KERN TRANSPORTATION FOUNDATION

Newsletter

DIRECTORS Donna Carpenter

Chairman Bruce Biggar CFO Peter Smith Secretary Gary Blackburn Leigh Ann Cook David Couch Steve Esselman Jim Hunter, Mobilization Ted James Karen King Barbara Lomas Jess Ortiz Cindy Parra Larry Pickett Patricia Poire Cathy Prout Howard Silver John Spaulding Will Winn, Newsletter TECHNICAL ADVISORS

Bob Neath John Schuler Ted Wright KernCOG

March 2015 KTF Newsletter, Issue 11

Gas tax hike best highway funding fix, group says

WASHINGTON Raising the federal gasoline tax is the most reliable way to meet the nations transportation needs in the near term, a major credit rating agency said Thursday. Other proposals to shore up the federal Highway Trust Fund using one-time changes in corporate taxes or continuing to bail it out with general funds are too subject to political whims, Fitch Ratings said. Though Scott Zuchorski, senior director of Fitchs Global Infrastructure & Project Finance Group, conceded that an increase in the gasoline tax is un-likely in the near term, he said that Congress stopgap approach to the feder-al transportation program hinders states planning efforts. The point Fitch is making is that youve got to set the politics aside, he said. Theres a great deal of uncertainty out there. On average, states rely on federal funds for half their road and bridge spending. Many count on a reliable stream of federal dollars to pay down construction bonds. In 2012, citing the diminished reliability of those funds, Fitch downgraded the ratings of bonds in several states, which raises their future borrowing costs. Congress has not passed a multiyear transportation bill in a decade and hasnt raised the per-gallon taxes of 18.4 cents for gasoline and 24.4 cents for diesel since 1993. A handful of lawmakers in both parties have embraced an increase, but the idea hasnt gained much support at either end of Pennsyl-vania Avenue. The current transportation bill extension expires at the end of May, and everyone from U.S. Transportation Secretary Anthony Foxx to governors and state transportation officials have warned lawmakers that states are already dropping projects from their plans. While transportation is one of the least partisan issues facing a fractious Congress, theres little consensus on how to pay for the federal program. Since 2008, lawmakers have transferred more than $50 billion in general funds to the federal Highway Trust Fund. Zuchorski said neither that approach, nor efforts by some lawmakers and the White House to close corporate tax loopholes to raise funds, would be sustainable in the long run. Rather, he said, Congress should be looking for more reliable sources of funding, including a tax on miles driven, increased tolling and more private-sector investment.

BY CURTIS TATE McClatchy Washington Bureau

The Kern

Transportation

Foundation

promotes a modern,

balanced

transportation

system that

enhances the

quality of life and

advances the

economic vitality of

the residents of

Kern County.

Page 2 KTF Newsletter, March 2015

Heres The Need, Wheres The Money? Congress is another week closer to the May deadline for re-authorizing highway

and mass transit spending.

What that means: if lawmakers dont pass an authorization bill before May ends,

then the Highway Trust Fund would be paying out money to the states at a much

slower pace than normal, which would hinder or halt projects during the spring and

summer construction season. This week most of the Obama administrations

transportation officials will be testifying on Capitol Hill at appropriations hearings.

The Senate Commerce, Science and Transportation Subcommittee on Aviation

Operations, Safety and Security heard from Melvin Carraway, acting administrator of the Transportation Security Administration about the Obama administrations

Fiscal Year 2016 TSA budget

request and issues such as the

effectiveness of the TSAs Pre-

Check program for trusted trav-

elers. Meanwhile the Federal

Aviation Administration

chief Michael Huerta will testify

to the House appropriations

subcommittee on Commerce,

Justice, Science, and Related

Agencies. Also, the House

Transportation and Infrastruc-

ture Committee got the state and local perspective from North Carolina Gov. Pat

McCrory, Salt Lake City Mayor Ralph Becker, and Wyoming Department of Trans-portation director John Cox. In addition, Transportation Secretary Anthony Foxx testified before the Senate Appropriations Subcommittee on Transportation.

Finishing testimony, the House Appropriations Subcommittee on Transportation

heard from Gregory Nadeau, acting head of the Federal Highway Administra-tion, Therese McMillan, acting head of the Federal Transit Administration, National

Highway Traffic Safety Administration chief Mark Rosekind, and Maritime Admin-istration chief Paul Jaenichen. The administration witnesses made the case for budget certainty and for a long-term infrastructure funding solution, but latter is

looking less and less likely in 2015. By Roll Call March 16, 2015

Sen. Kelly Ayotte, R-N.H., will chair a hearing on the TSA budget for FY 2015

Page 3 Newsletter

By Keith Laing 03/16/15 Lawmakers are searching for a way to pay for a new transportation bill before federal funding for road and transit projects expires at the end of May. Members of both parties say they want to see transportation funding extended with little drama. The House Transportation and Infrastructure Committee is scheduled to hold a hearing about the highway bill in March where members will be able to debate the path forward. Here are five possible ideas: 1.) Raise the gas tax Transportation advocates have said raising the 18.4 cents per gallon federal gas tax would be the easiest way to pay for a new infrastructure bill. The gas tax has been the main source of transportation funding for dec-ades, but it has not been increased since 1993, sapping its buying power. While the tax hike has backing from business associations and unions, the idea has run into opposition from conservative groups such as Club for Growth and Heritage Action, and GOP leaders in the House have sug-gested it is a non-starter. The federal government typically spends about $50 billion per year on transportation projects, but the gas tax will only bring in $34 billion annually without an increase.

2.) Taxing overseas corporate profits Some lawmakers are pushing to fund the highway bill through taxes on corporate profits that are held over-seas. The proposal would require companies to bring back earnings to the United States and pay a one-time, 14 percent tax rate on them. Budget groups and conservatives labeled the corporate tax proposal a gimmick, and transportation advocates have complained it would not address the underlying problems in infrastructure funding. The Obama administration, which supports the plan, says it could generate $238 billion in new revenue for the government that could be used to pay for infrastructure improvements.

3.) New tolling systems Some groups are pushing to increase the use of tolls on American highways to help pay for their maintenance. Advocates have said tolling is the easiest way to replace the gas tax with a similar user fee that charges driv-ers directly for the upkeep of the nations roads. Opponents counter that polls show voters do not want to pay to drive on roads that are currently free. A large increase in the use of tolling would require lifting a current ban on states placing tolls on existing highway lanes, which has been controversial in the past. 4.) Barrel tax Supporters of keeping transportation funding tied to gasoline sales have suggested changing the source of the gas tax from drivers to oil wholesalers. The proposal, which has been dubbed the barrel tax, would implement a per-barrel tax on oil companies to fund federal transportation projects instead of having drivers pay at the pump. States such as Virginia have switched from a tax at the pump to a barrel tax in recent years as federal trans-portation funding has dried up. Supports of the proposal argue that moving to a federal barrel tax would give drivers a break at the pump while providing more funding for transportation improvements.

5.) General fund transfer With just two months to go before the expiration of the current highway bill, observers of Congress say the most likely solution will be a temporary extension that takes money from other areas of the federal budget. Transportation Secretary Anthony Foxx has lamented the number of temporary transportation funding patches 32 by his count that Congress has passed since 2009. None of the temporary transportation bills has lasted longer than two years. Foxx said the uncertainty about the available of federal funding is discouraging states from starting large trans-portation projects. But with each passing day, another short-term patch becomes more likely.

Taxes or Toll? Five Possible Fixes For Highway Funding

KTF

Kern Transportation Foundation Find KTF on Face Book P.O. Box 417 Bakersfield, CA 93302-0417 Web Page Under Construction

Page 4 KTF Newsletter March 2015

The mission of the Kern Transportation

Foundation is to provide a forum for advancing the

requirements of a modern, balanced

transportation system that meets the economic and social needs of the public in Kern County.

The Kern Transportation Foundation will work to

the following: - Identify and create public awareness of current and future

transportation needs in Kern County.

- Investigate solutions to providing a balanced

transportation systems.

- Build the private/public partnership required to

develop a modern, balanced transportation

system.

Kern Transportation Foundation Mission

Statement

Tesla newest car, vows to end Range Anxiety BY CHARLES FLEMING Los Angeles Times

New Tesla vehicles will soon be able to steer themselves, park themselves and brake in an emergency, Tesla Motors Chief Executive Elon Musk said. Such vehicles, already being tested, have driven from San Francisco to Seattle with virtually no driver input, Musk said. And current Tesla Model S sedans will now be able to tell you exactly how much juice you have in the battery, and ex-actly what to do about it. During an invitation-only telephone news conference, the Silicon Valley-based billionaire touted software updates for his companys all-electric Model S that will dramatically reduce the electric vehicle condition known as range anx-iety the fear that the car will run out of power before it reaches its destina-tion. Musk said new updates, which will download wirelessly to Model S cars already on the road some time in the next 10 days or so, will scan the locations of all Tesla charging stations and tell drivers exactly how far it is to the best one, and then recommend the best route for getting there. The new features are going to make a key difference to people driving the car and their percep-tion of it as they are driving the car, Musk said. It makes it impossible to run out of range unintentionally. The car will always take care of you. Musk also promised another set of software updates that will make it possible for the car to drive itself on highways and major roads parking lot to park-ing lot he said. During test drives along a route from the Bay Area to the Northwest, he said, We are able to travel almost all the way without the driver touching any controls at all. Perfecting those features will require a lot of validation testing, Musk cautioned. But these capabilities could be a reality in three months or so. The car will also be its own valet, Musk said, though not in public parking lots. On private property you will be able to press the summon button and your car will be able to find you, he said. You can press it again and the car will put itself to bed in the garage, and close the garage door. Despite touting these improvements, Musk suggested range anxiety was more imaginary than real. It should be enough that the Teslas range and supercharger network already allow for a range of 280 miles of freeway driving, at 60 mph, Musk said. There are rare occasions where someone wants to drive non-stop for 10 hours and wear diapers, Musk said. But thats unusual. Analysts were not impressed. Musk is giving the buyers of his luxury car an app that says dont drive too far from one of my chargers, said Kelley Blue Books managing editor Matt DeLorenzo. And, diapers? Obviously he never has taken a road trip of any length.

Tesla Motors Chief Execu-tive Elon Musk says his

vehicles will soon be able to come to the driver when called and park themselves

in the garage at night.