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Presented By: Tom SkanckePresented By: Tom Skancke

President, The Skancke CompanyPresident, The Skancke Company

CommissionerCommissioner

National Surface Transportation Policy and Revenue Study National Surface Transportation Policy and Revenue Study CommissionCommission

Item 12

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Mary Peters, Secretary of Transportation — ChairpersonMary Peters, Secretary of Transportation — Chairperson Jack Schenendorf Of Counsel, Covington & Burling LLP—Vice Jack Schenendorf Of Counsel, Covington & Burling LLP—Vice ChairChair Frank Busalacchi, Wisconsin Secretary of TransportationFrank Busalacchi, Wisconsin Secretary of Transportation Maria Cino, Deputy Secretary of TransportationMaria Cino, Deputy Secretary of Transportation Rick Geddes, Director of Undergraduate Studies, Cornell UniversityRick Geddes, Director of Undergraduate Studies, Cornell University Steve Heminger, Executive Director, Metropolitan Transportation Steve Heminger, Executive Director, Metropolitan Transportation CommissionCommission Frank McArdle, General Contractors Association of New YorkFrank McArdle, General Contractors Association of New York Steve Odland, Chairman and CEO, Office DepotSteve Odland, Chairman and CEO, Office Depot Patrick Quinn, Chairman, American Trucking AssociationPatrick Quinn, Chairman, American Trucking Association Matt Rose, CEO, Burlington Northern Santa Fe RailroadMatt Rose, CEO, Burlington Northern Santa Fe Railroad Tom Skancke, CEO, The Skancke CompanyTom Skancke, CEO, The Skancke Company Paul Weyrich, Chairman and CEO, Free Congress FoundationPaul Weyrich, Chairman and CEO, Free Congress Foundation

CommissionersCommissioners

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Past Generations Have Given Us The Past Generations Have Given Us The Preeminent Surface Transportation System Preeminent Surface Transportation System

In The WorldIn The World““Our unity as a nation is sustained Our unity as a nation is sustained

by free communication of by free communication of

thought and by easy thought and by easy

transportation of people and transportation of people and

goods... Together the unifying goods... Together the unifying

forces of our communication forces of our communication

and transportation systems are and transportation systems are

dynamic elements in the very dynamic elements in the very

name we bear — United name we bear — United

States. Without them, we States. Without them, we

would be a mere alliance of would be a mere alliance of

many separate parts.” many separate parts.”

Dwight D. Eisenhower, 1955

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Today’s ProblemsToday’s Problems

Our nations Our nations transportation transportation infrastructure is infrastructure is deteriorating.deteriorating.

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Our Nation’s surface transportation is Our Nation’s surface transportation is at capacity and can no longer keep up at capacity and can no longer keep up with demand.with demand.

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The US stands to be in Third Place to China The US stands to be in Third Place to China and India if we do not build a transportation and India if we do not build a transportation system to compete with the World system to compete with the World Economy.Economy.

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Our system was not designed Our system was not designed for all of these commuters or for all of these commuters or commerce.commerce.

Our system was primarily Our system was primarily designed for military designed for military mobilization in the 1950’s.mobilization in the 1950’s.

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The Business of TransportationThe Business of Transportation

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Sources: Global Insight World Trade Service

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Port expansion throughout the western United Port expansion throughout the western United States will account for 67% of our nations goods. States will account for 67% of our nations goods. The demand for the 17 western states is only The demand for the 17 western states is only 22%. 45% must be moved east of the 22%. 45% must be moved east of the Mississippi River.Mississippi River.

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70% of our goods are moved by trucks 30% are 70% of our goods are moved by trucks 30% are moved by rail. Investment in both are needed.moved by rail. Investment in both are needed.

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The Price of CongestionThe Price of Congestion

Congestion Costs the US Economy $74 Congestion Costs the US Economy $74 billion per yearbillion per year

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What are the Needs?What are the Needs?

It will take It will take $225 Billion $225 Billion per year for per year for the next 50 the next 50 years for all years for all modes.modes.

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Key Causes of Crisis…Key Causes of Crisis…

– Financing Mechanism Has Not Financing Mechanism Has Not Kept Up With NeedsKept Up With Needs

Gas TaxGas TaxHighway Trust FundHighway Trust Fund

Federal Program Broken Federal Program Broken Massive UnderinvestmentMassive Underinvestment

– No Clear Mission Or VisionNo Clear Mission Or Vision– Bridge To NowhereBridge To Nowhere– Lengthy Project DeliveryLengthy Project Delivery

– Enormous NeedsEnormous NeedsNecessary: $220 to $340 Billion Necessary: $220 to $340 Billion Current: $87 BillionCurrent: $87 Billion

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First The Fuel Tax…Yes the First The Fuel Tax…Yes the Fuel TaxFuel Tax

The fuel tax in our The fuel tax in our country has not country has not been raised since been raised since 1982. It is the most 1982. It is the most stable and stable and predictable revenue predictable revenue source we have for source we have for our infrastructure our infrastructure fundingfunding..

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The Highway Trust Fund The Highway Trust Fund Is DiminishingIs Diminishing

Source: U.S. Department of the Treasury projections.

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We’re Breaking The Bank!We’re Breaking The Bank!

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FinancingFinancing

FederalFederal– Motor Fuels TaxMotor Fuels Tax

5 to 8 cents per year for five years5 to 8 cents per year for five yearsIndexed to inflationIndexed to inflation

– Freight Fee Freight Fee E.g., Container fee, bill of lading taxE.g., Container fee, bill of lading tax

– Customs Fees (portion)Customs Fees (portion)– Ticket Tax on Transit and Intercity Passenger RailTicket Tax on Transit and Intercity Passenger Rail– Cap-and-Trade Revenue (transportation-related)Cap-and-Trade Revenue (transportation-related)

– VMT (privacy, evasion, cost of collection must be addressed)VMT (privacy, evasion, cost of collection must be addressed)

State/LocalState/Local– Tolling New Capacity on InterstateTolling New Capacity on Interstate– Congestion Pricing on Existing InterstateCongestion Pricing on Existing Interstate– Private Tolling/Congestion PricingPrivate Tolling/Congestion Pricing

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SAFETEA-LU expires Sept. 30, SAFETEA-LU expires Sept. 30, 20092009

Relatively NormalRelatively Normal– New CongressNew Congress– Short Time FrameShort Time Frame– First Time For Many Leaders/StaffFirst Time For Many Leaders/Staff– New AdministrationNew Administration

First TimeFirst Time– Trust Fund ShortfallTrust Fund Shortfall

30% Cut Without Increased Revenue30% Cut Without Increased Revenue– Loss of CredibilityLoss of Credibility

Complications/OpportunitiesComplications/Opportunities– Climate ChangeClimate Change– Bold Initiative With Increased RevenuesBold Initiative With Increased Revenues– Politics, Politics, PoliticsPolitics, Politics, Politics

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Time Is MoneyTime Is Money

Project Delivery time Project Delivery time must be cut by 10 must be cut by 10 years. The savings to years. The savings to the American tax the American tax payer is billions.payer is billions.

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New ProgramsNew Programs

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A New BeginningA New Beginning

Fewer ProgramsFewer ProgramsLess Time on Project DeliveryLess Time on Project DeliveryPerformance Driven SystemPerformance Driven SystemA Safer SystemA Safer SystemFocus on Freight and Goods MovementFocus on Freight and Goods Movement

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Multi Modal ChoicesMulti Modal ChoicesInvestment In Transit Creates Less Investment In Transit Creates Less Congestion On Our Streets & HighwaysCongestion On Our Streets & HighwaysBetter Quality of Life for All AmericansBetter Quality of Life for All AmericansMore Productivity From Our Work ForceMore Productivity From Our Work ForceRemain The #1 Economic Power In The Remain The #1 Economic Power In The WorldWorld

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What Can You Do?What Can You Do?

Hold Public Officials To A High StandardHold Public Officials To A High Standard

Call For A National Effort Led By Federal Call For A National Effort Led By Federal GovernmentGovernment

Cannot Be Business As UsualCannot Be Business As Usual

Reform and Increased InvestmentReform and Increased Investment

Willing To Pay If Congress Gets It RightWilling To Pay If Congress Gets It Right

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Preeminent Surface Transportation Preeminent Surface Transportation System in the World.System in the World.

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ConclusionConclusion

Business As Usual Is Unacceptable Business As Usual Is Unacceptable

Challenges Are Enormous, But We Can Challenges Are Enormous, But We Can Meet ThemMeet Them

Will We Do For Future Generations What Will We Do For Future Generations What Previous Generations Did For Us?Previous Generations Did For Us?

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Gambling With Our Gambling With Our Transportation Future Is NOT Transportation Future Is NOT

An OptionAn Option

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For More Information:For More Information:www.transportationfortomorrow.org

tom@skancke.nettom@skancke.net

For More Information:For More Information:www.transportationfortomorrow.org

tom@skancke.nettom@skancke.net