Capitol Comments

Transportation Needs Shifting

Declining revenue and a skeptical public are among the barriers state officials must overcome to fund the improvements needed in the nation’s aging infrastructure.

The country is undergoing a “paradigm shift, a departure from where we were in the 1950s,”  Kris Kolluri, commissioner of the New Jersey Department of Transportation, said Monday during a Council of State Governments Eastern Regional Conference transportation committee meeting.

Transportation: A National Perspective on Freight and Goods Movement

In terms of substance policy, and finance, the U.S. infrastructure system is broken, a member of a bipartisan national transportation commission said during The Council of State Governments Eastern Regional Conference annual meeting.

Frank McArdle from the National Surface Transportation Policy and Revenue Study Commission opened the transportation policy meeting by providing a bleak outlook on the state of infrastructure.

FROM THE EXPERT: The Road to Dwindling Transportation Budgets

By Sean Slone, CSG Transportation Policy Analyst

With high gas prices prompting many Americans to cut back on driving this summer, states are finding that their two main sources of transportation funding are drying up.

That threatens to delay or bring to a halt ongoing work on roads, rails and bridges around the country and potentially lead to the loss of thousands of jobs. The declining revenues also come at a time when costs for asphalt and other construction materials are straining state transportation budgets. The cost of asphalt alone is up 25 percent to 30 percent this year, while construction inflation is up 40 percent over the last three years.

Federal and state taxes collected on each gallon of gasoline go into both the federal Highway Trust Fund and state road funds. But those revenues are dropping precipitously as Americans cut back on their driving. Vehicle miles traveled on the nation’s roads fell in May by 3.7 percent from a year ago, the seventh consecutive month of year-to-year decline and ninth in the last 12.

States Looking to Save on Gasoline Bills

As prices at the pump continue to increase to up around $4 a gallon this summer, several states are looking at options to cut costs.

Just in time for the Independence Day holiday, Kentucky State Police announced a plan to scale back patrols and set up at least 200 checkpoints to reduce the amount of gas officers use, according to The Courier-Journal. 

The new policy will run from July 4 and is expected to continue through Labor Day, according to the newspaper. Kentucky State Police spent $132,000 more for gasoline in May than they did in May 2007, according to The Courier-Journal.

State Police Capt. Tim Lucas told the Louisville-based newspaper the plan was in efforts to "let traffic come to us instead of us seeking traffic."

State Legislators Can Drive Innovative Transportation Finance

State legislators need to be aware of what’s coming at them when it comes to financing transportation projects. That’s the simple truth from Kathy Ruffalo, who is on the National Surface Transportation Infrastructure Financing Commission.

Here’s what legislators face: The federal piece of the transportation finance pie—the Highway Trust Fund—is not raising enough money to put back into the system, she said, “We are in trouble.” People are driving less, she said. “Last month we had the largest decrease because of the fuel prices in this country,” Ruffalo said. 

“That’s only going to exacerbate the problem,” she said, adding that as people buy less gas, less tax goes into the system to maintain and build America’s roads.

Public-Private Partnerships An Answer for Some States

States reeling from declining revenues and aging infrastructure are looking at innovative alternatives to finance transportation projects.

One alternative is public-private partnerships, also known as PPPs. Several states have either leased or have proposed leasing public assets such as toll roads. State Rep. Randy Borror of Indiana, who helped shepherd through the legislature a $3.8 billion lease arrangement of the Indiana Toll Road in 2006, described the Indiana plan Thursday at a Financial Services  workshop.

Borror said the state budget was in a deficit, there were 200 unfunded transportation projects on the books, some as old as 40 years, and other funding options were not feasible. He said the other options included increasing the gas tax, restructuring debt, issuing more bonds and increasing tolls.

States Partner with Private Sector for Transportation

When it comes to financing transportation projects, many states have turned to public-private partnerships. Taking on various degrees of public and private responsibility, state governments are partnering with the private sector to fund and build roads, bridges, toll roads and other transportation facilities.

In fact, the method has been so widespread that the Federal Highway Administration (FHWA) maintains online resources on the issue. The administration explains the different forms these projects can take on its Web site.

Among them:

Bridges On A Fast Track

Missouri has a novel idea to put repair or replace more than 800 bridges in five years.

Contractors would finance the $400 million to $600 million in repairs and maintain the bridges for another 25 years under the plan. The state, in turn, would use a portion of its federal bridge funds to repay the company over 25 years. The plan is being touted as a model for the rest of the country.

Many states are looking closely at bridges after the August collapse of a major bridge in Minnesota.

Find out more about Missouri's plan at stateline.org. And you can find out what other states are doing in public-private partnerships to take care of transportation infrastructure in an upcoming issue of State News. Visit The Council of State Governments Web site in early November to read the story. CSG will also release an issue brief on the subject at its annual meeting in November.

Washington State Ready to Use Enhanced Driver’s License

Washington state’s enhanced driver’s license project provides a possible alternative to the Western Hemisphere Travel Initiative (WHTI), and it has created a major shift in the relations between state and federal officials over border security.

“We want to assure states and provinces that we want to be in partnership,” said David Sarrisan, chief customs and border protection officer with the Department of Homeland Security.

Sarrisan was one of four state and federal officials who participated Sunday in panel discussions on WHTI and the implementation of the PASS Card during the 47th meeting  of The Council of State Government’s Eastern Regional Conference in Quebec City.

Alternative to Passport rules

Note: This is an updated version of the article that ran in the June/July 2007 issue of State News titled "REAL Alternative: States, Provinces Experiment with Enhanced Driver's Licenses"

Excerpt:

In a reversal of position, the Department of Homeland Security (DHS) is considering enhanced driver's licenses as eventual acceptable documentation for border crossings between the United States and Canada -- a possible alternative to the passport requirements of the Western Hemisphere Travel Initiative (WHTI). Under WHTI, only passports or PASS cards  -- a smaller and cheaper alternative to a passport  -- can be used to enter or re-enter the U.S. from the Americas at land and sea borders.

Some state and provincial leaders are concerned that cross-border travel and tourism could suffer a major economic blow if there is an insistence on using passports -- a requirement slated to take effect summer of 2008. Responding to pressure from the U.S. Congress and the Canadian government, DHS announced it would delay the passport requirement to at least the summer of 2008. At least 60 days notice will be given before the new rule goes into effect. This move is a major shift in policy for DHS Secretary Michael Chertoff, who has said for months the new rules for land border entry would take effect as early as January 2008.