DOT Secretary Ray LaHood testifying in the Senate yesterday.

Yesterday, the Senate Committee on Commerce, Science and Transportation held a hearing about the future of national surface transportation. This much isn't in doubt: Current policies need a major overhaul. What to change and, especially, how to pay for it are very much in question.

Several panelists spoke about the need to reform the nation's transportation priorities and set firm goals, like reducing car dependence and traffic deaths. Shifting away from policies that emphasize highway capacity and reward gas consumption didn't sit that well with senators from states like South Dakota and Texas, but there was a broad sense that the next surface transportation bill must reverse years of underinvestment in the nation's infrastructure. Nevertheless, Secretary of Transportation Ray LaHood reiterated the Obama administration's opposition to a promising funding solution -- raising the gas tax -- and obeyed the directive from up top to never again mention a tax on vehicle miles (VMT).

At around the same time, a very different story was unfolding in the House, where James Oberstar (D-MN), chairman of the Transportation and Infrastructure Committee, pushed for his preferred funding solution, a VMT tax. Asserting that the technology to implement this solution is already available, he asked his committee to rapidly advance the timetable: "Why do we need a pilot program? Why don't we just phase it in?" Since Oberstar has taken a leading role in shaping the next transportation bill, this may mean that a VMT tax will be included in the first draft.

Back at the Senate hearing, several panelists called attention to the impending insolvency of the Highway Trust Fund, which uses money raised by the gas tax to pay for transit and roads projects. Steve Heminger, director of the San Francisco Bay Area Metropolitan Transportation Commission, estimated that the U.S. needs to invest at least $225 billion annually in its transportation infrastructure. We're only spending about 40 percent of that today, and the downward trend in driving means the fund is drying up. Few options will suffice to raise the needed revenue, he said, other than increasing the gas tax or imposing a VMT fee.

LaHood skirted the funding issue and focused on rethinking existing transportation priorities. "Our initial focus will be on expanding the transportation choices available to American families," he said. LaHood repeatedly described his intention to help communities become more transit-friendly, walkable and bikeable. He cited the administration's desire to get Americans out of their cars, but never made the link that higher gas prices create powerful incentives to reduce car dependence. His prepared testimony instead asked for "innovative" ideas from Congress to address the transportation funding dilemma, leaving aside any specifics.

For Streetsblog, Freemark will break down the legislation, explain its progress through Congress, and fill us in on some of the people working to shape it. His first post looks back at the current transportation funding bill, called the "Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users" (SAFETEA-LU), which was approved in late July 2005 after a year of infighting in a sharply divided Congress.

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Ultimately, SAFETEA-LU’s greatest failing may have been its failure to articulate a truly multi-modal vision for the nation's surface transportation network. Essentially a continuation of 1950s-era policies, it repeated the same-old same-old about a need to complete the Interstate highway program, directing billions of dollars to state DOTs to pour asphalt and expand roadways. Nowhere did the legislation suggest a need to adapt to a future in which American dependence on automobiles and fossil fuels must be dramatically reduced. That's the challenge faced by Congress today.

Less of this, please... (Photo: SkilliShots/Flickr)

The $10 billion in public transportation funds is distributed by the Federal Transit Administration (FTA) for a variety of uses. The FTA administers the urban areas program, which allocates money to metropolitan areas for transit system capital expenses, as well as a rural areas program that helps states pay for rural transit. SAFETEA-LU also included a fixed-guideways formula, aimed at keeping mostly older rail transit systems like those in Chicago or Boston in working condition. Finally, the New Starts/Small Starts program allowed the FTA to fund competitive grants for major capacity expansion such as new subway or bus rapid transit lines.

...more of this... (Photo: Paul Purser/Flickr.)

SAFETEA-LU provided for $40 billion in annual funding from the highway account, the traditional federal source for financing Interstate highways. But under the law, money from the account could actually be spent on more than just roads. Roughly $6.5 billion per year was allocated to the "Surface Transportation Program." States were allowed to use this money to fund transit and "bicycle transportation and pedestrian walkways." The "Congestion Mitigation and Air Quality Improvement Program" -- about $1.7 billion a year -- went to projects likely to reduce pollution, and specifically forbade funding "a project which will result in the construction of new capacity available to single occupant vehicles."

There's one problem, though. The federal government may allow such funds to be spent on non-auto uses, but that's rarely the case.

That's because, while each metropolitan area has a federally-mandated Metropolitan Planning Organization (MPO) whose role is to establish priorities for transportation investments, state departments of transportation have ultimate discretion over how national highway funds are used. The inevitable consequence? Asphalt-happy DOTs usually choose to invest highway funds in roads, even when MPOs advocate for improved transit or bikeways. According to Transportation for America, only five states -- California, New York, Oregon, Pennsylvania, and Virginia -- have taken advantage of the flexibility of these funds. The rest have spent the vast majority on auto infrastructure.

What’s more, SAFETEA-LU made it easy for states to build roads and hard for them to build transit projects. While funds for new roads were simply distributed to states based on a formula, new transit lines had to undergo the rigorous New Starts process -- competing with other projects from all over the country -- before winning a share of federal dollars. There was no such required audit for road projects.

...and this. (Photo: Richard Masoner/Flickr).

The source of all this money is another problem. Funds for surface transportation come primarily from the national gas tax, 18.4¢ per gallon of gas (24.4¢ for diesel). Until last year, the gas tax was a reliable source of funds, but the recent decrease in miles driven by Americans and an increase in fuel economy forced the Congress to authorize $8 billion in emergency funds for roads from the general budget for fiscal year 2009. The same scenario is likely to occur in the coming year.

SAFETEA-LU provided no alternatives to the gas tax, but the next transportation bill may well do so. Secretary of Transportation Ray LaHood proposed using a mileage tax as a new source of revenue last month, but his initiative was quickly shot down by the White House press secretary, who said that the tax is not and will not be the policy of the Obama administration. A recent U.S. Government Accounting Office study suggested that additional monies could come from increasing the gas tax, encouraging tolls or moving funding from dedicated revenues to the general budget. Congress has yet to grapple with a long-term solution to this crisis.

Intercity rail development also fared badly under SAFETEA-LU, receiving only $100 million yearly through the legislation. Until last year, Amtrak was forced to plead to Congress every year for separate operations funding from the general fund; now, thanks to five-year guaranteed funding legislation pushed through by huge majorities in both houses of Congress, it receives $2.5 billion a year. President Obama's stimulus bill also turned things around for rail corridor construction, with $8 billion set aside and $1.3 billion dedicated to Amtrak. This money came from general tax revenues, not the Highway Trust Fund.

Then we have the much-maligned earmark system. Under SAFETEA-LU, thousands of appropriations worth more than $24 billion were earmarked by congressmen for projects in their local districts. One example: Congressman Jerrold Nadler's $100 million for the New York Cross Harbor Freight Tunnel, a project for which funds weren't even requested by the agency that was supposed to be sponsoring it, the Port Authority. SAFETEA-LU also famously appropriated $250 million to a Ted Stevens special: a certain "Bridge to Nowhere."

But many of the earmarks were for much smaller projects that helped communities provide citizens with more transportation options, such as bike lanes or pedestrian bridges. Congresswoman Nydia Velazquez earmarked more than $6 million for the Brooklyn Waterfront Greenway, a project driven by grassroots commitment. Such infrastructure would be almost impossible to fund in any other way, given the way the law is written and state DOT reluctance to transfer highway funds to non-auto uses.

With Congress preoccupied by important health care, immigration and economic legislation, the transportation reauthorization bill isn't grabbing headlines for the moment. But a diverse coalition of groups that see the benefits of transit use and improved bike and pedestrian infrastructure -- including public health advocates, developers, senior citizens, real estate agents and chambers of commerce -- is demanding a place at the table along with the traditionally more influential highway lobby. Over the next few months, that coalition will be fighting for a federal transportation program that provides a stable source of revenue for a balanced selection of mobility options.