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Business Gets Wise to Transportation

July 08, 2008 By Conrad deFiebre, Transportation Fellow
When America's leading business advocacy group comes out foursquare for more and smarter investments in transportation infrastructure, you know that the nation has turned a corner in its regard for the roads, bridges, rails and other mobility assets that are so vital to our prosperity.

In a deeply researched report issued in June, the U.S. Chamber of Commerce's National Chamber Foundation branded our current transportation system inadequate to meet 21st century economic challenges and urged that "every funding and financing option must be considered to address its enormous problems."

That's just the latest, and maybe the most influential, salvo from America's opinion leadership that is beginning to bury the no-new-taxes-no-matter-what ideology, which for years has paralyzed our state and nation's ability to compete in the global marketplace.

"The consequences of inaction are unacceptable," the U.S. Chamber said. "Something must be done - now."

The Chamber's initiative endorses the National Surfaced Transportation Policy and Revenue Study Commission's call for investing "at least $225 billion annually over the next 50 years to upgrade our existing system to a state of good repair and ... sustain and ensure strong economic growth for our families. We are spending less than 40 percent of this amount today."

The commission, which was chartered by the federal government and chaired by U.S. Transportation Secretary Mary Peters, urged increasing the current federal gasoline tax of 18.4 cents a gallon, unchanged since 1993, by 40 cents over five years.

(Peters, a member of President Bush's Cabinet, dissented from that proposal, although her department's chief economist has estimated the cost of congestion across all U.S. transportation modes at as much as $200 billion a year, counting productivity losses, cargo delays and other economic impacts.)

The U.S. Chamber hasn't gotten specific about transportation user taxes, but on its blog it noted that China is spending 9 percent of its gross domestic product on infrastructure, compared with 2 percent in the United States since 1980. "We cannot expect to remain competitive with that level of investment," the blog added.

Not willing simply to throw money at the problem, the Chamber also urged more strategic planning of the nation's entire transportation system with mode-neutral funding standards that could boost local transit and intercity rail systems as efficient alternatives to driving.

That echoes another recent report from the centrist Brookings Institution that calls for broad reform of transportation funding policy as a necessary adjunct to funding increases. Brookings supports "a sharp increase in the tax on fossil fuels" and indexing it for inflation to "allow revenues to keep pace with rising costs" - but only if national transportation goals are clarified and funding is rigorously oriented to the desired outcomes.

Why does all this matter to Minnesotans?

First, it points to increased federal support of our state's transportation needs, and perhaps a proportionate boost compared with other states, thanks to the Minnesota Legislature's willingness to supports roads, bridges and transit over Gov. Tim Pawlenty's veto this year.

The Minnesota Chamber of Commerce backed that move. Its senior vice president, Bill Blazar, noted that a nationwide recommitment to transportation excellence will help Minnesota, too. "The condition of the system beyond our borders has a lot to do with our success," he said. "Connectivity with the United States and the rest of the world is very important for us."

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