Public Works Financing

It's Time for a Goods-Movement Interstate System

Trucking lifeblood needs less congestion
As we reach the end of 2004 without a reauthorization of the federal surface transportation program, it's appropriate to step back and take a hard look at the program. The chief author of the Bush Administration's SAFETEA proposal, Emil Frankel, did just that in a recent speech in Sacramento. Frankel decried the lack of vision in what has become "a great big local public works program." He noted with dismay the alarming growth in "earmarks," from about 500 in ISTEA to 1,600 in TEA-21 to 3.200 in TEA-LU. Where, he asked, "is the discussion of what an intermodal, seamless transportation system can contribute" to economic growth, to international trade, and to the continued mobility of people and goods?

I support Frankel's call for a new paradigm in surface transportation. In my view, there are two driving forces making such a rethink necessary and timely in 2005. First, America faces an impending crisis in goods-movement over the next 15 years. And second, the huge federal deficit, coupled with a larger GOP majority in Congress, means the total federal program will be smaller than what seemed possible in 2004. While a $299 billion (six-year) compromise was almost reached back in August, I don't think the White House will sign on to anything larger than $270-275 billion in 2005.

Trucking is America's lifeblood, with 90% (by value) of all goods moving by truck. This overwhelming predominance of trucking for goods-movement stems from the development of the Interstate highway system in the second half of the 20th century. But that system is heading for major problems in the 21st. Just 15 years from now, more than 16% of Interstate route-miles will be severely congested, especially in urban and suburban areas (and including key links to ports and major rail yards). Truck VMT is growing at 3% per year, faster than general highway VMT (at 2.5%). Yet very few Interstate lane-addition projects are in the planning process. Present fuel-tax revenue sources can barely keep pace with maintenance needs, making billion-dollar lane addition projects problematic in most states. And with little or no growth in the reauthorized federal program, there's no chance of a major federal goods-movement initiative this time around.

So we need to think outside the box, drawing on recent research that supports toll truck lanes as a bold new approach. The Administration should set forth the goal of a new national freight infrastructure of toll truckways, overlaid on the most truck-intensive portions of the Interstate system. Key long-haul links would include major portions of I-5, I-10, I-15, I-20, I-35, I-40, I-65, I-75, I-76, I-80, I-81, I-90, and I-94. Urban links would be needed for key ports such as Los Angeles/Long Beach, Oakland, Newark, and others.

In urban areas, large time savings and improved reliability of delivery times would make it worth truckers' while to pay tolls, in many cases. But the real key to gaining trucking industry support is to allow truckers to haul much larger payloads in these special, barrier-separated new lanes. Longer combination vehicles (LCVs), especially turnpike doubles and short triples, can produce 50 to 100% greater payload with only a modest increase in operating cost. These gains are so large that it can be worth paying a hefty toll to obtain them. Today use of LCVs is restricted to a handful of western states and eastern turnpikes by the 1991 ISTEA legislation's "LCV freeze," which applies to any federal-aid highway. But what Congress imposed, Congress can remove.

Trucking industry support depends not only on allowing use of LCVs on toll truckways. It also hinges on not forcing existing street-legal 18-wheelers to use the pay lanes; instead, they should be lured into these lanes by time savings, increased safety, and lower stress. The American Trucking Associations is on record supporting this type of toll truckway, and the California Trucking Association is backing a plan for such truckways in Southern California. But Virginia Trucking Association is fighting bitterly against mandatory toll truck lanes (with no LCV access) proposed for I-81 in Virginia.

At this late date in the reauthorization process, it's not realistic to add a full nationwide toll truckway program. But the Administration's revamped SAFETEA bill should set forth the long-term vision and then authorize a pilot program to test the idea in key urban and long-haul corridors. Building on SAFETEA's existing provisions that remove restrictions on adding toll lanes to Interstates, that pilot program must also include (1) exemptions from the LCV freeze for such projects, (2) a simplified method of setting up multi-state intergovernmental agreements for long-haul toll truckways, and (3) expanded authorization for tax-exempt toll revenue bonding, perhaps $30 billion worth of private activity bonds (rather than the $15 billion figure in the 2004 bills).

With $30 billion worth of private activity bonds in the offing, the Administration and its allies could argue that last summer´┐Żs $299 billion total figure could be achieved via $270 billion from conventional tax sources and $30 billion of net new private capital investment. And by the time the next reauthorization bill is ready to be drafted, we should have toll truckway projects financed and under way in (at least) California, Texas, and Virginia, demonstrating the degree of interest by MPS, state DOTs, and the trucking industry. That should provide enough information to decide whether to go forward with a national goods-movement successor to the Interstate highway program.

Robert W. Poole Jr. is director of transportation studies and founder of the Reason Foundation.

Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy





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