AMERICAN DREAM COALTION Stimulus, Reauthorization and Mobility Alan E. Pisarski

WHAT’S IN OUR FUTURE?  STIMULUS PACKAGE  TRUST FUND INSOLVENCY– AGAIN VMT DOWN 3.6% FUELS DOWN 7.1% HTF REVENUE DOWN 11.6% vs forecast  REAUTHORIZATION OF SURFACE TRANSPORTATION LEGISLATION

STIMULUS PACKAGE—ARRA  789B$ TOTAL  27.5B$ HIGHWAYS  1.5B% DISCRETIONARY GRANTS Corridors, TIFIA, Earmarks  8.4B$ TRANSIT  1.1 AIRPORT IMPROVEMENT GRANTS  850m$ AMTRAK; 450M$ security  8B$ HSR (plan due yesterday)

Transportation lost in the game  “We got rolled” John Mica Ranking Member House T&I  AASHTO had “5000 shovel ready projects” worth about 66B$ (hwys only)  Bill uses standard formulas; no St. match  States taking varied approaches lots of small maintenance – paving, painting or few big ones (KS 4) Texas supporting toll road plans  1,800 projects obligated ($5.6b) this week

Next Reauthorization  Due Oct 1, 2009 (6 years usually)  Highways and transit; HSR?  Congress always misses due date; 12 CRs last time  They say they will be ready this time  I doubt it – new Admin., no $$$$$

Next Reauthorization (2)  Who will be in charge? WH, DOT, Congress?  New Secretary Ray LaHood alone  No Senior staff– some announcements  DOT might prefer a CR so that they could be serious players next year  If meet September goal then DOT’s role limited

Next Reauthorization (3)  Finance, Finance, Finance  Stimulus package will affect decisions  Tolling, congestion pricing disliked by leadership but few options  More afraid of gas tax increases  Is private sector still ready with $$$  Devolution by Default ??

Next Reauthorization (4)  Maybe reorg DOT away from modes to “functional structure” = intercity; metro  Metro mobility = transit, bikes, walking  Intercity; tourism weak  Watch private freight rail  New focus on land use policies

State of play in national legislation – Financial issues –  Not close to increase in last cycle (40%)  Needs put at 2x funding  Fed Gas tax at 18.4¢ doesn’t = 3¢ in 1956  Fed share of capital about 40 %  Some opportunities regarding revenues  “Innovative Finance” as alternative INNOVATIVE FINANCE AIN’T MONEY

THREEWAY CONFLICTS  TRANSPORTATION LEGISLATION  ENERGY LEGISLATION  GHG LEGISLATION Cap and Trade – rebate or spend? Carbon Tax Air could catch brunt of plans after roads ALL ANTAGONISTIC TO MOBILITY

EFFICIENCY VS EQUITY The Efficiency/Equity argument is fundamental to any regulatory process  EQUITY = your responsibility for share of solution should equal your share of the problem!  EFFICIENCY = do most cost- effective first and solve more of the problem per $

TRANSPORTATION VS OTHER GHG OPTIONS  Options for alternate fuels in other sectors are greater. MOST COST EFFECTIVE  Main focus should be electricity generation.  WHY IS TRANSPORTATION SINGLED OUT AS ONLY SECTOR TO HAVE OUTPUT CUT?  No one suggests farm output or industrial output should be cut by their share of GHG !

Impacts on mobility  Energy; GHG = CUT VMT!  Metro Mobility = Walk, Bike, Transit  Coalition w/HUD = use Transportation $$ for land use coercion and subsidies  Emphasis on Tolling/Pricing but not market driven; pay-at-pump insurance  VMT tax = tax travel based on where, when and what you are doing GOAL IS TO SUPPRESS VMT – GHG IS JUST THIS YEAR’S EXCUSE

The policy conflict = opposed thinking about the world Neighborhood  Shorter trips  Walk/bike  Land use solutions  Design  What’s freight?  Accessibility  Public  Mass  Behavior change  Make it happen Globally Integrated  Longer trips  Broad “community”  Choices  Market forces  Major role for freight  Mobility  Private  Personalized  Technological fix  Let it happen

The Right Answer Should At Least Be Among The Options Available!  This is A Real Problem even independent of global warming Fuel costs Energy Security Economic Uncertainties  This Is A Real Problem With Little Resources  FOCUS ON EFFICIENCY Selling Bad Solutions To A Real Problem Should Be Out!  Research / Economic Analysis / Performance Measurement should be key

The focus on changing behavior diverts us from the real issues  Enhancing economic opportunities  Access to workers; access to jobs  Mainstreaming minorities  Safety  Serving an aging population  Greater freedom of mobility  Infrastructure Reconstruction  More!

A closing thought – TRB 2009  The major challenge facing the new Secretary will be getting people to take transportation seriously—to recognize that the cost is not the benefit, and it is what happens after you build the road or the airport or transit system that matters to our future economic productivity and national well-being.”

Thank you Alan E. Pisarski

Next Reauthorization (5)  Commissions are for cover or temporizing!  Two commissions said the same thing – more $$ needed  Commission mandated by SAFTEA- LU reported last month:  need 10c for inflation and plan for new non-petroleum based vehicle mileage tax

The Federal Highway Trust Fund becomes insolvent this year!

Next Reauthorization (5)  Next week AASHTO will release its Bottom Line estimates of investment needs for highways and transit on the hill (4 th I have done)

State of play in national legislation – Context –  Difficult period – Economy, Policy Conflicts, New Admin., etc.  Multiple transportation legislative issues Aviation Amtrak Rail freight Maritime  More temporizing actions likely

THE PRESENT LEGISLATIVE IMPASSE IS A SYMPTOM OF THE FUTURE! PREMISES  USER-PAY TRADITION AS GUIDE  FUNDING INADEQUATE –IN 2 WAYS  CONGRESS/ADMIN. RELUCTANT ON FUEL USER FEES BOOST  BUT NOT READY FOR THE NEXT STEP  ADVENT OF “POST GAS-TAX ERA”  SHIFT TO STATE AND LOCAL LEAD  WANT/NEED PRIVATE & PUB/PRIV. PARTICIPATION; BUT HOW?

As the Interstate Era Came to a Close  No new vision emerged  Nothing with the Interstate’s Power  A Rich Funding System without a goal 1¢ = $1.7 Billion/yr  RESULT Lack of Focus Great Expansions of Eligibility A Grant Program Congressional “Earmarks”

Post-Interstate Era Legislation  THREE 6 YEAR CYCLES 1992-ISTEA 1998-TEA SAFTEA-LU (2 years 11 extensions)  A new cycle begins this year  Will the Congress continue to temporize or will it launch a new era? THE POST POST INTERSTATE ERA!

CONTEXT has two elements FINANCE  INADEQUATE FUNDING OF HIGHWAY NEEDS  FUEL EFFICIENCY  SOME INFLATION  NEW POWER SOURCES POLICY  MANAGE SYSTEM  USE “MARKET- PLACE”  USE PRIVATE SECTOR  USE ECONOMIC CONCEPTS

Transport is most dependent on high energy density fuels  “Cost effectiveness (cost per tonne of CO 2 ) is the fundamental determinant of which abatement policies to adopt and how much the transport sector should contribute towards economy-wide CO 2 abatement goals --- it is important to achieve the required emissions reductions at the lowest overall cost to avoid damaging welfare and economic growth.”  “Transport and other sectors are expected to contribute less to overall emissions reduction strategies.” ECMT Council of Ministers Transport and Environment ;Jun 2006

28 U.S. Greenhouse Gas Emissions

Surface Transportation is the main issue for now Rail, 43 Waterborne, 58 Air, 171 Heavy Vehicles, 350 Light Vehicles, 1113 Pipeline/Other, 47 Internat'l./Bunker, 84 U. S. Transportation Carbon Emissions by Mode, 2003 (Million metric tons CO2)

A little Perspective Here! How much are we really talking about? 3.6% drop for year = Last year I drove 300 miles a week [15,000 miles/yr] This year I drove 290 miles a week = 1 five mile trip lost per week

VMT trend is not just gas prices  WEAK ECONOMY  Discretionary trips in Vacation Season  DEMOGRAPHY - a long term trend

IS FUEL CHEAP AT 4$? Cost/ gal Fuel Efficiency Cost/ mile $ cents cents 2008 approx * 16.8 cents PLUS WE ARE 20% RICHER THAN THEN!

Would 5$ or 6$ gas change America?  LIFE STYLE PREFERENCES WILL DETERMINE GOALS; AND TECHNOLOGY WILL RESPOND  The consumer benefit of automobility is colossal – think of toll costs = $4/gal  Europe at $9/gal; still has traffic jams  SERIOUS EFFECTS slower access to automobility of minorities and lower income populations Rural stress Less access to broader worker pool Depresses auto sales  FLEET TURNOVER RATE WILL BE KEY

THE GHG TRENDS ARE LARGELY POSITIVE  CO 2 Is Almost Self-stabilizing Energy Intensity/GDP Declining about 2%/yr Energy Intensity/Capita will decline.5%/yr Transportation VMT Slow Growth  Vehicle Fuel Efficiency  Demography Price Will Be Key Factor

Backgrounder #2 Energy, Environment and Economy Institute of Transportation Engineers  Requested by ITE Board of Directors  A WIN, WIN, WIN Opportunity  Traced fuel issues and travel trends  Its all about efficiency

VMT Trends  US decline in VMT in 2008 about 3.6%  Still low now that Economy is driver  Rural areas hit hardest around 9%

VMT trend is not just gas prices  NOW WEAK ECONOMY  Discretionary trips in Vacation Season  DEMOGRAPHY - a long term trend

A little Perspective Here! How much are we really talking about? 3.6% drop for year = Last year I drove 300 miles a week [15,000 miles/yr] This year I drove 290 miles a week = 1 five mile trip lost per week

VMT Response: Where did it go?  TRIP CHAINING – Big payoffs  CARPOOLING Work – some gains Non-work – more  CUTS IN TRIP LENGTH  CUTS IN TRIPS MADE  SHIFTS TO TRANSIT? Maybe 2%  FREIGHT Local Distribution opportunities Load changes Big Fleet gains

WAS FUEL CHEAP AT 4$? Cost/ gal Fuel EfficiencyCost/ mile $ cents cents 2008 approx cents PLUS WE ARE/WERE 20% RICHER THAN THEN!

Would 5$ or 6$ gas change America?  LIFE STYLE PREFERENCES WILL DETERMINE GOALS; AND TECHNOLOGY WILL RESPOND  The consumer benefit of automobility is colossal – think of toll costs = $4/gal  Europe at $9/gal; still has traffic jams  SERIOUS EFFECTS slower access to automobility of minorities and lower income populations Rural stress Less access to broader worker pool Depresses auto sales  FLEET TURNOVER RATE WILL BE KEY

A Question! What Part Of Gains In Air Quality In The Past 20 Years Have Come From: Technology  95% to 105%  Changed Behavior +5% to -5% What Part Of Gains In Green House Gases In The Next 20 Years Will Come From:  Technology?  Changed Behavior?

44 Potential impacts on new and existing transportation infrastructure?  Permanent inundation of roads, bridge approaches  Weakening of land, substructure supporting roads, bridges  Temporary flooding of roads Coastal Interior  Increased stream flow, erosion and bridge scour  Pavement cracking, deformation; King Gee, FHWA

REGULATION  SAFETY of growing interest Major decline last year; why?  CAFÉ – raised standard from current 27.5 miles per gallon standard to 35.7 miles per gallon by light trucks, from 23.5 miles per gallon in 2010 to 28.6 miles per gallon in 2015  GHG – BIG ISSUE Cap and Trade – rebate or spend? Carbon Tax Air could catch brunt of plans after roads

TRANSPORTATION VS OTHER OPTIONS  Options for alternate fuels in other sectors are greater. MOST COST EFFECTIVE  Main focus is, and should be, electricity generation.  WHY IS TRANSPORTATION SINGLED OUT AS ONLY SECTOR TO HAVE OUTPUT CUT?  No one suggests farm output or industrial output should be cut by 25%