US Sec Peters to governors: toll approach will unleash new wave of transport investment

US secretary of transportation Mary Peters told a meeting of governors at the White House Feb 25 that they have the "opportunity to unleash the greatest new wave of transportation investment this country has ever seen." She was continuing to make the case for abandoning the five yearly tax-and-grant programs and politicized control of road projects in favor of market-based funding and management.

State governors have the choice of leading an historic transformation or getting mired in what she called the "usual formula fights and feeding frenzies over earmarks" in which communities are "stuck with clogged roads, wasteful spending, and ineffective financing."

"We have the opportunity to live in a time when consumers and shippers set transportation priorities instead of central planners. And we already do live in a time when technology can assist us in delivering free-flow highways and reliable commutes every day of the week," said Peters.

Tax-based spending has been growing without stemming growth in congestion

The failings of federal tax and earmark programs she said are highlighted by the 300% increase in traffic congestion in the past 25 years while spending on roads and transit is doubling every ten years.

"There is no greater symptom of failure than the fact that Americans simply don’t support putting more money into this broken system. Poll after poll shows strong opposition to traditional fuel taxes. The public ranks gas taxes as among the least fair taxes at the federal, state and local levels. And they are rightfully suspicious that higher taxes will (not) translate into more efficient transportation systems."

States she said can "take charge of your own destiny and provide better service to your constituents," she said by tapping private sector resources.

$400 billion available right now

Peters said there is "upwards of $400 billion available right now" in private sector capital looking to invest in transport infrastructure.

"All we need is the political courage to embrace a new paradigm in transportation financing and construction, the courage shown by Governors like (California's) Arnold Schwartzenegger and (Pennsylvania's) Ed Rendell, who are aggressively working to open the door to private capital."

Pricing the key

Key to tapping the private sector capital is pricing, Peters said. She said that in the era of a government mandated monopoly in telecommunications and price controls you'd get a recording: "I'm sorry all circuits are busy. Please try again later."

"Your call couldn’t go through the system for the same reason your car can’t get through rush hour – poor pricing," Peters said.

Pricing immediately cuts congestion and gives people choices. It is fairer than gas taxes and allows peoples dollars to be kept locally rather than being sent to Washington to be skimmed off. Tapping the private sector will allow state borrowing to be reduced and taxes cut, Peters added.

President Eisenhower had originally wanted the interstate system financed by tolls, Peters said: "He believed directly charging the people who used the roads was the fairest and most efficient approach. But Ike was limited by the technologies of his day."

Open road tolling

Peters Continued: "Unlike the 1950s when technology limited toll collection to expensive, unsightly and inconvenient toll booths, (now) we never need to build a new toll plaza again. Instead, we can quickly and easily install high-speed, open-road tolling equipment that will never require a single driver to slow down. In fact some 24 million transponders are already in use nationwide today."

Public favor direct charges

"Just as technology has changed," said Peters, "so has the public’s attitude. A review of recent public opinion surveys found majority support for tolling and road pricing concepts in 56 percent of the surveys. When people know how the funds will be used and the tangible benefits they can expect, support is higher still."

She cited the recent case of King County WA in the Puget Sound area where residents favored using electronic tolls over gas taxes to fund replacement of the 520 Floating Bridge by a margin of 78 percent to 17 percent.

"More and more people are seeing that direct charges offer a better deal for taxpayers than increasing dependence on dysfunctional sources like federal gasoline taxes. This simple but powerful technology unlocks enormous new opportunities for communities BOTH to attract new investment capital AND to manage congestion through variable prices."

The US Secretary said she was there with the governors "to invite you to work with me to change the way we look at congestion, invest in transportation, and get goods moving through our economy."

Policy summit early summer

Peters said a partnership would be launched with the National Governor's Association to develop "exciting projects". There would be a summit meeting for governors and senior staff on the policy and financing options available to be held late spring or early summer.

Do you want to be the Governor who...?

Peters then asked rhetorically:

- "Do you want to be the Governor who delivers traffic-free commutes to the people in your state?

- "Do you want to be able to attract businesses with reliable roads and predictable shipping schedules?

- "Are you ready to stop having Washington dictate your transportation agenda and start setting your own?

She asked the governors for support in three respects:

"First, we need to substantially re-focus federal investments on improving the quality, safety, and performance of the Interstate system and on reducing congestion in major metropolitan areas. By trying to be all things to all people, we are often nothing to anyone.

"Second, we need to loosen current restrictions on the ability of states to implement electronic tolling (on our highways) and to attract private investment to the highways. If you want to manage your transportation systems by charging those who use those systems, the federal government should not block you from doing so.

"Lastly, we need to eliminate earmarks entirely, reduce federal process requirements that add minimal value, and insist on cost-benefit analysis.

Peters concluded hr speech to the governors: "America’s transportation system can be better, and my goal is to clear federal obstacles to innovation and investment so you can make that happen."

Two Peters papers

Also of note from Mary Peters is a paper just released called "Towards a New Surface Transportation Economic Model."

Downloadable here in MS Word, 6 pages:

http://www.tollroadsnews.com/sites/default/files/PetersNewModel.doc

And a dissent from Peters and several colleagues on a congressional study commission whose majority sadly advocated enlargement of the wasteful and corrupt tax-and-grant programs, downloadable here:

http://www.tollroadsnews.com/sites/default/files/MinNSTPARSC.pdf

TOLLROADSnews 2008-02-25