WHAT'S IN OUR FUTURE? STIMULUS PACKAGE. TRUST FUN

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AMERICAN DREAM COALTION Stimulus,
Reauthorization and Mobility Alan E. Pisarski
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WHATS IN OUR FUTURE?

• STIMULUS PACKAGE
• TRUST FUND INSOLVENCY AGAIN
• VMT DOWN 3.6
• FUELS DOWN 7.1
• HTF REVENUE DOWN 11.6 vs forecast
• REAUTHORIZATION OF SURFACE TRANSPORTATION
  LEGISLATION

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STIMULUS PACKAGEARRA

• 789B TOTAL
• 27.5B HIGHWAYS
• 1.5B DISCRETIONARY GRANTS
• Corridors, TIFIA, Earmarks
• 8.4B TRANSIT
• 1.1 AIRPORT IMPROVEMENT GRANTS
• 850m AMTRAK 450M security
• 8B HSR (plan due yesterday)

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Transportation lost in the game

• We got rolled John Mica Ranking Member House
  TI
• AASHTO had 5000 shovel ready projects worth
  about 66B (hwys only)
• Bill uses standard formulas no St. match
• States taking varied approaches
• lots of small maintenance paving, painting
• or few big ones (KS 4)
• Texas supporting toll road plans
• 1,800 projects obligated (5.6b) this week

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Next Reauthorization

• Due Oct 1, 2009 (6 years usually)
• Highways and transit HSR?
• Congress always misses due date 12 CRs last time
• They say they will be ready this time
• I doubt it new Admin., no

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Next Reauthorization (2)

• Who will be in charge? WH, DOT, Congress?
• New Secretary Ray LaHood alone
• No Senior staff some announcements
• DOT might prefer a CR so that they could be
  serious players next year
• If meet September goal then DOTs role limited

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Next Reauthorization (3)

• Finance, Finance, Finance
• Stimulus package will affect decisions
• Tolling, congestion pricing disliked by
  leadership but few options
• More afraid of gas tax increases
• Is private sector still ready with
• Devolution by Default ??

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Next Reauthorization (4)

• Maybe reorg DOT away from modes to functional
  structure intercity metro
• Metro mobility transit, bikes, walking
• Intercity tourism weak
• Watch private freight rail
• New focus on land use policies

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State of play in national legislation Financial
issues

• Not close to increase in last cycle (40)
• Needs put at 2x funding
• Fed Gas tax at 18.4 doesnt 3 in 1956
• Fed share of capital about 40
• Some opportunities regarding revenues
• Innovative Finance as alternative
• INNOVATIVE FINANCE AINT MONEY

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THREEWAY CONFLICTS

• TRANSPORTATION LEGISLATION
• ENERGY LEGISLATION
• GHG LEGISLATION
• Cap and Trade rebate or spend?
• Carbon Tax
• Air could catch brunt of plans after roads
• ALL ANTAGONISTIC TO MOBILITY

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EFFICIENCY VS EQUITY

• The Efficiency/Equity argument is fundamental to
  any regulatory process
• EQUITY your responsibility for share of
  solution should equal your share of the problem!
• EFFICIENCY do most cost-effective first and
  solve more of the problem per

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TRANSPORTATION VS OTHER GHG OPTIONS

• Options for alternate fuels in other sectors are
  greater. MOST COST EFFECTIVE
• Main focus should be electricity generation.
• WHY IS TRANSPORTATION SINGLED OUT AS ONLY SECTOR
  TO HAVE OUTPUT CUT?
• No one suggests farm output or industrial output
  should be cut by their share of GHG !

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Impacts on mobility

• Energy GHG CUT VMT!
• Metro Mobility Walk, Bike, Transit
• Coalition w/HUD use Transportation for land
  use coercion and subsidies
• Emphasis on Tolling/Pricing but not market
  driven pay-at-pump insurance
• VMT tax tax travel based on where, when and
  what you are doing
• GOAL IS TO SUPPRESS VMT
• GHG IS JUST THIS YEARS EXCUSE

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The policy conflict opposed thinking about the
world

• Neighborhood
• Shorter trips
• Walk/bike
• Land use solutions
• Design
• Whats freight?
• Accessibility
• Public
• Mass
• Behavior change
• Make it happen

• Globally Integrated
• Longer trips
• Broad community
• Choices
• Market forces
• Major role for freight
• Mobility
• Private
• Personalized
• Technological fix
• Let it happen

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The Right Answer Should At Least Be Among The
Options Available!

• This is A Real Problem even independent of global
  warming
• Fuel costs
• Energy Security
• Economic Uncertainties
• This Is A Real Problem With Little Resources
• FOCUS ON EFFICIENCY Selling Bad Solutions To A
  Real Problem Should Be Out!
• Research / Economic Analysis / Performance
  Measurement should be key

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The focus on changing behavior diverts us from
the real issues

• Enhancing economic opportunities
• Access to workers access to jobs
• Mainstreaming minorities
• Safety
• Serving an aging population
• Greater freedom of mobility
• Infrastructure Reconstruction
• More!

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A closing thought TRB 2009

• The major challenge facing the new Secretary will
  be getting people to take transportation
  seriouslyto recognize that the cost is not the
  benefit, and it is what happens after you build
  the road or the airport or transit system that
  matters to our future economic productivity and
  national well-being.

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Thank you

• Alan E. Pisarski
• alanpisarski_at_alanpisarski.com

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Next Reauthorization (5)

• Commissions are for cover or temporizing!
• Two commissions said the same thing more
  needed
• Commission mandated by SAFTEA-LU reported last
  month
• need 10c for inflation and plan for new
  non-petroleum based vehicle mileage tax

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The Federal Highway Trust Fund becomes insolvent
this year!
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Next Reauthorization (5)

• Next week AASHTO will release its Bottom Line
  estimates of investment needs for highways and
  transit on the hill (4th I have done)

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State of play in national legislation Context

• Difficult period Economy, Policy Conflicts, New
  Admin. , etc.
• Multiple transportation legislative issues
• Aviation
• Amtrak
• Rail freight
• Maritime
• More temporizing actions likely

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THE PRESENT LEGISLATIVE IMPASSE IS A SYMPTOM OF
THE FUTURE!

• PREMISES
• USER-PAY TRADITION AS GUIDE
• FUNDING INADEQUATE IN 2 WAYS
• CONGRESS/ADMIN. RELUCTANT ON FUEL USER FEES BOOST
• BUT NOT READY FOR THE NEXT STEP
• ADVENT OF POST GAS-TAX ERA
• SHIFT TO STATE AND LOCAL LEAD
• WANT/NEED PRIVATE PUB/PRIV. PARTICIPATION BUT
  HOW?

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As the Interstate Era Came to a Close

• No new vision emerged
• Nothing with the Interstates Power
• A Rich Funding System without a goal
• 1 1.7 Billion/yr
• RESULT
• Lack of Focus
• Great Expansions of Eligibility
• A Grant Program
• Congressional Earmarks

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Post-Interstate Era Legislation

• THREE 6 YEAR CYCLES
• 1992-ISTEA
• 1998-TEA-21
• 2005-SAFTEA-LU (2 years 11 extensions)
• A new cycle begins this year
• Will the Congress continue to temporize or will
  it launch a new era?
• THE POST POST INTERSTATE ERA!

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CONTEXT has two elements

• FINANCE
• INADEQUATE FUNDING OF HIGHWAY NEEDS
• FUEL EFFICIENCY
• SOME INFLATION
• NEW POWER SOURCES

• POLICY
• MANAGE SYSTEM
• USE MARKET- PLACE
• USE PRIVATE SECTOR
• USE ECONOMIC CONCEPTS

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Transport is most dependent on high energy
density fuels

• Cost effectiveness (cost per tonne of CO2) is
  the fundamental determinant of which abatement
  policies to adopt and how much the transport
  sector should contribute towards economy-wide CO2
  abatement goals --- it is important to achieve
  the required emissions reductions at the lowest
  overall cost to avoid damaging welfare and
  economic growth.
• Transport and other sectors are expected to
  contribute less to overall emissions reduction
  strategies.
• ECMT Council of Ministers Transport and
  Environment Jun 2006

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U.S. Greenhouse Gas Emissions
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Surface Transportation is the main issue for now
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A little Perspective Here!How much are we really
talking about?

• 3.6 drop for year
• Last year I drove 300 miles a week 15,000
  miles/yr
• This year I drove 290 miles a week
• 1 five mile trip lost per week

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VMT trend is not just gas prices

• WEAK ECONOMY
• Discretionary trips in Vacation Season
• DEMOGRAPHY - a long term trend

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IS FUEL CHEAP AT 4?
PLUS WE ARE 20 RICHER THAN THEN!
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Would 5 or 6 gas change America?

• LIFE STYLE PREFERENCES WILL DETERMINE GOALS AND
  TECHNOLOGY WILL RESPOND
• The consumer benefit of automobility is colossal
  think of toll costs 4/gal
• Europe at 9/gal still has traffic jams
• SERIOUS EFFECTS
• slower access to automobility of minorities and
  lower income populations
• Rural stress
• Less access to broader worker pool
• Depresses auto sales
• FLEET TURNOVER RATE WILL BE KEY

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THE GHG TRENDS ARE LARGELY POSITIVE

• CO2 Is Almost Self-stabilizing
• Energy Intensity/GDP Declining about 2/yr
• Energy Intensity/Capita will decline .5/yr
• Transportation VMT Slow Growth
• Vehicle Fuel Efficiency
• Demography
• Price Will Be Key Factor

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Backgrounder 2Energy, Environment and Economy
Institute of Transportation Engineers

• Requested by ITE Board of Directors
• A WIN, WIN, WIN Opportunity
• Traced fuel issues and travel trends
• Its all about efficiency

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VMT Trends

• US decline in VMT in 2008 about 3.6
• Still low now that Economy is driver
• Rural areas hit hardest around 9

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(No Transcript)
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VMT trend is not just gas prices

• NOW WEAK ECONOMY
• Discretionary trips in Vacation Season
• DEMOGRAPHY - a long term trend

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A little Perspective Here!How much are we really
talking about?

• 3.6 drop for year
• Last year I drove 300 miles a week 15,000
  miles/yr
• This year I drove 290 miles a week
• 1 five mile trip lost per week

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VMT Response Where did it go?

• FREIGHT
• Local Distribution opportunities
• Load changes
• Big Fleet gains

• TRIP CHAINING Big payoffs
• CARPOOLING
• Work some gains
• Non-work more
• CUTS IN TRIP LENGTH
• CUTS IN TRIPS MADE
• SHIFTS TO TRANSIT?
• Maybe 2

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WAS FUEL CHEAP AT 4?
PLUS WE ARE/WERE 20 RICHER THAN THEN!
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Would 5 or 6 gas change America?

• LIFE STYLE PREFERENCES WILL DETERMINE GOALS AND
  TECHNOLOGY WILL RESPOND
• The consumer benefit of automobility is colossal
  think of toll costs 4/gal
• Europe at 9/gal still has traffic jams
• SERIOUS EFFECTS
• slower access to automobility of minorities and
  lower income populations
• Rural stress
• Less access to broader worker pool
• Depresses auto sales
• FLEET TURNOVER RATE WILL BE KEY

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A Question!

• What Part Of Gains In Green House Gases In The
  Next 20 Years Will Come From
• Technology?
• Changed Behavior?

• What Part Of Gains In Air Quality In The Past 20
  Years Have Come From
• Technology
• 95 to 105
• Changed Behavior 5 to -5

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Potential impacts on new and existing
transportation infrastructure?

• Permanent inundation of roads, bridge approaches
• Weakening of land, substructure supporting roads,
  bridges
• Temporary flooding of roads
• Coastal Interior
• Increased stream flow, erosion and bridge scour
• Pavement cracking, deformation
• King Gee, FHWA

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REGULATION

• SAFETY of growing interest
• Major decline last year why?
• CAFÉ raised standard from current 27.5 miles
  per gallon standard to 35.7 miles per gallon by
  2015. light trucks, from 23.5 miles per gallon in
  2010 to 28.6 miles per gallon in 2015
• GHG BIG ISSUE
• Cap and Trade rebate or spend?
• Carbon Tax
• Air could catch brunt of plans after roads

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TRANSPORTATION VS OTHER OPTIONS

• Options for alternate fuels in other sectors are
  greater. MOST COST EFFECTIVE
• Main focus is, and should be, electricity
  generation.
• WHY IS TRANSPORTATION SINGLED OUT AS ONLY SECTOR
  TO HAVE OUTPUT CUT?
• No one suggests farm output or industrial output
  should be cut by 25