The Financing Commission-with valuable input and technical assistance from the Federal Highway Administration-developed its own estimates to respond to its congressional mandate to examine needs for HTF resources (the methodology used to develop these estimates was generally consistent with that used by the U.S. Department of Transportation in developing its biennial Conditions and Performance reports as well as that used by the National Surface Transportation Policy and Revenue Study Commission). This effort resulted in the Base Case Investment Scenario, which provides an update to total and federal long-term capital investment needs for highways and transit based on current policies and programs and the historical federal/non-federal spending roles. (The Commission also examined investment needs assuming an alternative strategy, one that assumes aggressive implementation of road pricing and greater use of public transportation, which is described in Chapter 2.)
Exhibit A-1 summarizes the results of this Base Case Investment Scenario. Total annual capital investment (from all sources) needed just to maintain current conditions and performance is estimated to average $131 billion for highways and $42 billion for transit, in 2008 dollars. This translates into annual federal highway and transit spending requirements of $59 billion and $19 billion, respectively, for a total of $78 billion. Using the Commission's Baseline Forecast of average annual HTF revenues of $32 billion (2008 dollars averaged over the 2008-35 period), the resulting annual federal investment gap for highways and transit is $46 billion. In addition, the total average annual spending (for all levels of government) needed to go further and improve the system under the Base Case Investment Scenario is $165 billion for highways and $49 billion for transit. The associated annual federal funding requirement is $96 billion for highways and transit combined, leaving an annual federal revenue shortfall of $64 billion.
The Baseline Forecast of average annual HTF revenues of $32 billion (2008 dollars) is only 41 percent of the estimated amount of federal spending needed to maintain the nation's highways and transit systems and a mere 33 percent of the estimated annual amount needed to improve conditions and performance (using a benefit-cost ratio threshold of 1.2).
EXHIBIT A-1: BASE CASE NEEDS FORECAST | |||||
(all figures in billions of 2008 dollars) | |||||
| Need to Maintain Scenario | ||||
| Total | Federal | State/Local |
| |
| Highways | $131 | $59 | $72 |
|
| Transit | $42 | $19 | $23 |
|
| Total | $172 | $78 | $95 |
|
| Revenues | $76 | $32 | $44 |
|
| Gap | $(96) | $(46) | $(50) |
|
| Need to Improve Scenario | ||||
|
| Total | Federal | State/Local |
|
| Highways | $165 | $74 | $90 |
|
| Transit | $49 | $22 | $27 |
|
| Total | $214 | $96 | $118 |
|
| Revenues | $76 | $32 | $44 |
|
| Gap | $(138) | $(64) | $(73) |
|
|
|
|
|
|
|
Note: Sums may vary due to rounding