Current Challenges in Highway Funding

1
Current Challenges in Highway Funding

• Gregory Cohen, P.E.
• American Highway Users Alliance
• Argus Asphalt Conference
• Houston, TX
• gregcohen_at_highways.org
• www.highways.org

2
Highway Funding Has Been Stable for 10 years

• 170 billion/hr at all levels of government
• 50 for capital spending
• 25 for maintenance and ops
• 25 for other spending including admin.
• Capital Spending includes
• 52 surface rehabilitation
• 21 new roads and bridges
• 18 new lanes on existing roads and bridges
• 9 on system enhancements

3
Highway Funding Has Been Stable for 10 years

• Federal leadership is the reason highway funding
  has been stable
• 1998 highway bill (TEA 21) provided special
  budget treatment for highway programs
• This meant guaranteed annual funding increases
  for multi-year periods of time (1998-2003)
  (2005-2009)
• We had increased funding without gas tax
  increases since 1993
• By 2009, all gasoline, diesel, and truck user
  fees have been spent and reserves are spent too!

4
Highway Funding Has Been Stable for 10 years but

• State funding under stress
• Economic recession affects states even more than
  fed because of diversity of revenue
• Federal matching requirements (80 fed / 20 state)
  important for raising state funding
• No state has ever failed to match federally
  apportioned funds for highways (some have
  struggled to make it)

5
A Perfect Storm is Brewing

• For the first time since 1956, the Highway Trust
  Fund will be empty by summer 09
• Widespread dissatisfaction with current TEA
  program major changes coming
• Since spending has been greater than revenue,
  severe cuts (as much as 50) in federal funding
  needed to match spending with revenue
• Without a higher federal user fee or other
  government intervention, major cuts coming.

6
A Perfect Storm is Brewing

• But have you tried asking for support for a gas
  tax increase? Very low support
• Election year politics make it impossible in 2008
• Fiscal problems multiply with each year
• Public trust in Congressional spending very low
  (heard of the bridge to nowhere?)
• No help from U.S. DOT leadership
• Carbon politics could help but likely to hurt

7
Politics

• Bipartisanship has been critical on highway bills
  over the years
• But partisan battles in committee are at a peak
• Current Administration has tried to change the
  subject by focusing on tolls and PPPs
• New Administration has little time to propose a
  highway bill that Congress can act on before
  September 2009

8
National Needs are Growing

• Pavements 33 poor or mediocre
• Bridges 26 structurally deficient or
  functionally obsolete
• Congestion 36 of urban highways
• Safety 43,443 deaths / 33 preventable through
  safer roads and roadsides
• Economic competition with a prospering world
  China is investing 2.6 of GDP and U.S. is
  investing 0.65 of our GDP in highways and
  bridges.
• Freight mobility and reliability Doubling of
  freight over 20 years. Just in time delivery
  threatened.

9
But Special Interests Have Grown Too

• Big Tent Politics have hurt our credibility
• Earmarking got out of control
• Donor/donee battles indicate no consensus on
  national program purpose
• Many non-highway groups have asked and received a
  share of highway user fees their funding has
  grown faster than highway funding
• Now that funding may be cut, they dont want to
  lose their slice of pie

10
Costs are Growing

• Worldwide demand for highway materials raising
  prices
• Flat gas tax has lost half of its purchasing
  power since 1993

11
Public Support is Lacking

• Still no agreed upon purpose for federal trust
  fund spending
• Commission has helped some but was unable to
  focus the programs mission. Media focused on
  tax increases only.
• We can all agree that the current TEA program
  is broken.
• Lots of work to do with media, grassroots, and
  politicians to reform grow investments.

12
Federal Priorities and Performance Standards
Non-Existent

• The federal government and States have not
  identified priorities for federal funds
• Without performance standards and measurement of
  results, the public will remain skeptical of
  raising taxes
• Politicians will have to say no to new and old
  groups and special interests

13
Solutions Were All In It Together

• Truckers, farmers, materials suppliers, soccer
  moms, shopping center owners, etc.
• We all need to be together. Truckers are
  supporting a diesel tax increase for the first
  time ever!
• Governors are state elected officials are
  critical
• Construction interests alone cannot sell
  solutions to the media and public
• Many stories to tell Safety, Mobility, Economic
  Growth, Jobs, and Quality-of-Life are under
  threat. This is important to voters.

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What Can You Do?

• Nothing more important than meeting and talking
  to your Congressmen
• Help us with out efforts
• Lobbying
• Media
• Grassroots
• Emails are not enough but they do help
• Tell your friends, employees, co-workers
• Call us for ideas

15
Thank You

• The challenges are real and urgent
• You can make a difference
• For more information
• gregcohen_at_highways.org
• www.highways.org

16
Questions?
Gregory Cohen, P.E. American Highway Users
Alliance Argus Asphalt Conference Houston,
TX April 17, 2008 gregcohen_at_highways.org www.hi
ghways.org