TRB Chairman's Luncheon - January 16, 2013

TRB Chairman’s Luncheon

Building Highway Capacity

John HorsleyExecutive DirectorJanuary 16, 2013

TRB Speech like a Texas Longhorn: “Two points with a lot of bull in between”

Three Points• Need to increase

highway capacity

• Ability of states to build that capacity

• Ways Congress can fund it

AASHTO Supports Transit

• In 2012, AASHTO, APTA and others defeated an attempt to undercut long-term funding for transit

• States provide more funding for transit than the federal government. In 2012,States $13.6 billion, Federal $11.7 billion

• AASHTO goal: Double transit ridership in 20 years

1960 2013

Population 160 million 315 million Doubled

Vehicle Miles 1 trillion 3 trillion Tripled

Heavy Trucks 700,000 2.5 million Quadrupled

1. Need for Highway Capacity: Backlog over last 50 years

From 1980 to 2010, Interstate Traffic Increased by 150%, While Capacity Increased Only 15%: Result - Bottlenecks

Highway Capacity Needed over next 40 years

• As U.S. population grows by 100 million

• As truck freight doubles

• As vehicle miles traveled increases from

3 trillion to 4 trillion or more

You do the math and judge for yourself whether additional highway capacity will be needed

2. Ability of States to Build Highway Capacity Needed

• Three projects completed over last 5 years

• Three projects to be completed over next 5 years

• Dispell Myth that States can’t build big projects anymore

$2.5 Billion Woodrow Wilson Bridge, Maryland and Virginia DOTs, 2008

$685 Million Legacy Parkway, Utah DOT, 2008

$1.9 Billion I-495 Beltway HOT Lanes, Virginia DOT, Transurban/Fluor PPP

$6.4 Billion San Francisco Bay Bridge Replacement, Caltrans, 2013

$2.5 Billion Louisville Bridges, KYDOT Design-Build, INDOT PPP

$2 Billion Detroit, Michigan to Windsor, Ontario International Bridge

Given political will and a way to fund the project, states can build what the country needs

3. Ways Congress Can Fund Needed Highway and Transit Investment

• $50 billion TRIP Bond program

• Tax Reform to restore solvency to Highway Trust Fund by

• replacing cents per gallon excise tax on fuels with a sales tax

$50 Billion TRIP Bond Program,

$1 Billion for Every State• Sponsored by Sen. Ron Wyden, Oregon (D),

and Sen. John Hoeven, North Dakota (R)• Wyden’s Build America Bonds, authorized 2009

$181 billion issued, 25% for transportation• From proceeds of TRIP bonds, over 6 years

every state would receive $1 billion in cash• No debt incurred by states, cost to U.S. Treasury

totally paid for through customs fees

Transportation’s Fiscal Cliff October,2014

Tax Reform to Restore Solvency ofHighway Trust Fund

• Replace cents per gallon excise tax with sales tax on fuels

• Twelve states already levy sales taxes• Federal Government spends $15 billion more

each year than revenues coming in• Rate to be set at level that restores solvency to

Highway Trust Fund• Sales taxes indexed to price of fuel

Potential Sales Tax Receipts

(Figures in billions)

2013 2014 2015 2016 2017 2018

GASOLINE RECEIPTS(at 8.4%)

$37.7 $39.6 $40.8 $41.3 $41.9 $42.2

DIESEL RECEIPTS(at 10.6%) $14.7 $15.6 $16.3 $16.8 $17.2 $17.6

TOTAL $52.4 $55.2 $57.1 $58.0 $59.1 $59.8

Note: Based on Energy Information Administration forecast of fuel prices. 2013 average sales-weighted gasoline price for all grades with all federal, state, and local state taxes is $3.29; diesel is $2.70.

Stable Future for Highway and Transit Programs 2013-2018

• Funding program at current levels would require $320 billion

• Excise taxes are expected to generate • $236 billion.• Sales tax revenues would generate about • $350 billion • At stake is more than $100 billion

Four Questions for Members of Congress: Left and Right

• Do you want to sustain the program at current levels or reduce it and cut thousands of jobs?

• Do you want to sustain the program by transferring more general fund dollars, or make transportation users pay their own way?

• By shifting to a sales tax, do you want to reduce the deficit $150 billion over ten years?

• If you could do all this and it would cost drivers less than $1 dollar per week per car, wouldn’t this make sense?

Please Join Forces to Demand that Congress Provide Long-term Funding for Transportation