Copyright 2000 Federal News Service, Inc.
Federal News Service
July 25, 2000, Tuesday
SECTION: PREPARED TESTIMONY
LENGTH: 1578 words
HEADLINE:
PREPARED STATEMENT OF DAVID D. KING DEPUTY SECRETARY OF TRANSPORTATION NORTH
CAROLINA DEPARTMENT OF TRANSPORTATION
BEFORE THE
HOUSE COMMITTEE ON WAYS AND MEANS SUBCOMMITTEE ON OVERSIGHT
SUBJECT - HEARING ON TAX TREATMENT FOR INFRASTRUCTURE
BODY:
Mr. Chairman, my name is David King. I
serve as the Deputy Secretary for Transportation of the North Carolina
Department of Transportation. My responsibilities include highways, ferries,
aviation, bicycles and pedestrians, public transportation and rail.
I
testify today on behalf of the States for Intercity Passenger Rail. States for
Intercity Passenger Rail is a grass roots organization of state departments of
transportation. North Carolina is one 18 of states in the group ably chaired by
Secretary Terry Mulcahy of the Wisconsin DOT. Our growing membership is drawn
from around the country and includes states with existing passenger rail service
as well as those in the implementation stages. From large states and small
states, we span the political persuasion continuum with varied interests and
geography. We are quite a diverse group and we are a national group. Our
strength is initiative created and supported by states which share a common
goal. It is refreshing to characterize our state-based transportation group as
national after the fractious, regionally based alignments that characterized the
TEA-21 debate. Five basic principles provide the foundation of States for
Intercity Passenger Rail:
First, intercity passenger rail complements
existing intercity passenger and freight systems. Those
systems, mainly road and air, are saturated to the point that safety and
reliability are compromised. The states and the private sector are meeting the
challenge by investing record amounts of money in those systems. We have made
the business decision that we receive a greater return on investment by
increasing the capacity of passenger rail rather than by making alternative
investment decisions. An example is the cost of adding a lane of interstate is
more expensive than improving a segment of rail.
Second, because
intercity passenger rail trips tend to be 100 to 500 miles in length, many of
the corridor planning, analysis, and construction management tools routinely
used at the state level apply. States can and do plan, build and maintain
interstate transportation corridor systems. We meet a myriad of environmental,
planning, and safety standards. These projects require massive investments and
we deliver them every day.
Third, improved intercity passenger rail is
attractive to states because it is incremental. Our programs are publicly funded
to deliver public services, and states must make prudent investments. We
recognize that new transportation infrastructure cannot be built overnight, but
we need to start where we are today and work to improve those systems. Our
stockholders, the citizens of our various states, have very high expectations.
Fourth, states recognize the importance of partners in this process.
Because railroading is both a capital and labor intensive business, we must have
the full participation of the freight railroads, existing shippers, and labor.
The freight railroads own most of the assets outside the Northeast Corridor.
Publicly and privately held railroad assets are currently shared in part by
commuter agencies. Our emphasis will be to assure that nothing we do to improve
rail passenger service diminishes the ability of the
freight railroads to provide safe, reliable freight service.
All workers have a right to expect equitable compensation and decent working
conditions. The burden is on the states to learn and work with our partners
effectively.
Fifth, the federal government has a role to play in
intercity passenger rail because financial investment is in the national
interest. Beyond the interest of the individual states and groups of states in
nearly a dozen corridors, it is in the interest of the Nation to have series of
vibrant, well built, well operated intercity rail corridors. These corridors
contribute to a national commitment to improve mobility and the social and
economic quality of life for all our citizens. They anchor an integrated system
of public transportation services including local and regional transit and
access to major airports. States, however, cannot accomplish this laudable goal
alone or even collectively; transportation federalism dictates a need for a
federal partner.
Capital formation is an essential role for the national
government in transportation federalism.
The federal government fulfills
a vital role in highway, public transportation, aviation and inland water
transportation by creating a series of excise taxes and fees, placing them in
trust funds, and allocating those resources.
We need a federal partner
that provides a stable, dedicated, long-term financial commitment. Further,
these financial resources must expand the overall level of financial commitment
to all modes of transportation. The lack of progress nationally in improving
intercity rail passenger service is directly attributable to the lack of a
meaningful federal partner.
More specifically:
The complex,
long-term nature of corridor development dictates a multi-year tool. The federal
government, through the tax code, can provide useful means of organizing larger
amounts of investment capital. States are currently investing in intercity
passenger rail. These funds can be used as match for federal investments. In
fact, the issue of matching funds deserves a more thorough and complete
examination. States are creatively using a broad array of public and private
resources to provide improved rail service. A broadening of the sources of
eligible matching funds should be encouraged. The combination of federal, state
and other funds can help achieve both economies of scale and funding levels
attractive to investors.
Further, we need to increase investment in
transportation infrastructure. States are responsible for delivering a broad
array of transportation services. This requires program stability and a reliable
and predictable source of revenue. In large measure this stability is derived
from the latest multi-year surface transportation bill AThe Transportation
Equity Act of the 21st Century of 1998
or ATEA-21. States for Intercity
Passenger Rail do not want to re-open TEA-21. Rather, we wish to draw upon a
major strength of the bill - its commitment to financial innovation and equity.
The Transportation Infrastructure Finance and Innovation Act (TIFIA) is
especially instructive. It is encouraging to note that one of the first TIFIA
investments was Pennsylvania Station in New York City, which is in part an
intercity passenger rail facility.
HR 3700: AThe High Speed Rail
Investment Act is a highly significant financial innovation for states and their
partners.
The structure of HR 3700 benefits all levels of transportation
federalism.
For the federal partners it provides significant additional
capital without unduly straining budget resources and the appropriations
process. On the state side it provides a stable, long-term, source of financial
resources.
HR 3700 maintains the integrity of TEA-21. By capping the
amount of funding any single corridor can receive, it is more likely that an
equitable distribution of the funds will occur.
States for Intercity
Passenger Rail support enactment of HR 3700 as amended.
I believe three
areas merit perfecting language:
1. Project development: What
constitutes a worthwhile project? Characteristics of an appropriate project need
to be described in greater detail.
2. Project selection: Is there a more
effective means of ensuring that the most meritorious projects move forward?
3. Project management: States should manage the projects.
We do
not believe that these are insurmountable problems. Individually and
collectively we are eager to work with the committee, the subcommittee and
others to clarify language to strengthen the bill.
Clarification can
promote the success of the bill. A clear understanding of the roles and
responsibilities of the partners will lead to prompt implementation. All the
partners should focus on the strengths and experiences they bring to the effort.
In this regard we view Amtrak as a partner whose strength is to operate
passenger rail services as well as mail and express business. This bill should
not be seen in any way as an alternative for Amtrak funding. Our National
Railroad Passenger Corporation has a continuing need for capital investment at
the levels provided in authorizing legislation.
We value our partnership
with Amtrak but we believe that giving states a choice of providers and partners
will lead to a stronger and more efficient Amtrak.
North Carolina is
ready to move forward, now.
Based on Governor Jim Hunt's unwavering
support for intercity rail over the past eight years, North Carolina is ready to
implement this legislation now. Two years ago we invested over
$72 million to acquire control of the North Carolina Railroad.
We have invested nearly $40 million in train stations around
the state. We are poised to invest another $48 million in track
and signal improvements this year. Our high-speed rail corridor forms an
integral part of North Carolina's freight and passenger rail
network and will serve all North Carolinians.
We feel a sense of urgency
from our citizens who perceive correctly that despite our record levels of
investment in transportation infrastructure, congestion and air quality continue
to be problematic. We look forward to working with you on this critical project.
Thank you for allowing me the opportunity to testify before you today.
END
LOAD-DATE: July 27, 2000
