To me, investing in the nation’s modern transportation system is the definition of good federal spending.

It’s a lifeline, creating jobs, driving economic growth, enhancing security and making the United States more competitive. Through the Highway Trust Fund users have provided the revenues necessary to improve the facilities they use and those revenuesprovide a positive return to the users and the overall economy.

Current proposals don’t address the primary issue we face: Our country will be best served with a long-term, dedicated and sustainable funding mechanism.

A one-time transfer of war savings out of the general revenue is welcomed as a stop gap measure, but it’s not a solution. And it sets a precedent.

The firewall around the Highway Trust Fund was established for good reason. That guarantees road users pay for the infrastructure they use. What’s more American or free-market focused than that?

Yet, there hasn’t been an increase in revenue for 19 years. It’s difficult for any organization to maintain its assets – let alone grow – under those circumstances.

Past discussions have included funding cuts of up to 30 percent. That would cost one-half to 1 million jobs. Such actions, particularly when our economy is struggling, are simply unacceptable. I’m open to any suggestions that produce enough money. But if we want jobs now, we need to increase revenue now.

Just last week the Association of Equipment Manufacturers released a survey that found 65 percent of the U.S. electorate said they’d be more inclined to vote for a candidate with a strong position on rebuilding the nation’s infrastructure.

So I say let’s get to work to find the best way to make that happen.

Yarossi also is the current chairman of American Road and Transportation Builders Association—www.artba.org

Read additional perspective from Yarossi here: http://www.hntb.com/sites/default/files/issues/1.23.12_Yarossi_TampaBayOnline.pdf

The issue is not whether there is "good spending" or "bad spending." Of greater significance is the importance of recognizing the nature and value of investment in the nation's transportation infrastructure. Some have claimed that "investment" is just another word for "spending." Clearly, that is not the case, and treating investment in America's key capital assets as the same as spending on operations or subsidies can create the circumstances in which we now find ourselves, that is, a transportation system that is aging, congested, and deteriorating and on which we can no longer rely for an efficient and productive economy.

While the federal government does not distinguish in its budgeting between capital and operating expenditures, almost every other governmental entity, at all levels, does, and of course the accounting principles applied to the private sector depend on this distinction. Even in the current environment of slow economic growth, high unemployment, and unsustainable budget deficits, "wise" capital investments can contribute to economic recovery, improved productivity, and the enhanced tax revenues, on which balanced federal budgets can be constructed. Such investments can, thus, be justified, even in times of fiscal constaint and reduced spending. Indeed, such spending is an urgent requirement of our current economic and fiscal circumstances.

As the Bipartisan Policy Center's National Transportation Policy Project (NTPP) pointed out in its June 2011 report, "For years there has been overwhelming evidence that the U.S. is falling short in making the infrastructure investments needed to provide for the long-term needs of our growing population and economy." As transportation spending faces the same pressures as all other elements of the federal budget (circumstances that are likely to remain unchanged for many years), reforms should be implemented that will allow us to idenfify "wise" investments and to establish the institutional framework and decision-making processes that will produce investments that will bring the greatest benefits and economic returns.

In January 2011 NTPP released a report by Douglas Holtz-Eakin and Martin Wachs on the relationships between investments in transportation infrastructure and the nation's short- and long-term economic well-being. They pointed out that not all transportation investments were equally effective in creating jobs or providing for economic growth. Different expenditures can have different short- and long-term impacts. It is essential, the authors noted, to focus on long-term impacts. "Well-targeted transportation investments can deliver long-term benefits in terms of improved efficiency and productivity by reducing costs associated with congestion, environmental damage, and accidents," Holtz-Eakin and Wachs wrote. "At the same time they can also create employment opportunities in the short-term and contribute to the nation's economic recovery."

These words would seem to provide an to the question of what "good" transportation spending is.

There’s no question but that some spending is better than other spending. The real problem, however, is that Washington’s lexicon doesn’t distinguish between spending and investing. A great many observers have noted – most recently former Secretary of Transportation Andrew Card at the Transportation Research Board’s Annual Meeting in Washington last week -- that if the federal government used a capital budgeting approach instead of scoring every investment as a current expense, we might be able to figure out the real economic return on our transportation investments and thus channel funds into the most worthy projects. It’s a time-honored calculus in business and, applied to public works, would restore people’s confidence in government decision-making. Alas, the prospects for changing the way we score outlays aren’t bright.

Even more dispiriting than our inability to evaluate the performance of our transportation investments is the inability of our institutions to engage in the long overdue rethinking of our financing mechanisms that every transportation policy report issued in the past several years has recommended. It’s a familiar Washington syndrome: We organize commissions, populate them with talented and experienced people, and then ignore what they tell us.

But it’s a mistake to throw brickbats at politicians for not tackling these issues effectively. Whether we experts like it or not, political priorities reflect those of the electorate. The simple truth is that the public at large is a long way from camping out in McPherson Square over deficiencies in our transportation system.

The University of Virginia’s Miller Center, with which I am affiliated, conducted another of its transportation policy conferences in November and targeted more effective "messaging" as perhaps the most important prerequisite to more effective policy making. Encouragingly, we learned that a number of well-conceived and well-financed publicity campaigns are ramping up now in the hope of putting transportation on the national policy agenda in a far more conspicuous way. Perhaps by leveraging this election year, they will generate the pressure that’s needed to ensure we find a way to support an appropriate level of transportation investment – at least with near-term stopgaps.

What is needed in the longer term, however, is a major adjustment in the way we think about transportation. Of all the infrastructure networks that Americans depend upon – including water/sewer services, telecommunications, electricity, natural gas, broadband, home entertainment – transportation is the only one that requires annual appropriations from Congress. As successful as our federal-centric system was in connecting up the country during the last century, everything is different today -- how we work, where we live, how we power our vehicles, how we connect to each other. The pace of change appears to be increasing exponentially. At the risk of being accused of Newtonian grandiosity, we need transformational thinking about the best way to provide for and maintain a transportation system that will serve us appropriately for the next hundred years. Until we embrace a more contemporary approach to transportation, with a more relevant division of labor between our federal, state, and local governments and a determination to pay our way through properly designed user fees, it will be impossible to know in too many cases whether we are making the right choices.

Let’s hope that the messaging campaigns are effective and that Washington finally accords transportation the priority treatment it deserves. A lot of fresh and relevant ideas have been put on the table in the past few years. It’s time to notice them. Increased investment in transportation is a non-optional prerequisite to a robust future for America, but that increased investment will remain beyond reach without some genuine policy breakthroughs.

I think there is widespread agreement that transportation spending is a wise investment that pays dividends now and into the future. Certainly, there are examples of both bad and good transportation spending over the years. The public reaction to high-visibility projects like the now-infamous “Bridge to Nowhere,” readily illustrates the “bad”, whereas the I-35W bridge replacement in Minneapolis was viewed as necessary and good. The public is most upset when they feel policymakers don’t have a strategic investment plan that clearly outlines where revenues will go and the expected benefits. And when neglecting our infrastructure leads to decay and more expensive repairs, the taxpayer is justified in questioning the competence of those who lead.

In January 1983, President Ronald Reagan doubled federal gasoline taxes. During the legislative debate of the previous year, he said it would take a “palace coup” to gain his support for increasing the gas tax. But as negotiations got serious, what were once horrible funding options took on a new light. Upon signing the bill containing the tax increase, Reagan described it as “an investment in tomorrow that we must make today.”

There has been much talk of President Reagan’s influence surrounding the recent Republican Presidential primary. Candidates are in a fierce discussion about how much they align with Reagan’s governing philosophy and his resulting conservative legacy. And I would expect a similar Reaganesque, “storm the palace” statement from all of the candidates if asked their opinion on raising the federal gas tax right now. But Reagan’s decision and actions while President just go to show how much more difficult it is to govern than to campaign, and how in order to do what is in the best interest of the country, sometimes compromise is necessary.

Today, it is important that both Chairman Mica and Chairman Boxer make progress on getting their respective bills considered and to a conference committee. Perhaps the best hope for a positive outcome is to get to a point where negotiations are serious, similar to 1982 on President Reagan’s watch. We need both program reforms and a solid investment plan, as well as realistic funding options, to help make the plan a reality.

I would note at the outset that this topic was heavily discussed here in Washington during the past week at the 91st Annual Transportation Research Board (TRB) conference. Given the current state of our transportation infrastructure, it is beyond question that substantial investment - whether private or public - is required to ensure that our transportation infrastructure is in a state of good repair so as to support sustainable economic growth and ensure the safety of the traveling public. This entails, I would respectfully suggest, not so much a matter of "good" or "bad" spending, so much as a need to maximize the impact of any spending and commensurably the ROI on public or private monies. Traditional metrics have often equated this to lane miles of highways, runways or gates at airports, or new light rail or BRT lines in and out of urban centers. Certainly these projects will always be essential. However, in making decisions going forward it will also be necessary to account for the ability of intelligent transportation systems (ITS) to enhance transportation assets already in use, and to optimize new systems as they are deployed. The second decades of the 21st Century, more than any that preceded it, will be defined by data as much as concrete and steel, and it is incumbent upon decisionmakers across party and public / private lines to account for this from the earliest stages of planning through procurement and operation of the transport. That, above all else, will ensure that private or public transportation spending is indeed "good" spending.

Of course there is “good” and “bad” spending. Many of us consider spending “good” when the benefits from the expenditures exceed the costs.

So, yes, there can be “good” and “bad” spending on infrastructure, but the federal government seems to have problems identifying the “good”. It was, for example, pushing for a national “High-Speed Rail” network, while its Federal Railroad Administration was unable to provide even one cost-benefit analysis to show that the benefits from such a system would exceed the costs. This suggests that the financing of transportation infrastructure is too important to be left to politicians.

In our market economy, we try to ensure that benefits from investments exceed their costs by getting customers — not the government — to pay the costs, as in the cases of necessities such as food, water, telecommunications, and even self-financing toll bridges and roads.

Many of our urban areas suffer from excessive traffic congestion. Express toll lanes, financed by private investors, and paid for by means of electronic (e.g. E-ZPass) tolling, are likely to be “good” infrastructure projects meriting urgent priority.