A Vision for 21st Century Transportation by Joe Roman

Friday, June 20, 2008

Comments of Joe Roman, President and CEO of the Greater Cleveland Partnership at the June 17 Ohio's 21st Century Transportation Task Force 'conversation' at Cleveland State University

Thank you, Mr. Chairman, members of the Task Force.  My name is Joe Roman and I am the President and CEO of the Greater Cleveland Partnership.  We appreciate this opportunity to offer comments for your consideration about one of the most important issues of this decade.  Indeed, the decisions we make today about transportation policy will impact our region, state and nation well into the next Century. 

Transportation policy is important on many levels - no longer can we think about these issues in isolation.  Transportation policy impacts our economic competitiveness, environmental sustainability and social equity.  You will hear from many professionals and concerned citizens about the issues that face us.  This evening, I will focus my comments on the impact of transportation policy on the economy and the environment.

Over the past decade, we have come to realize that our state - indeed our nation - is made up of metropolitan regions.  We are beginning to look at our economy in these terms by recognizing that each region in our state has its own strengths and challenges.  Indeed, each region has its own economy.  It is time to begin to think of transportation policy in regional terms as well.

As noted in the report recently released by the Brookings Institution, Blueprint for American Prosperity, metropolitan areas are now the functional units of our economy. 

The 100 metropolitan areas of the United States take up only 12 percent of the land, but account for 65 percent of our population, 68 percent of the jobs, and 75 percent of the nation's economic output.

These metropolitan areas handle 72 percent of the nation's seaport tonnage, 92 percent of air passengers, and 93 percent of rail travelers.

Northeast Ohio is one of these 100 metro regions and has an economy that is unique, as do the other regions of Ohio. 

We are facing a national transportation crisis of immense proportions.  The ever increasing cost of maintaining and repairing our existing transportation system and the need to invest in the future has created a funding deficit, the amount of which is staggering.  And while some would argue that this could not come at a worse time - with a challenging fiscal environment and scarce sources of revenue - I believe we should look at this moment as the best time to take a serious look at transportation policy.

A collective recognition of the need to reinvest in our aging and outdated transportation network has finally become clear - although tragic, the collapse of I-35 bridge in Minneapolis brought this into keen focus.  And as we all experience the increasing congestion on our daily travels, we are forced to recognize that delays equal a loss of productivity and add to our air quality and pollution problem.  Northeast Ohio already has the worst air quality in the state - a fact that we must keep in mind as we discuss these issues.  Additionally, due to the changing nature of the American economy, congestion around our ports and freight corridors is worse than it has ever been.  And no relief is in sight. 

As we listen to our members and the problems they face, especially our small businesses, we hear with more frequency than ever before that the cost of transportation is becoming almost unbearable for some.  Transportation is now the second largest expense for American households, consuming on average 20 cents out of every dollar.  Only housing costs exceed this, with food a distant third. 

Our restrained federal transportation budget and the deficit facing the Highway Trust Fund demand that we take these problems seriously and that we rethink our transportation policies.  The current system has its roots in the 1950s, a time when our objective was to link the nation with an interstate highway system, one that allows us to get from one place to another, but does not consider the needs within each metropolitan area. 

Federal and state transportation policy should empower states and metropolitan areas to grow within the dynamics of their own economy.  Regions should be empowered to determine how transportation dollars should be invested - whether that be in roads and highways, rail, public transportation or investments in ports. 

We need a national transportation strategy, one that looks to the future and provides an overarching vision that supports competitiveness, rather than funding individual states or singular needs.  One concept that is gaining traction in the business community is the creation of a permanent, independent federal commission that would be charged with prioritizing national needs in all transportation sectors - including highways, freight, and passenger travel.  A roadmap that would become the basis for investments, if you will.  The charge of such a commission would be more limited than that proposed by the National Surface Transportation and Revenue Study Commission in 2008.  Instead of focusing on all specific investments, it would focus on three program areas of national importance:  the preservation and maintenance of the interstate system; the development of a national intermodal freight agenda; and a comprehensive plan for inter-metropolitan passenger travel.  This is not a new concept.  In fact, several countries (and competitors, I might add) have already initiated national transportation investment plans.  Recommendations from Australia's National Transportation Council include a model that recognizes the need to coordinate regional and national goals.  Canada's "Straight Ahead" transportation plan is a blueprint to promote competition, emphasize multi-modal investment, and recognize related objectives, such as environmental sustainability.  Germany has opted for an entirely different approach to transportation policy, one that creates a national vision, but empowers regions to carry it out and maximize performance.  In the past, Germany's transportation policy was designed to prop up rural areas, but the country has now changed its vision to focus on metropolitan areas and regional competitiveness.  Every region now has a goal and economic development goals that are assisted by the use of transportation funding.

Once this national vision is created, federal government should empower states and regions to grow.  States should retain the primary role on most decisions, but major metropolitan areas should be given more direct funding and project selection authority.  Projects that benefit regions often expand beyond the boundaries of each municipality - by creating a way in which regions can make regional decisions, we can bring elected officials, citizens, and businesses together to make regional decisions.  This "carrot and stick" approach might be just what we need to begin thinking and spending regionally.  One example would be the creation of "sustainability challenge grants" that could be awarded to regions that develop their own vision for coping with congestion, greenhouse gas emissions, housing, land use, economic development and energy policies.

Accountability and performance measures are an important indicator of future success.  In order to rebuild public trust and maximize efficiency, transportation policy should include metrics and measurements.  A transparent, data-rich reporting system that allows us to determine which projects really work, which ones are more than a "bridge to nowhere", and which ones create economic vitality.

So, how do we pay for this?  In the next year, many funding proposals will be laid upon the table.  We must consider them all and think of spending as investing - in our future, our safety, our economic competitiveness. 

The Federal Government must address the current shortfall in the Highway Trust Fund, which is expected to be bankrupt before the next reauthorization, and we must work together to implement a funding mechanism what will minimize the possibility for future deficits.  We encourage this task force and the State of Ohio to work closely with Ohio's Congressional delegation and other federal leaders to create a partnership to see that this is resolved.  Without a response to the pending shortfall, Ohio and our economy will suffer dramatic slowdowns in road construction at a time we cannot afford it. 

One idea that has already been proposed by two of our Northeast Ohio Members of Congress - Congressman LaTourette and Congressman Dennis Kucinich -- is that of a Federal Financing Bank within the Treasury Department.  Through such an entity, the nation would gain a new financing authority that would identify, evaluate, and help finance infrastructure projects of substantial regional or national importance through various mechanisms, including zero-interest mortgage loans for states and local governments to use for specific projects.  The loans would bear a small fee of one-quarter of one percent of the loan principle to cover the administrative costs of the bank.  It would not require Congress to appropriate any funds and would effectively double the amount of financing that is available for infrastructure investment.  Over time, it could conceivably replace the existing and troubled highway trust fund and enable us to think about a transportation system that could not have been imagined 50 years ago - when the current system came into being.

In closing, the members and staff of the Greater Cleveland Partnership commend you for taking this important step of studying and rethinking transportation policy.  There are specific local projects for which we will be advocating, but we need to do so within the framework of a national and statewide policy that recognizes the importance of our metropolitan regions. Our comments this evening are dedicated to that process and we stand ready to work with you to move this critically important process forward.

Thank you.

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