We’ve spent the last couple days looking back at some of the bests and worsts of 2011. A brief recap: The hit to transit budgets was the low point of the year, with the high point being the willingness of voters to tax themselves to restore some funding. Capitol Hill’s paralysis in the face of urgent infrastructure needs was a double-edged sword, given some of the really bad proposals out there. We booed Wisconsin Gov. Scott Walker, Sen. James Inhofe, the lawmakers that killed President’s Obama’s high-speed rail plans, the city of Dallas, and the jury that convicted Raquel Nelson of “vehicular homicide” when she wasn’t even behind the wheel of a car. And we heaped praise on Minneapolis and Charleston for making good decisions to move their cities forward sustainably.

And before we sing Auld Lang Syne and ring in 2012, we’ve got just a little more kvetching and kvelling to do, starting with:

Most Annoying Distraction From the Real Transportation Funding Problem (and Solution): It’s no secret that the Highway Trust Fund is sputtering, and it’s taken $35 billion in general fund infusions just to keep it going this far. It’s a pretty basic equation: If you’re taking in less than you’re spending out, you’re going to come up short. So you can spend less or earn more. Most experts say it’s time to raise the federal gas tax.

What's so incompatible about bikes and bridges? Photo: Flickr / WSDOT

But this year saw some other brilliant ideas emerge – like eliminating the federal gas tax altogether and leaving all transportation taxing and spending to the states. Which is a punt if I’ve ever seen one, ignoring the fiscal crises and anti-tax atmospheres most states face, not to mention the fact that slicing transportation funding up exclusively by state doesn’t make sense for building national networks.

And it takes a few days off my life every time I give column inches to the argument, which found great support among congestion enthusiasts this year, that transit shouldn’t be funded through the Highway Trust Fund, that the Fund was just fine before all these “hangers-on” started detracting from the “core programs” – I just can’t even go on.

But I think we can all agree that the Streetsie for the Most Frustrating and Illogical Proposal for Raising Infrastructure Funds goes to the scheme to eliminate biking and walking from federal funding programs. Sen. Rand Paul (R-KY) framed it as a safety issue – that it’s more important to fix crumbling and unsafe bridges than to build bike trails. He was ignoring the obvious fact that it would take his home state of Kentucky 66 years to repair the bridges currently listed as deficient if they used the tiny sliver of funding devoted to bike/ped projects.

The numbers don’t crunch any better for Oklahoma, yet that state’s Sen. Tom Coburn has the same idea. It’s too bad too. It’s a state with a serious infrastructure maintenance backlog and some desperately unsafe bridges. Oklahomans could benefit from some honest proposals to make their state safer, not this political quackery.

House Republican Blooper Reel: How could we wrap up 2011 without a final lap around some of the ways the House of Representatives made a mess of transportation authorization and appropriations? We started the year with some hope that all the parties were on board to pass a transportation bill in 2011, but instead we got:

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  House Budget Committee Chairman Paul Ryan's plan would have slashed transportation spending and prioritized highways. Photo: Christian Science Monitor.

  Republicans changing House rules to allow transportation funds to be withheld from transportation projects

• GOP attacks on Amtrak’s funding and proposals to sell off Amtrak’s only profit-making asset – the Northeast Corridor – to private companies
• Rep. Paul Ryan’s slash-and-burn budget, which would have guaranteed that the little money available would be spent on costly highway projects that take the transportation system backward
• A final transportation budget that included deep cuts to livability programs like the interagency Partnership for Sustainable Communities
• Transportation Committee Chair John Mica’s bill to reduce spending without ensuring that money is wisely spent and that would have put bike/ped and transit funding in jeopardy
• Then, hooray! House Republicans say they’ve discovered a way to raise funding levels. They’re secretive about the details for a while before announcing that really, they didn’t have an idea about infrastructure spending; they had an idea for creating more political gridlock
• Republicans pitting high-speed rail funding against flood relief in the Midwest
• An inordinate amount of time spent on the brink of a government shutdown (or at least a shutdown of the transportation system) (or, to spice things up a little bit this year, an economic default and global meltdown), and most of the time, the deals brokered to break the impasse have been bad news for transportation reformers

How to choose the worst? Republicans, the Streetsie goes to you for your myriad bad ideas and bad policies. May 2012 bring a change of heart.

Atlanta Mayor Kasim Reed was part of the mayors' rebellion against wasteful highway spending. Photo courtesy of U.S. Conference of Mayors.

Good Stuff That Happened This Year: Enough bad news! Some good stuff happened this year too. The Department of Transportation doubled down on its Distracted Driving campaign (with some eleventh hour help from the NTSB) and distributed a third round of TIGER grants. An increased focus on performance measures by advocacy groups like Smart Growth America, Building America’s Future, and the Bipartisan Policy Center helped create a smart discussion around the next transportation reauthorization that wasn’t just a volley over numbers. Mass transit saved people time and money as more and more people filled trains and buses, leaving their money-guzzlers in the garage. And there are reasons to believe the transit trend will only keep growing. Indeed, more and more evidence built up that for once, people are beginning to drive a little less.

The demand for smart-growth style urbanism – albeit in suburban locations – has risen, and the real estate market is beginning to respond. Even better, smart growth could be our escape out of the slump the economy is in. And mayors are taking a stand against state DOTs that ignore the transportation needs of metro areas in favor of building more roads to nowhere that speed outward sprawl and don’t address congestion.

These are the things we’ll be looking to build on in 2012.

So that’s our list! Did we miss anything? Let us know in the comments if there’s any more cheering and jeering left to do. New Year’s Resolutions also accepted!

We’ll be back to our regular publishing schedule Tuesday, January 3 — just in time for the Iowa caucuses.

States left $10 billion in potential gas tax revenue on the table last year. Photo: CNN

It’s not just the federal government that is playing this game of chicken with roads, bridges and transit. A majority of states are equally egregious offenders. According to a new report from the Institute on Taxation and Economic Policy, US states leave a combined total of $10 billion on the table every year that could be used for infrastructure.

Thirty-six states have gas taxes that aren’t indexed for inflation. For the average state, that tax has declined in real value by 20 percent since the last time it was raised. That amounts to $300 million in losses each for the states of Iowa and Oklahoma, or $500 million a piece for Maryland and New Jersey.

Of course, many states would likely just blow the additional revenues on unneeded highways.

But still, desperate states like Wisconsin, Utah and Nebraska are dipping into general fund revenues to offset the decline in gas tax receipts, according to TEP. That means education, healthcare, social services, economic development and other important government concerns are suffering because states are afraid to challenge the almighty driver.

Furthermore, that means those who choose to get around in single occupancy vehicles are enjoying an additional subsidy of their harmful activity.

You can see what your state has lost in forfeited transportation revenues in the appendix of the ITEP report [PDF].

A new generation of fuel-efficient automobiles will compromise the gas tax as a method to fund infrastructure. Enter the VMT fee? Photo: Eco-Business Links

To date, none of the states have passed legislation to enact a vehicle miles traveled (VMT) fee. But with an increase in the federal gas tax seemingly impossible in an election year and federal funding increasingly uncertain, states may well be left with little alternative but to reconsider an idea many experts agree makes sense.

With Americans driving less and opting for more fuel-efficient cars, revenues from state gas taxes have been on the decline. Data from the Federal Highway Administration show that between 2007 and 2008, 30 of 50 states experienced declines in their gas tax receipts, dropping by an average of two percent. If electric cars one day replace America’s internal combustion fleet entirely, revenues based on gas taxes could dry up altogether.

For many states, VMT fees may be just what the doctor ordered. While the prospect of a mileage-based system has led some to argue that the GPS technology needed to make it work optimally is an invasion of privacy, there is a growing consensus that it is a much more sustainable option for transportation funding. Earlier this year, the Congressional Budget Office issued a report stating that the VMT fee system is a feasible transportation funding option and would result in a more efficient use of the highway system. This follows several earlier reports, including from two federal transportation financing commissions, recommending that the federal gas tax be gradually replaced with VMT fees [PDF].

In the past decade, about two dozen states have examined the feasibility of such a system. Here are some of the more noteworthy initiatives:

Oregon: Having learned valuable lessons from its original VMT pilot program in 2007, Oregon transportation officials redesigned the ways that vehicle mileage is recorded and fees are collected in a Phase II pilot program this year. Instead of a pay-at-the-pump concept, the state’s Road User Fee Task Force proposed legislation (HB 2328) based on an “open technology” platform applied only to drivers of electric and plug-in hybrid vehicles.

The original pilot program exposed design shortcomings and significant public opposition to the mandatory use of GPS technology to track vehicle miles traveled, so the new proposal would give Oregon’s DOT the flexibility to establish multiple methods for reporting VMT. An “opt-in” feature would allow drivers to choose the method by which they report their mileage and pay their fees. The revised concept also envisions a larger role for the private sector in the data collection and management of accounts.

Colorado: In 2007, a blue-ribbon commission exploring alternatives to the gas tax recommended that a pilot program be established to test the feasibility of implementing VMT fees, and that pilot is now underway. Some legislators are also considering introducing bills to require that only electric cars pay the fee, at least in the beginning. A final report is due in May 2012.

Minnesota: In May of this year, Minnesota began a pilot program in which a group of 500 drivers from two counties are asked to test VMT collection technology. The participants will use smart phones and GPS technology to submit information that MNDOT will use to evaluate whether travel data is being recorded and conveyed accurately and reliably. The test will also examine whether other applications — such as real-time traffic alerts on construction zones, crashes, congestion and road hazards — are effective in communicating safety messages to motorists. Three different groups of volunteers will test the devices for six months each.

Nevada: Last year, Nevada also completed a feasibility study, which noted that it could take a decade or more to fully phase in a VMT fee program and that public acceptance will be critical to its success. Nevada hopes to eventually replace the gas tax as a funding source for surface transportation.

Idaho: A transportation task force, appointed by the governor to address a growing gap between the state’s transportation system needs and available revenues, proposed a list of options including mileage-based user fees. The formula used to allocate funds to local jurisdictions would be adjusted consistent with user-pay principles.

Texas: Research on VMT fees has been ongoing in Texas since 2007. This year, state legislators introduced a bill (HB 1669) that would have developed a pilot program in response to a state-authorized Texas Transportation Institute study [PDF] calling for a mileage-based system. Although the bill failed to make it out of the House Transportation Committee, there is a strong possibility that it will come up again in the future.

Hawaii: A bill, SB 819, was introduced this year but failed to pass. It would have established a pilot program in the state and authorized refunds of motor vehicle fuel taxes paid to participants.

Massachusetts: A bill similar to Hawaii’s (HB 2660) is pending, which would create a pilot program to study the challenges of adopting a VMT fee.

Multi-state: Perhaps the most intriguing of all the state trials is the federally-funded, multi-state VMT field test by the University of Iowa. Six sites were chosen: Austin, Texas; Baltimore, Maryland; Boise, Idaho; Eastern Iowa; and the Research Triangle, North Carolina. While the final report is currently being reviewed by the U.S. Department of Transportation and its findings have not yet been made public, it’s the most geographically broad test to date and could be the most significant in showing whether the system would work on a nationwide scale.

That’s the question that brought together five former U.S. Transportation Secretaries this week at the University of Virginia’s Miller Center.

Former DOT Chief James Burnley took a swipe at Transportation Enhancements and the stimulus.

James Burnley was deputy secretary and then secretary under President Reagan. He took the position that “75 percent” of the public “gives the thumbs down to paying more for transportation” because we’re giving them the wrong argument about why it matters. He took a jab at President Obama’s stimulus program:

We have to stop treating transportation infrastructure as a short-term jobs program. It didn’t work by any conventional definition of what “working” means. We all knew –those of us who have expertise in the field – it would not work in terms of short-term stimulus.

Because it takes time – it takes years for that money to actually be spent and people to be hired. We need to convince the American people that we need to invest in transportation infrastructure because we need to invest in transportation infrastructure. If we sell that idea – not as a jobs program, but because it affects the ability of our economy to grow over time, our international competitiveness and all the other things that we believe it affects, then we’ve got a fighting shot at convincing the American people that the resources that we believe ought to be devoted to transportation should be devoted to it.

That’s a legitimate point, and Streetsblog has made the same argument – that selling transportation as a jobs program undersells the true value of transportation. But there are a few problems with what Burnley is saying. First, when asked to tax themselves at the local or state level for transportation improvements, 75 percent of voters say yes. So maybe the case isn’t so hard to make after all.

And second, most Republicans – and many Democrats – fault the stimulus for not investing enough in infrastructure. Not quite seven percent of the package was devoted to infrastructure, and many critics say that’s why the stimulus didn’t do more to create jobs. Certainly, the president’s desire for “shovel-ready” projects may have been naïve, which Obama himself has publicly admitted. But Burnley may have been over-simplifying things with his statement.

Meanwhile, Sam Skinner, who served under President George H.W. Bush, argued that too many bridges to nowhere have eroded public confidence. And it’s not just transportation, he said – government mishandling of Medicare and pensions and everything else leads to overall distrust that the government can handle anything at all, despite the fact that the transportation department has proven that it “actually can complete projects under budget and on time.”

He said the reputation of the transportation program is “still suffering from the residue of a couple projects that got out of control” – most notably, Boston’s Big Dig, whose price tag grew from $3 billion to $19 billion. (The final price tag was actually $14.6 billion, or $22 billion if you account for interest.) Skinner said the government risks losing the public’s confidence again with high-speed rail: After all, the cost of California’s new rail line has gone from “$20 billion” (fact check: it was more like $43 billion) to “$90 billion” (actually $98.5 billion) – “without a single shovel being put in the ground.”

“You cannot have high-profile projects with runaway costs without undercutting American confidence in the ability of government to do it,” Skinner said.

Rodney Slater, DOT Chief under Clinton, said Enhancement projects are some of the most popular around.

Rodney Slater was President Clinton’s second-term transportation secretary. He said his job was made easier by the fact that he had “just wonderful legislation” to work with (ISTEA and TEA-21) “and the dollars as well.” But he also said it was a different time.

“I always had a wonderful time working with Republicans and Democrats,” Slater said. “I can’t think of a bad experience. Only recently that we’ve gotten to a point where that is not something that you can expect.” He did point out that the EPW committee did manage to turn around the recent trend of bitter, divided partisanship, “and you cannot have two more distinct titans than Barbara Boxer and Jim Inhofe.”

Still, he said, when he came in to office, “people were as skeptical about government as they are now.” He said getting the public sector to be a good partner to the private sector – and labor to be a good partner to management, as well as Republicans to be a good partner to Democrats – was key.

He also exhorted transportation officials to “hit the road” to explain to people in different localities how the federal transportation program can be a partner to them in realizing their projects. He said that although some people wanted to reverse some of ISTEA’s good policies when it came time to craft TEA-21, those policies had proven themselves. “Because of the good we could demonstrate, we were able to hold the line.”

And Slater put in a good word for an active transportation program the Republicans are currently determined to do away with:

During that period, not only did we raise the gasoline tax, but we also built upon ISTEA with TEA-21. We have some enhancements there – that’s a small amount of money. But I’ll tell you, if you go to see some of those projects dedicated, the crowd that’s there is the same as for those multibillion dollar projects. Those crowds are the same.

Burnley had taken a different line on these programs. “If you’re building trolley museums instead of repairing bridges, you should not be surprised if people become cynical over time,” he said.

Mary Peters, who served as USDOT chief for much of President George W. Bush’s second term, agreed with Burnley, not Slater.

What destroyed the confidence people had in the transportation system? If you ask Peters, it was a bunch of things like “bicycle trails and historic covered bridges” (read: Transportation Enhancements) that are “nice-to-do” things when you have the luxury. Right now, she said, during a time of tight budgets, we don’t have that luxury. “We have to now cut back to the very core highway and transit programs that these bills are supposed to fund,” she said. She added that she’d put high-speed passenger rail in the “nice-to-do” category.

She said there would have been no need for an urgent conversation about how to convince Americans of the need for transportation investment during the interstate era, “when there was a compelling national purpose.”

People didn’t mind “incremental raises in the gas tax” to pay for interstates, Peters said, “even though the money didn’t come from one state and go back to that state” – a common complaint among states that see themselves as “donor” states, paying more in gas taxes than they get back in federal funding.

Peters also noted the need to look at alternatives to the gas tax, which she said was being weakened more and more by improved fuel efficiency standards. “The gas tax is not sustainable, it is not reliable, and it is not going to get us into the future,” she said.

During her time in office, Peters was an advocate of privatizing transportation infrastructure, partly because of her prescient concern about the declining Highway Trust Fund.

Finally, Norm Mineta spoke. Mineta, like Ray LaHood, is a crossover, serving in an administration of the opposite party. (He was a Democrat serving in George W. Bush’s Cabinet.) His comment came less in the form of advice on how to frame the message, and more a lament about where things are.

“Transportation is something everyone takes for granted until it’s denied them,” Mineta said. “And when it’s denied them, it has a shelf life of 45 days.” He was referring to the tragic bridge collapse in Minneapolis in 2007. Two days after the collapse, Rep. Jim Oberstar (D-MN), then-chair of the House Transportation Committee, urged the passage of a five-cent emergency bridge tax. “The bridge went down Wednesday,” Mineta said. “He talked about that Friday. And by Tuesday, Jim was already backpedaling from the five-cent emergency gas tax idea, and 45 days later, USA Today had a survey about the five-cent emergency gas tax idea and 57 percent said ‘No, we don’t need it.’ So I figure the shelf life is a tragedy is 45 days.”

And yet, he said, transportation is something everything is dependent on, to move around and to get goods on the shelves.

There are a few messaging points I’d like to add that none of the five secretaries mentioned.

First, a superficial one: Surveys show that people don’t know that the gas tax has stayed the same since 1993, not indexed to inflation or the price of gas. They think the gas tax is going up every time the price of gas does. So, it could just be a matter of wording. Instead of asking about “raising” the gas tax, you could ask simply about indexing it to inflation or the price of gas. Or you could ask about ways to stop the decline of transportation funding. You could mention that it is no longer a winnable proposition to count on gas-guzzling to fund our infrastructure needs.

Second, it’s true that more money for transportation isn’t always a good thing. Skinner talked about the Big Dig and bridges to nowhere, but to that I’d add endless highway expansions with no plans for maintenance and no accommodations for alternate modes. I’d add a highway system built on sprawl and disconnected from smart land use planning. None of the secretaries mentioned that a well-functioning transportation system won’t be built on formula funding but on a strategic process of setting national and regional goals and actually building transportation infrastructure that meets those goals. Will that cost more money than we spend today? Less money? The same? It remains to be seen. But however much it costs, it might be easier to gather public support for raising that amount if the transportation spending decisions are based on projected benefits, and not just asphalt for asphalt’s sake.

Earl Blumenauer takes the podium at Rail~Volution, while moderator Grace Crunican of BART, APTA President Bill Millar, and Transportation Secretary Ray LaHood (not pictured) stand by. Photo by Clarence Eckerson, Jr.

“We should make some adjustments to a gas tax that hasn’t increased since 1993,” Blumenauer said. “Half the people think the gas tax goes up every year.”

He said he’d like to see it indexed to inflation:

In an ideal world, I would not raise the gas tax this year or next year. Come out of this recession, but put in place increases that are going to occur over the next 10 years; have that revenue stream. I would borrow against the revenue stream to take advantage of record low interest rates and a bidding climate like we’ve never seen, fund the president’s infrastructure bank to help move some of these forward, and work toward replacing the gas tax.

He reminded the audience that his state was the first to institute a gas tax, and now Oregon is working to get rid of it and replace it with a vehicle miles traveled fee.

Bill Millar, the outgoing president of the American Public Transit Association (“on Halloween, I turn into a pumpkin!”), said that before switching to a VMT fee, Congress needs to eliminate the federal guarantee, called “equity bonus,” that states will get back at least a certain percentage of what they pay in gas tax receipts. (The GAO recently found that every state actually gets back more than it puts in, thanks to infusions from the general fund, but that hasn’t stopped a lot of states from complaining that they don’t get their fair share.)

“States that encourage more travel get more money back [under the equity bonus system],” Millar said, “so we’ve got to break that cycle too, to make sure instead it’s an inverse relationship and states that give people more choice, more ways to travel, get more federal aid, not less federal aid.”

Millar thinks the answer is simply to raise the gas tax. And he doesn’t agree that it needs to wait. After all, the average price of gas in America went up by seven cents this week, he noted. But did anybody notice? “If you told Americans that, they wouldn’t like it, but hey, it’s gas, what can you do?” he said.

Either way, the U.S. has got to do something to avoid running up the deficit. Congress can continue to run up an infrastructure deficit, Blumenauer said, which will cost far more in the long run. Or the country can keep spending even the meager amount it does now on transportation maintenance and the Highway Trust Fund will run dry, requiring another general fund transfer, which adds to the deficit.

Why can’t Congress move forward on any path out of the current fix? Transportation Secretary Ray LaHood has been pretty open with his frustration lately. “The last election elected about 70+ new members of the House,” he said at Rail~Volution. “About 30 or 40 of those people came here to do nothing. And that’s what they’ve done.”

Blumenauer noted that his first public event in Congress was a bipartisan press conference with LaHood, then a representative from Illinois. They had called for civility in Washington.

“In the days when I served with Earl and others, there was a good mix of policy and politics,” LaHood said. “Unfortunately, today, the policy part has dropped off and it’s all politics. It’s all about the next election.”

He fumbled his call to action, though. “Everyone in this room has a member of Congress; everyone has two senators,” he said – momentarily forgetting, I guess, that he was talking to hundreds of people in Washington, DC, where 600,000 residents have neither. Just the day before, Mayor Vincent Gray had buttered up the Rail~Volution audience by talking about the Dulles rail extension and streetcars, and ended by asking the audience to push for democracy for DC so that residents there can be represented like everyone else as Congress debates the issues of the day.

For example, the jobs bill: That’s what LaHood wanted everyone to call up their members of Congress about. Or passing a “five-year” [sic] transportation bill.

Bill Millar reminded the audience that transit activism isn’t just about those big federal-level initiatives that get caught in big federal-level partisan gridlock. Eight cities and towns will vote on transit-related ballot initiatives in November. Millar noted that on the very same day last November when the American people voted in a new class of self-styled fiscal hawks, they also voted nearly three-to-one in favor of pro-transit measures – even when they involved taxation.

“You can’t rest when you get home!” Millar exhorted Rail~Volution attendees.

They gave him a standing ovation.

We also asked him for his thoughts about some major themes in transportation today. 

Chairman Jim Oberstar calls transportation enhancements "the point of transformation" for transportation. Photo courtesy of Oberstar's office.

On the “dissipation” of high-speed rail funds:

We reshaped Amtrak in the 2008 authorization, designating 11 corridors and creating a mechanism by which there could be competition from private sources and from state consortia, with Amtrak, to provide the passenger rail service in a particular corridor.

At first, I didn’t like that idea, but I spent a lot of time talking to Mr. Mica about it and as we talked, I said, “You know, that’s beginning to make more sense. We ought to challenge Amtrak. That’s a good idea; let’s put this into the bill.” And then we got consensus that high-speed should be defined as 110 mph, and that was in the bill. And we got a bill that George Bush signed!

So there was a structure against which to pit [the $8.5 billion in stimulus dollars for high-speed rail]. I thought that was going to happen. Instead, it was all put up for competition for various states to come forward and put a proposal on the table.

Wisconsin, for example: to Madison, Milwaukee, Chicago. That should have been done as part of the Midwest High-Speed Rail Initiative, with Chicago as the hub, south to St. Louis, east through Detroit to Cleveland and eventually to Cincinnati, and west to Minneapolis-St. Paul. That would have been one very defensible, manageable anchor.

The Northeast Corridor could have been another important anchor. The west coast, which is already underway: a third anchor to this system. And then some other amounts in the other corridors, depending on proposals that they would have and should have submitted to DOT.

Allowing pieces to be bid or requested by states dissipated the critical mass of investment. And I’m not saying that in hindsight – that was my concern at the time.

On the attack on Transportation Enhancements in Congress:

Transportation Enhancements was the pivotal point of transformation at the end of the interstate era — an era in which travelers went where the road took them — to the era in which users of our system had a say in their quality of transportation and where that road should go in the future and how their transportation experience should be managed.

Enhancements is the breakthrough transformation of our surface transportation system in the post-interstate era. If it were eliminated, it would erode public trust and acceptance of our surface transportation programs.

On how he would pay for his 2009 bill if he were defending it in this fiscally conservative Congress:

I would still insist on a restructuring of the categorical programs, to reduce those categories from 108 to four formula programs and to require the intermodalism that is depicted in my plan. And by law, you can require that the modal administrators meet monthly. There is nothing to impede the secretary of transportation from doing that now, from convening a monthly meeting of FRA and Federal Transit Administration, Maritime Administration, and all the rest. But they haven’t done that, regardless of administration.

So do it by law! You will develop a safety plan. What can highways learn from aviation and safety? What can waterways learn? What can highways learn from waterways? All of these need to be done intermodally.

So you give the public a sense of accomplishment, of simplicity and clarity, transparency of the program. And then you have freight corridors to deal with the farm-to-market movement of goods and inter-city goods movement, which is a segment of that bill, and then the metropolitan mobility and access provision that addresses the fact that 50 percent of vehicle miles traveled in this country are in urban areas and we are wasting $110 billion a year just sitting in traffic.

And then requiring states to develop plans, and defend them, and be accountable to them. It’s doable; we did that. I had a hearing every month on the stimulus investments and made state DOTs and USDOT and the wastewater treatment agencies and the aviation authority all come and say, what did they do with their money, how did you invest it, what are the benefits from it? So you include that accountability, clarity, and performance.

And then project delivery – in the current law it’s not widely understood. But I crafted 42 pages of legislative language to expedite project delivery. The result: 47 projects – these are big ones, these are $100 million-and-above-sized projects – have had a 36 month reduction in permitting, which means you’re almost cutting in half the time it’s taking for permitting — without denigrating the environment, without denigrating historical preservation, without overriding local permitting interests and requirements.

So, you require better performance, better project delivery, and then you can ask the public. If I were still there, I’d be saying, now we go to the public and say, “We have funded our surface transportation system with the user fee, so you have a claim on the future investments, by which you pay at the pump and now you have something in which you can have confidence that it will be used effectively.” There will be much greater accountability.

Then you can appeal for an increase in the user fee or a combination of funding mechanisms, which we provided for in the metropolitan access and mobility provisions.

Rep. John Mica won't be specific about where additional transportation funding could come from. Photo: 13 News

Mica told an audience at a Washington Post-sponsored forum on transportation that passing yet another extension of the surface transportation reauthorization persuaded leadership that there would not be consensus on a long-term bill until the spending levels were raised. “There wont be a gas tax increase,” Mica said, “but our leadership has asked us to look for other sources of revenue, and we’re on that mission now.”

“Speaker Boehner has really opened the door to us to look for any responsible means” to fund the bill, Mica said, adding that a gas tax increase is still off the table. “There’s also the possibility of doing away with it; adopting something else.” He wouldn’t specify what the replacement fee could be.

Nor would he say what he thinks of a Republican proposal to fund the bill with revenues from new oil drilling except to say, “We’re looking at it. We have some scoring issues. And then we have to make sure we have the votes.”

Mica said he was confident that a long-term bill would pass in March. “Don’t let anybody talk about a two-year transportation bill; that’s criminal,” he said. His counterpart in the Senate, Barbara Boxer, has proposed a two-year bill, but could be willing to go along with a longer-term bill if funding levels were raised.

Mica also reiterated his support for state infrastructure banks, saying he prefers them to a national bank. He said the way Washington works is: “the biggest gorillas get the most bananas.” Instead of having big guys compete for big loans from a big national bank, he said, “the best way to prioritize projects is to have them evolve from local level, get local and state participation, and then assist them.”

Transportation Secretary Ray LaHood also addressed the Washington Post gathering. He said he was confident that, despite current gridlock, there was enough pressure on Congress to create jobs that they’ll pass some form of transportation bill this year.

Still, he hinted that Republicans in Congress might be trying to sabotage Obama’s presidency at the expense of the unemployed. He said Congress was polling lower than it ever has among the public “because they haven’t done anything.”

“Maybe that’s deliberate,” LaHood said. “I hope it’s not.”

He said the most recent class in Congress came in, not with a mission to find solutions, but determined to obstruct movement.

Infrastructure bills used to be bipartisan and easy to pass, LaHood said, but “some people don’t want Obama to be successful.” The result? Aside from 9.1 percent official unemployment, “infrastructure is in terrible shape,” he said. “America is one big pothole right now.”

In comments to reporters after his remarks, LaHood said he believed that, despite recent attacks, transportation enhancements (the major way the federal government funds bicycle and pedestrian facilities) would remain.

“These enhancements have always been a part of the transportation program, and I anticipate that they will be in the future,” he said. As for assertions by Sens. Rand Paul and Tom Coburn that bike paths aren’t “real” transportation, he said, “That’s why we have debates in Congress,” but repeated, “I feel pretty confident that these programs will continue.”

LaHood let it slip yesterday that he was planning to leave after Obama’s first term, whether or not the president is re-elected. “My wife has plans for me to do something more monetarily pleasing to her,” he said in an attempt to answer what he might do next.

While some bicycling advocates might hope the president would nominate someone of similarly bike-friendly proclivities, LaHood made it clear that wasn’t why he was nominated. “I wouldn’t have this job if I wasn’t a Republican,” he said. “If I was anything else, I wouldn’t be here today.”

He did say he agreed with the president on transportation, including the importance of getting high-speed rail moving. He said the $10 billion the administration has invested in high-speed rail was “10 billion times more than has ever been invested before” and would make the U.S. the envy of the world again, as Asia and Europe’s rail systems are now.

He countered skepticism about the slow speed and reticence in Congress to fund the program by saying that when he was growing up in Peoria, and the interstate system was being built, “I remember seeing stretches of cement that went nowhere.” But what started as little, disconnected segments eventually came together into one nationwide network.

LaHood also put in a plug for the TIGER program, calling it was a good way to connect projects with the federal government without having to go through governors and that had very little red tape for a federal program. He also highlighted the importance of keeping roads, bridges and transit systems in a state of good repair.

Republicans have never met a problem that couldn't be solved with a little more of this.

Republicans have a different idea, though: oil drilling. Several GOP representatives have introduced bills to expand fossil fuel extraction and use the proceeds to fund transportation infrastructure.

Somehow, whatever the problem is in Washington, Democrats want to solve it by raising taxes on the wealthy, and Republicans want to solve it with oil drilling.

When it comes to funding a quick jolt to the economy, it’s pretty clear that oil drilling won’t really cut it. “Any royalties from any new energy development wouldn’t start flowing to the Treasury for years,” said Erich Zimmermann of Taxpayers for Common Sense. “Essentially this would be like spending money now to be paid for with revenues that may or may not be realized at some future time. Sounds like a recipe for a doubling down on our current deficit mess.”

Some speculate that a GOP oil drilling plan would explain the recent news that House transportation leader John Mica, with permission from his party’s leadership, is looking to raise transportation funding levels by an extra $15 billion a year in his proposed six-year reauthorization bill. After all, they’ve said that raising the gas tax is off the table.

A plan to pay for transportation and infrastructure through oil drilling would erode the entire basis of the transportation funding system, which historically rests with the Highway Trust Fund, paid for with fuel taxes and a smattering of other fees on driving and vehicles. In fact, Congress requires that at least 90 percent of what the Highway Trust Fund spends must be generated from taxes “related to the purposes for which such outlays are or will be made.”

“Generating additional revenues from an increase in energy production, therefore, would likely violate this requirement and at the very least result in an override of the Budget Act,” Zimmermann said, “but would also call into some question the importance of the ‘user pays’ principle itself as it relates to paying for the transportation system.”

Whether or not Mica is planning on paying for his transportation bill with oil drilling is a matter of speculation at this point. But several other Republicans have already introduced bills to that effect.

Take. for example, the Rebuilding American Roads Act, introduced last week by Rep. Shelley Moore Capito (R-WV). The bill directs the Secretary of the Interior to expand offshore oil and gas leasing, depositing the majority of the revenue into the Highway Trust Fund. Capito estimates that the drilling would yield $435.5 billion over thirty years. After taking out some for waterways, the Highway Trust Fund gets $13.4 billion a year – pretty close to the $15 billion a year Mica’s searching for. Capito says the bill has the added benefit of creating not just infrastructure jobs, but oil-industry jobs too.

Then there’s the Infrastructure Jobs and Energy Independence Act, introduced in May by Rep. Tim Murphy (R-PA). This one would spread the oil-drilling royalties around, giving 30 percent to the states where drilling occurs and 10 percent to the Treasury’s general fund. The remaining 60 percent is distributed among several “reserves” – for renewable energy, clean water, environmental restoration, conservation, clean coal and carbon capture and sequestration, nuclear energy – and an “Infrastructure Renewal Reserve,” which gets 20 percent of the total.

That would bring in $22 billion a year for infrastructure, according to Murphy. The bill has 20 co-sponsors.

Murphy’s proposal could avoid running up against the Congressional language mandating the way Highway Trust Fund revenues are collected and spent by simply using a different mechanism, the Infrastructure Renewal Reserve. Still, Zimmermann’s not so sure this one would fly either.

“The bill stipulates that the highway and highway safety funds be distributed using the same formulas that are used presently,” Zimmermann said. “At present, distribution of a significant portion of funds from the Highway Trust Fund is based on the amount of gas tax paid in a particular state. These new funds, then, would be distributed based on formulas that have nothing to do with where the funds came from, and in fact create an entirely new class of ‘donor’ and ‘donee’ states.”

“Donor/donee” is always one of the most contentious issues regarding infrastructure funding, and in fact often leads to calls for the elimination of federal tax collection and funding of infrastructure altogether.

Sen. Barbara Boxer, chair of the Environment and Public Works Committee, made it clear today that these GOP proposals are a “non-starter.”

“That just sets up a huge fight, and that’s the last thing you want,” she told Streetsblog today. “I don’t want to pay for construction jobs by losing fisherman jobs, and tourism jobs, and recreation jobs, plus destroying some of our environment. It makes no sense. That’s just a controversial way to pay for this.”

Obama’s plan to pay for infrastructure jobs by raising taxes on oil companies and rich folks, on the other hand, has some pretty broad support – even among rank-and-file Republicans (if not their elected representatives): a recent Gallup poll found 70 percent support for it.

Meanwhile, Boxer said if Mica finds another, less controversial way to pay for it, she’d be up for switching back to a six-year bill. Her proposal is to fund transportation at current levels for just two years – at which point new revenues will definitely be needed to keep the Highway Trust Fund afloat.

Georgia Gov. Nathan Deal wants to freeze the state gas tax. Photo: The Beacon

Besides, they say, the national government is broke. There’s no more money to spend on roads and trains.

There are a hundred reasons why leaving transportation revenue collection and spending to the states is a bad idea. First, states are in a worse fiscal crisis right now than the feds – in part because they have a balanced-budget requirement, meaning they can’t overspend their revenues in lean times. Second, just because I don’t live in Kansas or West Virginia doesn’t mean I don’t have an interest in those states’ infrastructure, when so much of what I buy rides the roads and rails of those states to reach me. And I start to care a lot about the infrastructure of New Jersey when I travel to New York from Washington.

But here’s another reason: it’s not that much easier to gain public support for raising taxes at the state or local level than at the national level.

Georgia Governor Nathan Deal is asking state legislators to approve his state gas tax freeze – saving drivers 1.6 cents a gallon, but costing the state $30 million. New York legislators have also drunk the tax-holiday Kool-Aid, despite the fact that it would cost the state $19 million over just three weekends. Massachusetts Governor Deval Patrick is trying to raise the gas tax, and Sen. Scott Brown is giving him a hard time about it. A Connecticut state senator is going around getting petition signatures against raising the state gas tax. Gas station owners in Carson Valley, Nevada are running their own campaign to keep the county from raising the gas tax five cents — which would just bring it on par with the neighboring county.

There is evidence that when voters know exactly what the revenues will go toward – and it will benefit them – they support higher taxes. But that doesn’t mean raising taxes is ever easy — even if it’s just to replace a federal tax that used to be in place. Once a tax is gone, you can bet people will fight against re-implementation. For proof, just look at the fight brewing over merely extending the federal gas tax that’s been in place for decades.

Grover Norquist wasn't content to just bring us to the brink of default. Photo by Gage Skidmore

A few weeks ago, Ben Smith at Politico mentioned in a short post that the gas tax was expiring September 30. If not extended, all but 4.3 cents of the 18.4-cent federal gas tax would disappear. Extending the gas tax has always been an easy, bipartisan move that happened more or less automatically. (Raising it to a reasonable level is another story entirely.)

When Smith first wrote about the gas tax expiration, it was the first some had heard of the issue. Others were monitoring it cautiously, just in case the Tea Party or other antitax crusaders decided to kick up a stir. But media reports confirm that those forces are preparing for battle.

House Transportation Committee Chair John Mica has proposed a bill based on the current gas tax, and his office has confirmed that he supports keeping it at 18.4 cents. But according to Platts news service, Republican members on key committees are “still deciding what to do about the federal gasoline tax.”

The demigod of the tax-haters, Grover Norquist, has decided to take up the banner, after enough news organizations asked if he was going to. “ATR will be urging people to look at ending the federal gas tax either cold turkey or phasing it out as soon as possible and allowing states to simply go raise their own taxes, rather than send the money to Washington and get it back with strings,” Norquist told Platts in an email.

Even other right-wing small-government types part company with Norquist there. Politico quotes Heritage Foundation and Reason Foundation experts as saying the gas tax “has to” be renewed and that a “cold turkey” end to the gas tax, as Norquist appears to be pondering, would be “chaotic.”

That seems to be fine by Rep. Joe Wilson (R-SC) of “You lie!” fame. (Chaos is sort of his thing.) His local TV network, WJBF, quotes Wilson as questioning the federal gas tax. “Sadly, it has been used in large cities to subside a transportation system, the subway systems of New York, Chicago, San Francisco. We need to look at this carefully. And, I believe the money should be spent where it is raised and that is by the drivers of Georgia and South Carolina.”

Oregon Democrat Peter DeFazio doesn’t put it past the GOP to play politics with the most basic funding mechanism of our already-crumbling transportation system. “The Republicans will use the expiration of the program and the tax… for some sort of leverage or further blackmail,” said DeFazio, the top Democrat on the House Transportation Subcommittee on Highways and Transit. “If the ultra-right prevails, it has already been rumored they would end the gas tax, which would mean no more surface transportation trust fund.”

Gas tax receipts are up this year, according to the FHWA, generating about $22 billion so far in fiscal 2011, compared to a total $32 billion for all of FY 2010, says Platts. Gas taxes make up 90 percent of the balance of the Highway Trust Fund.

Meanwhile, Republican Sens. Kay Bailey Hutchison and Tom Coburn, as well as Reps. Jeff Flake and James Lankford, have introduced separate bills to drastically alter the way gas taxes are collected and distributed. They would rather a system more to the liking of Rep. Wilson, with states keeping their own gas tax money and spending it as they see fit, rather than sending it to Washington and then getting it back.

“Donor” states complain when they don’t get back as much as they sent. Indeed, Wilson’s home state only got back 85 cents on the dollar in 2009. But that money wasn’t primarily going to New York and San Francisco. Alaska was raking in $3.70 for every dollar it shelled out. Montana and North Dakota also took back more than twice what they sent. (That information is from the Heritage Foundation, by the way [PDF].)

Of course, asking states to take on more of the burden for raising transportation revenues might assuage some small-government types, but asking a bunch of cash-strapped states to take this on in the middle of a recession is rough stuff. And it’ll just turn states into the next battleground for tax foes.

The same argument even Democrats use to justify not raising the gas tax is the same argument some will wield in defending the idea of repealing it altogether. Doug Heye, former spokesman for the Republican National Committee, told Politico that gas prices are “really affecting families. If you have to drive 20 miles to work every day, those are real costs.” He predicted that “there will be Republicans who will be resistant” to renewing the tax.

As CNNMoney said at the beginning of its story on the brewing fight, “You may want to consider investing in some good shock absorbers for your car this fall.” (Make that “knobby tires for your bike,” Streetsbloggers.) After all, if gas tax receipts fall, road maintenance – already miserably underfunded – will suffer even more.

The current gas tax is already too low to keep the Highway Trust Fund solvent -- what would happen if Congress lets the tax fall even farther? Source: Congressional Budget Office

Ben Smith of Politico mentioned a little tidbit that has eluded some of us: The federal gas tax expires September 30, at the same time as the current reauthorization extension. Most of it, anyway — 4.3 cents of the current 18.4-cent-per-gallon tax will stay.

The gas tax isn’t part of the reauthorization; it’s just a coincidence that the dates are the same. Regardless, it’s another thing to worry about on that day.

Smith cites an accountant’s memo which details exactly what’s expiring:

— All but 4.3 cents-per-gallon of the taxes on highway gasoline, diesel fuel, kerosene, and alternative fuels (Secs. 4041(a) and 4081(d)(1))
— Reduced rate of tax on partially exempt methanol or ethanol fuel (Sec. 4041(m))
— Tax on retail sale of heavy highway vehicles (Sec. 4051(c))
— Tax on heavy truck tires (Sec. 4071(d))
— Annual use tax on heavy highway vehicles (Sec. 4481(f))

“What could possibly go wrong?” tweets kclightrail.

No one on Capitol Hill is seriously suggesting an increase in the tax, and transportation advocates are just hoping no one targets it for a cut. So, while the expiration of the reauthorization is the subject of much fanfare, the impending expiration of the gas tax has mostly flown under the radar, and that’s just the way many advocates want it.

But the date is circled on the staff calendar over at Transportation for America. “In this political climate, who knows if Congress will suddenly decide to cut the gas tax?” said T4America’s Steve Davis.

Indeed, as advocates have pushed (to no avail) for a higher gas tax to fund the nation’s transportation needs, they may now find themselves having to defend the too-low tax we now have.

The Carnegie Endowment for International Peace has teamed up with a multi-partisan group to reform the way our transportation system collects revenues.

The Leadership Initiative on Transportation Solvency, a project of the Carnegie Endowment for International Peace, has come up with a solution.

The three principals of the Initiative – former senator (and presidential candidate and basketball star) Bill Bradley (a Democrat), former governor and DHS secretary Tom Ridge (a Republican), and former comptroller general David Walker (an Independent) – aren’t transportation experts, which Carnegie Endowment President Jessica Matthews says is an asset, since they have “no constituencies to serve.” Indeed, their interest is in creating a paradigm for “the type of fundamental review and reexamination that must be undertaken with every major government program and policy,” according to Walker. All three spoke at an event yesterday to launch the 125-page report, “Road to Recovery: Transforming America’s Transportation.”

A New Way to Raise Transportation Revenues

In addition to other reforms, the three are advocating a formula for increasing transportation revenues in a way that might be more politically and economically palatable.

First, they say, tax gas when the price is on the way down. That’s the way to make it less controversial. They’d like to see a variable gas tax of anywhere between zero and 43 cents per gallon. It would go up or down counter-cyclically based on oil prices, rising when oil prices diminish.

The problem, of course, is that oil prices aren’t expected to diminish. Sure, they were on their way down over the last few months (and then spiked again last week), but over the long term, as scarcity increases, so will prices. The Bradley/Ridge/Walker strategy, then, would leave us with a lower gas tax – and less ability to pay for infrastructure. Right?

Nope. They’ve already thought of that. They’d start by adding a five percent “ad valorem” tax on oil per barrel. This tax would be added upstream, at production or importation, not downstream at the pump. And since it’s a percentage, not a flat amount, revenues will go up with higher gas prices, balancing out the losses in the variable gas tax.

What does all this mean for prices? If crude oil is $100 a barrel, the five percent tax would net $5.00, and gas taxes would be set as they are now – 18 cents a gallon, or 24 cents for diesel (in the report, they round to the nearest cent). That would yield gas prices in the range of $3.70/gallon and yield a total of $63.4 billion a year.

If the price of crude rose $20, the five percent fee would net slightly more – six dollars per barrel instead of five – gas taxes would go down to 12 cents per gallon, and consumers at the pump would pay about $4.13 per gallon. That would bring in revenues of $57.7 billion. (Still better than the roughly $35 billion the Highway Trust Fund is bringing in these days.)

Meanwhile, if the price of crude went down to, say, $70, the ad valorem fee would only net $3.50 a barrel, but per-gallon gas tax would soar to 43 cents, adding up to a $3.16 gas price for consumers and revenues over $100 billion a year.

It’s a more sophisticated pricing instrument than a gas tax hike of a set amount, as is often proposed. This plan would help stabilize price fluctuations to some degree, which makes even auto executives happy, and in even the worst-case scenario nets far more for infrastructure than our current gas tax regime. And even better, it envisions a transition to mileage-based fees in the long term.

“Before We Ask For Another Dollar, Make the Program More Efficient”

The report claims that the costs of building transportation infrastructure just barely exceed the returns on the investment, and that “once the rate of economic return meets the long-term interest rate (cost of capital), it becomes equally beneficial to keep invested capital in the private sector, a clear signal that those investments could be without merit.”

According to the report, the U.S. only recoups two-thirds of its transportation expenses via user fees, far below other developed countries, where transportation revenues end up being a net gain for the economy. (Italy makes back 14 times what it spends in transportation costs through user fees.)

Other developed countries make more from transportation fees and taxes than they spend on transportation. Source: Leadership Initiative on Transportation Solvency

“Most people, when they pull up to the pump, figure ‘well, I just paid x percent for gas, gas tax probably goes up every year, and I’m paying for the roads,’” said Tom Ridge, “when in fact they’re only paying for about two-thirds of the rebar, the concrete, and the asphalt we put down. We’re borrowing the rest. And that’s not a sustainable model if you’re going to bring a 21^st century approach where you accept that you have a national security interest in balancing the budget and you have a national security interest in building a strong transportation network.”

That’s where performance measures come in. “Before we ask the American public for one dollar more in infrastructure, we have to make sure the program is right-sized and we’re using every dollar most efficiently,” Walker said.

Fifty years ago, “most of the performance metrics and most of the federal oversight was on process, not on outcomes,” said David Burwell, director of Carnegie’s Energy and Climate Program. “It was about design criteria and requirements for building it right, designing it right, getting it done under budget. It was not about the performance of the system once built. Now that we have a built system we need to focus on performance.”

We’ve covered other recent reports that have called for increased performance measures, but those didn’t have a robust plan for increasing revenue, like this one. In fact, the Bipartisan Policy Center’s study explicitly refused to call for greater revenues, instead choosing to focus on better ways to split up the pie, no matter the size of the pie. Carnegie takes it a step further, acknowledging the hard truth that the transportation sector cannot, in fact, “do more with less,” as House leaders continually exhort them to do. “You can’t build more capacity, and you can’t enhance the existing capacity and improve it, with less money,” Ridge said. “That’s truly the new math, and it won’t work.”

Like many other reform groups (as well as Congressional leaders), the Leadership Initiative calls for the elimination – not just the consolidation – of unneeded programs, which they define as “those that do not directly support national security and prosperity goals.” They also support a permanent ban on earmarks, the creation of a national infrastructure bank, and a move away from formula-based funding allocations – all steps toward a more efficient, more outcome-based transportation system.

They also advocate for a “national register of nationally significant transportation projects.” Bradley says that register could have been used as a shopping list for infrastructure projects for stimulus funding. “Our stimulus was, ‘Well, we need to spend money on infrastructure,’” Bradley said. “The Chinese had a list of nationally significant infrastructure projects for the next five years. And they simply moved year three and two up to year one – so that every dollar that was spent in that stimulus package went to improving the economic competitiveness of that country. That is what we need.”

The Leadership Initiative is relatively agnostic on the question of what a 21st century transportation system – one that reduces oil dependency, cuts carbon emissions, and stabilizes the economy – would look like. The report is decidedly mode-neutral. “The idea was that it would be the best mode for whatever purpose that it was supposed to serve,” said Shin-Pei Tsay, who wrote the report and coordinated the leadership team. “Let other people determine what the split [between funding for highways and other modes] should be, depending on an analysis of what the goals of the program should be.”

As useful as this report is, how much impact can it have, given the timing? The House bill is all but released, the Senate is reportedly just waiting at the gate to release its version – is this suggestion coming too late to have any impact?

“I think the timing is perfect,” said Burwell. “Nothing’s moving – except a straight extension. At least people are thinking about transportation right now.”

GW CEO Dan Akerson wants the gas tax raised. Photo: The Detroit Bureau

Akerson told The Detroit News that, rather than have the government incrementally increase fuel efficiency standards over the next several years, “You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.”

“People will start buying more Cruzes and they will start buying less Suburbans,” he said.

Akerson isn’t the first representative of a major U.S. automaker to come out in favor of a higher gas tax. Two years ago, as the automakers were being rescued from collapse by the U.S. government, Bill Ford, CEO of Ford, complained that demand shifted with gas prices.
“As a manufacturer, we don’t like that,” Ford said at a business conference. “Our ability to forecast has been just horrible,” said Ford. “If gas prices are gyrating wildly, we have no idea whether we’re planning right. We’d much rather have a fairly predictable level to shoot for in gas prices. That’s why I think a gas tax would work for us.”

Chrysler’s response to high gas prices in 2008 was quite the opposite – the company offered a guarantee of $3/gallon gas for three years for car buyers. Lee Iacocca championed a hike in the late eighties, before the last gas tax increase, but the company isn’t on record currently as supporting a raise.

The construction industry is a vocal supporter of an increase, since low revenues have hamstrung new development. Indeed, it’s hard to find anyone outside of Washington these days that doesn’t see the obvious need to raise the gas tax, which hasn’t been increased since 1993, when gas was just over a dollar a gallon.

“This is about survival,” said MoDOT spokesman Jorma Duran. “This is about making sure our roads and bridges continue to be maintained and operable.”

Drastic times call for drastic measures. And outdated gas tax rates, state operating shortfalls and a lack of foresight are combining to create a crisis for state DOTs in Missouri and beyond. In the last two years, Virginia DOT let go of 1,000 employees and New York DOT eliminated 100 positions.

The Virginia Department of Transportation made 1,000 layoffs in 2009, the biggest reduction in the history of the agency. Photo: Richmond Times-Dispatch

“We just ran out of money,” Reta Busher, VDOT’s chief financial officer, told the Richmond Times Dispatch.

State transportation agencies are adjusting to a “new reality,” said John Horsley, executive director of the American Association of State Highway and Transportation Officials. And there will be widely felt impacts.

“It’s terrible,” he said. “Because of these economic crises, you’ll see projects put off. States will not do as much as they recognize is absolutely essential.”

Horsley said the most vulnerable employees are rural maintenance crews. “If you go to rural Missouri and just about any rural place, the state maintenance facility is one of the most important employers,” Horsley said. “That’s a real blow to rural economies all over Missouri. Those paychecks were very important to those regions.”

How did states get into this mess? Well, stagnant gas taxes are a big part of it. States depend on gas taxes — federal and their own — for an average of 24 percent of their budgets, according to Smart Growth America. But since the federal gas tax was last raised in 1993, inflation and greater fuel efficiency have greatly diminished its purchasing power. In addition, many states have not had the political gumption to take on gas tax hikes themselves (Georgia and Connecticut being a few notable exceptions).

Rising fuel prices have also forced gas tax receipts downward, as consumers curb nonessential driving. Where in headier times, states might have subsidized their transportation agencies out of the general fund, few states are in the financial position to do so at the current time.

To make matters worse, many states have been pouring their increasingly scarce transportation resources into projects of dubious merit. According to a report by the Brookings Institution, states do a poor job ensuring their transportation investments are strategically targeted to aid economic growth. Transportation investments are not properly coordinated with land use considerations. States were also found to be underinvesting in maintenance, a recipe for long-term financial disaster. The problem in a nutshell: Building sprawl is expensive.

“States face challenges because they spend their (now-declining) transportation dollars poorly,” the report noted. “By failing to join up transportation up with other policy areas—such as housing, land use, energy—states are diminishing the power of their interventions and reducing the return on their investments.”

Missouri has been spending about $1.2 billion annually on highway construction. In the new economic reality, MoDOT’s budget will be reduced to about $600 million annually. The cuts will leave the agency with just enough money to maintain its current system and meet its required federal match — 20 percent of the project costs, said Duran.

Part of the reason for the sudden flurry of job cuts in Missouri was the expiration of a bond-backed surge in transportation funding beginning in 2004. In a report called “Falling Off a Cliff” [PDF], MoDOT noted that declining state revenues and increased construction costs were part of the problem, as well.

These same problems are plaguing DOTs across the country. It’s difficult to know where the next shoe will drop. Ohio Department of Transportation Director Jerry Wray told members of the House Transportation and Infrastructure Committee in February that without an increase in revenues “We will not be able to match federal funds; we will have a difficult time maintaining our existing system.” According to some reports, New Jersey seems to be headed in the same direction.

If environmental and social justifications for pursuing smart growth strategies haven’t been enough to encourage states to change course, maybe a fiscal mandate will. At least in Missouri, the funding crisis means that new construction is off the table, Duran said.

But highway expansions won’t be the only projects targeted for cuts. Pedestrians and cyclists will be among the biggest losers as the state reverts from construction to maintenance mode, said Brent Hugh, of the Missouri Bicycle and Pedestrian Federation.

“The last thing we need is a lot of new roads and big freeways in Missouri,” Hugh said. “But we need to maintain what we have. We need to add bike lanes and sidewalks.”

Infrastructure investment creates 11,000 to 30,000 jobs per $1 billion spent. Isn't that a better way to grow the economy and reduce the deficit than spending cuts? Photo: FreeFoto

“Infrastructure spending, adjusted for inflation and accounting for the depreciation of existing assets, is at about the same level it was in 1968, when the economy was one-third smaller,” Tyson argues. “Financing highway projects whose economic benefits exceed their costs would necessitate more than a doubling of federal investment on highway infrastructure from its 2010 level of $43 billion.”

Government spending on infrastructure raises demand, creates jobs and increases the supply and growth potential of the economy over time. The C.B.O. says infrastructure spending is one of the most effective fiscal policies for increasing output and employment and one of the most cost-effective forms of government spending in terms of the number of jobs created per dollar of budgetary cost.

Tyson goes on to support the replacement of formulas and earmarks with performance criteria, the creation of an infrastructure bank, the development of public-private partnerships, and the implementation of congestion pricing.

Those financing tools are getting a lot of airtime in Congress these days, where the theme is “doing more with less.” But financing isn’t the same as funding. While Tyson laments the lower levels of funding likely to be approved by the House, her proposals stop short of getting to the heart of the problem and suggesting new revenues.

Without new revenues, the country has no choice but to slash spending. Right now, a bipartisan group of lawmakers is huddling with Vice President Joe Biden to cut a trillion dollars from the national budget because deficit spending over the past decade has run up $14.3 trillion in debt.

But according to David Walker, former Comptroller General of the U.S. under Presidents Clinton and Bush, “it’s not socially equitable or politically feasible to solve our problems solely with spending cuts.”

Walker says the reticence to increase taxes amounts to nothing but “deferred taxes,” which are still taxes. “People are playing a game,” he said.

Meanwhile, as lawmakers look for places to cut spending, Walker hopes they’re considering what kind of spending they’re cutting.

“We need to cut back on consumption-oriented spending and spending relating to programs and policies that aren’t working,” Walker said. “And there are plenty of opportunities to do that. At the same time, there are some areas that are Investment-oriented that we need to be allocating more revenues. Critical infrastructure is one of them.”

Still, it’s “T minus two months” and the clock is ticking for lawmakers to come up with enough spending cuts to meet Republican conditions for approving a raise in the debt ceiling. Walker says it’s anyone’s guess whether the negotiators are being precise enough with their proposals to spare investment-oriented spending that will create jobs and grow the economy.

Laura D’Andrea Tyson, in her op-ed, also calls for a more surgical approach to spending cuts. “The heated debate in Washington about how much and how fast to slash government spending is overlooking how a significant, sustained increase in infrastructure investment would create jobs and strengthen the nation’s competitiveness,” she wrote. Every billion dollars in infrastructure spending creates between 11,000 and 30,000 jobs, she adds.

Lawmakers say they don’t want to raise the gas tax in the midst of a recession. But how are we ever going to get out of the recession without the kinds of investments that create jobs and economic growth?

House Speaker John Boehner told reporters today that the bipartisan negotiations on budget cuts as a precursor to raising the debt ceiling were "frank" and "productive." Photo: AP

The vote went how it was supposed to go: not a single Republican voted for the bill, and Democrats split almost down the middle on it.

It makes perfect sense for Congress to ask for some guarantee of future fiscal discipline when they’re being asked to allow the U.S. to go deeper into debt. Interest alone on that debt cost $414 billion last year. But the spending cuts the Republicans are demanding could be far more painful than the last round.

Rep. Paul Ryan, Vice President Joe Biden and other big figures in the debt ceiling debate aren’t talking a lot about transportation, but that doesn’t mean the sector doesn’t have a significant stake in the outcome. Transportation will be dramatically affected both by the debt ceiling itself and the strings-attached spending cuts.

First, the Debt Ceiling

Everyone pretty much agrees that the debt ceiling needs to be lifted. If it’s not, the U.S. will default on its debts and worldwide financial pandemonium will ensue. But does it make sense to keep deficit spending, particularly on transportation?

That’s what we’ve been doing, after all. As the Highway Trust Fund balance drops, the U.S. keeps spending more on transportation than it brings in. As Streetsblog has been saying throughout the reauthorization debate, we can either raise new revenue (most likely by raising the gas tax), we can lower spending to levels that would starve our transportation agencies, or we can take money from the already-stretched general fund.

In order to keep repairing our bridges and running transit services, Congress has given the Highway Trust Fund a series of infusions from the general fund – basically, deficit spending. That can’t continue if we don’t raise the debt ceiling.

Of course, we don’t want it to continue. Transportation agencies should be more accountable for the money they spend and should have to prove that the projects they fund are achieving the goals that were established. That’ll help. But we’ll still need to spend more for transportation than we have right now.

The long-term solution, as we’ve often said, is raising the gas tax or shifting to different revenue streams. By refusing to raise the debt ceiling and cutting off all future deficit spending, Congress can force the issue of raising revenue by eliminating the possibility of general fund transfers. There would be no choice but to raise transportation revenues or cut transportation spending. Even without that dramatic backdrop, the House has indicated its preference: it’s flat-out refused to either raise revenue or borrow from the general fund to pay for the new transportation bill, preferring instead to reduce spending to dangerously low levels.

Next: Spending cuts

House Budget Chair Paul Ryan’s proposed 2012 budget calls for cutting the transportation budget by about a third. That budget is the GOP’s starting point for the delicate negotiations ongoing between the two parties in an attempt to come to some kind of compromise on spending cuts that will convince Republicans (and those 82 holdout Democrats) to vote to raise the debt ceiling. In other words, transportation policies could become bargaining chips in the larger battle over the debt ceiling.

Ryan’s budget didn’t have a lot of details in it about exactly what would be axed from the transportation budget. We can imagine some of the more vulnerable and controversial projects would be on the list, including livability programs, TIGER, and all those “hitchhikers” onto a Highway Trust Fund Republicans maintain should be just for highways – hitchhikers like transit and bicycle infrastructure.

Last night’s vote was just the Republicans’ way of setting the stage for the fight over spending cuts, a way of proving that a debt ceiling raise without spending cuts is a non-starter. Once the theatrics are over, we’ll be watching to see what concrete actions the bipartisan negotiators come up with.

Rep. Jerry Nadler says more investment, not less, is necessary to preserve critical transportation infrastructure. Photo: AP

In an op-ed in Politico this morning, House Transportation Committee Chair John Mica (R-FL) calls for getting rid of waste and inefficiencies in the transportation system, shifting more power to the states, and “doing more with less.”

The emphasis, of course, being on the word “less.” Mica is still gunning for a bill at existing revenue levels that would “dramatically enhance” the value of those funds. “We are exploring every responsible means of doing this,” he asserts.

Meanwhile, New York Democrat Jerry Nadler, also on the committee, wrote in his own Politico op-ed, “The single greatest challenge is to fund the investments that we so desperately need in the face of a Republican-sponsored hysteria for budget cutting that pays no regard to the consequences.”

Mica attempts to make up for an estimated $2 trillion infrastructure need by rooting out waste and inefficiencies in the system. No one can argue with his desire to maximize efficiency, but that is no replacement for adequate funding. He wants to improve the successful TIFIA loan program and work to make other programs like Railroad Rehabilitation and Improvement Financing more successful. He writes:

The committee hopes to consolidate more than 100 federal surface transportation programs. Over the past 50 years, dozens of new programs have been created to address issues beyond the original programmatic goals. We are examining every program to determine its viability. By consolidating duplicative programs and eliminating ones not in the national interest, we can reduce the Transportation Department’s bureaucracy and better utilize our existing resources.

Reliance on the federal bureaucracy impedes our efficiency. According to the Federal Highway Administration, highway projects can take up to 15 years to complete, from planning through construction. This is government at its worst. States and local governments deal with an endless review process, while needed safety and maintenance improvements languish and construction costs escalate.

A project review process is necessary to protect the environment, but we can provide protections in a more reasonable manner. The committee intends to streamline this costly, cumbersome and duplicative review process.

Some consolidation is called for, and we’ve heard enough from stakeholders of all stripes to know that environmental reviews can be streamlined without being gutted. But Mica is using the language of the Road Gang here. Highway boosters often defend their turf by saying that urban transit and bike-ped investment falls “beyond the original programmatic goals” of the surface transportation program. “Eliminating [programs] not in the national interest” reads like code for consolidating the meager sums guaranteed for active transportation out of existence.

Meanwhile, as we reported last week, experts are unanimous in asserting that dreams of a six-year bill are all but dead, despite Mica’s best efforts to keep them alive. And they overwhelmingly say it’s the insistence on underfunding the bill that will deflate enthusiasm among stakeholders and lose the support of many in Congress.

Nadler affirms his support for additional revenues — an unpopular topic in this Congress, and with the economy still struggling to recover. Still, he says more resources are needed to fund the real needs of the crumbling transportation infrastructure system.

We will need some combination of increasing the gas tax, making that tax inflation-sensitive, such as by indexing it to the cost of construction or some other indicator, and securing other revenue sources. We should look into the feasibility of assessing a fee on shipping containers, taxing oil at the refinery head or even charging a fee on energy speculation.

Nadler also says the country needs to break apart “siloes” that divide funding for highways, transit or safety programs, and replace those with a more multimodal framework. He also favors greater ability to fund regional projects, rather than channeling all money through the states.

Meanwhile, Melissa Porter, senior counsel to the Senate Commerce Committee, recently told the annual meeting of the Coalition for America’s Gateways and Trade Corridors that until the committee has a better sense of how Congress will get the money, it’s hard to look at a six-year reauthorization bill, according to a report in TruckingInfo.

Either way, the path Mica is proposing appears to be a road to nowhere. The TruckingInfo story on the CAGTC meeting also quotes Alex Herrgott, a Republican staffer on the Senate Environment and Public Works Committee, as saying that no member of Congress will want to pass a bill that contains a 30 percent funding cut, as Mica is proposing, with no new revenues. “It doesn’t matter if they are a conservative Republican or a moderate Democrat,” Hergott said.

Nadler’s proposal of increasing user fees at a time of economic distress might be just as unrealistic as Mica’s proposal to starve the transportation system. Perhaps that’s why Melissa Porter told the CAGTC she’s hearing a lot of talk of shifting to a short-term bill to address policy concerns, as the Brookings Institution suggested last year. Indeed, it’s hard to envision another way forward, aside from another round of extensions to drag this fight out until after the next presidential election.

Sen. Lamar Alexander (R-TN) listens to mayors' concerns about federal funding for transportation. Photo: Alan Spearman / Commercial Appeal

After a meeting with mayors in his home state of Tennessee, where he listened as area mayors expressed concerns about the federal budget, Republican Senator Lamar Alexander said, “State and local governments will have to decide whether to have an increase in the gasoline tax.” He delivered the bitter news to the mayors that they may be getting even less money from the federal government over the next few years.

For many Republicans, that’s just as it should be. They think the federal bureaucracy is too big and more government functions should be left to the states. Alexander said that when he was governor in the eighties, he was able to fund and complete several state road projects without federal dollars.

But the mayors he spoke to were concerned. According to the Commercial Appeal, they explained that most transportation projects get 80 percent of their funding from the feds with just a 20 percent local match. They count on those federal dollars.

Alexander didn’t specify how much the state should raise the gas tax, but he indicated that tourists and truckers would “pay for a big share of it,” perhaps as a way to help local politicians sell the idea of a higher state gas tax to constituents.

Tennessee has one of the lowest gas tax rates in the country, taking into consideration the fact that sales tax is exempted on gasoline. The state gas tax is 15 cents a gallon (on top of the federal levy of 18.4 cents) but drivers essentially get back two-thirds of that cost (10 cents) since gas is exempt from sales tax. Tennessee dedicates its entire gas tax to highway-building.

Mayor Stan Joyner of Collierville, a Memphis suburb, told the Commercial Appeal he didn’t see a state gas tax hike as a solution to the funding problem. “Jiminy Christmas,” he said. “Gas is high enough and is taxed enough… If there are cuts or if they [federal officials] keep more, it puts a greater burden on us. It means we have an aging infrastructure with no funds to do anything about it.”

Donna Cooper, former secretary for policy under Pennsylvania Governor Ed Rendell, says state gas tax increases may be warranted in states that have not been able to meet local road repair needs. “But they should not be substitutes for the continued federal role,” she said, “in collecting gas taxes sufficient to ensure that our interstate highway system and transit systems are in good repair and have sufficient capacity to meet America’s transportation needs.”

Las Crucus Mayor Pro Tem Sharon Thomas. Photo: Tanya Snyder.

Though the conversation didn’t get stuck on the funding issue, as many other congressional hearings have, Sen. Max Baucus, who chairs the EPW Subcommittee on Transportation, suggested that maybe it’s time to look at a two-year bill if funding for a six-year bill seems unattainable. At least one witness made it clear that even a smaller long-term bill is preferable to a short bill because it allows transportation agencies to plan. Still, Baucus made clear that he found the funding question “frustrating.”

I’ve been involved in many highway bills. I can’t remember a time as challenging as today with all the different forces converging – one is the trust fund deteriorating – that’s a big one. And the politics in our country today, it’s very, very difficult to get additional revenue. And obviously the costs are going up because fuel’s going up, equipment’s more expensive, asphalt’s more expensive. You have to keep up. Also we have to compete internationally. Other countries have very up-to-date infrastructure systems.

This was a full committee hearing that normally would have been chaired by Sen. Barbara Boxer, but she was unavailable so Baucus stepped in. He told witnesses that Congress responds to pressure from outside; it doesn’t lead.

One leader that livability advocates will want to take notice of is Sharon Thomas, the mayor pro tempore and councilwoman of Las Cruces, New Mexico, who testified at today’s hearing. “How a community is laid out — roads, transit, pedestrian and bicycling facilities, open space, public areas, commercial areas, housing choices, economic development, health issues — are all related,” she told the committee.

Las Cruces was chosen in 2009 to participate in an EPA planning program to better connect the downtown with the university. “In that vision, El Paseo Road would be transformed from a vehicle clogged, dying, strip-mall-lined street into a mixed use, pedestrian and bicycle friendly, tree-lined boulevard, with multiple transportation options, a range of housing choices, and plenty of public gathering places,” she said. “That is what the community told us they wanted.”

Thomas spoke up for TIGER and Safe Routes to School and against the bureaucratic “silos” that separate land use and transportation planning.

Thomas didn’t get as much airtime as Fred Smith, the head of FedEx. Congestion hits FedEx’s bottom line like nothing else, but Smith’s interest isn’t just about the bottom line. He heads up the Energy Security Leadership Council, a team of business and military leaders who think the U.S.’ dependence on foreign oil is the biggest national security and economic risk the country faces. He spoke in favor of electrification of vehicles and linking policy goals to petroleum consumption.

He did away with conservative anti-government arguments by saying, “It would be great if there were a free market solution to our problem in this regard but there is no free market for oil. It’s managed by a cartel that, if it were doing what it does in the United States, it would be illegal.” He supports “alternatives to the current fuel tax regime,” meaning a vehicle-miles-traveled fee. When asked by rural lawmakers how to make sure it’s fair to rural people who inherently travel longer distances, he pointed out that a VMT would be fairer than the gas tax, since it can be adjusted to allow for things like congestion pricing.

Sen. Tom Carper (D-DE), an ardent (and lonely) supporter of a gas tax hike, heard Smith’s point that even a gas tax hike doesn’t fairly include drivers of alternative-fuel vehicles, like the Chevy Volt he just took for a test-drive.

Much of the hearing, however, belonged to state DOT heads defending their highway-centric turf. Oklahoma DOT chief Gary Ridley, invited witness of Ranking Member James Inhofe (R-OK), took an opportunity to condemn “set-asides” for bike trails and other “recreational and fringe” expenditures. He was the only person there – on the witness stand or on the dais – not to push for a bigger bill to fully fund transportation. He said it wasn’t for him to tell Congress how much to spend or how to fund the bill, and he made it clear he was prepared for a smaller bill than the last one – as long as all the money goes to important things, meaning highways.

Inhofe took his opportunity to push for offshore oil drilling, which, he said, could help break our dependence on Middle Eastern oil. He also got in his own digs at the “set-asides” – the popular new buzzword for non-motorized transportation options – saying taking transit and other “hitchhikers” out of the Highway Trust Fund would restore its surplus.

Meanwhile, John Cox of the Wyoming DOT argued for 90 percent of transportation funds being distributed according to a formula with no “set-asides.” He also told lawmakers that 77 percent of Wyoming’s traffic is through-traffic carrying goods and passengers that neither begin or end their trip in Wyoming. So, he said, Wyoming highways are in the national interest, as opposed to minor highways and bridges.

In a conversation about performance metrics, Cox said he was all for them but that they shouldn’t be imposed as part of the surface transportation reauthorization. He said he was afraid it would pit state DOTs against one another.

Alabama DOT chief John Cooper had to mention, too, that he’s concerned that high-speed rail “does not present a viable solution to problems with transportation in our state and we hope you will not use scarce federal highway dollars to support that mode.”

The EPW Committee is taking the lead on the Senate side on crafting the transportation bill. Committee leaders say they’re working closely with the House Transportation Committee and plan to mark up a bill by Memorial Day.

Raymond Poupore of the National Construction Alliance II asked for robust investment in infrastructure.

The specter of a new reauthorization that starves the transportation sector for the next six years has become a very real possibility, as the fact sinks in that Congress is not willing to overspend the Highway Trust Fund, and neither Congress nor the White House is willing to get behind any new revenues for the fund.

Here are just a few of their pleas for a renewed commitment to a viable funding source for transportation.

Kathy J. Caldwell, P.E., President, American Society of Civil Engineers

ASCE remains concerned with the increasing and continued deterioration of the nation’s infrastructure. In our 2009 report card, the nation’s roads received a grade of D-, bridges a C and transit a grade of D. A multiyear surface transportation bill with increased funding levels is necessary to address this documented gap.

Raymond Poupore, Executive Vice President, National Construction Alliance II

Congress should focus on shoring up the trust fund to meet the nation’s surface transportation deficiencies and revive the ailing construction economy… For Congress to enact a reauthorization that falls short of our demonstrated transportation needs would, in our judgment, lead to weaker economic recovery, persistent high unemployment in the construction sector, unstable Highway Trust Fund, more dangerous bridges and highways, and American economic vulnerability in the face of unrelenting global competition. Yet as you well know, the revenue question remains. That is most politically challenging issue facing reauthorization.

Paul Diederich, President, Industrial Builders

When Eisenhower signed the first highway bill in 1956, the user fee was three cents a gallon and a first-class postage stamp was exactly the same amount. Today the user fee stands at 18.4 cents per gallon, which is about six times the rate of 1956. On the other hand, a first-class stamp costs 44 cents, which is roughly 14 times the amount it was in 1956. It is critical that we continue to invest in our nation’s infrastructure in order to maintain the integrity of what we have as well as to improve in areas of need.

Frank McCartney, Executive Director, Delaware River Joint Toll Bridge Commission

Begin the transition to mileage-based user fees. As we come to rely more and more on renewable energy and less and less on petroleum-based fuels, we must develop a transportation funding mechanism that matches our usage patterns.

Adrian Moore Vice President, Reason Foundation and National Infrastructure Finance Commission

We looked at every mechanism that could fund the national transportation program that anyone suggested to us, and we unanimously arrived at the conclusion that the best mechanism in the long run is mileage based user fees. They are more effective than most of the alternatives, more economically sustainable than most of the alternatives, and at least as fair as any of the alternatives.