1. Trucking Industry Perspectives on Transportation Funding Greg Owen Head Coach Ability/Tri-Modal Talking Freight – December 16, 2009

2. Top Five Trucking Industry Issues Based on ATRI’s 2009 survey of industry: 1. The Economy 2. Government Regulation 3. Fuel Issues 4. Congestion/ Highway Infrastructure 5. Hours of Service

3. Key Trucking Realities Deregulated? Deregulated? HOS/Equipment/Routing/Insurance HOS/Equipment/Routing/Insurance Highly Competitive/ Low Profit Margins Highly Competitive/ Low Profit Margins 640K Carriers with U.S. DOT; <100K in last 5 years 640K Carriers with U.S. DOT; <100K in last 5 years Critical to US Economy Critical to US Economy 68% of Tonnage; 86% of Revenue 68% of Tonnage; 86% of Revenue 6%-7% of GDP 6%-7% of GDP 7% of vehicles; 15.5% of VMT 7% of vehicles; 15.5% of VMT

4. Transportation Funding Issues Congestion is worsening Congestion is worsening Vehicle miles traveled are expected to increase more than 72% by 2025 Vehicle miles traveled are expected to increase more than 72% by 2025 Transportation system investment is needed: Transportation system investment is needed: Research suggests the need for over $100B annually simply to “maintain” infrastructure up to $200B annually by 2015

5. Proposed & Existing Highway Funding Options Motor Fuels Tax Motor Fuels Tax Tolling Tolling Highway Privatization w/ Tolling Highway Privatization w/ Tolling Mileage Based Tax Mileage Based Tax All Options Will Draw Revenue from Trucking All Options Will Draw Revenue from Trucking

6. Trucking Perspective on the Motor Fuels Tax

7. Motor Fuels Tax Realities No increase in federal motor fuel tax since 1993 No increase in federal motor fuel tax since 1993 Inflation has decreased motor fuel tax purchasing power >28% Inflation has decreased motor fuel tax purchasing power >28% Tax exemptions reduce user-based revenues Tax exemptions reduce user-based revenues Highway user fees diverted to non- highway uses Highway user fees diverted to non- highway uses Project “earmarking” diverts $$ from critical projects Project “earmarking” diverts $$ from critical projects

8. Trucking Perspective on Tolling

9. Tolling Efficiency Fiscal Year Toll Authority Toll and Related Revenue Estimated Toll Operations Cost Cost to Revenue Ratio 2004 New Jersey Turnpike Authority $828,919,609$251,389,10130.3% 2005 New York State Thruway Authority $511,200,000$123,822,15124.2% 2004 Ohio Turnpike Commission $211,771,000$46,449,00021.9%

10. Safety Impacts of Toll Diversion Between 1995 and 1999, Ohio Turnpike Authority increased tolls on Ohio Turnpike by 82% Between 1995 and 1999, Ohio Turnpike Authority increased tolls on Ohio Turnpike by 82% As a result, commercial traffic diverted to alternate, non-tolled roads As a result, commercial traffic diverted to alternate, non-tolled roads High profile crashes (fatalities) on alternate routes led to rollback in tolls High profile crashes (fatalities) on alternate routes led to rollback in tolls

11. Trucking Perspective on Privatization

12. Privatization Issues Non-Compete Clauses Hurt Adjoining Systems Non-Compete Clauses Hurt Adjoining Systems Pricing is Uncertain Pricing is Uncertain Interstate System is Critical for U.S. Economy Interstate System is Critical for U.S. Economy Privatization Success Stories? Privatization Success Stories? Macquarie Financial Troubles.. Macquarie Financial Troubles..

13. Trucking Perspective on Mileage-Based Tax

14. Mileage Tax Implementation will be costly Implementation will be costly Enforcement appears difficult Enforcement appears difficult Technology not robust enough for lane/facility differentiation Technology not robust enough for lane/facility differentiation Overall, feasibility is questionable Overall, feasibility is questionable

15. Summary HTF not meeting needs HTF not meeting needs Fuel tax most efficient Fuel tax most efficient Tolls inefficient & create safety impacts Tolls inefficient & create safety impacts Privatization negatively impacts seamless transportation network Privatization negatively impacts seamless transportation network Mileage-based tax is not possible in the short-run Mileage-based tax is not possible in the short-run Balkanization of system harms U.S. global competitiveness Balkanization of system harms U.S. global competitiveness

16. The Bottom Line: Motor Fuel Tax is an Efficient Way to Collect Revenue… Ultimate user fee; social equity compass Ultimate user fee; social equity compass Cost to collect federal motor fuel tax approximately 0.2 percent of revenue collected Cost to collect federal motor fuel tax approximately 0.2 percent of revenue collected At the state level, cost of collecting motor fuel tax 1-2 percent At the state level, cost of collecting motor fuel tax 1-2 percent A tax increase would be inexpensive and quickly implementable A tax increase would be inexpensive and quickly implementable