Congress authorized the Commission to examine these specific HTF issues:

•  Current revenues in the federal HTF

•  Projections of how HTF revenues might change

•  Alternatives for funding the HTF

•  Highway and transit needs for HTF funds

•  Potential fuel tax exemptions for states waiving HTF funds

•  Other matters closely related to these tasks

More broadly, the Financing Commission is to provide recommendations addressing:

•  Funding levels sufficient to maintain and improve the nation's highway and transit systems

•  Funding levels sufficient to ensure that federal investment in highways and transit systems does not decline in real terms

•  Other mechanisms or funds that could augment the current means for funding and financing highway and transit infrastructure

Consistent with its statutory charge, the Commission has focused its efforts on highway and transit investment needs and funding options. It is clear, however, that improving the transportation system also requires giving more attention to other modes necessary for moving goods and people—including ports, inland waterways, freight and intercity passenger rail, aviation, and various intermodal linkages. The Commission has not attempted to quantify the potential investments in these other modes and related connections that might be advisable or necessary, Put it acknowledges that such additional investments are critically needed and makes appropriate references to them in this report, especially as they relate to freight movement.

The Commission is mindful of the important work completed by the National Surface Transportation Policy and Revenue Study Commission (the Policy Commission) in January 2008 and its perspective on many of the funding issues the Financing Commission is authorized to explore. In light of the Financing Commission's broad mandate and the work already completed by the Policy Commission, the Financing Commission formulated three interrelated questions that are critical to addressing the surface transportation funding crisis:

1.  How much revenue is needed to maintain and improve the nation's highway and transit systems?

2.  How should this revenue be raised, including consideration of whether other mechanisms or funds could augment the current means for funding and financing highway and transit infrastructure?

3. How should this revenue be invested?

Section 11142(a) of SAFETEA-LU established the National Surface Transportation Infrastructure Financing Commission and charged it with analyzing future highway and transit needs and the finances of the Highway Trust Fund and making recommendations regarding alternative approaches to funding and financing transportation infrastructure. These recommendations must address, but are not limited to, the following topics:

(a)  the levels of revenue that the federal Highway Trust Fund will require to maintain and improve the condition and performance of the nation's highway and transit systems and to ensure that federal levels of investment in highways and transit do not decline in real terms (§11142(b)(2)(A)-(B));and

(b)  the extent, if any, to which the Highway Trust Fund should be augmented by other mechanisms or funds as a federal means of financing highway and transit infrastructure investments (§ 11142(b)(2)(C)).

BOX 1-1. GROWING CRISIS IN SYSTEM PERFORMANCE

While accomplishments have been achieved in recent years, performance in several critical areas is declining, and without increased funding and a corresponding change in investment policies, these areas will deteriorate further.

Highway Performance

Highways serve as the backbone of our transportation system and are widely recognized as one of the nation's greatest assets. They provide citizens with a high degree of personal mobility and are integral to the movement of freight and the productivity of U.S. industry. Despite improvements in some areas, the performance of our highway system is generally in decline:

•  From 1980 to 2006, automobile vehicle miles traveled (VMT) increased 97 percent and truck VMT increased 106 percent, while over the same period the total number of highway lane miles grew only 4.4 percent.a

•  From 1982 to 2005, hours of delay per traveler increased 171 percent and total hours of delay increased 425 percent; over this same period, the total cost of congestion increased 383 percent and in the nation's 437 urban areas that cost is now estimated at over $78 billion per year.b

•  As of 2006, over half of total VMT on the overall federal-aid highway system occurred on roads that were in less than good condition, many of which are in rural areas that connect these regions to each other and to urban centers. Over one-quarter of the nation's bridges are structurally deficient or functionally obsolete.a

Transit Performance

An efficient, safe, and environmentally sound network of public transportation facilities is

essential both to moving people and to ensuring the ongoing vitality of the U.S. economy. Public transportation also plays a significant role in our efforts to mitigate traffic congestion, conserve fuel, enhance transportation system efficiency (including of highways), and address air quality issues. The nation's transit systems, however, face many challenges:

•  Total ridership grew by 32 percent from 1995 to 2007 (2.4 percent annually) and recently surged in response to the increase in motor fuel prices that occurred in early and mid2008.c

•  Roughly one-quarter of the nation's bus and rail assets are in marginal or poor condition (near or past their useful life or have one or more defective or deteriorated components).d

•  Between 1996 and 2006, more than 460 miles of fixed-guideway public transportation were added across 26 cities (exclusive of commuter rail service using private rail facilities). As a result of ridership growth, however, some existing rail systems are operating near or in excess of their physical capacity and above a level that provides acceptable passenger comfort and safety.c

•  Many rural areas currently do not have any transit services, and in areas that do have service the quality and coverage are inconsistent.c

Freight Movements

Efficient and reliable freight movement is and will continue to be the lifeblood of the fatality rate declined by only 18.5 percent and the total number of fatalities actually rose by 4.7 percent. Since 2006, however, progress has been made. In 2007, the overall number of traffic fatalities on the nation's highways was the lowest since 2004, and improvement continued into 2008.g

•  From 1995 to 2006, annual transit-related fatalities dropped from 0.77 to 0.49 per 100 million passenger miles traveled, a reduction of 36 percent.h Looking forward, however, the National Transportation Safety Board has expressed concerns that the rail transit industry is not investing enough to protect its workers, passengers, and capital assets.d

Environmental Impact

The environmental impact of the surface transportation system is an increasingly important performance consideration. Future surface transportation investments not only must provide increased capacity and better efficiency but also must seek to minimize impacts on the physical environment as well as harmful emissions:

•  In 2007, the transportation sector was responsible for about 30 percent of U.S. carbon dioxide emissions.i

•  While highway emissions of several regulated air pollutants have fallen significantly over the last several decades, greenhouse gas emissions (principally carbon dioxide) continue to climb—and are up 28 percent since 1990, due to increased travel demand associated largely with population growth and the stagnation of fuel efficiency across the U.S. vehicle fleet.j

U.S. economy. Without a balanced and integrated network of freight infrastructure to support trucking, freight rail transportation, port activity, and intermodal transfers, we will not maintain our global economic competitiveness. Demand for freight movement is expected to increase rapidly in the future; our transportation system, however, is ill equipped to handle it:

•  From 1994 to 2006, ton-miles of freight moved by truck and rail grew by 31 percent and 52 percent, respectively, while the ton-miles moved by water shrank 31 percent.e

•  The top 25 truck bottlenecks in the United States (primarily at interstate interchanges) account for approximately 320 million total vehicle hours of delay and 37 million truck hours of delay each year.f

Safety

Continually improving the safety of our transportation system has been a high priority for transportation agencies at all levels of government. In the past, highway and transit safety performance has improved steadily and significantly overtime. But achieving further improvements, most importantly reductions in fatality rates, will require additional effort and investment:

•  From 1980 to 1994, the fatality rate (measured as deaths per million VMT) fell by almost 50 percent and the total number of highway fatalities declined by 20 percent. Improvements have been more modest in recent years; from 1994 to 2006, the highway 

Notes

a.  Federal Highway Administration, 2006 Status of the Nation's Highways, Bridges, and Transit Conditions & Performance (Washington, DC: U.S. Department of Transportation, 2007).

b.  Texas Transportation Institute, The 2007 Urban Mobility Report (College Station, TX: September 2007).

c.  Transit Cooperative Research Program, State and National Public Transportation Needs Analysis (Washington, DC: Transportation Research Board, September 2008).

d.  Federal Transit Administration, Transit State of Good Repair (Washington, DC: October 2008).

e.  Bureau of Transportation Statistics, National Transportation Statistics, Table 1 -46b: U.S. Ton-Miles of Freight, BTS Special Tabulation (millions), updated October 2008.

f.  Cambridge Systematics, Inc., Estimated Cost of Freight Involved in Highway Bottlenecks, prepared for Federal Highway Administration (Cambridge, MA: 2008).

g.  National Highway Traffic Safety Administration, Traffic Safety Facts (Washington, DC: U.S. Department of Transportation, 2006 and 2008).

h.  Federal Transit Administration, National Transit Database - Transit Safety and Security Statistics and Analysis Reporting.

i.  Energy Information Administration, Emissions of Greenhouse Gases (Washington, DC: U.S. Department of Energy, December 2008).

j.  Environmental Protection Agency, Inventory of Greenhouse Gas Emissions and Sinks: 1990- 2006, Table 2-15 (Washington, DC: April 2008).