As you are reading this, transportation leaders in Congress are writing the federal surface transportation law that will determine highway and transit investment through 2009. What it contains and when it is enacted will depend on how well we convey this message: "Invest in Transportation: Invest in America."
Increasing transportation investment by $5 billion for each of the next two years through a user-fee-based program could create over 200,000 new jobs without adding a cent to the deficit. Stimulating recovery may be just what the economy needs now. Ramping up the highway program to at least $45 billion annually by FY 2009 and transit to at least $11 billion annually will help sustain that recovery.
The men and women of the American Association of State Highway & Transportation Officials (AASHTO) share with the transportation industry the conviction that transportation is crucial to rebuilding our economy and to improving our quality of life.
The facts are compelling:
* No less than 42,000 jobs are created through every $1 billion in highway and transit investment;
* One in 11 Americans holds a transportation-related job, some 11.3 million Americans nationwide;
* Each year we move more than 14 billion tons of freight by road, rail, air, water or pipeline, with a value to our economy of at least $11 trillion. Further, domestic freight is expected to double in the next two decades; and
* Highway travel increased from 2.1 to 2.7 trillion miles in the 1990s and another 600 billion miles are expected to be added over the next 10 years.
In September 2002, AASHTO published an assessment of the nation's highway and transit needs from 2004 to 2009 in a report called "The Bottom Line."
Not only will growing the highway program to a spending level of at least $92 billion a year be needed just to maintain road and bridge condition and performance, another $19 billion a year is needed to keep transit systems up to current performance levels.
Investment of up to $125.6 billion a year is needed to improve the U.S. highway system, and yearly spending of $44 billion would be required to upgrade transit. But all spending in these areas--be it for condition maintenance or for improvement--gives a boost to the economy, and that effect is sorely needed right now.
A few enhancements
The current six-year surface transportation law, known as the Transportation Equity Act for the 21st Century (TEA-21), allowed for an increase in the transportation program of almost 40% and opened the doors for a variety of innovative financing approaches states can use.
Most importantly it guaranteed that highway user fees would be used for transportation purposes and protected transportation funds with firewalls. Those protections must be maintained.
TEA-21 improved safety approaches and invested significant funds in the enhancement program, which has been warmly embraced by the traveling public. Though the enhancement program--which puts federal funds into such amenities as bike paths, historic preservation and scenic byways--dates back to the surface transportation bill that preceded TEA-21, under the more recent legislation enhancements have really come into their own. Enhancements build public good will for the entire transportation system.
TEA-21 will formally expire at the end of September. Where do we stand in terms of winning passage of a new highway and transit bill this year? It's true that our economy is tight; states are as strapped as they have been in half a century; and we recently fought a war, with the costs that involves. But that was the same backdrop almost 12 years ago when Congress showed the leadership to enact TEA-21's predecessor, the Intermodal Surface Transportation Efficiency Act, which increased federal investment 30%. TEA-21 followed six years later with an even larger boost. We must have the same kind of strong leadership today.
I am encouraged by our progress. Last year we were fighting against a proposed highway funding cut of some $8 billion--or, to look at it another way, 170,000 jobs. We won that battle a few months ago when Congress enacted $31.6 billion for highways this year. That was critically important because it set the baseline, or the starting point, for the reauthorization bill that will cover the next six years.
More vitamin B
Our AASHTO proposal is based on an objective analysis of need. And that means we must grow the highway program from $34 billion to $45 billion, and the transit program from $7.5 billion to $11 billion over six years, to begin meeting these pressing needs.
If this is done, the U.S. can look forward to the addition of 200,000 more jobs in 2004 and 2005--and a total of 650,000 jobs by 2009.
AASHTO proposes a variety of options to get us to the investment levels needed. We believe there will be some revenue increase as a result of the continuing growth of travel, recently estimated at $17.6 billion over six years; another $4.1 billion from the federal transfer of revenues from ethanol-blended motor fuels, or "gasohol," into the highway trust fund from the general fund; $4.4 billion from a drawing-down of reserves now in the federal Highway Trust Fund; and $2.6 billion from interest generated on that trust fund.
Further, AASHTO proposes the creation of an entity we call the Transportation Finance Corp., which would leverage and increase $34 billion for highways and $8.5 billion for transit through the issuance of tax-credit bonds.
Just a few weeks ago, U.S. DOT presented the administration's proposal for the six-year reauthorization program (SAFETEA). While we need to see more funding there, the U.S. DOT's reauthorization proposal maintains many features of TEA-21 we support.
AASHTO supports an ever-intensifying emphasis on transportation safety and to that end recently sponsored a nationwide National Highway Safety Leadership Forum in conjunction with U.S. DOT and several national groups with safety emphasis. With nearly 43,000 Americans being killed yearly on our highways, and more than 3.25 million people injured each year, a new drive for prevention and cooperation can only do good.
Security also will be a concern in the coming reauthorization, to a degree that seemed unnecessary six years ago. Our world has changed, and with it, our obligations to the public have changed.
Other important provisions of the SAFETEA proposal is a strong emphasis on freight and proposals for environmental streamlining to accelerate project delivery. Another is to put the revenue from the 2.5 cents-per-gallon gasohol tax into the Highway Trust Fund for transportation instead of into the general fund. That will make $4 billion available for transportation use over the six-year life of the legislation.
For more information on AASHTO's proposals for reauthorization, log onto our website at www.transportation.org. The opening page is currently configured to present reauthorization updates. Two other links are of special interest: www.transportation.org/bottomline/, which features AASHTO's objective "Bottom Line Report" detailing needs in the highway and transit areas, and reauthorization.transportation.org, which summarizes our reauthorization proposals.
