In Pennsylvania, Democratic Governor Edward G. Rendell and the
Republican-controlled Legislature achieved a breakthrough by agreeing to
permanent funding of the two largest transit systems in the State, PAT
in Pittsburgh and SEPTA in Philadelphia.
Now, however, comes word that the Highway Trust Fund is about to run out
of money. Mass transit receives 20% of the Highway Trust Fund Revenues.
Federal transit revenues are received at the rate of 80% from the Trust
Fund and 20% from the General Operating Fund. It is highly unlikely that
Congress will vote to increase the Federal fuel tax, which finances the
Highway Trust Fund, in this election year but if Congress does increase
the tax rate President George W. Bush is all but certain to veto the
increase.
So what is a state to do to make up for the Federal revenue shortfall? I
served on the National Surface Transportation Policy and Revenue Study
Commission. We anticipated the Trust Fund shortfall although it is
coming much earlier than anticipated because of the decline in
automobile travel in the wake of $4 gasoline. We made several
recommendations which Pennsylvania officials would do well to examine.
First, every State also taxes fuel. It most likely would be easier to
raise the taxes at the state level and if the Pennsylvania Legislature
agrees to do so it would be almost certain that Governor Rendell would
sign the measure.
Secondly, we recommended that a ticket charge be initiated for every
trip taken. That would be difficult to implement at the city level but,
for example, tickets on the Keystone service between Harrisburg and New
York are a perfect candidate. Even SEPTA's interstate lines to Trenton,
New Jersey and Wilmington, Delaware might have the "pay as you go"
ticket tax applied to those routes. At least one community is taxing
hotel rooms to pay for its proposed light-rail system.
Our most controversial recommendation was to implore Congress to remove
the barriers to pricing and trading. There are roads that currently do
not have tolls which could support tolls. In fact, the Pennsylvania
Congressional Delegation should join with other state delegations to get
Congress to permit tolling on some interstate highways. In addition,
some experiments are taking place which have initiated
congestion-pricing. That ought to be examined carefully. If it cost more
to drive on a certain road in peak hours motorists would need to choose
between driving at the busiest periods and waiting to drive in off-peak
hours. Those who elect to travel at peak times could be charged for the
privilege.
The Commission also recommended more extensive use of Public-Private
Investments (PPI). Many states and localities have leased sections of
their highways and bridges to private investors. The investors get to
keep the revenues they receive from tolls or congestion pricing. In
Europe Public-Private partnerships have been tried with rail facilities.
There is no reason they can't be tried here as well. The Commission said
it could not support Public-Private partnerships if the investors were
from abroad. We believe only domestic PPIs should be permitted.
I frequently am asked which one of these solutions should be adopted by
States and localities. I tell the questioner, "all of the above." If
America is to invest in the level of mass transit needed to give
taxpayers a real choice to drive or take transit, revenues must increase
significantly at the state and local levels.
Some have claimed that the Commission is too pro-rail. That charge is
false. We are for giving citizens a choice. If they elect to drive they
ought to pay more of the actual cost of that decision. If they choose
transit we would need to face this fact. Half of America has no real
transit facilities available. Those which do offer an alternative are
often unattractive, do not keep a reliable schedule and in some cases do
not go where people want to go.
While the depletion of the Federal Highway (and Transit) Trust Fund is
causing major heartburn all across America, in the long run it may be a
blessing. States and localities will be obliged to face up to their
obligations and responsibilities to make transit the mode of choice for
the average American.