[Senate Hearing 110-1005]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1005


   CONDITION OF OUR NATION'S INFRASTRUCTURE: LOCAL PERSPECTIVES FROM 
                                 MAYORS

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

THE CONDITION OF OUR NATION'S INFRASTRUCTURE FROM THE LOCAL PERSPECTIVE 
                               OF MAYORS


                               __________

                        THURSDAY, JUNE 12, 2008

                               __________

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                                Affairs




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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

               CHRISTOPHER J. DODD, Connecticut, Chairman
TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         WAYNE ALLARD, Colorado
EVAN BAYH, Indiana                   MICHAEL B. ENZI, Wyoming
THOMAS R. CARPER, Delaware           CHUCK HAGEL, Nebraska
ROBERT MENENDEZ, New Jersey          JIM BUNNING, Kentucky
DANIEL K. AKAKA, Hawaii              MIKE CRAPO, Idaho
SHERROD BROWN, Ohio                  ELIZABETH DOLE, North Carolina
ROBERT P. CASEY, Pennsylvania        MEL MARTINEZ, Florida
JON TESTER, Montana                  BOB CORKER, Tennessee

                      Shawn Maher, Staff Director
        William D. Duhnke, Republican Staff Director and Counsel

                      Amy S. Friend, Chief Counsel

                    Mark Osterle, Republican Counsel

                       Dawn Ratliff, Chief Clerk
                      Shelvin Simmons, IT Director
                          Jim Crowell, Editor













                            C O N T E N T S

                              ----------                              

                        THURSDAY, JUNE 12, 2008

                                                                   Page

Opening statement of Chairman Dodd...............................     1

Opening statements, comments, or prepared statements of:
    Senator Shelby...............................................     3
    Senator Hagel................................................     6
        Prepared statement.......................................    37
    Senator Reed.................................................    17
    Senator Dole.................................................    17
    Senator Carper...............................................    18
    Senator Martinez.............................................    20
    Senator Menendez.............................................    21
    Senator Corker...............................................    22

                               WITNESSES

Saxby Chambliss, U.S. Senator from the State of Georgia..........     3
Johnny Isakson, U.S. Senator from the State of Georgia...........     4
Bill Nelson, U.S. Senator from the State of Florida..............     5
Mel Martinez, U.S. Senator from the State of Florida.............     6
 Michael R. Bloomberg, Mayor, New York, New York.................     8
    Prepared statement...........................................    39
Shirley Franklin, Mayor, Atlanta, Georgia........................    10
    Prepared statement...........................................    43
John Peyton, Mayor, Jacksonville, Florida........................    12
    Prepared statement...........................................    54
Mark Funkhouser, Mayor, Kansas City, Missouri....................    14
    Prepared statement...........................................    59

 
   CONDITION OF OUR NATION'S INFRASTRUCTURE: LOCAL PERSPECTIVES FROM 
                                 MAYORS

                              ----------                              


                        THURSDAY, JUNE 12, 2008

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:15 a.m., in room SD-538, Dirksen 
Senate Office Building, Senator Christopher J. Dodd (Chairman 
of the Committee) presiding.

       OPENING STATEMENT OF CHAIRMAN CHRISTOPHER J. DODD

    Chairman Dodd. The Committee will come to order.
    I appreciate all who are here this morning. I want to 
particularly thank our mayors who are joining us for this 
hearing on the issue of our infrastructure problems in the 
country. We gather this morning to examine once again the 
condition of our Nation's physical infrastructure and proposals 
that are needed to make improvements in it.
    When the Committee last gathered to examine this critical 
issue, we considered the perspectives from individuals who held 
expertise in public and private financing, civil engineering, 
labor and business. They were unanimous in voicing compelling 
support for increased investment in our Nation's infrastructure 
and for the need to develop and implement alternative ways to 
finance this critically important investment in our Nation's 
future.
    Today we consider the local perspective on our Nation's 
infrastructure, and we will hear from individuals who are most 
qualified to offer that critical perspective--our Nation's 
mayors. We are fortunate to have before us a distinguished 
panel of leaders who represent cities from different regions of 
our Nation, who hold different political affiliations, and who 
face different challenges in their communities. But what they 
share in common is far more important than what differentiates 
them. These mayors, like their colleagues across the Nation, 
bear the lion's share of responsibility for maintaining the 
roads, bridges, mass transit systems, drinking water systems, 
waste water removal systems, and other vital components of our 
national structures.
    The Federal Highway Administration reports that out of the 
4 million miles of roads in our Nation, over 3 million miles 
are owned by counties, cities, and towns. Local governments 
maintain almost 60 percent of our Nation's 54,000 drinking 
water systems and 98 percent of the 16,000 waste water systems 
in the country. Our counties and cities and towns also have a 
front-line perspective on what happens when the needs of our 
infrastructures go unmet.
    I have just a couple of photographs to illustrate the point 
here. Obviously, we all remember last summer, in August in 
Minneapolis, the collapse that afternoon of the bridge, the 
loss of lives, and the national attention it drew to the 
condition of our highway systems. And then the second 
photograph--Mayor Bloomberg, you will be familiar with this 
one--is the New York City steam pipe explosion that caused 
great disruption in the city, again, a further example of what 
is happening.
    When the bridge collapsed in Minneapolis, Mayor Rybak was 
among the first to respond. When the steam pipe exploded in New 
York City, Mayor Bloomberg was among the first to respond. And 
when the Mianus River bridge collapsed in my home State of 
Connecticut in 1983, I know that several mayors in Fairfield 
County joined State officials in responding to that tragedy.
    Here in Washington, we may cite alarming statistics like 
the 14,000 Americans who die each year at least in part because 
of crumbling roads and bridges; the over 5,500 Americans who 
are sickened each year from some of the 850 billion gallons of 
storm water and raw sewage left untreated by obsolete waste 
water systems; or the average American who wastes 1.5 hours a 
year, if you will, in traffic congestion--excuse me, 51.5 hours 
a year in traffic congestion.
    However, our mayors see these alarming statistics as more 
than just numbers on a piece of paper. They witness how these 
statistics play out each and every day in their communities and 
the people who are affected by them. They personally console 
individuals and loved ones in road accidents caused by poorly 
engineered highways or collapsed bridges. They personally 
connect with individuals who are sickened by an overburdened 
drinking water system or waste water system. And they 
experience the devastating economic effects when jobs are lost 
because the infrastructure in their communities cannot provide 
for effective movement of people, goods, and information.
    There is no question that the mayors are acutely aware of 
our Nation's enormous immediate and unmet infrastructure needs. 
In fact, this awareness has already translated into meaningful 
action. I want to commend recent and comprehensive efforts 
undertaken by State and local governments to raise the 
awareness of infrastructure needs nationwide. Efforts such as 
Building America's Future, which Mayor Bloomberg has undertaken 
with Governors Rendell and Schwarzenegger, are certainly well 
known to most Americans. The American Society of Engineers 
estimates that an investment of $1.6 trillion over 5 years is 
required just to bring our current infrastructure to an 
acceptable level. That translates into $320 billion a year just 
to upgrade existing structures to serve the needs of our 
Nation.
    As we face the prospect of significant long-term budget 
deficits, a weakening economy, decreasing tax revenues, and 
increasing unemployment, it is clear that the current ways by 
which we invest in our Nation's infrastructure has become as 
obsolete as many of the infrastructure systems themselves. We 
must, I think, forge a strong partnership between Federal, 
State, and local governments to explore other creative and 
fiscally responsible ideas that protect Americans to keep our 
economy as strong as possible.
    We also cannot afford to delay. I believe the cost of 
meeting our infrastructure needs is great, but the cost of 
failing to meet them is even greater, and it will grow every 
day. That is why, along with my colleague from Nebraska, 
Senator Chuck Hagel, who is here with us this morning, and a 
variety of other people, we have proposed creating a national 
infrastructure bank to help us meet these challenges. The bank 
would mark the first Federal effort to prioritize 
infrastructure projects across different modes of 
transportation and water treatment. It will be the first 
Federal program to rate these different infrastructure projects 
on the basis of merit and to invest in projects based on their 
merit. And by focusing on projects of regional and national 
significance, the bank would help us meet some of the largest 
challenges that we are confronted with.
    This proposal will not solve all of our problems, 
obviously, but we believe that it will go a long way to 
addressing many of the concerns that we have heard from our 
witnesses, as we will today, and those who appeared prior to 
today. And I will continue to work, obviously, with my 
colleague from Alabama, Senator Shelby, and other Members of 
this Committee to find that common ground that I hope we can, 
and we will be able to move this legislation forward, my hope 
would be even in this Congress. I do not know an exact 
timetable. As you know, we are very busy working on legislation 
to address the housing issues in our country. But I do hope 
that we can move a bill through this Committee possibly in a 
timely fashion.
    I appreciate, obviously, the willingness of our witnesses 
to share their insights with the Committee today. We look 
forward to your testimony. I know that we have several other 
Members who are here to introduce some of our witnesses, and 
before doing that, let me turn to my colleague from Alabama, 
the Ranking Member of this Committee, for any opening comments 
he wants to make, and then we will turn to the introduction of 
witnesses and any comments of our colleagues here.
    Senator Shelby.

             STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Mr. Chairman. I will be brief. I 
just want to welcome our distinguished panel of witnesses and 
ask that my written statement be made part of the record.
    Thank you.
    Chairman Dodd. That is it?
    Senator Shelby. It is a long statement.
    Chairman Dodd. Well, we have a couple of our colleagues 
here. Senator Chambliss and Senator Isakson are here to 
represent Mayor Franklin, a good friend, and why don't I invite 
both of you--where is Johnny? There you are right there. If the 
two of you want to step up and introduce the mayor of Atlanta.

           STATEMENT OF SAXBY CHAMBLISS, U.S. SENATOR
                   FROM THE STATE OF GEORGIA

    Senator Chambliss. Thank you, Chairman Dodd, Senator 
Shelby, and Members of the Committee, for the opportunity to 
introduce what is, without question, one of the most 
outstanding mayors the city of Atlanta has ever had and one of 
the most outstanding mayors in America.
    I know you are here to talk about infrastructure problems 
and the needs of cities across America, and there is no city 
that we can look at that has had more of an issue with respect 
to decaying infrastructure than has the city of Atlanta. The 
predecessors to Mayor Franklin frankly did not pay much 
attention to this. They decided they would rather pay big fines 
to the Federal Government than address the issue of decaying 
water and sewer systems in Atlanta and the surrounding areas.
    Mayor Franklin came into office and did something very 
unique. As an elected official, she made a decision, No. 1, 
that we have got a serious problem that has got to be 
addressed, and she made the decision to address it in the right 
in which to fix it over a long period of time. And instead of 
looking to the Federal Government for funding solely from the 
standpoint of fixing it, instead of looking to the State 
government solely for the funding to fix it, she decided that 
the residents of the city of Atlanta needed to pay their fair 
share, and then let's work in coordination with the State and 
Federal Government to provide some additional assistance.
    So what she did was to come in and raise user fees in the 
city of Atlanta by a significant amount, something that was 
normally not thought of as very popular. But thanks to her 
leadership, the citizens of the city Atlanta accepted it, and 
we now have a major project in excess of $3 billion that is 
underway under her leadership, and we are seeing real progress. 
The Federal Government has stepped up to lend a helping hand. 
The State government has stepped up to lend a helping hand. 
But, frankly, Mayor Franklin's leadership on this issue is what 
has caused it to happen.
    In addition to that issue of infrastructure, under her 
leadership we have seen the infrastructure at Hartsfield-
Jackson Airport, the busiest airport in the world, expand in 
great numbers, great measures. She has overseen a $6 billion-
plus expansion at Hartsfield-Jackson. We have added a fifth 
runway. And, again, thanks to her leadership, we are seeing a 
much busier airport in Atlanta today, serving the needs of 
people all over the world, something that was not happening 10 
years ago.
    So I am very pleased to be here today to introduce her to 
this Committee and just to tell you that you could not have a 
better resource than Mayor Franklin to talk to when it comes to 
infrastructure needs and, most importantly, ways to fix those 
infrastructure needs.
    So it is my privilege to share with my colleague Senator 
Isakson the honor of introducing Mayor Shirley Franklin.
    Chairman Dodd. Thank you very much, Senator.
    Johnny, welcome to the Committee.

           STATEMENT OF JOHNNY ISAKSON, U.S. SENATOR
                   FROM THE STATE OF GEORGIA

    Senator Isakson. Thank you, Chairman Dodd. I will not be 
redundant in what Saxby said, except to say that I came to the 
Atlanta business community, and for 33 years, 20 of which I ran 
a company, I worked with elected officials and mayors in 
Atlanta. We had had benign neglect for a long time in our major 
infrastructure. We needed our fifth runway. We needed a new 
CSO. We needed to address homelessness. Shirley Franklin on 
each and every one of those counts had the vision, the 
intestinal fortitude, and the will to see to it that we did it 
in a public-private partnership with the city of Atlanta and 
its people being the first to step up to the table.
    Just one example. While doing the airport runway, while 
addressing the CSO, a $3.2 billion problem, she also saw to it 
that homelessness in Atlanta was addressed through a project 
she put together, and we have 24/7 gateway centers that every 
day serve 500 homeless people, gives them food, gives them 
shelter, gives them direction, has helped the streets of 
Atlanta, but most important, the humanity of Atlanta. In the 
words of my grandson, Charlie, she is ``a good old gal and a 
rock star,'' and we are mighty proud of her.
    [Laughter.]
    Chairman Dodd. Cannot get a better endorsement than that, I 
think. Well, thank you very much, both Senators from Georgia. 
We appreciate it very much.
    And our colleague from Florida, we obviously have Mel 
Martinez from Florida on the Committee, but Bill Nelson, my 
good friend, is also here. Why don't we start with you, Bill, 
and introduce the mayor of Jacksonville.

             STATEMENT OF BILL NELSON, U.S. SENATOR
                   FROM THE STATE OF FLORIDA

    Senator Nelson. Well, Mr. Chairman, I wanted to come along 
with Mel and tell you about our mayor, the mayor of the bold 
new city of the South, the first coast of Florida, a city that 
was quite visionary some three decades ago when it decided to 
consolidate its government, and so, in essence, the city 
government is the county government. And there are a number of 
cities in Florida that are having now a recognition of that 
kind of charter form of government is the most efficient. And, 
of course, atop that structure sits the mayor of Jacksonville, 
an extremely powerful person and one who has great vision.
    Now, it is great that Mayor Peyton is here to talk about 
infrastructure because Jacksonville has really been quite 
visionary in getting the infrastructure that we need. Our 
colleagues from Atlanta are talking about the infrastructure of 
the airport, and indeed that is, and yet the Jacksonville 
airport, as Jacksonville was host to the Super Bowl, who ever 
thought about a little city being host to a Super Bowl, and yet 
people realized it was not a little city, and the city the size 
it was handled that Super Bowl and all of its traffic with 
exceptional aplomb, discretion, and efficiency.
    And so representing that here, as you all talk about the 
desperate need that we have in this country for infrastructure, 
if it had been this Senator's druthers, instead of that 
stimulus bill, sending out checks, this Senator's preference 
was that we would have put that money into infrastructure. And 
now you all are addressing that, and I commend you for it, and 
I am very happy that our mayor is here to address the specifics 
of that legislation.
    Thank you.
    Chairman Dodd. Thank you very much.
    Mel, do you want to say a word or two?

            STATEMENT OF MEL MARTINEZ, U.S. SENATOR
                   FROM THE STATE OF FLORIDA

    Senator Martinez. Thank you, Mr. Chairman. I will go ahead 
and join in. I have some opening comments on the whole subject, 
but I really appreciate John Peyton being here. He is a good 
friend and a good man and a good mayor. Again, as Senator 
Nelson indicated, hosting the Super Bowl was the pinnacle, I 
think, of his mayoralty. But he has worked on some other 
things, too, that are laudable. He has launched a nationally 
recognized early childhood literacy program for which I know, 
Mayor, you have received a lot of attention, and I think 
deservedly so.
    The city of Jacksonville is one of our great cities. This 
mayor form of government, when I was mayor of Orlando, Orange 
County in Orlando, I quickly went to Jacksonville and met with 
his predecessor to see how this mega government was working. 
They have done a great job. I am proud to have you here. 
Welcome.
    Chairman Dodd. Well, thanks very much, and let me say to 
Mayor Funkhouser and to Mayor Bloomberg, Senator Schumer I know 
would like to get by. He still may. He is not here, but let me 
just say how pleased we are you are here, Mayor Bloomberg. It 
is a great honor to have you before the Committee, the 108th 
mayor of New York City. It is a remarkable city and a 
remarkable job with it, and I think most people are aware of 
your background in the private sector and then moving into the 
second stage of your life, the public sector, two times being 
elected by the people of that city. So we are honored to have 
you here.
    Mayor Funkhouser, I know Claire McCaskill as well wanted to 
be by this morning to present you to the Committee, and she has 
another Committee assignment this morning that she is chairing, 
I believe. But it is important, I think, that everyone know 
here that the mayor of Kansas City is a former auditor. He was 
named National Public Official of the Year by Governing 
Magazine in 2003. He holds a doctorate in public administration 
and sociology from the University of Missouri, and is also in 
Washington the lead participant in the Brookings Institution 
Summit for American Prosperity, a remarkable career and a great 
career. And you are wonderful to be with us this morning and 
share some thoughts.
    Let me turn, if I could just quickly, to Senator Hagel. He 
has been my co-author of this bill we have spent the last 3 
years on, along with people I know that Mayor Bloomberg knows, 
Felix Rohatyn and Bernie Schwartz, not to mention the Center 
for Strategic International Studies, CSIS, and a lot of good 
people who have spent a lot of time helping us craft this idea 
that we have asked you to comment on this morning.
    But, Chuck, do you want to make any opening comments?

                STATEMENT OF SENATOR CHUCK HAGEL

    Senator Hagel. Mr. Chairman, thank you. I do have a 
statement that I would ask to be included in the record. Thank 
you. And thank you, Mr. Chairman, for holding another hearing 
on this issue, and, of course, to our distinguished witnesses 
who are on the front line of governing in this country. Just a 
couple of comments, Mr. Chairman.
    Many of you may have noted this week a column in the 
Washington Post by Fareed Zakaria on the world economy and 
America's competitive position in the world today. And I 
commend the article to you, and I want to just quote two lines 
from that piece. Fareed wrote, ``U.S. spending on 
infrastructure as a percentage of GDP is the lowest in the 
industrialized world.''
    Earlier this year, many of you may have noted as well 
Morgan Stanley predicted that emerging economies, including 
countries throughout Africa, Asia, and the Middle East, will 
spend over $22 trillion on new infrastructure over the next 10 
years. And that Morgan Stanley report goes on in some detail 
about the specific projects in the countries. No group of 
leaders in this country understands the need for infrastructure 
more, as we know, Mr. Chairman, than our mayors, and these four 
in particular who have, not unlike all bodies of government, 
been restricted by fiscal realities, and they are no different 
in some ways than we are here representing the Federal 
Government. But yet they have come up with creative, new, 
dynamic, 21st century ideas on how to do this. And that is as 
much the essence of this hearing as you and I have talked over 
the years, Mr. Chairman.
    We must find 21st century ideas, programs, systems, 
processes, policies to address 21st century challenges. If we 
are not willing to do that, not only do we fail our country, 
the next generation of Americans, and the next generation after 
that, but we will find ourselves falling behind in a very 
competitive world. And we cannot afford to do that.
    So I do not know of an issue that is more fundamental to 
our future, Mr. Chairman, and to our Nation's future than this 
infrastructure challenge. We are, I believe--this country--
represented by the finest minds, most creative thinkers. Our 
balance sheet, we have some--at the witness table, some here 
around this table, who have been in business. Balance sheets 
are important. America's balance sheet is more significant than 
any nation's balance sheet. I wouldn't trade our balance sheet 
for China's, for India's, or any other country. But we will 
squander that balance sheet unless we provide some very, very 
insightful 21st century leadership. And those before us this 
morning, Mr. Chairman, have done that, are doing that in 
difficult times.
    So I am very proud to join with you, Mr. Chairman, in this 
effort in this Committee, and I thank all who have been 
particularly involved. You mentioned some of them, and there 
are others, and to our distinguished witnesses, and look 
forward to their comments.
    Thank you.
    Chairman Dodd. Thank you very, very much.
    Mayor Bloomberg, we are honored that you are here this 
morning, and thank you for the work you have been doing on this 
with Governor Rendell and Governor Schwarzenegger. It is great 
to have the three of you involved in this, and we are honored 
you are here this morning. And we thank you for all the work 
you have been doing as well. The floor is yours.

           STATEMENT OF MICHAEL R. BLOOMBERG, MAYOR,
                       NEW YORK, NEW YORK

    Mr. Bloomberg. Well, thank you, Mr. Chairman, Senator 
Shelby, Members of the Committee. Mel, I have to say, my mother 
is a big supporter of yours, Dickinson High School, 1925, who 
when I came in before this Committee, wanted to make sure I 
said hello, so I have said hello. But keep up the good work.
    I am the mayor of New York City. I am also the co-chair, as 
Senator Dodd said, of Building America's Future, a coalition of 
State and local officials that we founded along with Governor 
Rendell and Governor Schwarzenegger this past January. And the 
reason that we came together is really very simple: We are 
facing an infrastructure crisis in this country that threatens 
our status as an economic superpower and threatens the health 
and the safety of the people that we serve.
    As you know, infrastructure is not a sexy or glamorous 
topic, but it is one of the most pressing issues facing our 
country today. And that is why, in good economic times and in 
bad ones, we in New York have made infrastructure a top 
priority. Attached to my testimony today is a summary list of 
the projects that we are currently working on, but let me just 
point out a few.
    We in the city of New York, with city taxpayer dollars, 
have invested $2 billion in a new subway extension to open up 
the Far West Side of Manhattan; $6 billion on our Water Tunnel 
so that we can have a critical back-up supply of water for our 
city; and $6 billion on upgrades to our sewage treatment 
plants. Nobody wants to spend money on infrastructure, 
particularly in difficult times when we do not have enough 
money to do everything else we have to do. But this is our 
future, this is our legacy, and we are not going to walk away 
from it.
    Across the city, in addition to this, we are spending tens 
of billions of dollars on other things, improvements and 
expansions, but the truth of the matter is that is certainly 
not enough. New York City and the region needs something like 
$30 billion just in the next 5 years to continue to bring our 
mass transit system up to a state of good repair and to expand 
its capacity to meet growing demand. We need $23 billion to do 
the same for our drinking water and our sewerage system. And we 
are not unique in this regard. According to the American 
Society of Civil Engineers, the entire country needs to invest 
at least $1.6 trillion over the next 5 years to maintain and 
expand our roads and bridges, bring our rail networks up to a 
state of good repair, and construct critical water and waste 
water projects.
    This $1.6 trillion is obviously a staggering amount of 
money. But it is also staggering how little the Federal 
Government is doing to help cities and States address these 
challenges. Senator, I think you pointed out, it is not always 
easy to do this, but during the Great Depression, you should 
remember that the New Deal did provide economic stimulus in the 
form of jobs to build infrastructure. La Guardia Airport--which 
I am sure a lot of you have flown in and out of--was a New Deal 
project, as was the electrification of the New York-Washington 
rail line. These projects created jobs, but they also created a 
lasting infrastructure that still serves our country.
    And then, after World War II, Congress saw the need to tie 
the Nation together with a highway network and, together with 
President Eisenhower, they made that network a national 
priority and funded 90 percent of its total costs. Think about 
it this way. You had a Democratic and a Republican President 
instituting a stimulus package and a jobs creation program--
yes, they did both--but most importantly for our country, they 
invested in our future, not short-term, politically popular 
giveaways with dubious economic impact. Decades of growth came 
from the institutions and the initiatives that they started 70 
and 50 years ago. Lately, sadly, we have looked for ways to 
avoid short-term investments that give us long-term benefits.
    In the 1960s and 1970s, in all fairness, the Federal 
Government did take the lead in funding transit projects around 
the Nation, including Washington's Metro system.
    But the decades that followed did see less and less 
leadership from Washington, less and less willingness to open 
its purse strings.
    Now, I am as happy as any other mayor to get Federal or 
State funding, but I will say New York City taxpayers have 
gotten tired of waiting for both. And so the five boroughs that 
I represent have reached into their own pockets and paid higher 
taxes to make the kind of investments that we have to so that 
we will be proud of what we leave our children and 
grandchildren.
    In 1980, the Federal Government was spending 6 percent of 
its entire domestic budget on infrastructure. Today, that is 
less than 4 percent. And as a result, State and local 
governments are now responsible for three out of every four 
dollars spent on public infrastructure.
    To remain the world's economic superpower, we must build 
the infrastructure to support strong and sustained growth. And 
that means, very simply, things have got to start changing in 
Washington, and I hope the year 2009 will be a watershed year.
    The expiration of the current transportation bill will 
allow for a new debate on our infrastructure needs, and I would 
hope and expect that it will focus on two important issues: 
one, what should the role of the Federal Government be in our 
transportation system; and how we are going to pay for 
everything that we know we need.
    There are a few principles that I believe should guide the 
discussion:
    First, we need to set clear goals--both for the short term 
and long term--and clear metrics for measuring success. Right 
now, we have no coherent national transportation policy. It is 
just a grab bag of programs with no goals that correspond to 
national priorities, such as reducing our dependence on oil and 
cutting our greenhouse gas emissions. We also lack performance 
standards to ensure that we can meet our goals, which is just 
basic accountability. And we lack incentives that encourage 
cities and States to be more efficient, which is a basic tenet 
of market economics. These practices are straight from 
Management 101, and we need to put them to work when it comes 
to transportation.
    Second, we need to dramatically increase funding. There are 
no two ways around it--no ways around it. Infrastructure costs 
money. But polls show that people are willing to pay for it--if 
they know they will benefit. Voters really are smarter than we 
give them credit for. They know there is no free lunch. But 
they want to get infrastructure fixed. And there are lots of 
things on the table. We need Congress to step up.
    Third, and finally, we need to fund projects based on 
merit, not on politics. We think one of the most promising 
concepts is the one introduced by Senators Dodd and Hagel: a 
national infrastructure bank. That bank would create an 
independent, nonpartisan entity that would fund the most vital 
needs and not the most parochial needs.
    So the system is broken, but these three principles we 
think would help, and we are not sitting there just asking for 
money. We are doing what we can with our own money. It is just 
much too big a problem for any one city. The pain has to be 
spread around the country because the benefits are countrywide.
    Thank you.
    Chairman Dodd. Mayor, that was excellent testimony. Thank 
you very, very much.
    Mayor Franklin, thank you for being here. I have known 
Mayor Franklin for some time, we have great mutual friends, and 
as well it is an honor to have you with us this morning.

             STATEMENT OF SHIRLEY FRANKLIN, MAYOR,
                        ATLANTA, GEORGIA

    Ms. Franklin. Thank you very much. Thank you, Mr. Chairman 
and Members of the Committee, for inviting me to participate, 
and also thank you to Senators Chambliss and Isakson for 
joining us this morning and introducing me.
    I am pleased to join my colleagues from cities across 
America to come forward and speak on this subject. In Atlanta, 
I have a self-proclaimed nickname. I am ``The Sewer Mayor,'' 
and I chose that name because I wanted to raise the issue of 
infrastructure to the discussion level across the city. I named 
myself in 2003 before the press did. But I am pleased to be 
here to let you know how important it is that we address the 
issue that you have studied in previous hearings, but also to 
address the issues as described by my colleague Mayor 
Bloomberg.
    When I took office as mayor of the city of Atlanta in 
January of 2002, it did not take me very long to realize that 
the city had severely neglected infrastructure that would 
require my immediate attention, particularly the rebuilding of 
our water and sewer infrastructure. We are a city of 500,000 
people with a water and sewer system that serves over 1 million 
people each day. We recently passed the halfway mark in our $4 
billion water program, the details are described in the written 
testimony that I have presented.
    In Atlanta, there is a pressing need for a broader and more 
comprehensive approach to transportation planning and funding 
focused on a more pedestrian and public transit-oriented 
system. Last year, I was invited to testify before the National 
Surface Transportation Policy and Revenue Commission about the 
city of Atlanta's transportation vision and its relationships 
with transportation agencies and transit providers in the 
region. Our transportation infrastructure is critical to the 
economic well-being not just of Atlanta and its residents, but 
especially our entire region, which is expected to grow by over 
2 million people by the year 2030. For the city of Atlanta 
alone, we are expecting a 75-percent increase above our 2005 
population in 2030.
    We are certainly interested in this fund because, indeed, 
Atlanta has stepped up to fund water and sewer infrastructure 
ourselves. In my second year in office, I raised water and 
sewer rates nearly 50 percent. Rates are up almost 75 percent 
now, and I have pending before the City Council yet another 
rate increase to help pay for water and sewer infrastructure.
    We believe that we cannot do this alone, not for too long. 
And, in fact, we need support from the Federal Government in 
terms of matching funds and Federal assistance. I announced a 
Clean Water Atlanta Program, a comprehensive long-term program, 
involving a complete overhaul of the city's over 100-year-old 
water and sewer infrastructure. The program includes court-
ordered mandates to repair and replace sewer infrastructure and 
voluntary upgrades to our water system.
    As part of this program, we have drastically reduced 
sanitary and combined sewer overflows; separated the sewers; 
built more than 120 miles of new water mains; inspected more 
than 1,000 miles of sewers; and rehabbed about 250 miles of 
sewers. As a result of these efforts, one of our primary 
waterways--the Chattahoochee River--is cleaner than it was 10 
years ago.
    Although we have secured $500 million in low-interest State 
loans and approximately $6 million in grants from the EPA, we 
have undertaken this initiative largely on the backs of the 
city's residents, some 25 percent of whom live at or below the 
poverty level. Atlanta's customers are already paying some of 
the highest water and sewer rates, and, unfortunately, we will 
have to continue to raise rates to fund this program.
    The condition of our infrastructure has a profound impact 
not just on the city, but on the entire metropolitan region, 
and I believe on the State of Georgia and the Southeast region. 
My testimony contains more detail on the national scope of 
water and sewer problems, but suffice it to say Atlanta's 
situation is not unique.
    Local governments are the primary investor in water and 
waste water infrastructure in the United States, and there have 
been numerous studies by the U.S. Conference of Mayors that the 
local share, as has been noted by Mayor Bloomberg, surpasses 
the Federal share and the State share.
    So I would like to move quickly to transportation. This 
area is one--Atlanta is originally a railroad crossing town, so 
infrastructure for transportation is very dear to our hearts. 
In the metropolitan Atlanta region, we have discovered that the 
elevated environmental and social-economic impact of congestion 
has a tremendous impact on our future for economic prosperity. 
We believe that if we are not able to address this core 
problem, Atlanta will not be able to continue to be one of the 
key hubs of economic activity in the United States.
    The Federal Government was very good at matching us for the 
building of our transit system, MARTA, Metropolitan Atlanta 
transit system, and we are looking forward to continuing that 
relationship as we look into the future.
    Mr. Chairman, it is a matter of record that the Federal 
Government has reduced its overall commitment to 
infrastructure, and we are pleased to come today to testify on 
behalf of this bill that we might be able to apply for Federal 
funds to assist us with transportation, with water and sewer 
infrastructure, and, additionally, with other types of 
infrastructure, whether it is roads and bridges, in the city of 
Atlanta and in American cities.
    Thank you very much.
    Chairman Dodd. Mayor, thank you very, very much. We 
appreciate your testimony.
    Mayor Peyton, we are delighted to have you with us and look 
forward to your testimony.
    By the way, any supporting documents and materials you 
think the Committee would benefit from, please know that it 
will be included in the record. And I am going to turn, when we 
complete hearing from our witnesses, to my colleagues for any 
opening statements they may have. I know time is difficult for 
some people, so I want to give you a chance to make some 
opening comments, and then we will get to some questions if we 
can, just to give you some idea of how we are going to proceed.
    Mayor, welcome.

                STATEMENT OF JOHN PEYTON, MAYOR,
                     JACKSONVILLE, FLORIDA

    Mr. Peyton. Mr. Chairman, thank you for having me, and 
Ranking Member, and Members of the Committee. I want thank 
Senator Nelson and Senator Martinez for their kind 
introduction. I appreciate their great representation of our 
State. I am honored to be here with this distinguished group of 
mayors to talk a critical issue certainly facing our cities 
and, of course, our country.
    I serve as mayor of Jacksonville, Florida, which is the 
most populous city in Florida and the 13th largest city in 
America, which is a really unknown fact by most. We have a 
population of about 850,000, and as Senator Nelson said, we are 
a consolidated city-county, which certainly changes our 
numbers.
    Jacksonville is a high-growth city and is really at the 
center of a high-growth metropolitan area. But with the growth 
comes needs, and primarily major capital investment needs. New 
roads, new sewers must be built while still maintaining older 
existing infrastructure in the urban core.
    For example, my Growth Management Task Force I appointed a 
few years ago analyzed the development and transportation needs 
in our city, Jacksonville, and predicted that about $2.6 
billion is the shortfall in transportation funding alone.
    Our Nation's vital economic centers are metropolitan areas 
like Jacksonville, Florida, where basic infrastructure is in 
disrepair or altogether lacking.
    Like the Interstate Highway System, the physical assets of 
these major metropolitan areas yield huge national benefits. 
Meeting these needs extends well beyond our capacity typically 
in local government, and others of regional and national 
significance demand a greater and more strategic Federal 
partnership to really move the ball.
    Jacksonville, fortunately, has a really long history of 
being good stewards and strong physical management and self-
help. We have dedicated numerous local resources like they are 
doing in Atlanta to really invest in infrastructure with local 
projects, with large-scale projects that also have a national 
influence. We recently passed a half-cent sales tax in Duval 
County in the year 2000 called the Better Jacksonville Plan, 
which basically was a $2.2 billion infrastructure investment in 
our community. And most recently I passed a fee for storm 
water, which is a dedicated funding source, first of its kind 
in Jacksonville for public infrastructure and primarily water 
improvement for the St. John's River.
    However, State action over the past year to reduce local 
property taxes has resulted in a loss of about $100 million to 
our local revenue. Now we are struggling to sustain delivery of 
fundamental city services on a daily basis, let alone find the 
resources to address compelling, longer-term infrastructure 
needs.
    In my written testimony, I highlighted two specific 
examples of infrastructure needs that illustrate how 
appropriate and integral the Federal Government partnership is 
to completing these projects: build-out of the transportation 
network surrounding our expanding marine port terminal, and 
expansion of our sewer system and septic tank phase-out 
initiative.
    Jacksonville is the fastest-growing deepwater port on the 
East Coast of the United States, and as you know, the Panama 
Canal is widening, scheduled to open 2015. And as that widens, 
we are now able to receive Asian carriers that otherwise could 
not economically deliver to the East Coast. Jacksonville has 
become the port of choice primarily because of our three major 
Federal interstate systems--I-75, I-10, and I-95--and, of 
course, three rail hubs. We are proud of our port expansion, 
but quite frankly, the growth of the seaport as a tremendous 
economic booster really is not designed from an infrastructure 
standpoint to handle this kind of growth.
    The port generates about $3 billion in economic activity, 
which will increase to $5 billion when the two terminals that 
we have currently under construction will be operational. The 
port system will employ about 100,000 people within the next 10 
years. But one terminal expansion will increase the number of 
trucks on local roads by 250,000 within its first year of 
operation and 500,000 within 3 to 5 years of operation.
    Our existing local transportation infrastructure simply 
cannot handle this type of shift in trade from the West Coast 
to the East Coast as it is today. We will need new roads and 
rail to divert port traffic away from our local neighborhoods 
and directly onto our interstate network. The necessary highway 
improvements will total at least $326 million, and potential 
rail yards have a construction estimate of $100 million.
    Now, in Jacksonville, the St. John's River, which is 
hosting all of this port expansion, supports more than 19,000 
jobs in our community with an annual economic impact of about 
$2.2 billion. Property along our river accounts for more than 
$1.3 billion in the county tax rolls. This river is a 
tremendous asset, and that is why we think it is important to 
invest in it.
    But the river faces significant problems, in notable part 
due to failing septic tanks, not unlike what they are facing in 
Atlanta, and, of course, it requires major investment to 
replace sewers. The city already has provided $80 million, and 
the State has granted about $12 million toward this cause. But 
it will cost between $408 million to finish the job. There is 
no local or State funding source that can, quite frankly, 
address this need at this magnitude. Florida's clean water 
revolving loan Fund is insufficient, and, of course, in 2007 
the Federal allocation of State funds was only $36 million.
    But most Federal grant formulas do not adequately target 
resources to infrastructure projects on a regional or national 
level. These systems tend to promote equity distribution among 
States and then within States between urban and rural areas. We 
spread these funds so thin that, without national strategic 
direction, there is little impact to the most significant 
needs.
    As both a businessman and an elected official, I believe 
that a more cost-effective approach, like what Mayor Bloomberg 
is proposing, targets our limited resources around strategies 
and investments in projects based on merit and projects that 
will generate the greatest return.
    The principles that underlie the proposed national 
infrastructure bank follow, I believe, this framework--
dedicating sufficient funding for large-scale projects with 
true regional or national significance, while allowing the 
formula-based funds to be allocated more appropriately to 
smaller, localized projects.
    For our Nation's continued economic vitality and for us, it 
is all about the economy. We need a national funding strategy 
for activity that yields the highest ROI, return on investment, 
the term I used when I was in the private sector. We must 
assure that the quality of our infrastructure meets or exceeds 
those of the major metropolitan regions and countries that we 
are competing with around the world.
    I appreciate this opportunity and certainly would be 
welcome to answer any questions at any point.
    Chairman Dodd. Well, Mayor, thank you very much. Very 
eloquent testimony, and I commend you for the job you have done 
as well. It is very exciting, what you are doing in 
Jacksonville. Those are exciting numbers--except the 500,000 
trucks on the road. That is not an exciting number if you are 
living near 95 around New York and Connecticut. I see Mayor 
Bloomberg and I rolling our eyes a little bit, along with Bob 
Menendez in New Jersey.
    Mayor Funkhouser, thank you very much for being here.

              STATEMENT OF MARK FUNKHOUSER, MAYOR,
                     KANSAS CITY, MISSOURI

    Mr. Funkhouser. Chairman Dodd, Ranking Member Shelby, and 
Members of the Committee, good morning, and thank you for 
inviting me to testify today on behalf of the city of Kansas 
City, Missouri. It is an honor and a pleasure to join Mayor 
Bloomberg, Mayor Franklin, and Mayor Peyton on this panel to 
offer a local perspective on the condition of our Nation's 
infrastructure.
    I come before you today as the elected representative of 
the citizens of Kansas City, the largest city in Missouri, with 
more than 445,000 residents. Given today's topic, however, I 
would like to expand my jurisdiction, at least for a moment, to 
encompass the entire Kansas City region. As you are likely 
aware, this wider region spans two States, six counties, and 
more than 100 municipalities, and is home to nearly 2 million 
Americans. In the context of today's hearing, I speak in these 
broader terms because together we form one economy, and we 
share much of the infrastructure that is vital to our 
communities' shared health and prosperity.
    Just the same, however, the health and prosperity of our 
Nation's metro communities are vital to that of the Nation. In 
today's world, metropolitan areas drive the American economy. 
Consider the following: 83 percent of Americans live and work 
in metropolitan areas; 65 percent live and work in the Nation's 
100 largest metro areas; 74 percent of the country's most 
educated citizens call metro areas home; 84 percent of our most 
recent immigrants do as well; and, metro areas offer 76 percent 
of our knowledge economy jobs.
    As these figures clearly demonstrate, our Nation's 
metropolitan communities are the incubators of the 21st century 
American economy and will continue to serve as the arena for 
American innovation and competitiveness globally. In order to 
provide meaningful support to the national economy, then, we 
must sustain and improve the quality of life in our metro 
communities and provide a sound foundation upon which to 
continue to produce and innovate. It is a simple fact that 
cities grow when people want to live in them. And solid, 
dependable infrastructure is the most fundamental component of 
cities where folks want to live.
    Kansas City, in particular, continues its historical role 
as a vital hub within the Nation's commercial and commuter 
transportation infrastructure. As many of you are certainly 
aware, the city initiated the Nation's first interstate and has 
long served as the home to the Kansas City Southern Rail 
Network and a primary junction between three major commercial 
rail systems.
    Prior to becoming mayor, I was the city auditor, and my 
office conducted an annual survey of citizens' satisfaction 
with city services. Year after year, people in Kansas City tell 
us that they are most concerned with the condition of the 
streets, sidewalks, bridges, sewers, and storm water drains. 
Further, when we surveyed business owners in Kansas City, we 
were told the same thing: infrastructure is paramount. I 
continue to hear this as mayor at regular town hall meetings 
throughout the city. Every time I hear a complaint about city 
services, it is grounded in, it has to do with infrastructure.
    Yet, as municipalities, we are simply unable to meet the 
infrastructure needs of the region on our own. This is 
something I have devoted a great deal of time studying as 
auditor and now I spend a lot more time working on as mayor. 
Despite ongoing efforts to leverage existing resources, the 
scale and cost of a regional highway and road system, public 
transit, water and waste water systems are more than we can 
shoulder on an already constrained budget. Even if we pool our 
resources with the other municipalities of our region, as we 
are trying to do, we will not be able to tackle the daunting 
challenges we face. The expense is too large, the challenges 
too far-reaching to be adequately addressed by local and 
municipal governments alone. Only the Federal Government has 
resources to match the scale of the problems.
    In Kansas City, for example, we have a $6 billion backlog 
of deferred maintenance, and our citizens are paying. We are a 
high-tax-effort city. Kansas City residents pay as a portion of 
their income much more than their suburban counterparts and 
much more than most big cities in taxes, and yet these problems 
continue to grow. Despite the best efforts of local officials, 
these and other infrastructure problems will demand a more 
robust and assertive Federal commitment.
    Much the same, our city's outdated sewer system allows over 
6 billion gallons of sewage overflow every year into our 
rivers, streams, and urban lakes. These circumstances mean that 
we are under the gun from the Federal Government and others 
locally to improve existing facilities. But the price tag for 
this little repair job is $2.3 billion. That is a hefty chunk 
of change for a city with an annual budget of only $1.3 
billion, a median household income of $37,000, and 23,000 
households with annual incomes of $10,000 a year or less. Their 
sewer rates could quadruple over the next decade, and the cost 
of construction on these projects is increasing at a rate much 
faster than our revenues are increasing.
    This is reason enough to support the National 
Infrastructure Bank Act of 2007, but I want to also express my 
support for the Federal partnership that that act represents. 
The proposed legislation presents a good concept for how to 
provide long-term funding for large, regionally significant 
infrastructure projects. In general, the bill represents a 
commitment on behalf of the Federal Government to assist 
metropolitan areas meet their infrastructure needs and ensure 
the continued economic vitality and growth of the American 
economy. On a deeper level, it allows the Federal Government to 
make a more realistic assessment of its economy and begin to 
act strategically to ensure prosperity and global 
competitiveness far into the future.
    With this proposed legislation, the Federal Government can 
begin to address infrastructure not as a budgetary cost, but as 
an investment--because it is an investment. Productivity is the 
result of capital applied to labor. In other words, a man with 
a spade cannot be as productive as a man with a backhoe. In the 
same way, our cities cannot be as productive if we do not have 
infrastructure adequate to meet the demands of a rapidly 
diversifying and expanding global economy. So long as we fail 
to invest in these capital resources, we will fall behind other 
nations in this global economy, nations that do understand the 
value of quality infrastructure and that are making the 
necessary investments to ensure their competitiveness.
    I want to close with this thought: Recently Jack 
Schenendorf, Vice Chair of the National Surface Transportation 
and Revenue Study Commission, spoke in Kansas City about the 
need for progressive funding. He said this: ``If we don't step 
up to the plate and come up with a solution, our children and 
our grandchildren will have a lesser standard of life than they 
have today.''
    Thank you.
    Chairman Dodd. Mayor, thank you very, very much, and thank 
you for your tremendous work in this area. I know you have 
spent a great deal of time thinking about it, in addition to 
the management of your own city's issues. So we appreciate 
immensely your thought process and your contribution to this 
bill effort as well as it has been of tremendous assistance to 
us.
    I would just like to give my colleagues a chance maybe to 
share a few thoughts on this, knowing time constraints and so 
forth, and then we will get to some very direct questions. 
Jack, do you have anything you would like to raise.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Mr. Chairman, I just want to welcome the 
mayors and thank them for their extraordinary leadership. You 
are truly on the front lines, and we appreciate what you do to 
deliver services to our constituents.
    Thank you.
    Chairman Dodd. Senator Dole.

              STATEMENT OF SENATOR ELIZABETH DOLE

    Senator Dole. Thank you, Mr. Chairman. I do have some 
comments that I would like to make and to raise this morning, 
and I want to thank you and Ranking Member Shelby for bringing 
us together to focus on this important topic. And certainly my 
great thanks to our outstanding mayors for your witness this 
morning, for sharing your experience and your expertise with 
us.
    There is no question, of course, that our Nation's 
infrastructure is in dire need of maintenance and repair. 
Deteriorating infrastructure diminishes highway safety and puts 
a strain on our economy. According to the National Surface 
Transportation Policy and Revenue Study Commission's Report, 
which was released in January, the Texas Transportation 
Institute estimates that congestion cost the American economy 
$78 billion in 2005. The same report estimates that the average 
driver consumed an additional 26 gallons of fuel during rush 
hour commuting.
    As we continue to explore ways to stimulate the economy, 
funding for transportation infrastructure should be right at 
the top of the list. We need to take a serious look at how the 
Federal Government allocates money for transportation projects 
before it is time to reauthorize the next highway bill.
    In North Carolina, there are many high-priority projects 
that are in need of immediate funding. One of these projects, 
the Interstate 85 bridges over the Yadkin River, is located 
near my home town of Salisbury. This project's cost is $400 
million, and the North Carolina Department of Transportation is 
exploring funding options. If any Federal funds are directed 
for the bridges under current Federal law, the project becomes 
a Federal priority, and the State must finance the balance of 
the cost. Due to North Carolina's method of distributing 
transportation dollars and the expense of the new bridges, this 
action would wipe out the funding slated for other 
transportation projects in that area of the State. I understand 
the rationale of packaging Federal dollars with a Federal 
priority. We should, however, consider methods that provide 
States more flexibility.
    Another very important project is the proposed North 
Carolina International Terminal in Brunswick County. This new 
port would not only be valuable to North Carolina, but also to 
the Nation as a whole. As we have already heard this morning, 
our West Coast ports continue to operate at close to maximum 
capacity. Vessels are increasingly being rerouted to access 
ports along the eastern seaboard. North Carolina's proposed 
deepwater port could give shippers another valuable alternative 
as projected volumes of international trade double over the 
next 20 years, not to mention the host of new U.S. jobs that 
would support this facility.
    Now, this is incredible to me, what I am about to tell you. 
To date, the North Carolina Port Authority has received 
considerable interest from various private investors for the 
proposed terminal. The Port Authority is ready to move forward 
with a $200,000 reconnaissance study. They have been ready. It 
has the resources necessary to fund this federally required 
study. Unfortunately, these funds cannot be utilized. Under 
current law, only Federal dollars can be utilized for the Army 
Corps of Engineers to perform a study. I am all too aware of 
this situation because over the past couple of years, I have 
made this project a top priority in the appropriations process. 
But due to continuing resolutions and budget restraints, this 
project has remained unfunded.
    In May, I personally met with John Paul Woodley, the 
Assistant Secretary of the Army for Civil Works to see what the 
Army Corps of Engineers could do to resolve this situation. 
Unfortunately, Mr. Woodley told me that without a Federal 
funding commitment specifically designated for this 
reconnaissance study of $200,000, the Corps is not in a 
position to move forward on its own.
    To my utter amazement, what we have here is a potentially 
multi-billion-dollar project of regional and national 
importance that is being held hostage at the moment by an 
appropriations process for a relatively small amount of money.
    In summary, Mr. Chairman, our goal should be to have the 
best transportation infrastructure in the world. To reach that 
goal, we must remove the unnecessary hurdles currently in place 
that prevent projects from being completed in an acceptable 
length of time.
    I thank you very much for the opportunity to make these 
comments. This has been a very frustrating situation for me, 
and I think we should add this to our consideration of these 
important topics.
    Thank you very much.
    Chairman Dodd. Thank you.
    Senator Carper.

             STATEMENT OF SENATOR THOMAS R. CARPER

    Senator Carper. Thanks, Mr. Chairman. To all our witnesses, 
welcome. It is good to see each of you. Thanks for coming. 
Thank you for your stewardship and the examples you set not 
just for other mayors, but one of you is from a city that has 
as many people as my State of Delaware, so setting some good 
examples for States and I think for those of us in the Federal 
Government, too.
    I have a statement for the record, Mr. Chairman, but I 
would just like to speak off of that statement.
    I think I was intrigued by--the idea of the infrastructure 
bank I think is one that I heard you talk about during the 
Presidential campaign. I am not sure. But I----
    Chairman Dodd. I talked about a lot of things during that 
campaign.
    Senator Carper. Yes, but a lot of good ideas, I think this 
might have been one of them. But Senator George Voinovich of 
Ohio and I introduced legislation calling for the--well, let me 
just back up before I say that.
    A number of years ago, about 4 years ago, we passed a 
major--every 5 or 6 years we pass a major transportation bill, 
as you may recall. We included in that measure 4 or 5 years ago 
the creation of a commission that said let's look at 
transportation infrastructure in this country. Let's look at 
our roads, highways, bridges, and so forth, and see what our 
needs are. And we asked for a commission of very good people to 
come back and report to us what is the scope of the need, give 
us some sense of what the priorities should be, and tell us how 
you think we should pay for it. And they did that. They looked 
across the country. They tried to figure out what our needs are 
in different modes of transportation, and they came back to us 
within the last 6 months and said this is it and this is how we 
think you ought to pay for it.
    You have heard the term ``dead on arrival''? Unfortunately, 
their recommendations were dead on arrival. They called for 
actually making us pay for stuff that we wanted to have, not 
just borrow money, not just issue debt but actually have to pay 
for things--pay for it out of the--when we go pull up to the 
gas station. They called for an extra nickel a gallon for gas 
taxes, for motor fuel taxes over the next 10 years or so. They 
called for looking at other ways to raise fees that we would 
have to pay for the services that we want to--the 
infrastructure we wanted to build and the services we wanted to 
use.
    So that happened about over the last 4 or 5 years, and the 
results came to us. I am sorry to say that not much has 
happened from their efforts, and it is too bad.
    Last year, the month or so before the bridge--we saw the 
bridge in Minneapolis that collapsed. About a month or so 
before that, Senator George Voinovich and I introduced 
legislation that called for creating a different kind of 
infrastructure commission. We are pretty good about creating 
commissions around here. Maybe you are, too, in your cities. 
But we had a little different idea here. What we wanted to do 
was to create an infrastructure commission not just looking at 
transportation, not just looking at roads, highways, and 
bridges, but also to look at rail, to look at water, waste 
water treatment, to consider dams and levees, to look across 
the country to see what the needs are, to come back to us to 
try to quantify those needs, and to say these will be our 
priorities, and this is how we would suggest that you pay for 
those--not just the transportation fees but the broader pieces.
    Well, the week that the bridge collapsed in Minnesota, the 
bill passed the Senate just like that. The bill went over to 
the House, was introduced in the House that same week, and it 
still is awaiting action over in the House.
    What we suggested was a commission, eight people in all--
two appointed by the Majority Leader here, one by the Minority 
Leader here in the Senate; two appointed by the Speaker, one by 
the Republican Leader in the House; and two by the President. 
You would have an eight-member commission, and the eight of 
them would decide who the Chairman would be. They were tasked 
with spending about the next year and a half to come back and 
give the new President and the new Congress a road map, if you 
will, for moving forward on infrastructure.
    That is not the same idea as Senator Dodd's proposal, but I 
think much like that SAFETEA-LU commission, it was a good idea, 
and I think this is not--what our Chairman has come up with and 
what Senator Hagel has come up with is also a good idea.
    At the end, though, we have got to figure out how to pay 
for this stuff. Nobody wants to. And in my State, as a former 
Governor, I know you have to--in Delaware, we had a balanced 
budget requirement. If we wanted to do things, we had to pay 
for it. And obviously in your cities the same is the case. We 
have got to figure out how to pay for these things, and that is 
the toughest part of all.
    Chairman Dodd. Thank you, Senator, very much.
    Senator Martinez, any quick comments?

               STATEMENT OF SENATOR MEL MARTINEZ

    Senator Martinez. Yes, sir, just real quickly. You know, we 
in the State of Florida, a high-growth State, and, Mayor, your 
eloquent comments. As a high-growth State, we also are a donor 
State when it comes to the Highway Trust Fund. You know, we do 
not--we send more money to the Federal Government than we get 
back. And that is a continuing problem for our State as we have 
increasing infrastructure needs.
    But I want to mention in addition to our transportation 
needs, we are very obvious and clear. We also have a need in 
Florida for mass transit. We are making small attempts at that. 
But with the price of gas what it is today, Floridians really 
have very few alternatives to just getting in an automobile and 
driving. We need to look at mass transit as a future mode, and 
obviously our airports continue to grow and expand. And that is 
a continuing area of concern.
    One area where I think we really are going to be facing a 
tremendous challenge in the future is the issue of water. 
Florida is going to have serious water problems, and, of 
course, the wonderful St. John's River, which flows right 
through Jacksonville, is going to increasingly become a source 
that we are going to turn to for water. Surface water is much 
more expensive to treat, and the whole processing of that is 
going to take Floridians much more to pay for water that they 
would consume.
    So these are all serious problems, and, Mr. Chairman, I 
want to tell you, and Senator Hagel, that I am very intrigued 
by your proposal. I think we need to be looking at creative 
ways. I think private financing also for infrastructure and 
public-private partnerships, which has been tried in some 
places, I think has a lot of merit, particularly in the 
transportation arena. And I hope that as we look to your 
proposal that perhaps facilitating public-private partnerships 
might be part of the issue that we address as well.
    Thank you very much.
    Chairman Dodd. Thank you very much.
    Senator Menendez.

              STATEMENT OF SENATOR ROBERT MENENDEZ

    Senator Menendez. Thank you, Mr. Chairman, and let me 
welcome all the mayors, and I thank them not only for their 
testimony and their service. Having been a mayor, I think it is 
the toughest job in America and the one where you are on the 
front lines and everybody--maybe not in some of the bigger 
cities, but everybody knows how to get a hold of the mayor. 
Everybody knows who the mayor is, and everybody thinks the 
mayor can do everything. So having been there for 6 years, I 
think it is an incredibly challenging job.
    On the specific issue, Mr. Chairman, you know, we have 
studies that say we need $1.5 trillion over the next 5 years 
just to deal with bringing existing infrastructure up to some 
of the most significant and important standards we have. That 
is not about creating new infrastructure. And so it gives you a 
dimension of the challenge, and certainly municipalities, both 
large and small, do not have the wherewithal to do a lot of 
that.
    Second, at a time of $4 a gallon gas, you know, this mass 
transit that Senator Martinez just talked about, and others, is 
incredibly important. In my home State of New Jersey, we have 
seen a 5-percent increase in the first 3 months, and we already 
have a pretty robust mass transit operation. But it is not just 
places like that. In North Carolina, in Charlotte, they have a 
34-percent increase in ridership in what is a new rail line.
    So this is pretty geographically diverse, and as people are 
consistently challenged with the choices between a gallon in 
their tank and a gallon of milk, they are going to be looking 
to mass transit. But that has got to be effective, efficient, 
and affordable at the end of the day, as well as it has 
positive environmental consequences for us as well.
    And, finally, the reason that I have joined with you, Mr. 
Chairman, in supporting your legislation, you know, I look at 
this in multi-dimensions. You know, the infrastructure 
investments are that--investments. And that is why I appreciate 
the way the legislation is structured that you and Senator 
Hagel put together, because it looks at it in the context of 
investments and makes investment decisions wisely.
    The reality is that, you know, a report in the Atlantic 
talked about congestion of our roadways, of our railways, of 
our ports and airports costing our economy $78 billion in 2005. 
That is the last time we had that study.
    Now, imagine if we unlock the potential of that investment 
in a way that has a great return on the dollar. Half of those 
costs were in the Nation's ten largest metropolitan areas, 
including the area around my home State of New Jersey. You 
know, we share with New York the port of New York and New 
Jersey, the mega port of the East Coast, 225,000 jobs, $25 
billion of economic activity, but at a time in which we have 
closed military water ports on the East and West Coasts, those 
ports now are also about forward deployment of military 
equipment for our men and women abroad. So it has a security 
dimension.
    And the last point I want to make is that at the same time 
that we look at this in terms of economy, creating jobs, as 
well as quality of our environment, I would point out that in a 
post-September 11th world, infrastructure investment in 
transportation is also about security. On that fateful day on 
September 11th, the reality is that when the bridges and 
tunnels were largely closed for that period of time, a large 
number of New Yorkers and New Jerseyans got out of downtown 
Manhattan by an alternative method of ferries, which is a 
relatively new--you know, a decade or so that has started back 
in the New York-New Jersey area, and we see in many parts of 
the country. Inter-city travel on that day was only available 
through Amtrak.
    And so the reality is that in a post-September 11th world, 
we have to look at infrastructure investments, yes, about the 
economy, yes, about creating jobs, yes, about improving our 
collective environment, but I would urge that we look at it 
also in the context of having the security necessary to create 
alternative means of transportation, alternative access, and a 
whole new dimension that we did not think of before. All of 
these come to roost, and that is why I appreciate the 
legislation and the testimony of the mayors, and hopefully in 
the next Congress we can have a Congress that understands that 
these are investments that the longer we put off, the more it 
costs, and the more consequential it is to us in all of these 
specters.
    So thank you, Mr. Chairman.
    Chairman Dodd. Thank you, Senator, very much. And having 
the perspective of a number of our colleagues who have been 
mayors I think helps a great deal, and the last of our 
colleagues is the newest on this Committee----
    Senator Menendez. And, Mr. Chairman, very briefly, I just 
want to say to Mayor Bloomberg, we welcome your mom to come 
back any time to have a visit at Dickinson and to the State.
    [Laughter.]
    Chairman Dodd. That warmth between New York and New Jersey 
just is flowing here.
    Senator Corker, former mayor of Chattanooga.

                STATEMENT OF SENATOR BOB CORKER

    Senator Corker. Yes, sir. Mr. Chairman, thank you, and I 
just want to say to the witnesses, it is rare that I make 
opening comments out of respect for the witnesses. I typically 
want to hear more from you. The opening this time has taken so 
long, I am afraid I am going to miss the questioning portion, 
so let me just say very briefly I really respect what all of 
you have done, and I know that each of you are term-limited and 
will be moving on to other things. And I sincerely hope, even 
though we are of various differing parties, that each of you 
ends up continuing in the public arena in some form or fashion 
because I think you have provided exemplary service, and I 
really thank you for that.
    No. 2, I hope that Mayor Bloomberg at some point laced into 
answers to other Senators if I am not here the comment about 
spreading the pain. If you could maybe educate us as to which 
types of infrastructure projects in your opinion ought to be 
those where pain is spread and the others where just local 
citizens ought to participate, I think that would be quite 
edifying. And then to Mayor Franklin, who is my friend, and I 
think I was the first public official to visit her when she was 
first sworn in, we have had a really low-level discussion 
between our States that has almost been beneath the dignity of 
our citizens regarding a water issue. And I know that Mayor 
Franklin has done extraordinary work in building infrastructure 
and doing those things that are not glamorous to build the city 
into the future.
    The State is building $100 billion worth of roadways, the 
State that she is a part of, and yet there is a no-brainer, 
easy solution to the water issues that face Atlanta and face 
the State, and it is the desalination plant down at Savannah 
running up I-16 that would benefit the State.
    I say that--and, fortunately, Mayor Franklin has not 
dignified some of this low-level discussion that has taken 
place, but I hope in your comments someplace, if I am not here, 
you will address specifically that issue, but also just the 
issue of the role that States need to play. We are having a 
Federal discussion. There are some planning issues that mayors 
and States--there is a piece there that we are not discussing 
today that is so important, especially around big urban areas 
where the State is so affected.
    So those are somewhat questions and not opening comments. 
Mr. Chairman, thank you for indulging. I hope I am here when it 
comes time, but thank you for having this hearing. And I want 
to say that Senator Martinez and I were mentioning earlier that 
we are squandering so many opportunities right now as a 
country. We are presiding over a period of time, I think, when 
we are going to be remembered during this period of time for 
not doing those things we should have done that generations 
before us did. And whether this bank is the appropriate focus 
on infrastructure or whether some other solution, I do thank 
you for having these distinguished witnesses, and for you and 
Chuck Hagel bringing forward this subject in this manner.
    Chairman Dodd. Well, thank you, Senator, very, very much. 
And I appreciate the patience of our witnesses as well, but my 
colleagues care deeply about the issue, and obviously hear from 
their own mayors across the country. And I appreciated very 
much the comments about the proposal that Senator Hagel and I 
have put forward. There is nothing etched in marble or concrete 
about that. They are just ideas on how you finance and how your 
prioritize in an intelligent way the major national and 
regional needs of our country and financing. I was looking at 
the number of China the other day. They will invest on a yearly 
basis close to $1 trillion in infrastructure every year. That 
is their plan, $920 billion a year. I listened to Chuck last 
year, earlier last year, talking about just what they have done 
as a major economic competitor in the 21st century on roads and 
mass transit systems, harbors and the like. So aside from what 
we obviously need to do, the realities are of the 21st century 
you do not grow economically without making these investments, 
one way or the other. And draining it out of an appropriate 
process is not going to work. All of us know that. We are going 
to go from $2 to $3 trillion in sovereign wealth funds to maybe 
$12 to $14 trillion in the next 6 or 7 years. Sovereign wealth 
funds become, I think, a tremendous opportunity for us to 
invest some of those dollars, or attract them in some of these 
areas.
    So, Mayor Bloomberg, why don't you start and pick up on 
Senator Corker's very good question. The one specific question 
I had is you made some wonderful suggestions encouraging cities 
about providing incentives to manage infrastructure issues that 
I thought were rather worthwhile, and maybe you would pick up 
on his questions and the one on the incentive idea as well and 
tell us how you think we can contribute to that.
    Mr. Bloomberg. Well, Senator, I think that if things go 
between States, clearly Federal issue--it does not have to be 
only Federal money, but the Federal Government can justify 
doing that. If it is to bring commerce to this country, all the 
major airports, those particularly that deal with tourism and 
business people from around the world, they are bringing the 
lifeblood that we need, the economics and the additions to our 
culture. If you take a look at energy independence, this 
country is going in the other direction, so, clearly, Federal 
money spent on promoting alternative energy sources and the 
kind of jobs we need for the future.
    Where I do not think it is appropriate is to protect jobs 
from industries that the marketplace is saying are not going to 
be around, holding the waves from coming in, the tides from 
coming in is just not doable, and it is certainly not good 
economics. I do not think a lot of the small pork barrel 
things--which we are as guilty as anybody. We ask for money for 
things that are totally local, and why the Federal Government 
does it, I don't know. They shouldn't be doing it, although we 
will continue to ask as long as they are giving it out. You 
know, our Senators have the obligation to bring home the bacon, 
like everybody else does. But the Federal Government, it seems 
to me, the Senate should get together and say together we are 
not going to do it anymore. We will all swear and the 
leadership will enforce a focus on sitting back, saying what 
national priorities are, and then saying, Does this particular 
item fit in?
    There is the political reality that everybody has got to 
get something, and I understand that. On the other hand, there 
are certain projects that have a nationwide impact. And if you 
take a look, at what Senator Dodd said, at what is being done 
overseas, we really are falling behind. Companies are failing 
to locate here, partially because of our immigration policies 
which are keeping them from bringing their employees in and 
out.
    I can just tell you, my company, we are having more and 
more of our international meetings outside the United States 
because our employees just don't want to go through Customs and 
Immigration here. They just don't want to do it. You should go 
to Vancouver and see how Silicon Valley companies are all 
opening offices there for the best and the brightest from 
around the world that can get working papers in Canada, cannot 
get working papers here. That is--I have described it as a case 
of national suicide, and I think that is understating the 
damage that we are doing to ourselves.
    In terms of Chris' question, there is never any 
accountability. There is never any you said you were going to 
do it for this price, then you have got to deliver it. And you 
have got to assure us if you don't deliver on schedule and on 
budget, then you are not going to get any other monies. If you 
tied the next grant to performance on the last grant, you would 
get a much different focus on deliverables. And in the private 
sector, you have to do that. The stockholders or the 
marketplace makes you do that, and if you don't, there is a 
very big penalty, including going out of business.
    Chairman Dodd. One last question before I turn to Senator 
Shelby. On the rail issues, we talk about mass transit moving 
people, obviously. There has been an advertisement on 
television recently, and I will just tell you what it says. And 
no one has contradicted it, but you move one ton of goods 500 
miles on rail for the cost of one gallon of gasoline.
    Mr. Bloomberg. Very efficient.
    Chairman Dodd. Or something like that, in that range. Let's 
assume for a second it is true. How are we prepared--I mean, 
Mayor Peyton, you were talking about this. Obviously, Atlanta 
is a hub rail. Kansas City has been, of course, historically. 
And, of course, we know about New York. To what extent do we 
have the capacity either to expand or to acquire, if you will, 
rights of way and so forth to begin to start--first of all, 
just forget the congestion issues. I mean, that number of 
500,000 additional trucks on the highway. But the idea of just 
reducing the kind of congestion and cost. If you can move--if 
it is close to that number, then it seems to me it is in our 
Internet to try and expand the opportunity more of utilizing 
that mode of transportation. Can we do this, or is it totally 
unrealistic? Have we gone beyond the point, the tipping point, 
when you can actually take advantage of rights of way and the 
like to expand the opportunity of rail--not for necessarily 
mass transit purposes but for moving commercial goods?
    Mr. Peyton. I will start, and, of course, I will let others 
finish. But as we look at the emergence of our port, we are 
looking at hosting between 8,000 to 10,000 containers a day, 
and trying to get those containers on the interstate system is 
a big challenge. We think that the rail solution obviously is 
not only cheaper from infrastructure investment and wear and 
tear on the road system, particularly the Federal road system, 
but from an energy perspective as well.
    So the biggest barrier is capital dollars. We as a city do 
not have the hundreds of millions of dollars necessary to build 
the kind of intermodal facility that allows these containers to 
move to the rail system in an expeditious way. Probably our 
most hopeful remedy on rail is to divert about 20 percent of 
the containers onto rail. And I think the more successful ports 
probably can boast about a 20-percent diversion. Without that 
capital investment of the rail yards near the terminal, it is 
hard to overcome.
    So then we have to rely--we fall back on the interstate 
system, and now the question is with the three major interstate 
systems that we benefit from, can they handle it? Today they 
don't have the capacity to handle it, not to mention the road 
systems around the interstates that allow us to feed into the 
Federal system really are not designed to handle it in 
addition. So I think the challenge is the capital, the huge 
capital investment.
    And let me just piggyback on what Mayor Bloomberg said. I 
think the challenge is that we see a lot of piecemeal work 
being done.
    Chairman Dodd. Yes.
    Mr. Peyton. Of course, our congressional leaders are very 
proud to bring home something to our community. But in the 
absence of a bigger plan, with measurables, with a matrix, I 
don't think we are making a difference. There are certainly a 
lot of projects that we are glad to see, but I would rather see 
a national strategic focus on what is going to move this 
economy and what is to our strategic advantage, and it really 
needs to be all about the economy.
    And so that focus, I think, is really what is desperately 
needed.
    Chairman Dodd. Well, that is what we are trying to do with 
this bill, and, again, there is no pride of authorship or the 
funding schemes, but as I say, we are never going to do this 
out of the normal just, you know, finding a project and getting 
some funding out of the Appropriations Committee and going 
through the process. It has got to be a far more creative and 
expansive idea of attracting capital, private and otherwise, to 
come into this, where you can offer people some decent rates of 
return on that investment as a way of generating the kind of 
resources necessary. And then, of course, as you pointed out, 
and all of you have, this idea of stepping back with a bigger 
idea here and understanding there needs to be a strategic plan 
and thinking where you are talking about national projects. 
None of us have to be informed about how we have grown over the 
years, whether it was the point Mayor Bloomberg made with the 
Federal Highway System in the 1950s, going back to the 19th 
century, the canal system, the Erie Canal system, the Panama 
Canal, the electrification of rural America during the 
Depression. A lot of these things just made huge differences 
not only at the moment but, of course, in terms of economic 
expansion.
    I wonder if either--Shirley, do you want to comment on 
this?
    Ms. Franklin. I would just add on the rail that for a city 
like Atlanta, an intermodal approach is important, both for the 
movement of passenger as well as cargo. Our airport does both 
cargo and passenger. We talk mostly about passenger, but a good 
bit of the growth has been international cargo and the 
relationship of the airport to the Savannah port and the ports 
along the eastern seaboard.
    So while we have capacity today, as that area continues to 
grow, we have got to maintain that system, and not only expand 
it, but maintain the rail system. And for me, the significance 
of this bill, in addition to getting funds, is the flexibility 
that seems to be built into it that allows for a multiple modal 
approach.
    Chairman Dodd. Right.
    Ms. Franklin. And not just transportation but water as 
related to transportation, storm water as related to 
transportation, et cetera, et cetera.
    Chairman Dodd. And the human side of this, the air traffic 
control idea. That is not necessarily building of physical 
plant, but the idea of capacity through the human 
infrastructure investment needs that you have to do in order to 
accommodate growth as well.
    Mayor, any quick comments? Obviously, the mid-part of the 
country, and rail is a critical issue.
    Mr. Funkhouser. Well, for us we have two major multimodal 
facilities under construction right now, and we are positioned, 
I think, to deal well with that. We are taking advantage 
because we are on I-35 north-south. We have this North American 
Trade Corridor, and we are actually taking advantage through 
Kansas City Southern of ports on the coast of Mexico and 
bringing trains up through.
    So for us, the rail thing is something we are pretty much, 
I would say, on top of. But there are other comments that I 
wanted to--you know, when we look at the bridge collapse in 
Minnesota, several of you have sort of touched on this, but 
what we are witnessing is, in addition to that big obvious 
collapse, we are having a quiet collapse of prosperity. You 
know, Mayor Bloomberg's words, ``national suicide,'' you know, 
when Senator Menendez talked about security, there isn't any 
greater threat to the security of my children and my 
grandchildren than the decline in productivity that comes from 
being--what did Senator Hagel say?--last in industrial nations 
in investment in infrastructure. This is bizarre.
    The main thing--obviously, we need a lot more money, but 
the beauty of the bill that you have is that we also clearly, 
obviously, again, as these mayors and you have said, we need a 
different strategy for investing. We need a different system. 
We do not have--the Federal Government is like the only 
government I am aware of that does not have a capital budget. 
It does not have a capital budgeting process. It treats 
everything as if it were an operating expense. That does not 
make any sense, and that is what has contributed to the 
situation that we find ourselves in.
    So your bill does, you know, the trick of trying to come up 
with a better way of funding, allocating. I mean, you make 
reference in the bill to the FDIC. What I kept thinking of was 
the Federal Reserve Bank. You know, it is the same kind of a 
non-politicized system for managing our money economy. We need 
a non-politicized system for managing our infrastructure.
    Chairman Dodd. Thanks very, very much.
    Senator Shelby.
    Senator Shelby. Thank you, Senator Dodd.
    What kind of infrastructure investments are you currently 
making? I will ask the panel this. And how are you paying for 
these projects? And how heavily do you rely on Federal 
resources and State sources, or perhaps private sources? Is it 
a combination? What are you doing, Mayor?
    Mr. Bloomberg. In New York, because the city is so big, the 
Federal monies tend to be a relatively small percentage, and we 
export dollars to the State. I think the Senator from Florida 
talked about how they are exporting dollars to the Federal 
Government, and we complain about that as well. But New York is 
the economic engine of New York State, and so we pay for a vast 
preponderance of our projects ourselves. We do tend to go to 
the capital markets. I have argued we should pay as you go, but 
the reality is if you are going to build a school that is going 
to last 30 or 40 years, it is not a bad fiscal policy to 
finance that over 30 or 40 years. In fact, it probably is going 
to last longer than the debt is outstanding.
    The danger is that we rush to build things that we really 
do not need because they are politically popular. We have 
exactly the same pressures in local government that you have at 
the Federal level, and we are not unmindful of that. The 
difference, I think, is that these three mayors--and I hope I 
do as well--stand up and say no, we are not going to do that 
because we are not going to have the money to pay the interest 
down the road, the debt service, or it is a project that is not 
as important as other things.
    The great infrastructure investments that we have to do is 
our school system. Great infrastructure investments we have to 
do is water and transportation. Great infrastructure things we 
have to do is to make sure that we can keep our streets clean 
and safe and our cultural institutions growing. And I thought 
Mayor Funkhouser said it very well. There are enormous risks in 
the world, but we always want to go and worry about those 
rather than the risk that is facing us every day and that is 
destroying us. This country is throwing away its heritage by 
not making investments, by not opening its borders, by not 
address the issues of how we are going to pay for medical care 
and who is going to get it.
    I understand the political lift. I would suggest if any of 
you want to close fire houses, put a smoking ban in, and raise 
property taxes, and then do a parade on Staten Island, you can 
join me. But today, all of those things are popular, so what do 
I know?
    Senator Shelby. We are talking about long-term investments, 
is what we are really talking about.
    Ms. Franklin. Yes.
    Senator Shelby. Mayor Franklin.
    Ms. Franklin. At the airport, Senator, there are 
significant Federal funds. There are passenger fees for 
example. The biggest single resource is actually parking fees 
at our airport. So it is a combination. Concession fees; an 
enterprise fund, and a variety of sources----
    Senator Shelby. So a great deal of your infrastructure is 
financed privately, isn't it?
    Ms. Franklin. At the airport that is true. Water and sewer 
maintenance and replacement costs are different. This was a 
problem that the city basically ignored for several decades. We 
have a sales tax, a 1-cent sales tax.
    Senator Shelby. You ignore at your peril, though, don't 
you, if you----
    Ms. Franklin. Well, you do. You do ignore it at your peril. 
And in addition, you pay a lot more for it when you wait 40 
years to do it. That is the point that we are all making about 
the investment. But in that case, 95 percent of the money is 
local money, ratepayers and a sales tax; $6 million of $2.5 
billion came from the Federal Government. So most of our money 
is local ratepayers for water and sewer. For bridges, some of 
that money comes from the Federal Government. Very little of it 
comes from the city of Atlanta. But, indeed, in the case of 
bridges, unlike roads, where we fund a lot more of it.
    So it is a combination depending on the type of 
infrastructure. But the bottom line is the cost is greater than 
our city can bear long term. And we fool ourselves to think 
that we can just do water and sewer now. In our case, CSOs, 
combined sewer overflows, sewer separation, and drinking water 
upgrades, we have not even started on storm water. That is down 
the road in 2012, 2014, which is one of the reasons I was so 
anxious to testify. We need the Federal assistance because our 
rates will be too high to raise then.
    Senator Shelby. Mayor Peyton, similar----
    Mr. Peyton. Yes, well, you know, I think outside of the 
interstate system and enhancements at our port, you see very 
little Federal money. And I think what we have--we have come to 
the realization that if we want to see improvement in 
infrastructure, we have to do it locally, and that means 
passing a half-cent sales tax, which we did in 2000; passing a 
storm water fee, which is public infrastructure, primarily for 
leaking and failing septic tanks, that was done last year. We 
have kind of come to the conclusion that if we are going to 
improve our city and invest in it, we cannot depend on a 
reliable source with Federal grants or even State grants. The 
$2.2 billion we raised with our half-cent sales tax went 
primarily to State and Federal roads. Our congestion was so 
bad, those were the major arteries that were clogged. We could 
not wait any longer because our quality of life and economy was 
starting to suffer.
    So local initiatives are funding the bills. I think really 
there should be more Federal or State.
    Senator Shelby. Mayor, quickly.
    Mr. Funkhouser. The first thing I would say is that, you 
know, we have not as a city--while we are spending a lot of 
money relative to our residents' income, we have not spent it 
as wisely as we should have. We have spent it on operating 
funds more than capital investment. And one of the things that 
I ran on as mayor--I have only been in office about a year--is 
I was very clear to folks we are going to push money from the 
operating budget to the capital budget, and I am going to be 
real popular when I do some of the things that Mayor Bloomberg 
was talking about. You know, I have already had the protests at 
City Hall and so forth about, you know, what I want to do.
    Looking at where we have spent money, we spent a ton of 
money on our airport recently, and as you point out, a lot of 
that is private. And we did get a lot of Federal assistance 
there. We spent a lot of our own money in property taxes 
primarily, upgrading our schools. We are spending a lot of our 
money on these intermodal facilities. We spend a lot of money 
on our streets. We are just starting to build a new bridge, the 
Kit Bond Bridge across the Missouri River. That is a huge 
project. We are getting a lot of help on that.
    Senator Shelby. I bet you got a lot of help from Senator 
Bond, didn't you?
    Mr. Funkhouser. Yes, sir.
    [Laughter.]
    Senator Shelby. He is good at that.
    Chairman Dodd. Is that the same Kit Bond----
    Mr. Funkhouser. We are very happy--we are very proud of 
Senator Bond. Senator Bond is an icon for us, and we are glad 
to have him.
    Senator Shelby. He is good.
    Mr. Funkhouser. But overall, our investment in 
infrastructure, a relatively small amount of it is Federal 
money. Like Mayor Franklin, I am about to embark on a major 
sewer project, and I am hoping for Federal help. But we have no 
idea what it might be.
    And then, finally, on transit, we are going to do a major 
transit thing, and we are assuming we are going to get about a 
50-percent Federal match on that.
    Senator Shelby. Quickly, what is the single biggest 
impediment to the establishment of a public-private partnership 
for the financing of major infrastructure investments? The 
single largest impediment.
    Ms. Franklin. Well, I mean, I can tell you water and sewer, 
the biggest--the single impediment was the size of the need and 
the lack of revenue. In other words, we had to create the 
revenue by raising the rates and then passing a sales tax. We 
could probably get a private sector partner----
    Senator Shelby. Create the funding stream to----
    Ms. Franklin. We had to create the funding stream. So 
creating the funding stream was the single biggest hurdle.
    My predecessor, in fact, signed the agreements and had much 
of the planning done for the program. The problem was there was 
no funding mechanism. So I spent about 2 years putting together 
a funding formula, and I would say today, 5 years later, that 
it is the single hardest thing I have done politically. 
Yesterday, the day before, 3 weeks ago, when I am in community 
meetings, people complain to me about the cost of the 
infrastructure improvements.
    Someone mentioned that we are term-limited, and in some 
ways, that is a good thing, because it gives me an opportunity 
to step way out on a limb to do something that is so unpopular. 
But if I had a Federal partner, the second biggest question I 
guess behind why are the rates so high is why doesn't the 
Federal Government help us more.
    Senator Shelby. Mayor.
    Mr. Bloomberg. The funding source is a particular thorn in 
our side. We came up with one called ``congestion pricing,'' 
and in all fairness to the Federal Government, they did offer 
us $354 million to pay for all of the equipment, install it, 
get it going. It would have also generated half a billion 
dollars in revenue every year. And the legislature walked away 
from it. So nothing is easy, but I think down the road that 
kind of thing, whether it is congestion pricing or tolling 
bridges or something, we are going to have to have a dedicated 
funding source that is not authorized by a legislature every 
year because without that, nobody is going to lend you money 
long term. You have got to obligate the future taxpayers and 
future governments to be able to do that. And then you have got 
to be able to allow the private investors to operate it as a 
business. If your strategy is going to be we have to protect 
special interest groups, whether it is people that work there 
or something else, nobody is going to make those kinds of 
investments. They want to be able to deal with the marketplace. 
It is tough enough doing that if you are constrained by the 
fact that you cannot reduce your size of your workforce or you 
cannot pay them competitively with how you can get other 
employees. You may decide you want to do that for a societal 
point of view, but you just are not going to get private money 
to do it.
    Senator Shelby. Thank you very much.
    Chairman Dodd. Thank you, Senator Shelby, very much.
    I know Mayor Bloomberg has a plane he has to catch back to 
the city. We appreciate very much the time you spent, almost 2 
hours with us this morning, so we are very grateful to you.
    Mr. Bloomberg. Thank you.
    Chairman Dodd. Thank you, and work will be continuing on 
this, and we thank you very much for being here.
    Senator Carper.
    Senator Carper. Mayor Bloomberg, as you leave, why did your 
legislature come out against the congestion pricing approach?
    Mr. Bloomberg. I am going to have to deal with them 
tomorrow, I guess, so let me phrase it this way.
    [Laughter.]
    Senator Carper. Maybe I should ask this question for the 
record and you can respond in 2 days.
    Mr. Bloomberg. One house of the legislature refused to--
they set a procedure to look at and craft the legislation, 
which the agreement we had was if we went through it, they 
would bring it to a vote, and we assumed it would pass. We 
complied with every single thing they asked for, and then I 
cannot answer your question because they never brought it to a 
vote.
    Senator Carper. Thank you. Well, one of the--go ahead. 
Thank you. Thank you so much for joining us.
    Chairman Dodd. Thank you, Mayor Bloomberg.
    Senator Carper. As the mayor leaves, I have got to share 
with people what I think is a wonderful story. There is maybe a 
little bit of humor here.
    Eli Broad is a fellow who has been very much involved in 
this country in education reform. Some of you know him. He is 
from California. And he hosted, really sponsored an evaluation, 
sort of a competition, if you will, among large urban school 
districts. And among the urban school districts that competed 
was New York City. And within the last 16 months or so, here in 
Washington a number of the top urban school districts were 
invited in, and one of them was recognized for being the best 
urban school district in the country. And it is, ironically, 
probably the toughest urban school district in the country, is 
New York City. And they were honored as the best by the Broad 
Foundation. I will never forget, Mayor Bloomberg spoke and was 
receiving the award on behalf of New York City. He talked about 
how smart the kids were in our schools today, and he recalled 
his job in school. He said, ``My job in school was to make it 
possible for other kids to be in the top half of the class.'' I 
just thought that was one of the most self-deprecating, funny 
things I had heard a mayor or somebody of that stature say. I 
have quoted him many, many times. It was refreshing to hear him 
then, and today, and to hear all of you. I describe myself 
sometimes as a recovering Governor, and I yearn for the days 
when I actually get stuff done, and I just applaud each of you 
for having the courage to work hard and to take on some tough 
jobs and to get things done.
    I want to go back to SAFETEA-LU, the major transportation 
bill we passed about 4 years ago. And I said earlier that we 
created an infrastructure commission, and we said to them to go 
out and look at our transportation needs across the country and 
figure out what we ought to do and how we ought to pay for it. 
And one of the things they came back with was a nickel increase 
in the gas tax over about 9, 10 years, so it would be about a 
half a dollar over that period of time.
    They also suggested that we consider privatizing some of 
our roadways, allowing private companies to come in and buy 
them, and presumably toll those roads and improve them 
accordingly. They called for additional tolling of roads. They 
called for congestion--charging people more money for greater 
congestion.
    Of those ideas, do any of those register with you? I do not 
want to put you on record as favoring a nickel increase in the 
gas tax----
    Ms. Franklin. Well, I will go on record. Georgia has one of 
the lowest gas taxes, and really to tie this to an earlier 
question, which is how do you--one of the problems that we have 
in Atlanta in the metro area is that we, too, had a gas tax--a 
transportation tax that couldn't make it out of our General 
Assembly.
    If, in fact, this were an incentive, this bank had 
incentive funds, we might have been able to get the three votes 
that we missed in getting that out, because there would have 
been some incentive from the Federal Government. So, I mean, 
there is no question that a gas tax--our Governor recently 
waived the State gas tax during the summer, which, in my 
opinion, is going in the opposite direction.
    Senator Carper. I concur.
    Ms. Franklin. So we do have a whole series of problems in 
relating to our General Assembly around these very issues of 
funding infrastructure. The gas tax is one we certainly--I 
would certainly support in Georgia.
    Senator Carper. All right. Thank you. Any other thoughts on 
transportation needs?
    Mr. Peyton. You know, tolling I think can be a viable 
source. We are working on an outer beltway in our county that 
will be supported primarily by tolls. And I think it is 
probably the ideal user fee.
    The notion of a gas tax in this environment, I think, would 
be a very, very tough sell. I would not want to advocate it. 
But certainly, if we can find ways to capture costs of those 
that are using the roads primarily, it is viable.
    It is interesting, the technology, I think, has made 
tolling a lot more attractive. One of the biggest barriers to 
it was the congestion it would create. But now you see, around 
Orlando and others that have really done a lot of tolling, they 
can drive through nearly at the speed limit and be registered.
    So I would think that is a viable alternative.
    Senator Carper. Yes.
    Mayor Funkhouser, let me just say, Mayor, before you 
answer, I love your name. I can just imagine a big billboard in 
Kansas City saying ``Funkhouser, Mayor.'' What a great name.
    It reminds me of a 1970s funk group or something, 
Parliament or whatever. It is great.
    Mr. Funkhouser. We have capitalized a lot on it.
    Senator Carper. I bet you have.
    Mr. Funkhouser. I never thought my name would be an asset, 
or my size, or the way I look. But all of it was, in the 
campaign.
    Senator Carper. Any campaign slogans you want to share with 
us, as an aside here?
    Mr. Funkhouser. Google it sometime. You will find more than 
enough.
    With regard to the proposals that you mentioned, we 
obviously need to do all of those things. I mean, we obviously 
need to do significant gas tax increases. And the folks who 
think that that is not very smart, just wait 2 weeks and you 
get the equivalent at the pump that you are paying anyhow. But 
it is going to some foreign company, some foreign government, 
or to one of the major companies here.
    Senator Carper. Let me just interrupt you just for a 
second. This commission, the SAFETEA-LU Commission recommended 
a nickel increase in the gas tax over 9 or 10 years, 50 cents 
in all I think. And the price of gasoline has gone up that 
much, I think, this year.
    Mr. Funkhouser. Oh, easily. I read most of that report that 
they put out.
    Senator Carper. Did you?
    Mr. Funkhouser. I thought it is, again, the question is 
what is politically practical? I do not know. I am not a very 
good politician.
    Senator Carper. You must be pretty good. You picked the 
right name.
    Mr. Funkhouser. No, rational thought, rational action. We 
have to do what makes--and most citizens cannot--you can sit 
down and explain this. I talk to citizens at these town hall 
meetings once or twice a month and just stand there and take 
questions and talk to them about this sort of stuff. And they 
get it. They understand it is an investment and it is pay me 
now or pay me later.
    I mean, we are trying to get a one-half cent sales tax 
increase as a region to support transit. And if you do the 
math, for one of the families in our wealthier communities that 
would cost them about $250 a year. If they reduced--if they 
have got two or three cars and they take one of those cars and 
they drive it 10 percent less, they save more than that $250. 
So if you are a family with a husband, a wife, and a couple of 
teenagers and one of the teenagers can take the bus or the 
train to school instead of driving, you have saved more than 
you are going to pay in the tax.
    The math works and citizens get it.
    Senator Carper. We have got one son who goes to school up 
in Boston and he does not use a car. He used to use the 
transit, uses transit going back and forth, the train and so 
forth.
    Mr. Chairman, you asked earlier, you said I think it is--I 
am not sure on these numbers, but you said I think I have heard 
that moving a ton of freight by rail is about $500. We had a 
hearing before the Commerce Committee this week and a guy was 
there from the American Association of Railroads. In his 
testimony he said it is 436.
    Chairman Dodd. 436 miles, I apologize.
    Senator Carper. No, no, no, no, it is close enough. But if 
you actually think about it, that is basically moving a ton of 
freight by rail from Washington, D.C. to Washington on one 
gallon of diesel fuel.
    Chairman Dodd. The cost of one gallon of gas.
    Senator Carper. I have been riding the train this week, not 
just between Wilmington and D.C., but also from Wilmington to 
Philadelphia, Philadelphia to New York, and New York back to 
Wilmington. I noticed, even in midday trains, the trains were 
full. In a couple of cases like standing room only.
    The House yesterday passed their Amtrak reauthorization 
bill, which calls for creating--similar to what Frank 
Lautenberg and Trent Lott and others and I have proposed here 
and has passed the Senate. But they have proposed that we use 
the Federal Government as a little bit of a different partner 
in intercity rail support and try to do it in a way that 
involves the States--invites the States to participate and 
freight rail owners.
    You know, when you are out of the Northeast corridor, the 
folks--it is not Amtrak's track anymore. They are on the 
freight railroad tracks.
    When I was Governor, we wanted to do a highway project, it 
was 80/20, 80 percent Federal/20 percent local. If it was a 
transit project, it was 50 percent local/50 percent Federal. 
But if I wanted to do an intercity rail project in my State 
that made more sense than either of those, it was 100 percent 
local/zero Federal.
    What we propose to do is to change that in our legislation. 
And that is, I think, something that kind of works with what 
you and Senator Hagel are working on, too.
    Chairman Dodd. Thank you very much.
    Senator Carper. And again, our thanks to all of you for 
being here, for your jobs.
    Chairman Dodd. I just have a couple of quick questions for 
you. One, I want to pick up the point, Mayor Funkhouser, you 
talked about. I read David McCullough's biography of Harry 
Truman. Was he State auditor? He was State----
    Mr. Funkhouser. He was the county judge, which is basically 
the chief executive of the county.
    Chairman Dodd. Was that when he went back--I loved the 
chapter when he goes out because there were a lot of dirt roads 
in his day. And he went out and sold the idea of paving the 
roads. But he went out from community to community, day after 
day, day after day, making the case to people in clear, 
rational terms about why it would benefit the community for 
doing that. And they, of course, bought into it.
    But he made the point it is labor intensive work, this 
stuff. You have got to just put the time and effort in. So it 
was a wonderful example of Missouri politics. It is exactly 
what you are----
    Mr. Funkhouser. Plain speaking.
    Chairman Dodd. Plain speaking.
    I wanted to pick up--I have got a number of members here 
that come from rural states and I think there is a danger that 
people see this as an urban issue. And obviously, there is a 
lot of attention on the urban issues that we can talk about. 
But Jon Tester from Montana, for instance.
    I was curious. I wonder if you might comment, if you could, 
I know you have given it some thought, in terms of how this 
benefit--it is not just the areas we are talking about, we are 
talking about national projects and regional projects--and for 
the record, what this could mean to a broader constituency 
beyond those immediately affected by this.
    Mr. Funkhouser. You know, goods are going to--rural folks 
buy goods the same as everybody else. And a lot of those goods 
are going to come from overseas. And they are going to come 
through these ports and they are going to come on the trucks 
and they are going to come on the railways. And they are going 
to cost more, they are going to take longer, they are going to 
be more difficult to get in. And that is going to cost rural 
folks, just like everybody else.
    At the same time, rural folks, many of them are farmers or 
miners. And their goods, timber, what supports their economy 
has to be shipped out. And they are going to have difficulty 
doing that.
    There is not any question that we are all interconnected. 
Everybody is dependent on everybody else in the United States. 
All of this stuff vitally affects all of us.
    Chairman Dodd. Mayor Peyton, any comment on that?
    Mr. Peyton. Yes, I will just give you the example that we 
have. Our port is growing because there is a major shift in 
goods from the West Coast to the East Coast, due primarily to 
congestion on the West Coast and a perception that there is a 
labor unfriendly environment.
    So with the widening of the Panama Canal, these goods are 
coming to Jacksonville because we have three interstates to 
reach these exact areas that we are describing, I-75, I-95, I-
10. We are actually west--the most western city on the East 
Coast, so we are easier to get to the Midwest through the 
interstate network.
    So I would say this shift is an economics shift that is 
allowing a lower cost providing company to bring goods to these 
areas more efficiently, more effectively.
    Chairman Dodd. Shirley, any thought on that? Georgia, a lot 
of rural areas in Georgia.
    Ms. Franklin. Well, agriculture is a big industry in 
Georgia. So the movement of goods, I think, is an important 
one. Certainly the movement of--as has been described--from 
foreign ports or other ports into and out of our airport and 
our port.
    But I would also say that the issues of climate and climate 
change affect everyone. So to the extent that you have heavier 
concentrations of carbon emissions in a city like Atlanta, that 
is not on the coast, where we do not get the winds that my 
colleague might get, the bottom line is that pollution goes out 
beyond the city of Atlanta. And it affects--so if we are 
creating more and more air pollution, that is a problem. If we 
are creating water pollution, our river, the river that serves 
Atlanta for drinking water purposes and that we use for 
wastewater purposes, as well, flows up and down the State of 
Georgia on the Alabama border.
    So what we do, what happens in the river really affects 
Alabama, Georgia, rural and urban. So that would be two 
examples.
    Chairman Dodd. Very, very good. Listen, you have been 
great, and your patience here in all of this.
    I am going to leave the record open here for a few days 
because members may have some additional questions.
    I was speaking with Senator Hagel as he was leaving and I 
obviously talked with Senator Shelby about this. But my 
intention would be to try to mark this bill up in July. We have 
got housing issues to move along and I cannot predict what is 
going to happen. Obviously, we have got only a few weeks left 
around here.
    But I think the fact we have had a diversity of political 
opinion at this table, as we have when we have had other 
hearings. And I think you have heard, just around the table 
here, this is an issue that transcends any of that.
    And I have got the benefit of having a number of colleagues 
on this committee who have been mayors. There is no greater 
advantage, since you come at the end of the food chain, as we 
all know, in the game of national politics.
    So my intention would be to try and move this bill along. I 
know there are a number of similar proposals. My former chief 
of staff, Congresswoman Rosa DeLauro, the Congresswoman from 
New Haven, has got a very good proposal in the House on 
infrastructure, as do several other members. Jim Oberstar, the 
Chairman of the Transportation Committee over there, has some 
decent ideas, as well.
    So we are going to try and incorporate some of these. But 
we need, as you pointed out, strategic national thinking on 
this question. This is not a time for small bore politics here, 
where the continuation of an existing system where we fund the 
little projects around the country--some of which I do not 
underestimate--are important. But in terms of having a national 
strategy to get us back on our feed again, it is never going to 
happen unless we do this.
    Education, and this, energy policy, and health care are the 
four issues that I identify as a way you can start to get this 
country moving in the right direction. And we can start by 
doing it quickly, in my view.
    So I thank you immensely. I cannot begin to tell you how 
valuable it is to have you here. It is wonderful to have the 
technical people. We had a great hearing with technical people 
who came. And they are invaluable in giving us their data and 
assessment about how this works. But to have mayors who deal 
with this every single day and wrestle with these tough 
political choices just adds tremendously to the quality of the 
debate and discussion.
    So I am deeply appreciative of the time that you have taken 
to be here, to share your thoughts. And we will stay in touch 
with you. And additional thoughts and ideas we welcome to this 
committee.
    So I thank you all very, very much.
    The Committee will stand adjourned.
    [Whereupon, at 12:03 p.m., the hearing was adjourned.]
    [Prepared statements supplied for the record follow:]


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