After 22 months of deliberations, the National Surface Transportation Policy and Revenue Study Commission report is out, with much of the attention zeroing in on its call for a big boost in the federal motor-fuels tax. The study, released Jan. 15, drew positive reactions from construction and transportation groups but was blasted by Transportation Secretary Mary Peters, who is also the panel’s chairman, and congressional Republicans.

Debate on the report could flare at congressional hearings starting Jan. 17. But the study’s true impact may not be felt until 2009, when it could help a new President and new Congress craft the next major highway and transit bill. The commission was established by the last such measure, 2005’s SAFETEA-LU.

Related Links:
  • NTSB Finds Fractured Gussets in I-35 Span
  • “We have concluded that our surface transportation system in America is at a crossroads,” panel vice chairman Jack Schenendorf says. “We have a looming crisis coming.” Federal and nonfederal governments now spend less than 40% of the $225 billion to $340 billion a year the panel estimates is needed for roads and rails, says Schenendorf, a former top House Transportation and Infrastructure Committee aide. “We have to increase our investment and close this gap.” He adds, “The federal government needs to be a full partner in this effort.”

    To keep the federal funding share at its current level of 40% of total surface transport spending, the panel calls for hiking the federal fuels tax by 5¢ to 8¢ per gallon annually for five years. That would push the levy from 18.4¢ to as much as 58.4¢ per gallon. After that, the panel wants to index the tax for inflation.

    Other revenue proposals include a “federal ticket tax” on transit and passenger rail riders; and a new federal fee plus a share of federal customs duties to help finance freight transportation projects. It also calls for higher state fuels taxes, broader authority to put tolls on Interstate highways and more public-private partnerships.

    Moreover, the commission proposes major highway and transit program changes, including steps to have projects completed faster and shrinking 108 federal programs to just 10.

    Nine of the 12 commissioners endorsed the recommendations, including four appointed by Democrats and five named by Republicans. The other three, led by Peters, dissented, saying: “To simply modify historic methods of providing infrastructure relying on increases in the federal fuel tax and inviting political earmarking is a recipe for failure that we, as a nation, can no longer afford.”

    DOT Secretary Peters, chair of the 12 person panel, dissented from its report, joined by two other members.

    Transportation and construction groups welcomed the panel majority’s findings. John Horsley, American Association of State Highway and Transportation Officials’ executive director, says, “In my view, the commission got the big issues right,” including a strong, continued federal funding role.

    Jeffrey D. Shoaf, Associated General Contractors’ senior executive director for government and public affairs, notes the panel’s call for Congress in 2008 to fix the projected Highway Trust Fund highway account deficit, and says, “I think Congress wants to that.” Beyond that, he says, “This is the opening kickoff of the transportation reauthorization.”

    Peter Ruane, American Road and Transportation Builders Association CEO, says the fight over higher gas taxes will come in 2009, adding, “No matter what the majority [party] is, we think that the merit of that suggestion, notwithstanding its difficulty, can carry the day.”

    Commission Recommendations:
    Fix projected Highway Trust Fund highway account deficit
    Hike federal fuels tax 5¢ to 8¢ per year for five years, indexed for inflation after that
    Higher state fuels taxes
    Federal “ticket taxes” for transit, passenger rail
    Federal fees, share of customs duties to pay for freight-related infrastructure
    Broader authority for tolls on Interstate highways; congestion pricing on Interstates in major metro areas
    Encourage use of public-private partnerships, though with conditions
    (Beyond 2025)
    Shift from fuels tax to vehicle-miles-traveled charges
    Program Changes
    Speed up project delivery, including faster environmental reviews and permitting
    Shift from 108 federal surface transportation programs to just 10, including infrastructure asset management, congestion relief, freight, safety, passenger rail, environmental
    Set up an independent commission, like the Defense base closure panel, to oversee national transportation spending and revenue plan