Sustainable Funding for Sustainable Infrastructure

New York City -- This past Friday, Princeton University's PRIOR Center and the NYU's Rudin Center convened a conference on what's next in transportation. The speakers, who included Mort Downey, former Deputy Secretary of Transportation and leader of the Obama transition team for transportation, Tony Shorris, former head of the New York and New Jersey Port Authority,  current PA chairman Anthony Coscia, and others agreed that we are at a crossroads in transportation policy. 

On the one hand, there has never been more enthusiasm for new modes of transportation such as high-speed rail and new approaches such as vehicle mileage tolling and congestion pricing. Billions in the stimulus bill and the Obama budget for rail have set off a frenzy of excitement about building high-speed rail in the United States. At the same time, however, the old system of funding infrastructure, the Highway Trust Fund, fed by gas taxes, has never been under greater stress. With a new transportation authorization bill likely to move this year, we stand at a key juncture in U.S. transportation policy.

Transportation reform is vital to building a clean economy. Not surprisingly, therefore, much of the discussion at Princeton focused on the irony of trying to fund the reinvention of transportation out of a five-cents-per gallon gas tax -- at a time when reducing gas consumption has emerged as a national security, economic and environmental priority.

Currently, the Highway Trust Fund, built on nickel-a-gallon gas tax accounts for the lion's share of infrastructure funding in the United States -- not only for roads, but for mass transit as well. But the fund essentially depleted (having required a bailout last fall to stay solvent).  Additionally, with construction prices higher but gas usage falling, the gas tax now provides only about half the purchasing power needed to sustain our current system, let alone make improvements.

As a result, many people have been talking about switching to a Vehicle Mileage Tax or VMT as an alternative to the gas tax. A VMT would toll mileage, not gas, enabling the country to reduce gas consumption without starving its infrastructure. However, the "t word," as Mort Downey has described it, whether that refers to taxes or tolls, is highly controversial and recently White House Press Secretary Robert Gibbs struck down a suggestion by new Transportation Secretary Ray LaHood that switching to a VMT is on the table.

One alternative that would sustain historic levels of funding but would not provide funds for much new investment would be a dime-a-gallon tax. That would be the easiest -- if least imaginative -- fix.

A bolder idea is to create a national infrastructure bank as proposed by U.S. Sens. Chris Dodd and Chuck Hagel to tap private money for infrastructure investment, an idea endorsed by NDN. Indeed, the Obama budget would fund such a bank. However, in the current environment, private money is not as available as it was.

Last week, U.S. Rep. Earl Blumenauer, who spoke at NDN's clean infrastructure event in January, introduced Clean Tea legislation to tap 10 percent of revenues from a cap-and-trade system of the type contemplated by the Administration's budget for transportation. Given the key role of transportation in emissions and cleaner transportation in reducing emissions, this makes a great deal of sense. 

Everyone recognizes that the old system of a nickel-a-gallon tax combined with earmarks isn't working. There is a great appetite to reform the basis for funding infrastructure and this year, a real opportunity.