Innovative transport projects have caught on in a big way, especially with America’s towns and cities. But national policies lag far behind. When it comes to transportation policymaking, it’s time for Congress to stroll along Main Street.
All over the country, we hear the trumpeting of local policies designed to promote walking and biking, the rising popularity of urban bike share systems, even the raising of local taxes and issuing of bonds to support local public transit service. Indeed, more of America’s mayors and city managers, together with their departments of transportation and spurred on by community groups, are finding new and better ways of utilizing their streets.
While local efforts are significant and critical, a wholesale paradigm shift is needed to accelerate the upgrade of the U.S. transportation system. Many local officials will tell you that their most innovative transport projects are either stalled in or workarounds of government red tape and budget confusion. Such barriers must be removed if we hope to provide better transportation options to more places across the country. Every community deserves a functioning economy, cleaner air, safer streets, and less gridlock. Even during the recent recession, the cost per retail square foot in Times Square quickly rebounded after the pedestrianization of Broadway and now competes with the most expensive retail space in New York City, Madison Avenue.
Thinking local is not enough. Flourishing local efforts must be bolstered by a sound national transportation policy complete with a long-term strategic vision, guided with performance benchmarks, and underpinned by adequate revenue sources.
To help address this need, the Carnegie Endowment for International Peace assembled three bipartisan leaders, former senator Bill Bradley, former governor and secretary of homeland security Tom Ridge, and former comptroller general Dave Walker to examine opportunities to change the course of transportation through its funding mechanism. In the culminating report, Road to Recovery: Transforming America’s Transportation, we found that not only does the current transportation system contribute to the national deficit by as much as $100 billion annually, it no longer gives the country a return on investment. We also found that there is a light at the end of the tunnel; reform the program, and you not only upgrade the nation’s transportation system to maintain global competitiveness and increase mobility choices, you reap co-benefits in health care cost savings, reduce defense spending, and make significant progress on environmental mitigation.
Funding must be fair, transparent, and sustainable. The transportation program’s primary revenue source is currently the federal gas tax, which is unsustainable. Over time the gas tax has not kept pace with increasing costs of maintenance and construction. As for transparency, recent polls show that the majority of Americans don’t know what the federal gas tax is—it’s 18.4 cents per gallon federally; across the country, total gas tax including local, state, and federal average about 43 cents. Moreover, 60 percent of Americans believe that it goes up every year—in reality its last increase was in 1993 for deficit reduction reasons. Regarding fairness, economic research concludes that the gas tax is a drop in the bucket compared to the overall cost of driving. Those who believe that motorists alone should benefit from road improvements fail to recognize the full cost of driving and the benefits of pricing it fairly.
It’s time that those who benefit the most—oil companies—shoulder more of the burden of the nation’s transportation system. More than 70 percent of our oil supply is consumed by transportation. We send $161 billion per year to countries classified as dangerous or unstable by the state department to continue this consumption.
We recommend that a per-barrel oil fee be added to fill the funding gap. An upstream oil fee would be accompanied by a variable gas tax at the pump. When the global price per barrel increases, the gas tax is abated. When the global price goes down, gas tax slowly increases. For drivers, this creates a predictable price band for gas. For the country, it funds overall mobility. In short, this revenue strategy is a good, immediate solution to filling the funding gap until other options can be implemented.
Congress persisted in delaying action on a new transportation bill and the gas tax over the last year. Last fall, the super-committee, charged with coming up with a deficit reduction package, petered out without any results. At the same time, a group of seven former U.S. transportation secretaries and assorted experts came together at the University of Virginia’s Miller Center to discuss the federal transportation policy impasse. The conclusion: “go local.”
This March 2012 when the latest transportation bill expires, or more realistically in 2013 after the presidential election, Congress has another opportunity to reassess the national transportation program—its vision, goals, structure, and funding.
Federal policymakers need only to look down Main Street. Towns, rural areas, and cities across America are all in on the action, developing local solutions to mobility problems that cannot wait any longer. Collectively, their actions speak volumes about untapped ingenuity that promises a brighter future for U.S. transportation.
Congress should genuinely reform and work to fund a federal program that supports local efforts. Our prosperity and climate and security solutions can all be found on Main Street.
The Carnegie Energy and Climate Program engages global experts working on issues relating to energy technology, environmental science, and political economy to develop practical solutions for policymakers around the world. The program aims to provide the leadership and the policy framework necessary to minimize the risks that stem from global climate change and to reduce competition for scarce resources.
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