• Economic Development and Commerce Committee (EDC) – Surface Transportation; foreclosure
• Education, Early Childhood and Workforce Committee (ECW) – Transforming the Workforce System: Upskilling American Workers
• Health and Human Services Committee (HHS) –  Health Care Reform
• Natural Resources Committee (NR) – Energy Infrastructure: Vital for a 21st Century Economy
• Special Session – Innovative Infrastructure Financing, Accountability and Sustainability
• Miller Center Discussion and Debate – Infrastructure
• 2008-09 Pennsylvania Gov. Edward G. Rendell’s Chair’s Initiative: Strengthening our Infrastructure for a Sustainable Future

Plenary Session Discussion Subjects:  "Infrastructure Matters," Energy Infrastructure for the 21st Century, and International Infrastructure Best Practices: Ideas for Governors

Plenary Session Points of Interest: 
The opening plenary session focused on the critical role of infrastructure in America's economy, environment, and quality of life. Dr. Frank Luntz, CEO of Word Doctors, presented findings from a recent national poll of Americans' attitudes concerning infrastructure investment. Among the poll's findings were that people believe infrastructure is a right, not a privilege, and that the definition of ‘infrastructure' goes beyond roads, bridges and highways to include energy, waste waters, schools, and railroads. Respondents also stressed the importance of seeing measurements of success in the implementation of infrastructure programs and transparency in the financial investments that are made in our infrastructure. Energy is ranked by the public as the most important area of infrastructure, and economic soundness is the highest infrastructure priority (higher even than safety). In a moment of levity, Dr. Luntz noted that people are so concerned about water quality that they would rather drink from their toilet bowl than from a river, and they are so frustrated by problems with the highway system that they would rather be audited by IRS than get stuck in a traffic jam.

T. Boone Pickens, founder and chairman of BP Capital Management, laid out his strategy for reducing America's dependence on foreign oil via new infrastructure investments. Pickens noted that only five million barrels of oil are produced daily in the United States, down from a peak of ten million barrels forty years ago. The U.S. imports fully 70 percent of our oil (up from 50 percent in the early 1990s), amounting to 21 million barrels daily, or fully one quarter of worldwide oil production to serve just four percent of the world's population. Of greatest concern to Pickens is that our heavy reliance on foreign oil puts the security of the U.S. at risk.

In July 2008, the "Pickens Plan" was introduced, aimed at reducing our dependence on foreign energy sources by moving toward the use of renewable sources of energy, including solar and wind. Pickens noted that there is excellent potential for wind-generated energy, as well as for the production of countless jobs, via a wind corridor running through the Great Plains, from Texas to Canada. And he emphasized the value of turning to natural gas, a cleaner source of energy than oil that can be found in abundance in the United States. As an example, he cited steps taken by the Southern California Air Quality Management District to switch the largest polluters in Southern California—trash trucks—to the use of natural gas. It cost $50,000 per truck to make the change, but the short-term investment was worth the long-term savings in air quality and fuel costs. And were the switchover to be made on a larger number of vehicles, benefits would be seen as well in terms of job creation.

John Rowe, CEO of Exelon Corporation, spoke of the work he did as a member of the National Commission on Energy Policy. Rowe emphasized that the necessary ingredients in energy policy reform include the use of more renewable resources, greater energy efficiency, and making either new nuclear energy production or carbon sequestration work. He differed from T. Boone Pickens in expressing the belief that gas, not wind—which is more expensive than gas to convert, is the best source of electricity. He cited the Energy Policy Commission's conclusion that a cap and trade system is the soundest way to ensure a market in more efficient forms of energy. He added that most of the money needed to ensure a richer, "smarter" utility grid (i.e., offering better transmission with the newest, smartest technology) can be raised through rate increases, but emphasized that with rate increases must come greater accountability, itself a costly proposition.

Governor Manchin of West Virginia asked why investments in research and development on clean coal production are relatively low compared with investments in alternative energy sources, given the amount of tax that coal production generates. John Rowe answered that investment in research on carbon sequestration is indeed critical to ensuring that coal can be made into a genuinely clean fuel.

Governor Schweitzer of Montana asked for the speakers' opinions on which was preferable: investing in a new DC grid overlay or continuing to invest in the AC system that patches existing grids together. John Rowe argued for strengthening and expanding the existing system, but noted that it would still be necessary to convert DC to AC at various points.

The closing plenary session focused on strengthening America's infrastructure and future outlook. Dr. Robert Atkinson spoke to governors about the work of the congressionally-mandated National Surface Transportation Infrastructure Financing Commission, which he chairs, and about how U.S. infrastructure investments differ from those of other nations. He noted that the down side of the U.S. having been at the forefront of technological innovation is that our system has become outdated. According to the infrastructure financing commission's findings, combined federal, state, and local investments currently total about $76 billion annually. Yet $138 billion will be needed to make even modest, gradual improvements to surface transportation infrastructure, and a minimum of $96 billion will be required to maintain the status quo. As promising as the recently-enacted stimulus package is, it will fill only three months of the gap between existing and needed investments.

Atkinson noted that the U.S. needs to follow the lead of other nations and: invest additional money; raise more funds from direct user fees (e.g., higher gasoline taxes and tolling and congestion pricing); embrace greater innovation in infrastructure construction and management; and make greater use of public-private partnerships.

Currently, only 40 percent of transportation costs in the U.S. are funded through user fees. Increasing those fees would not only help fund infrastructure improvements, but also serve as a disincentive toward unnecessary usage, in turn reducing the need to expand the infrastructure network.

Atkinson expressed recognition that invasion of privacy is a key concern with respect to the use of technology to track vehicle usage in order to levy user fees, but emphasized that new technology enables a signal that is one-way, not two-way, and is capable of tracking only payment information (not when or where driving has taken place) to protect privacy.

He also spoke of the importance of our information and energy infrastructures to prosperity and quality of life, and noted that other nations are ahead of the United States with respect to advances in the development of smart electric grids and expansion of broadband access—accomplishments that have resulted in part from public-private partnerships.

During a question and answer session, Governor Ritter of Colorado pointed out that because of the distances rural Americans must travel, rural Americans would be disproportionately affected by user fees based on mileage. Atkinson acknowledged the validity of Governor Ritter's concerns but noted that on the other hand, emphasis on mileage fees would work to the advantage of someone who drove a vehicle that was not fuel efficient, because their mileage fee would be offset by the payment of lower gas tax relative to those driving more fuel-efficient vehicles. By the same token, in the years to come, assuming that the number of electric and hybrid vehicles increases, gasoline tax will become less of a factor in infrastructure financing.

Atkinson noted that the final report of the infrastructure financing commission will be available at www.financecommission.dot.gov

Coni Hedegaard, Denmark's first Minister for Climate and Energy, spoke to the governors about her nation's efforts to develop and use clean energy and incorporate it into the transportation system. Minister Hedegaard pointed out that Denmark, which will host the upcoming UN Climate Change Conference, was compelled to shift to greener technology in the face of a severe economic crisis during the 1970s brought on by the disruption of the supply of Middle East oil. The nation has since taken bold steps to shift to the development and use of other energy sources and to make energy delivery more efficient, as a result of which Denmark has gone from being almost completely dependent on foreign sources of energy to being an energy exporter and the most energy efficiency country in the European Union. Among the actions taken in Denmark to reach this point are: (1) the establishment of heating systems by district that are efficiently supplied by heating power plants; (2) the introduction of waste incineration for power and heat production; (3) the creation of a natural gas grid based on the discovery of gas in the North sea; (4) the adoption of market-based policies (e.g., subsidies for renewal energy development, charged to users on their electric bills, and incentives to foster demand for the right types of technology); (5) the inclusion of energy efficiency standards in building codes; (6) the use of a vehicle tax system that favors environmentally friendly cars, while electric vehicles are exempted entirely from taxation; and (7) an increase in the public budget for research and development of energy technology. Denmark also is comprehensively addressing the transition from fossil to alternative fuels, focusing on sustainable biofuels as an alternative to gasoline. And emphasis on energy storage technology will make both renewable energy and electric vehicles more competitive and more feasible.

The Danish government has been careful to integrate transportation and energy systems by ensuring that the necessary energy and transportation technologies are in place prior to construction of housing and other building projects that will need them, and by establishing an integrated public transportation system that includes efficient inter-city railroads. Minister Hedegaard argued that the current global energy and economic crises provide a unique chance to create new synergies such as these worldwide between our transportation and energy systems.

During a question and answer session, Minister Hedegaard said that she would recommend a cap-and-trade system over a carbon tax for the U.S. because those who can afford to pay a tax will continue to pollute, while cap-and-trade serves as an incentive to ‘go green.' She also noted that the use of offshore-generated wind avoids the "not in my backyard" argument. In addition, although it is more expensive than the production of wind from land turbines, its production capacity is greater and more efficient.

Two NGA Corporate Fellows Public-Private Partnership awards were given for private sector cooperation in the achievement of state goals. The first was to ESRI of Maryland for embracing and expanding geographic information systems (GIS), which permit mapping of the environment to track where problems such as pollution exist. The second was to Microsoft for its program "Partners in Learning Worldwide Initiative," a five-year, $500 million investment to help increase student access to technology and strengthen workforce preparation. In addition to its focus in the state of Washington, Partners in Learning is engaged with the states of Florida, Michigan, New Mexico, Pennsylvania, and Virginia.

At a governors-only meeting, NGA members adopted a statement expressing confidence in the resiliency of the American economy and in the ability of the American people to emerge from the current economic crisis a stronger nation.

Governors' Statement on the Economy: "Our states and our citizens are experiencing unprecedented fiscal challenges. As leaders in our states, we face these difficult economic times not as Democrats and Republicans, but as governors charged with the public's trust and well-being.

"We are unified in our unwavering belief that the United States' economy is resilient and the true strength of our nation remains the ingenuity, perseverance and hard work of the American people.

"We have been through tough economic times in the past and have always emerged a stronger nation with a more vibrant economy. Our country's ability to persevere is not in question—we know better days lie ahead. Working together we can speed recovery, provide new opportunities and ensure a prosperous future."

NGA Chair, Governor Ed Rendell of Pennsylvania, said: "... we have to commit ourselves to a long-term, significant infrastructure revitalization program in this country. It is and always will be the best creator of jobs... It... will give us a credible benefit of economic competitiveness, quality of life, and public safety... the American people are interested... in not [just] bridges, roads, and highways... but... they want to see built out... and modernized... our energy infrastructure."

Coni Hedegaard, Denmark’s Minister for Climate and Energy, said: "Transportation is... crucial to our modern way of life but... is also a key reason for our current emissions and energy dependence.  We must diversity, increase efficiency, and also enhance public transportation to rid ourselves of this dependency, and we must redesign our transportation infrastructure."

Selected Policy Positions Adopted:
(1) recommending federal funding and flexibility for the states in enforcing the federal Real ID act to strengthen the security and integrity of state-issued driver’s licenses; (2) calling on Congress to ensure a strong federal-state partnership in the enactment of legislation for economic recovery, financial services regulatory reform, health care, surface transportation, and workforce and competitiveness programs; (3) urging sufficient federal funding to implement Base Realignment and Closure (BRAC) recommendations so as not to compromise other authorized mission growth construction projects, including those for military reserves; (4) offering guidance on a gubernatorial vision for federal surface transportation; (5) streamlining NGA’s policy on community development, affordable housing, and housing assistance; (6) emphasizing governors’ support for efforts to develop and expand passenger and freight rail; (7) strengthening policy to promote U.S. exports and ensure a level playing field for investment in the United States; (8) highlighting the critical role of state housing finance agencies in both ownership and rental housing and offering recommendations for federal action to help steady housing finance because of current economic conditions; (9) calling for transformative legislation to support a comprehensive, flexible, state-based workforce system within a governor-led, regional framework; (10) establishing a federal framework to accelerate governors’ international benchmarking work in education standards, assessment, human capital, and accountability; (11) supporting maximum state flexibility and outlining an appropriate federal-state partnership for the promotion of student health and nutrition; (12) providing governors with the option to pass through child support collections directly to families; (13) calling for strong action by all levels of government in addressing the HIV/AIDS epidemic; (14) urging federal policymakers to work with states in advancing consistent health care goals under Medicaid; (15) emphasizing the need to include long-term care in discussions about health care and to secure greater state flexibility and new innovative partnerships in the development of long-term care; (16) calling on the U.S. Environmental Protection Agency (EPA) to review any potential negative impacts from federal rules and regulations on state Superfund program and asking Congress and EPA to create effective liability and enforcement processes that create incentives for voluntary cleanups; (17) calling for the establishment and full funding of an Ocean Trust Fund; and (18) clarifying that governors support the ability of certified states and Indian tribes to use Abandoned Mine Land (AML) program funds for non-coal reclamation.