Panel Sees Best Hope for Transportation on the Local Level

SAN FRANCISCO — If there are any solutions to the nation's persistent shortfalls in financing transportation infrastructure, they're more likely to come from the local level, according to members of an expert panel Friday.

"The current political climate is generally unfavorable to tax increases," moderator Norman Mineta, a former U.S. transportation secretary, said to kick off the discussion. "What options will be politically feasible in the short and medium term?"

San Jose State University's Mineta Transportation Institute sponsored the panel at San Francisco's Commonwealth Club.

None of the panelists believe higher federal fuel taxes are imminent, despite the continuing shortfalls in the federal highway trust fund and the federal fuel tax's declining effectiveness.

"There is no political appetite in Congress or with the president to raise fuel taxes," said John Horsley, executive director of the American Association of State Highway and Transportation Officials. The per-gallon excise tax has not increased since 1993.

"There are very few things in my household that were the same price in 1993," said William Millar, president of the American Public Transportation Association. "We've lost a lot of purchasing power in that gas tax."

It's been even longer since California raised its state excise tax on gasoline, and that's not likely to change, either, according to state Sen. Alan Lowenthal, D-Long Beach.

"The political will remains missing," he said.

California's funding choices for transportation — which include a pledge of sales tax from gasoline purchases, since revoked, and a $19.9 billion bond measure voters approved in 2006 — have pushed financing away from a user-pay funding basis toward the state general fund, Lowenthal said.

"We're subjecting transportation to the same revenue vagaries general fund programs face," he said.

Gas taxes, generally speaking, remain unpopular, noted Asha Weinstein Agrawal, director of the Mineta Institute's National Transportation Finance Center. A recent opinion survey she helped coordinate offers some insight into the nature of that opposition.

When the national survey asked people what they thought about a 10-cent-per-gallon gas tax hike, only 23% responded favorably.

"To many people in this room, perhaps a depressing result," Agrawal said.

When the gas tax hike was linked to projects that reduce the impact of transportation on global warming, 19% of those surveyed switched from opponents of the tax hike to supporters. And when survey participants were told the hike would be phased in over five years, 16% changed their opinion from "no" to "yes."

Only at the local level is there any momentum toward increasing transportation funding, panelists said. They cited the California example, where voters in 19 counties have voted sales tax hikes for local projects in elections that require a two-thirds majority.

"When Americans understand what they're getting for their investment, they're much more likely to vote for transportation taxes," Millar said.

Lowenthal said the relative ease of passing local projects indicates a bottom-up funding approach may be more successful. The panelists did not envision public-private partnerships playing a dominant role in future transportation funding.

"It's just not a sustainable way to finance our entire transportation system," Agrawal said.

For reprint and licensing requests for this article, click here.
Transportation industry California
MORE FROM BOND BUYER