of the federal-state partnership in transportation and innovative transportation financing options for states including public-private partnerships and state infrastructure banks. Here are some highlights of remarks by policy academy briefers and links to resources where you can learn more.

Transportation Policy Academy attendees following meeting at U.S. Department of Transportation, Washington, D.C., June 28, 2012. Attendees included from L to R: Rep. Jonathan Barnett (R-AR), Rep. Judy Clibborn (D-WA), Rep. Karen St. Germain (D-LA), Rep. Christopher Perone (D-CT) and Rep. Rex Damschroder (R-OH). Not pictured but also attending the policy academy: Rep. Bob Godfrey (D-CT), Sen. Jeff Mullis (R-GA) and Rep. Alex Willette (R-ME)

 

 

Keynote Speaker: Sean Connaughton, Virginia Secretary of Transportation

On the High-Occupancy Toll Express lanes under construction on I-495, the Capital Beltway…

“One of the things we’re finding is that we have to get more out of the (road) capacity that we have. If you look and see how urban and how congested and how built up the community is around our roadways, we can’t go any further out. So we’re trying to figure out ways we can get more out of the capacity that we have. Those Express Lanes (on I-495, the Capital Beltway) are exactly that … When we had it as a state project, we were just going to add two extra lanes onto the Beltway. It was going to be $2.5 billion project and we were going to take 400 homes and 30 office buildings in the Tyson’s area. We had an unsolicited (public-private partnership) come in. They could add four lanes. They took four homes, no office buildings and the cost was $1.5 billion. They’re ahead of schedule. In fact, they’re delivering bridges a year ahead of schedule. And so we’re actually going to open them up in November of this year and we’re very, very excited about it.”

On Virginia’s inland port in Front Royal…

“We built this facility to take trucks off of I-81 down to the port. We’ve been successful. We’ve taken about 45,000 to 50,000 trucks a year going down to the port and coming back. But what we didn’t expect to happen is at this intermodal facility—it’s essentially an intermodal facility—we now have 7,000 jobs located in and around this inland port, $2 billion in economic development, logistics facilities, chemical plants. We’ve had all different types of manufacturing facilities locate around this facility. Now everyone is demanding one of these intermodal facilities.”

On why the state has emphasized public-private partnerships and tolling…

“In Virginia, we have not raised our gas tax since 1986-87. It is at 17.5 cents. It’s one of the lowest in the country. And also if you look at inflation, it’s essentially half of what it was. The other challenge that we have is we are really starting to see the impact of the CAFÉ standards … I have more cars in Virginia than I had five years ago. I have dramatically more vehicle miles being driven in Virginia. My gas tax revenues are going down … Tolling is to me the wave of the future. Virginia is a little bit ahead of everybody else because we’ve been able to get some of these projects moving …When you look at really where the future is going to be, it is about tolling and it is about public-private partnerships.”

Additional Resources

Virginia Megaprojects

I-495 Express Lanes

Virginia Office of Transportation Public-Private Partnerships

Virginia Inland Port

Wednesday, June 27, 2012 - Morning Plenary Session

Speaker: Brian Pallasch, Managing Director of Government Relations and Infrastructure Initiatives, American Society of Civil Engineers

On “identifying the problem…”

“We’re actually making progress on (infrastructure). It may not feel like progress … but I think one of the ways that we see progress being made as we’ve looked at some of the opinion polls, as we’ve gone around the country and talked to not only state legislators and engineers but regular citizens shall we say, they all acknowledge that there’s a problem. No one is left standing saying ‘oh, our infrastructure’s great. We don’t need to do anything about it.’ So we’re at the point of what I call problem identification and everyone sort of agrees that there’s a problem. We are not at all yet agreed on what the set of solutions are to solve those problems …”

On ASCE’s 2009 “Report Card for America’s Infrastructure”…

“In 2009, ASCE gave the infrastructure a grade of a ‘D’ and that’s based on 15 categories … With the grade of a ‘D,’ the other thing that we’ve tried to calculate is sort of what’s it really going to cost for us to actually rebuild some of our nation’s infrastructure and when we talk about that, our goal is sort of a grade of ‘B.’ … We felt after all of our calculations … that the total need on infrastructure over a five-year period starting in 2009 was about $2.2 trillion … We feel if you look at how we’ve been investing at the federal, state and local level, that about half of that money is going to be spent over that five-year period.”

On the condition of transportation infrastructure…

“One third of our major roads are in poor or mediocre condition. Forty-five percent of our urban highways are congested …We spend 4.2 billion hours a year stuck in traffic. That’s a cost of $78 billion … The current spending is about $70 billion for capital investment from all levels of government … When it comes to our bridges, 26 percent or one in four are either structurally deficient or functionally obsolete.”

On ASCE’s report on the cost of failing to act to invest in infrastructure…

“The calculation  … was $1,060 dollars a year over the next 10 years to a family due to this problem of under-investing in our surface transportation system. Part of that’s in lost wages. Part of that’s in the money that we pay to fix our vehicles and our lost time. There were about 800,000 jobs that will be lost over that 10-year period between now and 2020 … The job gains are actually in things like auto repair because we’re going to have to spend money on fixing our vehicles. But we lose jobs in high-skilled areas and wages get suppressed in certain areas as well … The transportation costs to businesses also go up. The calculation in this report says $430 billion over the 10 years, which is a significant amount of money. If you just divide that by 10, you get to $43 billion, which is more than the Federal government is currently spending on surface transportation … Our gross domestic product underperforms by $897 billion …”

On raising the gas tax…

“We pay every day already. We’re already paying. We’re paying in a different way … If you raise the gas tax 10 cents, which is anathema to many people and I understand that, but if you did that, you’d raise X millions of dollars—at the federal level, it’s about $1.5 billion for every penny … And the amount of change that you might have might actually save me the equivalent of whatever extra I was paying. It’s possible and we certainly would have better infrastructure. But to have that conversation is an impossibility at this point … Everybody wants something but they don’t want to have to pay for it.”

Additional Resources

“2009 Report Card for America’s Infrastructure”

“Failure to Act: The Economic Impact of Current Investment Trends in Surface Transportation Infrastructure,” July 2011

Speaker: Janet Kavinoky, Executive Director for Transportation and Infrastructure, U.S. Chamber of Commerce and Vice President, Americans for Transportation Mobility Coalition

On MAP-21, the federal surface transportation authorization bill…

“You’re going to see I think substantial opportunities to speed up project delivery … You’ll see a consolidated set of federal programs so states aren’t going to have to deal with 108 different categories. But in that consolidation of programs there will be more requirements for accountability and part of that is states being able to say ‘this is how we spent the money.’ …

"This is going to be a reform bill. It may not be massive amounts of reform, not a total overhaul of the federal program but that’s not what we do in Washington. But at least the groundwork I think to be able to go out in the future—and by the future I mean starting about the week after this thing passes—and talk about how we need sustainable, predictable, growing sources of revenue so the federal government can keep up its commitment to transportation. So I think that there are going to be a lot of positive things coming out of this.”

On why the impetus will remain on states despite the bill…

“I personally believe I think you will continue to see more money (for transportation) coming at the state and local level in part because it’s easier to identify projects, it’s easier to tell the voters what they’re going to get for it. But that doesn’t mean that you give Washington a pass and let them walk away …”

On what’s left undone by the legislation…

“(This bill) will be good through (September 2014) and it does not solve the problem of what’s the future role and the future funding sources for transportation at the federal level. On the one hand you could say we’ll just throw it in with the rest of the federal budget, forget the Highway Trust Fund, nobody wants to increase user fees, nobody wants to increase the gas tax. But that means that we’re just going to play the appropriations game every year and you certainly aren’t going to know what your state is going to get. On the other hand we can find a way to find revenues, keep them in a protected trust fund and at least provide some certainty going forward. Unfortunately I think that still puts in your hands the issue of how do we do a good job of prioritizing, how do we choose our wants from our needs and then what kind of campaigns or ballot initiatives are going to have to be waged at the state level or what type of courage is it going to take from you all to raise the state revenues that you need overall.”

Additional Resources

Free Enterprise blog: Articles by Janet Kavinoky

Speaker: Edward Wytkind, President, Transportation Trades Department, AFL-CIO

On inaction from Washington…

“There are too many members of Congress who are ignoring what’s happening to the country, who are ignoring what state and local government are having to deal with. … The transportation system is falling apart and we have too many politicians who either don’t get it or don’t care … We have lost our way in trying to figure out how to fund a transportation system that is completely falling apart … The economy is the victim here and if businesses don’t thrive, my members don’t work. Pretty simple stuff. It’s not about ideology. It’s not about whether I like Democrats or Republicans. It’s about the fact that Washington is not doing its job and it’s forcing Georgia (which has a local option sales tax for transportation on the ballot this summer) and a bunch of other states to do Washington’s work for them and take the tough votes and increase gas taxes and do the things that unfortunately Washington is not doing … We have a real disconnect between state and local government and Washington. I think we’re giving them a pass. And it’s requiring I think some very innovative, perhaps effective, but still short on money initiatives because Washington is not doing its job and we have to not let them get away with that.”

On the politicization of transportation…

“We’re sort of just deferring the bill again for the future … We have a policy problem yes. We have challenges that need to be addressed through reforms I agree. But we have a messaging problem. We’ve allowed transportation to become Obamacare … It’s become just more fodder for electoral politics and as a result we’re no longer doing things that Democrats and Republicans used to do … The sort of party discipline that’s going on nationwide over all these issues is hurting our ability to have a real discussion … We have to stop kicking the can down the road but it requires a political truce. If Democrats and Republicans don’t work together on this, we’re doomed … When you’ve got the Chamber, the labor movement, and all sorts of other politically viable organizations and institutions in Washington all pushing in the same direction and you can’t even come close to having—we can’t even get a debate on the House or Senate floor on how to fund (transportation) let alone pass it—I think we have a political crisis and a messaging crisis in this area. It’s not about the facts. It’s not about who’s right and who’s wrong. It’s not Democrats and Republicans. We’re losing this fight and I don’t see a solution unless we completely change the game and I haven’t found the magic strategy yet.”

On public-private partnerships in transportation…

“We don’t oppose, in fact we support the role of public and private sector together in these initiatives. The problem is that they’re not guaranteed for a long time. And I think the whole public-private partnership discussion is a symptom of Washington’s inaction. It’s forced governors, mayors, state legislatures and others to look for alternative ways to deal with their needs because Washington is completely inactive on it.”  

Additional Resources

Move America: The blog of the Transportation Trades Department, AFL-CIO

Speaker: Joshua Schank, President & CEO, Eno Center for Transportation

On the federal and state roles in transportation…

“What (the Eno Center has) been focusing on with respect to the federal role (in transportation) is trying to define where the federal government has a clear role and where things should be delegated to the states. The reasons you want to do that: one, you want to do that because no matter how much money you have, you want to make sure it’s being spent effectively and you want to define what your national priorities are if it’s a federal program to make sure that you’re achieving what you think you should be achieving at the national level. But second, we also are facing a time when there is a funding crisis and not just in transportation but for the whole country. And the programs that effectively demonstrate that they have accomplished national priorities are the ones that are going to survive and the ones that don’t, will not. If transportation is to maintain a strong federal role or really any federal role, it’s going to have to demonstrate value at the national level. The reality is that transportation has never really been forced to do this in the last 20 or so years. We’ve been fortunate to have an abundance of resources that we were able to use and the strategy that we used to create a federal program that was sustainable was to have a continually expanding pie and bring more and more people into it and make sure everyone got paid so that at the end of the day, we could have a larger transportation program. And that model is not going to work anymore.”

On why there should be a federal role in transportation…

“There are certain goals that can only be accomplished through a strong federal role and they’re essential to the nation and they’re essential to transportation. One of them is economic growth. The federal government plays a specific role with respect to economic growth and transportation that can’t really be borne by states alone. And that’s because of two things: one, the federal government helps support investment within metropolitan regions that increase accessibility within those regions and those regions are where we get innovation and that’s where we get the bulk of our economic growth and productivity. And two, by connecting the nation through interstate commerce, which is a clear role that the federal government has and without it, we couldn’t do that effectively. But the federal government also has a role in addressing transportation’s contribution to greenhouse gas emissions and our dependence on oil and it has a role in reducing fatalities and injuries on the nation’s transportation network.”

“We said that these are the things that we should be focusing on and anything that isn’t clearly under that purpose we can devolve to the states. It doesn’t mean it isn’t important but important is not the same thing as national, federal responsibility and so let’s figure out what belongs there and what doesn’t. And the approach that we came up with was to say it’s not for the federal government to mandate (that) you need to spend money on this X thing because it clearly is in line with national purposes but rather that the federal government’s responsibility is to say let’s measure the performance and the outcomes from what you are trying to build and see if those things are in line with national purposes and then base our funding investment on that performance outcome rather than the means by which you’re achieving that performance. So this was the general concept and we had a good amount of success in convincing lots of folks on the Hill that this was a good idea—a surprising amount of success actually.”

On the future for the federal role in transportation…

“It doesn’t look good for the federal role to expand as it has over the last 20 years. If anything it looks good for the federal role to either be stagnant, which is what’s been happening lately and is always the easiest thing for Congress to do, keep trying to kick the can down the road as much as possible. Or it could be cut and it could be a reduced federal role. And the biggest danger we face, the worst case scenario is if it’s a reduced federal role and it’s not better defined. Because if you have a reduced federal role that doesn’t necessarily mean that you are causing a transportation crisis although it could. But if you have a reduced federal role and you don’t allocate the resources you do have effectively, that could be a real problem and that’s the outcome we’re trying to avoid.”

On the importance for states of demonstrating performance…

“If I’m in a situation and I’m a state and I’m looking at what the federal government is doing, there are a number of actions I would want to take: One is I want to figure out how I can demonstrate performance within my state, within my region with respect to the transportation investments I’m making. Because if you don’t demonstrate that performance, you’re unlikely to be able to raise revenue at the state level either and more than likely you’re going to have to raise revenue at the state level. Because if states aren’t able to raise revenues for their transportation networks, we’re going to see a real problem in our transportation system in the coming decades. Two, I would be looking to see how I can use that reform and that measurement of my transportation investments to spur the federal government to recognize the value of transportation and the investments that they could be making. If you look at how reform has come about in virtually every policy area, it almost always comes from the states … It’s up to states to do that innovation because unfortunately the federal government is not meeting the needs at the moment … I do think there’s an opportunity for real reform at the federal level. I do think that there are people who care about it and want to make it happen. And I think that if the federal program is going to survive, it’s going to have to have that reform. But it’s not going to do that on its own and it’s not going to do that if the priority of all the stakeholders is just to make sure they get as much money as possible. The priorities have to shift from how much money I’m getting to how is the money being spent effectively and once that shift happens, we at least have a prayer of having a successful federal role.”

On the absence of leaders pushing for new transportation revenues…

“Coalitions are important and obviously you want to have a broad coalition, you want to reach out to all the different people who should be involved in this stuff. But bottom line is you’re not going to get a state initiative passed unless the governor is a strong leader who is behind it. And the bottom line is you’re not going to get a federal gas tax (increase) passed unless you have a president and Congress with strong leadership who are willing to put their necks out to pass it. We don’t have a lot of leaders right now who are staking their political futures on transportation policy, certainly not at the federal level. But even at the state and local level, it’s hard to find.”

Additional Resources

“The Federal Role in Transportation: Four Ideas for Greater Federal Involvement,” May 2012

“The Federal Role in Transportation Part II: Four Ideas for Lesser Federal Involvement,” June 2012

“Better Use of Public Dollars: Economic Analysis in Transportation Decision Making,” June 2012
 

Speaker: Emil Frankel, Visiting Scholar, Bipartisan Policy Center

On the future of the federal transportation program…

“The period of growth in the federal (transportation) program is over at least, I think it’s fair to say, for the balance of the time you all are going to serve in public life. I think we’re facing a generation of no substantial growth in federal spending in transportation and infrastructure … We need to have a clearer articulation of national goals and national purposes. (The federal program) needs to be a program that is based on outcomes and results, on performance measurement and accountability … We can’t invest in everything. The days of bridges to nowhere, of paving the parking lot for the local art museum, of money for every small airport in the country—those days are over at least from the federal and I would judge at the state and local level as well. We can only invest in those projects which reflect and offer the promise of real benefits and returns in terms of national goals particularly long-term economic growth. And that’s really the change we face I think in this federal-state relationship.”

On transportation as a factor in global fiscal policy…

“The issue of transportation funding and creating sustainable sources for investment in our infrastructure will only be resolved, in my opinion, in the context of this “grand bargain.” That is figuring out what we’re going to do more broadly as a nation in terms of our fiscal policy and getting our house in order and stop living beyond our means which is what we are facing along with the rest of the Western World. We’ve been living beyond our means for the last 25 years or more and the bills have come due. And transportation has to be part of that (consideration).”

On the role of states in transportation investment…

“Public money because it’s scarce, because it’s constrained and will be for the next generation, we’ve got to use it more effectively to leverage other sources—other public sources and private sources. And we’ve got to be imaginative in thinking about it … We have to create new revenue streams because existing revenue streams are not going to be adequate to support the kind of investment that we need to make. And I think we need that kind of creativity and the innovation and creativity has to come … from the bottom up. It has to be developed in these laboratories of democracy which are states and specifically state legislatures. We’ll learn from each other and the federal government will learn from you and we’ll reshape this federal-state partnership around transportation investment over the next 25 years and longer I think largely on the things that are developed at the state level.”

“We have to create the capacity to make wise decisions about the investment of scarce resources. We hoped that this bill at the federal level would make a start towards that … That’s what this is going to be about for the next generation.”

Additional Resources

“Statement by Emil Frankel on the Surface Transportation Conference Committee Report,” June 29, 2012

“Performance Driven: Achieving Wiser Investment in Transportation,” June 2011

“Strengthening Connections Between Transportation Investments and Economic Growth,” January 2011

“Transitioning to a Performance-Based Federal Surface Transportation Policy,” June 2010

Speaker: James Corless, Director, Transportation for America

On future revenue sources for transportation…

“In addition to perhaps a miles traveled tax, which I know is sort of the most popular alternative, I think we’re going to have to bundle sources of revenue together like never before. And frankly—and I know every state’s different—we’re going to have to go to voters like never before.”

On the importance of diverse coalitions to getting state transportation funding initiatives passed…

“It requires these very unusual coalitions to come together. When I have the Sierra Club and the nurses and the road builders standing in one room and saying ‘pass this sales tax,’ nobody’s seen that before. And when (California) first tried on these tax measures they failed and it honestly (took) a second and third attempt. And I will tell you … I think those measures got better after we failed and had to go back to the drawing board, try again, fail again, come back to the drawing board … The more we had to do that, the bigger the coalition got, the more thoughtful we had to be, throw out certain projects, rethink others and really make the case. That is not a bad thing for us to have to do … It’s these kinds of coalitions I think in the future we’re going to need to bring to bear to be able to understand why transportation investments are important, to convince the public and voters so that we can get more revenue. And if we can’t build those bridges and those coalitions, I think we’re going to be in crisis not just for years but for decades in transportation.”

Additional Resources

“Ten key things to know about the new transportation law,” July 13, 2012

“Newly approved transportation bill is a clear step backwards—a message from T4America,” June 29, 2012

“Conference Committee Deal a Step Backward from Current Transportation Policy,” June 28, 2012

Thursday, June 28, 2012 - Breakfast Briefings

Speaker: Christopher Lloyd, Senior Vice President and Director of Infrastructure and Economic Development, McGuireWoods Consulting Public Affairs Solutions

On private sector dollars available for investment in U.S. infrastructure…

“There is a lot of money out there but that doesn’t mean it’s free. It doesn’t mean that (public-private partnerships are) easy to do and it’s not a panacea. Because at the end of the day, that money is sitting on the sidelines and it wants to invest but money isn’t for free. It wants a return on that investment. Money from the private sector is not going to be as cheap as you can bond it yourself. It doesn’t mean that there aren’t advantages from using private money. There are a lot of advantages to using private money. But if you’re trying to get a project necessarily cheaper, it’s not necessarily cheaper. You’re going to get probably a lot of innovation.”

On Virginia’s Office of Transportation Public-Private Partnerships

“What a lot of other states have done and Virginia has created one and a number of states have started to investigate it--and this is the Canadian model--is creating a public-private partnership office. In addition to the legislative oversight, you’ve got an independent body within the executive branch. Instead of vesting everything within the DOT or the secretary of transportation, you’ve got a separate office which is led by people with private sector expertise who help get out the word regarding public-private partnerships, who run the process. They hire the consultants that do all the oversight and review on behalf of the state. They’re out there promoting the state as a great place to invest for public-private partnerships. They’re there leading the negotiations. They’re the ones that pull together the Attorney General’s office, the Treasurer’s office, the outside consultants to look over these projects so you’re not adding to someone within the DOT. You’re not adding to their responsibilities. You’ve got truly a team which is there not to promote public-private partnerships … at all costs. It’s to be there and to run the process. So again that is something that as you all are looking at public-private partnerships in your own state you might want to think about is the creation of a public-private partnership office.”

Additional Resources

Christopher Lloyd PowerPoint presentation, June 28, 2012, CSG Transportation Policy Academy

McGuireWoods Consulting

Speaker: Jonathan Gifford, Dean and Director of the Master’s in Transportation Policy, Operations and Logistics Program, School of Public Policy, George Mason University

On state infrastructure banks…

“There are a lot of benefits and potential for infrastructure banks that are there. There are a number of challenges that go along with it looking at diverse states and diverse needs. Payoffs are the regional and statewide development, accelerated project delivery, and the ability to attract capital from the private markets.”

Additional Resources

Jonathan Gifford PowerPoint presentation, June 28, 2012, CSG Transportation Policy Academy

“State Infrastructure Banks: A Virginia Perspective,” November 2010

Speaker: Gus Bauman, Former Chairman, Blue Ribbon Commission on Maryland Transportation Funding

On the value of a diverse blue ribbon commission making recommendations…

“The value of a blue ribbon commission … is that it is truly a diverse group. When you can come up with a report with a bunch of recommendations and you’ve got all the interest groups, it’s very hard for elected people to say ‘oh, I’d love to do it but y’know, the labor unions will kill me on it or the chamber of commerce will kill me.’ No, because they were all on board with this. That’s the value of this. They’re all on board and it gives the elected people that comfort level to say ‘I’ll put the bill in and I’ll fight for it.’”

On the importance of restoring faith of voters that funds intended for transportation will be used for transportation rather than raided for other budget priorities…

“The phrase that I use is we have to put the trust back in the Transportation Trust Fund. There was no way on God’s green earth that taxpayers (were) going to say to the government ‘yes, please recommend and go ahead even and implement a tax or fee whether it’s a gas tax or anything else if the money’s going to go into what you call a trust fund and you’re going to just simply do what you want with the money as you’ve been doing for years so that there’s no linkage, there’s no nexus between what I’m paying as a transportation user and the money going to transportation needs and projects in my state.’ That trust was broken long ago.”

On the importance of creating a report with shelf life…

“I made it real clear. I’m no Pollyanna. I know how the world works. I understand law and I understand politics and government. We were writing this report not just for this governor and this general assembly. We were writing a report for the people of Maryland and if they didn’t want to do anything about it this year, there’s next year and the year after. So you will notice if you’re reading the report it is written with no time elements in it. It is written for someone to read today or three years from now after the next election.”

Additional Resources

“Final Report to the Governor and Maryland General Assembly by the Blue Ribbon Commission on (Maryland) Transportation Funding,” November 2011

“Transportation Funding Commissions,” (CSG Capitol Research Brief), May 2012

The 2012 CSG Transportation Policy Academy was made possible through the support of CSG associates the American Society of Civil Engineers and United Parcel Service.