Governor Bill Graves, President of the American Trucking Associations (ATA), was the keynote speaker yesterday afternoon at Transplace’s Shipper’s Symposium.  His presentation (“Current Conditions and The New Administration”) focused mostly on the role and importance of trucking on the economy.  He touched upon some of the themes I wrote about back in December in “Truck: How Today Moves“-e.g., how truck remains the leading mode of transportation in terms of value (over $8.3 trillion, or almost 71 percent of the total), tons (close to 9 billion tons, or 69 percent of the total), and ton-miles (almost 1.4 trillion, or 40 percent of the total). 

Graves concluded his presentation with “The Five Things that Keep Me Up at Night,” and number five on the list was California.  “I don’t want California to be the next Wall Street or the automotive industry [in terms of needing a federal bailout],” is how Graves summed it up.  He was referring, of course, to California’s worsening budget deficit.  Back in February, the state faced a $41 billion gap in its budget, which it ultimately closed with tax increases, deep cuts in services and extensive borrowing.  A month later, the budget was already in the red.  California now faces an $8 billion deficit this year, growing to $26 billion by 2014.  The situation is so bad that on Tuesday Governor Schwarzenegger proposed a study on legalizing marijuana use as a way to raise over $1 billion in annual tax revenue.

Why does California matter?  For starters, California has the eighth-largest economy in the world, so its financial health matters significantly to the overall economic future of the United States.  Also, as I wrote a few months ago in “California and the Trucking Industry,” if you want a glimpse of how “green” regulations, as well as “infrastructure” initiatives, could impact logistics operations in the near future, look no further than California and its Clean Trucks Fee, The Heavy Duty Vehicle Greenhouse Gas Emission Reduction measure, and the Statewide Truck and Bus rule.  Simply stated, when it comes to the economy, environmental issues, and logistics, what happens in California matters, for better or for worse.

The number one issue keeping Graves awake is the Federal Surface Transportation Reauthorization Bill (also known as the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)).  In a nutshell, “SAFETEA-LU addresses the many challenges facing our transportation system today – challenges such as improving safety, reducing traffic congestion, improving efficiency in freight movement, increasing intermodal connectivity, and protecting the environment – as well as laying the groundwork for addressing future challenges.”

The big issue, of course, is funding.  Despite the $27 billion in “stimulus” money recently allocated to road and bridge projects, the Highway Trust Fund (which relies heavily on gasoline taxes) is nearly bankrupt.  As I highlighted back in March, there’s a $68 billion-per-year gap between the revenues the Highway Trust Fund collects (long-term annual average of $32 billion) and the required infrastructure investments of nearly $100 billion per year (see “Carbon Tax, VMT Fee, and Future Transportation Costs“).  The bottom line: our transportation infrastructure needs an upgrade, otherwise it will become a constraint on economic growth, and we have to figure out a way to pay for it, which implies increased taxes or other fees down the road.

Numbers two through four on Graves’ list are Obama and Congress (he’s concerned that they’ll pander to the unions, trial lawyers, and environmentalists), Card Check (aka The Employee Free Choice Act, a topic we’ve written a lot about), and Cap-and-Trade, which Graves considers a tax on the entire business community.

My list of what keeps me up at night (if I wasn’t such a great sleeper) is a bit different: Pakistan, Iran, North Korea, pandemics, and asteroids (not always in that order).

What about you, what keeps you up at night?