In response to these challenges, Congress established the National Surface Transportation Infrastructure Financing Commission to embark on an investigative and analytical effort to assess the funding crisis and make recommendations to address the growing transportation infrastructure investment deficit. Specifically, Section 11142(a) of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users established the Commission and charged it with analyzing future highway and transit needs and the finances of the Highway Trust Fund, making recommendations on alternative approaches to funding and financing surface transportation infrastructure, and reporting back to Congress within two years (by April 2009). While the Commission recognizes the important intersection between highways and transit and other forms of transportation, including freight rail, intercity passenger rail, inland waterways, and aviation, the focus of its work was highways and transit.
The Commission consists of 15 individuals from diverse backgrounds—economics, finance, government, industry, law, and public policy—united by a passion to help develop a more viable model to fund and finance our national surface transportation system. Its final report has drawn heavily on available literature, ongoing debates and forums, and, most important, input offered directly by a wide range of experts and user group representatives—for which the Commissioners are extremely grateful.
In charting its course, the Commission was mindful of the important work of the National Surface Transportation Policy and Revenue Study Commission (referred to here as the Policy Commission). Given the Policy Commission's thorough treatment of how investments should be prioritized and delivered, the Financing Commission focused its efforts primarily on the question of how revenues should be raised, including whether there are other mechanisms or funds that could augment the current means for funding and financing highway and transit infrastructure. As it relates to this core question, the Commission also considered how much revenue is actually needed and a few key issues related to how it should be invested.
To guide its work, the Financing Commission established a set of goals for the national surface transportation system—that it be safe, effective, efficient, fair, and sustainable. And to achieve these fundamental goals, the Commission developed a set of overarching principles to guide consideration of funding and finance approaches.
Readers should recognize that there are inherent and unavoidable trade-offs among these principles, which require some subjective balancing among them. The Commission strived to achieve such a balance in its final recommendations. Chapter 1 lays out these principles in greater detail and provides additional background on the nature of the Commission's charge.
The Commission relied heavily on previous efforts by the U.S. Department of Transportation, the Policy Commission, and others to define the extent of the needs and forecast revenues for the future. The Commission did, however, develop from these resource materials its own refinements to account for currently available information as well as its hypotheses for the future. Chapter 2 establishes the investment needs and revenue forecasts developed by the Commission and used as the baseline for its deliberations.
Working directly from the guiding principles and the baseline estimates, the Commission next developed systematic evaluation criteria to apply to the widest range of alternative funding approaches for the federal program, and indirectly for state and local programs, feasible for a study of this scale. Chapter 3 presents the 14 evaluation criteria that the Commission developed and the results of a preliminary screening of a comprehensive range of alternative funding mechanisms.
GUIDING PRINCIPLES TO SHAPE A NEW FUNDING AND FINANCE FRAMEWORK | After examining the full range of potential funding approaches, the Commission conducted an additional level of review for a subset of the most promising options or those that otherwise required more in-depth analysis. Chapters 4, 5, and 6 provide the results of these in-depth analyses for motor fuel tax mechanisms, freight-related funding options, and facility-level tolling and broad-based pricing mechanisms. In recognition of the supporting role that financing mechanisms can play in leveraging resources—as distinct from the underlying revenue-raising mechanisms that generate net new resources—the Commission considered alternative financing approaches, including private-sector financial participation, that can help meet the investment challenge. Chapter 7 summarizes the results of this assessment, recognizing that these financing approaches are enhancements to rather than substitutes for much needed funding increases. Finally, and critically, the Commission arrived at specific policy recommendations to help narrow the federal funding gap and transform the overall funding and finance framework for the nation's investment in surface transportation infrastructure. Specific recommendations are offered in detail in Chapter 8 and in summary form here. |
• The funding and finance framework must support the overall goal of enhancing mobility of all users of the transportation system. The range of mobility needs throughout the nation requires an intermodal transportation network that ensures easy access, allows personal and business travel as well as goods movement without significant delays, and permits seamless transfers and choices among complementary transportation systems and services. | |
• The funding and finance framework must generate sufficient resources to meet national investment needs on a sustainable basis, with the aim of closing a significant funding gap. The frame- work must enable the federal government to raise sufficient funds and also support the ability of other levels of government to raise sufficient funds and make appropriate investments. | |
• The funding and finance framework should cause users and direct beneficiaries to bear the full cost of using the transportation system to the greatest extent possible (including for impacts such as congestion, air pollution, pavement damage, and other direct and indirect impacts) in order to promote more efficient use of the system. This will not be possible in all instances, and when it is not, any cross-subsidization must be intentional, fully transparent, and designed to meet network goals, equity goals, or other compelling purposes. | |
• The funding and finance framework should encourage efficient investment in the transportation system—recognizing the inherent differences between and within individual states—such that investments go toward projects with the greatest benefits relative to costs. | |
• The funding and finance framework should incorporate equity considerations—for example, with respect to generational equity, equity across income groups, and geographic equity. | |
• The funding and finance framework should support the broad public policy objectives of energy independence and environmental protection. Revenue-raising mechanisms that impose the full cost of system use (including externalities such as carbon emissions) can support reduced petroleum consumption and improved environmental outcomes. |