Maryland Transportation Operations Summit - Linthicum, MD
Remarks for James S. Simpson, Administrator, Federal Transit Administration
May 1, 2008
On behalf of President Bush and Secretary Mary Peters, I’m pleased to be here with you.
I’m here today to share some good news about the state of transit in America...to share some not-so-good news...and to speak frankly about some of the tough decisions that lie ahead for all of us – in Washington, D.C., Maryland, and throughout the National Capital Region.
First, the good news: It may surprise you to learn that FTA is in a reasonably strong position right now to invest in urban and rural capital transit projects across the country -- the kinds of projects that truly enhance mobility for millions of Americans who want to get out of their cars and take public transit.
With gas prices heading past $4 a gallon, that’s got to be good news, right?
FTA’s fiscal 2008 budget includes $9.5 billion for public transportation. That’s an all-time high level of funding – with increases provided for nearly every transit program we fund.
Our proposed 2009 budget seeks $10.1 billion – including a record-setting $1.62 billion in capital investment funds for our New Starts program, and more funding for urban formula and rail modernization grants, as well rural areas that currently lack transit options.
Over the last few years, the FTA has made major funding commitments to four of the largest capital transit projects in the nation’s history -- including three historic rail projects in the New York region and a new light rail system in Seattle.
These are all ambitious projects that are going to help reduce gridlock and vehicle emissions, and spur new economic development.
Now, it’s true that Maryland does not have a major transit project in our New Starts pipeline at the moment -- but that’s subject to change. . . I’m guessing sooner, rather than later, if the leadership in the room today has anything to say about it.
The point is, the FTA remains firmly committed to investing billions of dollars in viable transit projects that meet our strict evaluation criteria--projects that we’re confident can be delivered on time and on budget...and with the promised benefits.
Being a good steward of the taxpayers’ dollars is something I take very seriously.
We simply cannot afford to fund transit projects that aren’t likely to succeed. And while it’s not possible to control everything that goes on with these big, complex, multi-year projects -- like the plan to dig a new rail tunnel under the Hudson River between New York and New Jersey -- we’ve gotten much better at accurately predicting the cost and the ridership levels for the projects we do decide to fund.
Now let’s talk about the not-so-good news.
No matter how carefully we invest the funds we have, we simply don’t have sufficient resources to help America develop the transit and transportation infrastructure that’s needed for the future, to keep our economy moving.
Nor does the federal government have enough to re-invest in the legacy transit systems we’ve already got -- to keep them in a state of good repair.
Have you ever taken Amtrak into Manhattan? As you approach the city from New Jersey, you see acres of dense urban transit infrastructure that’s a century old or more – a vast network of rail lines, catenary wires, trestles, retaining walls, tunnels -- you name it.
How much longer do you think all that is going to last without a serious infusion of capital?
I can promise you that this issue about state-of-good-repair will be front and center when Congress takes up new authorizing legislation for transportation programs after 2009.
In any case...the funding gap between the infrastructure we have, and the infrastructure we need, is large, and growing larger.
The DOT calculates that we need roughly 22 billion dollars a year to improve the condition and performance of our nation’s existing transit systems through 2024. That level is 70 percent higher than all transit capital spending in 2004.
As you may know, our traditional funding source – the Highway Trust Fund – is projected to run a deficit of 3 billion dollars by 2009.
These revenues are declining at a time when commodity prices for the materials needed to build infrastructure -- like concrete, steel, aluminum, copper, and brass – are escalating.
Meanwhile, the transportation problems you face right here in Maryland – like in the rest of nation -- are not going away.
- It affects nearly every resident, commuter, and tourist.
- It affects the air we breathe.
- It affects the Baltimore-Washington region’s ability to provide the mobility that’s so vital to keeping this a workable, livable corridor for millions of people and their employers.
The Brookings Institution recently reported that if we implement congestion pricing in about 100 metro areas, we’ll raise three times what we raise through the Highway Trust Fund now, for ambitious transportation and transit projects.
The point is this: Whether we’re talking about congestion pricing -- where drivers pay a fee for using certain roads at certain times of day -- or putting new tolls on existing roads...we’re talking about raising hundreds of millions of dollars annually to address local transportation needs.
This is money we don’t have at all right now -- money that can be used for building new transit options, keeping existing transit and transportation systems in a state of good repair, and mitigating traffic congestion.
I don’t think that’s a bad bargain.
And don’t forget: The taxes and fees we pay now to use these assets do not reflect their true long-term economic costs – and never really have.
A proposal by the Metropolitan Washington Council of Governments to introduce new tolls on the B-W Parkway, and other roads and bridges in the region, could generate an estimated $2.75 billion a year.
A slice of that pie might help to offset the hundreds of millions of dollars that the Maryland General Assembly has recently “borrowed” from the state’s transportation fund to help balance the budget.
What else can you do?
I know that tolling and congestion plans are controversial in the U.S. -- but they are not unproven. Cities like Stockholm, Rome, London, Singapore and other cities, already know first-hand that congestion pricing works!
In some of these places, congestion pricing models have actually reduced urban traffic by 20 percent or more, and increased transit usage. Prague is about to join them.
And here in the U.S....Miami, Minneapolis, San Francisco, and Seattle are all using DOT funds to develop congestion pricing plans.
We’re hopeful that these cities are going to lead the way on this -- and generate sustainable sources of new revenue to use for transit and transportation projects.
The truth is, our transportation infrastructure has reached a tipping point. We cannot continue to do business as usual -- and we can’t expect 20th century solutions to solve 21st century problems.
So where do we go from here?
I know this much: An across-the-board fuel tax increase is not going to do the trick.
Over the past 25 years, highway funding has increased 100 percent -- thanks in large part to fuel taxes -- yet congestion has increased 300 percent.
It’s hard to imagine we’re going to be able to make any real progress without trying new things -- like congestion pricing. . . high-speed electronic tolling. . . and public-private partnerships.
In fact, we’re conducting a demonstration project with selected New Starts grantees to encourage public-private partnerships on capital transit projects where there’s a real need for additional funding sources.
This approach has worked well for highway capital construction -- so we’re trying it on the transit side.
The idea is that the grantees contract with private partners to design, build, finance, operate, and maintain transit facilities -- from rail and bus stations to parking garages.
These arrangements offer many potential advantages, by supplementing public funding with private equity and debt...transferring long-term financial risks to the private sector...and speeding up project construction and delivery, which in turn may reduce costs on some transit projects.
We have selected three locations for public-private partnership demonstrations -- Houston, Denver, and Oakland, California.
We’re monitoring these projects closely, and we think they’ll provide new models for other states to follow.
We’re also supporting more transit-oriented development, by encouraging local transit agencies to lease or sell federally financed land to private developers.
FTA is also working with the U.S. Department of Housing and Urban Development to identify ways to improve linkages between transit and transit-oriented development and affordable housing.
These efforts are key to spurring economic development near transit hubs.
I applaud Governor O’Malley and Secretary Porcari for supporting more transit-oriented development in places like Prince George’s County, where thousands of acres near Metro stations are ripe for development.
We’ve got to send a signal to developers that this is a good opportunity – and we in the federal government will do all we can to help streamline the process.
I’ve often said that transportation is the circulatory system of our economy. We cannot afford to let it fail -- and we should not settle for a system that is second-best behind other nations.
Now more than ever, we need leaders willing to make tough and courageous decisions about what it will really take to build and sustain a world-class transportation infrastructure, to keep our economy moving.
We need market-based solutions as well as government leadership.
And we need a mindset in our communities that is receptive to new ways of paying for -- and using -- our transportation networks.
We cannot afford to push this problem off onto future generations.
And especially here in the Baltimore-Washington corridor, we cannot allow geopolitical boundaries to stop us from doing the right thing for everybody who lives, works, and travels across Maryland, D.C., and Virginia.
After all, gridlock does not start and stop at the state line.
And this isn’t about highways versus subways...or cities versus suburbs.
In fact, it isn’t about one mode of travel versus another...It’s about people!
So let us pledge that we’re all going to work together to find ways to make our transportation systems better...make them sustainable...and ensure that the state of Maryland – like the nation as a whole -- can effectively compete in a global economy.
I’ll leave you with a remark made by a former president of General Motors, back in the 1970s:
“Leadership is the courage to admit mistakes, the vision to welcome change, the enthusiasm to motivate others, and the confidence to stay out of step when everyone else is marching to the wrong tune.”
I hope that all of you find the courage and the vision to solve our transportation problems today, for the sake of our children and grandchildren tomorrow.