New Mexico State Highway and Transportation Department
Pete K. Rahn Secretary
Subcommittee on Transportation and Infrastructure
Committee on Environment and Public Works United States Senate
Las Vegas, Nevada March 28, 1997

Good morning. I am Pete K. Rahn, Secretary of the New Mexico State Highway and Transportation Department. I am here today on behalf of the State of New Mexico and the New Mexico State Highway and Transportation Department regarding federal legislation reauthorizing funding for surface transportation in our country.

I am very pleased to have this opportunity to present New Mexico's views on legislation that is so critical to our nation and my state.

Mr. Chairman, I would like to begin by recognizing first that the concept of fairness is a relative term when all the states and special interests are attempting to increase their share of a federal program. Therefore, I would like to propose a definition to help you understand my comments about a national interest in a surface transportation system. Our nation currently possesses a global economic advantage because of our efficient and safe transportation of goods and people within our borders. The movement of people or goods must drive the focus of any surface transportation reauthorization proposal.

New Mexico, located within the Rocky Mountain west, is well aware that the entire mountain time zone has less than 6% of the nation's population but over 25% of the land mass. This would normally greatly diminish our ability to influence a national issue. However, transportation is a distance issue as much as it is a population issue. Just as a road that comes to a river is useless without a bridge, the coastal populations of our country need a bridge that crosses the vastness of the Rocky Mountains. New Mexico's highway system serves as a bridge between the population and manufacturing centers of California, Texas and the rest of the Sunbelt, while deriving little direct benefit from this function.

BACKGROUND

New Mexico is our nation's fifth largest state with 121,666 square miles. The states of New York, Pennsylvania, New Jersey, Maryland, Delaware, Massachusetts, and Rhode Island could all be placed within the federally designated rural portion of New Mexico, with over 1,600 square miles to spare. To travel from Farmington, NM in the northwest corner of the state to Hobbs, NM in the southeast corner is 513 miles, or roughly the same distance as Detroit, Michigan to Washington D.C.

In 1995, the state's population was just over 1.64 million residents; we are the 36th most populous state in the nation. One third of the state's population resides in the Albuquerque metropolitan area. Population density outside of the state's three metropolitan areas of Albuquerque, Las Cruces and Santa Fe is among the lowest in the United States. The seven states listed above have a combined population in excess of 53 million people.

New Mexico shares 175 miles of it's border with the states of Chihuahua and Sonora, Mexico.

New Mexico ranked 48th in 1995 per-capita income and has an unemployment rate of 6.6%, well above the 5.4% national average.

New Mexico collects $105.80 per capita more than the national average in state transportation taxes. This is a heavy burden for a poor state. As derived from the U.S. Department of Transportation Federal Highway Administration's 1995 Highway Statistics manual, New Mexico's 1995 state revenue contribution to transportation per capita was $294.36. The only state that had a higher per capita contribution than New Mexico was the state of Washington. For comparison, California's was $220.11, Florida's was 168.76, and New York's was near the bottom at $126.06. Mr Chairman, I submit to you that the national average state contribution per capita was $188.56. The details of per capita contributions are attached to my presentation that I am providing to you.

New Mexico has 1,000 centerline miles on three Interstate Highways and the National Highway System in New Mexico has 2,932 centerline miles. Due to its size, low population density and for the most part, financially hard-pressed local governments, New Mexico's 27,911 lane-mile state system is relatively large when compared to many other states, but is in line with other large rural states such as Montana (the country's fourth largest state)with 26,261 lane miles.

New Mexico is also one of the fastest growing states in the nation. Projections place New Mexico behind only California for the percentage of expected growth by the year 2015. This growth is painful for our state since there is not a large or wealthy population base to absorb the cost of expanding infrastructure to accommodate this influx of people.

New Mexico's existing highway system has deteriorated due to a lack of resources and an increased traffic volume of 292% since 1986. The major increases in traffic have been on the Interstate and the National Highway System. In New Mexico the NHS carries 66.23% of the traffic volume on the state highway system and 44% of the total vehicle miles. About 93% heavy commercial vehicles on these routes originated and are destined outside the state. Further we estimate that about 82% of the vehicle miles of travel on the state's east-west interstate routes are for traffic moving across the state to out of state destinations. It is estimated that over 50% of the vehicle miles of travel on the non-interstate National Highway System is also traffic moving across the state to out-of-state destinations. We have observed significant increases in the number of heavy commercial vehicles moving on the non-interstate national highway system, due to increased movement of commercial goods to destinations where our interstate system is not the most direct route.

This increased travel on New Mexico highways, especially by heavy commercial vehicles, has played a major role on the conditions of highways in the state. New Mexico's deficient pavement road miles (bad roads) have increased by 1,509 miles to over 43% of our system in the last ten years; and if funding does not change in the next ten years the deficient road miles will increase by another 1,640 miles to over 55% of the system. Current deficient mileage places us 2nd to Rhode Island for the highest percentage of bad roads in the country.

In addition, New Mexico is very concerned about the effects of possible increased weight limits as a consequence of NAFTA might have on our fragile highway system. I would add, New Mexico welcomes any increased economic activity due to NAFTA, but the federal government must recognize the cost to our state infrastructure when it is impacted by national policies such as NAFTA.

ISTEA represents an important policy decision by our nation. It forced many states, New Mexico being one of them, to consider and inter-relate all feasible modes of transportation when making decisions. This has been beneficial to our state. The general perception however, that ISTEA was a windfall to the states is wrong. While ISTEA brought additional funds to the New Mexico, with it came additional responsibilities. Funds were not only for roads. Prior to ISTEA, funds from the highway account were primarily dedicated to roads. In ISTEA new investments such as the Enhancement and Congestion Mitigation programs were introduced and funding formulas required a higher proportion of funds to urbanized areas. ISTEA also stressed inclusion of funds for Intermodal and alternative modes of transportation.

CONCEPT

Mr. Chairman and Senator(s), New Mexico, until recently, had not joined any group that had developed positions regarding ISTEA Reauthorization. The reason for this is that we feel that the primary goal of those proposals is to keep existing funding advantages or to gain new ones without regard to national interests. Apparently, heavily populated states want to devaluate the national program by creating an urban-oriented program with some support even for the devolution of a federal interest in transportation. Further, heavily urbanized states are pushing for higher subsidizing of their transit systems by rural states, while arguing they no longer wish to be "donors" to highway systems in those rural states. Indeed, the definition of "donor" and "donee" is only applied to the highway account. If such a calculation was made on the sum of all transportation expenditures, many of the so called "donees" would in fact be "donors"!

New Mexico's principle in choosing to support a legislative proposal is simple. Our state recognizes the need for a strong national surface transportation system. The nation benefits most when the major components of that system are adequately funded prior to other expenditures that can be categorized as being politically popular but have the real effect of diluting the efficiency and effectiveness of a national transportation system.

I hope to provide you today an explanation of why the major components of a national transportation system should be given priority in this legislation.

To better serve the nations needs, there are several key issues I feel need to be brought forth:

The National Highway System should be the focus of the federal-aid highway program. Given the huge volume of commercial traffic carried by only 4% of all roads in the country, it is evident that the NHS is most important to the nation's economy.

Overall funding for surface transportation should be increased to address the deterioration of transportation infrastructure in all regions of the nation.

Distribution of funds among states should be fair and based on the national interest. The issue of donor/donee relationship should be considered in the context of all surface transportation expenditures.

States should be granted flexibility to address different needs as faced by that state. Streamline and consolidate the program to effectuate timely results by reducing regulations, mandates and set-asides.

Provide equity to states in the funding distributions by addressing needs based on formulas and consider issues such as: 1. eliminating demonstration project funding. While demonstration project funding is sought for constituent purposes, it distorts the concept of national funding of national transportation interests ( If the dollars that went into demonstration projects had instead been distributed by the existing ISTEA formulas, 36 states would have received more funding and only 14 would have received less. New Mexico would have received $56 million more dollars based on allocation formulas provided under ISTEA.); and 2. recognize that access to and across federal lands is a national interest that when ignored only penalizes those states least able to cope with the impacts of large federal land holdings, and reauthorization should include those holdings as a criteria for distribution of federal lands funds.

I would like to use the rest of my testimony to present to you New Mexico's choice in the reauthorization proposals of ISTEA which we believe comes closest to the above principles and to provide you information that explains our issues further.

NEW MEXICO'S ISTEA REAUTHORIZATION PROPOSAL CHOICE and SUPPORT

As I indicated to you earlier, New Mexico had not, until recently, supported any proposal. We have reviewed many proposals including STEP 21, the Ohio proposal, DOT's NEXTEA, ISTEA Works, AASHTO, WASHTO, and others. In our final analysis, the proposal that we feel best supports the national interest and is fair to all the states is the Surface Transportation Authorization and Regulatory Streamlining Act ("STARS 2000") being prepared for introduction by Senators Baucus, Kempthorne, and Thomas.

The STARS 2000 proposal sets forth a balanced and thoughtful approach to the highway program issues. This proposal 1) puts highway user taxes to work for taxpayers; authorizes highway program levels as high as the Highway Account of the Highway Trust Fund can sustain; 2) emphasizes investment in the National Highway System (NHS) and gives investment in the NHS greater emphasis than would be the case under other proposals; 3) provides states greater flexibility to determine how to invest funds while retaining appropriate program emphasis areas; 4) reduces regulation; 5) achieves a fair national interest distribution of funds among states; and 6) continues the role of local governments, but also provides flexibility to states and localities in the use of funds by allowing them to develop multi-modal and intermodal transportation systems.

STARS 2000 by reaffirming the national interest in Federal investment in highways and transportation facilities, represents a complete rejection of so-called "turn back" or "devolution" proposals. Although no one proposal we reviewed is the best for all states, the STARS 2000 proposal does the most for the most states and the nation. It is balanced and treats the nation fairly; it strikes the balance between reducing program categories and maintaining reasonable federal program emphasis areas; it emphasizes the NHS while maintaining reasonable requirements for expenditures on bridges, safety, enhancements, and for urbanized areas of 200,000 population. This is a good balance.

As a final note about STARS 2000, New Mexico's strong belief about federal lands highway provisions are recognized. STARS 2000 will increase the overall level of Federal Lands Highway investments by the same rate of growth as the overall program and make needed reforms to help direct the funding where the Federal Lands are located.

ON THE ISSUES:

1. Investment in the National Highway System (NHS).

It is important that the greatest program emphasis be given to the National Highway System as it is the NHS that ensures that the entire nation is well connected; it is the principal grid upon which people and goods move safely and efficiently across the country. While these roads make up only four per cent of the nations network, they serve 43 per cent of all traffic and 75 per cent of heavy commercial vehicles.

While it is clear that these roads are extremely important to the nation as a whole, it is also known that a great deal of money is needed to maintain them and even more will be needed to improve the NHS.

Therefore, New Mexico recommends that great emphasis be given to these important roads and through our analysis we find that STARS 2000 does that.

2. Increase Federal Highway Program Levels.

Simply stated, the accepted proposal should allow states to invest the full level of funding which the Highway Account of the Highway Trust Fund can sustain. There are many reasons for this statement, but some important ones include:

Investment in highways and related transportation facilitate economic growth, bring additional revenues to the states as well as the federal government through that investment and help keep American businesses internationally competitive.

The Highway Account of the Highway trust Fund is supported by user taxes. Highway users have paid these taxes with a reasonable expectation that the money will be put to work for transportation purposes.

Good transportation improves the personal mobility and quality of life of our citizens.

The needs of our transportation network are vast and are not being met with current funding levels as I indicated before when identifying the growth in deficient miles in New Mexico. At present levels of Federal investment we are not able to maintain, much less improve, the current condition of our NHS and Federal-aid highway systems.

It is our understanding that the current income of the Highway Account, interest on the balance in the Highway Account, and a gradual draw down of that balance, the Highway Account can sustain investments of $26 to $27 billion annually. Additionally, if the proposal made earlier this year at the National Governors' Association is adopted, the 4.3 cents per gallon of fuel tax currently being used for General Fund purposes will be deposited in the Highway Trust Fund and used for transportation purposes; then the Highway Trust Fund can sustain an even larger investment annually. Like many other states we have spoken to, New Mexico is very disappointed with the low funding levels proposed by the Administration. We urge the Congress to adopt much higher funding levels which we and so many others desperately need. Here again we find that the STARS 2000 proposal supports our position on this issue.

3. Distribution of Funds to Reflect the National Interest in Highways.

There is clearly a need to emphasize that the national need for investment in our region continues even though the Interstate highways have been built. We are now entering a period where major reconstruction of the Interstate is upon us. It is known that maintenance of those routes is solely a state responsibility, and an expensive one for New Mexico which has 2% of the nation's Interstate system and low population density. These highways enable agricultural products and natural resources to get from source to metropolitan markets and enable manufactured goods to move from coast to coast. They provide the nation's citizens with access to the country's national parks and the great outdoors. Clearly, investments of Federal highway funds in this region help the nation, not just the states in which the investments are made. Funding formulas must reflect this ideal. Rural states, while they provide connectivity to the national interest, are not able to pay for the Federal-aid system of roads without an influx of federal funds. Rural states have few people to support each lane mile of highway; however, per capita income in our region is below the national average, our citizens pay considerably more per person into the Highway Trust Fund than the national average. Even though the argument about "Donor" (putting more into the Highway Account than they get out) and "Donees" (getting more than they put in) continues, it is the so called donee states like ours whose citizens, per person, are contributing more of their income into the Highway Trust Fund than the national average and it is our citizens who are carrying a heavier load on a per-capita basis for the national interest.

Another item that needs to be considered in the distribution of funds to serve the national interest is the high percentage of land in this region which is either owned by the Federal Government or held in trust. Federal lands are generally not open for commercial or residential use, depriving a state of part of its tax base and in New Mexico this is a large per cent. Thus, states with large federal land holdings have a significant impediment to the their abilities to raise revenue. These states still maintain significant federal highway systems in and through federal lands, which serve national interests. The point is that in addition to the national need to continue and improve a Federal Lands Highway Program, the general apportionment formula should reflect the special burden faced by States which must ensure transportation across or adjacent to Federal Lands.

We agree with the STARS 2000 proposal in its approach to distributing funds of the Highway Account of the Trust Fund, which will be well served by a funding distribution formula which takes the following approach:

Emphasizes extent and use of the Federal-aid highway system, particularly the extent of the Interstate and NHS routes. With Congress having directed that a National Highway System be designated, it is clear that there is a higher federal interest in the Interstate and NHS than in other Federal-aid routes.

Provides increased funds to States with low population densities and with a high percentage of land subject to Federal ownership or trusteeship. All of these factors tend to reflect the inability of rural States to pay for the national interest routes within their borders.

Retains the mechanism for distributing highway funds to ensure that the nation as a whole is served and to take into account the concerns of all areas by providing an appropriate minimum allocation.

4. Flexible Program Structure

To serve the national interest, the authorization proposal approved by congress should contain a balance between the different programs. There needs to be a balance between permitting States freedom to decide how to spend the money apportioned to them and telling them exactly how to spend it.

As proposed, metropolitan planning funds will ensure that the urban and regional planning requirements under ISTEA are met.

While the CMAQ program is eliminated as a separate category, projects remain eligible under the surface transportation program which is an appropriate mechanism for achieving the goals of this program.

Bridges provide vital links of the transportation network and are an important factor in allocating transportation funds to insure needs are met. The proposal uses bridge deck area as a factor and makes these projects eligible under the Surface Transportation Program. 5. Obligation Ceilings

Obligation limits unevenly penalize highway dependent states since they only apply to the highway program and not transit programs. Authorization in the new legislation should be closely matched to anticipated spending (obligational authority) to assure that all states are treated equally. Also, the practice of higher authorization limits than accompanying appropriations is a disservice to the citizens and the states since it leads the public into believing that the federal government is solving problems that should and could be addressed locally if the truth were known.

6. Regulation of States

Regulations of states by the federal government should be reduced, not increased. States and the federal government have been moving to partnerships on issues. This has been working well and should continue; it is an effective way to handle issues in a positive way. Regulations tend to attempt to address issues of all states by assuming that states have the same roles, problems and needs, while in fact, they do not. It is well known that regulations are needed, however, when induced into most aspects of most programs, they become burdensome, ineffective, and prolong the time lines for states to accomplish their mission for effective and efficient transportation.

AASHTO has developed methodologies to streamline and ease regulatory requirements. We believe that the AASHTO approach is correct and should be given strong consideration.

7. Additional Issues

I have addressed the issue of demonstration project/program funds and the way they were awarded in ISTEA; however, I bring it up again because I feel it is important to realize the adverse impact the distribution of these funds had on New Mexico and many other states.

We do not dispute the need for a national transit program, however, the goals should be better defined to assure that it fulfills a national purpose. 8. Intelligent Transportation Systems (ITS)

In New Mexico, we have had some opportunities to participate on ITS programs. New Mexico obtained $1.985 million for research of what is known as the EURICA project, an Urban-Rural Intelligent Corridor Application. The purpose of this project was to research implementation of an integrated, regional, multi-modal intelligent transportation system that would combine transportation management and data collection functions, create a regional multi-modal transportation information system, provide a traveler information system, improve the efficiency of the transportation system, enhance the quality of public transportation, and improve the safety of the transportation system for its users.

ITS can be successful. New Mexico participated in the HELP (CRESCENT) program to identify and implement technology to support pre-pass of heavy commercial vehicles through states using transponders on heavy commercial vehicles and electronically reading information off of the transponders to provide registration and other needed information by the CRESCENT states to provide a pre-pass to ports of entry. By our use of weight-in-motion devices, heavy commercial vehicles are given a green light to pre-pass a port of entry helping the trucking industry by keeping its vehicles moving with minimal delay. This ITS project has gone from a demonstration to full production with more than 10 states participating. The future funding will be provided by users of this technology.

New Mexico received an ITS grant of over $1 million to study technology applications at international ports of entry to determine if technological initiatives could be utilized in the processing of commercial goods through international ports to effectively save time at crossings. This study has recently begun and the research work is being performed.

Other than the HELP/CRESCENT program, these ITS grants have been the exception rather than the rule. ITS has been a political rather than a technical process. ITS is not structured in a way that it is readily identifiable to the states of what is available for projects and/or programs. Future ITS funding should be allocated to benefit rural states as it now does states with large metropolitan areas.

CONCLUSION

Senators, I have covered quite a few items on the issue of reauthorization for transportation and infrastructure. Again, New Mexico's initiative is simple; keep the focus on the national interest, keep programs functional as needed by states, provide as much funding as possible, consider both the highway and the transit account in determining formula distributions, and make fair and equitable distribution of funds.

With that, Mr. Chairman, I conclude my statement and will be pleased to respond to any questions the Committee may have.