Thanks to the leadership of Sen. Barbara Boxer and the support of local leaders like Los Angeles Mayor Antonio Villaraigosa, the United States has a 27-month surface transportation authorization bill. It ensures critical infrastructure projects – like the Interstate 405 Sepulveda Pass Improvements Project – continue for at least another two years by providing stable funding. In addition, through the America Fast Forward lending program, the Los Angeles County Metropolitan Transportation Authority will have the opportunity to build 12 major mass-transit projects in 10 years rather than 30.
Yet a big problem remains unresolved: Where will the money come from in the future? The fact is the well from which the nation – and California – draws transportation funds is running dry.
However, a simple change in how we think of our roads, bridges and tunnels could generate a giant leap forward toward solving this transportation funding crisis. Instead of seeing surface transportation facilities as a build-it-once-and-forget-it proposition, we should view them for what they really are: public utilities.
While they often are taken for granted, public utilities are essential to our modern way of life. Yet every day we depend on transportation every bit as much as other similarly essential services, including electricity, water, sewers, natural gas and telephones.
Across the country, the mechanism for properly funding these modern necessities is public utility commissions. Independent boards are responsible for ensuring local, regional and state utility companies have enough revenue to meet the public need, but not so much that they generate excessive income.
Public utilities champion the common good.
But why treat transportation as a public utility? Because the way we’ve been doing it is broken.
Our highway system is funded largely by per-gallon federal and state fuel taxes along with various vehicle user fees. The federal fuel tax hasn’t been increased since 1993. While California’s was last raised in 2010, this was accompanied in part through simultaneous decrease in the state sales tax. And each time the price of gas closes in on the $4 per gallon mark, politicians looking to score points with a cash-strapped electorate propose a tax holiday or – most recently in California’s case – a refund of the state sales tax on gasoline.
It’s obvious that California voters don’t want their federal or state taxes raised. When have Americans ever been in favor of increasing taxes on themselves? But even though suspending or refunding fuel-related tax proceeds may be politically popular in the short term, it most definitely is not in the long-term interest of the common good.
Adequately funding critical transportation infrastructure is a matter of economic survival. Yet our growing demand for transportation always seems to outpace our current funding structure’s ability to pay for it.
According to the California Department of Transportation’s most recent 10-year operation and protection plan, the state faces a $4 billion annual shortfall in its ability to operate and rehabilitate the existing state highway system. This isn’t just a challenge for policymakers – it hits Angelenos right at home and in their pocketbooks. In 2009, the TRIP transportation research group reported 92 percent of L.A.’s major roads were in poor or mediocre condition. That costs area motorists 70 hours per year in traffic and $2,462 per year in higher vehicle operating costs, traffic crashes and congestion-related delays. These are often hidden, yet much higher, costs than what we pay at the pump.
Ignoring this issue costs us our safety and the ability to maintain the kind of healthy lifestyle and growing economy we desire for the state and region.
Take out the politics
A very workable solution would be to take the politics out of transportation funding. Rather than forcing elected officials to make potentially career-ending decisions, independent commissions could regularly adjust fuel tax rates and other fees to ensure our transportation network’s long-term viability.
These independent transportation rate commissions could be formed at both the state and federal levels of government. And, to keep the process in check, the California Legislature and Congress could have the power to overturn by a super-majority vote any decision the commissions make.
Existing utility commissions provide a ready-made model for us to follow and improve upon.
California could implement such a strategy. A public utility approach would ensure the state has a safe, adequate surface transportation system. An independent commission also would prevent transportation agencies from collecting more revenue than they need to serve the public’s interest.
We’ve seen such solutions work in the past at the federal level, perhaps most effectively with the military’s Base Realignment and Closure Commission. When it became politically treacherous to select which U.S.-based military facilities to cut or close, Congress delegated the decision-making process to an independent commission.
As a nation, we must ensure we are investing adequately in our transportation system so it remains a valuable asset, not a national liability. For Gov. Jerry Brown and state legislators who want to address the transportation crisis but not agonize over tax issues, managing the state’s transportation system as a public utility is a smart solution.
Pete Rahn is the national transportation practice leader of HNTB Corp., an employee-owned infrastructure firm in Kansas City, Mo.
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