With a 66 percent increase in funding, will Congress pass the president's budget proposal for transportation? During today's OnPoint, Bill Millar, president of the American Public Transportation Association, explains how the federal government can pay for high-speed rail and infrastructure improvements. He also weighs in on the controversy surrounding Florida's high-speed rail proposal and explains how high gas prices affect public transport.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Bill Millar, president of the American Public Transportation Association. Bill, thanks for being here.
Bill Millar: Monica, my pleasure.
Monica Trauzzi: Bill, with budget cuts on all sides, the president offered a well-funded transportation package in his 2012 proposal. Why does transportation rank so highly for this administration?
Bill Millar: Well, we were very pleased with the president's proposal. We think that he has recognized, and recognized over the years, this is not a new thing with him, the importance of investing in transportation infrastructure. Whether it's public transportation, whether it's roads, whether it's the rail system, having a good, solid transportation infrastructure is essential to the country's growth and prosperity. It really lays the foundation upon which the economy rests. So, we were very pleased with his proposal and we are hopeful that the Congress will consider it seriously, work with the president to find a way to get it funded so that the American people and the American economy can benefit and grow for many years to come.
Monica Trauzzi: It's a six-year, $556 billion proposal. Where does the money come to pay for that?
Bill Millar: Well, that's certainly what has to be worked out. Traditionally, in public transportation and in highway transportation, user charges have been a significant portion of the funding, as well as general funds. And I noticed in the president's budget proposal that he was calling for the opportunity to sit down with congressional leaders and work out a proposal that would be acceptable to all parties. And so, while it's hard to know exactly what that would be, it wouldn't surprise me if it included some additional user fees, as well as some general fund revenue and perhaps some new ideas. The president has talked about dedicating a portion of the sale of radio spectrum to support high-speed rail investment and Internet investments. There are a number of ideas that have been put out there and I think what I read in the president's budget was a desire to sit down and work out a proposal that the House and the Senate could find acceptable, that would fund the transportation bill.
Monica Trauzzi: Is a time for Congress to get serious about a gas tax?
Bill Millar: Well, these days with the price of gas going up, certainly that would seem counterintuitive. But we know gas prices go up, they come down and it never seems like just the right time. And we have to remember that the purpose of a transportation investment is not just about today, but it's building the foundations for the growth in the future. So while my Association would personally be in favor of raising the gas tax for transportation purposes, after all, it hasn't been raised since 1993. And I think it is time. It's lost purchasing power just through regular inflation. Never mind the fact that people are driving more fuel efficient cars and thankfully many are taking public transportation more often. So, I do think that a gas tax has to be on the table. But I think there are other ideas as well. We would certainly believe that the experience with tax credit bonds for some of the major multiyear projects could be something that could be looked at. And, as I say, going back to the beginning of the modern federal program for public transportation, there's always been a general fund component because the benefits of investing in public transportation benefit everybody, not just the people that are riding the train or the bus. So I think there are a number of ideas that have to be explored and looked at. I think what's key is to get a significant multiyear investment. The president has proposed $556 billion. We certainly would be very comfortable with that level of investment if a proper and agreed-upon way to fund it can be found.
Monica Trauzzi: And what happens if you don't get that multiyear investment?
Bill Millar: Well, the difficulty with infrastructure is that you don't realize if you don't keep it up in what's called a state of good repair, one day you have a catastrophic example. Everyone will remember just a few years ago when there was a catastrophic collapse of a bridge up in Minnesota. I mean nobody had thought about bridges too much outside of the transportation community and suddenly that was brought home to the public. Well, it's that way whether you're talking about buses or trains. The equipment gets older, it becomes less reliable, it's harder to maintain, it's more expensive to maintain. It becomes like that old oil filter commercial of a few years ago, it's pay me now or pay me later. The need doesn't go away. We're lucky, we're an expanding country. The long-term prospects for our economy are good. The Census Bureau tells us that we could expect at least 100 million more Americans over the next 30 to 40 years. So, unlike some countries in the world that are shrinking, we're a growing country. We need the infrastructure to support that growth.
Monica Trauzzi: Should we be reaching out more to the private sector for funding high-speed rail projects?
Bill Millar: Certainly the private sector has shown around the world a desire to be involved in infrastructure projects. In fact, if you look at most highway construction, most public transit construction in America, it's done by the private sector. We should also look to models where the private sector may be able to earn a profit in not only building, but designing, operating, and maintaining those systems for many years. And so, certainly, we would only invest in true high-speed rail in those corridors where it was truly needed and there is commercial value in those corridors and we think private investment could provide part of the investment necessary for high-speed rail.
Monica Trauzzi: You're heading into APTA's legislative conference here in Washington next week. Transportation reauthorization will likely dominate the discussion there. Has the tone in the discussion shifted at all from last year, particularly with the new Congress in place?
Bill Millar: Well, we will have probably 800 of our members from all 50 states in town next week. We will be discussing the issues of public transit. We'll be visiting the Hill and helping all members of Congress, but particularly the new members of Congress who may not be that familiar with the federal aid programs for public transit, what they mean. Certainly, the economy is still-I mean the-yes, the economy is still a major focus for many people. Everyone knows the unemployment rate is too high. So, one of the things we'll be talking about with the Congress is how continued investment in public transportation, including high-speed and inner-city rail is a good way to produce jobs that will benefit Americans. We will also be pointing out things that historically about 76 percent of all the money that the government has invested in public transit creates private sector jobs. I think sometimes because we're called public transportation, some people think, well, gee, all those jobs must be in the public sector. No, the vast majority of the jobs that are created are created in the private sector.
Monica Trauzzi: I want to get to one final point before we run out of time. Florida recently had an interesting case on high-speed rail. Their plans for high-speed rail died because the governor refused to accept federal funding. Is that a sign of how the states feel in terms of accepting federal funding from the government and are you concerned that we may see more cases like this one?
Bill Millar: I think that was a most unfortunate decision. I think it received a lot of attention. We must remember, only three governors have turned back the money. Twenty-eight states have continued with their inner-city and high-speed rail programs. We are seeing more states line up to proceed with rail. So, while all the attention has gone on three states, including Florida, let's keep our eye on the ball, which is America needs a good multimodal transportation system, including high-speed and inner-city rail, that most governors in most states are proceeding with their plans and we believe that the need will be there as our population grows, as our economy grows. And so I expect we'll see continued investment in rail transportation for many decades to come.
Monica Trauzzi: Okay, we'll end it right there. Thank you for coming on the show.
Bill Millar: Thank you, my pleasure.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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