If we want a more robust transportation system, transportation user fees and taxes will have to be significantly increased. Now that we are looking at new initiatives like freight corridors and high speed passenger rail, new user charges need to be imposed on freight users and rail passengers.Traditionally there was little opposition to increases in gas taxes as these were viewed as user fees and there was a national consensus on the need for better transportation based on a vision and purpose, Many of these favorable conditions have been lost in recent years. Additionally, taxes have become viewed as a negative and caught up in political grandstanding.We need to turn around the perception of transportation from pork and earmarks to goals, performance and accountability and remind the public that good transportation is a prerequisite to global competitiveness. Hopefully, in 12 or 18 months a better performing economy will faciltate the enactment of increased user fees..

Excellent question from Lisa, and a lot of thoughtful responses. I have just a few thoughts, having struggled with this as others have as well:

1. Framing matters: John Horsley makes this excellent point in his post. Explaining the modest level of investment expected per-consumer eases some of the anxiety about a tax. So does an explanation of the results consumers can expect from their investment, as Steve Van Beek points out -- economic growth, fewer potholes, more mobility options, energy security, cleaner environment, that kind of thing. And it's especially useful if it's easily translatable into visible, tangible benefits as the Washington State experience shows.
2. The merits our case matter: However, by starting with a bullet explaining how we should talk about the revenue issue, I stumbled as transportation advocates frequently do. We lead with our chin by talking first and foremost about how much additional hard-earned money is needed from taxpayers. The desired price tag for the bill should be one of the last items people hear about (as was the case all too often with reauthorization proposals last time around; it was hard to tell what was in the stew, but we all knew how costly or cheap the stew was). Fortunately, there appears to be broad consensus about the means to boost the chances for a successful transaction with the public: The program needs to be overhauled. Otherwise the talk of results taxpayers can expect will ring hollow. The program architecture needs to re-shaped from the ground-up so that it is likely to perform levels that are compelling to taxpayers.
3. Leadership matters: Transportation is, in theory, a must-pass bill. Yet billions of dollars of infrastructure investment were just put at risk because Congress couldn't even agree on an extension of current law, let alone a new program. Health care and clean energy legislation are on the front burner, meanwhile, because leaders on both ends of Pennsylvania Avenue have made them a priority. We need to push our leaders to get moving on a brand new transportation program too. And again, one way to get their attention is to talk about the likely results of a new, reformed program and not the price tag. You'll notice that's the last thing anyone who's driving the process brings up when discussing other priority legislation.
4. Of course, financing matters: While this should be last among our talking points I want to answer Lisa's question about the gas tax, an increase in which I believe is necessary but insufficient. This is in part because of what Ken Orski points out -- political reality is that the increase is likely to be far smaller than the need. It's also true because of what Gabriel Roth implies: Effective forms of road user charges (HOT lanes) can be cobbled together across the nation to help make ends meet, which has the added benefit of achieving measurable energy savings and emission reductions. And we shouldn't forget that there are ways to assemble a financing proposal that will make it still more compelling, something that Congressman Blumenauer points out when he mentions that a gas tax increase can be engineered to kick in after the economy's recovered, an assured source of revenue that allows for investments right away by borrowing against it. Last but not least I agree that, as some have advocated, as gasoline demand eases and road-user-charging infrastructure spreads a transition to a VMT fee is worthy of consideration for the longer-term.

Pressing the case for a new, expanded program entails a transaction with a skeptical public. It will require a concerted, relentless campaign with smart framing, actual program reforms, real leadership and a thoughtful financing package. I agree with Steve Van Beek that increased collaboration among often-conflicting interest groups will help make the recipe successful, and look forward to working with many on this blog to get it done.

Many of the most urgent transport investment needs arise from the congestion of existing roads in urban and suburban areas. These can be dealt with by providing express toll lanes that could be privately financed, without the need for additional federal taxes. The money would come from electronically-paid tolls set at levels designed to provide congestion-free travel. Such “HOT” lanes have been operating successfully on California’s State Route 91 since 1995. They were privately provided without government financing.

Ken Orski, with his usual modesty, omits to remind us that he himself, with Robert Poole, reviewed the possibilities of $40 billion being spent on “HOT Networks” in eight major urban areas which, seven years ago, could have been largely self-financing, and congestion has increased since then. In addition to relieving congestion, such networks could accommodate congestion-free high quality express bus services.

The Poole/Orski “HOT Networks ”study was published as a Reason Policy Study in 2003 but was updated and published as Chapter 19 in the 2006 award-winning volume “Street Smart”. Patrick DeCorla-Souza recently suggested that such networks could be provided, at lower costs, by making better use of the capacity of existing highways.

I agree with Jim Burnley that our nation is significantly off course when it comes to transportation policy. The policy is unsustainable in many ways but certainly with funding where our current and projected resources do not match our needs and wants. That means we have to recalibrate our desires, reform how we allocate available resources, and/or raise additional resources. This is a reality whether we are looking at the highway and transit program, aviation, intermodal discretionary projects (TIGER), or high speed rail (the latter two new project categories have many multiples of wants for available resources).

John Horsley’s submission is a cause for optimism, but the level of effort to reach the public, educate them, and sell them on tax increases is a herculean effort, especially with legislative efforts that dwarf local ballot initiatives in scope. At the local level, advocates ask the public to support a series of individual transit and highway projects, enabling the public to see specifically how their additional sales or other tax will be spent. Given the scale of national programs, our “ask” has to be for jobs, productivity, emissions reduction, and mobility and access. To the public, these priorities can often appear to be amorphous and distant from their daily lives. it is our job to make the connection for them.

Having acknowledged the difficulty we have no choice but to educate the public and ask them for their support. The process has to begin with spelling out how we are going to reform programs; we have addressed a variety of alternatives for doing so in our previous weeks’ answers to Lisa’s questions. Reforms that address the needs of passengers and shippers, that steer our nation on a course to meet the twin challenges of energy independence and reducing greenhouse gas emissions, and do so according to goals and performance metrics (rather than naked political power) provide the best policy formula and also set the stage for the best message.

Nothing happens in politics with strong leadership, both outside and inside the Beltway, and a strong desire to pass legislation. The fact that groups such as business, labor, and the environmental communities are activated for many of these efforts is a great sign. Notwithstanding the 100% ideological purity and certainty often demonstrated by advocates on this blog, all of us will have to hold hands, work together, and modulate our individual desires according to what the public and their elected representatives will support. This requires that we have the political maturity to take a longer view, recognize we cannot get everything we want, and work toward the center where majorities are found in this representative democracy.

Steve Van Beek

Ms. Caruso's question this week is a much needed reality check. Both those who have responded thus far and she have done an excellent job of outlining the arguments in support of more spending on transportation infrastructure and more revenues through increased fuel taxes.

I don't need to rehash those arguments or the facts cited in support of them. But I do have some additional questions and reflections:

1. Every federal policy flag points toward new regulations (i.e., much higher fuel economy standards) and legislation (i.e., cap and trade, and various so called "livability" schemes) intended to incentivise and coerce Americans into radically reducing the use of gasoline and diesel to power motor vehicles. Isn't it a bit irrational to focus the collective energies of the transportation public policy community on modestly raising fuel taxes, over the objections of the President, his Secretary of Transportation and at least a major portion of Congress?

2. Is that focus at least in part responsible for our abject failure to convince Congress and the Administration of the urgency of a multiyear reauthorization bill being enacted?

3. Ken Orski estimates that to pay for Chairman Oberstar's vision of a multiyear bill, an increase in fuel taxes of 20 cents/gallon is required. To echo and broaden his question, who among transportation users will be the first to embrace an increase of that magnitude?

4. The national poll commissioned by HNTB, released on September 1, underscores the public's skepticism about increased fuel taxes. For example, "even when considering the possibility of an impoved economy (two consecutive quarters of economic growth), 64 percent of Americans still wouldn't support a 10-cent increase in the gas tax...." When asked which of several mechanisms should be used "to pay for America's roads and bridges in the future", only 16 percent supported increased fuel taxes.

5. I don't doubt John Horsley's assertion that when properly briefed, a focus group can be convinced to support a nickel increase for "improving better transportation systems in their community." But that suggests that "in their community" may be the critical variable. I wonder what their answers would have been if they had been asked to support a 10 or 20-cent increase to fund the follow on bill to the last one, which had over 7,000 earmarks, over 100 categorical grant programs and the usual donor/donee compromises.

6. And then there's the unpleasant fact that the House has passed a massive fuel tax increase this year, known as cap and trade. Even though the trust fund has collapsed, not a dime of the hundreds of billions of dollars to be generated by a floating tax on fossil fuels is to be deposited to the trust fund.

I believe with every fiber of my being that we have a transportation infrastructure crisis in the country, which will rapidly worsen as the economy grows again. So I raise these facts and questions not to undermine the effort to address it. To the contrary, I want the transportation community to find a path to solutions that will be politically feasible and effective in convincing the American people that they should support robust infrastructure investments.

We are badly off course. I fear that we now face several years of short term extensions (short term extensions of aviation programs are now entering their third year). We need to use this time, to borrow the President's favorite phrase, to reset conceptually and politically our approach to what we all agree are critical needs.

While the current state of the U.S. economy makes raising fuel taxes a politically sensitive issue, it is important that Congress recognize the dire condition of our nation’s infrastructure and demonstrate the courage necessary to find the critical funds to maintain our roads and highways.

The harsh reality facing Members of Congress is that increasing fuel taxes currently stands as the only viable option for generating the income needed to sustain the highway trust fund.

In 2008, the National Infrastructure Commission recommended to Congress a series of options for increasing highway trust fund revenues. In addition to a fuel tax increase, proposals put up for consideration in Congress included implementing a vehicle miles traveled tax, the imposition of tolls and privatizing the nation’s infrastructure.

Critics have attacked the increase in the fuel tax in favor of alternative options. But none is a more effective solution than the fuel tax, which has been in place since the inception of the interstate highway system.

Until a more concrete, reliable proposal to tax motorists based on the number of miles traveled can be developed and debated, fuel taxes remain the most efficient, effective, and equitable method for raising infrastructure development funds.

Tolling schemes result in double taxation on motorists who already have paid for infrastructure improvements through fuel taxes. What’s more, tolling significantly reduces the economic activity of highways located within a tolled area.
Tolls also incentivize drivers to use roads not equipped to handle large traffic flows or tractor trailers, creating un-necessary safety risks.

What’s more, states develop tolling strategies that disproportionately affect out-of-state drivers. For example, Pennsylvania’s proposal to toll Interstate 80 -- the commonwealth’s third attempt to do so -- would charge toll fees on trucks and out-of-state vehicles, but allow local drivers to travel the same roads for free. Such a concept, expanded to a national level, would wreak havoc on interstate commerce and cause many drivers to alter their driving routes to avoid becoming ensnared under a particular state’s tolling.

Privatizing roads represents a far worse solution, requiring what essentially amounts to the sale of American, public assets.

The visionaries who created the Interstate Highway System in 1956 sought to create a national highway network serving the public good. Congress needs to carry on that legacy.

Americans make hundreds of decisions on how they spend their money each day -- Do I go to McDonalds today or pack a sandwich? Do I pay this bill or wait until Friday? Do I buy gas today or take the Metro? All these decisions are balanced against individual needs, priorities and desires.

Paying for a solid transportation system isn't any different. What is different, however, is the magnitude of the decision and how policymakers talk about it. Last year AASHTO held a series of focus groups to get a better handle on what the public understands about our national transportation system and how to fund it. When asked, "Would you support a five-cent gas tax?" almost every person in these meetings shook their heads "no." But when told that this increase would be about $1.50 a week -- or the price of only one cup of 7-Eleven coffee, to a person they raised their hands in support, especially when told the revenues would go toward improving better transportation systems in their community.

The state of Washington had a similar experience in 2003 and 2005, when the legislature approved two significant increases to the gas tax (5 cents and 9.5 cents respectively) The tax increase proposals specified the transportation projects of statewide and regional significance that would be result from the increased revenues. The result? A public effort to repeal the increases was soundly defeated by the voters and the dedicated projects are underway or are completed.

The federal portion of the gas tax hasn't been raised from its current 18.4 cents a gallon since 1993. Changes to the gas tax must be taken into consideration, along with many other options identified by AASHTO, including container fees, tax credits, tax credit bonds, a share of customs revenues and a mileage fee. (Go to http://AreWeThereYet.transportation.org for more details).

Our highways, bridges, transit systems and buses are aging and need significant repair. Our population and economy are going to expand, adding to transportation demands. Some straight talk about funding is needed. The states' departments of transportation have shown they can deliver the goods with the monies they have -- but more is needed if we want to achieve our national goals to save lives, double transit use, reduce congestion, improve the environment, and repair our infrastructure.

ATA joined the U.S. Chamber of Commerce, the National Association of Manufacturers, and the AAA last week in urging Congress to quickly pass a long-term National Surface Transportation Bill that reduces congestion and improves the flow of commerce. Making investments in our nation’s highways is critical to the recovery and growth of the U.S. economy.

ATA supports paying for these improvements through an increase in the federal gasoline and diesel fuel taxes. The fuel tax remains the simplest, most cost-effective solution for funding crucial highway infrastructure.

As we’ve discussed before, traffic congestion poses a great threat to U.S. productivity. This is especially true in our world of sensitive just-in-time logistics systems. The Texas Transportation Institute's 2009 Urban Mobility Report indicates that congestion creates a $87.2 billion annual drain on the U.S. economy in the form of 4.2 billion “lost hours” stuck in traffic and 2.8 billion gallons of wasted fuel.

If we don’t address this problem, it will only worsen. U.S. freight tonnage is expected to increase more than 25 percent over the next 10 years. With trucks delivering nearly 100 percent of consumer goods to stores around the country, repairs and additional highway capacity are necessary to accommodate this growth.

At present, 18.4 cents from every dollar spent on gasoline and 24.4 cents from every dollar spent on diesel goes into the National Highway Trust Fund. This tax has not been adjusted since 1993, yet costs of highway projects continue to escalate with the costs of labor and materials. Today, one dollar purchases the equivalent of 40 cents worth of pavement in 1993. This is a very poor formula for maintaining a healthy, let alone robust, highway trust fund.

In 2006, commercial trucks made up 12.5 percent of all registered vehicles, but paid 36.5 percent of total highway-user taxes, or $37.4 billion in federal and state highway-user taxes. ATA supports the fuel tax increase because it is by far the most cost-effective solution, costing only a few cents on the dollar. Other user-taxes such as tolling have much higher administrative costs that reduce the total amount of tax receipts available for constructing these necessary highway projects. Effectively targeted repair or replacement of highway infrastructure is vital and comes at a price. Of any method available, the federal fuel tax makes the most sense, especially during a recession, because it maximizes the value and results of tax-payer’s contributions while delivering the highway infrastructure needed to help our nation thrive.

The unprecedented, unfortunate, and destructive effort by the Republican leadership in the House to politicize the already complex and difficult reauthorization process shows why the Obama Administration has been reluctant to make transportation yet another “front burner” issue. After receiving no Republican support for the economic recovery, they understandably have little interest in providing another target for demagogic, misleading, and inflammatory partisan political attacks (think “Death Panel”).

The good news is that there is sufficient momentum, broad based support, and clarity of objective to move this agenda forward. The House Transportation and Infrastructure Committee has been hard at work for 30 months and has delivered a solid outline for the reauthorization with a whole new approach. The Administration is now in place with some extraordinarily talented people who are ready to engage, refine, and fine-tune the legislative proposals. There is a consensus among the interest groups. Forums highlighting infrastructure needs and demonstrating local commitment are being held literally from coast to coast. As a result of excellent work by two high level blue-ribbon commissions appointed by the Bush Administration, there is a very clear path in terms of the need, the policy outline, and the future of revenue requirements and sources.

Most important of all, the public is there. According to Republican pollster Frank Luntz, infrastructure investment is overwhelmingly supported across party, geographic, and philosophical lines. A majority of Republicans, Democrats, and Independents would raise their taxes 1% to fund infrastructure. That is more than necessary to get us back on track. In fact, given the state of the economy, there is no interest in raising taxes this year or maybe even next; no one wants to dampen the recovery. Working together with the vast coalition for reauthorization, Congress can solve the funding question. Approving a revenue stream that would take effect after recovery is firmly under way would provide financing in a deficit neutral way, even if we borrow against it for a year or two. Congress and the American people could get on with the job of rebuilding and renewing America.

Thoughtful people everywhere should reject the polarizing and destructive approach of the Republican leadership and agree to a reasonable timeframe to enact legislation for the next construction cycle. There is nothing more important than to pull Congress and the country together physically, fiscally, and politically; we need a robust and urgent effort to make our communities more livable while we help politicians figure out how to work together again.

The “Tea Party” protest that descended on the National Mall this month reminds us that any mention of a tax increase galvanizes a loud and passionate opposition. The anti-tax sentiment is a strong force, but advocates for a safe and efficient transportation system are capable of meeting the challenge as long as we are as willing as the other side to stand up for our principles.

The message may not fit on a bumper sticker as easily as an anti-tax sound bite, but we should still endeavor to inform the public about the benefits of increasing the gas tax. ASCE estimates that almost $740 billion is needed over the next 5 years to bring the road and transit systems up to a “good” level – and that doesn’t take into account the fact that by 2010 the gas tax will have lost half of its purchasing power since it was last raised in 1993. The National Surface Transportation Policy and Revenue Study Commission and the National Surface Transportation Infrastructure Financing Commission agree that we must raise the gas tax and the federal government needs to take an increased role in surface transportation.

We need to show Congress and anti-taxers that these are the solutions people want. Those of us who post on this blog represent hundreds of thousands of people. We have the opportunity to leverage their influence and energy as we make our case. ASCE is arming our members with the tools to educate and inform their coworkers, families, friends, and community groups about the condition of the nation’s infrastructure and how we must take action to restore it to its former glory. The 2009 Report Card for America’s Infrastructure illustrates the problems in a way that is universally understandable, and gives examples of how the solutions would positively affect local communities.

Gas tax opponents are not just in Washington, there are advocates in every city and town across the country and we need to be there to serve as a counterpoint. I would like to commend the US Chamber of Commerce, the National Association of Manufacturers and the American Trucking Organization for endorsing a gas tax increase last week. I challenge all the contributors on this blog to enlist their members, clients or whomever they represent in this important cause. All the studies and revenue projections in the world are not enough to prove our point; we need advocates winning the hearts and minds of drivers at home.

While there appears to be substantial (but by no means unanimous) support for raising the gas tax within the business community, none of the advocates have stated what they would consider as an "appropriate" or "adequate" increase in the price of fuel. According to Rep. Oberstar's testimony before the House Ways and Means Committee, the fuel tax and other excise taxes are expected to generate no more than $236 billion at current rates over the next six year period --- or roughly $39 billion/year. To cover the annual $36 billion shortfall in Chairman Oberstar's proposed $450 billion 6-year program (or roughly $75 billion/year), would require a tax increase of 20 cents/gallon (a one cent increase in the federal fuel tax currently generates approximately $1.8 billion/year.) Is the business community prepared to advocate a 20-cent/gallon tax increase? Or should we aim for a more realistic gas tax hike of say, 5-8 cents/gallon and accept its consequences, i.e. a more modest program than that proposed by Rep. Oberstar?

With only hours to go before the current bill expires, it’s obvious that we are in overtime, and that the key issue continues to be how to pay for the system improvements we all need. Arriving at a positive outcome on this issue is a tall order, notwithstanding the leadership being exhibited by some, notably the Chamber, NAM and the ATA (whom I hope will all be chiming on the issue this week.) We also have the clear advice from the two congressionally sponsored commissions that supports the case that increased investment is needed and that we should bite the bullet and pay for it.

On the other side, we have the political belief that any tax is a bad tax and that any time (especially a time when the economy is down) is a bad time. We need to realize the strength of that argument, but at the same time refute it with the facts about economic benefits to be gained and jobs to be produced when we invest in our future. We know that ordinary Americans, in fact, will usually support transportation investments, and even the measures to pay for them, when they have some assurance as to what they will gain and an understanding that performance will be monitored. We see that regularly in transit and highway referenda around the country. The high ground here is relief from congestion, support for business and an investment in the communities that folks want to live in. Those who are blocking action should be seen as standing in the way of needed investment rather than as protecting the taxpayer.

It’s hard to predict when the logjam will break. Eighteen months from now we could be in the same stalemate unless there is leadership from the Congress and the Administration. Breaking that logjam will require some creativity—new forms of revenue, possible supplementation as a continued form of stimulus, greater flexibility in tolling and charging, and the like. Meantime, conditions worsen and opportunities for long term investment are foregone. Simply putting off the debate to a time uncertain is not an answer. Whatever the extension period, it should be used productively to explore all the possibilities.

The short answer to today’s question is there really are no good options, other than raising the gas tax, to pay the bill for transportation in the near term. Two independent commissions have thoroughly examined the issues and came to the same conclusions – the funding needs are staggering and the federal gas tax is the best near-term funding solution. Tolling, public-private partnerships and other funding and financing tools can help fill the gap, but they can’t close it.

Policymakers who argue we don’t need to invest more in transportation and that federal gas taxes should never be raised, need to recognize that the alternative in the near term is a significantly scaled back program. They will be shortchanging the American people with an outdated transportation system that impedes economic development and quality of life, rather than fostering economic growth, safety and mobility. We’re already far behind in maintaining the existing system, let alone improving and expanding the system to meet future needs.

There is no painless way to do what needs to be done for transportation going forward. In some form or another, users of the system will pay more, whether it’s a gas tax, a toll, repaying bonds, freight fees, or any other scenario. The reality is that, through the purchase of more fuel efficient vehicles and the effect of inflation, road users are paying significantly less tax per mile travelled today than they were when the gas tax was last adjusted in 1993.

Last week AAA joined the U.S. Chamber, NAM and ATA to reinforce the message that transportation should be a priority on the Congressional agenda, and to demonstrate that diverse organizations with different constituencies have come to the same conclusion about the need to increase investment in transportation. Our organizations have never taken tax issues lightly. If members of Congress would put the political games aside for a moment and recognize the broad stakeholder support for an array of funding solutions, including the gas tax, perhaps a rational discussion could occur about how to do this in the context of challenging economic times. The key to getting public buy-in is to give them a program worthy of additional investment.

ACT believes that getting a transportation bill done quickly should be a national priority. When you consider that much of the success of the stimulus bill has been a result of the transportation spending, it is obvious why many lawmakers want to pass a new bill soon: transportation spending = jobs. However, the rush to get a bill done should not overpower the need to get the right bill done. Raising the gas tax or any other revenue-raising measure will be a politically sensitive subject, as we have not proven the effectiveness and need for increased transportation revenue to the public. However, I think most experts agree that Americans are willing to pay more for performance. One of the good examples of this concept is the 2005 vote in Washington State to raise the gas tax. The success of that vote was directly tied to two elements: a well-defined need that the public could understand, and the continued efforts of WSDOT to show their performance through the Grey Notebook. We need that level of performance measurement to be contained in the next bill if we are to convince the public that more revenue is necessary.

It is ACT's position that no matter what size the bill is, the policy behind the number is most important. With that said, ACT is supporting a robust transportation bill. However, money does not come from thin air. There needs to be revenue-raisers in this bill and I believe it is a mistake from both a policy and political perspective to begin taking options off the table. I believe that in order to fight some of these headwinds, industry partners must continue to push and promote to Congress, the President and the public that the reforms tied to more effective transportation spending will have benefits that they will be able to follow and judge for themselves.