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June 2005
Looking past the gas tax: 4th Oberstar Forum examines transportation finance alternatives
James Oberstar
Tyler Duvall
Anne Canby
Tony Kane
Bill Millar
James Whitty
Steve Lockwood
C. Kenneth Orski
Barry Ryan
David Levinson
Max Donath
Lee Munnich
Regional and national transportation officials, policymakers, and professionals joined U.S. Rep. James L. Oberstar April 17–18, 2005, to discuss the future of transportation financing, including the gas tax and possible alternatives. This was the fourth meeting of the transportation policy and technology forum named in honor of Oberstar and hosted by CTS.
Oberstar headlined the two-day event, which featured USDOT acting assistant secretary for transportation policy Tyler Duvall, Surface Transportation Policy Project president Anne Canby, American Association of State Highway and Transportation Officials engineering and technical services director Tony Kane, American Public Transportation Association president Bill Millar, and Oregon DOT innovative partnerships and alternative funding manager James Whitty. Many other state and national leaders also attended. CTS director Robert Johns served as master of ceremonies.
"We have different pricing mechanisms for different sources of energy for transportation," Oberstar said, unveiling his vision for a national commission to examine all Highway Trust Fund financing options by 2009. "We've got to bring those all together in some unified system that brings us sustainability, certainty of revenue, and fairness and equity."
The portion of the event open to invited participants included a series of presentations and panel discussions following an introductory briefing on transportation financing from Parsons Brinckerhoff vice president Steve Lockwood as well as comments from Innovation Briefs editor/publisher C. Kenneth Orski. In addition, University of Minnesota researchers presented findings from their transportation financing-related studies. Barry Ryan from the Applied Economics department discussed current transportation finance mechanisms and challenges for Minnesota. Civil engineering assistant professor David Levinson described his research about the future of transportation networks and their financing.
During the public portion of the form, a panel of transportation leaders discussed short-term directions in transportation finance from a variety of perspectives. Duvall highlighted the Bush administration's proposal for financing surface transportation programs at an increased level of $284 billion through 2009. "We've also laid the groundwork in the policy arena for some fairly significant changes," he continued, "in terms of how we finance and manage our transportation systems in the future."
Next, Canby weighed in on the specific issue of tolls. "We must be mindful that we're talking about how we use a public right-of-way," she said. "At the moment, the public might not accept tolling options because the price of gas already is increasing the cost of driving. The double whammy of a toll might be a hard concept to sell."
But Kane believes the biggest challenge to the fuel tax is the lack of political will to raise it. "It has been 20 years since the gas tax was raised in Minnesota," he said. "I think the public is willing to pay a higher price for better service on their transportation systems."
Finally, Millar contemplated a shift from an indirect source of funding, like general taxes or gas taxes. "We need to talk about the entire system, all its components, and all that can be contributed to the system to make sure there's a way to fund each and every one of those components," he said.
The next panel moved beyond short-term issues and addressed future visions for transportation finance. Whitty described Oregon's year-long, road user-fee pilot program scheduled to roll out in late 2005. Using in-vehicle global positioning system (GPS) receivers linked to computers at select fueling stations, drivers will be assessed a per-mile charge based on the number of miles driven within the state or zone. "The intent is to replace the gas tax," Whitty explained. "We don't think this is the only solution or best solution. It's simply an option we want to prove can work."
Max Donath, director of the University's Intelligent Transportation Systems Institute, explained that the Oregon program is a very simple system. "Simple is what we should all be working toward," he said. "However, there are technologies available that facilitate even more differentiation than Oregon's zone system such that we can distinguish individual roads and allow each jurisdiction to recoup the cost of travel on its roads." These technologies include differential GPS and digital maps, which conceivably could offer high enough accuracy to track vehicles as they move back and forth between a high-occupancy toll (HOT) lane and a normal lane—and apply road use pricing accordingly.
Lee Munnich, director of the Humphrey Institute's State and Local Policy Program, added that studies during the mid-1990s concluded that technology was available to enable road pricing but it lacked political and institutional support. "We're beginning to see that we can't make the necessary changes without political leaders and champions," he said. "Not just because they do the legislation, but if they can't understand and explain something to their constituents, then there's no way change will happen."
Following the panel discussions, Oberstar addressed the pros and cons of various alternative financing mechanisms, emphasizing his belief that the gas tax still is a fair method of financing highway development. "All the users pay," he explained. "Although the system is not perfect, the amount of tax each user pays is generally equivalent to miles driven and use made of the system."
To close the event, Oberstar reiterated his hope that the forum continues to be "a place where ideas can clash" in a thoughtful and constructive way. "We're looking for short-term answers to our transportation problems," he concluded, "and long-term solutions to maintaining our sustainability, our competitiveness in the domestic and international marketplace, and our quality of life in today's society and for those who follow us."
Get more information about the James L. Oberstar Forum for Transportation Policy and Technology. A detailed report summarizing this year's forum will be available in July.