Mary E Peters

Remarks at the National Conference of State Legislators Fall Forum - Nov. 29, 2007

Mary E Peters
November 29, 2007— Phoeniz, Arizona
National Conference of State Legislators Fall Forum
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Thank you, Representative Clark, for that kind introduction. I appreciate the warm welcome and the invitation to be part of NCSL's Fall Forum. And let me welcome you to my home state of Arizona.

It is a pleasure to see so many familiar faces in the audience. Many of you attended one or both of the White House Legislative Leadership Summits we held this year, and I met several others during visits to your state capitols.

As your program says, this is a forum about "Big Challenges and Grand Ideas." That absolutely describes the situation when it comes to transportation in America today.

Congestion is clogging our highways and choking our cities; freight is bogged down on both sides of the port gates. The inefficiencies and deficiencies of our transportation system today are impacting directly on the lives of the citizens you represent and threatening local economies and our national economic position.

The more I think about the big challenges we face in transportation, the more I am convinced of the need to move forward with new ideas -- grand ideas -- to solve them. And I do not mean one- size-fits-all dictates from Washington.

Congress is gearing up to write the next highway reauthorization bill. This is a tremendous opportunity to open the door for the kinds of transportation solutions that come about when states are free to innovate.

You have great leadership with Senator Starr heading up your new reauthorization working group. He represented NCSL well at our second White House Transportation Leadership Summit earlier this month.

But I am here today to tell you that you all need to be involved -- not just legislators who sit on Transportation Committees, but each and every one of you. These issues have implications far broader than transportation -- they affect budgets, and economic development, and quality of life.

The more legislators I meet with, the more I travel the country, the more I become convinced that the momentum is building for the kind of revolutionary change in transportation that we saw with welfare in the 1990s.

With welfare rolls multiplying and federal red tape flourishing, states took matters into their own hands. And while Washington talked, states acted. The changes they ignited created such a surge that federal reform became inevitable.

I see this same groundswell in transportation today. And we want to give states more flexibility to innovate and to use your money to match your priorities and to leverage it with private investment.

For many years, Washington mandates have increasingly overridden state transportation priorities. For example, the number of earmarked projects has grown from a handful in the mid-1980s to over 6,000 in 2005 -- valued at a staggering $24 billion.

Here's the problem. These misdirected mandates saddle states with building projects that may or may not be on their priority list. Adding insult to injury, the earmark is only good for a fraction of the total project cost. So states are left to come up with the balance of the funding, likely diverting resources from other priorities.

As a result, some earmarks sit unused for years and years. Isn't that a cruel irony in this era of tight budgets and growing needs?

There was a lot of talk as this year began about reform. But if you think things have changed in Washington, take a look at the latest appropriation bill for our Department. The House included more than 2,000 earmarks that divert funds from priority purposes such as bridge repairs, highways, and housing to pay for, among other things, museums, zoos, gardens, gymnasiums, and golf courses.

In addition to earmarks, the number of federal programs and mandatory set-asides has ballooned, while the rules and regulations that accompany them have become more complex and cumbersome.

Federal funds come with strings that add time and cost to transportation projects. Compounding the problems with Washington second-guessing your priorities is the fact that trust funds are evaporating -- even as demand for transportation escalates.

Current projections show a $4.3 billion shortfall in the highway account in FY 2009, and uncontrolled federal spending could drive it up further. I know that is a big concern among state legislators. You cannot afford to wait around for Washington to run out of money while gridlock grows and project backlogs multiply.

You understand the time has come for a fundamental change in transportation. You see the results of our current policy failures in your districts every day. As state leaders, you know your constituents want relief from traffic gridlock, not fancy press releases out of Washington about projects that won't make a difference.

So forward-leaning state leaders, including many in this room, are taking matters into their own hands. They see the innovation taking place in transportation financing around the world and they are applying those models to get traffic moving back home.

Countries as diverse as Canada, France, Spain, England, Italy, China, Mexico, and India routinely use private capital to finance transportation infrastructure improvements. I read a recent announcement that Russia has a pipeline of Public Private Partnership projects lined up that will involve hundreds of billions in private- sector investment.

PPPs as we call them are no longer just experiments. They are being utilized around the world -- and increasingly in the United States -- to reduce congestion, complete projects more quickly, and improve accountability to customers.

Just this week, California Governor Arnold Schwarzenegger announced that he will push to expand the role of the private sector in meeting the mounting transportation needs in his state. The Governor's invitation for greater private-sector innovation in transportation promises relief for California communities grappling with some of the most notorious traffic jams in the country.

California has an established record when it comes to partnering with the private sector. Earlier this month, San Diego's long-awaited South Bay Expressway opened thanks to private capital turning this "much-needed but how can we possibly pay for it" highway project into a reality. This is a new road financed, built, operated, and maintained with tolls that will be electronically collected.

Tolling is fast becoming part of the transportation mainstream, and the preferred model for adding significant new capacity in metropolitan areas. I was struck by Chicago Mayor Richard Daley's recent comment to a group of legislators that his city has no business operating a toll road. "We're not the experts," he said, adding that city government needs to focus on what it does best and let experts do what they do best -- a far more efficient approach than building a new government bureaucracy.

From the Chicago Skyway, to the Capital Beltway, to the Hiawatha Light Rail, states are a fertile proving ground for creative ways to engage the private sector in transportation. You are showing America that the free market has much to offer -- delivering capital but also innovation, cost-savings, and quality. Because of these experiments, public support for tolling and road pricing is growing. Perhaps that is because more and more people are seeing the concrete benefits -- roads being built faster, less time spent in traffic congestion.

Many states, however, still have laws on the books that get in the way of this kind of innovation. When you get home, I hope you will review yours and work on removing legislative and regulatory roadblocks.

We have developed model Public Private Partnership legislation based on some of the most effective laws in the country. It can be found on our website,, along with a wealth of additional information to help empower states that want to use innovation and technology to combat congestion.

At the Department of Transportation, we want to help you find the grand ideas that will keep your communities moving.

We are doing just that though our Urban Partnership Initiative. Many of you are aware of our challenge to communities to submit innovative transportation plans that would not just slow the growth of congestion, but would reduce it. We encouraged them to take a holistic approach. And we promised to allocate the federal contribution in a lump sum to get these projects into action, not dole funds out in bits and pieces over years and years.

In August, we awarded $850 million in federal grants to cities in five states -- Miami, Florida; Minneapolis, Minnesota; San Francisco, California; Seattle, Washington; and New York, New York. The initiative has helped jump-start cutting-edge traffic-fighting packages that combine technology, tolling and congestion pricing, and use the revenues to expand transit by light-rail and even ferry.

The results are so exciting that we are hoping to follow up with a second competition next year. I want to challenge you to get communities in your state thinking about becoming part of this wave of progress.

States hold the key to turning grand ideas like technology, innovation, incentives, and pricing into a new way of doing business for transportation in America. Your creative programs and our efforts to support them have, however, shocked many in Washington who prefer more of the same. They fail to appreciate what you know is true: change in transportation is already underway.

You are the ones setting the pace and driving real reform. Your grand ideas at the state and local level are influencing and directing national changes, just as they did with welfare back in the 1990s. Because as we have seen, where the states go, Washington follows.

Thanks to your efforts, the time has come for Washington to accept that the debate is no longer whether to change transportation policy, but rather when. Thank you.

Speech taken from website: