[Senate Hearing 114-207]
[From the U.S. Government Publishing Office]
S. Hrg. 114-207
SURFACE TRANSPORTATION REAUTHORIZATION:
THE IMPORTANCE OF A LONG TERM REAUTHORIZATION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON SURFACE TRANSPORTATION
AND MERCHANT MARINE INFRASTRUCTURE,
SAFETY AND SECURITY
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
MAY 5, 2015
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
David Schwietert, Staff Director
Nick Rossi, Deputy Staff Director
Rebecca Seidel, General Counsel
Jason Van Beek, Deputy General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel and Policy Director
------
SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE
INFRASTRUCTURE, SAFETY AND SECURITY
DEB FISCHER, Nebraska, Chairman CORY BOOKER, New Jersey, Ranking
ROGER F. WICKER, Mississippi MARIA CANTWELL, Washington
ROY BLUNT, Missouri CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
JERRY MORAN, Kansas RICHARD BLUMENTHAL, Connecticut
DAN SULLIVAN, Alaska BRIAN SCHATZ, Hawaii
RON JOHNSON, Wisconsin EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada TOM UDALL, New Mexico
STEVE DAINES, Montana
C O N T E N T S
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Page
Hearing held on May 5, 2015...................................... 1
Statement of Senator Fischer..................................... 1
Statement of Senator Booker...................................... 2
Statement of Senator McCaskill................................... 34
Statement of Senator Ayotte...................................... 36
Statement of Senator Klobuchar................................... 38
Statement of Senator Cantwell.................................... 40
Witnesses
Senator Curt Bramble, President Pro Tempore, Utah State
Legislature; President-elect, National Conference of State
Legislatures................................................... 4
Prepared statement........................................... 6
Nick Yaksich, Vice President, Association of Equipment
Manufacturers.................................................. 13
Prepared statement........................................... 15
Janet Kavinoky, Executive Director of Transportation and
Infrastructure, U.S. Chamber of Commerce; Vice President,
Americans for Transportation Mobility Coalition................ 16
Prepared statement........................................... 18
Hon. Brian C. Wahler, Mayor, Piscataway Township, New Jersey and
President, New Jersey State League of Municipalities........... 26
Prepared statement........................................... 28
SURFACE TRANSPORTATION
REAUTHORIZATION: THE IMPORTANCE OF A LONG TERM REAUTHORIZATION
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TUESDAY, MAY 5, 2015
U.S. Senate,
Subcommittee on Surface Transportation and
Merchant Marine Infrastructure, Safety and Security,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:40 a.m. in
room SR-253, Russell Senate Office Building, Hon. Deb Fischer,
Chairman of the Subcommittee, presiding.
Present: Senators Fischer [presiding], Ayotte, Sullivan,
Johnson, Booker, Cantwell, McCaskill, Klobuchar, Blumenthal,
Schatz, and Manchin.
OPENING STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. The hearing will come to order.
Good morning. I am pleased to convene the Senate
Subcommittee on Surface Transportation and Merchant Marine
Infrastructure, Safety, and Security for our sixth hearing,
titled, ``The Importance of a Long Term Reauthorization.''
Although some may say we are not moving forward on
infrastructure, I would point out that today's hearing is the
third in a series on the reauthorization of our Nation's
surface transportation programs. Our hearing will highlight the
importance of a long-term transportation reauthorization.
Senators will hear perspectives from local and state officials,
manufacturers, and private businesses on the importance of
long-term transportation policy.
As many of you here know, at the end of this month,
authorization for surface transportation programs will expire.
A short-term extension is highly likely.
According to the latest projections, by August, the Highway
Trust Fund will run out of money. The time for action is now.
Although the United States leads in so many areas, we are
falling behind when it comes to our Nation's infrastructure.
Our highways and bridges are in need of investment. In 2013,
the American Society of Civil Engineers, the ASCE, issued a
report card on America's infrastructure, giving our roads a
grade of D and our bridges a grade of C-plus.
States and local governments need more tools at their
disposal to address the growing challenge of sustaining local
infrastructure and transportation systems. As one state
department of transportation director recently testified before
this subcommittee, states allocate limited transportation
resources by need versus want, but based on which projects must
be initiated now versus those that can be delayed.
The Nation's economy depends on an efficient and reliable
transportation network. With expanding global trade volumes,
America's economic growth will depend on the resilience of our
intermodal surface transportation system.
With the upcoming transportation reauthorization, we must
keep in mind that nearly 95 percent of all consumers reside
outside the United States. Without adequate infrastructure,
U.S. manufacturers and businesses are going to pay the price in
delayed or missed shipments and lost market share abroad.
As Congress looks to reauthorize surface transportation
programs, we must ensure that transportation regulations meet
their intended safety goals by providing as little economic
harm as possible. Congress must hold regulators to a higher
standard, particularly when it comes to balancing the goals of
safety with the cost of regulatory compliance.
It is key that we incorporate innovative approaches and
technology into our regulatory framework. For example, Congress
should continue on the path that MAP-21 created for
performance-based standards for grants and safety regulations.
Performance targets will allow agencies to better allocate
already scarce transportation resources and encourage private
sector innovation.
Each day, American families, consumers, workers, and
businesses depend upon a safe and reliable transportation
system. I look forward to working with my colleagues in the
Senate and with stakeholders to find a long-term, sustainable
approach for addressing our Nation's transportation needs.
I would now like to invite Senator Booker, my Ranking
Member, to offer any opening remarks.
STATEMENT OF HON. CORY BOOKER,
U.S. SENATOR FROM NEW JERSEY
Senator Booker. Thank you, Senator Fischer. I am grateful
for your leadership, especially on this issue.
I'm grateful for the panel being here.
I have to say, I have been a Senator now for 18 months, and
my frustration with our approach to infrastructure as a Nation
just grows with every day. Here we are now approaching a moment
when our transportation funding is about to end. That is bad,
in and of itself, but what is even worse, in talking to leaders
all across my state and in the Northeast region, is the
frustration that you cannot do long-term planning and
investment without a sustainable, reliable funding mechanism
and knowing what the future budgets are going to be.
This is no way to run a country. In fact, if this was
America, Inc., we would be liable for shareholder lawsuits,
because we are not making critical investments in our
infrastructure, which is one of the best uses for the
investment of a taxpayer dollar when it comes to returns on
investment. Every dollar invested in infrastructure nationally
produces more than a 40 percent return in economic growth. And
in the Northeast region, Newark, I say--some people call it the
greater New York City region--in which I live, it is actually
far more than that kind of return.
We have inherited this incredible infrastructure system
from our grandparents. It is as if we inherited the nicest
house on the block and then trashed our inheritance and are
about to pass it over to our children with an incredible multi-
trillion-dollar worth of debt within the infrastructure.
We were ranked number one around the globe. Now we are
ranked around number 18 in the quality of our infrastructure.
We must begin to get back to putting America first, and that is
investing in our physical plant, our infrastructure, which will
ensure long-term growth.
Now we have an urgent need for infrastructure in all parts.
I am glad for the partnerships with Senator Fischer and others,
who are exploring ways to do this better with more
accountability and more transparency.
I want to highlight, very quickly, the urgent need, number
one, for passenger rail. Yesterday, thanks to the Chairman and
Ranking Member, I held a field hearing in Newark, New Jersey.
We talked and heard from people from Amtrak, the Federal
Railroad Administration, regional planners, and labor groups
about how important infrastructure investment is to New Jersey
and the economic prosperity of the region.
Passenger rail in the Northeast Corridor has more
passengers than all the airlines combined. Yet we do not
proportionately invest in it.
There is also an urgent need to invest in a freight
program. The Port of New Jersey and New York is the busiest
port on the East Coast, and demand is expected to continue to
grow in the coming years. The port is a critical component of
the freight corridor that runs through New Jersey from New York
to Philadelphia. The corridor moves $55 billion worth of goods
each year. And that freight area, that port is connected to
over a quarter million jobs, directly or indirectly.
This is a crisis that we have in our country, and the
people it is hurting most are people who are trying to do
business. The economic vitality of our Nation is being choked
by an inadequate infrastructure. Working families are paying
the price.
The heavy congestion, wear and tear on roads, and
insufficient investment is hurting New Jersey families.
According to a recent report, New Jerseyans themselves lose
about $2,000 per year because of poor road conditions,
congestion, and accidents.
The time for action is now. But, as Senator Fischer said,
the time for intelligent action, learning from the past, doing
it right, doing it with long-term vision, and doing it in a way
that is reliable for public-private partnerships to come about
to invest in infrastructure, is well past time.
So I am grateful to the Chair of this subcommittee for her
leadership. I'm excited today to hear from our panel, which I
think will be a chorus of conviction to the points that I've
already made.
And, with that, I will turn it back over to my Chairperson.
Senator Fischer. Thank you, Senator Booker. I would like to
welcome our panel of witnesses today and thank them for their
testimony and ask you to give your opening remarks.
We will begin with Mr. Bramble, who is the President-elect
of the National Council of State Legislatures and the President
Pro Tempore of the Utah State Senate.
Welcome.
STATEMENT OF SENATOR CURT BRAMBLE, PRESIDENT PRO TEMPORE, UTAH
STATE LEGISLATURE; PRESIDENT-ELECT, NATIONAL CONFERENCE OF
STATE LEGISLATURES
Mr. Bramble. Thank you, Chairman Fischer, Ranking Member
Booker, and distinguished members of the Senate Subcommittee on
Surface Transportation and Merchant Marine Infrastructure,
Safety, and Security.
As noted, my name is Curt Bramble, President Pro Tempore of
the Utah Senate and President-elect of the National Conference
of State Legislatures. I appear before you today on behalf of
NCSL, a bipartisan organization representing all the
legislatures of our states and territories.
Madam Chairman, I would like to take this opportunity to
thank you and the Committee for your leadership on the
important issue of surface transportation reauthorization. I
also would like to note for the record that it was an honor and
pleasure serving with you during your time as a state senator
in the 3 years that we served together on NCSL's executive
committee.
As we all know, on May 31, authorization for Federal
surface transportation programs will expire and the Highway
Trust Fund is set to become insolvent shortly thereafter.
Surface transportation reauthorization is a top priority for
NCSL and state legislatures across the country. It is not only
critical to the movement of people and goods, but also brings
with it job creation and economic growth.
While my written testimony addresses a number of key policy
issues pertaining to reauthorization, if this committee doesn't
remember anything other than the next three points, my
testimony will have been successful: first, the need for
Congress to provide sustainable, predictable funding with
flexible financing opportunities; second, the need to ensure
the continuation of a state-administered Federal aid surface
transportation program; and third, the need to explore
alternatives to fuel taxes as a funding source for
transportation.
To expand on these, NCSL encourages Congress to ensure the
continued solvency of the Highway Trust Fund while committing
to adopt a long-term agreement on surface transportation
funding.
The uncertainty that pervades short-term extensions makes
it extremely challenging for states to adequately plan and
achieve their performance targets, considering that many
transportation infrastructure projects require multiyear
commitments.
Due to the uncertainty of Federal funding and short-term
extensions of MAP-21, Utah withheld one-third of our bid-
letting for the current year. We anticipate 25 projects with a
total of $65 million will be deferred to next year. These
delays have a harmful impact on the state's broader economy.
I cannot overstate the negative impact this uncertainty
creates.
Despite Federal inaction, state legislatures in more than a
quarter of the states, including my home state of Utah, have
stepped forward to invest billions of dollars so that we can
both repair and upgrade our Nation's surface transportation
assets to ensure their continued safety and viability.
However, the significant steps taken by many states should
not be misconstrued. NCSL is a strong supporter of the Federal
Government's role in a national surface transportation system.
We fully support the continuation and preservation of a Federal
aid surface transportation program that provides flexibility to
states to address unique regional issues.
Finally, I would like to quickly touch on the 800-pound
gorilla: how to pay for these necessary investments. NCSL
believes the next long-term reauthorization should provide for
a more sustainable funding mechanism that maintains a Federal
trust fund financed by user fees. We urge Congress to support
state-level pilot programs to explore transportation funding
alternatives to fuel taxes.
In Utah, I recently helped lead efforts to bolster our
state surface transportation funding to ensure the continued
success of our state infrastructure system. The decision was
not an easy one, nor was it taken likely. Our motor fuel taxes
had been in the same amount per gallon since 1997 and had lost
49 percent of their buying power due to inflation.
In addition, while we have more miles of road, more cars,
and more vehicle miles traveled over that same period of time,
our total fuel consumption has remained flat. It has remained
constant. It has not increased.
We have a static rate applied to static base, which does
not support our necessary long-term expenditures. Given the
requirements of increased fuel efficiency, the growth in hybrid
electric and other alternative fuel vehicles, and a static
funding system that fails to adequately address demand, we need
a new approach.
Additionally, although the major funding portion of the
bill was similar to a sales tax, we also included provisions
for directing our Utah Department of Transportation to study
road usage fees, similar to a pilot program in Oregon.
Madam Chairman, throughout the history of our country,
transportation infrastructure has played an integral role in
the success of our economy. Article 1, Section 8, of the United
States Constitution notes that it is the duty of the Federal
Government to provide support for national transportation
investment. Strong Federal support for the development of
roads, canals, and highways has supported economic development
throughout the history of our country.
As we approach the 100-year anniversary of the Federal Aid
Road Act, it is this partnership that has enabled the United
States to build a surface transportation network envied by the
rest of the world.
I thank you for this opportunity to testify before your
subcommittee. The importance of a long-term reauthorization
cannot be overstated.
Along with states, the Federal Government plays a vital
role in supporting our national surface transportation system.
State legislators stand ready to work with Congress as it
continues to develop a long-term successor to MAP-21.
I look forward to questions from members of the Committee.
Thank you very much.
[The prepared statement of Mr. Bramble follows:]
Prepared Statement of Senator Curt Bramble, President Pro Tempore,
Utah State Legislature; President-elect, National Conference of State
Legislatures
Chairman Fischer, Ranking Member Booker and distinguished members
of the Senate Subcommittee on Surface Transportation and Merchant
Marine Infrastructure, Safety and Security, my name is Curt Bramble,
President Pro-Tem of the Utah Senate and President-elect of the
National Conference of State Legislatures (NCSL). I appear before you
today on behalf of NCSL, the bipartisan organization representing the
50 state legislatures and the legislatures of our Nation's
commonwealths, territories, possessions and the District of Columbia.
Madam Chairman, I would like to take this opportunity to thank you
and the Committee for your leadership on the important issue of surface
transportation reauthorization, not just with today's hearing, but with
the Committee's hearing earlier this year on reauthorizing of highway
safety programs. I would also note that it was an honor and pleasure to
serve with you during your time as a state senator including the three
years we both served together on NCSL's Executive Committee.
Infrastructure Priorities
Before I begin a more specific discussion on the importance of
surface transportation reauthorization. I would like to highlight for
the Committee that transportation infrastructure and funding is one of
NCSL's top nine priorities for the 114th Congress. NCSL maintains its
strong support for infrastructure programs and will work to ensure that
all funding and financing options remain available to states to
continue the economic benefits that infrastructure programs provide. As
part of this priority, NCSL has maintained a strong and detailed
Surface Transportation Federalism Policy Directive, which was
unanimously approved by our organization, showing wide bipartisan
support. A copy of that policy directive is included as an appendage to
my testimony and I ask that it be included as part of the record for
today's hearing.
The Urgent Need for a Long-Term Reauthorization
As you know, on May 31, authorization for Federal surface
transportation programs will expire and the Highway Trust Fund is set
to become insolvent shortly thereafter. NCSL urges Congress to ensure
the continued solvency of the Highway Trust Fund (HTF), while
committing to adopt a long-term agreement on surface transportation
funding as part of a multi-year reauthorization of the Moving Ahead for
Progress in the 21st Century Act (MAP-21). Although the enactment of
MAP-21 in 2012 put a brief end to the numerous short-term extensions
that followed the expiration of the Safe, Accountable, Flexible,
Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU)
in 2009, it unfortunately seems that Congress may return to this
pattern. The uncertainty that pervades short-term extensions makes it
extremely challenging for states to adequately plan and achieve their
performance targets especially because many transportation
infrastructure projects require a multi-year commitment. It is
difficult for me to overstate the negative state impacts this
uncertainty creates.
Like other cold weather states, Utah's highway construction is
seasonally driven by the weather and temperatures, limiting
construction activities during colder months. Bid lettings are
scheduled at the ``right time'' to maximize competitive bids and take
into account the capacity of contractors to prepare bids for multiple
projects at any one time. Accordingly, projects are put out to bid
throughout late fall, winter, and early spring to prepare for the
annual summer construction season. Utah's goal is to have 100 percent
of the program bid by May each year. Due to the uncertainty of Federal
funding and short-term extensions of MAP-21, Utah withheld one-third of
our bid letting for the current year. Even if Congress extends
authorization of MAP-21 beyond the current May 31 expiration, a portion
of the 2015 construction program will be lost. While we could resume
bidding activities later, it will be too late for larger paving
projects. We anticipate 25 projects with a total value of $65 million
will be deferred to next year. These delays have a harmful impact on
the state's broader economy.
Despite Federal inaction, over the past two and half years, state
legislators in more than a quarter of states, from Maryland and
Virginia to Iowa and my home state of Utah, have stepped forward and
invested billions of dollars to repair and upgrade our nation`s surface
transportation assets to ensure their continued safety and viability.
However, the significant steps taken by many states should not be
misconstrued. NCSL is a strong supporter of the Federal Government's
role in a national surface transportation system. A system that
facilitates interstate commerce, addresses fairly and equally the
mobility needs of all Americans and meets our national defense needs. I
would also stress that NCSL supports the continuation and preservation
of a federal-aid surface transportation program that directs spending
to national priorities while providing flexibility for states to
address regional variations. The Federal program should provide states
maximum flexibility in deciding how to generate and leverage
transportation revenues and how to use state and Federal dollars. The
ability of states to maintain flexibility in decision making and comply
with environmental and other mandates depends on regulatory flexibility
as well as adequate and reliable Federal funding.
This hearing represents an important and needed step towards a
long-term reauthorization. It is an opportunity to recognize and review
MAP-21's successes as well as those policy areas in need of an update,
so that all parties, including state legislatures, can work together to
ensure a safe and reliable surface transportation system throughout the
country.
Freight and Interstate Commerce
One critical responsibility of the Federal Government, within the
arc of surface transportation investments, is to ensure the safe and
timely movement of goods across the Nation. Robust state-federal
consultation can help to evaluate freight flows and collaboratively
plan the routes and development necessary to maintain and expand the
highway freight corridors. As such, NCSL believes that Congress should
look to engage and invest with states to ensure effective and efficient
movement of freight.
In fact, in my state of Utah, our Department of Transportation
Director Carlos Braceras stated that, ``Nearly a quarter of the traffic
on Utah's interstate system is commercial freight vehicles.'' These
vehicles carry goods from out-of-state producers to and through Utah.
Just as out-of-state businesses depend on a reliable, effective, well-
maintained, and safe transportation system in Utah, the businesses
located in Utah also rely on effective transportation infrastructure in
the national system.
National Highway and Transportation Safety Administration (NHTSA)
MAP-21 consolidated various grant programs from SAFETEA-LU,
including impaired driving and motorcycle grants, along with the new
graduated driver and distracted driving grants, into the new Section
405 National Priority Safety program. There are concerns that the
qualifications for these new grants are so high it is proving difficult
for states to participate.
In particular, although 18 states have ignition interlock laws for
all offenders, only four states have qualified for the Federal grant
program because of issues surrounding rare exemptions for medical and
work issues. Additionally, of the nearly 40 states that applied only
one qualified for the distracted driving grant program due to the
overly rigorous definitions and criteria being imposed on states. While
every state has implemented some form of a three-stage graduated
licensing system, no state qualified for this grant program in either
FY 2013 or FY 2014.i The three-stage graduated licensing
system has been credited as a primary driver of the significant
reduction seen in teen driving deaths.
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\i\ Governors Highway Safety Association. Surface Transportation
Reauthorization--Behavioral Highway Safety Provisions. 2015
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While NCSL supports the expansion of Federal safety programs to
incorporate emerging safety issues, those efforts must respect state
sovereignty and recognize the unique transportation demands of each
state. NCSL opposes the use of Federal sanctions or redirection
penalties to enforce those standards.
Performance Management
One of the largest transformations within MAP-21 was the
introduction of a national performance program so as to ensure that
investments are correctly targeted as well as increase the
accountability and transparency of these investments. The U.S.
Department of Transportation (USDOT) continues its process of
implementing these national level performance measures required in MAP-
21. It is important that these efforts recognize and build off of the
extensive work states have done with regard to performance management.
As many states, including Utah, already make use of certain performance
measures on a regular basis, we urge the department and Congress to
avoid creating additional reporting mandates or implementing lowest-
common denominator performance measures that run counter to good asset
management practices.
As an example, Utah's Transportation Commission has established a
Funds Exchange Program that allows local governments to exchange their
Federal transportation funds for state transportation funds on certain
types of projects at a rate of $0.85 state funds per $1.00 Federal
funds. Local governments jump at the opportunity to buy the flexibility
provided to them in this transaction.
In Utah, as with all of our sister states, the success of our
communities--both large and small--is critical. As such, we have
developed what we refer to as a Unified Plan, in which all of our
Metropolitan Planning Organizations (MPOs), cities, counties, and
transit authorities have come together to develop a unified plan of
projects that will address the goals of the state and individual
communities for the next 30 years. We speak with one voice toward an
agreed-upon set of goals.
These examples highlight why the Federal Government should build
upon the work states have done as well as demonstrate why it would be a
mistake for the Federal Government to mandate the use of Federal
performance measures for making important investment decisions when
other, more complete measures would provide more accurate information.
Project Streamlining
The Federal Government has a role to play in ensuring that national
environmental policy aligns with national transportation policy, while
assuring efficient and cost-effective approaches to both goals. The
findings of an August 2011 Congressional Research Service (CRS) report
noted that major highway projects can take 10 to 15 years to plan and
build.ii NCSL favorably views efforts included in MAP-21 to
streamline regulatory review processes so that construction projects
can again be realized on-time and on-budget. NCSL encourages Congress
to allow and enhance states' programmatic permitting as well as provide
incentives to states to achieve environmental quality standards through
transportation projects.
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\ii\ Congressional Research Service. ``Accelerating Highway and
Transit Project Delivery: Issues and Options for Congress.'' August 3,
2011. Accessed from: http:bit.ly/CRS080311
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In Utah, we have assumed assignment of Categorical Exclusion
documents since 2008 with great success, and we are currently in the
process of securing full National Environmental Policy Act (NEPA)
delegation. Earlier this year, the Utah legislature approved a bill
authorizing Utah Department of Transportation (UDOT) to fully assume
Federal responsibilities for NEPA. UDOT believes that we will secure
full NEPA assignment by the end of the year.
Transportation Infrastructure Finance and Innovation Act (TIFIA)
One program in particular from MAP-21 that I would like to discuss
is the Transportation Infrastructure Financing and Innovation Act
(TIFIA). As reported by the Government Accountability Office (GAO),
demand for the program has been very high, with requests exceeding
budgetary resources by a ratio of 10 to 1 since 2008.iii
With MAP-21 authorizing an expansion of TIFIA to $1.75 billion over two
years, from only $122 million in FY 2012, states will be able to
finance and complete major projects of national and regional
significance. NCSL supports this kind of expansion of credit-based and
loan guarantee programs to incentivize private sector investment.
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\iii\ Government Accountability Office. ``Financing Program Could
Benefit from Increased Performance Focus and Better Communication.''
June 21, 2012. Accessed from: http://www.gao.gov/products/GAO-12-641
---------------------------------------------------------------------------
Beyond MAP-21
Finally, I'd like to quickly touch on the 800 pound gorilla--how to
pay for these necessary investments? The Highway Trust Fund is
estimated to become insolvent in a matter of months, while state gas
taxes continue to show diminishing returns. The American Society of
Civil Engineers has estimated America's surface transportation
infrastructure faces a funding gap of about $94 billion a year based on
current spending levels.iv NCSL believes the next long-term
reauthorization should provide for a more sustainable funding mechanism
for surface transportation that maintains a Federal trust fund financed
by user fees. We urge Congress to support state-level pilot programs to
explore transportation funding alternatives to fuel taxes. Attached to
my testimony is NCSL's Solving America's Long-term Transportation
Funding Crisis Policy Resolution, which details our stance on
Congressional support for state pilot programs.
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\iv\ American Society of Civil Engineers. ``2013 Report Card for
America's Infrastructure.'' May 2013. http://
www.infrastructurereportcard.org/
---------------------------------------------------------------------------
In Utah, I recently helped lead efforts to pass House Bill 362,
which made significant changes to the state's motor fuel tax structure
and rate. The decision was not an easy one, nor was it taken lightly.
In our very conservative state, raising taxes is not a regular
occurrence. However, Utah legislators and Governor Herbert took the
long view. Our motor fuel taxes had been the same per gallon amount
(24.5 cents) since 1997 and had lost 49 percent of its buying power to
inflation. Looking into the future, we realized we were facing a
structural deficit in transportation. We had a static rate applied to a
static base, which would not support our necessary long-term
expenditures. Given the requirements of increased fuel efficiency, the
growth in hybrid, electric and other alternative fuel vehicles and a
static funding system that fails to adapt to demand, we needed a new
approach. We recognized that continued economic expansion requires
continued infrastructure investment.
In particular, we set a minimum base cost per gallon at the rack
for purposes of calculating the tax. We then applied a 12 percent rate
to that per gallon minimum. That results in a 5 cents per gallon
increase-to 29.5 cents-at the pump. Once actual wholesale prices reach
that minimum, the minimum will increase over time by the consumer price
index, up to a maximum of $3.33 per gallon. This index will allow our
per gallon tax to match inflation up to a ceiling of 40 cents per
gallon--a 15.5 cent per gallon maximum increase.
We expect the changes in House Bill 362 will generate $25 million
more in revenue for part of Fiscal Year 2016 and $75 million more in
its first full year of implementation.
Although the major funding portion of the bill was similar to a
sales tax, we also included provisions directing UDOT to study a road
usage fee similar to a pilot program that Oregon is set to undertake in
a few months. Additionally, multiple states have approved legislation
aimed at attracting private sector support.
Madam Chairman, I thank you for this opportunity to testify before
the Subcommittee. The importance of a long-term surface transportation
reauthorization cannot be understated. Along with states, the Federal
Government plays a vital role in supporting our national surface
transportation system. As state legislators have responsibility for
state budgets, policy planning and oversight activities we stand ready
to work with Congress as it continues to develop a long-term successor
to MAP-21. I look forward to questions from members of the
Subcommittee.
Appendices
NCSL Surface Transportation Federalism Policy Directive
NCSL Solving America's Long-Term Transportation Funding Crisis
Policy Resolution
______
National Conference of State Legislatures
The Forum for America's Ideas
Solving America's Long-Term Transportation Crisis
NCSL Natural Resources and Infrastructure Standing Committee
Revenues for our transportation system continue to decline with
vehicles becoming ever more fuel efficient and changing travel patterns
nationwide. The Highway Trust Fund is estimated to become insolvent in
2015 while state gas taxes continue to show diminishing returns. The
American Society of Civil Engineers has estimated America's surface
transportation infrastructure faces a funding gap of about $94 billion
a year based on current spending levels.
To respond to this well-documented funding crisis currently
impacting America's surface transportation system, the National
Conference of State Legislatures urges Congress to support the creation
of a $20 million program, with no more than $2 million available for
allocation to any one state, to support state-level pilot programs to
explore transportation funding alternatives to fuel taxes.
______
National Conference of State Legislatures
The Forum for America's Ideas
Surface Transportation Federalism Policy Directive
NCSL Natural Resources and Infrastructure Standing Committee
The National Conference of State Legislatures (NCSL) calls on
Congress to work closely with states to develop a shared, long-term
vision for financing and funding surface transportation systems that
will enhance the Nation's prosperity and the quality of life of all
Americans.
The Federal Government plays a vital role in supporting a national
surface transportation system that meets national defense needs,
addresses fairly and equally the mobility needs of all Americans and
facilitates interstate commerce. NCSL supports the continuation and
preservation of a federal-aid surface transportation program. The
Federal program should direct spending to national priorities while
allowing for state and insular area flexibility in local and regional
variations. It is also essential that the federal-aid surface
transportation program incorporate requirements and foster goals of
other national policies that impact transportation decision-making.
Recent Federal reauthorizations have recognized the unique
contributions of each transportation mode to the productivity of the
states and the nation, and to the ability of this Nation to compete
globally in the emerging and existing international economies. These
laws contemplate an integrated transportation system for the movement
of both goods and people, with increased emphasis on adopting
technologies that improve productivity. NCSL urges Congress to provide
states enhanced programming flexibility to meet a multitude of national
goals. States should have maximum flexibility in deciding how to
generate and leverage transportation revenues and how to use state and
Federal dollars. The ability of states to maintain flexibility in
decision making and comply with environmental and other mandates is
dependent upon regulatory flexibility as well as adequate and reliable
funding.
National Vision
The surface transportation system in the United States needs a new
vision to guide it beyond the Interstate Highway era into the 21st
century and the needs and challenges that lie ahead. Congress should
look at surface transportation anew, authorizing a new program that
better meets current and future needs for interstate mobility.
Congress must clearly articulate this new national vision for
surface transportation. In doing so, Congress should consider the
following as Federal objectives:
Interstate commerce and freight mobility,
Interstate movement of people,
National defense and homeland security,
Safety,
Environmental and air quality preservation and improvements,
Research and innovation, and
Economic productivity.
Congress should focus Federal programs and funds on these
interstate goals. In doing so, Congress should heed the Tenth Amendment
and not intervene in or interfere with state-specific transportation
priorities.
Funding and Financing
A Federal trust fund, financed by user fees, should be retained as
the primary method of funding federal-aid surface transportation
programs. It must provide states a sustained, reliable source of
transportation funding. It is critical that the Highway Trust Fund
(HTF) retain spending firewalls that ensure that user fees will be
deposited in the HTF to be used on surface transportation and will not
be subject to non-transportation Federal discretionary spending. NCSL
supports states having maximum flexibility in the use of funds they
receive from the HTF. Additional surface transportation financing and
investment priorities include the following.
User fees previously collected and diverted from the HTF
must be reclaimed.
Transit agencies, including commuter rail operations, should
be exempt from Federal fuel or energy taxes.
Unobligated revenues should not be allowed to accumulate in
the HTF. Moreover, Federal highway spending should not be
artificially reduced so that HTF revenues will accumulate
unspent, thereby appearing to lower the Federal deficit.
Annual appropriations should equal authorized spending
levels. Obligation ceilings should be set and maintained to
reflect gross receipts, plus interest earned.
Any Federal user fee or container fee assessed for
transportation security or infrastructure should provide for
state flexibility in project selection and may include private
sector input when programming projects funded by a security or
infrastructure user fee or container fee.
User fees designated for deposit in the HTF should be made
available for flexible transportation usage by states. States
should have flexibility in the use of funds for intercity
passenger rail service, including Amtrak. The Federal match
should encourage state efforts in specific programs of national
significance, but not discourage flexibility in state or
insular area transference of categorical funds. Despite
separate Federal authorizing legislation for Amtrak, Congress
must ensure that surface transportation authorizing legislation
acknowledges and fully supports the role of passenger rail for
ensuring interstate mobility. States that invest in or
otherwise support passenger rail services to complement highway
mobility options should be rewarded and encouraged.
Any examination undertaken on the advisability and
feasibility of establishing a Federal capital budgeting program
should preserve the ability of states to set surface
transportation infrastructure priorities.
Federal formulas designed to distribute discretionary
highway funds should consider all state, insular area, and
local efforts to fund highways and not be limited to fuel taxes
raised.
An increase in Federal highway transportation funding is
needed in the short-term to provide sufficient funding for the
next authorization to meet the new vision and until a new, more
stable long-term funding mechanism for surface transportation
can be put in place. Any fees or taxes imposed on carbon-based
fuels used by vehicles should be recognized as a traditional
source for transportation funding and should remain dedicated
to the Highway Trust Fund. Congress must migrate the Highway
Trust Fund from a gas tax to a new national funding stream. In
order to accomplish this, Congress must examine innovative ways
that capture all system users. Congress should encourage pilot
programs in states for experimentation with approaches, methods
and mechanisms. Any system should ensure the privacy of users.
Apart from the existing Highway Trust Fund flows for
transit, NCSL discourages expansion of federal-local funding
streams without appropriate coordination with state
legislatures as these complicate state-local relationships,
financial arrangements, and state match expectations for
transportation programs.
Congress should continue to encourage and expand incentive-
based programs, such as the Urban Partnerships program, to spur
local and regional transportation innovation in full
coordination with state authorities and to promote the use of
tolling, congestion pricing, public transit, telecommuting,
real-time traffic and other advanced technologies (also known
as intelligent transportation systems), and other strategies in
a comprehensive approach to achieve interstate mobility goals
through urban congestion reduction.
All funding and financing options must be available to state
legislatures for state and federal-aid programs. All current
Federal restrictions on states' authority to toll should be
removed so that states can optimize resources for capacity
expansion, operations and maintenance while ensuring free flow
of goods and people. Tolling, value-pricing and public-private
partnerships (PPPs) should remain state provinces and are not
appropriate Federal funding and financing mechanisms.
Federal guidelines should be designed to accommodate private
sector support. The level of private sector participation is
best determined by state and local authorities, and private
participation should not be a prerequisite for receiving
Federal funds. Statutory or regulatory barriers to state and
locally-granted revenues should be removed. States should
continue to have flexibility in creating legislative and
programmatic frameworks for public-private partnerships (PPPs),
and full authority to select and engage in PPP projects.
Congress should not mandate or prescribe state use of toll
revenues or tolling mechanisms, though Congress may seek to
incentivize states to avoid redirection of toll revenues to
non-transportation uses.
Congress should continue Transportation Infrastructure
Finance and Innovation Act (TIFIA), Grant Anticipation Revenue
Vehicles (GARVEE), private activity bond, and State
Infrastructure Bank (SIB) programs. Congress should expand
credit-based and loan guarantee programs to incentivize private
sector investment--particularly for freight mobility by rail,
highway and waterway--in projects sponsored by the public
sector.
Congressional earmarks on transportation spending or for
transportation projects should represent additional funding,
should be distributed from non-formula funds, and should not
redirect base funding. Earmarks should fit within a national
objective as defined in the surface transportation program's
new vision and must appear in a state DOT's plan.
Technology
NCSL endorses the U.S. Department of Transportation's goal of
deploying advanced technologies known as intelligent transportation
systems for consumers of passenger and freight transportation across
the Nation. Intelligent Transportation Systems are advanced wireless
technologies that maximize the safety, mobility and environmental
performance of the surface transportation system. These services should
be integrated, interoperable, intermodal and voluntary.
NCSL recognizes that the private sector and the Federal Government
should lead in the development and bringing to market of reliable and
affordable ITS. The Federal Government should also set national
standards for original equipment manufacturers to install the necessary
technology so that states can take full advantage of the efficiencies
and safety benefits of intelligent transportation systems. Congress
should require the Secretary of Transportation to initiate a rulemaking
proceeding that new motor vehicles be equipped with platforms for
interoperable systems that enable vehicle-to-vehicle and vehicle-to-
roadside communications for the purposes of active safety and
electronic tolling and tax collection and to provide a means of
accelerating the deployment of this equipment in existing vehicles.
Congress should incentivize states to explore and deploy technology
for intelligent infrastructure, making it a high priority and
performance measurement benchmark in the restructured Federal surface
transportation program. Privacy protections must be developed and
incorporated into all policies and practices governing use of
intelligent transportation systems and technologies. ITS should not be
mandated except for legitimate governmental purposes. Any information
collected with such technology should be governed by state laws.
The Federal Government should encourage states to cooperate with
the private sector in the development of real-time traffic information
systems.
Planning
Congress must work with state legislators to establish in the next
authorization a robust and cooperative state-federal system to set
system plans and priorities for Federal investment. Transportation
program plans developed by entities other than those created by the
states must be coordinated with state legislatures to ensure that
proposals fit into state programmatic and funding plans.
The Federal Government is uniquely situated to identify and collect
data of importance to the development of, maintenance of, and planning
for a national transportation system. Congress should incentivize
states to share data with the Federal Government and not use mandates
to elicit participation in data collection and analysis.
NCSL supports a negotiated rule-making led by U.S. Department of
Transportation, or another collaborative process congressionally
mandated and facilitated by the Transportation Research Board or
American Association of State Highway and Transportation Officials
(AASHTO), in which NCSL and state legislatures are fully represented to
determine the necessary level of and standards for uniformity among
states in data collection efforts.
Performance Measures
NCSL encourages the Federal Government to establish a cooperative
process through which performance measures can be crafted for gauging
the success of programs. Federal funding should not be directly linked
to performance measures; instead, a pilot program should be established
in which states can voluntarily participate to gain incentives such as
additional funding or reduced regulatory burdens upon successful
deployment and use of performance measures. Performance measures should
be framed as goals for which states may determine the specific measures
and benchmarks.
Federal monitoring and compliance standards should accurately
reflect compliance effort and unique state circumstances.
Freight and Interstate Commerce
Ensuring the safe and timely movement of goods across the Nation is
an appropriate Federal transportation priority. Robust state-federal
consultation should evaluate freight flows and collaboratively plan the
routes and development necessary to maintain and expand the highway
freight corridors.
Rail capacity expansion should be coordinated with the states to
ensure intermodal cooperation and maximum public benefit.
The Federal Government should incentivize states to explore methods
of separating highway freight traffic from passenger traffic for the
purposes of efficiently moving interstate commerce and public safety.
Federal engagement with, and investment through, the states to
ensure effective and efficient movement of freight through ports or
other commerce choke-points is appropriate.
Environmental Issues
The Federal Government has a role to play in ensuring that national
environmental policy meshes with national transportation policy while
assuring efficient and cost-effective approaches to both goals.
Efforts to streamline regulatory review processes must
continue so that construction projects can again be realized
on-time and on-budget. Congress should allow and enhance
states' programmatic permitting.
Incentives to states to achieve environmental quality
standards through transportation projects should replace
prescriptive Federal regulation and punitive funding actions.
Safety
NCSL supports a continued Federal role in helping to set national
performance and safety goals. Safety programs should be expanded to
incorporate emerging safety issues while respecting state sovereignty.
Federal transportation safety programs should promote comprehensive
safety programs in the states. NCSL opposes the use of Federal
sanctions or redirection penalties to enforce Federal safety standards.
Federal mandates that are enforced through the use of ``reprogramming''
sanctions should be repealed. Any existing Federal compliance standards
should reflect overall state effort to promote safety.
Research and Innovation
NCSL acknowledges that Federal leadership and investment in
transportation related research and innovation is needed and
appropriate. In particular, NCSL supports Federal research that
promotes fuel efficiency, alternative fuels, high-mileage vehicles,
safety and technology. Findings and best practices identified through
Federal research should be shared fully with states in an unbiased,
nonpartisan and scientific manner.
Indian Programs
Transportation is an important service program that provides the
infrastructure upon which American Indian tribes' initiatives can be
achieved. NCSL recognizes the unique and extensive transportation
funding needs on Indian lands. In an effort to ensure that these needs
are adequately addressed, NCSL supports a direct planning relationship
between Indian Nations and state departments of transportation. NCSL
further supports the continuation of the Federal Lands Program and its
work with Indian reservations.
Senator Fischer. Thank you, Senator Bramble.
Next, we have Mr. Nick Yaksich, Vice President, Government
and Industry Relations, the Association of Equipment
Manufacturers.
Welcome.
STATEMENT OF NICK YAKSICH, VICE PRESIDENT, ASSOCIATION OF
EQUIPMENT MANUFACTURERS
Mr. Yaksich. Chairman Fischer, Ranking Member Booker, and
members of the Subcommittee, thank you for the opportunity to
appear today to offer some perspective on the importance to
manufacturers of passing a long-term highway bill.
My name is Nick Yaksich. I'm Vice President of Government
Affairs for the Association of Equipment Manufacturers. We are
based in Milwaukee, Wisconsin. We represent over 900 equipment
manufacturers of heavy agriculture and construction equipment.
Our membership includes almost every piece of equipment you
would see on a farm or construction site.
Manufacturers' need for safe and reliable transportation to
conduct their business, to efficiently access supply chains,
and move our products to market, face great uncertainty with
the lack of a long-term commitment to fund our Nation's
transportation system.
Unfortunately, we've had to wrestle, in recent years, with
effects of deteriorating transportation infrastructure across
the United States. Congress' inability to effectively address
the chronic shortfall facing the Highway Trust Fund is eroding
manufacturers' bottom line, where the effect is overbearing
throughout the economy.
On behalf of manufacturers, I wanted to use this
opportunity to urge you to break the cycle of patchwork fixes
and meaningfully provide a long-term fix to the Highway Trust
Fund. These short-term bills harm manufacturers in a number of
ways.
First, as I mentioned earlier in my remarks, poor
infrastructure harms our access to supply chains and markets.
Congested and pothole stricken roads slow the pace of commerce
for manufacturers, which in turn drive up costs.
Second, the continued cycle of short-term fixes has sapped
the State departments of transportation of their ability to
plan most major, long-term capital investment projects. States
like Mississippi, Arkansas, Georgia, Tennessee, and Wyoming
have pulled back on projects totaling almost $1 billion in
combined value. It is hard to imagine that another short-term
surface transportation extension would prompt any renewed
confidence among the State DOTs.
The cloud of uncertainty especially harms manufacturers in
the construction equipment sector. State officials lack the
financing or confidence to make major investments, which
translates to uncertainty for our customers, who then are
unwilling to make capital investments in an uncertain market.
This means fewer jobs in your states.
The uncertainty is also reflected in the increased growth
in the rental market. Manufacturers distribute primarily
through dealers and rental businesses. In recent years, we have
seen a dramatic increase in rental equipment as customers limit
their financial exposure and chase work in new markets where
they don't have existing equipment to manage the work.
Third and finally, the persistent underinvestment in
surface transportation infrastructure is harming our
agriculture community. America's farmers need safe and reliable
roads along with improved railways and inland waterways to get
their harvest to consumers.
According to TRIP, The Road Information Program, almost one
in five rural roads are rated in poor condition. And trucks,
for instance, account for 92 percent of the ton miles for
transportation of perishable agricultural goods.
So today, I want to urge you to please break this cycle.
This Congress has shown it is capable of bipartisan successes
after breakthroughs related to the sustainable growth rate and
trade policy. You have a golden opportunity this year to add a
long-term sustainably funded bill to this list.
A long-term bill would represent an affirmative way for
this Congress to reverse the decaying of our national
infrastructure. It is a pro-growth solution that would promote
commerce and help lower costs. And it supports job creation,
both within the manufacturing sector and beyond.
I know that finding a financial solution to long-term
infrastructure development is politically difficult. AEM
believes that a user fee system requires the simplest and
fairest way to ensure that those who use our roads pay for the
maintenance and growth.
In closing, on behalf of equipment manufacturers, I urge
you to support a long-term solution to provide the necessary
support to maintain and grow our Nation's infrastructure
system. It is critical to both rural and urban America.
Thank you for your time today. I look forward to your
questions.
[The prepared statement of Mr. Yaksich follows:]
Prepared Statement of Nick Yaksich, Vice President, Government and
Industry Affairs, Association of Equipment Manufacturers (AEM)
Chairman Fischer, Ranking Member Booker, and Members of the
Subcommittee:
Thank you for the opportunity to appear today before this
distinguished subcommittee to offer some perspective on the importance
of passing a long-term highway bill for manufacturers.
My name is Nick Yaksich and I am Vice President, Government and
Industry Affairs of the Association of Equipment Manufactures (AEM).
Based in Milwaukee, Wisconsin, AEM represents nearly 900 construction
and agriculture manufacturers of heavy equipment. Our membership
includes almost every piece of equipment you would see on a farm or
construction site.
Manufacturers' need for safe and reliable transportation to conduct
their businesses--to efficiently access supply chains and move our
products to market--faces great uncertainty with a lack of long term
commitment to fund our Nation's transportation system.
Unfortunately, we've had to wrestle in recent years with the
effects of deteriorating transportation infrastructure across the
United States. Congress's inability to effectively address the chronic
shortfall facing the Highway Trust Fund is eroding manufacturers'
bottom line, and the effect is reverberating through the economy.
The Highway Trust Fund is slated to run out of spending authority
later this month, and we understand Congress is preparing to adopt
another short-term measure to extend the Highway Trust Fund for just a
few more months.
On behalf of manufacturers, I want to use this opportunity to urge
you to break the cycle of patchwork fixes and meaningfully provide a
longer term fix to the Highway Trust Fund.
These short-term bills harm manufacturers in a few key ways.
First, as I mentioned earlier in my remarks, poor infrastructure
harms our access to supply chains and markets. Congested and pothole-
stricken roads slow the pace of commerce for manufacturers, which, in
turn, drives up costs.
Second, the continued cycle of short-term fixes have sapped most
state departments of transportation of their ability to plan most
major, long-term capital investment projects. States like Mississippi,
Arkansas, Georgia, Tennessee, and Wyoming have pulled back on projects
totaling $1 billion in combined value. It's hard to imagine that
another short-term surface transportation extension would prompt any
renewed confidence among state DOTs.
This cloud of uncertainty especially harms manufacturers in the
construction equipment sector. State officials lack the financing or
confidence to make major investments, which translates to uncertainty
for our customers who then are unwilling to make capital investment in
an uncertain market. That means fewer manufacturing jobs in each of
your states.
The uncertainty is also reflected in the increasing growth in the
rental market. Manufacturers distribute primarily through dealers or
rental businesses. In recent years, we have seen a dramatic increase in
rental equipment as customers limit their financial exposure and chase
work in new markets where they don't have existing equipment to manage
the work.
Third, and finally, our persistent underinvestment in surface
transportation infrastructure is harming our agriculture economy.
America's farmers need safe and reliable roads (along with improved
railways and inland waterways) to get their harvests to consumers.
According to TRIP, The Road Information Program, almost one in five
rural roads are rated as being in ``poor'' condition. And trucks, for
instance, account for 91 percent of ton-miles for transportation of
perishable agricultural goods.
So today, I want to urge you to please break this cycle.
This Congress has shown it's capable of bipartisan successes after
breakthroughs related to the Sustainable Growth Rate (SGR) and trade
policy. You have a golden opportunity this year to add a long-term,
sustainably funded highway bill to that list.
A long-term highway bill would represent an affirmative step by
this Congress to reverse the decaying of our national infrastructure.
It's a pro-growth solution that would promote commerce and help lower
costs. And it supports job creation, both within the manufacturing
sector and beyond.
I know that finding a solution to finance long-term infrastructure
development is politically difficult. There are any number of proposals
floating around Capitol Hill, ranging from repatriation to the gas tax
to a ``supercommittee'' dedicated toward figuring out how to finance
infrastructure in the future. But the bottom line is that the user fee
system remains the simplest and fairest way to ensure that those who
use our roads pay for their maintenance.
In closing, on behalf of equipment manufacturers, I urge you to
support long term solutions to provide the necessary support to
maintain and grow our Nation's transportation system. It is critical to
both urban and rural America.
Thank you for your time today. I look forward to your questions.
Senator Fischer. Thank you, Mr. Yaksich.
Next we have Janet Kavinoky, the Vice President, Americans
for Transportation Mobility with the United States Chamber of
Commerce.
Welcome.
STATEMENT OF JANET KAVINOKY, EXECUTIVE DIRECTOR OF
TRANSPORTATION AND INFRASTRUCTURE, U.S. CHAMBER
OF COMMERCE; VICE PRESIDENT, AMERICANS FOR
TRANSPORTATION MOBILITY COALITION
Ms. Kavinoky. Thank you, and thank you for the opportunity
to testify today. The Chamber's jobs growth and opportunity
agenda prioritizes long-term investment and leadership in
transportation, because a first-rate transportation system is
necessary to maintain a first-rate economy in the United
States.
A system with adequate capacity and high quality of service
is strongly correlated with GDP growth and increased foreign
direct investment, which create jobs. Failure to address
transportation problems undermines our economic growth.
In February, Chamber member Ingredion testified that an
outdated transportation system leads to increased freight
costs, variability in deliveries, higher inventories, poor
customer service, and an overall competitive disadvantage for
all industries. Because of strained transportation capacity,
Ingredion had to increase product inventories and struggle to
meet its customer demand.
But their story is just a pixel in the bigger picture.
Increased transportation costs are impacting the broader
American business community. The Council of Supply Chain
Management Professionals' most recent state of logistics report
revealed that U.S. business logistics costs totaled almost $1.4
trillion in 2013, the equivalent of a little over 8 percent of
current GDP.
Business leaders recognize these threats to competitiveness
and are voicing concern. Eighty-seven percent of executives
told the Economist Intelligence Unit that aging infrastructure
had an impact on their operations in recent years, and 10
percent mentioned that it had caused severe problems in their
operations that they were still continuing to address.
Many steps have been taken to address these issues, but
there is obviously more to be done. The Chamber is a member of
the Freight Stakeholders Coalition, a longstanding group of the
country's largest shippers and public and private
transportation providers, and we support the principles
outlined in the coalition's MAP-21 reauthorization platform.
The principles call on Congress to provide dedicated
funding for freight mobility and goods movement, promote and
expedite project development and delivery, and foster
operational and environmental efficiencies in goods movement,
among other recommendations. The principles reflect the need to
address major challenges to this country and its
competitiveness.
Other nations have ambitious and strategic infrastructure
initiatives designed to project economic power, grow their
economies, improve the quality-of-life for their citizens, and
support the competitiveness of their businesses. In contrast,
in the United States, we lurch from crisis to crisis, dealing
in short-term extensions that prevent us from truly focusing on
the ever-increasing demands on our infrastructure.
And with increases in population and trade, both export and
import volumes, possibly facilitated by the Export-Import Bank,
TPA, and immigration, the transportation challenges keep
growing.
It is notable, then, that the Freight Stakeholders
Coalition included as its first principle the imperative that
Congress and the administration together must achieve real,
long-term, sustainable funding solutions designed to meet our
current and future infrastructure needs.
Unfortunately, MAP-21 left the big question unanswered, and
the issue of revenue for the Federal Highway Trust Fund has
been a topic of nonstop debate, discussion, and handwringing
since MAP-21 passed in 2012. It is time to stop talking and
act.
The Chamber supports revenue sources that are
transportation-related; collected on an ongoing basis;
structured to be sustainable and growing; adequate for full
funding or, at a minimum, able to maintain funding levels; and
collectible by the Federal Government. It is the Chamber's
position that the simplest, most straightforward, elegant
solution to the immediate problem we face is to increase user
fees going into the Highway Trust Fund. Adding a penny a month
for a year and indexing the total user fee to inflation could
support current services funding levels for the foreseeable
future.
And yes, we know that there is a need to look to other
revenue sources. The vehicle fleet is becoming more fuel-
efficient. Driving patterns are changing. Construction costs
typically grow faster than the Consumer Price Index. And
multimodal investment calls for more diversified sources of
revenue. Likewise, the use of procurement approaches, like
public-private partnerships to deliver more value, better
allocate risk, and draw private capital, are needed.
In conclusion, it should be evident that Federal investment
in safe, reliable, efficient transportation systems is, quite
simply, smart business. The Chamber looks forward to the day
that Congress passes a long-term, fully funded bill that builds
all the reforms contained in MAP-21 and identifies the
resources needed to maintain and, ideally, increase smart
spending on the Nation's transportation system.
Thank you for this opportunity to testify, and I look
forward to your questions.
[The prepared statement of Ms. Kavinoky follows:]
Prepared Statement of Janet Kavinoky, Executive Director of
Transportation and Infrastructure, U.S. Chamber of Commerce; Vice
President, Americans for Transportation Mobility Coalition
Introduction
Chairman Fischer, Ranking Member Booker and distinguished members
of the Senate Subcommittee on Surface Transportation and Merchant
Marine Infrastructure, Safety and Security, thank you very much for the
opportunity to discuss the importance of Federal investment and
leadership in transportation infrastructure. I am Janet Kavinoky,
Executive Director of Transportation and Infrastructure at the U.S.
Chamber of Commerce (Chamber) and Vice President of the Chamber-led
Americans for Transportation Mobility Coalition (ATM), which includes
business, labor, highway and public transportation interests. We
believe strongly that Federal investment in highways, public
transportation, and safety for both freight and passengers is necessary
to boost economic productivity, create and support jobs, successfully
compete in the global economy, and maintain a high quality of life.
The bipartisan highway, transit and safety law, Moving Ahead for
Progress in the 21st Century (MAP-21), which ended years of short term
extensions that created a great deal of uncertainty for businesses and
infrastructure owners and operators, is once again about to expire. By
May 31, Congress should pass a long-term, fully-funded bill that builds
on the reforms contained in MAP-21 and includes the resources needed to
maintain, and ideally increase, smart spending on the Nation's
transportation system. The alternative is to begin the pattern of
extensions and revenue patches all over again. That pattern leads to
slowed or cancelled lettings, project delays, cost increases, and
uncertainty that negatively affect business outlooks.
Transportation infrastructure is one of the top priorities on the
Chamber's Jobs, Growth, and Opportunity Agenda. Having a safe,
reliable, efficient transportation system is, quite simply, smart
business.
Transportation Infrastructure and the National Economy
Infrastructure is not the end result of economic activity; rather
it is the framework that makes economic activity possible.\1\
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\1\ Trimbath, Susanne. 2011. ``Transportation Infrastructure:
Paving the Way,'' STP Advisory Services, LLC.
---------------------------------------------------------------------------
In 2009, the Chamber undertook a study to explore the degree to
which transportation system performance--the ability to meet the needs
of business--related to the national economy. We created the
Transportation Performance Index (TPI) by asking our members to
identify what was important and why, translated those into indicators
of performance, identified data sources, and combined the data into the
TPI, which is statistically representative of the diverse economics,
geography, and demographics of the United States.
Here is what we found:
A transportation system that works for businesses can propel
economic growth and, conversely, one that falls short of performing as
it needs to will drag down the economy.
There is a strong correlation between performance, which the TPI
defines as the degree to which the transportation system serves U.S.
economic and multi-level business community objectives, and economic
growth as measured by Gross Domestic Product (GDP). The TPI econometric
analysis provided robust, stable results showing the overall
contribution to economic growth from well-performing transportation
infrastructure as fundamental to maintaining a strong economy.\2\
---------------------------------------------------------------------------
\2\ Transportation Performance Index--Key Findings, U.S. Chamber of
Commerce, (http://www.uschamber.com/sites/default/files/lra/files/
LRA_Transp_Index_Key_Findings.pdf), 2011.
---------------------------------------------------------------------------
The analysis also exposed a strong correlation between
transportation infrastructure performance and foreign direct investment
(FDI) in the United States. There is a positive relationship between
FDI that opens new establishments in the United States--creating new
jobs--and the performance of transportation infrastructure as measured
by the TPI.
A first rate national transportation system is necessary in order
to maintain a first rate economy in the United States. Failure to
address transportation problems undermines U.S. economic growth. This
is the fundamental reason that the Federal Government must take a
leading role in making sure that transportation policies--and the
related programs and spending that implement these policies--contribute
to a strong economy, including enabling interstate commerce,
facilitating international trade, and propelling the efficient mobility
and connectivity of people and products.
Business generally cares about three things when it comes to
transportation infrastructure:
Supply: availability of infrastructure, which is a key
consideration for businesses when deciding where to locate
their facilities;
Quality of service: reliability of infrastructure, whether
it supports predictable and safe transportation services and
travel; and,
Utilization: whether current infrastructure can sustain
future growth. Utilization is a key consideration for companies
that look years into the future to inform the decisions and
capital investments they make today.
Finding good data to indicate performance can be difficult.
One of the main challenges in creating an index based on
performance was finding data sources that were publicly available,
collected consistently across the country, and reflective of more than
just a few years. In general, congestion and intermodal connectivity
for both people and goods were major concerns of our members, but
indicators that look across modes--of particular importance for the
reliability and velocity of freight movement--are limited. If the
Chamber's experience is any indication, maintaining Federal research
and data collection assistance across all modes of transportation will
be critical to the success of performance-based transportation
decision-making mandated by MAP-21.
Business Can Tell You a Short-Term Approach is a Bad Idea--Ingredion's
Story
Chamber member Ingredion Incorporated is headquartered in Chicago
with a global research and development center in Bridgewater, New
Jersey. Ingredion products are found in 80 percent of all items on a
grocery store shelf either in food, beverage or personal care products,
or in the packaging. Ingredion's Vice President of Supply Chain and
Customer Experience David Gardener testified to transportation
infrastructure challenges and the need for a long-term bill earlier
this year.
Our supply chain is a worldwide network of 35 manufacturing
plants and 24 ingredient development centers. In North America
we operate 13 manufacturing plants, with seven in the United
States. The largest is located in the Chicago area and the
others are scattered across the country from California to the
Carolinas.
Our primary raw material is corn, which is shipped to our
plants from the farm-belt states via rail and truck. Our
finished products are distributed to our customers across the
country by a network of rail, truck, warehouses, and break
stations.
Needless to say, a smooth-functioning surface transportation
system is not only essential to Ingredion's business; it
impacts our bottom line and the bottom line of our customers.
Logistics costs represent a significant portion of our inbound
corn costs and delivered finished product costs. In 2014 alone,
our transportation costs excluding the cost of fuel increased
by 3.6 percent, significantly outpacing inflation.
An outdated transportation system leads to increased freight
costs, variability in deliveries, higher inventories, poor
customer service, and an overall competitive disadvantage for
our and all industries. Here are a few examples to illustrate
how a neglected infrastructure impacts us.
Last year, it took longer to transport corn from the farmers
and storage elevators to our plants. This resulted in millions
of dollars in increased freight costs, higher manufacturing
costs due to plant downtime, and curtailed production.
The transportation industry is struggling. In 2014, the average
train speed decreased by over five percent and delay time
increased by 10 percent. As a result, we had to increase
product inventories and address a shortage of rail cars to
transport our products, leaving us to struggle to meet customer
demand. As the network moves slower, we are forced to increase
our rail fleet and to make suboptimal sourcing decisions.
Chicago is a primary transportation hub and the location of our
largest plant. The increased rail volume through Chicago is
causing unprecedented delays. For example, it can take up to
three days just to exit the Chicago metropolitan area.
Customers that are a mere seven hour drive from our plant can
take up to five days to reach by rail. In some cases, we are
forced to shift production from our plant in suburban Chicago
to a Canadian facility just to avoid the delays around Chicago
and satisfy our customers.
Because we cannot consistently rely on rail to deliver products
to our customers on time, we, as many others, often must revert
to trucks, costing significantly more than rail. However, the
trucking industry is also challenged. Available truck capacity
compared to truck demand is at an historic imbalance. This has
been amplified by tightening regulation on driver hours of
service and a deteriorating highway infrastructure.
Our ability to respond to our customer's needs is directly
impacted by the availability of trucking capacity. As truck
capacity tightens, our on time delivery rate suffers.
Ingredion's incidence of late truck deliveries increased by
over two-fold in 2014. This not only creates inefficiency in
our supply chain, but also our customer's.
However, our story is just a pixel in the bigger picture.
Increased transportation costs are impacting the broader
American business community. According to the Council of Supply
Chain Management Professionals most recent State of Logistics
report, U.S. business logistics costs totaled almost $1.4
trillion in 2013, the equivalent of a little over eight percent
of current GDP.
Business leaders recognize these threats to competitiveness and
are voicing concern. The Economist Intelligence Unit found that
87 percent of executives said that aging infrastructure had an
impact on their operations in recent years, with 10 percent
mentioning that it had caused severe problems in their
operations that they were continuing to address.\3\
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\3\ Testimony of David Gardner, Vice President of Supply Chain and
Customer Experience, Ingredion Incorporated, to the Senate Committee on
Environment and Public Works, February 25, 2015.
Many steps have been taken by to address the issues raised by
Ingredion, but there is obviously more to be done. Congestion,
connectivity, and future capacity are important in rural and urban
areas, and within and among modes.
Freight Stakeholders MAP-21 Reauthorization Principles
Congress needs to act on a long-term bill because of the importance
of transportation to the U.S. economy. It is a national priority.
Other nations have ambitious and strategic infrastructure
initiatives designed to project economic power, grow their economies
and improve the quality of life for their citizens, and support the
competitiveness of their businesses. Short-term extensions keep the
United States from truly focusing on addressing the ever-increasing
demands that are being placed on our infrastructure. And with increases
in trade--both export and import volumes--and population the
transportation challenges are growing while we in Washington lurch from
crisis to crisis.
To create a 21st century infrastructure to support a 21st century
economy requires a partnership among all levels of government and the
private sector, use of multiple modes of transportation as well as
technology, and flexibility for those closest to the problem to tailor
solutions to their particular needs.
The Chamber is a member of the Freight Stakeholders Coalition, a
longstanding group of the country's largest shippers and public and
private transportation providers. We support the principles outlined in
the Freight Stakeholders Coalition Surface Transportation
Reauthorization Platform and wholeheartedly agree that, ``The Federal
Government must lead long-term efforts designed to further America's
competitive advantage by advancing projects of regional and national
significance that reduce congestion, enhance goods movement, improve
the environment and create jobs.'' \4\
---------------------------------------------------------------------------
\4\ https://www.intermodal.org/assets/private/
2014freightstakeholderscoalitionplatform.pdf. Accessed May 3, 2015.
---------------------------------------------------------------------------
The principles of this group can guide Congress and the
Administration in addressing the challenges faced by Ingredion and
thousands of businesses across the country.
1. Congress and the Administration, together, must achieve real,
long-term, sustainable funding solutions designed to meet our
current and future infrastructure needs.
First and foremost, the public sector needs certainty in future
Federal funding. Short-term approaches to funding infrastructure create
uncertainty and discourage states from undertaking multi-year and
complex transportation investments such as new bridge replacements,
improved highway interchanges, transit upgrades, and additional
capacity to relieve congestion that chokes our roads. The private
sector also needs certainty; for example, funding certainty enables the
public sector to partner effectively with freight railroads and address
rail bottlenecks. The CREATE program in Chicago, the Crescent
Corridor--a partnership between Norfolk Southern and 13 states, and the
Alameda Corridor in California are prime examples of this kind of
partnership.
2. Provide dedicated funds for freight mobility/goods movement, and
3. Continue and fund the Projects of National and Regional
Significance program.
The Chamber's position on funding for freight dates back to
SAFETEA-LU reauthorization:
The Chamber supports creation of a national freight
transportation program for identifying and funding federal,
state, and metropolitan efforts to ensure adequate capacity,
reduce congestion and increase throughput at key highway, rail,
waterway and intermodal choke points.
The program should include a national freight
transportation plan built on performance measures and
should include a comprehensive survey of key freight
corridors and other assets.
A national freight transportation plan should incorporate
the development of new capacity, access routes to major
water ports and airports, access routes to border crossings
and international gateways, operational strategies to
improve utilization of existing assets, and strategic
intermodal investments to expedite freight movement.
The plan should guide government project selection and
prioritization.
The program should not dilute other Federal transportation
priorities.\5\
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\5\ https://www.uschamber.com/sites/default/files/legacy/lra/docs/
safetealureauthorization
policystatementboardapproved.pdf. Accessed May 3, 2015.
4. Promote and expedite the development and delivery of projects and
activities that improve and facilitate the efficient movement
---------------------------------------------------------------------------
of goods.
The Hoover Dam was built in five years. The Empire State Building
took one year and 45 days. The Pentagon, one of the world's largest
office buildings, took less than a year and a half. The New Jersey
Turnpike needed only four years from inception to completion. Fast
forward to 2015, and the results are much different.
MAP-21 made great strides in improving project delivery for highway
and transit projects. However, rail projects did not benefit from those
changes. The Chamber urges Congress to pass S. 280, the bipartisan
Portman-McCaskill permit streamlining bill, which would help all
infrastructure projects move forward in a timely but environmentally
responsible manner. Among other things, S.280 would: (1) designate a
lead agency that is responsible for managing and coordinating the
review process among agencies, and (2) place time limits on decision
making and legal challenges for infrastructure projects without
changing the substantive requirements that protect the public.
5. Establish a multi-modal freight office within the Office of the
Secretary.
6. Support multi-state freight corridor planning organizations.
7. Reauthorize/reinstitute programs that have facilitated freight
mobility projects.
8. Expand freight planning at the state and local levels.
Planning must address both passenger and freight needs and
incorporate the challenges at border crossings, along trade corridors,
and across jurisdictions. Goods movement in urban areas, typically the
last mile of delivery, is a prime example of where those two customer
groups can either conflict or peacefully coexist. One only needs to
look at bottlenecks near our major ports to see that planning must
consider both the needs of freight and people.
9. Foster operational and environmental efficiencies in goods
movement.
On this latter point, there are two specific policy measures that
the Chamber encourages the Committee to consider during MAP-21
reauthorization. First, the Chamber encourages the Committee to provide
permanent relief from the 34-hour restart provision in the Federal
Motor Carrier Safety Administration's hours of service regulations for
trucking. Second, although the Chamber is typically silent on trucking
productivity issues, we do support changes to the law allowing less-
than-truckload carriers to increase their productivity without
sacrificing safety if allowed to use two 33 foot container
configurations instead of the twin-28 foot containers.
The High Cost of Inaction
These principles reflect the need to address major challenges to
this country and its competitiveness globally.
Failure to act is--and will continue to be--costly. The American
Association of Port Authorities Port Surface Transportation
Infrastructure Survey representing the views of nearly all of the top
U.S. seaports on the Atlantic, Pacific and Gulf coasts, and along the
Great Lakes, was revealing. One-third of respondents said congestion on
their port's intermodal connectors over the past 10 years has caused
port productivity to decline by 25 percent or more. And nearly fourth-
fifths of AAPA U.S. ports surveyed said they anticipate a minimum $10
million investment being needed in their port's intermodal connectors
through 2025, while 30 percent anticipate at least $100 million will be
needed.\6\ As Jonathan Gold, vice president of supply chain and customs
policy at the National Retail Federation, said to the Wall Street
Journal, ``We can't have U.S. ports acting as a barrier to trade,'' he
says. ``We're shooting ourselves in the foot.'' \7\
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\6\1A``The State of Freight.'' American Association of Port
Authorities. April 21, 2015.
\7\ Wall Street Journal. ``U.S. Ports See Costly Delays as Cargo
Ships, Volumes Grow.'' April 29, 2015
---------------------------------------------------------------------------
A recent Wall Street Journal article brought the problem down to
the company level.
Audax transportation hauls goods ranging from car engines for
Ford Motor Co. to frozen chicken parts for Perdue Farms.
Bottlenecks at the Port of Virginia have reduced the amount of
goods its truck drivers can move in a day by 50 percent in the
past year, says Ed O'Callaghan, the firm's president and an
agent of trucking company Century Express in Norfolk, Va. To
make up for lost revenue, his company has raised prices for
customers by about 35 percent.\8\
---------------------------------------------------------------------------
\8\ Ibid.
And Thomas Riordan, representing the National Association of
Manufacturers at a hearing earlier this year emphasized the importance
of action on MAP-21 reauthorization from a global competitiveness
---------------------------------------------------------------------------
perspective.
The manufacturing impacts of the West Coast dispute mounted
daily, and the uncertainty over the past several months led to
some cancelled orders from overseas customers, increased costs
and even lost jobs in some circumstances. Worst of all, this
situation tarnished the reputation of the United States as a
global supplier.
The West Coast ports situation showed the fragility and
complexity of our transportation network and what happens when
an export cannot move to a customer or a manufacturing input is
not received in time for a production line.\9\
---------------------------------------------------------------------------
\9\ Testimony of Thomas Riordan, President and CEO, Neenah Foundry,
to the Senate Committee on Environment and Public Works, February 25,
2015.
---------------------------------------------------------------------------
The Issue of Funding
Moving Ahead for Progress in the 21st Century addressed many of the
policy concerns that the Chamber had with Federal surface
transportation programs. Our members asked for transportation policies
that cut through red tape at all levels of government so that projects
move forward quickly. MAP-21 delivered, and as the law continues to be
implemented we are eager to assess the results. Businesses wanted to
see Federal funds leveraged for locally selected projects that
addressed the transportation needs of companies large and small. MAP-21
was an excellent step toward ensuring that the ``how to'' decisions are
made at the state and local levels of government through simplification
and reorganization of the Federal program structure but maintaining
oversight and requiring transparency and accountability through
performance measurement. Performance measurement systems should allow
us to determine how well state and local decisions are prioritizing and
delivering on the national interest.
Unfortunately, MAP-21 left the Big Question unanswered: where will
the Federal Government find the revenue needed to fully pay for a long-
term highway and transit bill that truly improves the condition and
performance of the Nation's transportation system. The Chamber is
pleased that Congress has rejected, repeatedly, efforts to make drastic
cuts in Federal investment on roads and bridges, public transportation,
and highway safety.
However, as everyone is painfully aware, the issue of sustainable,
growing revenue for the Federal Highway Trust Fund (HTF) is central to
MAP-21 reauthorization. It has been a topic of nonstop debate,
discussion, and hand wringing since MAP-21 passed in 2012.
It is time to stop talking and act.
The stakes are high. Approximately half of all capital investment
in roads and public transportation across the country comes from the
Federal Government.
U.S. Chamber and American Public Transportation Association
analysis of Federal Transit Administration data for Federal Fiscal Year
2012.
Congress must to identify revenue sources to fill the gaping hole
between revenues and current spending levels. Ideally, should seek to
fill the growing hole between available resources and needs.
The Chamber evaluates revenue sources along five criteria. A
``five-star revenue source'' will have a yes answer to each of the
following questions:
Is the revenue source transportation-related? In simple
terms, because of special Federal rules, if revenues are
transportation-related, Congress can pass a long-term bill that
provides funding certainty. Without transportation-related
revenues, annual appropriations could vary dramatically.
Uncertainty means transportation projects cost more and have
less impact because big, high-impact projects rely on multi-
year transportation funding certainty.
Are the revenues ongoing, rather than one-time? One-time
money is a Band-Aid, rather than a solution. This is the path
Congress has taken to `solve' the problem since 2009. It
involves funneling money from one place to another, and does
not address the HTF's structural problems in the long term.
Are the revenues sources structured to be sustainable and
growing? We need to not only meet today's demands on our
national transportation network, but also the increasing
demands we know will be placed upon that network in the coming
years.
Are the revenue sources--alone or in combination--adequate
for full funding or, at a minimum, able to maintain funding
levels? In combination or by themselves we need $91 billion
over the next six years just to maintain funding levels. And
that won't necessarily deal with the backlog of maintenance and
construction needed to improve the condition and performance of
transportation systems, anticipate demographic changes, and
accommodate and spur economic growth. We should aim for full
funding, meaning what's needed to bring our seriously outdated
network of highways, bridges and transit systems up to par, and
keep it that way, so future generations can rely upon the
network.
Can the Federal Government collect the revenues? There are
some options, like sales taxes and value capture, which are
viable at a state or local level but that the Federal
Government cannot use. It seems basic, but this knocks out a
lot of potential ideas that work well at other levels of
government.
It is the Chamber's position that the simplest, most
straightforward, elegant solution to the immediate problem we face is
to increase user fees--gasoline and diesel taxes--going into the HTF.
Adding a penny a month for a year and indexing the total user fee to
inflation could support current services funding levels for the
foreseeable future. The collection system itself is highly efficient:
the owner of the fuel at the time it breaks bulk from the terminal rack
pays the excise tax to the Internal Revenue Service. According to the
American Petroleum Institute, there are about 1300 terminals in the
country, translating to a low number of payers and low cost of
administration. The gas tax, if adjusted in amount and indexed,
receives five stars as a revenue source.
And yes, in the long run, we know that there is a need to look to
other revenue sources. The vehicle fleet is becoming more fuel-
efficient. Driving patterns are changing. Construction costs typically
grow faster than the Consumer Price Index. And multi-modal
transportation investment calls for more diversified sources of
revenue.
Finally, I should mention that the Federal Government has many
other tools at its disposal to encourage investment in both freight and
passenger transportation, including promoting public-private
partnerships (P3s). Those mechanisms include using the Transportation
Infrastructure Financing and Innovation Act (TIFIA) program, private
activity bonds--which need the cap lifted for transportation projects,
and technical assistance to project sponsors. The Chamber is a big
supporter of P3s. A recent article in Governing Magazine summarized the
benefits, which are not about creating money where there is none but
rather in creating significant public value through the ``responsible
fusion of public-private resources.'' Projects delivered using P3s have
a record of coming in ahead of schedule and under budget. The private
sector taking on risk shelters the public sector from losses. New
technologies and other innovations are brought to bear. Public-private
partnerships are not for every project, but there is a growing track
record of success in the United States and we should continue to
encourage P3s.
Conclusion
The Chamber strongly supports Federal investment in transportation.
We need a smooth flowing, efficient national transportation network
that will support the transportation needs of businesses from origin to
destination across the globe, and from the factory to the corporate
headquarters to main street retailers to medical centers.
Congress should pass a fully funded, long-term MAP-21
reauthorization bill by May 31, although it is unlikely it will do so.
Kicking the can again has costs. Companies cannot plan for hiring or
capital expenditures. Land, labor, and capital are more expensive as
the time value of money increases project costs. Projects that need
multi-year funding commitments are delayed. Opportunities for economic
development and economic growth are lost.
Thank you for the opportunity to testify today and the Chamber
looks forward to working with you to build on the reform success of
MAP-21, stabilize the HTF and find ways to grow investment in highways,
transit, and highway safety so each state and region can get out of the
system what they need to be successful--whether that is moving freight
or their employees.
Senator Fischer. Thank you.
I would like to recognize Senator Booker.
Senator Booker. I wanted to have the opportunity to
introduce the next witness, who is one of New Jersey's great,
outstanding mayors, a truly dedicated public servant who has
been the Mayor of Piscataway for about 15 years.
It is my pleasure to introduce Mr. Wahler.
STATEMENT OF HON. BRIAN C. WAHLER, MAYOR, PISCATAWAY TOWNSHIP,
NEW JERSEY AND PRESIDENT, NEW JERSEY STATE LEAGUE OF
MUNICIPALITIES
Mr. Wahler. I think, Senator, with that introduction, that
is good for 10,000 votes in my town.
[Laughter.]
Mr. Wahler. I want to thank Chairwoman Fischer and Senator
Booker and the rest of the Committee for inviting us before the
Subcommittee today.
In June 1996, the American Highway Users Association issued
a report, ``Forty Years of the U.S. Interstate Highway System:
An Analysis. The Best Investment a Nation Ever Made.'' The
report noted that it is not an exaggeration but a simple
statement of fact that the interstate highway system is an
engine that has driven 40 years of unprecedented prosperity,
positioning the United States to remain the world's preeminent
power in the 21st century. It was estimated that the total
construction cost of the interstate highway system through 1995
was $329 billion in 1996 dollars, and $58 billion in 1957
dollars.
It was conceived as a pay-as-you-go system that would rely
primarily on Federal imposed user fees on motor fuels. The
Federal user fees per gallon of gasoline was increased by one
cent, and the Federal user fee provided 90 percent of the costs
of construction, with the balance primarily paid by state user
fees.
For that investment, the Nation as a whole reaped a direct
economic productivity benefit of at least $6 for every dollar
spent on construction, and that was just the beginning. There
were additional benefits, such as higher employment rates and
greater economic opportunity that could not be quantified.
The report noted that for the first 40 years, the
interstate system had enriched the quality of life for
virtually every American, saved lives of at least 187,000
people, prevented injuries to nearly 12 million people,
positioned the Nation for improved international
competitiveness, and enhanced national security.
Isn't it scary to think that our Nation would have looked
like in 1996 if President Eisenhower and the leaders in
Congress in 1956 had not made this critical investment for fear
that raising the fuel fee would anger voters?
Let me tell you little bit about the New Jersey
transportation infrastructure. Just last year, the American
Society of Civil Engineers reported that New Jersey has 39,272
centerline public road miles. We have 6,800 miles of major
roads, 35 percent of which are, according to the report, in
poor condition; 651 of the 6,500 bridges in New Jersey, 9
percent, are considered structurally deficient; and well over
1,700 are considered functionally obsolete.
That report also estimated that driving on roads in need of
repair costs New Jersey motorists $3.4 billion a year in extra
vehicle repairs and operating costs, $601 per motorist, and
that 66 percent of New Jersey roads are in poor to mediocre
condition.
But it is not just New Jersey natives and New Jersey
businesses using these roads. Our ports handled well over 150
million short tons of cargo in 2012, ranking us number four in
the Nation. The freight that wasn't carried to the customers
through the eastern half of the Nation by our 18 freight
railroads on 989 miles of rail also ended up on these roads,
and so did the freight trucked between New York and
Philadelphia or between Boston and Baltimore, or are almost
anywhere between Miami and Maine.
For these reasons, New Jersey roads carry more vehicles per
mile per day than any other state. And the wear and tear those
roads experience would be worse if not for the fact that New
Jersey transit carries over 295,000 riders every day, and our
light rail system takes 82,000 commuters off the road, and our
public bus system, including N.J. Transit and contract buses,
carry over 570,000 riders every workweek.
Historically, New Jersey was at the crossroads of the
revolution. Today, we are host to a number of America's vital
economic and commercial arteries. Our Department of
Transportation reports that New Jersey municipalities are
responsible for 64 percent of the 28,400 centerline roadway
miles on our roads. County governments are responsible for
another 22 percent, which equals 6,600 centerline roads.
Together, local governments are responsible for more than
39 percent of our bridges. Our local roadway and bridges carry
about 55 percent of all of our traffic.
Local officials know that investments in these assets must
be made. Failure to do so compromises the safety of the public
and economic vitality of our communities and our security in
our neighborhoods.
Municipalities and counties throughout this Nation
collectively own 78 percent of the Nation's roadway miles, 43
percent of the Nation's Federal aid highway miles, and 50
percent of the Nation's bridge inventory, and operate a
majority of the Nation's transit systems.
According to a 2000 Pew Charitable Trust analysis, cities
and counties collectively spend $75 billion annually on
highways and transit, just 4 percent less than states are
investing. At the New Jersey League of Municipalities, it is
our firm belief that local officials responsible for a vast
majority of the system are best situated to direct available
transportation resources to projects that best serve
communities in the region.
Despite owning a majority of the share of the country's
transportation network and making substantial investment in
surface transportation infrastructure, local governments and
their metropolitan planning organizations receive a relatively
small share of the overall Federal transportation funds. MAP-21
further strained local governments by decreasing by 30 percent
the amount of highway funds available for transit
infrastructure. Increasing locally available Federal
transportation funds would have tremendously benefited the
Nation's economy without disruption.
For those reasons, the National League of Cities, the U.S.
Conference of Mayors, the National Association of Counties, and
the Association of Metropolitan Planning Organizations hereby
want reauthorization of local surface transportation
alternatives. We use the congestion mitigation programs that
are very helpful to our residents.
And last but not least, the economic case for investment in
our long-term infrastructure is clear. We know it will grow the
economy, create jobs, and position us for long-term growth. And
the moral case for this action is plain. What will we leave the
costs of disinvestment to our children? What will they say when
they look at it 40 years from now?
Thank you, Madam Chairwoman.
[The prepared statement of Mr. Wahler follows:]
Prepared Statement of Hon. Brian C. Wahler, Mayor, Piscataway Township,
New Jersey and President, New Jersey State League of Municipalities
In June of 1996, the American Highway Users Association issued a
report, ``40 Years of the U.S. Interstate Highway System: An Analysis.
The Best Investment A Nation Ever Made.'' That report noted ``It is not
an exaggeration, but a simple statement of fact, that the interstate
highway system is an engine that has driven 40 years of unprecedented
prosperity and positioned the United States to remain the world's pre-
eminent power into the 21st century.''
It was estimated that the total construction cost of the interstate
highway system, through 1995, was $329 billion in 1996 dollars ($58.5
billion in 1957 dollars). It was conceived as a ``pay as you go''
system that would rely primarily on federally imposed user fees on
motor fuels--the Federal user fee per gallon of gasoline was increased
by one cent. That Federal user fees provided 90 percent of the cost of
construction with the balance provided primarily by state user fees.
For that investment, the Nation as a whole reaped a direct economic
productivity benefit of at least $6 for each $1 spent in construction.
And that's just the beginning--there were additional benefits such as
higher employment rates and greater economic opportunity that could not
be quantified.
The report noted that in those first 40 years, the Interstate
system had:
enriched the quality of life for virtually every American;
saved the lives of at least 187,000 people;
prevented injuries to nearly 12 million people;
positioned the Nation for improved international
competitiveness; and
enhanced national security.
Isn't it scary to think what our Nation would have looked like in
1996, if President Eisenhower and our leaders in Congress in 1956 had
not made this critical investment because of a fear that the raised
fuel fee would anger voters?
Let's fast forward 18 years from the1996 review to July, 2014, when
a report was released by the National Economic Council and the
President's Council of Economic Advisors--``An Economic Analysis of
Transportation Infrastructure Investment.''
That report stated:
Today (2014) there are more than 4 million miles of road,
600,000 bridges, and 3,000 transit providers in the U.S. And
yet, over the past 20 years, total federal, state, and local
investment in transportation has fallen as a share of GDP--
while population, congestion, and maintenance backlogs have
increased.
The U.S. lags behind many of its overseas competitors in
transportation infrastructure investment. In the most recent
World Economic Forum rankings, the U.S. had in less than a
decade fallen from 7th to 18th overall in the quality of our
roads.
65 percent of America's major roads are rated in less than
good condition, one in four bridges require significant repair
or cannot handle today's traffic, and forty five percent of
Americans lack access to transit.
Americans spend 5.5 billion hours in traffic each year,
costing families more than $120 billion in extra fuel and lost
time.
American businesses pay $27 billion a year in extra freight
transportation costs, increasing shipping delays and raising
prices on everyday products.
Underinvestment impacts safety too. There were more than
33,000 traffic fatalities in 2013 alone and roadway conditions
are a significant factor in approximately one-third of traffic
fatalities.
Citing recent research, the report noted that transportation
investments affect not only the level of economic output but geographic
distribution of economic activity. In other words, like a Field of
Dreams, if you build it, they will come. And they will bring their
checkbooks with them.
Reduced transportation costs, produced by investments in
infrastructure in the past, facilitated the growth of cities across the
United States. Chicago, for example, grew in size and importance
because it served as a central hub between the fruitful plains of the
mid-west and the markets of the northeast and Europe.
Infrastructure investment can also raise property values,
particularly if these investments bring about improvements in local
living standards (including shorter commute times and greater proximity
to desirable amenities).
A strong and efficient infrastructure network is critical to
maintaining U.S. competitiveness in a global marketplace. However, in
recent years, the United States has fallen considerably behind other
advanced countries when it comes to total transportation investment.
Taken together, total spending as a share of GDP has been falling,
from about 3 percent of GDP in 1962 to only 1.4 percent today. That's
more than a 50 percent decline. These investment flows show up in
business leader evaluations of the United States as a place to do
business. For example, in the World Economic Forum's latest Global
Competitive Index, the U.S. ranked 10th for transportation, 18th for
roads, and 19th for quality of overall infrastructure--well below other
advanced economies. We are well behind countries including Poland,
Estonia, Hungary, Spain and Greece.
If we, in the U.S., want to remain an economic leader, it is
obvious that we need to reverse these trends. If we want the best for
our people, our businesses and the future of our children, we need to
imitate the intelligence and the integrity exhibited by President
Eisenhower and our leaders in Congress in 1956.
Let me tell you a little bit about New Jersey's Transportation
Infrastructure.
Just last year, the American Society of Civil Engineers (ASCE)
reported that New Jersey has 39,272 centerline miles of public roads.
We have 6,822 miles of major roads, 35 percent of which are, according
to that report, in poor condition. 651 of the 6,554 bridges in New
Jersey (9.9 percent) are considered structurally deficient and 1,717
(26.2 percent) are considered functionally obsolete. That report also
estimated that driving on roads in need of repair costs New Jersey
motorists $3.476 billion a year in extra vehicle repairs and operating
costs--$601 per motorist, and that 66 percent of New Jersey's roads are
in poor or mediocre condition.
But it's not just New Jersey natives and New Jersey businesses
using those roads. Our ports handled 152.7 short tons of cargo in 2012,
ranking us 4th in the Nation. The freight that wasn't carried to
customers throughout the Eastern half of the Nation by our 18 freight
railroads on their 983 miles of rail, also ended up on those roads. So
too did any freight trucked between New York City and Philadelphia--or
between Boston and Baltimore--or
almost anywhere between Miami and Maine.
For these reasons, New Jersey roads carry more vehicles per mile
per day than those in any other State. And the wear and tear those
roads experience would be even worse if not for the fact that New
Jersey Transit trains carry 295,000 riders every day. Our Light Rail
system takes 82,000 commuters off the roads. And our public bus system,
including NJ Transit and contract busses, carries over 570,000 riders
every work day of the week.
Historically, New Jersey was the Crossroads of the Revolution.
Today, we are host to a number of America's vital economic and
commercial arteries.
Our State's Department of Transportation (DOT) reports that New
Jersey's municipalities are responsible for 64 percent (28,539 center
line road miles) of our roads. County governments are responsible for
another 22 percent (6,649 center line road miles). Together, local
governments are responsible for 39 percent of our bridges. Local
roadways and bridges carry about 55 percent of all traffic.
Local officials know that investments in these assets must be made.
Failure to do so can compromise the safety of the public, the economic
vitality of our communities and the security of our neighborhoods.
Municipalities and counties, throughout the Nation, collectively
own 78 percent of the Nation's road miles, 43 percent of the Nation's
federal--aid highway miles, 50 percent of the Nation's bridge
inventory, and operate a majority of the Nation's transit systems.
According to a 2015 Pew Charitable Trusts analysis, cities and counties
collectively spend $75 billion annually on highways and transit, just
four percent less than what states are investing.
At the New Jersey League of Municipalities, it is our firm belief
that local elected officials, who are responsible for the vast majority
of the system, are best situated to direct available transportation
resources to projects that best serve their communities and regions.
Despite owning a majority share of our country's transportation
network and making a substantial investment in surface transportation
infrastructure, local governments and their metropolitan and regional
planning organizations receive a relatively small share of overall
Federal transportation funds. MAP--21 further strained local
governments by decreasing--by 30 percent--the amount of highway funds
available for the transportation infrastructure they own. Increasing
locally available Federal transportation funds would have tremendous
benefits for the Nation's regional economies, without major disruptions
to the underlying legislative approaches.
For those reasons, we join with the National League of Cities, the
U.S. Conference of Mayors, the National Association of Counties, the
Association of Metropolitan Planning Organizations, the National
Association of Regional Councils and the National Association of
Development Organizations to urge you to sub-allocate more funding to
local decision--makers and local areas under the Surface Transportation
Program, the Transportation Alternatives Program, and the Congestion
Mitigation and Air Quality Program. We also seek reaffirmation of
longstanding Federal commitments to the more than 177,000 federal--aid
highway bridges (or ``on--system bridges'') that are not a part of the
designated National Highway System, which lost access to predictable
funding after MAP--21 took effect.
The economic case for investment in our long-term infrastructure is
clear--we know it will grow the economy, create good jobs, and position
us for long-term growth. The moral case for action is just as plain.
Will we leave the costs of disinvestment to our children? What will
they say when they write their transportation infrastructure reports,
40 years from now?
This is the month when Congress decides, and the time for action is
now.
Senator Fischer. Thank you, Mr. Mayor.
We will begin our first round of questions.
Senator Bramble, in your written testimony, you explained
that Utah established a funds exchange program through the Utah
State Transportation Commission. I established a similar
program in Nebraska that has seen statewide success in
jumpstarting a number of projects.
Can you explain how your program has worked in Utah, and
how it is providing flexibility to local governments for
infrastructure projects? And do you have any examples of
success?
Mr. Bramble. Thank you, Madam Chairwoman. It is a great
question.
In Utah, we have a fund transfer exchange program where the
state will put up dollars for political subdivisions, and then
when we get reimbursed when Federal dollars come in, we provide
85 percent to the local government, and then we receive the
reimbursement from the Federal Government.
It is not that much different than what the State of Utah
did on the major transportation artery for our state,
Interstate 15. That goes from Idaho to Nevada. It is the main
north-south transportation link.
In the state of Utah, the largest infrastructure project in
our state's history, rebuilding Interstate 15 in Utah County,
which is the county I represent, was done completely with State
dollars, because of the uncertainty of Federal dollars. And
that's really a variation on that theme. When Federal dollars
come in, we will apply it to other projects.
It is really a timing issue, and by providing that
flexibility, we are able to meet the most critical and
immediate needs, regardless of the inaction of Congress. The
challenge with that is that is not a substitute for the Federal
Government's obligation to meet the transportation funding
needs.
Senator Fischer. Do you have any idea how much your
Department of Transportation has helped those local governments
save in seeing projects speeded up?
Mr. Bramble. It's in the hundreds of millions of dollars. I
don't know the exact number, but it has been substantial. And
it has been a real success, because of the municipalities, they
are able to move forward with their projects backed by the
state, and the state has perhaps a little bit more flexibility
than a local, city, town, or county.
Senator Fischer. But those savings I believe are
substantial, when you're looking at the limited resources that
we have.
Mr. Bramble. I don't know the exact number. I'm a CPA, and
so I don't want to throw out a number that I couldn't defend,
but it has been substantial.
Senator Fischer. Understood.
Senator, you mentioned in your written testimony also, in
MAP-21, that there were efforts made to streamline the
regulatory review. Did the changes in MAP-21 go far enough, do
you believe? Are you still seeing delays in projects that are
moving in Utah? And can you offer us any recommendations in
moving forward?
Mr. Bramble. Let me start with the last part of that.
States need flexibility. If you look at the transportation
needs, Senator Booker indicated the rail corridor in the
Northeast. The challenges of building an infrastructure in a
state like Utah that has 70 percent of the land mass owned by
the Federal Government, and where we have urban areas, but we
have vast tracts of very remote areas; that is far different
than what you see in the Northeast. So the needs of the states
are different.
The safety concerns, if you look at building a road that
has to go across a 10,000 foot mountain pass, that may be
different than building a road in Nebraska.
So the flexibility, the one-size-fits-all standard, or even
if you have a couple different alternatives, we need more
flexibility. So I would say that yes, it was helpful. It didn't
go far enough. States really need flexibility to meet the
unique conditions that we find in each of our states.
Senator Fischer. Thank you, Senator.
Ms. Kavinoky, in your written testimony, you mentioned that
the Chamber has a long-standing position in support of our
national freight policy. Could you explain to the Committee
what you view that policy as looking like? Do you have examples
of things happening in the states, too, how they use those
transportation dollars to address that?
Ms. Kavinoky. Certainly. What we have heard from Chamber
members time and time again is that businesses look end-to-end
when it comes to their supply chains. They are looking origin
to destination. They are not interested in squabbles over which
mode is best or which jurisdiction is in charge.
They want the ability of the Federal Government, when it
comes to freight, to set a strategic approach, to give
flexibility, so that the right decisions can be made. And then
they want help cutting through red tape at all levels of
government to make sure that, if they locate a plant somewhere,
it can get the trucking service, the rail service, and the
inland waterway service it needs. They are looking very, very
comprehensively.
We consistently hear that the need to address bottlenecks
on our Nation's roadways is of critical importance, and I think
that that has been proven time and time again.
We hear talk, and Senator Booker knows this very well in
northern New Jersey, of the need to balance both freight and
passenger traffic. The New Jersey Turnpike is a prime example
of something that is both a commuter corridor as well as a
freight corridor.
Some states have taken more strategic approaches and are
working together. The I-69 Corridor coalition, the Ports to
Plains Corridor coalition through the Midwest have both taken
the view that we need to facilitate trade and goods movement
north to south.
We have certainly heard in states that have border
crossings that it is critically important to help facilitate
goods movement at those bottlenecks.
And in places where ports, whether those are inland ports
on the waterways, whether those are seaports, or those are
airports that are facilitating high-value goods movement, we
have heard from all of them that the capacity to move goods
between modes is of critical importance.
Everyone points to the CREATE Program in Chicago as
something that is an example of a good public-private
partnership to try and unblock the rails there in transit, as
well to what Norfolk Southern has been able to do with the
Crescent Corridor.
But fundamentally, we are looking from origin to
destination.
Senator Fischer. Thank you very much.
Ms. Kavinoky. You're welcome.
Senator Fischer. Senator Booker?
Senator Booker. Thank you very much.
As I suspected, and saw in your written testimonies,
everybody on the panel echoed the urgency of the moment.
Mr. Mayor, I would love to just pounce on you for a second,
if I could. Not in a physical way. I mean verbally.
[Laughter.]
Mr. Wahler. I think my wife beat you to that.
[Laughter.]
Senator Booker. Mayor, you talked about the impact of not
investing. But can you speak from sort of a personal sense as a
mayor, what is the cost of this decaying infrastructure right
now, as you see it?
Mr. Wahler. I think after this very harsh winter in the
Northeast, I think everybody can relate to out-of-aligned
suspension systems and things like that, blown tires, which, in
this day and age, some of these tires can run $400 a shot.
So when you have infrastructure to that effect decaying and
creating problems at the local level, I know within my own
community, we have a backlog of $40 million in road projects
ready to go where we have all the right-of-way acquisition and
where we can actually physically put it out to bid, but we only
do about $5 million a year at the local level.
So if you multiply that in New Jersey with all the
municipalities with local projects, you have the potential to
singlehandedly really gin up the economies in certain regions
of the country with the backlog of projects. You have a lot of
these bridges that tend to be 100 years old or more, these
culvert bridges at the county level, some at 50 years. They
don't get any cheaper to refurbish and rebuild.
Senator Booker. That is the point I want to go a little
further with. Mr. Bramble mentioned some of this in his
testimony.
He also mentioned that he is a CPA, which I am not, but we
need more of in Congress. I hope you think about that.
But the reality is, you and I both know from having to run
cities that the more you put off capital maintenance, the more
the cost goes up. So from your perspective, waiting on the
investments we are making, the deferred maintenance, what is
that doing to the cost?
Mr. Wahler. It's obviously, Senator, driving the cost up.
For Senators on the panel, even hypothetically, if a
municipality or county or state entity can hire an engineering
firm, depending upon on the largeness of the scope of the job,
you are looking at 7 or 8 years down the road before a shovel
gets in the ground. So you need to start planning now in the
respect that it takes a while, depending upon what the
regulatory process is in any given state, to get the approval
for permits.
But I don't know if a lot of our infrastructure can wait 7
or 8 years. When I tell residents within our community, ``Your
road is in the queue. However, it may be 3 or 4 years down the
road,'' what we're doing is sending the department of public
works or engineering division out to do minor patches out there
and hope that something seriously is not going to happen to the
motoring public or those biking or walking along the roadways.
Senator Booker. And those minor patches add to the total
cost of repairs.
Mr. Wahler. Absolutely.
Senator Booker. So I have a final question for the panel,
but my penultimate question to you, because I think you
mentioned it when you started talking about the history of the
infrastructure we have, Republicans, Democrats coming together
to make these investments, you talked in about the moral
courage of politicians to make the tough calls that ultimately
will benefit our grandchildren. Can you just touch on that for
a second?
Mr. Wahler. I was fortunate enough, I had a prior life to
being a mayor. I actually worked on Capitol Hill for the late
Speaker O'Neill. He would always comment that there is no
Democratic or Republican way to fill a pothole. Being an
elected official, I always viewed that when it came to
transportation. And over time, it was always a nonpolitical
issue, that elected officials always did the right thing,
because they know that their citizens demand that action be
done.
No mayor can hide from their constituents in a grocery
store or anything like that when there is a problem. Maybe
Senators can, but I don't know.
Senator Booker. Hey, hey.
[Laughter.]
Mr. Wahler. But with that being said, I'm very, very
concerned. Having been Mayor for 15 years and working with a
lot of colleagues at the national level through the National
League of Cities, the U.S. Council of Mayors, we're very
frustrated at this point. We have a way of getting a lot of
these projects up and starting a lot quicker than the Federal
or State governments can. And the truth of the matter is, 60
percent of the roadway miles in this country are at the local
level that feed into the state and national roadway network
system.
Senator Booker. I'm going to have to make that my last
question. Hopefully, I will get another round. I will now turn
it over to the savvy and tech-savvy Senator McCaskill.
Senator Fischer. Look at you running the place.
[Laughter.]
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Yes, he likes this.
Senator Booker. I'm sorry. I'm so sorry. I forget my place.
I am the junior, junior, junior Senator from New Jersey.
Senator McCaskill. Madam Chair, may I proceed?
Senator Fischer. Yes, please do.
[Laughter.]
Senator McCaskill. Thank you so much.
Senator Booker. It's a good thing that the women are
running this place.
Senator McCaskill. You are outnumbered, Booker.
Senator Booker. I am.
Senator McCaskill. Be careful. Between the two of us, Deb
and I can do some damage.
I thank you all for being here today. As the Chair said,
this is our third hearing on the importance of long term. I
think we are 26 days away, and we have no bill. There is not
even a bill.
Now, this is kind of a joke that there is not even a bill,
and we are 26 days away. So let me just be very clear. It is
clear to me that the only thing that they are going to do is a
patch.
And my question to you--how do you pronounce your last
name?
Ms. Kavinoky. It is Kavinoky.
Senator McCaskill. Kavinoky. If some of us were to decide
that we are done with short-term patches that do irreparable
harm to our economy and to predictability and sustainability,
that gets a lot of jawing around here about how much we care
about that, is the Chamber willing to score that vote for those
of us who would rise up and say we are done with a 2-month
patch or 7-month patch, and it's time for us to do our work and
take the tough votes?
Ms. Kavinoky. I think that the Chamber shares your
frustration.
Senator McCaskill. Will you score it?
Ms. Kavinoky. If we are presented with an opportunity to
send up a key vote, and the choice is let's do a really long
patch or something short enough to keep the pressure on this
summer, I think we will score it.
Senator McCaskill. Well, I would really like to know that,
because the U.S. Chamber of Commerce is very powerful around
here. Everybody runs around wondering about scores.
So the record is clear, what a score is, it is people who
work to influence legislation who keep a grade card of how
Senators do. Some of us believe that some of those groups have
selective scoring, because they don't want to step on the toes
of certain people in Congress by scoring something that would
make it uncomfortable for them.
I just implore you to begin scoring this. I mean, look what
we have. We have Export-Import Bank, a huge problem for
businesses in this country, if that is not renewed. We have
debt ceiling, a huge problem for our economy, if that is not
handled appropriately. We have financing of highways and
infrastructure in this country that, frankly, we all agree
with. We all want to do it.
But we are all sitting around here and we are acting as if
something is going to change as a result of this great hearing
when we know full well--everyone sitting here knows--we are
talking about another patch.
Ms. Kavinoky. Senator, we have scored every transportation
vote and used those scores in our scorecard over the last
several years.
Senator McCaskill. Well, my scorecard is never very good
and I just want to know----
[Laughter.]
Ms. Kavinoky. You know, it's kind of that multi-issue
thing. And I know sometimes we don't always see eye to eye.
Senator McCaskill. It's a little confusing for some of us
who have had pretty moderate voting records, in fact.
Ms. Kavinoky. But on this one, we see clearly eye to eye.
Senator McCaskill. OK, then I think it's time you let
everybody know, and all your membership should let everybody
know, that you are done with this.
The American people should be done with this. We need a
bill. I mean, just give us a bill that we can disagree on. At a
minimum, it shows we are trying, right?
Does anybody know if there have been any studies that have
shown the economic impact of our inability to take a tough vote
around here? The short term, let's say, we're going to do it
for 3 months or 2 months so we can get out of town and get
beyond the looming deadline.
Do you know of any studies that have been done, for
example, on the shutting down of the Government or the
threatened shutdown, all of this fits and starts and
legislating by crisis and deadline? Has anybody looked at the
long-term impact of those on job loss and job sustainability?
Mr. Yaksich. I'm not aware of a particular study, a
specific study to the points you raise to the highway program
and short-term extensions.
Part of the challenge, the leverage of the industry, is
that there is that pressure to have the continuation of
funding, so there isn't a disruption, so contractors aren't
laid off, and the program and money is halted coming out of the
DOTs. So in terms of an impact, the money has continued to flow
through these short-term extensions.
As I said in my statement, it is disruptive for capital
investments and just across-the-board. To trickle down through
the economy, that uncertainty just adds a challenge for the
economy.
Mr. Wahler. Senator McCaskill, if I may highlight some of
what the panelists are saying here, it short term does not do
towns and counties any good, because you have engineered
projects out there that are ready to go with the current
regulations. What happens is that if they become stale, the
next thing you know, there's a change order to modify the plans
to whatever new Federal or State DOT guidelines, which ends up
costing local taxpayers more money.
So we are ready. We have a backlog of projects to go at the
local and national level. So we're not in favor of short-term
fixes. We want a long-term source of funding and certainty.
That is the keyword. We need certainty.
Senator McCaskill. Not patching and letting it go would be
short-term pain, but it might be the long-term gain that we
need.
Thank you all very much.
Thank you, Madam Chairman.
Senator Fischer. Thank you, Senator.
Senator Ayotte?
STATEMENT OF HON. KELLY AYOTTE,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Ayotte. I want to thank the Chairman.
I thank all of you for being here today.
And I, certainly, hearing the end of my colleague Senator
McCaskill's comments, I think all of us feel that doing the
longer term reauthorization would be the right thing to do for
certainty in planning and communities.
I wanted to follow up, Senator Bramble, in New Hampshire,
I'm sure like in your state, there are projects that are very
important and significant, and they are multiyear projects.
That is one of the reasons why you need to be able to plan over
a multiyear basis.
In New Hampshire, one of them is the widening of Interstate
93 from Salem to Manchester, New Hampshire. So we have a
situation where many Granite Staters commute to Boston, and so
that is a critical corridor in terms of traffic and their
ability to have their jobs. And then also, we have it going the
other way, which we are glad to have the residents from other
states and Massachusetts going up to see our beautiful White
Mountain region in New Hampshire.
So this project has been underway for several years. And
recently, the Assistant Commissioner of the Department of
Transportation in New Hampshire has been in the process, which
I've supported, of applying for credit assistance under the
Transportation Infrastructure Finance and Innovation Act, or
TIFIA.
So in your testimony, I know that you had touched on, at
least your written testimony, that this is an important
mechanism for states and local communities, and the other
financing mechanisms that states rely on to fund projects of
national and regional importance.
Could you further explain the National Conference of State
Legislatures' support for an expansion of credit-based and loan
guarantee programs to incentivize private sector investment,
and what your thoughts are on what we need to do to ensure that
these financing mechanisms are in place?
I'm also someone who is a fan of sponsored legislation to
further allow, whether it is State infrastructure banks, also a
bill that would be the partnership to Build America, where it
would leverage dollars and allow further financing mechanisms,
and also private sector support.
So I wanted to get your thoughts on these financing
mechanisms and what more we could do.
Mr. Bramble. The issue of flexible financing options, that
hits home. Representing the state of Utah, we did something
with a transportation project on Interstate 15 that was
different. It wouldn't fit the Federal guidelines for
financing. It doesn't directly address the TIFIA question.
Let me give you an example of what we did in Utah. We have
this interstate, and we have a debt limit, both a statutory
debt limit in our state and we have a constitutional debt limit
in our state, and we have this interstate that needed to be
rebuilt. So instead of putting forward simply bids and saying
how much will it cost to build this interstate from point A to
point B, we knew how much we could authorize in terms of
bonding.
And this was a Federal highway, Interstate 15, but it was
all State funds. We authorized $2 billion of bonding, and then
we went out to the private sector and we said OK, we have
authorized $2 billion of bonding, tell us how far you can go on
this interstate, because our needs are greater than Point A to
Point B.
Instead of it costing $2 billion for Point A to Point B,
which happened to be an interchange at American Fork to what is
called University Parkway, it is about a 17-mile stretch, we
actually rebuilt about 24 miles and it cost us $1.5 billion
because the flexibility in how we approached the bidding
process was entirely different than what the Federal guidelines
would have allowed for.
The way we built the bridges is different than what the
Federal Government would have allowed for. We built the bridges
on the side of the road, lifted them and put them in place in a
very innovative way. We kept three lanes of traffic open in
both north and south directions during the entire project but
for a very limited overnight closing from 10 p.m. until 5 a.m.
The reason I point that out, the opportunity for flexible
financing, and when I say financing, not just sources of funds
in terms of revolving loans or those kinds of things, but in
terms of how you approach the design-build, all of those things
contributed to a $2 billion project that only would've been 17
miles being actually a little bit more than 24 miles costing
$1.5 billion.
That is a model that would be helpful if those principles
would be adopted by the Federal Government.
Senator Ayotte. So if we could give you more flexibility,
obviously, the financing is a big piece, but more flexibility
to have innovative solutions at the State and local level, is
that something that would be positive in allowing you to
stretch the dollars that we give you further?
Mr. Bramble. Absolutely. A couple of your grant programs,
18 states have ignition interlock laws for offenders, but only
four states qualified under the very stringent Federal
guidelines for a grant. We have 40 states applied and only one
qualified for distracted driving programs. And while every
state has implemented a three-stage graduated drivers license,
no state in Fiscal Year 2013 or 2014 qualified for a grant
based on the Federal program, because of the very stringent,
inflexible criteria.
What works in New Hampshire may not work in Nebraska and it
may not work in Utah. Each of our states have unique--and by
the way, your White Mountains, I've ridden a motorcycle through
them. It is beautiful.
Senator Ayotte. Excellent.
Mr. Bramble. But it is different in your state than other
states.
Senator Ayotte. Absolutely. And I think we need to give
your ability to stretch these dollars and have your unique
solutions in each of your states and in each state in this
country to be able to make sure that we can get more projects
done.
So I appreciate all of you being here. Thank you.
Senator Fischer. Thank you, Senator Ayotte.
Senator Klobuchar?
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Madam Chair, and
thank you to you as well as Ranking Member Booker. I look at
your two states and think about them. They are little different
in their transportation needs.
But I'm very glad you held this hearing, and I'm hopeful
that we are going to come up with some solution here.
One of the concerns I have, and I think, Mr. Wahler, you
can relate to this, and certainly Utah can as well, just being
a cold-weather state, and the uncertainty that is created by
not knowing whether or not we are going to have a continual
Highway Trust Fund is exacerbated when you have a shorter
construction season.
And in Minnesota, it is pretty short. We always say that we
have two seasons, mosquito season and then winter, and that's
it. The construction season and the mosquito season are the
same.
So can you talk a little bit about, I know Senator
McCaskill touched on this, but the uncertainty that is created
and how this in particular can affect construction projects
where cold-weather states don't even want to go ahead and they
stop in their tracks? I understand there are number of states
that have stopped letting out contracts.
Mr. Wahler. If I may, Senator, one of the things, because
of the severity of this last winter, the frost line, which
would be typically 3 feet in New Jersey, went down to 3.5 feet,
which undermined a lot of the roads. Now I know the frost line
is a little bit more in your state, obviously.
However, what we have had to do is we have had to start our
reconstruction projects typically a lot sooner now this year.
As we speak, my Department of Public Works is paving three
streets today, because we're trying to get every available day
in. You're at the mercy of the weather. You can't pave when
it's raining out. So we're trying to get everything in before
the cold weather starts in October.
This all goes back to the certainty issue. We don't want a
short-term fix. I know that may sound like something nice here
at the Federal level, but the truth of the reality is that the
business sector, the elected officials, we need certainty. That
is the key word, and I can't emphasize that enough.
I'm very concerned about a lot of projects that are going
stale, which I have to go back and tell my councilmembers
there's going to be a change order because the Federal or State
rules have changed, or whatever, and it drives up the overall
cost of road projects. I think it is critical.
I'll give you a quick example. Route 18, which is a State
road in my town, which is Rutgers University, it has taken 48
years to get to the point where they are finally finishing the
last 3 miles of the roadway. So I had joked that I thought I
would see it before I got my AARP card. Well, I was wrong.
But the bottom line is that we can't be thinking 40 years
out now when we have projects that need to go right away.
Senator Klobuchar. I agree. That's part of the reason I got
on the bill with Senator Warner and Senator Blunt and others,
with this longer term infrastructure combined financing.
Obviously, this idea of doing some kind of international tax
reform, hopefully for the long term, is very appealing, if we
could hook that into infrastructure. But it has to be something
I would hope not just do the baseline amount, but it would
actually add money into infrastructure funding.
I don't know, Ms. Kavinoky, if you want to comment on any
of that? Any solutions?
Ms. Kavinoky. Sure. I think it is going to take a number of
solutions in order to boost overall investment. We have spent
the vast majority of our time over the last 10 years talking
fundamentally about the Highway Trust Fund, which provides
about 50 percent of all highway and transit capital investment.
That is critical to fix.
The Chamber is focused on revenue sources that are
transportation related. We have concerns about using mandatory
repatriation outside of comprehensive tax reform to pay for
that. But we are focused on, let's get a solution.
In addition to that, that is not going to solve all the
problems, so proposals like infrastructure banks and funds, the
Move America proposal that Senator Wyden just released
yesterday, and others that would help promote other sources of
financing, help the public sector finance at lower rates, help
draw private capital, are going to be critical.
Those are all tools that are being used worldwide, and they
are ways that other countries are using to project their own
economic power.
But fundamentally, what I keep hearing from our members is,
the solution set for the Highway Trust Fund hasn't changed for
years. We had two big commissions, 2008 or so, that issued
reports that looked through every possible revenue option. We
haven't come up with any other magic, new solutions.
This is a matter of getting the politics right, which we
are certainly trying to help with, getting some sense of
agreement on the policy, and then finding something in this
legislative process to move the ball.
Senator Klobuchar. OK. I think there are a lot of us
interested in doing that.
Last thing, and I won't ask a question, because my time is
up. I just wanted to point out, to follow up on your comments,
Mr. Bramble, just like the graduated license funding, I've been
doing a lot of work for years on distracted driving. There's a
program set up there. Right now, 70 percent of the funds are
unused for the states. Only one state in 2014 qualified, and
that would be Connecticut.
We really need to change that. So Senator Hoeven and I have
a bipartisan bill called the Improving Driver Safety Act, which
makes some changes to the program to get the money out. Our
states have high rates of distracted driving, and I'm hopeful
when a bill does move with transportation, that this will be
part of it. It is very important to change the criteria and get
that money out to the states.
Thank you.
Senator Fischer. Thank you, Senator.
Unless we have any other members show up, our next Senator,
our last Senator to ask questions, will be Senator Cantwell.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Madam Chair. And thanks for
this important hearing.
Ms. Kavinoky, I think you talked about freight in your
testimony, or in a follow up question, so I did want to ask you
about the National Freight Advisory recommendations that were
released in 2014. They were about the efficient movement of
global products, so that we can continue to compete
effectively.
Currently, do you believe that there is a sufficient
investment at the Federal level in infrastructure improvements
around freight? And if not, where do you think we should look
for resources to fund those recommendations?
Ms. Kavinoky. Thank you. The commission made 80 different
recommendations around freight, and I think they took a very
good and comprehensive look.
As you know, in Washington state, it is about roads, rails,
waterways, ports, and aviation to move goods. Across-the-board,
we know that overall investment in transportation and in
infrastructure, including freight, is insufficient. If it were
a little bit more sufficient and targeted in the right way,
maybe we wouldn't have people waiting 40 hours a year in
traffic, or companies like UPS having to make sure that all
their drivers make right turns so that they are saving millions
of dollars a year.
What we hear repeatedly is that the focus on intermodal
connections and on the last mile is critical. It is no good to
have bigger ships coming into ports, if you can't get those
goods off the ships and where they need to go. We know that
truck bottlenecks are absolutely critical, but we have to make
sure we don't fix one bottleneck and just move it upstream.
And then, of course, the Chamber has focused on the need to
fully use the Harbor Maintenance Trust Fund. I know there are a
lot of discussions about how to use that properly. But we need
to make sure that that is being fully used, so our inland
waterways and our ports, in addition, are getting the
investment they need.
I think there is a lot of room to work there, and we would
be happy to talk with you about how to shape a freight program
that works well.
You raise a very important question, though, which is how
to pay for it. As a member of the Freight Stakeholders
Coalition and other groups discussing freight, what I
discovered is that the conversation about how to pay starts
breaking down when you get to that point. We have some members
who say we already pay into the Highway Trust Fund. We have
other members who say make sure we are not regulated so we can
invest our own money. We have others who say maybe we ought to
have a freight waybill.
When you get the freight stakeholders together, there's not
a lot of, as you probably know, consistent answers to that. And
I have not figured out how we break through that disagreement
and come up with a coherent approach.
Senator Cantwell. For our state, I can just tell you that
the identification of this as a necessary need for keeping our
competitiveness and jobs, it was easier than when a new
expansion was called for, then that group came forward and said
we should get a percentage of that, a dedicated source for
that. I don't know whether something like that is going to be
considered here in Washington for a long time, so I think the
freight coalition has to consider whether we should do
something more along the lines of a user fee to help this issue
in the near term.
I don't know what your thoughts are on that, as opposed to
the general strategy of when we have new revenue for
transportation, let's get a piece of that dedicated toward
these job-creating activities, or should we look at ways to
identify some other sources right now and move ahead?
Ms. Kavinoky. I think that it works to try to identify
those other sources. Again, I think the challenge is defining
what that user fee is and how it affects the different users,
and that is where we have seen some disagreement among folks in
the freight community.
Senator Cantwell. OK.
Mr. Yaksich, can improved planning, especially related to
freight movement, and efficient goods and services, make
limited resources go further? How should we think about this
and your organization in identifying some of these
infrastructure challenges?
Mr. Yaksich. The planning is critical for the movement of
goods, as I testified to in my statement, in terms of the
supply chain. We are seeing such a diverse global supply chain
coming that on-time delivery is critical in the parts and with
that delivery is the planning.
So planning and investment in planning is critical toward
manufacturers, manufacturing success, and then getting product
to the customer.
Senator Cantwell. Thank you.
Thank you, Madam Chair.
Senator Fischer. Thank you, Senator Cantwell.
I'd like to thank, again, the panel members for being here
today. I appreciate the good information that you have provided
to the Committee.
I would note that the hearing record will remain open for 2
weeks. During this time, Senators are asked to submit any
questions for the record. Upon receipt, the witnesses are
requested to submit their written answers to the Committee as
soon as possible.
And with that, I will adjourn the hearing.
[Whereupon, at 11:46 a.m., the hearing was adjourned.]
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