Congress asked the Commission to consider the potential viability of a program that effectively would exempt a state from all or part of the federal surface transportation program. It has been contemplated that, under such a program, a state could "opt out" of the federal fuel taxes and the spending programs funded by them-in exchange for increasing its own state-level taxes and committing to maintaining and improving the transportation system within its borders to certain standards. The stated goal of such proposals is to shift much of the funding responsibility to the state so that it can determine its own transportation spending priorities. The underlying premise is that much of the current federal-level spending is misallocated by an inefficient process that dispenses funds according to outdated formulas and wasteful earmarks-and that the states are more flexible, closer to the transportation challenges that need to be met, and more accountable to transportation system users and taxpayers.
While sympathetic to frustrations about some of the federal funding decisions and program requirements associated with the current system, the Commission has serious reservations about any potential opt out program. These concerns stem from consideration of the appropriate federal role, required infrastructure investments, potential program mechanics, and the question of "devolution" of funding responsibility to the state level. The common theme of these interrelated issues, which are discussed in more detail below, is ensuring the integrity of the national highway and transit network.
The purpose of the federal program is to make sure that investments critical to the national network are made across the country, regardless of how or where revenues are generated. Our economic competitiveness as a nation relies on an effective and integrated surface transportation system. Federal involvement helps ensure that sufficient resources are allocated to meet the mobility needs of all citizens. Effective improvements to the national system require a national perspective, national coordination, and national funding.
Attempting to support the national system at the state level would be highly problematic- especially in light of the growing funding gap. Although it is desirable to develop performance standards guiding the operation and maintenance of existing assets by the states, that alone would not guarantee that necessary enhancements are made to the national network. In any given time frame, individual states may or may not have the resources available to make critical investments. And they likely would have conflicting priorities over time for making those enhancements to the network-both for highways and for transit. Furthermore, as summarized in Chapter 2, the levels of investment needed to maintain and improve the conditions and performance of the nation's highways and transit systems are significantly higher than current levels. It is not clear that states, absent federal support and acting on their own, could maintain existing levels of investment, much less close the gap and make necessary improvements to the national system.
The Commission recognizes that the specific definition of the federal role in surface transportation that Congress chooses to maintain or set in the future will drive the level of resources that must be generated at the federal level. But it also emphasizes that reducing the federal role would not mean that investment needs are reduced; the burden of meeting those needs would simply be shifted to individual states. In light of the serious performance crisis facing the nation's transportation system and the associated investment shortfall, the Commission has concluded that any attempt to implement an opt out program is inadvisaPle. Moreover, the proposed transition to a mileage-based fee system presents a real opportunity to address many of the concerns that lead to calls for states to opt out of the current program.