The National Corridors Initiative
Testimony of James P. RePass
President and CEO, the National Corridors Initiative
ISTEA Reauthorization
April 21, 1997

Thank you very much for inviting me to be here today to testify upon the proposed reauthorization of the Intermodal Surface Transportation Efficiency Act. It is a privilege to be here, and to be permitted to address you. It is a privilege not only because such invitations are always an honor, but because the bill you and ultimately all Congress shall craft will, I believe, have a greater direct impact on the economic and environmental health, and on the quality of life, of the American people than any other piece of legislation that will come before this Congress.

I come before you today as a representative of the National Corridors Initiative, founded in 1989, and remaining as, a bipartisan private non-profit corporation dedicated to the advancement of intermodal passenger rail development in the United States.

My organization has, over the past eight years, beginning in the Northeast as supporters of the Northeast Corridor electrification project and continuing now throughout the United States, conducted national conferences, regional gatherings, and scores of smaller seminars and meetings, with the aim of educating the public and private sectors on the benefits of a balanced transportation system that includes rail.

We have done this and we believe this is no secret --- because rail passenger service has been and continues to be grossly under-utilized in the United States, especially when compared to the industrialized societies in Europe and Asia with which Americans must compete economically. By a variety of measures --- low cost, environmental impact, efficiency --- and as a very tangible as well as symbolic means of binding American towns and cities together, rail passenger service offers a welcome and very necessary alternative to highway and air travel.

This is true not only in the congested urban regions of our East Coast, as former Senator Claiborne Pell noted in his seminal book, "Megalopolis Unbound," and in those of the West Coast and Midwestern travel corridors, but for small towns and cities for whom passenger rail service is not only an alternative, but the only, means of connecting with the outside world. That is a fact we may tend to overlook in the Northeast, and indeed, our organization has become more and more cognizant of this fact as we have grown and reached beyond our own roots in the Northeast

In late February, for example, we held a conference in Atlanta on emerging Southern rail corridors, with representative of the business, academic, environmental and governmental communities of virtually every state in the deep South: Louisiana, Mississippi, Alabama, Tennessee, Georgia, and North and South Carolina, as well as states such as Florida and Texas. The message I heard loud and clear at Atlanta: include us in.

In NEXTEA, in building transportation systems, the South and West are demanding to be treated with the same degree of respect regarding infrastructure investment as the East or Pacific coasts which need heavy investment because of dense populations and/or aging infrastructure.

And yet, in preparing for this testimony, and in reflecting on our experiences in speaking with our bipartisan constituencies, I also read the remarks you made, Mr. Chairman, in introducing the Administration's version of the legislation before you today, the National Economic Crossroads Efficiency Act or NEXTEA.

I was struck with the plain truth of your observations regarding the very problematic way in which we tend to allow the means of raising most of the monies used for Federal transportation funds--- the gasoline tax --- to influence policy. As you noted:

"If you buy gas in Baltimore, MD, and drive to Woonsocket, RI, you will drive through the States of Delaware, New Jersey, New York, Connecticut, and Rhode Island. Maryland will be the only State that gets credit for this trip.

"Even if we were better able to estimate where gasoline is used, rather than just where it is purchased, setting national transportation policy on gasoline usage provides incentives that contradict policies of ISTEA such as environmental protection, intermodalism, and efficiency. Under a gas- tax based formula, States and localities that use transit significantly or use less gasoline because of good planning are actually penalized for their good work."

So, on the one hand we have the South and West asking for a greater share of the transportation pie, while at the same time the very means of allocating that pie makes for an unfair and unwise bias against efficiency and intermodalism, two of the key words in the very name of the original ISTEA bill.

To resolve this dilemma, and to make more funds available not only for rail but for other transportation projects which demand attention, we propose the following. As part of the reauthorization of ISTEA, we respectfully request that the Congress:

Make it easier for private sector funds to be invested in transportation projects, and

Make it easier for states to gather together in interstate compacts to pursue regional transportation projects

On the first point, what we are really talking about is a program for transportation investment that treats transportation infrastructure needs for this nation the same way we treated housing needs for returning American GI's at the end of the Second World War: as a matter of the highest national priority. Just as the creation of VHA and later Fannie Mae loan programs helped to create the middle class which more than any single factor lead to the flowering and prosperity of this the American century, let us resolve to create an equivalent infrastructure program whose legacy will be the growth and prosperity of a 21st Century America.

There is already a good start in the drafts of NEXTEA now circulating, in the State Infrastructure Banks program included therein. But it calls for funding of only $150 million a year. This level, and the related credit enhancement programs anticipated in the bill, need to be expended and strengthened. The private sector has shown the capability of massive investments in power plant and water utility infrastructure investment throughout the world; we need to allow it to succeed in transportation infrastructure investment as well.

On the second point, the need for interstate compacts is great. There are many proposed or desirable transportation projects which would cross state lines, but which are not of national importance. The Congress should not have to deal with them, and yet congressional approval is required for those projects because they go over state boundaries. We needs a more streamlined way to create such interstate authorities, and we need to invite in the private sector to the operation and management of those authorities as well.

Third, as the Congress is considering, governors must be allowed the flexibility to choose where transportation funds are allocated within their states. Also, the original ISTEA law contained an artificial barrier to investment in intercity rail. This was not due to a policy debate on the issue, but rather to a turf battle over committee responsibilities. This barrier must be removed. Coupled with greater flexibility in project funding allocation for Governors, these actions would help ensure that state and regional transportation projects will be funded.

Intermodalism means getting from door to door by the most efficient system possible. People don't take a plane to arrive at an airport, or a train to arrive at a station. The want to get home, or to an office, or to a vacation site. We need to make sure that it is possible to do so expeditiously and cost-effectively, and that new transportation technologies that promise to radically alter the way in which we make that last mile or so or our trip, technologies that I have seen in my private sector work, can become a reality.

At this point I want to talk about the national passenger rail system, Amtrak. I want to make it very clear that my organization does not represent Amtrak, or speak for it. We speak only for our own constituency, which consists of business, political, academic, and environmental leaders from throughout the United States, who come from broadly ranging political viewpoints, but who are united in the belief that investment in rail technology and systems is the best way to create and sustain a strong national transportation system that can take its place in the first ranks of the industrial world.

That having been said, we do believe that what Amtrak has accomplished, under an extraordinarily harsh and discriminatory environment, is remarkable. Without any regular source of capital, and without any commitment from any source that it would survive from one day to the next, Amtrak has become the most cost-effective passenger rail system in the world.

That may be hard to believe for those who catch only the headlines, which year in and year out point to Amtrak's struggles. But it is so. Amtrak recovers 84% of its operating costs from farebox revenue. No other major industrial country's rail system even comes close.

The NCI has watched this performance with considerable awe. As a group with many private sector businessmen as a key constituency, we are impressed that Amtrak has not only survived, but has been able to reach efficiency levels that are at the top of the list.

Unfortunately, for reasons that have to do with my comments above, that high-wire act may be about to end, in disaster. Unless a regular source of capital is made available to the national passenger rail system, just as capital is made available for highways and airports, Amtrak is going to die. When that happens, sometime early next year unless this situation is turned around, and Amtrak simply runs out of cash, there will be a transportation nightmare the likes of which this country has never seen. Transportation on the East and West coasts and in the Chicago areas will become chaotic, airports will back up, and highways will become saturated. In those 13 major cities where Amtrak is the contract operator of the commuter rail system, there will be chaos.

I know some people hate Amtrak because it has become a whipping boy for big government. It's ironic, because the highway and airport systems consume each year a subsidy many times that of Amtrak's, but get no criticism for it. Maybe Amtrak has lost people's luggage or served cold coffee to a few too many people. What is remarkable is not that Amtrak sometimes serves cold coffee and I'm not minimizing the need for improvement here --- but that it is able to serve coffee at all, and also run the most under-funded railroad system in the industrialized world.

In your deliberations here and in the Senate, I would ask not only that you include intercity rail in the category of eligible program recipients for Federal transportation dollars, as I noted above, but that each of you, Senators, also support your colleague Senator Roth of Delaware, and his bill to create an intercity trust fund from the 4.3 cent deficit-reduction gas tax, for Amtrak capital expenditures. That action, plus a supplemental capital appropriation to catch Amtrak back up to its totally unfunded capital needs of the past two years, when it should have been receiving the proceeds of that Intercity Trust Fund, are essential if the nation is to have a viable intercity passenger rail system. Finally, let us resolve to understand that above all else, we are and must be ONE country, not North or South, East or West, but simply America. We owe that to ourselves, to our children, and to the legacy our courageous forefathers created more than two centuries ago. Thank you very much.