Sen. Barbara Boxer, D-Calif., yesterday butted heads with Department of Transportation Secretary Mary Peters over her contention that the nation's growing transportation needs can be met by more efficiently allocating existing gas tax revenues and increasing the use of tolling and private financing.

"It is a false expectation for people to believe that we can meet our needs as a great and growing and strong nation" using Peters' funding agenda, Boxer, chairman of the Senate Environment and Public Works Committee, said at a hearing on the issue. "It is very disappointing to me."

The hearing is one of many that transportation lawmakers will hold this year as they prepare to begin drafting legislation to replace the current transportation policy and funding law, which expires next year on Sept. 30, the end of fiscal 2009.

Boxer's comments come after the National Surface Transportation Policy and Revenue Study Commission, a congressionally mandated panel charged with making funding and policy recommendations, last month suggested that at least $225 billion a year for fifty years be provided from all levels of government and the private sector.

"How we come up with $225 billion a year by simply allocating our resources more efficiently and encouraging states to impose fees such as tolls and congestion pricing is just not going to happen," Boxer told Peters. "I find your testimony a tremendous letdown."

In her comments to the committee, Peters argued that the federal government should have a reduced role in the transportation program. For example, the federal gas tax should continue to be collected by the states, but they should keep the revenue, she said.

Currently, states pay the gas tax receipts into the federal highway trust fund. The revenues are then distributed back to states under a formula. States sometimes use their trust fund allocation to repay bonds issued to finance transportation projects. Increased private sector funding and tolling would supplement the gas tax revenue.

"I confess to you I am a minimalist when it comes to" the transportation program, Peters told the committee.

Boxer - who intends to explore all kinds of funding mechanisms, including increased municipal bond issuance - said that she is interested in the idea of moving to a funding system that charges drivers based on miles traveled. But she is opposed to using global positioning system technology to monitor the travels of roughly 247 million registered vehicles because of privacy issues.

Her opposition to the use of GPS, which is also opposed by Sen. James M. Inhofe, R-Okla., the committee's ranking minority member, raises the question of how the vehicle miles traveled, or VMT, system would be enforced.

One of the advantages of using GPS is that the federal government would be able to charge drivers a higher fee for using a particular road during peak hours, according to JayEtta Z. Hecker, director of physical infrastructure issues for the Government Accountability Office, who also appeared before the committee.

Other lawmakers on the committee also showed interest in a VMT system.

"I understand the privacy concerns," said Sen. Johnny Isakson, R-Ga., But with increasing numbers of "hybrid vehicles and higher [auto fuel efficiency standards on the horizon], the old cents-per-gallon mechanism just does not work and we have to be willing to look at alternative fund raising mechanisms that reflect what is going to be the reality of the 21st century."

Sen. David Vitter, R-La., said he supports additional tolling and asked Peters, whose term expires with President Bush's next January, to prepare some ideas before she leaves to aid in the reauthorization of the existing transportation bill.

"I think we actually missed an important opportunity in the last highway bill not doing more in that area and not providing more flexibility," Vitter said. "And I hope we don't miss it again in the next highway bill in 2009."

Restricting tolling to only new roads and lanes could build consensus for greater use of tolling, he added. q

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.