Ken Simonson, chief economist for The Associated General Contractors of America (AGC): The Senate Finance Committee may be able to cobble together enough revenue raisers and "loophole closers" to pay for a two-year extension, but a six-year bill seems out of reach without an increase in fuel taxes or new sources of revenue -- both of which seem impossible before 2013.
Basu, ABC: The electorate seems to have expressed a preference for user fees relative to taxes. This implies significant use of tolling to promote infrastructure investment going forward. Higher vehicle fees, including higher gas guzzler taxes, are also possible.
Where does P3 fit in?
AC: Where does the public-private financing model fit in with funding future highway construction and preservation?
McGinn, ARTBA: Public-private partnerships (P3) are clearly a part of the financing solution, especially on projects that add capacity. Currently, 24 states and the District of Columbia have used a P3 process to help finance and build at least 96 transportation projects worth a total $54.3 billion. And 65% of these projects occurred in just eight states – Florida, California, Texas, Colorado, Virginia, Minnesota, North Carolina and South Carolina. Twenty-six states have not initiated a P3 transportation project. The P3 market share of total U.S. capital investment in highways by all levels of government since 2008 is about 2%. So while P3s are an important financing tool, they alone will not solve the nation's transportation funding challenges.
Basso, AASHTO: This is clearly a necessary element. Public-private funding will represent a slice, as much as 10%, of construction going forward. However, no matter what happens, future projects will require revenue streams to back them up.
Simonson, AGC: Public-private partnerships for both existing and future road segments seem likely to pay for an increasing part of highway construction. But the adoption of these models has been surprisingly slow since the Indiana Toll Road deal. The fiscal and banking-system problems in Europe may hold back P3's even more.
Basu, ABC: States and localities are increasingly looking to leverage private capital as they approach respective, often self-imposed debt limits. With the number of successful public-private partnership models expanding over time, policymakers should feel increasingly comfortable in their negotiations with private financiers. Public-private partnerships are therefore positioned to be one of the major economic growth engines this decade.
The role of pavement preservation
AC: With less funds available for new highway construction, how do you see the role of preserving our roads change?
McGinn, ARTBA: We are cautiously optimistic about the future. We don't believe it is a foregone conclusion there will be fewer funds for highway construction. The fact is the transportation network at the federal, state and local levels is deteriorating because of age and because it was not built to carry the current volume of traffic. We need a 21st century transportation system to meet the demands of the motoring public and business community, and to help facilitate economic growth and job creation. The public gets it. We just need to bring the politicians along until they do the right thing.
Simonson, AGC: While voters are more likely to support increased funding for transportation at the local and state level than they are at the federal level, it is entirely likely that the quality of infrastructure will vary from location to location based on the local political climate and the success of local transportation initiatives. As the federal role diminishes consistent with its declining investments, we are likely to see greater inequality in highway and transportation system quality.
Basu, ABC: Highway preservation, rehabilitation and maintenance will have emphasis over new construction. Stakeholders should also look for significant progress in terms of materials science.
The future of the Highway Trust Fund
AC: What does the future hold for the Highway Trust Fund (HTF)?
McGinn, ARTBA: That's a great question and one that Congress and the Obama Administration have the power to answer. The user-fee financing method for transportation projects has worked well for more than 50 years. That said, the Highway Trust Fund's balance has been drawn down and is on an unsustainable path with current investment levels unless Congress, as it should, takes action to boost the fund's revenue streams.