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ITS—More than Just Icing on the Cake


9/24/2012 10:00 AM

by Craig Updyke, Manager, Trade and Commercial Affairs

At NEMA, the big “T” usually means transmission—related to electricity—but the organization also keeps a close eye on and advocates industry positions regarding another big T—transportation. On the front lines of this activity are members of NEMA’s Transportation Management and Associated Control Devices Section who create and provide Intelligent Transportation Systems (ITS) technologies.

To a great extent, these companies’ customers are state and local transportation authorities charged with building and operating highways, roads, bridges, public parking and transit facilities, managing traffic congestion, and ensuring traveler safety.

Not only do members of NEMA’s Electric Vehicle Supply Equipment Section have a direct interest in the new generation of transportation options, but all NEMA members have a keen interest in making sure their products travel to customers over the roads in a safe and timely manner.

So in late June, after several years of advocacy, NEMA welcomed a new two-year law to authorize continued receipt of federal taxes on diesel fuel and gasoline and allocation of those and other funds to states for transportation infrastructure projects. The law, Moving Ahead for Progress in the 21 stCentury(MAP-21), maintains current funding levels (instead of cutting them) and provides states with at least two years of policy certainty to get projects off of the drawing board, through the permitting and construction process, and into operation. The law also includes several reforms to the project approval process aimed at accelerating completion.

It is difficult to overstate the importance of the federal role in planning, construction, and completion of transportation assets that many of our economic activities rely upon.

“States could not provide basic transportation operations and services without federal assistance,” said John Horsley, president and chief executive officer of the American Association of State Highway and Transportation Officials. “Federal funds account for 40 to 45 percent of state transportation infrastructure spending.”

According to Mr. Horsley, there is greater payback from investments in ITS technology than in concrete and asphalt.

“Now the door is open for the ITS industry to offer smart solutions to congestion and safety challenges,” he said.

Bryan Mulligan, chair of the NEMA transportation section and president of Applied Information, sees NEMA member companies at the forefront of developing the new technologies that will continue to keep America’s transportation sector the most efficient in the world.

“In order for the private sector to make these investment decisions, it is essential to have stability in the funding and policy arena, and this is why long term transportation bills are so important. Without stability, the private sector simply does not invest,” he said.

Although it is not the five- or six-year law that many hoped for, MAP-21 does provide a greater level of certainty for states than the continual temporary extension by Congress of the previous law passed in 2005 and represents a significant step forward.

As in other areas, state departments of transportation (DOTs) are under budgetary and performance pressure and are increasingly looking to technology not as just “icing on the cake” but as core solutions to persistent challenges.

It stands to reason that state DOTs need federal funds as well as policy and technology guidance to make decisions on adopting innovative solutions to traffic problems. The days of “just build another road” are receding while “do more with less” gains ground. MAP-21 provides clear direction to states to include ITS solutions in their project design planning process. The new law also specifically authorizes states to use federal funds to deploy ITS elements as part of their projects.

As defined in MAP-21, ITS is “electronics, photonics, communications, or information processing used singly or in combination to improve the efficiency or safety of a surface transportation system.” ITS applications are not restricted to highways but extend to rail and bus transit systems as well.

The impact of MAP-21 on business and jobs is still unmeasured, but it is clear that if Congress had extended the 2005 law yet again, then only persistent uncertainty would have been the beneficiary rather than state DOTs, ITS companies, and their workers. According to a 2011 federal study on the $48 billion U.S. ITS industry, 73 percent of its revenues are attributable to companies with fewer than 500 employees.

The transportation world is changing, with public-private partnerships for road management taking hold in some areas. The federal gas tax—18.4 cents a gallon for gasoline, 24.4 cents for diesel—has not increased since 1993 and is not keeping up with public revenue demands even as the boom in electric vehicles approaches. ITS technologies may also play an important role in future spending on infrastructure as they already have for tolling and other roadway systems.

New solutions will be needed for financing future spending, perhaps as early as 2014 when MAP-21 comes up for expiration or renewal.

Mr. Updyke ( craig.updyke@nema.org) manages trade and commercial issues for NEMA’s government relations.