SPECIAL REPORT: Transportation reform has a price

| 1/17/2008

Thursday, Jan. 17, 2007 – Members of a federal commission say the U.S. needs “reform with a capital ‘R’ ” to solve transportation problems, not the current administration’s plan for more tolling and privatization.

Tolling and privatization will still play a role in transportation funding, but they would be limited in their scope, said Vice Chairman Jack Schenendorf of the National Surface Transportation Policy and Revenue Study Commission stated Thursday, Jan. 17, during a hearing before the U.S. House Committee on Transportation and Infrastructure.

“It is reform with a capital ‘R,’ ” Schenendorf told the House committee. “We are recommending fundamental and wide-ranging reform of the federal transportation program.”

House Committee Chairman James Oberstar, D-MN, commended the commission on its vision.

“This report does precisely what the commission was instructed to do: It lifts our vision above the horizon; challenges our thought processes with innovative ways of addressing established, vexing, complex problems that seem irreconcilable,” Oberstar said.

Commissioners stated in their report that reform includes both long-term and short-term solutions.

The long-term solution, commissioners said, is moving toward a vehicle-miles tax to replace the federal fuel tax by 2025. Under such a program all drivers would pay by miles traveled, not by the gallons of fuel consumed. The view of the commission is that alternative fuels and reduced dependence on oil in the future will help guide the transition away from federal taxes on motor fuels.

Short-term solutions in the commission report include a limited amount of tolling and public-private partnerships, but the bulk of the reformed program would require a substantial increase in federal taxes on gasoline and diesel.

Commissioners in their report to Congress said a fuel-tax increase of between 5 cents and 8 cents per year from 2010 through 2015 is needed. That would amount to between 25 and 40 cents per gallon by 2015.

Truckers already pay their way
Truckers have paid into the national highway system for years through fuel taxes and various other fees, tolls and taxes.

OOIDA officials would like more accountability built into the reforms, but overall, the Association supports an equitable user-pay system, such as the fuel tax, for funding transportation programs.

“We appreciate the Commission’s strong emphasis on reform,” OOIDA Executive Vice President Todd Spencer said. “But we adamantly believe that Congress must make fundamental changes in how highway tax dollars are currently being spent before they consider increasing fuel taxes or other highway user fees.”

The Association maintains a position that runaway earmarks are part of the nation’s problem and that reform efforts should also focus on where other highway tax dollars are spent. For example, many federal agencies and programs are funded by those tax dollars.

“Some of those agencies and programs should be streamlined or done away with, and others should be funded by other means,” Spencer said. “Simply put, highway tax dollars should be spent on highways.”

The current administration with President Bush and Transportation Secretary Mary Peters has pushed for a reduced federal role in transportation funding through the use of tolling, congestion pricing and an increased role of private-sector investment.

Although Peters chaired the 12-member transportation commission reporting to Congress, she did not attend the hearing Thursday. She also did not agree with much of the commission’s report. In fact, Peters and two other commissioners wrote a separate report to voice their dissenting opinions.

Peters stated in her report that it’s the current fuel-tax system, not tolling or public-private partnerships, that is the problem.

“In fact, it is precisely the ineffectiveness of traditional taxes and the politicized nature of transportation spending decisions that are themselves the problem,” Peters stated.

U.S. House Committee on Transportation and Infrastructure Committee Vice Chairman Peter DeFazio, D-OR, said he believes the current administration’s views on transportation funding contain flaws.

“I would have loved to have her come and defend the indefensible, which is her position that we need to phase out any federal involvement,” DeFazio said.

“She says that by saying we should freeze the current levels of investment by the federal involvement and we will solve all of the problems through rationing otherwise called congestion management ... ration the system, price people off it, price the independent truckers off it, price working Americans off it and it will be less congested so the Lexuses will just speed their way to work. That is not a solution in the national interest.

“Secondly, she says privatization will solve all – all we have to do is add on the cost of the borrowing and the profits instead of financing it through public entities. That doesn’t seem to be a real rational argument to me. And finally, she’s a big fan of tolling. ... Luckily, when the next Congress sets a path for the future, we will be dealing with a different and hopefully more enlightened administration.”

– By David Tanner, staff writer