Financing and Funding

1
Financing and Funding

• Will Kempton
• Chair
• ASC Financing and Funding Legislative Team
• AASHTO Standing Committee on Finance and
  Administration
• Director
• California Department of Transportation

2
Considerations

• Federal government must continue to play a strong
  role in investing and maintaining an integrated
  and multimodal national surface transportation
  system.
• While a minimum distribution of Highway Trust
  Fund revenues to each state is appropriate, a
  greater proportion of Federal revenue should be
  distributed across core programs.
• Strong accountability measures must accompany
  substantially increased funding to ensure
  resources are spent as efficiently and
  effectively as possible.

3
Considerations

• Investment levels over the long-term need to
  correlate with documented needs.
• Investments in safety and research remain a
  compelling need.
• The impact of inflation on commodities and
  construction costs must be addressed in setting
  investment levels.

4
Legislative Recommendations

• Between 2010 and 2015, in order to invest in a
  robust surface transportation program to meet
  significant national needs, Congress should fund
  a 545 billion multimodal program comprised of
• Highway program funded at 375 billion
  (2015 level 75 billion)
• Transit program funded at 93 billion
  (2015 level 18.5
  billion)
• Freight program funded at 42 billion
  (2015 level 9
  billion)
• Intercity passenger rail program funded at 34.5
  billion
  (2015 level
  6.5 billion)

5
Legislative Recommendations

• Adopt a diversified portfolio of revenue options
  to meet the recommended program funding needs.
• Maintain the current federal and state shares for
  highway and transit capital programs.
• Eliminate or drastically limit earmarking in
  federal transportation programs.
• Develop policies that support maximum flexibility
  to allow for use of both conventional and
  innovative funding and financing tools. Given
  the magnitude and diversity of needs, states and
  local governments should be provided with maximum
  flexibility to use federal revenues from existing
  core sources to meet systemic transportation
  needs.

6
Legislative Recommendations

• Ensure budgetary firewalls and funding guarantees
  are applied to all modes.
• Create a Commission to recommend to Congress
  periodic adjustments for revenues necessary to
  meet program needs.
• Adopt a long-range approach to funding the
  surface transportation system that gradually
  moves away from dependence on the current motor
  fuels tax to a distance-based direct user fee
  such as a fee on vehicle miles traveled.

7
Legislative Recommendations

• Assure that any climate change legislation that
  creates a new revenue source, either through a
  carbon tax or cap-and-trade, provides substantial
  funding for transportation proportional to
  transportations impact on greenhouse gas
  emissions, and dedicate a sufficient portion of
  these revenues to support intercity passenger
  rail, transit, highway operations, bicycle and
  pedestrian projects, and freight programs that
  reduce greenhouse gas emissions.

8
Legislative Recommendations

• Special consideration should be given to
  important but costly projects that have regional
  or national benefits to ensure that projects of
  this type can be funded.
• Fund a proof of concept multi-state test(s) of a
  VMT-based funding approach at 50 million per
  year for 2010, 2011 and 2012 with a report to
  Congress by 2013.

9
Proposed Program Funding Levels
10
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