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New transportation reports released from SAFETEA-LU commissions

The current federal legislation for transportation programs is call SAFETEA-LU ( Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users), which authorizes the Federal surface transportation programs for highways, highway safety, and transit for the 5-year period 2005-2009. In recent weeks, two commissions created by the SAFETEA-LU each released a new report on future development of public transportation systems.

On January, the National Surface Transportation Policy and Revenue Study Commission issued its report, "Transportation for Tomorrow," that recommends a radical restructuring of surface transportation programs and incremental increases in the federal tax. The commission concludes that the United States needs to invest at least $225 billion annually from all sources (federal, state, and local) for the next 50 years to repair the existing transportation system and create a more advanced system. Today, only 40% of the recommended amount is invested each year. This significant increase in funding is needed to sustain strong economic growth and keep the United States competitive.

Accordingly, the commission recommends that the federal fuel tax be increased five to eight cents per year over the next five years, after which it should be indexed to inflation. States are encouraged to enact even larger increase. Additional recommendations include new federal ticket taxes to help pay for transit and passenger rail, a federal freight fee to help finance freight-related improvements, new flexibility regarding tolling and congestion pricing, and public-private partnerships.

Another commission is the National Surface Transportation Infrastructure Financing Commission, which is charged with analyzing future highway and transit needs and the finances of the Highway Trust Fund and making recommendations regarding alternative approaches to financing transportation infrastructure. The Finance Commission recently released its interim report titled The Path Forward: Funding and Financing our Surface Transportation System. This report outlines the current issues facing transportation funding and how the commission will analyze funding options and finally make recommendations. Highlights of the preliminary observations:

  • Demand for transportation is out pacing investment;
  • Maintenance costs are increasing and reducing the funds available for system expansion;
  • The fuel tax is not sufficient at current rates;
  • Direct user fees should be explored;
  • Along with increased investment, more intelligent investment and better operation of the system is needed.

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