Copyright 2000 Federal News Service, Inc.
Federal News Service
March 21, 2000, Tuesday
SECTION: PREPARED TESTIMONY
LENGTH: 2079 words
HEADLINE:
PREPARED TESTIMONY OF WILLIAM W. MILLAR PRESIDENT AMERICAN PUBLIC TRANSPORTATION
ASSOCIATION
BEFORE THE HOUSE COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE GROUND TRANSPORTATION SUBCOMMITTEE
BODY:
INTRODUCTION
Mr. Chairman, on
behalf of the American Public Transportation Association (APTA), I appreciate
the opportunity to comment on the misguided proposal to reduce the tax on
federal motor fuels by 4.3 cents. This Committee's commitment to providing a
balanced transportation system, most recently in the Transportation Equity Act
for the 21st Century (TEA 21), has made a real difference all across America in
addressing critical surface transportation investment needs. We are here today
to urge Congress not to jeopardize the important policies and investment
programs embodied in that legislation. In particular, our members are extremely
concerned about the proposal's potential to negatively affect the financial
stability of the Highway Trust Fund and its Mass Transit Account (MTA). In that
regard, on March 12, 2000, APTA's Board of Directors, drawn from all segments of
the industry and all regions of our country, unanimously passed a resolution
opposing any revision to the existing federal motor fuels tax. A copy of the
resolution is attached. Areas all over the country are straggling with traffic
and congestion. We can think of no worse time to reduce our commitment to
investment in surface transportation infrastructure, particularly since public
transportation plays a key role in energy conservation goals. Moreover, we
estimate that if the current proposal to reduce the motor fuels tax by 4.3 cents
were to be implemented, federal transit funds would be reduced by
$5 billion over the next 31/2 years, not including potential
reductions in state and local matching investments. This would result in 157,000
jobs lost, $15 billion lost in business sales, a
$7.5 billion loss in highway and transit user transportation
costs, and $0.8 billion in lost non-transportation taxes to
local and state governments.
About APTA
APTA's 1,270 member
organizations serve the public interest by providing safe, efficient and
economical public transportation service, and by working to ensure that those
services and products support national energy, environmental, community, and
economic goals. APTA member organizations include transit systems; design,
construction and finance firms; transit product and service providers; academic
institutions, and state associations and departments of transportation. More
than ninety percent of the people who use public transportation in this country
are served by APTA member systems.
On the first day of this year, after
a year-long strategic planning effort, APTA adopted a new name to reflect the
broader role that APTA member organizations play in addressing the
transportation needs of our nation's citizens - The American Public
Transportation Association. Our members chose "public transportation" in lieu of
"public transit" to better convey the full range of transportation services that
APTA members are engaged in -- planning how to meet local transportation needs,
managing mobility demands, and delivering a range of services in an energy
efficient manner.
Public Transportation Ridership Increases
Mr.
Chairman, thanks to Congress' investment in the federal transit program, public
transportation ridership has already increased by 16% over the past four
years-despite the fact that motor fuel prices during that period have been the
lowest in decades. However, despite the availability of inexpensive gasoline
during that time, more and more people turned to transit to get to jobs, health
care, entertainment, and other destinations. We expect this growth in ridership
to continue, especially with rising gas prices, and transit
agencies nationwide are investing in capital equipment and facilities to meet
the growing demand for their transportation services. Clearly, now is not the
time to jeopardize those investments by reducing federal investment in public
transportation, which is what a reduction of the motor fuels tax would mean.
$14 Billion Needed Each Year to Improve Public
Transportation Infrastructure
Indeed, transportation experts agree that
our capital investments are still not keeping pace with the annual
$14 billion which the U.S. Department of Transportation
estimates is necessary to modestly improve the conditions and performance of our
nation's public transportation infrastructure. An unprecedented level of travel
is taking place, and will continue to take place, throughout this country. If
current trends continue, over the next 15 years alone, highway travel is
expected to increase 40%, and transit use 60%. In order to accommodate such
growth, it is critical to provide maximum investment in all forms of surface
transportation. That system is best which offers Americans a choice for their
mobility needs, and such a multi-modal and balanced transportation system
depends upon an assured level of federal infrastructure investment.
Negative Impact on the Mass Transit Account & Infrastructure
Investment
Mr. Chairman, transit ridership is up and growing. The
significant need for additional investment in public transportation has been
demonstrated--yet public transportation investment would be seriously hindered
if the proposal to reduce the tax by 4.3 cents was implemented. Indeed, the
negative impact that this proposal would have on the financial stability of the
Highway Trust Fund's Mass Transit Account would be enormous--and it could be
felt almost immediately, affecting critical transit investments. Currently, the
Federal Gasoline Tax is 18.4 cents per gallon. Of this, 2.86 cents per gallon
flows into the MTA. The proposal would reduce that amount to 2 cents per
gallon--a 30% reduction. The President's budget for the current Fiscal Year (FY)
projects $4,673 million in MTA revenues. In FY 2001, the
President's budget forecasts revenue of $4,780 million. A cut
of 0.86 cents would result in a loss of $1.4 billion in FY
2001. In fact, for the remaining 3 1/2 years of TEA 21--which authorizes up to
$41 billion dollars for transit over the six-year period--the
MTA would lose $5 billion in revenue. Including the local
match, public transportation stands to lose more than $10
billion during the remainder of TEA 21. Moreover, the MTA would have a negative
cash balance by FY 2003.
In addition, the loss of funds under the
federal highway program that can be used for transit--which state and local
agencies are increasingly using to fund transit projects--would also be
significant. By the end of FY 2003, $950 million of Congestion
Mitigation and Air Quality Improvement Program funds and $3.9
billion in Surface Transportation Program funds would be lost.
Finally,
Mr. Chairman, if the gas tax were to be reduced, it is likely that transit
agencies would be forced to raise fares and/or cut services. If rising fuel
prices are the issue here, why would we want to discourage transit ridership,
which clearly addresses important national energy conservation goals?
APTA Supports Long-Term Energy Solutions--Not Short-Term Gimmicks
Mr. Chairman, we believe the current proposal to reduce the federal
motor fuels tax by 4.3 cents will have no impact whatsoever on the foremost
issue in this debate: America's continued dependence on foreign supplied oil.
While the energy crisis subsided in the early 1980's, America's dependence on
foreign oil continues.
According to the Energy Information
Administration, in 1998, net imports supplied about 52% of U.S. petroleum
consumption, the highest percentage ever. In an effort to provide for improved
energy efficiency, APTA supports long-term solutions to assist America in
overcoming its dependence on foreign supplied oil.
We appreciate this
Committee's promotion of public transportation as a major source for energy
conservation. In TEA 21, this Committee recognized the important role that
public transportation plays in protecting our precious natural resources: A bus
with as few as seven passengers is more fuel-efficient than the average
single-occupant automobile used for commuting. Moreover, the fuel efficiency of
a fully occupied rail car is 15 times greater than that of the average
single-occupant automobile. In fact, every commuter who switches from driving
alone to riding mass transit saves 200 gallons of gasoline per year.
Mr.
Chairman, the proposal to reduce the federal motor fuels tax by 4.3 cents would
have virtually no effect whatsoever on the average American consumer. In 1998,
the average annual fuel consumption per vehicle in the U.S. (passenger cars
only) was 548 gallons. The additional 4.3 cents we have paid at the pump since
1993 adds up to approximately $24 per year. If the tax were to
be reduced, at an average of $1.60 per gallon, an individual
would save only 2.7% on gasoline expenditures during a given year. Therefore,
the average consumer would save approximately $2 each
month--hardly noticeable to anyone in search of relief from higher-than-usual
gas prices. We also note, Mr. Chairman, that even at higher-than-normal prices,
the average price per gallon in the U.S. is significantly less than any other
industrialized nation.
Public Transportation Has Significant, Positive
Impacts On the U.S. Economy
It is not just that transit ridership is up
Mr. Chairman, but public transportation generates a real return on the federal
investment. In addition to the 300,000 people employed directly by the
$27 billion-a- year public transportation industry, thousands
of other people employed in the engineering, construction, manufacturing and
retail industries are dependent upon transit investment for their livelihood.
Moreover, a recent study prepared by Cambridge Systematics, Inc. finds that
transit capital investment is a significant source of job creation. Every
$10 million of transit capital investment creates approximately
314 jobs and a $30 million gain in sales for businesses.
Furthermore, the changes in travel patterns caused by transit investment remove
vehicles from the traffic stream, saving time for both transit and highway
users. The increased productivity caused by this significant timesaving serves
to stimulate the economy.
However, Mr. Chairman, if the current proposal
to reduce the motor fuels tax by 4.3 cents were to be implemented, the
$5 billion reduction in federal transit investment over the
next 3 1/2 years would result in: 157,000 jobs lost; $15
billion lost in business sales; a $7.5 billion loss in highway
and transit user transportation costs (including operating, fuel, and congestion
costs); and $0.8 billion in lost non-transportation taxes to
local and state governments.
Mr. Chairman, the nation's robust economy
depends significantly on investment in its transportation sector, which
represents 17% of the Gross Domestic Product. Increases in productivity and
reductions in excess inventory levels are attributable to "just in time"
delivery, manufacturing and other innovations dependent on a sound and safe
multi-modal surface transportation system. We believe that the proposal to
revise the current motor fuels tax could have a severe negative impact on all
aspects of surface transportation, potentially disrupting this period of
unprecedented economic growth. We urge you to oppose it.
CONCLUSION
Mr. Chairman, I again thank you for inviting us here today. As we have
stated, the proposal to reduce the federal motor fuels tax would put the Mass
Transit Account--the most important source of funds available to public transit
agencies throughout America-into deficit status in the very near future. We
believe that this would represent a genuine threat to the future of our nation's
public transportation infrastructure. Moreover, we believe that by reducing the
revenue flowing into the Mass Transit Account, Congress would be taking a giant
step backwards from the landmark TEA 21 legislation, which has been an effective
way to preserve and expand our public transportation infrastructure. As has been
the case throughout APTA's history, our mission will continue to include the
promotion of public transportation as a smart, cost-effective, and energy
conscious travel option. We look forward to working with you in an effort to
find long- term solutions to our nation's energy problems, and we believe that
public transportation should be part of the solution--rather than an unintended
victim of this misguided proposal to cut the federal gasoline tax.
END
LOAD-DATE: March 24, 2000
