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Chamber vs. Wall Street Journal on Transportation Bill

April 22, 2012

By U.S. Chamber of Commerce,
Free Enterprise

The next time the Wall Street Journal editorial board decides to reprint talking points from the Heritage Foundation they might endeavor in some fact-checking. In today’s Wall Street Journal piece, the editorial board offers a menu of reasons why the federal government shouldn’t be involved in transportation investment including the inequities it creates between states, saying that Western and Southern states get less than they pay in. In reality, from 2005-2009, each and every state received more back from the Federal government than they contributed in user fees to the Highway Trust Fund according to the General Accountability Office. This is because instead of keeping Highway Trust Fund revenues – which are largely derived from the federal gas tax – in line with federal commitments, Congress has chosen to periodically transfer general funds to keep the investments afloat.

Even when the Trust Fund was flush with cash, Western and Southern states generally made out much better in their Return on Investment (ROI) than heavily populated states on the Eastern corridor. While the donor-donee debate captures the imagination of many members of Congress when these laws come up for renewal, the whole argument misses the forest for the trees. The reason for this “inequity” is national connectivity, which in turn supports domestic and international trade, national security, emergency preparedness and interstate mobility – all important national objectives.

We also strongly disagree with the notion that investment in transit is an unserious, utopian enterprise. While the Chamber does not ascribe to most of the Department of Transportation’s livability initiative, we strongly believe that transit is a critical means of addressing congestion and driving economic development in many areas around the country. Addressing congestion is an incredibly complicated challenge that often requires a menu of logistical options. Building roads and congestion pricing are both valuable tools, but so too is transit. From 1995 through 2008, public transportation ridership increased by 38%—a growth rate higher than the 14% increase in U.S. population and higher than the 21% growth in the use of the nation’s highways over the same period. Without public transportation, congestion costs would have been an additional $13.7 billion.

With regard to economic development, every $10 million in capital investment in public transportation yields $30 million in increased business sales and every $10 million in operating investment yields $32 million in increased business sales. It’s no coincidence then, that most of the nation’s major transit operations are situated in areas with heavy congestion and often in close proximity to international ports. Just ask groups like Mobility 21, a business-led coalition that works to advance transportation solutions in Los Angeles and surrounding areas.

While we at the Chamber agree with the Wall Street Journal’s assessment that the federal programs need a great deal of reform and the permitting process needs some serious simplification, we believe the federal government plays an important and necessary role in infrastructure investment. Many of our nation’s conservative visionaries agreed, including Alexander Hamilton, Thomas Jefferson, Abraham Lincoln, Dwight Eisenhower, and Ronald Reagan. Even today, some of the most vocal opponents of federal spending recognize the importance of transportation investment. Rep. Paul Ryan points out in A Roadmap for America’s Future that transportation is a core government responsibility: “Governments must provide for a limited set of public goods: they must build roads and other infrastructure, foster the protection of property rights, and maintain internal and external security… this ‘core’ government spending tends to foster economic growth.”

Instead of throwing the baby out with the bathwater, the Chamber would like to see Congress work together to advance a serious bill that eliminates eligibility for expenditures that aren’t in the national interest, focuses dollars on core road networks and freight systems, invests in making commutes faster and more efficient, requires performance management and accountability in state and local decision making, speeds up project delivery, expands project financing options, creates incentives for private investment, and lays the groundwork for a sustainable revenue model that enables investment levels aligned with needs. For the sake of near- and long-term job creation, stronger economic growth, and enhanced U.S. competitiveness, the Chamber strongly supports robust surface transportation reauthorization legislation that addresses revenue shortfalls and includes necessary and urgent policy and program reforms.

  
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Bob Clark April 23, 2012

Transit loses more than it takes in in fares and depends on additional payroll taxes. That the Chamber should support continued funding of transit at elevated levels raises the specter the Chamber is acting somewhat in Crony Capitalist fashion.

It’s a dreadful shame the only way states like Oregon can get back their federal transportation monies is to committ them largely to light rail boondoggles, a technology which is relatively slow compared to bus rapid transit and hugely more capital costly.

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