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AGC CALLS ON CONGRESS TO CONSIDER COMMISSION'S VISION: CREATE AND SUSTAIN THE PREEMINENT SURFACE TRANSPORTATION SYSTEM IN THE WORLD

January 17, 2008

Washington, D.C.—The Associated General Contractors of America (AGC) today commended the House Transportation and Infrastructure Committee for conducting a hearing on the National Surface Transportation Policy and Revenue Study Commission's report to Congress—Transportation for Tomorrow—and called on Congress to give due consideration to the report's bold and visionary plan for the future of surface transportation policy in the United States.

"Congress assigned the Commission a great task, and it has responded comprehensively and boldly," said Stephen E. Sandherr, AGC's Chief Executive Officer. "For nearly two years the Commission tackled tough issues and weighed disparate views and, by placing the national interest above parochial concerns, carefully developed a thorough vision for the future of our nation's surface transportation network.

"This report links the future growth in the system to achieving measurable national goals by scrapping the current system to advance areas of clear national interest, such as system maintenance, congestion relief, rural connectivity, freight transportation, safety, energy security and environmental stewardship."

The Commission outlines a plan that will accommodate and enhance future economic growth. The Commission plan addresses inefficiencies and balkanization in the federal system and it focuses on an evolving user fee that better represents the actual cost of planning, building and maintaining the nation's transportation system.

The report recommends reforming and refocusing the system to maximize the impact of future investments. The reformed program would focus on truly national interests, holding funding recipients accountable for strict standards of performance, requiring cost benefit analysis, removal of wasteful bureaucratic steps in the process, and ensuring that transportation partners at the local, state and national level continue and increase their support for transportation.

One of the major recommendations of the Commission to Congress is to scrap the current federal surface transportation program structure and to put in place a more consolidated program to advance areas of clear national interest. The Commission recommends comprehensive local, state, and national planning efforts to identify and prioritize investment needs, estimated to be in the range of $225–$340 billion annually. This number is consistent with the investment needs for highways, transit, freight and passenger rail as identified by the American Association of State Highway and Transportation Officials (AASHTO) in its comprehensive transportation document released in July 2007 entitled A Vision for the 21st Century.

Following reforms to the program, the Commission recommends that the federal government significantly increase its financial support for surface transportation and contribute approximately 40 percent of the capital. The Commission joins AGC in proposing the creation of an independent, non–political commission–entitled the National Surface Transportation Commission—to make recommendations to Congress on specific revenue adjustments to implement the national surface transportation strategic plan.

"AGC is pleased the Commission is embracing the idea of de–politicizing how federal surface transportation investment decisions are made and how to pay for them," said Sandherr. "The federal government's commitment to surface transportation must be focused, renewed, and strengthened to maintain and improve our quality of life and economic well–being, and restore public trust in the program. This report lays out a way to achieve that goal."

The Commission's report also identifies waste and delay due to burdensome and lengthy project delivery requirements, such as the environmental review and permitting processes, as an area to be addressed.  AGC has reported that construction costs have increased at rates greater than inflation in recent years, a trend that has exacerbated rising transportation project costs nationwide.  Specifically, the Producer Price Index (PPI) for highway and street construction inputs has risen 49 percent from December 2003 to November 2007, whereas the Consumer Price Index (CPI) has risen 14 percent in the same time period.  AGC commends the Commission for recognizing the impact of construction inflation and delivery processes on the ability of the nation to meet surface transportation needs.

The National Surface Transportation Policy and Revenue Study Commission was created under Section 1909 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (P.L. 109–59) to investigate and make recommendations to Congress on the future federal role in surface transportation policy. A copy of the Commission report is available at www.transportationfortomorrow.org.

The Associated General Contractors of America (AGC) is the largest and oldest national construction trade association in the United States. AGC represents more than 32,000 firms, including 7,000 of America's leading general contractors, and over 11,000 specialty–contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters.  Visit the AGC Web site at www.agc.org.  AGC members are "Building Your Quality of Life."

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