D.C. Metro crash || Photo: Reuters

Following the subway accident on June 22 in the Washington, D.C. Metro, resulting in the deaths of nine commuters, it was made known that federal safety officials had previously warned that the type of train cars involved could be unsafe in crashes, and called for them to be replaced or, at least, strengthened.

Still, the Washington transit agency did nothing after the federal warning. Not because they did not also see the same problem, but because the agency could not afford to replace the cars, which make up more than a quarter of those used in the system.

Metro — like most mass transit agencies throughout the country — is on the verge of operating in deficit, as a shortfall of $154 million is projected for fiscal year 2010.

A tax shelter, also, according to the terms of a lease-back agreement — in which Metro raised extra funds by selling its trains to private companies, such as SunTrust Banks Inc. and KBC Group NV, that would, in return, lease them back — meant the leased cars, like the ones involved in the accident, have to remain in service until 2014.

According to Bloomberg, “The National Transportation Safety Board had advised Metro to improve its rail cars after a January 1996 collision that killed a train operator. In a 2006 report, the NTSB said it was dropping the matter because (Metro) was citing funding concerns related to lease-back agreements…”

The problem: Any federal mass-transit inspections or findings are nothing but symbolic at-best. Unlike with the Food and Drug Administration, for example, the government cannot recall flawed equipment or issue citations for ignoring recommendations.

Transit State of Good Repair

Graphic: Federal Transit Administration

A 2008 report by the Federal Transit Administration, “Transit State of Good Repair,” said, “Roughly one-quarter of the nation’s bus and rail assets are in marginal or poor condition (implying these assets are near or past their useful life or have one or more defective or deteriorated components). The proportion of assets in marginal or poor condition jumps to one-third when the analysis is limited to the nation’s nine largest rail agencies (including these agencies’ non-rail assets).”

The disrepair, according to the report, is the consequence of the fact that “the total level of investment required to bring the nation’s bus and rail assets to a state of good repair is currently estimated at $25 billion ($2004). This investment would effectively replace all assets that currently exceed their expected useful life and address delayed rehabilitation activities. After eliminating the backlog, an additional $9 to $11 billion from all sources is required annually to maintain this state of good repair into the future. At present, annual capital reinvestment rates are only 60 (percent) to 80 (percent) of that required to address both the existing backlog and normal replacement needs.”

President Obama, with Vice-President Biden, signing the stimulus bill into law last February in Denver. || Photo: The New York Times

When the stimulus bill was passed last February, it sent billions of dollars to the nation’s mass-transit agencies. Still, the money was purposed for only new equipment and construction — nothing to operate the systems, even as many are cutting service, laying off workers or raising fares.

An agency may get a new bus or build a new bus shelter using stimulus dollars, but, potentially, they would not have the operating funds to employ a new driver to run the new bus to the new stop.

For several months following the release of stimulus funds to transit agencies, the Obama Administration seemed opposed to repurposing any of the federal money to keep transit operating budgets solvent. Instead, only the benefits of new building — such as job creation — was championed.

Last Friday, however, President Obama signed legislation into law enabling transit agencies to use up to 10 percent of their stimulus dollars to cover operating costs for equipment and facilities. The provision, oddly, was tucked inside the latest war spending bill.

[This is an excerpt from the text of the bill]
H.R. 2346: Supplemental Appropriations Act, 2009

Sec. 1202. A recipient and subrecipient of funds appropriated in Public Law 111-5 and apportioned pursuant to section 5311 and section 5336 (other than subsection (i)(1) and (j)) of title 49, United States Code, may use up to 10 percent of the amount apportioned for the operating costs of equipment and facilities for use in public transportation or for eligible activities under section 5311(f): Provided, That a grant obligating such funds on or after February 17, 2009, may be amended to allow a recipient and subrecipient to use the funds made available for operating assistance: Provided further, That applicable chapter 53 requirements apply, except for the Federal share which shall be, at the option of the recipient, up to 100 percent.

D.C. Metro crash || Photo: Reuters

Though the funds were made available following the Metro subway crash last week in Washington, D.C. — the potential cause of which has been associated with the operating budget problems of the city’s mass-transit system — the legislation has no direct connection with the accident.

Rep. John Mica (R., FL), ranking minority member of the House Transportation and Infrastructure Committee || Photo: Washington Post

Last week, the Obama administration offered a temporary finance plan that, if implemented, could put off legislation to overhaul federal highway and transportation programs. It would also delay a possible vote to raise the national gas tax past the 2010 congressional midterm elections. The proposal came just a day before Rep. Jim Oberstar (D., MN), Chairman of the House Transportation and Infrastructure Committee, released an outline of the legislation - THE SURFACE TRANSPORTATION AUTHORIZATION ACT OF 2009 - aimed at reforming transportation nationally.

Rep. Oberstar had been counting on a September 30 deadline — when the current law authorizing federal highway and transit programs expires — to bring lawmakers together to not only renew federal transportation funding but to also rethink how it is funded.

The proposed transportation bill calls for $450 billion in federal funding, which is a 57 percent increase over the $286.5 billion bill approved in 2005.

The following is an interview with Rep. John Mica (R., FL), ranking minority member of the House Transportation and Infrastructure Committee, about the recent developments of the transportation bill:

BLUEPRINT AMERICA: The current highway authorization expires at the end of September. So what exactly is expiring?

REP. JOHN MICA: Every six years Congress adopts a federal authorization for highways, which outlines transportation policy, projects, and funding distributions for the whole country.

BLUEPRINT AMERICA: Right now, however, the Obama Administration wants to delay authorization.

REP. MICA: We’re on the verge of a transportation meltdown. The Administration has proposed an 18-month extension of both the highway authorization bill and the highway trust fund. That will require, depending on how long it is extended, between $8 and $15 billion.

BLUEPRINT AMERICA: But, typically, the transportation bill is not authorized every six years – it’s generally extended.

REP. MICA: Right. I think the last time we tried to authorize it we had 13 extensions.

BLUEPRINT AMERICA: Are you opposed to this 18-month extension by the Obama Administration?

REP. MICA: Well, I think that it would be better to go ahead with the transportation bill Rep. (Jim) Oberstar has introduced. We have been working on the bill for some time.

Still, I think we take that bill as the starter. The problem you’ve got with an 18-month extension is that it puts many of the major infrastructure projects on hold. The 18-month extension is a job killer. It gives you a temporary relief with the highway trust fund, but because you don’t have projects approved and policy and funding mechanisms in place for the future, it ends up killing jobs and delaying decisions on projects across the country. For example, there are 6, 800 project requests in the House bill alone – all of these would go on hold.

BLUEPRINT AMERICA: How will the extension be funded – this $8 to $15 billion?

REP. MICA: They would take it out of general revenue, which would basically be deficit spending – and fund it. They have talked about some offsets, but I haven’t seen any specifics. Last year, however, we did allocate $8 billion to keep the highway trust fund solvent. That said, it was with no offsets.

When we’ve spent $3 trillion so far this year with no offsets – $8 to $15 billion seems like a very small amount.

BLUEPRINT AMERICA: In the meantime, what is to be done about the highway trust fund?

REP. MICA: The highway trust fund will continue to lose money – for several reasons – as federal funding is based on an 18.4 cents a gallon national gas tax that hasn’t been increased in years. One, because of the economy, there’s not as much motor vehicle traffic. And two, every day the fleet is becoming more efficient, so people are driving further and paying less.

BLUEPRINT AMERICA: Why, then, is the Obama Administration wanting to delay authorization?

REP. MICA: A political reason – because they don’t want to promote another tax increase, which sure puts them in a bind as most of the Democrats in Congress favor a tax increase. Also, I think that they’ve got themselves overextended with taking on many controversial measures.

BLUEPRINT AMERICA: What do you favor in terms of funding transportation?

REP. MICA: There are two things we need to do. We need to leverage the funds we have coming in through a host of creative financing mechanisms. One, would be a dramatic increase in public-private partnerships. Two, would be leveraging some of the funds that we have coming in using bonds, full faith, and credit of the United States. And, guarantee programs toward financing infrastructure projects. Three, the national infrastructure bank and other financing or assistance programs.

That’s the first part.

The second part is speeding up the process. Most projects that the federal government is involved with take an inordinate amount of time for approvals, and they cost much more because there are so many delays and hoops that people have to go through.

I offer what I call the Mica 437-day process plan, which is the number of days it took to replace the bridge that collapsed over the Mississippi River in Minneapolis. Rather than the seven or eight years it takes complete any other bridge, which would be the normal time frame.

BLUEPRINT AMERICA: And why did it just take 437-days to complete?

MICA: It was done on an expedited approval basis, which I think you could do with most projects that don’t change the basic footprint of the infrastructure that you’re rebuilding.

BLUEPRINT AMERICA: Is an expedited approval process included in the transportation bill? That said, are you supportive of the highway authorization?

REP. MICA: I’m supportive with reservations. First, I’m trying to move the process forward, but there are things, if I were writing it, that I would write quite differently. If the process continues to be open and participatory, then I can be supportive. It does need some clean-up, and it needs some revision. I’d like to see much more of the ideas that I have advocated on, such as speeding up the approval process and increasing the revenues that are available without raising taxes. Those are my two big ones.

BLUEPRINT AMERICA: What is the likelihood of the transportation bill passing?

REP. MICA: It’s 50-50. It’s hard to say if we can get support. I think that with rolling the bill out this week, we will have an option of our bill versus the 18-month extension. Then you just have to work it, and see if you can bring a coalition of people who are interested in building and solving the problem of infrastructure now, rather than putting it off until later.

BLUEPRINT AMERICA: And, what would you say of the support right now for the transportation bill?

REP. MICA: Well, I think it could pass in the House.

BLUEPRINT AMERICA: What about the Senate?

REP. MICA: A little bit more dicey.

BLUEPRINT AMERICA: You were quoted as saying, referring to the Obama Administration wanting to delay authorization, “That’s a real slap in the face to a lot of hard work … I would have been mortified if this had been done to me under Bush.”

REP. MICA: I’m not Rep. Oberstar, but for his administration, after working as hard as he has to move the bill forward, to have the rug pulled out from under him, with this just out of the blue proposal, is a hard pill to swallow.

BLUEPRINT AMERICA: In terms of your role as a Representative from Florida, and getting funding for your state and your district, what needs to happen to that process?

REP. MICA: Well, I’m more interested in the country at large in terms of infrastructure. If we can provide adequate funds for improvements across the country, then it benefits every district – not just my own. Simply, I’m not taking a parochial viewpoint for my own district or for my own state.

BLUEPRINT AMERICA: You are a Republican – and you support transportation and infrastructure spending?

REP. MICA: Well, I tell you though, if you’re on the Transportation Committee long enough, even if you’re a fiscal conservative, which I consider myself to be, you quickly see the benefits of transportation investment. Simply, I became a mass transit fan because it’s so much more cost effective than building a highway. Also, it’s good for energy, it’s good for the environment – and that’s why I like it.

BLUEPRINT AMERICA: If anything, you’d say that your time in Congress and on the Transportation Committee has brought you around to these ideas?

REP. MICA: Yes. And, seeing the cost of one person in one car. The cost for construction. The cost for the environment. The cost for energy. You can pretty quickly be convinced that there’s got to be a more cost effective way. It’s going to take a little time, but we have to have good projects, they have to make sense – whether it’s high-speed rail or commuter rail or light rail. We got to have some alternatives helping people – even in the rural areas – to get around.

D.C. Metro crash || Photo: Reuters

The Monday Metro accident in Washington, D.C., when a train car rear-ended another killing nine people, involved some of the oldest cars in the city’s young subway system. The cars had already been said to have vulnerabilities. Washington, however, is not the exception for using equipment that is outdated.

Earlier this year, in a two-part report on The NewsHour with Jim Lehrer, Blueprint America reported on the financial state of America’s mass transit systems, and focused on Washington, D.C.

More than a third of the equipment in the nation’s seven largest rail transit agencies, according to a recent report by the Federal Transit Administration, is rated in marginal or poor condition.

Still, it has yet to be determined if the old age of the Metro cars in Monday’s crash caused the accident.

Nationally, according to The New York Times, “Replacing all the equipment that has exceeded its useful life and finishing all outstanding station rehabilitations for just those seven large systems would cost roughly $50 billion, the agency estimated, and keeping the systems in a state of good repair after that would cost an estimated $5.9 billion a year.”

The stimulus law passed in February only contains $8.4 billion for transit capital improvements across the nation. That said, the recently introduced transportation bill will dedicate more funding than ever for transit. The Obama Administration, however, wants to delay that funding increase for at least 18-months.

Washington transit officials said they could not afford to replace the outdated cars, which make up more than a quarter of their system. Moreover, due to the terms of a complicated tax shelter, the city is obliged to keep like-cars in service until 2014.

The New York Times goes on to say, “Paying for capital improvements has been a struggle for many agencies. Although federal financing for capital improvements to transit systems has been rising, the share going to the largest systems has been shrinking as they have had to compete with new, smaller systems. So while the nation’s seven largest systems — in New York, Boston, Chicago, Philadelphia, Washington, New Jersey and San Francisco — carry 80 percent of the nation’s rail riders, and are in many cases among the oldest systems, they have received only 23 percent of federal financing eligible for bringing systems into a state of good repair, according to the transit administration.”

The following is a breakdown of how mass transit is funded federally:

[Transit Capital Assistance] [Fixed Guideway (Rail) Infrastructure Investment] [Capital Investment Grants] [Federal Transit Administration Formulas]

$8.4 billion total in stimulus spending for mass transit
TRANSIT CAPITAL ASSISTANCE
$6.9 billion	The stimulus bill provides $6,900,000,000 instead of $8,400,000,000 as proposed by the Senate and $7,500,000,000 as proposed by the House. 80 percent of the funds will be dispersed according to the Federal Transit Administration’s (FTA) Urbanized Formula. 10 percent of the funds will be dispersed according to the Federal Transit Administration’s (FTA) Rural Formula. 10 percent of the funds will be dispersed according to the Federal Transit Administration’s (FTA) Growing States and High Density Formula. In addition, mass transit funding in the stimulus bill provides 2.5 percent of the rural funds for tribal transit needs and includes $100,000,000 (instead of $200,000,000 as proposed by the Senate) for discretionary grants to public transit agencies for capital investments that will assist in reducing the energy consumption or greenhouse gas emissions of their public transit agencies.
FIXED GUIDEWAY (RAIL) INFRASTRUCTURE INVESTMENT
$750 million	The stimulus bill provides $750,000,000 instead of $2,000,000,000 as proposed by the House. The Senate did not include a similar provision. The funds will be distributed to capital projects to modernize or improve existing rail lines, including purchase and rehabilitation of rolling stock, track, equipment and facilities. The estimated cost of the state-of-good-repair backlog for existing fixed guideway systems is nearly $50 billion. This money also has a 180 day use-it or lose-it provision.
CAPITAL INVESTMENT GRANTS
$750 million	The stimulus bill provides $750,000,000 instead of $2,500,000,000 as proposed by the House. The Senate did not include a similar provision. The funds will be distributed on a discretionary basis for New Starts and Small Starts projects that are already in construction or are nearly ready to begin construction. Priority is for projects already under construction or able to comply within 150 days. The funds are available through Sept. 30, 2012.
FEDERAL TRANSIT ADMINISTRATION (FTA) FORMULAS
Urbanized Formula	the formula: Primarily, the urbanized formula is based on population and population density. An urbanized area, accordingly, is an incorporated area with a population of 50,000 or more.For areas of 50,000 to 199,999 in population, the formula is based solely on population and population density. The funds are apportioned to the Governor of each state for distribution.For areas with populations of 200,000 or more, the formula is based on not just population and population density but also a combination of bus revenue vehicle miles, bus passenger miles, fixed guideway revenue vehicle miles, and fixed guideway route miles. Funds are not apportioned to a Governor but rather go directly to a designated recipient selected locally (most often, a responsible local official or operator of a public transit service) to apply for and receive federal funds. A few areas under 200,000 in population have been designated as transportation management areas and receive funding directly. eligible purposes: Federal funding according to the Urbanized Formula can be used for planning, engineering design and evaluation of transit projects and other technical transportation-related studies; capital investments in bus and bus-related activities such as replacement of buses, overhaul of buses, rebuilding of buses, crime prevention and security equipment and construction of maintenance and passenger facilities; and capital investments in new and existing fixed guideway systems including rolling stock, overhaul and rebuilding of vehicles, track, signals, communications, and computer hardware and software. All preventive maintenance and some Americans with Disabilities Act complementary paratransit service costs are considered capital costs. For urbanized areas with populations of 200,000 or more, operating assistance is not an eligible expense. Additionally, in these areas, at least one percent of the funding must be used for transit enhancement activities such as historic preservation, landscaping, public art, pedestrian access, bicycle access, and enhanced access for persons with disabilities. the match: The federal share of a mass transit project cannot exceed 80 percent of the net project cost. Exceptions: The federal share may be 90 percent for the cost of vehicle-related equipment needed to comply with the Americans With Disabilities Act and the Clean Air Act; The federal share may be 90 percent for projects related to bicycles. The federal share cannot exceed 50 percent of the net project cost of operating assistance. funding availability: Year appropriated plus three years (total of four years).
Rural Formula	the formula: Only for areas less than 50,000 in population, the Rural Formula is based on nonurbanized population and land area. The breakdown: 80 percent of the formula is determined by the nonurbanized population of a state; 20 percent of the formula is based on land area - no State can receive more than 5 percent of the amount apportioned for land area. The FTA also adds amounts based on the nonurbanized population according to the Growing States Formula. Eligible recipients are state and local governments, Indian tribes, non-profit organizations and public transit operators. eligible purposes: Funds may be used for capital, operating, and administrative purposes. The amount that a state can use for administration, planning, and technical assistance is limited to 15 percent of the annual apportionment. States must spend 15 percent of the apportionment to support rural intercity bus service unless the Governor certifies, after consultation with affected intercity bus providers, that the intercity bus needs of the state are sufficient. the match: The federal share for capital and project administration is 80 percent. Exceptions: The federal share may be 90 percent only if it is needed to comply with the Americans with Disabilities Act, the Clean Air Act or bicycle access projects. The maximum federal share for operating assistance is 50 percent of the net operating costs. funding availability: Year appropriated plus two years (total of three years).
Growing States and High Density Formula	The formula establishes new factors to distribute funds to the urbanized area formula and rural formula programs.One-half of the funds that are made available under the Growing States factors are apportioned by a formula based on state population forecasts for 15 years beyond the most recent census; amounts apportioned for each state are then distributed between urbanized areas and rural areas based on the ratio of urban/rural population within each state. The High Density States factors distribute the other half of the funds to states with population densities over 370 persons per square mile. These funds are apportioned only to urbanized areas within those states.

Sources: Congressional Budget Office, Department of Transportation - Federal Transit Administration, House Committee on Transportation and Infrastructure, House Committee on Rules, Joint Committee on Taxation

D.C. Metro crash || Photo: Reuters

On Monday evening in Washington, D.C., as area commuters headed home from work, a Metro train car rear-ended another car — resulting in the deaths of nine, so far, and critically injuring at least two.

Though the cause of the accident is still speculated, especially following two recent rail accidents nationally in the past year — in Los Angeles, where a commuter train collided with a freight train and 25 died, and in Boston, where a trolley rear-ended another trolley and injured 50 – officials said today the Metro train car involved was two months past due for scheduled maintenance on its brakes, and the car was an older model that federal officials had recommended be replaced because of concerns about its safety in a crash.

According to The Washington Post, officials have not said, however, “if they believe that the delayed maintenance played any role in the accident, or if they believe another type of rail car would have performed better in Monday’s crash.”

Still, as investigators are looking at possible mechanical, signal and operator failures for the cause of the accident, which also injured 75, the Metro system - like most mass transit agencies throughout the country - is on the verge of operating in deficit (a shortfall of $154 million is projected for fiscal year 2010 - see map below).

At this point, though funding issues may or may not have been the reason for overdue maintenance and updates to the train car, two U.S. Senators just released a letter to their colleagues asking for $50 million in grants to improve rail safety technology. Commerce Committee Chair Jay Rockefeller (D., WV) and Environment Committee Chair Barbara Boxer (D., CA) noted that a $50 million investment in technology improvement grants was authorized  under similar circumstances before — after the Los Angeles commuter rail accident — when Congress passed its rail safety law last year.

According to streetsblog.org, Sens. Rockefeller and Boxer wrote:

More commuters are turning to commuter rail today than ever before. In these tough economic times, with many commuter rail agencies facing budget cuts, funding for the railroad safety technology grants is vital to ensure that important safety measures continue to be implemented.

[CLICK TO DOWNLOAD BILL HERE]

________________________________________________________________________________________

PRODUCER: SAUL GONZALEZ
REPORTER: ANGIE CROUCH
EDITOR: MICHAEL BLOECHER

As the sage Yogi Berra once said, “When you come to a fork in the road, take it!” When it comes to financing transportation infrastructure, our nation has come to a fork in the road and we must take action. With President Barack Obama’s Administration warning that the trust fund for highway construction will go broke in August without a temporary fix, we have a choice to make: to hobble down the same federal funding path, or try something new.

Since the creation of the federal interstate highway system in 1956, Congress has relied on the Federal Highway Trust Fund to build and maintain roads. But the primary source of revenue for the fund, taxes on fuel, began to decline in late 2007 following a drop in driving and the growing popularity of fuel-efficient vehicles that guzzle less gas.

As a way to make up revenue, at least two congressionally mandated bi-partisan commissions have proposed increasing the gas tax, which has been 18.4 cents per gallon since 1993, at least as a short-term fix. The National Surface Transportation Infrastructure Financing Commission has recommended a gas tax increase of 10 cents per gallon and 15 cents per gallon for diesel, both indexed to inflation. We think those numbers are too low. For too long, the United States has lagged developed nations in Europe, where gas taxes can make up as much as 75 percent of the cost of a gallon of gas. During the last fuel crises in 1979 President Jimmy Carter recommended a 50-cents-per-gallon gas tax to get us weaned off foreign oil and get more efficient in transportation. Just imagine what our infrastructure would be like today had we followed Carter’s advice. No infrastructure crisis, impeccably maintained bridges, hi-speed rail and much more. Now fast forward to 2039; we hope people won’t similarly look back wistfully to 2009 and wish we had taken action.

A gas tax increase, however, should only be used as a short-term fix, rather than a long-term source of revenue. Why? Because relying on the gasoline tax creates a conundrum. If the gas tax is high enough to encourage citizens to drive less or to drive more efficient cars, as it should, then revenue dwindles. It reminds me of when I was New York City’s Traffic Commissioner and I reduced illegal parking so much the budget office was dismayed with lower fine collections. As Congress scrambles to come up with the roughly $7 billion it will need to plug the hole in the highway trust fund this summer, it is rightfully looking to industry experts for advice on funding alternatives to a gas tax hike. This soul searching couldn’t come a moment too soon.

The nation’s infrastructure system has deteriorated terribly. The American Society of Civil Engineers this year gave a D average to the country’s drinking water, wastewater, inland waterways, roads, and the new category: levees. The grade is not surprising given our mounting neglect to the system. The United States only spends about 2 ½ percent of its gross domestic product on infrastructure, compared with 9 percent in China and 4 to 5 percent in Europe. We should be reinvesting in ourselves as they do, with at least 4 to 5 percent investment annually.

There are a number of infrastructure funding proposals floating around at the moment that deserve to be road tested, while others may need to be redirected.

Much of the debate lately has swirled around the idea of taxing drivers by the miles they travel, a plan known as the vehicle-miles-traveled (VMT) tax. Such a system would harness the power of modern technology by using onboard tracking devices such as a Global Positioning System (GPS) to count the miles a car is driven. The Financing Commission in its February report to Congress recommended implementing this type of user fee system by 2020, and estimated that to maintain and improve the current amount of federal infrastructure spending the government would need to charge about 2.3 cents per mile for cars (equivalent to a 48.4 cents gas tax.)
Critics say a potential drawback to the VMT tax is that it wouldn’t encourage people to drive more fuel-efficient cars because drivers would be charged per mile regardless of whether they were driving a Prius or an SUV. A better system would take into account factors such as a car’s fuel economy, the time of day travelled, and the type of road travelled. Joe Giglio, a professor at Northwestern University and author of several books on transportation issues, favors a similar system that he calls “value pricing,” where technology could track multiple factors and drivers could essentially be tracked and charged for any lane on any roadway that they use. Rather than investing in pouring concrete for new roads, Giglio says, we should be investing in technology to implement value pricing, particularly in large metropolitan areas. The “net” from building fewer highway lane miles and revenue from user fees would be a savings to America.

At the moment, however, neither the VMT tax nor an increase in the gas tax is gaining much political momentum. Obama’s Administration has made it clear that the VMT tax is not an option at this time, and Congress isn’t too keen on raising gas taxes during the economic downturn. In that case, another good option on the table is to increase existing user-fees. We agree with the Financing Commission’s recommendations to expand the state and local governments’ ability to charge tolls on the interstate road system; and to double the heavy vehicle use tax, which has not been increased since 1983.

Another important funding idea that is gaining momentum is the use of public-private partnerships or “PPPs” as they are called in the industry. Cash-strapped state and local government entities would do well to seek out private funding sources to help modernize aging bridges, roads and other transportation infrastructure. And private investors would do well to step up. Infrastructure projects offer an opportunity for long-term investment. In a recent edition of Merrill Lynch Advisor, Andrew Obin, an analyst for Banc of America Securities, states that global stimulus spending on infrastructure “could offer some important and compelling opportunities.”

The public also appears ready for private investors to take part in our nation’s infrastructure. A new poll sponsored by the investment banking firm Lazard found that 59.8 percent of those questioned support private investment in public assets like roads, airports or stadiums, up from a support level of 52.2 percent last year.

Finally, we support Obama’s idea to create a National Infrastructure Reinvestment Bank. The enabling legislation says the fund would target large capacity-building projects not adequately served by current financing mechanisms, and calls for the bank to issue $60 billion in long-term bonds which could be leveraged to ten times that number. The bottom line is that it’s time to re-envision how our nation will pay for our infrastructure. The gas tax can no longer be relied on as a long-term solution. As transportation expert Gabriel Roth points out, back when the interstate highway system was created, in the late 50s, Congress agreed that when the system was finished in the 1970s, fuel taxes were to be abolished. He would like to see the Federal Highway Trust Fund expire, and fuel taxes expire along with it, so that financing returns to the states. We’re not ready to abandon federal support but we do agree with Roth that states should look long and hard at funding formulas that suit them. In our mind, user fees and PPP’s should get long hard looks.

The Obama Administration and its policy makers would do well to heed the warning of the Financing Commission and find a new long-term funding solution quickly. If the federal government fails to act now and to act dramatically, the Commission warns, the nation will face increasingly deteriorating roadways, bridges and transit systems; transportation-related crashes and fatalities will increase; and we will spend more time stuck in traffic. On a global level we will move toward the “second tier” of developed countries. We are better than that; let’s start acting like it.

Rep. Jim Oberstar, Chairman of the House Transportation and Infrastructure Committee

Expiring on October 1, the law authorizing federal highway and transit programs was expected to be renewed sometime this legislative session. This past Wednesday, however, Transportation Sec. Ray LaHood, under instruction from the Obama Administration, asked for an 18 month extension of the now four year old transportation law that would delay the planned reauthorization past the 2010 congressional midterm elections.

In an interview with Bloomberg, Sec. LaHood describes his decision as one to “face reality” instead of “stringing Congress along with three-month or six-month extensions.”

Still, Sec. LaHood’s request came just one day before Rep. Jim Oberstar, a Minnesota Democrat and Chairman of the House Transportation and Infrastructure Committee, planned to announce the outline of the Transportation Reauthorization Bill.

Rep. Oberstar’s bill, released on Thursday, would not only replenish the nation’s highway trust fund – expected to become insolvent sometime in August – but would also overhaul all federal transportation programs – from funding to practices.

[CLICK FOR AN OUTLINE OF THE BILL]

[CLICK FOR VIDEO OF REP. OBERSTAR INTRODUCING THE BILL]

As Sec. LaHood told senior lawmakers on Wednesday of the Obama Administration’s request, Rep. Oberstar called extending the existing law, passed under President George W. Bush, “unacceptable.”

Regardless, the proposed Transportation Bill calls for $450 billion in federal funding, which is a 57 percent increase over the $286.5 billion bill approved in 2005.

• $87 billion in highway trust fund money for transit; and an additional $12 billion in transit cash from the Treasury’s general fund. The 2005 bill gave transit less than $44 billion in highway trust fund money and $9 billion from the general fund.
• 75 funding categories from the current system for highway programs would be consolidated into four categories - only one focuses on building new capacity and that money, once allotted to individual states, has the flexibility to be spent on new transit rather than new roads.
• The National Infrastructure Bank, called for by President Obama and proposed by Sens. Chris Dodd (D., Connecticut) and Chuck Hagel (R., Nebraska – retired) and Reps. Rosa DeLauro (D., Connecticut) and Keith Ellison (D., Minnesota), would be established – putting in place a new public works funding structure that could leverage current spending to create more capital for more projects.

Extending the 2005 federal bill for the next six years, according to the House Transportation and Infrastructure Committee, which the Obama Administration only wants to do for 18 months, would result in $326 billion in funding – about $125 billion less than the proposed bill.

Rep. Oberstar has said he will challenge the Obama Administration. A vote on the bill could happen as early as next week. Still, the funding and revenue mechanisms of the bill will be left up to the House Ways and Means Committee – where the Transportation Bill could be stalled without the President’s support.

In the Midwest, Chicago has been a freight rail hub for around a hundred and fifty years. In the old days, some lines brought raw materials to the city – like cattle to the stockyards – while others carried finished products to market. The city’s rails are still laid out that way: a couple of lines come in from the west and a couple of others from the east. Even though Chicago still handles about a third of the nation’s freight, a lot of it has to stop there – wait there – and shift from one railroad to another.

As a result, traffic on Chicago’s rails is even slower than traffic on its roads: A 2002 study found that freight trains pass through the city at an average of just nine miles an hour.

At the same time, The community of Barrington, IL, an outlying suburb in the Chicago area, has had freight re-routed to pass through the city. Residents are not too happy. Still, the shift in train traffic is likely to lessen the congestion of freight in the City of Chicago.

And while the City of Chicago, railroads, and federal authorities have developed a plan to ease freight train traffic, it won’t be complete for years. As a result, the freight carrier Canadian National did what it could and moved some of its trains away from the metopolitan area.

From Illinois, Correspondent Rick Karr reports.