The “dog days of summer” have been with us for several weeks, coinciding perfectly with Congress’s annual August recess. All is quiet on Capitol Hill – for the moment. But even as lawmakers enjoy some time off, we have to believe that many are keeping an eye on what promises to be a complicated autumn agenda. Especially when they think about a Federal Highway Bill and long term transportation funding!
For anyone who wasn’t following the news a few weeks back, Congress recessed after passing yet another 3-month extension that will keep the Highway Trust Fund solvent until the end of October. Not that our legislators didn’t try to do more. As the last extension approached its expiration on July 31, there was a flurry of Congressional activity. The hope was that, maybe this time, the U.S. would gain a solid Federal transportation program with funding for the long term. It was not to be.
In mid-July, the House proposed a 5-month extension to give lawmakers time to iron out a long term program by the end of 2015. But the Senate had a bigger plan. Rather than enduring yet another short term funding extension, the Senate developed a 6-year transportation bill which they hoped the House would embrace. However, the Senate program was only funded for three of the six years. The House wasn’t buying. When the dust settled at the end of July, both chambers agreed on the 3-month extension, the 34th short term funding patch since 2009. The Senate also passed its own 6-year plan, setting the stage for more Congressional debate this fall.
So what’s different this time around? Well, despite differing opinions on funding mechanisms, both House and Senate have been exceptionally vocal about their goal of passing a long-term transportation program sooner rather than later. When the House proposed its 5-month extension in July, Republican leaders indicated that the short-term measure would give them more time to develop a long-term highway bill. “We want to do a multi-year highway bill, and typically a multi-year highway bill means a six-year bill, and that is our aspiration and that is our goal,” said Rep. Paul Ryan (R-WI), the bill’s co-sponsor. “So we’re here to extend the Highway Trust Fund through December 18 to give us the time we need to put together a multi-year solution.”
After passing its own 6-year highway bill, the Senate spoke in a similar vein. Senate Majority Leader Mitch McConnell (R-KY) said, “The multi-year nature of this legislation is one of its most critical components. It’s also something the House and Senate are now united on.” McConnell also noted that passage of the new 3-month funding extension gives the House space to develop its own long term-plan. “We all want to work out the best possible legislation for the American people in conference later this year,” he said.
It’s clear that Congressional leaders have placed development and passage of a sustainable, long-term highway bill right in the bull’s-eye for late 2015. Can they make it happen? We’ll see. But as summer winds down and lawmakers enjoy the last few days of August recess, it’s a good bet that transportation funding is very much in mind.
TRIP, a Washington, DC based national transportation research group, has released a new Ohio-focused report titled, Modernizing Ohio’s Transportation System: Progress and Challenges in Providing a Safe, Efficient and Well-Maintained Transportation System. The official announcement included several media events held last week in Columbus, Cleveland, Cincinnati, Toledo and Dayton. Representatives from local Chambers of Commerce, Regional Planning Commissions and the AAA joined TRIP officials in each locale.
The TRIP report acknowledges that Ohio has made progress, even without any recent increases in state or federal transportation revenues. Through operational improvements and the use of bonds backed by the Ohio Turnpike, the Ohio Department of Transportation (ODOT) has been able to increase construction investment in the state’s roads, highways and bridges from $1.6 billion in 2011 to $2.4 billion in 2014 and 2015. The increased investment helped keep state-maintained roads and bridges largely in acceptable condition.
But the TRIP study also emphasizes that current investment levels have not been adequate to close a funding shortfall for transportation improvements. In fact, ODOT has an $11.6 billion backlog for necessary road, highway and bridge improvements which are currently unfunded. Granted, the huge backlog cost includes every road and bridge problem throughout the state. All of those improvement projects would never commence at the same time. However, it is important to note that the new transportation budget recently passed in Ohio reduces highway and bridge construction spending to $1.9 billion in 2016 and $1.7 billion in 2017. That may reflect more typical annual budgets than the past two years, but it still means fewer funds for construction.
Equally important is the issue of whether Congress will approve a long term federal transportation plan that will ensure highway funding for years rather than months. The Highway Trust Fund contributes $1.3 billion to Ohio’s transportation budget annually, dollars needed to help fund road and bridge work throughout the state. But short term extensions of a few months make it difficult to plan future construction projects. Hopefully Congress will act this summer as the latest in a long series of short term extensions expires at the end of July.
In addition to transportation funding, the TRIP report is loaded with information on pavement and bridge conditions in Ohio, traffic congestion, highway safety and economic development. We’ll explore those topics further in upcoming posts. If you would like to delve in on your own, you can access the entire report at ocianews.com. Could be time well spent!
Congress voted in late May to extend Federal highway and transit program funding for another two months. Safe through July 2015! As Pete Ruane, President of the American Road & Transportation Builders Association (ARTBA), noted: “The good news is that Congress didn’t punt on the program for the rest of the year, putting the 2016 construction season in jeopardy.” Nevertheless, the two-month fix is another in a long series of short term funding extensions. So where do we go from here?
Congress is no doubt sincere about finding a viable revenue solution that will fund America’s transportation infrastructure for the long term. Many alternatives are under consideration. And everyone – business and citizens as well as the legislators themselves – hopes that Congress will succeed before the extension expires. We have much at stake and we’ll see what happens by late July. Between now and then, it is worth remembering that, throughout America’s history, our greatest leaders always took action whenever the country needed to get something important done. Our greatest leaders didn’t punt!
A new television commercial from the American Road & Transportation Builders Association (ARTBA) presents some very sensible recommendations for fixing the Highway Trust Fund for the long term. Instead of relying on temporary budget solutions to fund the nation’s highway and transit program, the commercial points out that a $0.15 increase in the highway user fee would permanently relieve the $16 billion dollar annual deficit in the Highway Trust Fund. It would also pay for a 6 year highway and transportation bill and fund investments in our national freight network and essential public transit systems.
What does the proposed increase mean for our wallets? Not much. A 15 cents-per-gallon increase in the federal motor fuel tax – which truly is more of user fee than a tax – would cost the average driver $0.24 per day. That works out to just about $87 per year. Given all the benefits of having a sustainable Highway Trust Fund, this seems like a no-brainer.
Check out the new ARTBA commercial, “Getting Beyond Gridlock”, to learn more!
A 180 to 200 percent return on investment (ROI) would be considered “good business” or a “good investment.”
OK, before you say, “I don’t know anything about ROIs, and I certainly don’t have any extra money to invest.” You – and more than 210 million people in the U.S. – are already making the investment and are a benefactor because of it. That’s according to a report by IHS Global, “Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of the Federal Highway and Mass Transit Program.”
Wait, wait, wait; don’t let the “ROI” and “macroeconomic contribution” confound you. You see, if you drive, you’re driving the economy. Each person who purchases motor fuel for their cars is making a contribution – or investment – into the federal transportation system.
For each gallon of motor fuel the U.S. driver purchases, an investment of 18.4 cents is made to the federal government’s highway, bridge and public transit infrastructure programs. While the average American driving 11,500 miles a year is paying less than $100 a year – that’s less than $2 a week – in federal gasoline tax, it adds up. Remember the last rush-hour traffic jam you were sitting in? There are a lot of drivers, or investors, on the nation’s roads, so the total investment equals around $50 billion a year.
Associated General Contractors of America CEO Stephen Sandherr said the IHS Global report “makes clear is that our entire economy benefits from federal investments in highway and transit projects.”
The ROI for drivers is not only a 46,000-mile, 610,000-bridge federal highway system – which allows us to commute to work, school and other activities that improve the American lifestyle – but much more according to IHS. The research shows that federal government’s investment in the nation’s highway system boosts the country’s job market and tax base – and thus the economy – provides additional pocket money for all, and much more:
Not Investing has its Consequences
A failing transportation system has widespread consequences, as the country’s physical transportation infrastructure is a major driver of manufacturing competitiveness. A failing transportation system also affects the travel industry and the people and businesses involved in that sector. “When our 2-trillion-dollar travel sector isn’t functioning well, it costs us in tax revenue, jobs,” said U.S. Travel Association President/CEO Roger Dow. And when “the hassle of dealing with the highway system” causes travelers to stay home, this affects waiters, hotels and more. “It’s critical to invest in infrastructure,” Down says. “It isn’t just about roads, it’s about how America does business – and we’re all in this together.”
The message resounds from the halls of Congress to the local news desk: “The U.S. needs a long term transportation plan!” Now, as the Highway Trust Fund faces insolvency once again, ideas for increasing transportation funding have taken on a new life. Many funding proposals have surfaced in Congress and legislators from around the country have suggested alternative funding methods for their states as well. The discussion is long overdue, and Ohio should be part of it. With the 4th largest interstate system and the 2nd largest bridge inventory in the nation, Ohio needs dependable highway funding for the long term.
Highway Trust Fund insolvency would rapidly quash infrastructure projects across the county. Without federal dollars to supplement state gas tax revenues, the negative impact on state Departments of Transportation, the highway construction industry and local economies would be immense. But another funding extension that keeps the Highway Trust Fund going for an additional six to nine months isn’t the answer. Short-term fixes fail to solve the long term challenge – building a sustainable transportation program that will carry America forward for decades.
Few disagree that the U.S. needs to improve the condition of roads and bridges throughout the country. It makes good economic sense to do so. But there is much more debate about how best to fund the process. So let’s start with the basics. A motor fuel user fee in the form of a gas tax is the primary funding source for highway construction and maintenance in America today. It is also the most reasonable funding alternative currently available. It’s time to revisit!
Check out our newest brochure, Highway Funding Revisited, for a quick look at gas tax history, why its purchasing power has declined in recent years and why increasing the gas tax remains the single best option for boosting revenue.
Talk about geographic advantage! The Buckeye state sits within a single day’s drive from 60% of the U.S. and Canadian population, making it a freight and logistics hub for the entire country. Companies in just about every industry depend on Ohio’s transportation system for reliable and timely shipment of everything from bulk commodities and machinery to thousands of items that line your grocery store shelves. The economic impact of all this activity is enormous.
Commercial trucking carries a major portion of the load with shipments accounting for 68% of the freight flow in Ohio. That translates to more than $438 billion in goods shipped, giving Ohio the 3rd largest freight payload in the nation. And looking ahead, the freight volume moved by truck is expected to increase 67% by 2040!
The other major freight transportation modes make a huge economic impact as well. With 36 railroads in service and 5,300 miles of track, Ohio ranks 4th nationally in total active rail miles and 6th in the number of operating railroads. The rail system accounts for 28% of the freight moving through the state. Ohio also ranks 4th in the nation in the value of shipments moved by water. The Buckeye state’s 26 ports have a $6.5 billion impact on the U.S. economy. Overall, the combined freight volume for transportation modes is projected to increase by 639 million tons annually by 2040!
There’s no question about it. Ohio’s network of highways, bridges, railroads and waterways comprise a powerful economic workhorse that benefits industries and communities throughout the nation. As more demand is placed on our transportation system in the coming years, we need to make sure that it can handle the load – safely and efficiently.
Check out our “Driving the Economy!” brochure to learn more about the impact of transportation in Ohio.
Transportation is a major driver of the nation’s economy, employing millions of workers, moving people and goods 24/7, generating revenue and utilizing the resources and services provided by other industries. Transportation impacts the life of every American on a daily basis. There is no better place to witness the impact of transportation at work than right here in Ohio.
Let’s take a look at employment. In Ohio, the design, construction and maintenance of transportation infrastructure supports the equivalent of 109,349 jobs, ranking the state 7th in the nation for transportation construction employment. Approximately 54,500 of these jobs are directly involved in transportation construction. They are full-time positions paying an average salary of $49,459. The remainder includes approximately 54,800 jobs sustained by transportation design and construction industry spending throughout the state. Collectively these employees earn an annual payroll of $4.2 billion and contribute $365 million in state and federal payroll tax revenue.
Additionally, more than 2 million full-time jobs in key Ohio industries such as manufacturing, agriculture, retail sales and tourism are dependent on the work done by the transportation construction industry. None of these industries – as well as many others – could function efficiently without a reliable highway network connecting communities within Ohio and throughout the nation.
Transportation construction is indeed a major employer in Ohio. And the roads and bridges built by the construction industry are relied upon by all. Keeping them in the best shape possible is just common sense.
Check out our “Driving the Economy!” brochure to learn more about the impact of transportation in Ohio.
The countdown has begun. No, not for Christmas.
The countdown has begun for the busiest day of the year. No, not Black Friday.
The busiest day on our nation’s roads is here! The day before Thanksgiving – Wednesday – TODAY – is traditionally the busiest travel day in our nation. And with some of the lowest gasoline prices in several years, Americans are more likely to be hitting the roads even more.
“Encouraged by low gas prices and a steady economy, travelers will experience more traffic on our roads than in recent years when more people stayed closer to home for the holiday,” said INRIX Analyst Jim Bak. “… Drivers will battle more traffic heading out of town this year, particularly on routes near major airports.”
If you’re one of 46 million Americans – that’s roughly one out of every seven people in our nation – heading over the hills and through the woods to grandma’s house this weekend, you’re enjoying both the lowest gasoline prices in five years and the busiest highways in seven years. Regarding the gas prices, according to AAA, the average price at the pump for regular gas in Ohio is $2.84 a gallon – a 40 cent decrease over a year ago. Nationally, the average price for a gallon of regular gasoline is $2.81 – nearly 50 cents cheaper than 2013. Lower motor-fuel prices have AAA estimating that nearly nine out of 10 Americans traveling this Thanksgiving Weekend will be doing so on our road system.
Fortunately for Ohio drivers, it is home to none of the busiest cities for Thanksgiving traffic. According to INRIX, a data technology company, the honor of busiest traffic cities goes to: 1. Los Angeles, 2. Portland, Ore., 3. San Francisco and 4. Seattle. The remainder of INRIX’s top 10 worst traffic cities for Thanksgiving are all east of the Mississippi River: New York, Washington, D.C., Philadelphia, Boston, Chicago and Miami.
INRIX reports that Americans headed out of town the day before Thanksgiving can expect their trips to take 25 percent longer to get to where they’re headed than on typical Wednesday drives. It’s better than Los Angeles and Portland, where travelers in those West Coast states’ metro areas can expect drives to take up to 36 percent longer than normal.
Bak said traffic data shows that the best time to head to your Thanksgiving destination on Wednesday is before 2 p.m. or after 6 p.m. He suggests, if possible, to avoid it all together and head out early Thanksgiving Day. “If it’s possible to wait to leave until Thanksgiving morning, roads will be free and clear as long as you’re not heading to the Macy’s Parade or a major shopping center to get a leg up on Black Friday.”
If you didn’t beat the rush and are sitting in traffic, you can join the debate of whether Thanksgiving Weekend is the source for the worst travel of the year. According to USA Today, it’s not. “There are about five or 10 days during summer that are busier than Thanksgiving,” said AAA’s Troy Green. “… But this holiday definitely earns a spot in the top 10.”
Chew on This
While you’re sitting in traffic, here’s something to chew on before that Thanksgiving feast. According to AAA, the worst days for traveling are (in no particular order):
Former U.S. Transportation Secretary Ray LaHood tells 60 MINUTES that many of the roads and bridges we drive on every day are “on life support.” What’s more, nearly 70,000 bridges in the U.S. are deemed structurally deficient. “I don’t want to say they’re unsafe. But they’re dangerous,” said LaHood. “Our infrastructure’s on life support right now. That’s what we’re on,” LaHood is now co-chair of Building America Future, a bipartisan coalition of current and former elected officials seeking to increase spending on infrastructure.
LaHood speaks to Steve Kroft for a 60 MINUTES report on the state of America’s crumbling infrastructure. It will be broadcast Sunday, Nov. 23 (7:30-8:30 PM, ET/7:00-8:00 PM, PT) on the CBS Television Network. Watch an excerpt.