Among its other recommendations is the investment of $500 a year for six years to recapitalize State Infrastructure Banks. Designed to help states and local governments fund projects too small to qualify for the TIFIA program, the State Infrastructure Banks would make loans available to states and local governments through revolving funds.
In 2008 Congress made an emergency infusion of $8 billion to fill the gap between gas tax revenues and the funding that had been promised to states, although commissioners don't expect a reauthorization of the Highway Trust Fund this year. Instead they are urging Congress to take action no later than 2010, at which point some of the recommendations, such as the proposed gas tax increase, would take effect.
The current 18.4 cents a gallon gas tax and 24.4 cents a gallon diesel tax are not enough to keep pace with inflation-especially as the cost of road maintenance rises with the need for news roads-argues the commission, which also is urging Congress to raise the gas tax by 10 cents a gallon, raise the diesel fuel tax by 12 to 15 cents a gallon, and implement a VMT system.
The Financing Commission's recommendations are timely, coming just one week after President Obama's press secretary, Robert Gibbs, rejected a suggestion by Transportation Secretary Ray LaHood that the administration consider the VMT system, which would rely on global satellite positioning devices installed on all vehicles. The device would tally how much tax motorists owed depending upon their road use. The commission recommends that a VMT system be deployed by 2020.
"We're going to build more privacy into the VMT system than you have on your cell phone," Yarema adds when asked about criticism that raises privacy concerns.
Created to advise the House Ways and Means Committee, the commission isn't the only federal panel urging lawmakers to rethink transportation infrastructure funding. The National Surface Transportation Policy and Revenue Study Commission, which advised the House Committee on Transportation and Infrastructure, recommended last year that investment in surface transportation increase to at least $225 billion annually for 50 years from all levels of government, not just the federal government. It also recommended increasing the federal gas tax and imposing peak-hour "congestion pricing" on urban highways.
"If the federal government fails to act now,...we will face increasingly deteriorating roadways, bridges, and transit systems," the latest report states-and Yarema says that's not an exaggeration. "It's a physical and fiscal crisis. We've been living for several decades on the investment of a prior generation, and we've been assuming that the investment would carry us through. That assumption is fatally flawed," he says.
Yarema hopes Congress and the Obama administration recognize that the findings and recommendations are unanimous. "There are not a lot of good choices, so our recommendations are multifaceted," he explains. "This is a holistic problem."