**REMARKS FOR**

**THE HONORABLE MARY PETERS**

**SECRETARY OF TRANSPORTATION**

**NATIONAL GOVERNORS' ASSOCIATION**

**WHITE HOUSE MEETING**

**WASHINGTON, DC**

**FEBRUARY 25, 2008**

**10 AM**

Thank you, Janet **\[Creighton, Director of White House
Intergovernmental Affairs\]**. I'm honored to have this opportunity to
talk to the nation's Governors about the future of transportation policy
and finance.

As I told the Governors on the Economic Development Committee yesterday,
I believe America today is in the midst of an historic transformation in
our approach to infrastructure.

We have the opportunity to unleash the greatest new wave of
transportation investment this country has ever seen.

We have the opportunity to live in a time when consumers and shippers
set transportation priorities... instead of central planners.

And we already *[do]{.underline}* live in a time when technology can
assist us in delivering free-flow highways and reliable commutes every
day of the week.

As Governors, you can lead the transformation... or you can get caught
up in the usual formula fights and feeding frenzies over earmarks, all
while communities in your states are stuck with clogged roads, wasteful
spending, and ineffective financing approaches.

It's no secret that I'm a strong believer in moving away from a system
in which you need Washington's permission to improve your highway
network.

I think we need a new way forward. But to be clear, we stand at a
crossroads. Either you will be in control of your state's transportation
future... or Washington will.

The failings of the federally focused system we have today are clear.

We are spending almost twice as much on transportation as we did 10
years ago. Yet traffic congestion has increased 300 percent since 1982.

There is no greater symptom of failure than the fact that Americans
simply don't support putting more money into this broken system.

Poll after poll shows strong opposition to traditional fuel taxes. The
public ranks gas taxes as among the least fair taxes at the federal,
state and local levels. And they are rightfully suspicious that higher
taxes will translate into more efficient transportation systems.

There *is* a better way... a way that allows you and your states to take
charge of your own destiny and provide better service to your
constituents... a way that avoids the zero-sum result of donor-donee.

There's upwards of 400 billion dollars available in the private sector
right now for infrastructure investment.

All we need is the political courage to embrace a new paradigm in
transportation financing and construction... the courage shown by
Governors like **Arnold Schwartzenegger** and **Ed Rendell**, who are
aggressively working to open the door to private capital.

Key to tapping these resources is the power of pricing.

Remember the era of Ma Bell, when you used to get that recording, "*I'm
sorry. All circuits are busy. Please try your call again later."?*

Your call couldn't go through the system for the same reason your car
can't get through rush hour -- poor pricing.

Pricing is easy to implement. It immediately cuts congestion and gives
people choices. And it's far less regressive than gas taxes,

And pricing allows you to keep transportation dollars in your
communities, not have them diverted to Washington.

Pricing even gives you an opportunity to cut taxes and reduce borrowing.
Only 38 percent of the approximately 150 billion we spend in highways
every year comes from federal, state, and local motor fuel taxes.

A wide array of other taxes that have nothing to do with using our
highways could be substantially reduced.

Did you know that Eisenhower originally wanted to use tolls to build the
Interstate system? He believed directly charging the people who used the
roads was the fairest and most efficient approach. But Ike was limited
by the technologies of his day.

Unlike the 1950s... when technology limited toll collection to
expensive, unsightly, and inconvenient toll booths... we never need to
build a new toll plaza again. Instead, we can quickly and easily install
high-speed, open-road tolling equipment that will never require a single
driver to slow down. In fact, some 24 million transponders are already
in use nationwide today.

Just as technology has changed, so has the public's attitude.

A review of recent public opinion surveys found majority support for
tolling and road pricing concepts in 56 percent of the surveys. When
people know how the funds will be used... and the tangible benefits they
can expect... support is higher still.

In King County, Washington, residents favored using electronic tolls
over gas taxes to fund replacement of the 520 Floating Bridge by a
margin of 78 percent to 17 percent.

More and more people are seeing that direct charges offer a better deal
for taxpayers than increasing dependence on dysfunctional sources like
federal gasoline taxes. This simple but powerful technology unlocks
enormous new opportunities for communities BOTH to attract new
investment capital AND to manage congestion through variable prices.

I'm here to invite you to work with me to change the way we look at
congestion, invest in transportation, and get goods moving through our
economy.

We've established a partnership with NGA's Center for Best Practices and
are working together on a number of exciting projects, including a
summit for Governors and their senior staff on transportation policy and
financing options... to be held in late Spring or early Summer.

Governors today are turning ideas like technology, incentives, and
pricing into a new way of doing business for transportation in America.

But to sustain the momentum, you need to be part of the policy debate in
Washington.

I know that there are many demands on your time. But *how* we
reauthorize federal surface transportation programs will have major
implications for how you do your jobs.

Only with your active engagement will we be able to put an end to poor
performance and lowered expectations, and establish a new transportation
vision for the century ahead.

Do you want to be the Governor who delivers traffic-free commutes to the
people in your state?

Do you want to be able to attract businesses with reliable roads and
predictable shipping schedules?

Are you ready to stop having Washington dictate your transportation
agenda and start setting your own?

Then I need you and your staffs to work with us to improve our federal
policies. Specifically, I'm asking for your support in three broad
areas.

First, we need to substantially re-focus federal investments on
improving the quality, safety, and performance of the Interstate system
and on reducing congestion in major metropolitan areas. By trying to be
all things to all people, we are often nothing to anyone.

Second, we need to loosen current restrictions on the ability of states
to implement electronic tolling on... and to attract private investment
to... their highways. If you want to manage your transportation systems
by charging those who use those systems, the federal government should
not block you from doing so.

Lastly, we need to eliminate earmarks entirely, reduce federal process
requirements that add minimal value, and insist on cost-benefit
analysis.

America's transportation system *can* be better, and my goal is to clear
federal obstacles to innovation and investment so you can make that
happen.

Thank you. And now, I would be happy to take your questions.

\# \# \#