Federal Highway Administrator Mary Peters
Remarks as prepared for delivery
AASHTO Washington Legislative Briefing
February 26, 2003, Pentagon City, VA

Thank you for the opportunity to meet with you during AASHTO's Washington Briefing. In my former position as a State DOT Director, I thought this meeting was an excellent opportunity to gain an understanding of the important political and policy issues affecting transportation.

I am honored to represent President Bush and Transportation Secretary Norman Mineta today. While the Secretary is not able to be with us, he does send best wishes to you, and I am pleased to report that he is well on his way to recovery from his recent surgery.

As we were discussing some strategic issues at FHWA recently, I recalled hearing that the Iroquois Indians, whose descendants now live in the New York state area, believe that tribal elders should consider the impact of their decisions on the next seven generations. Given current challenges, it is perhaps not the best of times, nor the worst of times, but it is an important time for America — a time that will shape our country, indeed the world, for many years to come.

The decisions we make now will affect the next 10-20 years — perhaps even the next seven generations.

BUDGET AND REAUTHORIZATION

As Transportation Secretary Norman Mineta has said, a safe and efficient transportation infrastructure is absolutely essential to business and rural development, for economic growth, and the quality of life of every American.

I want to give you a status report on the 2004 budget and the reauthorization of the transportation act that will, in all likelihood, guide our programs and spending for the next six years.

The President's proposed budget is both responsive and responsible for this nation at this time. In developing the '04 budget the President outlined three national priorities: winning the war against terrorism, securing the homeland, and generating long-term economic growth. The President's budget is focused on those goals. In fact, the Council of Economic Advisers reports that the President's economic plan would generate 1.4 million jobs by the end of 2004.

Keeping our country safe and secure has to be our number one priority. We are fighting a war against terrorism and our country is facing a potential war with Iraq.

States know what it takes to live on a budget. Resources are often inadequate to cover all that you need to do. Resources are stretched, especially during a time of budget deficits and growing security needs. In times like these, setting budget priorities is a tough business - one that requires determination and leadership. That is the kind of leadership that your Governors and President Bush provide.

SAFER, SIMPLER, SMARTER

When the Department's proposed FY 2004 budget was released early this month, Secretary Mineta said we are "creating a safer, simpler and smarter national transportation system for all Americans:

• safer, because we are placing a greater emphasis on saving lives and reducing crashes;
  
  
• simpler, because we want to consolidate and streamline programs and improve project delivery; and,
  
  
• smarter, because we are improving system performance and enhancing program accountability."

Secretary Mineta has challenged us to be Safety Advocates, to focus on a simple but profoundly important goal: improving safety and saving lives. We want to make sure that people arrive at their destination alive. As you know only too well, today many do not.

Forty-two thousand people perish annually in traffic crashes. Roadway crashes occur every five seconds, and there is a fatality every 13 minutes. Almost one out of four -- more than 9,000 lives -- could be saved, if America would only buckle up.

We look forward to working with you to improve the safety of the nation's roadways. The President's budget request will make a meaningful investment to strengthen our partnership with the states, the public, and law enforcement to improve safety.

The US DOT budget directs $14.4 billion, or 27 percent of the overall budget, to reducing highway fatalities, preventing injuries and encouraging safe driving. Another $447 million is included for grants to counter drunk driving and promote seat belt use.

While a few details of the Administration's reauthorization proposals are still being discussed, the 2004 budget reveals the foundation for proposed new legislation. The President's proposed budget for FY '04 increases overall discretionary spending by 4 percent — in line with what the income of the average American family is expected to grow.

The Administration bill calls for $247 billion for highways and transit over the next six years. That is a 19 percent increase over the level guaranteed by the expiring TEA-21, (Transportation Equity Act for the 21st Century) reflecting the priority the Administration places on our national transportation system.

Other key provisions of the Administration's proposed budget include:

Guaranteed funding -- it is one of the biggest success stories from TEA-21. These guarantees will be retained and refined in the new surface transportation legislation.

Our proposal calls for increased funding flexibility for state and local authorities so that you can address specific areas of concern. This will help deliver needed transportation improvements promptly, relieve congestion, and save lives.

I want to note that this flexibility extends to other DOT agencies. At the Federal Transit Administration, for example, the President's budget promotes common sense transit solutions by giving states and localities the resources and the flexibility to make informed decisions about transportation investments.

Most discretionary grant programs are shifted to formula programs and merit-based funding. The FTA budget also promotes independence and opportunity by increasing funding and flexibility for programs that serve our most vulnerable populations. That means programs for rural areas, for persons with disabilities, low-income persons, and the elderly.

The Administration's 2004 proposal extends the current funding approach we are using today under the TEA-21, which links highway spending to Highway Trust Fund receipts.

It also continues the Revenue Aligned Budget Authority (RABA) adjustments that link highway spending to Trust Fund receipts. Our reauthorization proposal will recommend modifications to RABA to address the wide fluctuations seen in the past few years. As the economy improves, the RABA adjustment will ensure that transportation infrastructure receives increased investment in line with increased revenue in the Trust Fund.

The '04 budget includes a new Infrastructure Performance and Maintenance Initiative, specifically aimed at immediate highway needs and at projects that are ready-to-go. It will provide states with $1 billion in contract authority each year for 2004 through 2009 that will enable them to focus on projects that preserve existing highway facilities and/or alleviate congestion. The idea behind the Infrastructure Performance and Maintenance Program is to promote projects that result in immediate benefits -- these benefits can provide immediate stimulus to the economy and create jobs, while also improving highway system condition and performance.

Funds will be apportioned to the states using the same formula used to apportion STP funds. If enacted, this could mean millions of dollars in new federal-aid funding to your states.

We will continue to encourage innovative financing tools so that states and municipalities can leverage the power of federal funding. We will also work with you to encourage more private sector investment in infrastructure projects.

We also propose that all revenue from gasohol taxes be deposited directly in the Highway Trust Fund - rather than the current approach that allows a portion of the gasohol taxes to be deposited in the General Fund. If enacted, this one change will add about $600 million of available funding to the Highway Trust Fund for each year of the authorization cycle. All of this money would be available exclusively for highway projects.

Every dollar collected into the highway account of the Highway Trust Fund during the six years covered by the reauthorization period will be obligated, and ultimately spent, under the President's proposal. In addition, over the six years, we would obligate $6 billion above the estimated receipts collected. This builds on the solid base of ISTEA and TEA-21 which included record levels of transportation funding.

The budget ensures the highest possible funding for investment in our nations transportation infrastructure, but does not propose new user fees. While this is the Administration's proposal, it is important to note that there remains a substantial review process and work with Congress before a bill is finalized.

To ensure environmental streamlining and stewardship, efficient environmental review processes are a priority. We will continue to implement the President's streamlining Executive Order to guide good decision-making on transportation projects and improve processes.

Good construction projects must move forward promptly, and those unsuited because they would be harmful to the environment, or do not enjoy community support should quickly and decisively be taken off the drawing board.

We have identified seven priority projects for streamlining attention, with additional projects to be announced very soon.

Here's how process is working at one of the initial seven projects:

Stillwater Bridge, a new National Highway System crossing of the St. Croix River, is a project shared by Minnesota and Wisconsin. The purpose of the project is to provide the capacity for existing and future traffic needs and to remove through traffic from local traffic within historic downtown Stillwater, Minnesota, replacing an aging lift bridge.

Federal, state, and local agencies and non-governmental organizations have recently reengaged in a process to supplement the EIS which led to a 1996 FHWA record of decision. Unresolved issues for the project include the disposition of the existing historic lift bridge and additional mitigation for the new bridge. An outside facilitator has been hired to help bring closure to these discussions.

A model of what we hope to accomplish at Stillwater is this example from Louisiana.

On Jan. 29, the FHWA Louisiana Division Administrator approved the ROD for the $650 million LA-1 Project, which is a four-lane elevated highway from Port Fourchon to Golden Meadow in the Louisiana bayou. The project will replace a substandard two-lane road that is often not dependable during gulf storms and heavy rain. LA 1, an NHS highway, is a nationally significant facility providing the only means of land access to Louisiana's Offshore Oil Port (LOOP), which handles 16 percent of the nation's crude oil and natural gas.

LOOP's pipelines are connected to 35 percent of the nation's refinery capacity. The project represents a landmark effort in environmental streamlining as the ROD was accomplished in about three years, which is about half the time it would normally take to process a project of this magnitude, located in such an environmentally-sensitive setting.

Concerns involving wetlands, fish habitat, marsh vegetation, and navigation channels were quickly resolved through close collaboration with such agencies as U.S Environmental Protection Agency, U.S. Army Corps of Engineers, U.S. Coast Guard, and the National Marine Fisheries Service.

It is important to note that our streamlining efforts and the President's Executive Order are not limited to projects. We continue to improve processes to facilitate good decisions in a timely manner.

ITS/Operations

An example of a "smarter" investment we will continue to support as a way to relieve congestion is the Intelligent Transportation Systems program (ITS) . . . and the important themes of research and deployment.

We believe that it will remain vital to promote investment in traffic monitoring and information sharing technologies to help system operators make decisions on how to best manage and operate the transportation system. We can help travelers make informed choices on when, where, and how to travel, and improve the reliability and predictability of the transportation system.

We are making some organizational changes as well. To more clearly reflect its cross-cutting application to various modes and growing importance within the Department, responsibility for ITS - in our ITS Joint Programs Office — has been separated from our Operations Program. The office will still operate on a day-to-day basis out of Federal Highways under the leadership of a new director. The new director will coordinate ITS programs and will have dual reporting responsibility to me and to the Deputy Secretary.

And, we are creating a formal ITS Federal Advisory Committee. Over the last 10 years ITS America has filled this federal advisory role, and as such, has played an important part in the successes that have been achieved. The restructured ITS Advisory Committee will provide guidance to the Department as we consider the issues, opportunities and policies that will shape future programs.

I have asked El Tinklenberg -- a friend, and the former Commissioner of Transportation for the State of Minnesota -- to help shepherd the development of the committee and to assure that both the make-up of the committee and its agenda reflect the high expectations we have for it.

STEWARDS OF THE NATION'S HIGHWAYS

Together we must continue to protect the investment of American taxpayers in our transportation systems. FHWA, in partnership with State DOT's, will ensure that whatever resources entrusted to us will be well managed and wisely used.

It is, after all, the public's money we are collectively entrusted with. Congress and the public rightfully hold us accountable for ensuring that federal highway funds are used in the most efficient and effective manner possible.

These are indeed challenging times for us all. The strength of America is in our resilience and optimism. I am optimistic about the future of our transportation system. I am confident in the resilience of our nation. I look forward to working with you to meet America's transportation needs.