Transportation & Infrastructure: Current Environment

Following the 50th anniversary the Interstate Highway program in 2006, talk in transportation circles is focused acutely on growing infrastructure needs and the concern that traditional mechanisms that provide Federal funding are increasingly becoming inadequate to meet 21st Century demands. Rising traffic congestion and environmental and quality-of-life concerns only exacerbate the dilemma facing policy-makers and legislators. As a result, there is rampant speculation about what the future holds and how the Federal government will rise to the daunting transportation funding challenges ahead.

For highways and transit, increasing suburban growth and accompanying demographic and political shifts are driving up demands for more highway lanes, as well as for more emphasis on transit and commuter rail options.   Yet in many cases the costs involved are prohibitive under current funding mechanisms.  Indeed, the best estimates are that the Highway Trust Fund will actually move into deficit mode sometime in 2009, the very year that Congress is scheduled to address the next major surface transportation legislation to succeed SAFETEA-LU, enacted in 2005.  Meanwhile, the SAFETEA-LU-authorized 12-member National Surface Transportation Policy and Revenue Study Commission is expected to come out by early 2008 with its recommendations about how to deal with the critical funding issues at hand.

Under basic consideration is the long-term viability of the 18.4-cents-per-gallon federal gasoline tax which provides the bulk of Highway Trust Fund revenues, which are currently split 80-20 between highways and transit.  The tax has not been adjusted since 1993, while inflation coupled with sharply increased construction costs has taken a significant toll on purchasing power.  In the eyes of many, political resistance to raising the tax, or indexing it to inflation, remains almost insurmountable in the current climate.  Therefore, alternative revenue sources are being vigorously explored.  These include such ideas as a greater reliance on both general revenues and/or tolls, more innovative financing in the form of public-private partnerships and even a possible mileage-based tax or fee using the most modern technologies for tracking and payment.

For aviation, a similar debate is underway as Congress faces legislating a major reauthorization of Federal Aviation programs in 2007.  At issue is whether airline ticket taxes can be changed or augmented with an array of other user fees that hold the promise of generating more revenue for vitally needed airport and air traffic control system upgrades.  In addition, aviation security remains a supreme challenge in a post-9/11 threat environment that is not expected to ease in any significant way for the foreseeable future.

Congress also continues to struggle with legislation to reauthorize Amtrak, the nation’s major passenger rail system.  There remain wide divisions about the extent and timing of proposed reforms and what the future federal role should be.   It is feared -- if not expected -- that many major decisions will be deferred again, as they have in recent years, perhaps until after the next presidential election.

Transportation policy and funding issues will also continue to percolate in annual appropriations cycles in Congress that are either truncated or accelerated by uncertain political developments.  In such an environment, it is important for interested parties to stay closely attuned to what is happening and to make sure their own issues, requests and needs are expeditiously presented and expertly advocated to all of the key Congressional, agency and interest group decision-makers who hold sway on the most important national transportation issues.

For additional information on key transportation issues, see the following:

Washington Letter on Transportation
U.S. Department of Transportation
American Association of State Highway and Transportation Officials
American Public Transportation Association
Community Transportation Association of America
House Transportation & Infrastructure Committee
Senate Environment & Public Works Committee
Senate Banking, Housing & Urban Affairs Committee
House Appropriations Committee
Senate Appropriations Committee