Management & Operations

Opportunities Arrive to Realign Transportation Program

Posted on August 25, 2008 by Jeffrey F. Boothe

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 [IMAGE]MET8p36large.jpg[/IMAGE] The next surface transportation bill is rushing headlong into the proverbial “perfect storm.” The winds that are threatening the Federal transit program are coming from so many different directions that it is difficult to know where to start in order to chart a course toward safer seas.

Stormy seas
Understanding the current state of the Federal transit program is crucial to charting a course to a different future. Thus, outlining some of the challenges that are roiling the seas is crucial to tacking to a different direction for the transit program. What are those challenges?

▶ Economic Competitiveness– The nation is in danger of lagging far behind other rapidly growing nations, such as China and India, in our surface transportation systems. While they have not yet caught up to the U.S., they recognize that the sustained growth of their countries hinge on a modern and efficient surface transportation system. To remain competitive, we must invest in the nation’s transit systems, roads, ports and intercity rail systems.

▶Highway Trust Fund– The Federal gasoline tax has not been raised since 1993 and remains at 18.4 cents, of which 2.5 cents is allocated to the Mass Transit Account (MTA) of the Highway Trust Fund (HTF). The average price of gasoline was $1.00 per gallon in December 1993 when the last gasoline Federal tax increase was approved and it was $2.50 per gallon in August 2005 when the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was signed into law. It has now risen to more than $4 per gallon in most communities.

Significant efforts were made by the House Transportation and Infrastructure Committee during consideration of SAFETEA-LU to raise the gasoline tax and then index it to inflation. However, these efforts were blocked by the Bush Administration and Congress lacked the political will to overcome the President’s opposition. Consequently, the Congress is now faced with the need to fill an $8 billion to $9 billion gap in FY 2009 and a nearly $20 billion gap in FY 2010 between receipts in the HTF and authorized levels for the highway program.

▶Escalating Capital and Operating Costs– Construction and operating costs are escalating at a rapid pace with little modulation projected for the future. The American Association of State Highway and Transportation Officials (AASHTO) estimates that construction costs increased nearly thirty percent between 1993 and 2006 and are projected rise to 47.9 percent by 2010. Rising fuel prices are only exacerbating this price escalation for construction. Moreover, the rapid increase in fuel costs is also dramatically affecting operating costs for transit authorities.

▶Greenhouse Gas Emissions– The transportation sector is responsible for 33 percent of the nation’s annual CO2 emissions, and those emissions are projected to grow due to rising travel demand. Passenger vehicles and trucks contribute 60 percent of the CO2 emissions in the transportation sector, which is the second largest and fastest growing contributor of greenhouse gases. Since 1980, the number of miles that Americans drive has grown three times faster than the U.S. population and almost twice as rapidly as vehicle registrations.

▶ Energy Independence and National Security– The nation’s land use patterns and increase in driving not only impact greenhouse gas emissions but also result in an increase in the consumption of oil. The Energy Information Agency issued a report in June, which found that world energy demand will grow by 50 percent over the next two decades, resulting in an increase of oil prices to $186 per barrel. Some argue that this estimate is too conservative since oil was approaching $150 per barrel by mid-summer. The transportation sector heavily relies on oil with 95 percent of the U.S. transportation system petroleum-based. More than 60 percent of that oil is imported, with a substantial portion of those imports coming from countries that represent potential national security concerns for the U.S., such as Iran, Venezuela, Saudi Arabia and Nigeria.

▶Changing Demographics– The nation’s population is expected to grow by 50 percent by 2050. The nation’s population will be older, more diverse and comprised of more single than married people. These people will drive less and have a greater need to be closer to necessary services. A surface transportation system that fails to recognize this transition and the impact it has on housing and transportation services will not adequately serve the nation’s population.


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