Transportation Is Economy’s Lifeblood

Posted December 3, 2004 at 12:29pm

A major piece of unfinished business from the 108th Congress is the reauthorization of the Transportation Equity Act for the 21st Century — TEA 21. To some, it may be surprising that such a popular bill which provides long-term funding for our nation’s highway, transit and safety programs has been so difficult to complete.

After all, our transportation system is the lifeblood of our economy, and we need a first-rate transportation network to move our people, goods and services across the country in a safe and efficient manner. This is a program, funded primarily from user fees collected in the Highway Trust Fund, that pays for itself and provides big dividends for our future.

Could it be that the program has become too popular? As the Transportation and Infrastructure Committee worked to put together a reauthorization bill and move it through the House and through conference, we were faced with tremendous demands and expectations.

Donor states, those that contribute more in gas taxes collected in the Highway Trust Fund than they receive back in federal highway aid, want to see significant increases in their “rate of return” — ideally a minimum of 95 cents back for every $1 contributed. Donee states, those that receive more in federal highway aid than they contribute to the trust fund, do not want to see a significant decrease in their rate of return — citing generally older infrastructure, higher costs and higher levels of transit ridership, which hold down their gas consumption.

Many states are facing huge infrastructure projects with price tags that can exceed $1 billion. They make the case that these projects — such as the rail consolidation project in Chicago — have national benefits and simply overwhelm the resources of the communities and states where they are located.

The corridors program, which was created in 1991’s ISTEA, has been very popular, and we were under pressure to significantly increase funding to build these emerging routes — such as Interstate 69 or Ports to Plains — which will carry much of the increased trade traffic.

A legitimate case can be made for all of these priorities. They are valid concerns that probably deserve support. The only problem is that, because all the funding for the program is from user fees paid into the trust fund, it is a zero sum game.

Any increase for some group of states necessarily means a decrease for others. More funding for discretionary programs necessarily means less going out to states by formula.

Add to this mix hotly contested presidential and Congressional elections, which made the job all the harder with each passing day.

Does this mean it is impossible to craft a bill and conference report that can pass the House and the Senate and be signed by the president? No. But we need to be realistic in our expectations, given the resources we have to work with as we face this task. Thankfully, we received a major boost when the corporate tax bill passed recently changed the ethanol subsidy (ethanol has been taxed at 5.2 cents less than regular gasoline as an incentive), which will result in roughly $2 billion more in increased revenues each year.

As the 109th Congress convenes, the transportation bill will be the top priority of my subcommittee on highways, transit and pipelines and the Transportation and Infrastructure Committee.

The current extension expires at the end of May, and it is important that we put into place a long-term bill that allows states to do adequate planning and project management. But we also want to get the best bill that we can.

As we look at the cost of the transportation bill, we should be sure to also look at the cost of not adequately investing in our infrastructure.

Nationwide, road congestion costs the U.S. economy about $67 billion annually and wastes 5.7 billion gallons of fuel as engines idle in traffic jams.

We should consider the fact that the average American motorist pays $222 each year in repairs to automobiles due to poorly maintained roads.

We should consider the cost of lives lost since poor or hazardous road conditions contribute to nearly a third of all fatal crashes each year. One child out of every 84 born today will die violently in a motor vehicle crash, according to the American Association of Highway and Transportation Officials.

And what do we get from investing in our infrastructure: a pretty good rate of return. At a subcommittee hearing last year, various transportation economists and academics testified that research indicated that every dollar of highway capital has a rate of return of 30 cents per year, and that highway capital investment has been responsible for 25 percent of our nation’s gains in economic productivity. Not only that, but as overall long-run productivity gains are realized, federal and state tax receipts increase.

Beyond long-term economic benefits, this investment is an investment in well-paying jobs today. Building, managing and maintaining the nation’s highways contribute more than $150 billion to our GDP. It supports 1.9 million jobs in everything from construction to supplier industries. Roughly 350,000 people are employed directly by public transit systems, with tens of thousands of indirect jobs in the areas of engineering, planning and other related industries.

So as we begin anew our task of passing a reauthorization bill, building on the foundation that has been laid this year, I hope that we all keep our eye on the benefits the nation as a whole will realize if we do our job right. Of course there are many challenges, but as in prior authorization fights, I know that we will come together, make the hard decisions, and produce a bill that moves us forward.

Rep. Tom Petri (R-Wis.) is chairman of the Transportation and Infrastructure subcommittee on highways, transit and pipelines.