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The Jobs and Transportation Act of 2009
TESTIMONY BY GOVEROR TED KULOGOSKI
House and Senate Interim Transportation Committees
Monday, November 10, 2008
Chair Beyer, Chair Metsger, and members of the House and Senate Interim Transportation Committees…thank you for having me here today.
For the record, I am Ted Kulongoski, Governor of the State of Oregon.
We have watched--- as Republicans and Democrats--- as we have spent much of the past year talking about our differences.
Now it is time to talk about our common vision for a strong economy that creates family wage jobs; protects Oregon’s environment, and enhances our quality of life.
There is no better place to begin that conversation than with this question: How do we make smart, cost-effective, and environmentally sound investments in our transportation infrastructure.
We have a long, bipartisan tradition – both at the national level and here in Oregon – of investing in transportation in good times, as we did in 2007, . . .
. . . but especially in tough times – as we did in 2003.
There are two reasons for this. First – building roads, bridges and public transit is good for the economy and puts our citizens back to work. I’ve always believed that the best social program is a job.
But just as important – investing in transportation in tough times sets us up for success during good times.
That means even as we deal with a painful budget environment – and there is no doubt we are in a recession – we cannot simply focus on the short-term.
We must think strategically – and optimistically – about the long-term.
I won’t go into a long history lesson. But I will remind you that national leaders – including presidents Roosevelt, Eisenhower, Kennedy and Reagan – all used investments in transportation to help pull America’s economy out of a downward spiral.
In doing so – they earned for our nation both economic and national security dividends.
Some of those investments were made right here in Oregon.
The Bonneville Dam was built by President Roosevelt’s Public Works Administration. As was the Portland Airport. And the Interstate Highway System – including Oregon’s critical I-5 and I-84 corridors – were planned and built by President Eisenhower.
The Interstate Highway System is the largest public works project the country had ever seen. Most people know that. But here is something most people either don’t know – or don’t remember:
The system was funded with an increase to the federal gas tax, which led to the creation of the federal Highway Trust Fund account at a time when our nation was battling its way out of a recession.
President Kennedy maintained that tax.
And President Reagan – in the depths of the 1982 recession – called for a doubling of the gas tax to meet the needs of deteriorating highway and transit systems.
But let’s look at more recent history. I mentioned 2003. That year the Legislature and I (you and me) were forced to cut more than 2-billion from the budget. Schools closed early and we had one of the highest unemployment rates in the country.
And yet, together, we made the largest investment in roads and bridges in Oregon since the building of our share of the Interstate Highway System.
Five years later I tell you without hesitation: We made the right decision. We made the smart decision. We made the bipartisan decision. And we made the decision that will continue to pay economic benefits long after the current downturn is over.
It is against this background of bipartisan progress and successful infrastructure investment that I come before you today to propose the Jobs and Transportation Act of 2009, or JTA, for short.
We are facing what may be the most serious economic crisis since the Great Depression. But as I’ve already suggested – this is no time to lower our sights or start looking in the rearview mirror.
Just the opposite. We need to focus on creating jobs – and getting ready to seize the opportunities that are certain to arise in the global marketplace when the business cycle turns positive.
In other words – we need to lay the groundwork now for a strong and healthy economic future.
That is what the JTA is designed to do. It is the most robust, sustainable, strategic and green transportation package in Oregon history.
First and foremost, the JTA will pump over 3.1-billion dollars into Oregon’s economy over the first five years alone.
That includes 600-million in one-time funding to help relieve bottlenecks in our transportation system – as well as money for maintenance, preservation and improvement projects around the state.
We will also invest 50-million in state highway modernization projects; provide a quarter billion dollars for road programs in cities and counties; and allocate fifteen million to continue our progress toward a new Columbia River Crossing – an absolutely critical investment for the Oregon economy.
Not only will these JTA investments be a powerful economic stimulus – they will sustain more than 6,700 jobs annually over the next five years.
To reap the economic dividends that are certain to follow the continued modernization of our transportation system – including thousands of new family-wage jobs – we first need make a financial investment.
But that will not be possible without new revenue.
That is why JTA – unlike OTIA III which was a bonded, one-time program – includes an on-going funding mechanism that raises 499-million dollars a year – through a combination of updated registration and title fees, and a 2-cent increase in the gas tax.
These increases will require shared sacrifice – and there is no doubt that all Oregonians will feel the pinch.
But if we don’t invest in our transportation infrastructure today, it won’t just be a pinch Oregonians feel in the future – it will be a body punch to the our economy delivered by the hidden tax that comes with poor roads and a deteriorating transportation infrastructure.
This hidden tax is: Increased vehicle maintenance costs; longer, slower commutes; and, tragically, increased injuries and loss of life caused by deteriorating roads and bridges.
My staff will be discussing these revenue pieces with you in greater detail, but I want to acknowledge that this is an area where I expect a vigorous legislative debate.
While I believe there is broad bipartisan agreement about the need for additional revenue to invest in transportation, reasonable people can disagree about how to raise that revenue.
Different states, for example, have followed different models.
Minnesota recently raised a substantial amount of new revenue by making registration fees more progressive – based on the value of the car being registered.
If this is an option that members of your committee support, I am open to that conversation.
The important point is this: We can – and should – cast a wide net in determining how we invest in transportation. But as to whether we must invest – we already know the answer: Yes! WE MUST!
And we must do so in a way that reflects who we are as a people. That means our commitment to the environment. Our determination to preserve our quality of life. And our belief that Oregon’s best days are always ahead of us.
Which brings me to the second major goal of my plan – providing the most sustainable transportation package in Oregon history.
These proposals include developing a least-cost planning model. Instead of making more capacity the answer to every transportation challenge – least-cost planning requires full consideration of all options including options that reduce harm to the environment.
The JTA also proposes shifting the focus of our current tax incentives for alternative energy vehicles.
Through the use of these credits, we have already helped Oregon --on a per capita basis --become the nation’s leader in the purchase of hybrid vehicles. Now it is time to take the next step by offering incentives for the next generation of highly efficient vehicles. Electric cars!
Another sustainability measure in the legislation is the requirement that government at all levels take a comprehensive approach to reducing greenhouse gas emissions.
This includes enhancing environmental standards for the transportation program – and a comprehensive transportation options program designed to reduce the number of cars on the road.
These sustainability measures relate closely to the final goal of the JTA – creating the most strategic approach to transportation in Oregon history.
This new strategy begins with finding a long-term funding source to replace the gas tax.
Yes – becoming less dependent oil – especially foreign oil – is a good thing.
But fact is: Less money spent on gasoline – as cars become more efficient and more people purchase alternative energy vehicles – means less gas tax revenue.
So this is a real challenge – one that Senator Starr, the chair of the Road User Fee Task Force – knows all about.
The task force’s pilot project on mileage fees has shown promising results, and the JTA includes five - million annually to continue the critical work of finding a permanent solution.
On a related matter, our current mechanisms for making transportation funding decisions are scattered among local and state entities, without clear lines of responsibility or a consistent accounting of transportation needs across the system.
To address those problems, the JTA creates a Transportation Utility Commission, modeled on the Public Utility Commission.
The Commission will have limited powers initially to develop a report that documents all road assets existing in Oregon among public and private jurisdictions and --using that document, --create a conceptual framework for determining total transportation costs and the revenue that will be necessary to meet those cost. In other words develop a conceptual framework for setting transportation rates.
The Commission will report back to the Legislature in 2011.
If the model proves workable, it will take on the primary responsibility for setting transportation rates in the future.
Another component in strategic planning is making sure that all Oregonians – not just those living or working between Portland and Eugene – benefit from our investments in transportation.
That’s why the JTA includes several provisions aimed at assisting rural Oregon, including a new trust fund for counties that will be hardest hit if Federal Timber Payments are not renewed after the current four-year extension.
Finally, and perhaps most importantly we must establish dedicated funding for non-highway transportation projects in Oregon.
In a global economy, our transportation needs go far beyond roads and bridges. We need modern air, rail and port facilities – and a funding source to keep these facilities among the best in the world.
The JTA rises to that challenge by creating a dedicated fund for non-highway projects – and by setting a goal of making ongoing investments in an amount equivalent to 15-percent of the lottery fund.
That goal, like many of the ambitious and far-reaching goals in the JTA, was initially proposed by the Transportation Vision Committee.
I’d like to take a moment to thank the members of that committee. I’d also like to thank the members of the Governance and Public Awareness committees. Over the past year, these three committees brought together business leaders, legislators, local officials, stakeholders, policy experts, and community leaders from around the state.
They did remarkable work that is in the best tradition of Oregon citizens giving their time and talent to make this wonderful state even greener, healthier and more prosperous in the future.
Now, it is time for us to go to work. And the place to begin is passage of the Jobs and Transportation Act of 2009, which I respectfully submit for your consideration.
Thank you.
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