National Commission Calls for Big Investments in Surface Transportation

Yaro at National Commission.jpg
The National Surface Transportation Policy and Revenue Study Commission issued their final report this week, calling for investments in the nation's surface transportation network of $250 billion a year for 50 years from all sources. Predictably, the media jumped on the Commission's controversial proposal to raise the gas tax over five years by 25 - 40 cents a gallon and index it to inflation. (Currently the gas tax is 18.4 cents a gallon.) No doubt a big political lift, our educated guess is that this is the scale of investment needed to invest in capacity for robust and prosperous economic growth in the 21st century.

But there are other valuable recommendations and themes in the report that help advance the debate around the nation's next surface transportation bill, which will come up for authorization in 2009. The report underscores the need for real reform. The current transportation program, scorned for its earmarks and regional battles over funding, is likened to a block grant program to the states with negligible accountability. The Commission's proposed solution is radical program reform, reducing the 108 existing mode-specific funding programs (all siphoned through separate administrations, Federal Transit, Federal Highways, Federal Railroad, etc.) to 10, "mode-neutral", goal-oriented programs like "Rebuilding America," "Saving Lives," "Congestion Relief," and "Energy Security." These programs would be guided by national plans and performance standards developed for each program to drive decisions about project funding and measure progress toward meeting program objectives.

Finally, a new independent commission, called the National Surface Transportation Commission (NASTRAC) would oversee the development of a national strategic plan composed of the 10 new program plans described above. NASTRAC would recommend the funding amount to Congress, and in the manner of the Base Realignment and Closure process (BRAC), would be subject to a Congressional veto but no amendments. In no actions are taken, the recommendations become law.

The devil is in the details of course, and we need to better understand whether the proposed process can move the transportation program away from the politics and earmarks that have plagued it, and toward a goal-oriented system with measurable results. If performance criteria become the key factor in project decision-making, the challenge is finding the right performance criteria that will select projects that provide a high return on investment, promote transportation choice and safety, and produce the greatest efficiency. In light of the enormous challenge to reduce carbon emissions 80 percent by 2050, we recommend performance criteria that evaluate projects on the basis of their climate benefits. Coordination with existing land uses could also be used to evaluate projects that create new capacity, as has been done in California.

Getting back to the gas tax, the Commission provides a great service by not shying away from the serious funding gap needed to fix the falling-down bridges, congested roads, inadequate public transit, and lack of decent intercity rail in the nation. America deserves a modern and sustainable transportation system to fuel growth and prosperity in this century as previous generations built for us in the past. We cannot and should not throw money at a broken system, so let us dive into the task of reform so we can feel secure in the investments we must make in our future.

Image: From left, Ms. Rae Rosen (Federal Reserve Bank of New York), Mr. Robert Yaro (Regional Plan Association), and Mr. Gerald Shaheen (U.S. Chamber of Commerce) testify at the November 15, 2006 Field Hearing in New York. (Photo: National Surface Transportation Policy and Revenue Study Commission.)