Reason Foundation

Transportation Policymakers Need to Use Congestion Pricing More

Posted on May 18, 2012, 3:58pm | Baruch Feigenbaum

Earlier this week I was at a congestion pricing workshop hosted by the Federal Highway Administration, Federal Transit Administration, and consulting firm ICF in Providence, Rhode Island. Four of these workshops have already been held around the country and although this workshop was intended primarily to attract participants from the New England states, participants came from as far away as California, Florida and Iowa. The workshop included Planners and Engineers from Chicago, Dallas, Denver, Minneapolis, Los Angeles, San Francisco and Washington D.C. 

In congestion pricing highway operators charge a variable price based on congestion to manage demand on an expressway or arterial. Although some projects generate revenue, this is not the primary purpose of congestion pricing. 

There are at least five different types of priced facilities. Priced lane facilities charge for some but not all lanes on an expressway. California State Highway 91 was the first project with variable priced lanes. Priced expressways include charging for all the lanes on a facility. Washington State Highway 520 over Lake Washington is an example of a priced highway. In priced zones or cordon zones drivers are charged either a fixed or variable fee to enter a certain area of a city. Central London is an example of a cordon zone. A priced road network uses a network of variably priced highways or a network of priced lanes on an expressway network. The Dallas metro area is developing such a network. Finally, pricing involves other transportation-related resources including performance parking: prices are adjusted to ensure a certain number of curbside parking spaces; pay as you drive insurance: drivers are charged for the number of miles they drive instead of a flat fee; carsharing: people rent cars for a short period of time from an hour to a day; and dynamic ridesharing: people who travel to a certain location are matched in one vehicle using technology (informal carpooling). 

Many U.S. metro areas have experienced the benefits of congestion pricing. The Los Angeles region reduced travel time by 10% and was able to decrease congestion sufficiently so that 132,000 additional people, 1.2% of the overall employment in the region, entered the workforce. While other factors were clearly in play, most of the growth can be traced to congestion relief. Another example is the Dallas region in which Planners and Engineers brought the public, business community, transportation agencies, elected officials and legislative leaders together to agree on a network of variable priced lanes. Dallas’ system has several innovative features including a rebate if speeds in the managed lane drop below 35 miles per hour. A third example is Chicago. Before the variable priced lanes, the average expressway speed during rushhour was less than 10 miles per hour. Commuters needed to multiply the time it would take them to reach downtown Chicago in off-hours by six to reach downtown Chicago during rushhour. San Francisco has also demonstrated how pricing reduces congestion and improves bus service. Additionally, since the proceeds from such a system are reinvested in transportation improvements, there have been no major equity issues in San Francisco. 

Congestion pricing is not one size fits all; different metro areas need different solutions. While Atlanta could benefit from a priced road network, Austin may need only a priced lane on I-35. While a cordon zone may be appropriate for New York it would not work as well in New Orleans.

Whichever systems a state or metro area chooses, congestion pricing can decrease traffic congestion, improve transit services, offer a guaranteed consistent commute time and improve safety. Unfortunately, many leaders are unaware of congestion pricing, do not understand it or are reluctant to try the concept. 

I hope that FHWA, FTA and ICF continue these congestion pricing workshops. While they require resources the workshops present a fact-based understanding of this concept. Additionally, political leaders, Planners and Engineers need to push for congestion pricing. With fiscal austerity the new reality, and a growing importance placed on improving and maintaining infrastructure, congestion pricing is one of the best tools to solve congestion. 

Private Sector's Increasing Role in Infrastructure Investment

Posted on May 17, 2012, 9:16pm | Harris Kenny

Today my colleague Leonard Gilroy and I published a piece on Real Clear Markets entitled, "States and Cities Going Private With Infrastructure Investment," which explains "...that new infrastructure financing models and sources of capital will be the only viable option to support and sustain growth." The challenge is simple: while governments at all levels are strapped for cash and continue to feel the effects of the Great Recession, they face pressing infrastructure needs.

Enter the private sector, where investors are demonstrating a willingness and capability to partner with governments to modernize and expand infrastructure, according to Reason Foundation's recent Annual Privatization Report 2011. The report finds that the amount of capital available in private infrastructure equity investment funds reached a new all-time high last year. And since 2006, the 30 largest global infrastructure investment funds have raised a total of $183.1 billion dedicated to financing infrastructure projects; the bulk coming from U.S., Australian and Canadian inventors. In fact, eight major privately financed transportation projects were under construction in the U.S. in 2011 totaling over $13 billion.

Historically, U.S. policymaker interest in public-private partnerships has been in surface transportation, however 2012 ushered in a wave of new social infrastructure considerations (along the lines of what is already seen across in the developed world.)

For a preview of the future, just look to Puerto Rico, where innovative infrastructure financing has been a priority of Governor Luis Fortuño's administration. Prior to his tenure, massive budget deficits and weak credit ratings left the territory with a limited ability to finance infrastructure. In fact, public infrastructure investment (as a share of GDP) had been on a steep decline in Puerto Rico since 2000.

Put simply, if Puerto Rico was going to maintain-much less expand and modernize-its infrastructure, it was going to need outside help. Policymakers proactively adopted a 2009 law authorizing government agencies to partner with private firms for the design, construction, financing, maintenance and/or operation of public facilities across a wide spectrum that includes transportation, ports, schools and other asset classes. The law also established a Public Private Partnership Authority (PPPA), a new unit of the Government Development Bank, to conduct due diligence on these infrastructure partnerships and take worthy projects to market in competitive procurements.

The piece goes on to highlight promising new efforts in Chicago, Texas, Connecticut and elsewhere, continuing:

Puerto Rico isn't alone though. For example, Chicago Mayor and former Obama chief of staff Rahm Emanuel stood with former President Bill Clinton last month to propose an ambitious $7.2 billion infrastructure program that will rely heavily on public-private partnerships and private financing for a broad spectrum of projects including roads, water, transit and more. To implement this program, city policymakers recently created a new Chicago Infrastructure Trust, a nonprofit infrastructure bank that can package deals and blend public and private financing to advance projects. Early pledges of up to $1 billion in private capital from several financial institutions, including Citibank, Macquarie and JPMorgan suggest the model may be viable.

Elsewhere, both Texas and Connecticut enacted broad-ranging laws to authorize private sector financing for state and local assets in 2011. In New York, The Yonkers Public Schools recently hired a team of financial, legal and technical consultants to evaluate the potential to tap private financing to help deliver a $2 billion K-12 school modernization program. Like Puerto Rico, Yonkers has a number of aging facilities over 70 years old that need reconstruction, yet lacks the ability to undertake large-scale renovation through traditional taxes and bonds given current fiscal and financial constraints.

We ultimately conclude that, "Infrastructure represents the arteries and capillaries of our economy, and if we let those deteriorate, the heart itself will soon follow." Read the full piece available online here. For more on this policy area, read my colleague Leonard Gilroy's previous post on Puerto Rico here.

Senate Transportation Bill Uses Creative Math

Posted on May 17, 2012, 10:07am | Baruch Feigenbaum

It has been three months since the Senate passed its Transportation bill, MAP-21. This has given analysts time to examine the bill in more depth. Unfortunately, the more transportation analysts research the bill, the more non-transportation spending they find. Since the House passed a shell bill, the eventual bill that becomes law will have many similarities with the Senate bill. Ken Orski who publishes Innovation NewsBriefs has highlighted many of the problems with the bill. I want to detail a few of his insights:

The non-transportation provisions that are raising eyebrows include the creation of a new National Endowment for the Oceans, Coasts and Great Lakes to be housed in the Department of Commerce (Sec. 1603(4) of MAP-21), and a seven-year reauthorization for the Land and Water Conservation Fund which is a National Park Service program within the U.S. Department of the Interior (Sec. 1701 of MAP-21). Indeed, the Senate bill includes over $6.8 billion in new non-Highway Trust Fund spending that has nothing to do with the core purpose of the bill. 

Creating an endowment for Oceans, Coasts and Great Lakes may be a good program. The same is true for the reauthorization of the Land and Water Conservation Fund. Two other unrelated provisions, the Restore Act and Rural Schools, each received more than $1 billion each in dedicated funds. The Restore Act sends money to the four gulf states affected by the BP oil spill. The Secure Rural Schools and Community Self-Determination Act reimburses counties for tax-exempt federal lands. However, both are environmental programs that have nothing to do with transportation. If Congress wants to fund these four programs, it should do so through a subject-related bill. While all four of these programs have some merits, none is transportation-related. These programs have no place in a transportation bill. 

The Republican House has been criticized for trying to include the Keystone Pipeline in its transportation bill. While the Keystone Pipeline is badly needed, it is not transportation and should not be included in a transportation bill. However, it is hypocritical for Democrats in the Senate to complain about Keystone when they have funding for non-germane programs in the Senate bill. 

This is Washington politics at its best; stick a program in at the last minute and hope that nobody notices. A total of $6.8 billion in new non-Highway Trust Fund spending is a substantial amount for a two-year bill. 

Further:

Critics are also paying close attention to changes that were quietly slipped into the Senate bill and approved on the floor by unanimous consent without debate on March 13, one day before the final passage of the bill.  They include, notably, an amendment affecting the treatment of transportation "enhancements" (Sec. 1113 of MAP-21). This provision shifts the flexibility to decide how to spend the enhancements set-aside money from the state DOTs to local government agencies, thus substantially modifying an earlier agreement reached by the leaders of the Environment and Public Works (EPW) Committee. As the Committee's chairman, Sen. Barbara Boxer (D-CA) and its ranking member Sen. James Inhofe (R-OK) agreed at the November markup of the bill, it was only a compromise on that contentious issue that allowed the parties to move forward on the entire bill.  

Transportation enhancements funded by the gas tax and included in the highway section of the transportation bill fund non-highway related provisions such as acquisition of historic battlefields, rehabilitation of historic transportation buildings and establishment of transportation museums. Of all the wasteful non-highway spending in the transportation bill, Transportation Enhancements may be the most egregious. The last minute change slipped into the Senate bill shifts program administration from state DOT’s to local government agencies. While Senate Republicans should have eliminated Transportation Enhancements, the Senate bipartisan approach is a welcome change in DC. But Republicans should not accept wasteful programs in the name of bipartisanship. Under the original Senate agreement, state DOT’s would have controlled enhancement funds. At least in this scenario, program funds could serve some sort of statewide purpose. If local governments control the purse, the funds will be used for local piecemeal projects making a mockery of a national bill. If local governments want to support transportation museums they should do so with local funds. It is doubtful they would since spending for actual roads, schools, hospitals, etc. is far more vital. 

Additionally:

Other MAP-21 provisions that have raised questions include … authority to revoke passports of tax delinquents (which the bill estimates would raise $743 million over ten years to help cover the $12 billion shortfall in transportation spending).

Finally, the bill is supposed to find offsets for new spending. It is doubtful the Senate could have offset the entire amount, but the authors could have made a better effort. The bill relies on provisions such as raising $743 million from revoking passports of tax delinquents. However, these types of provisions only total $3.1 billion. Where is the other $9 billion? How can the Senate justify that the bill will not increase the deficit? The Senate will be using offsets over the next 10 years to fund a 15-month bill. These future year transportation funds will not be able to support future transportation needs. Further, it requires a great deal of “imagination” to tote a bill as balanced when much of the funding for this two year bill comes from tax revenue projected over the next 10 years. 

Most transportation types want a new transportation bill. We are now on the 9^th extension of SAFETEA-LU that expired 2 ½ years ago. Hopefully the conference committee will eliminate much of the non-germane funding from both the Senate bill and the House proposal. But if this is the best we can do, maybe we need a 10^th extension to get serious about creating a transportation bill that actually funds transportation within our current budget. 

Puerto Rico's Infrastructure Renaissance Continuing in 2012

Posted on May 15, 2012, 4:40pm | Leonard Gilroy

Under the leadership of Gov. Luis Fortuño, Puerto Rico continued to emerge as a leader in attracting private investment in public infrastructure in 2011, with public-private partnerships (PPPs) undertaken or underway that include a modernization of 100 K-12 schools, a $1.5 billion toll road lease and an ongoing procurement for a long-term lease of San Juan's international airport. As I wrote in Reason Foundation's recently released Annual Privatization Report 2011 (see Puerto Rico excerpt here):

In two short years, the administration of Governor Luis Fortuño has turned Puerto Rico into a privatization leader among its state peers. To address the territory's chronic deficits and unsustainable debt, the administration has advanced a range of reforms that include major spending reductions, optimization of government operations and the enactment of a new law in 2009 inviting private investors to modernize or develop new infrastructure across a variety of sectors.

That law, Act No. 29, is now bearing fruit. It authorized government agencies to enter into public- private partnerships (PPPs) with private firms for the design, construction, financing, maintenance or operation of public facilities, with a set of priority projects that include toll roads, transit, energy, water/wastewater facilities, solid waste management and ports. The law also established a new Public Private Partnership Authority (PPPA), a new center of excellence within the Puerto Rico Government Development Bank responsible for identifying, evaluating and selecting PPP projects and for monitoring and enforcing the terms of PPP contracts.

Despite its short life, the PPPA has built a world-class PPP program utilizing global best practices, and it has already seen some major successes advancing projects through the procurement pipeline.

Read the rest of the Annual Privatization Report 2011 article here for more on Puerto Rico's schools, toll road and airport PPP initiatives that advanced in 2011.

I'm pleased to report that momentum has continued into 2012. Earlier this year, Puerto Rico's Public-Private Partnership (PPP) Authority announced what will become the next PPP project in their infrastructure pipeline—a design-build-finance-maintain project for a new 600-bed, privately-financed juvenile correctional detention and treatment facility, a project estimated to potentially save the commonwealth over $4 million annually. This will be Puerto Rico's first social infrastructure project in corrections, and upon completion, operations of the facility will remain in the public sector (though the private developer will continue be responsible for ongoing facility maintenance). The PPP Authority decided to move forward into procurement for this project based on the results of a feasibility and value-for-money analysis prepared for the project, available here. Statements of qualification from interested bidders were due last week. More information on this project is available here.

Also, earlier this month, the PPP Authority and the Ports Authority announced two consortia— Grupo Aerpuertos Avance (a team combining Ferrovial and Macquarie) and Aerostar Airport Holdings (a team combining Aeroportuario del Sureste and Highstar Capital)— as finalists for a long-term lease of San Juan's international airport. Six consortia were shortlisted last September out of 12 applicants, and the winning bidder is expected to be announced next month.

For more on Puerto Rico's robust and impressive PPP program, see:

• My February 2012 live, video interview with PPP Authority director David Alvarez at Reason Weekend in San Juan.
• My August 2011 print interview with Alvarez.
• Puerto Rico's PPP Authority website.

For more of the latest in state and local government privatization, see the full Annual Privatization Report 2011.

Washington Outer Beltway and I-495 BRT Have Benefits

Posted on May 11, 2012, 8:27am | Baruch Feigenbaum

Last Week transportation reporter Martin Di Caro of Metro Connection received a dressing down by David Alpert of Greater Greater Washington. Alpert argued in a column that Di Caro’s transportation article was one sided. Specifically, Alpert took notion with the idea that an Outer Beltway or other arterial highway could solve congestion in the Washington area. Other environmental and smart growth advocates issued similar critiques. 

Alpert accurately highlighted some of the shortcomings of the article. He was honest in noting that all of his articles are opinions and in detailing the difference between editorials and objective news coverage. I also agree with him about the quality of transportation coverage. Washington DC is fortunate to have dedicated, knowledgeable transportation reporters such as Robert Thompson of the Washington Post. But transportation is not as big a priority as issues such as taxes or defense. Sometimes transportation beat reporters are just passing through to other more lucrative positions. Most of the DC media tries very hard to offer balanced transportation coverage; but transportation is often the red headed stepchild.

However, I think there are several good reasons that Albert is not considering for building a parallel expressway. While some pro-highway groups can serve as boosters for new roads that may not be justified, some environmental groups are just as guilty of bias. Environmental groups have delayed many needed highways with minimal environmental impacts. 

Yes, new highways do induce demand. But that does not mean highways should never be built. A highway linking western Fairfax and western Montgomery could also serve drivers trying to avoid the Capital Beltway. As Alpert notes the Capital Beltway does not serve its original purpose. As many commuters travel from one location along the Beltway to another, travelers trying to bypass Washington D.C. become stuck in the 4-hour morning and 5-hour afternoon rush-hour traffic jams.

New highways do not necessarily induce new development. Several steps can be taken to lessen this phenomenon. First, the number of exits can be limited. Much of the new development occurs near exits because highways offer quick access between existing jobs and new residences. Second, the exits can be placed in areas that are already developed. Small existing communities are prevalent in Western Fairfax and Western Montgomery counties. 

Further, Washington is a growing metro area. While some new residents move to the District, Bethesda, or Tysons Corner those locations are not right for everybody. Some residents prefer to live outside the beltway or in the exurbs; others cannot afford to live close-in. Proclaiming that we are never ever going to build new highways is “solutionism” where one solution is the answer for every problem. It is no better a policy than deciding to build new highways everywhere, wherever there is a slight amount of traffic congestion. 

The region absolutely needs better transit solutions between Bethesda and Tysons Corner. The challenge is finding the best solution. In many corridors it is bus-rapid-transit (BRT) and not rail. BRT runs managed lanes such as high-occupancy vehicle (HOV) or high-occupancy toll (HOT) lanes. In addition to providing operating space for reliable, cost-effective and attractive transit, managed lanes encourage carpooling and vanpooling. Virginia will allow single person vehicles to use the managed lanes providing they pay a small toll. However the tolls will rise and fall with congestion to ensure buses will always travel at 45 miles per hour or higher. Virginia is building managed lanes from I-95 to The Dulles Greenway. Maryland is studying the system. A managed lanes system from The Dulles Greenway to I-270 could be operational in less than ten years. 

In many situations the solution is not rail. The most recent cost estimate for Maryland’s proposed purple line from Bethesda to New Carrolton is almost $2 billion. While Maryland is hoping that the federal government will pick up half the tab, opposition to the route and the cost continues to grow. A deluxe BRT system would cost less than a third of the light-rail line. The BRT system would also cost about $10 million less per year to operate. More details on why BRT is a better choice for that corridor are available here.

Unfortunately, many urban interstates were built through low-income minority neighborhoods. Routes were built in these locations because land prices were the cheapest and opposition the least well organized. In addition highways were used for socially nefarious goals. While urban interstate construction was often curtailed for good reasons, DC never built a highway network. As a result there are a limited number of ways for traveling in the DC region. The Potomac River and the lack of interjurisdictional cooperation further increase congestion. While it is much more challenging to build a new highway now than it was 40 years ago, a well-placed new expressway could provide many benefits. 

Much of the Capital in PPPs Comes from American Sources

Posted on May 4, 2012, 6:00am | Baruch Feigenbaum

The Reason Foundation’s Annual Privatization Report 2011 Surface Transportation Chapter reveals that much of the capital in Public Private Partnerships comes from American sources. Specifically as my colleague Bob Poole explains:

In the United States, concerns continue to be raised about “foreign takeovers” of infrastructure. It is therefore worthwhile to compare the nationality of the funds providing equity for infrastructure projects with the nationality of the concession companies that are implementing the projects. Based on Infrastructure Investor’s analysis of the 30 largest investors, 34% of the capital comes from U.S-based institutions, with Australia’s share at 29%. When you add Canada to the U.S. share, the total of North American investors is 54%. European institutions constitute 14% of the capital.

The large majority of project experience is European. Of the top 10 companies, eight are from Europe, one from Australia and one from China. Of the top 20 companies, 14 are from Europe (Spain, France, Germany, UK and Portugal), three from China, and one each from Australia, Mexico and Brazil. A U.S. firm does not show up until position 33. We can see that while the large majority of infrastructure development and operational expertise currently resides with European firms, the majority of the capital is coming from North American and Australian investment funds. Those who raise political concerns about foreigners “buying our toll roads” seem to have missed the difference between those who are building and operating these infrastructure projects and those who are financing them. More than half of all the equity investment is coming from North American funds.

The reason why “foreign control” has become an issue is because the United States entered the infrastructure privatization arena late in the game. Many European countries as well as Australia, Brazil, India and many others have been using PPPs for more than 20 years. Since foreign nations used PPPs before the U.S., it is only natural that many foreign companies are leaders in PPPs. Additional U.S. PPP infrastructure projects will lead to additional U.S. companies becoming involved in PPPs. 

For many years, the U.S. was fortunate to have a robust federal funding source: the federal gas tax. Although the country could have enhanced its infrastructure with PPPs there was no pressing need. Times have certainly changed. As a result of inflation the gas tax has diminished purchasing power. Vehicles are more fuel-efficient than ever resulting in less money for infrastructure. Additionally, an increasing amount of fuel tax revenue is diverted to transit, non-motorized transportation uses, or economic development projects. While PPPs are not ideal for every transportation project they can reduce the contributions from cash-strapped governments allowing projects to be built far sooner than if the public sector acted alone. PPPs are more important than ever for constructing a robust infrastructure system.

Unfortunately, xenophobic politicians who exaggerate the influence of foreign companies have become a major threat to PPPs. These xenophobes can be found in both political parties and appeal to union members and tea-party members alike. While fear of foreign investment is misplaced and illogical, it is also not accurate. While infrastructure development and operational experience resides with foreign companies, the majority of the capital is coming from U.S. sources. In addition, most contractors hired by foreign companies are American. While foreign companies may be managing the process, they are employing American workers.

Annual Privatization Report 2011: Surface Transportation

Annual Privatization Report 2011: Homepage

Secretary LaHood Should Focus on Real Driving Dangers

Posted on May 3, 2012, 5:00pm | Baruch Feigenbaum

While DOT Secretary LaHood obsesses over cell-phone use, a new report from the Society of Automotive Engineers details how improper use of turn signals causes twice as many accidents as distracted driving. (Cell-phone usage is one aspect of distracted driving.)

According to Autoblog:

A total of 12,000 turning and lane-changing vehicles were observed with visible turn signal usage (or neglect) data recorded. The study shows that the neglect rate for lane changing vehicles is 48% and the neglect rate for turning vehicles is 25%. That translates to an astonishing 750 billion times a year that drivers neglect turn signals on U.S. roadways, or over 2 billion times per day. Each incident of neglect elevates the risk of a multi-vehicle crash.

Obviously, not every absent turn signal results in a crash, but the study concludes that the collective result of turn signal neglect is as many as 2 million crashes per year. In comparison, the U.S. Department of Transportation states that Distracted Driving causes about 950,000 crashes per year, so Turn Signal Neglect is actually a more significant safety issue. While the causes and remedies to combat Distracted Driving remain a matter of ongoing debate, the remedy for Turn Signal Neglect is simple, direct, effective, and cost-saving: The singular cause is driver neglect. 

There are two solutions to this problem. The first is through technology. “Smart Turn Signals” which use vehicle sensors and computer control assist the driver in turning on and turning off turn signals. Drivers are encouraged to turn signals on via a warning light similar to the flashing dashboard light that reminds drivers to use their seatbelt. Signals turn off automatically after a turn. This new technology senses turning motions more precisely than current systems. This Smart Turn Signal has been in development for several years. The Society of Professional Engineers indicates that this technology will have no new costs since the vehicle sensors needed are already required equipment on all new cars. However, there could still be implementation issues. As a result this solution should not be mandated. However, it would be an excellent option on new vehicles. 

The second solution is education. The NHTSA can detail in fact-based campaigns why turn signals are important. Most states require use of a turn signal to make a left or right turn, to pull away from the curb, and to switch lanes. Some drivers may not fully understand all turn signal laws. A national campaign can highlight turn signal safety and laws that apply in every state. 

This study provides further proof that Secretary LaHood’s anti cell-phone campaign is misplaced. An earlier post highlighted the different distractions that drivers face including the radio, the application of make-up, children in the backseat and mechanical problems. This research highlights the number of yearly accidents (2,000,000) caused by improper turn signals usage dwarfs the number of accidents caused by cell phone usage. All yearly distracted driving accidents (which include cell phones) combined total 950,000. Although cell phone use can distract the driver, placing undue emphasis on cell phone safety could cause other safety issues such as improper turn signal use to be overlooked. 

Secretary LaHood has made usage of cell phones his top issue. New facts are unlikely to change his crusade. Perhaps he can add turn signal safety to his anti cell-phone campaign. While the two important safety issues are not the most pressing problems for the transportation community, at least his press releases will have a little more variety.

The Year 2011 in Surface Transportation and Aviation Privatization

Posted on April 26, 2012, 10:53am | Baruch Feigenbaum

The rollout of Reason Foundation’s Annual Privatization Report 2011 continues today with the release of the Surface Transportation Privtization and Aviation Privatization sections authored by Reason’s Bob Poole. The Surface Transportation section provides a comprehensive overview of the latest on toll roads, HOT lanes and other news on privatization and public-private partnerships in surface transportation. The Aviation section provides a comprehensive overview on the latest news on domestic and international airport privatization and privatization of airport security. Topics include:

 Surface Transportation

• In 2011, infrastructure finance continued to recover from the credit market crunch of 2009. The amount of capital available in infrastructure equity investment funds reached a new all-time high.
• Over the past five years, the 30 largest global infrastructure investment funds have raised a total of $183.1 billion dedicated to financing infrastructure projects, with the bulk coming from U.S., Australian and Canadian inventors. 
• Eight major privately financed transportation projects were under construction in the U.S. in 2011 totaling over $13 billion investment, including megaprojects in Virginia, Texas and Florida. 
• In 2010 CalPERS, the largest U.S. public employee pension fund, purchased a 12.7% equity stake in London Gatwick Airport, and public pension funds in Arizona, Louisiana, Oregon, Texas and San Diego are seeking similar investments. 
• Puerto Rico’s Public-Private Partnership Authority announced a $1.5 billion lease of the PR-22 and PR-5 toll roads, their as its first large-scale project.  Ohio officials are considering a similar lease of the Ohio Turnpike.
• Other topics include the federal role in private infrastructure finance, an update on high-occupancy toll and express lane projects in the U.S., and a review of toll road developments in the states and across the world.

Aviation 

• In the aftermath of the credit markets crunch of 2008–2009, the airport market continued its recovery in 2011, with efforts including Puerto Rico's current plan to privatize San Juan’s Luis Munoz Marin International Airport and Chicago's continued interest in a potential Midway Airport lease. 
• A total of 48% of European air passengers were handled by partly or fully privatized airports in 2011, with that share likely to grow with impending privatization initiatives in Spain and Greece. 
• Amid public outrage over TSA’s introduction of body scanners and aggressive pat-downs, the administration and Congress continued to battle over proposals to allow airports to opt-out of TSA security and hire private screeners. However, some progress was made in Washington D.C. over reviving the trusted traveler program, advancing a more risk-based approach to security.
• Since 1990, 51 governments have commercialized their air traffic control systems, separating the air traffic control functions from regulatory bodies, removing them from civil service, and making them self-supporting from fees charged to aircraft operators. However, there was no significant progress in 2011 toward commercializing air traffic control in the United States. 
• Other news on domestic and international airport privatization and air traffic control commercialization 

Romney's Transportation and Land Use Policies may be Little Different than Obama's

Posted on April 25, 2012, 1:54pm | Baruch Feigenbaum

Many people know that “Obamacare” was modeled on former governor Mitt Romney’s Massachusetts health-care law. However, few know that one of President Obama’s landmark “smart growth” initiatives known as the Partnership for Sustainable Communities was also based on a Romney program. 

When Romney was governor of Massachusetts he fought sprawl and encouraged density. According to The Grist, in 2002 he said, “Sprawl is the most important quality of life issue facing Massachusetts.” After winning Romney changed the state’s land-use laws in several ways. First, he created the Office for Commonwealth Development and appointed environmentalist Douglas Foy to lead it. According to Commonwealth Magazine, the business community was furious. The state office ensured that transportation, housing, energy, and environmental offices all worked together to promote smart growth. The Partnership for Sustainable Communities has accomplished the same goals on the federal level with the department of transportation, department of housing and urban development and the environmental protection agency.

Romney’s administration worked to concentrate development in town centers, construct housing near transit stations, and improve existing roads instead of expanding them. 

Further according to The Grist:

Romney was a vocal advocate for the cause. “I very much believe in the concept known as smart growth or sustainable development, which is the phrase I used in the campaign,” Romney told Commonwealth Magazine in 2003. “You do not want to deplete your green space and air and water [in order] to grow, and the only way that’s possible is if your growth is done in a thoughtful, coherent, strategic way.

As Romney put it in 2005, “By targeting development to areas where there is already infrastructure in place, not only can we revitalize our older communities, but we can also curb sprawl as well.” His administration actively pursued a “sustainable development agency” and promoted “transit-oriented development,” “multi-modal transportation,” “village-style zoning" “green building,” “mixed use” development, “mixed-income housing,” and other approaches that would delight any green-leaning city planner — and rile up any red-blooded Tea Partier.

Environmental activists still found plenty to criticize in Romney’s approach to land use and development, but many greens and smart-growth advocates were pleasantly surprised, at least in the first half of Romney’s term. In 2006, the U.S. EPA gave Massachusetts’ Office for Commonwealth Development its National Award for Smart Growth Achievement.

There are several parallels between Romney’s state program and the current federal program:

Just as Romney’s Office for Commonwealth Development incentivized local communities to embrace smart growth by offering grants, so does the Partnership for Sustainable Communities. Since its launch, the partnership has helped to allocate about $3.5 billion in grants and other assistance to more than 700 communities that want to better coordinate housing, transportation, and economic-development projects and make neighborhoods more walkable, transit-accessible, and sustainable.

In fact Romney’s policies were smart growth oriented until his last year as Governor when he decided to quit the Regional Greenhouse Gas Initiative (RGGI):

 [I]n mid-December (2005) Romney abruptly pulled the state out (of the RGGI)— despite the fact that several staffers in his administration had spent two and a half years and more than half a million dollars negotiating and shaping the deal.

Romney had until (December of 2005) been an advocate and architect of RGGI, which includes a market-based trading system that will let big fossil-fuel power plants buy and sell the right to emit carbon dioxide. As recently as November (2005), he was publicly talking up the agreement: “I’m convinced it is good business,” he told a clean-energy conference in Boston. “We can effectively create incentives to help stimulate a sector of the economy and at the same time not kill jobs.”

So why did then Governor Romney pull out? It was about this time he considered running for the Republican 2008 nomination for President. 

So where does Romney stand now? He recently told several donors that he might eliminate HUD, the department his father headed during the Nixon administration. He has said the EPA under President Obama is “out of control.” Would he approach smart growth in a similar manner to health-care and argue that promoting smart growth at the state level makes sense while promoting it at the federal level is unconstitutional? Since the President’s smart growth policies mostly apply at the local level, applying the health care reasoning to the smart growth arena is not the same. 

Still people who worked with Romney are not sure of his real views. I will try to hazard a guess. Romney is a moderate Republican; in a few states he might qualify as a Democrat. He believes in smart growth, providing universal healthcare, reforming immigration, and is pro-choice. However, to become President his views have “evolved” to become more in line with the base of the Republican party. While he is not the first politician to switch his views to become more electable, he is pressing the limits of believability. 

The question is what happens after he is elected. Will his true opinions on smart growth shine through or will he take a politically popular path. And what happens if he is elected to a second term?

Much of the current opposition to smart growth has arisen as a result of a United Nations document titled Agenda 21. The non-binding agenda that came out of the 1992 Rio Earth Summit contains many policies that could be harmful to the United States. However similar to most other bad United Nations policies it has been ignored by most of the world and will likely continue to be ignored. Some in the tea party are making a mountain out of this molehill of a document. Neither Obama’s nor Romney’s policies are based on Agenda 21. In reality, they are based on smart growth dogma that is emotionally charged and largely factually unsubstantiated. Programs such as the Partnership for Sustainable Communities, applied indiscriminately with no regard for the differences between different places, are potentially more damaging to the United States in the long-term than any United Nations document. 

From a land use and transportation viewpoint, Romney’s policies may be little different than Obama’s policies. In some ways Obama is more believable because he actually believes in what he preaches. Romney preaches just to be elected. In transportation matters, President Obama has been one of the least effective Presidents in the last fifty years. The fact that Governor Romney may be little different is a depressing thought indeed.

Midtown Tunnel Could Die Without Tolls

Posted on April 16, 2012, 6:00am | Baruch Feigenbaum

Recently, in a column originally published by the Jefferson Policy Journal, my colleague Len Gilroy and I detailed the importance of moving forward with the Midtown Tunnel extension in the Hampton Roads area. 

Despite the U.S. Department of Transportation providing a $422 million loan for the Midtown Tunnel project and Skanska Announcing the official financial close for the project, Hampton Roads area officials seem bent on delaying or cancelling the proposed public-private partnership (PPP) for the $2.1 billion Midtown Tunnel expansion. 

More stringent fuel efficiency mandates and inflation have been yielding diminishing returns for federal and state gas taxes in recent decades. There is a consensus among economists, state transportation agencies and other experts that it’s a matter of when, not if, we make a dramatic shift away from gas taxes to other more direct and financially sustainable types of user fees, such as tolls. Additionally, Tolls are fairer than taxes, as those who benefit from the tolled facility pay for it as they use it.

But after years in the making, some Hampton Roads area pols have cynically stepped in at the last minute to undermine the Midtown deal, holding the state budget process hostage for more state transportation money so they can lower planned local tolls.

The Midtown PPP illustrates well the sorts of PPP benefits now in jeopardy. First, PPPs expand the funding pool by allowing governments to tap into new sources of capital not typically used in traditional tax- or debt-funded transportation projects. Second, a PPP provides the only viable method to finance new road capacity in the Midtown Tunnel. The new tunnel will also improve the frequency and reliability of bus service. Finally, PPPs transfer key project risks to the private sector and away from taxpayers. This is in contrast with traditional infrastructure projects where government sponsors shoulder most project delivery and operational risks.

Attacking the Midtown Tunnel PPP will do nothing for the region but make the project more costly and forestall needed congestion relief. The full commentary is available here.

China Can Use Market-Based Solutions for its Congestion Problems

Posted on April 12, 2012, 11:25am | Baruch Feigenbaum

According to a recent article in The Atlantic the car has replaced the bike in the streets of Beijing:

Today the cars have taken over. In fact, Beijing more and more is just another traffic-clogged city with Chinese characteristics. Its bike lanes are rapidly filling with parked cars, auto rickshaws spewing exhaust, and strolling pedestrians.

To many Chinese, bikes are now for losers. The iconic Beijing bicycle is a sorry one-gear affair with a metal basket on the front which breaks so regularly that every street corner seems to have a makeshift fix-it stand.

"There is a quote: ‘I would rather cry in a BMW than smile on a bike,'" says Jinhua Zhao, an urban planning professor at the University of British Columbia who's conducting a study of cycling in Beijing. He’s found that bicycle use in Beijing has dropped from about 60 percent in 1986 to 17 percent in 2010. At the same time, car use has grown 15 percent a year for the last ten years. 

This has caused some bicycle advocates to start waxing poetic: 

The loss of a bike culture is a shame, says Shannon Bufton, the Australian-born founder of an NGO called Smarter Than Car. "It’s like Venice and gondolas. They go together, Beijing and the bike," he says. 

Chinese consumers buy automobiles for the same reasons that American consumers buy them: a growing middle class and urbanization. Over the last ten years more than 300 million Chinese have moved into the middle class. Contrast that with the 310 million people in all of the United States. According to Forbes, by 2030 China will have 1.4 billion middle class consumers compared with 365 million in the U.S. and 414 million in Europe. China’s demand-driven economy is creating a middle class, something most U.S. policy analysts believe is a positive. This large American middle class is one reason that the U.S. has such a strong economy.

As recently as 1985 no more than 20 percent of all Chinese lived in cities. By 2005, the number had climbed to 50%. By 2045, it may reach 75%. 

With more cars comes more congestion. The congestion and the resulting pollution are real problems, but ultimately solvable. China has tried conventional big government solutions to fix its problem without much success. During the 2008 Olympics, its 50,000 rental bikes sat largely unused at kiosks. China’s policy of blocking drivers from entering Beijing one day a week has not reduced congestion. Limiting registrations for new cars and imposing strict driving time restrictions on car owners have proven more successful. But at what cost? Draconian government restrictions limit China’s demand-driven economy 

Building new highways is part of the solution, but it is no panacea either. Beijing is expected to have 7,000,000 drivers by 2015. Each day an average of 1,900 new vehicles enter the capital city. And while seven new highways beginning in Beijing will be constructed by 2015, they will likely only be a short-term solution to the congestion problem. 

China can solve the problem by implementing market-based solutions. For example, single-occupant vehicles could be required to pay a small fee to use a stretch of highway and vehicles with three or more occupants could use the highway for free. Buses can use special express lanes to take a guaranteed congestion-free trip throughout the city. Major arterials could have queue jumpers that allow commuters to pay a modest price to avoid congestion.

Market-based solutions can be implemented on transit as well. To reduce crowding, Beijing’s metro can charge different prices based on the level of congestion. The most popular travel times would have the highest prices. Off-peak hours would have a lower price. The country could use the resulting funds to build new train lines or add extra trains during the most popular hours. If the transit commute was faster and more reliable additional commuters might use it. Pricing also encourages some travelers to make their trip to work slightly earlier or later.

China’s economy is creating a large number of middle-class employees. And these employees are using their wealth to buy automobiles in record numbers. However, arbitrary regulations that do little to reduce congestion are not the solution. And pining for the good-old-days when everybody commuted by bicycle and lived in the lower class won’t help either. China is embracing its own version of Capitalism at a record pace. It is time for the country to use market-based pricing to start solving its congestion issues.

Ybarra and Gilroy in Virginian-Pilot: Midtown Tunnel PPP needs to move ahead

Posted on April 11, 2012, 3:31pm | Leonard Gilroy

My Reason Foundation colleague Shirley Ybarra and I have a new op-ed in today's Virginian-Pilot on why the current political gamesmanship over Midtown Tunnel PPP is counterproductive, why it's the most viable path forward to reduce congestion in the Hampton Roads region, and why other states are using similar tolling and public-private partnership strategies to supplement the increasingly insufficient gas tax to get needed projects built.

Here's an excerpt:

Many local officials are trying to delay the $2.1 billion expansion of the Midtown Tunnel. Some are worried about the expected toll rates. Others want the government to build it. It is this never-ending political gamesmanship and short-term thinking that make building critical infrastructure so difficult.

Freeways aren't free. And neither are tunnels.

The possibility of a $1.84 toll for the tunnel during rush hour reflects the costs of building and maintaining this important project. Legislators and pundits suggesting that the government should raise gas taxes and build the tunnel are fooling themselves. Drivers are not about to embrace a 10-cent a gallon, or higher, increase in the gas tax they'll feel every time they go to the pump.

A national Reason-Rupe poll of 1,200 Americans asked voters if they'd rather pay for new transportation projects through higher gas taxes or pay tolls when they use new roads.

Fifty-eight percent of Americans said new roads should be funded by tolls, while just 28 percent said new road capacity should be paid for by tax increases. A whopping 77 percent said they'd oppose raising the federal gas tax.

And let's not forget that Hampton Roads voters shot down a one-cent sales tax increase for transportation at the ballot in 2002, just as Northern Virginia voters did with their proposed half-cent sales tax increase.

More importantly, the gas tax is no longer a viable way to pay for major projects. Cars keep getting better mileage per gallon, which means the tax delivers less and less to government coffers. That Toyota Prius is racking up the mileage on roads while paying less in gas taxes thanks to its fuel efficiency. In fact, electric car owners, like those driving Nissan Leafs, will cause wear and tear on roads while never paying the gas tax.

The government has been promoting and mandating fuel efficiency for decades. As a result, gas tax revenue is dwindling.

Unless the state and feds want to reverse course by banning fuel-efficient and electric cars and mandating Hummers, it's time to face facts: The United States and Virginia need a new long-term, sustainable funding source for transportation. User fees and tolls are the fairest, most equitable way to do that.

The Midtown Tunnel public-private partnership is a great example of why that's the case. The region and state are expected to put in $362 million to build a $2.1 billion project. It is a project Virginia and Hampton Roads simply cannot afford on their own. [...]

Continue reading the rest of the commentary here.

» Reason Foundation's Transportation, Tolling and Public-Private Partnerships research archive

New Deepening Option for Port of Savannah Vital

Posted on April 3, 2012, 9:24am | Baruch Feigenbaum

In an Atlanta Journal-Constitution editorial, I recommend deepening the Port of Savannah through a public-private partnership: 

The Port of Savannah needs hundreds of millions of dollars to deepen its harbor to take advantage of the Panama Canal expansion. But with the federal debt and deficit soaring, there is little taxpayer money available for harbor deepening at American ports. That expansion is expected to cost $650 million. The state is contributing $252 million and hopes the federal government will pay the rest. Georgia's leaders need to be realistic about the funding shortfalls.

Across the world, public-private partnerhips are used to deliver needed infrastructure including ports, raise new sources of capital for modernization, shift risks away from taxpayers and onto investors, and encourage innovation.

Maryland is showing how successful these partnerships can be. In 2010 the staet signed a 50-year lease with Ports America to operate the Port of Baltimore. This type of lease could also work for the Port of Savannah. Additionally, leases often include other benefit such as improvements to roads and rail systems near the ports. In Maryland, the port operator provided the state $120 million to pay for infrastructure improvements near the port.

The full piece is available here.

Finding a Better Way to Pay for Highways

Posted on April 2, 2012, 5:45pm | Robert Poole

The National Journal's Transportation Blog asks what alternatives are there to funding our nation's highways?

It's increasingly obvious that the fuel tax system of paying for highways is running out of gas. Charging for road use based on gallons consumed rather than miles driven only worked as long as everybody consumed gallons at more or less the same rate. 

The users-pay/users-benefit principle is still a sound one-after all, it's how we pay for the services of other capital-intensive network utilities: electricity, telecom, natural gas, water, etc. What's broken is the relationship between use and payment.

That's why we need to begin the shift from gallons consumed to miles driven as soon as possible-and this shift can be encouraged in the currently pending reauthorization bill. The way to do this is to reduce current federal barriers to tolling and pricing on federal-aid highways, especially the Interstates.

Ever since the Intermodal Surface Transportation Efficiency Act (ISTEA) reauthorization 20 years ago, each reauthorization bill has chipped away at what used to be a pretty thorough prohibition of tolling on federal-aid highways. But nearly all of this has been brought about via pilot programs, limited only to a modest number of states or a limited number of projects. Each of these pilot programs-Value Pricing, Express Lanes, Interstate Reconstruction via Tolling, etc.-was debated by a previous Congress, with the inclusion of various safeguards to prevent those user fees from turning into broader taxes (i.e., safeguarding the users-pay/users-benefit principle).

Consequently, the simplest near-term way to expand states' options for tolling and pricing is for Congress to remove the numerical limits on these pilot programs. Nothing new needs to be invented; all we need do is to let all states make use of these tools, rather than limiting them to a relative handful of states or projects.

A bipartisan amendment to do just that made a lot of progress in the Senate last month, jointly sponsored by Sens. Tom Carper (D-Del.), Mark Kirk (R-Ill.) and Mark Warner (D-Va.). Opposing it was an anti-tolling amendment from Sen. Kay Bailey Hutchison (R-Texas). After fierce lobbying over both amendments, both were withdrawn shortly before the voting was scheduled. Tolling and pricing advocates are now making their case to members of the House.

To be sure, expanding the tolling and pricing pilot programs will not solve the "pay-for" problem of the current bills. But it would be an important step toward enabling state Departments of Transportation (DOTs) to cope with what, at best, will be the first ever no-increase reauthorization bill since the federal program began in 1956. 

Gov. Cuomo Ushers Through $132.6 billion NY State Budget

Posted on April 2, 2012, 2:35pm | Harris Kenny

Last week New York Governor Andrew Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver announced the early passage of the state’s fiscal year 2013 budget. The Legislature approved the $132.6 billion budget on Friday March 30. According to an article by Thomas Kaplan in The New York Times:

The voting on Friday marked the first time the Legislature had approved a state spending plan with more than 24 hours to spare since 1983 – when Mr. Cuomo’s father, former Gov. Mario M. Cuomo, passed his first budget.

Four major stories jump out of this budget deal.

1. Fiscal Responsibility: Lawmakers closed a multi-billion dollar deficit ($2 billion, or 3.5% of the state budget, according to the Center on Budget and Policy Priorities) without raising taxes or imposing fees. State spending growth held to 2% for the second year in a row, while net spending (state and local) was reduced for the second year in a row thanks in part to tax caps on local governments. State spending will total roughly $88.8 billion in FY 2013. Most impressively, out year deficits have been reduced by a cumulative $72 billion since Gov. Cuomo took office.
2. Government Reform: Lawmakers are empowering the Office of General Services (OGS) to serve as a clearinghouse for state agencies, thereby transforming procurement by facilitating bulk purchase common goods and services through centralized contracts. Officials will leverage the state’s purchasing power to save $100 million in FY 2013 and a projected $755 million over five years. They’re also eliminating 25 state boards and commissions that are no longer active or whose missions have been completed or become redundant, such as the Department of State’s Barbers Board. (See the full list of eliminated boards and commissions available online here, for more on the new OGS initiatives see here).
3. Transportation Infrastructure: Lawmakers are enhancing their focus on transportation infrastructure. The budget establishes the New York Works Task Force to coordinate capital plans across state government and funds the New York Works program with $232 million in state capital funds and $917 in federal funds for $1.2 billion in new spending. This is in addition to $1.6 billion already allocated this year to core transportation capital investment. And most importantly, these funds are in addition to the advancement of the Tappan Zee Bridge replacement project. (For more on the Tappan Zee Bridge replacement project, see my colleague Baruch Feigenbaum’s latest Out of Control Policy Blog post here.)
4. Criminal Justice: The Budget serves as the launching point for Gov. Cuomo’s Close to Home Initiative, which seeks to reform the state’s juvenile justice facility system. Specifically it allows New York City officials to take responsibility for the case of lower risk youth who come from the City. This applies to youth in non-secure and limited security facilities. The aim of the program is to reduce crime and improve outcomes for youth and the communities in which they live by providing targeted educational, mental health, substance abuse and other service needs without compromising public safety. The program is expected to save $4.5 million in FY 2013 and $27 million in FY 2014, in part by reducing the state’s juvenile justice system capacity by 140 beds in FY 2013 and 180 beds in FY 2014. (For more on the Close to Home Initiative see a write-up by the New York State Juvenile Justice Advisory Group here.)

Overall there are some major accomplishments in this budget. Kudos to state policymakers for finding common ground and balancing innovation with fiscal responsibility along the way. Once considered in the dysfucntional company of states like California and Illinois, New York appears to be taking serious strides in the right direction.

FHWA and FTA Could Improve Monitoring of Highway Trust Fund

Posted on March 26, 2012, 9:59am | Baruch Feigenbaum

The U.S. House will likely pass another transportation funding extension this week. This three-month extension will buy the House more time to develop a long-range transportation bill. Any bill the House passes will need to be rectified with the Senate bill. It is unlikely that any bill will become law before November.

As a result, the solvency of the Highway Trust Fund remains an issue. The Trust Fund manages the federal gas taxes that each motorist pays. As the U.S. now spends more trust fund money than it receives, the fund will go bankrupt without transfers from the general fund. The fund is forecast to go bankrupt this September. Over the past four years $35 billion has been transferred from the general fund to the trust fund. Since Congress has pledged to eliminate further bailouts of the trust fund, proper management and monitoring is critical. 

For this reason the Office of the Inspector General (OIG) analyzed DOT’s management of the Highway Trust Fund’s solvency to determine if the department could improve the understanding and accuracy of the projections. The OIG suggested several steps that the department could take. Both the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA) were found to have issues. The full report is available here. 

In 2008 both FHWA and FTA instituted procedures to track shortfalls. FHWA also added a procedure to adjust the outlay of funds to State DOT’s. Although the tracking tools provide a rough job of estimating funds, a better system could improve tracking. 

The OIG found three problems with the current procedure. First, the projections are established in the President’s annual budget and outside of the six-month review are not updated. The condition of the highway trust fund can change substantially in as little as three months. Second, while the long-term projections are accurate, current tools do not allow for determination of short-term deviations. Third, it is challenging especially for FTA to determine long-term estimates since program funds are spent over different time periods from as little as 12 months to as long as 10 years. Once a shortfall appears, FHWA invokes payment delays and proration. FTA has no such policies. 

Determining how long the transportation fund will remain solvent is critical. Hopefully, the next transportation bill will fix the funding issues by reducing funding for programs without an interstate purpose including livability, non-motorized transportation, and transit. The lack of a long-term bill prevents States from undertaking major construction projects because there is no funding certainty. Temporary funding is less than ideal, but it still provides some guarantees. States are more likely to begin construction projects with funding certainty.

The inspector recommended that FHWA and FTA take three steps. First, provide in the weekly report to Congress a range of dates as opposed to a specific date when funding will end. Second, conduct an assessment of outlays to representative projects to identify deviations in outlay trends and adjust the forecast accordingly. Third, publish on each agency’s respective website its cash management procedures and what triggers the use of these procedures so stakeholders more fully understand the process.

The agencies agree with the first recommendation. The agencies also acknowledge the need for the second recommendation but want to choose a different evaluation procedure. This is appropriate if the procedure works; however, the agencies have not provided a date for conducting the assessment. The agencies need to select a date to make this process effective. 

The third recommendation is more of a sticking point. DOT leaders do not want to identify their cash management procedures and implementation time since DOT leadership can change its cash procedures in response to external events. Striking a balance between flexible fiscal management procedures and public information is challenging. The agency does not want to draw a line in the sand that might cause panic or lead states to take shortcuts to receive funding when the state is not ready. However, the department has the responsibility to be open and honest with the public. Congress, construction companies, and citizens have concerns about federal resources that they support with gas taxes. DOT should be as open as possible about the process. OIG is satisfied with DOT’s response to the third recommendation, but the agency could go further. 

Transportation extensions and excessive spending are poor ways to run a transportation system. However, the U.S. will have more of the same for at least the next eight months. With this reality, DOT needs to have a plan to effectively communicate available national transportation funding.

Lessons from China's Roading Building Binge

Posted on March 24, 2012, 8:29pm | Samuel Staley

I have a new commentary taking a look at China's road building binge. China now has the world's largest national network of limited access highways. Many might be tempted to dismiss this accomplishment due to China's large territorial size and authoritarian government. But, China's not that much larger than the US in square miles and the authoritarian nature of the government doesn't explain why the nation went nearly four decades with scarcely a highway built. Moreover, China was poor when it started building its road network.

So, is there anything we can learn?

While China is a complex place, and we certainly don't want to import bad habits, this nominally communist nation built it's roads by embracing capitalism, broadly defined, including:

• Tolls to finance the roads based on user fees and the beneficiary pays principle;
• Private capital, especially foreign capital, to fund the roads through an enterprise model of road development and management;
• A decentralized, provincial approach that limited the role of the central government.

Oddly enough, the US has increasingly embracing a more centralized approach and even more socialized model of road development and management.

Perhaps we can learn a few things from China about successful capitalist approaches to addressing our national infrastructure needs.

Caltrans: Private Companies Could Build and Run Toll Lanes

Posted on March 19, 2012, 3:57pm | Baruch Feigenbaum

With budget deficits, many states are having trouble maintaining their highways, not to mention expanding them. CALTRANS, the California agency that is responsible for highway construction, maintenance and planning, revealed that private companies could build and run hundreds of miles of planned toll lanes on Bay Area expressways. 

According to the Bay Citizen:

The toll lanes — which allow single motorists to use carpool lanes for a fee — are planned for 280 miles of freeways in the East Bay and South Bay. The cost of the lanes ranges from $1.6 to $6.8 billion, a sum that would be challenging for the state to raise on its own, making them good candidates for public-private partnerships, state transportation officials say. In such deals, private investors finance, design and build the roads and recoup their investment by collecting tolls.

The toll lane projects “will need innovative financing," explained Matt Rocco, a spokesman for Caltrans, who said that it is "logical" to have the public-private partnerships "in the pipeline." 

Not surprisingly, the state engineers’ union and their political allies disagree:

Democratic lawmakers and Caltrans engineers have strongly opposed highway privatization deals. The state engineers' union sued to stop the Doyle Drive replacement project, a $488 million deal to rebuild the southern approach to the Golden Gate Bridge that is being financed, designed, built and maintained for 30 years by a group of European investors. The project is now moving forward, after the suit failed last year. But the union’s executive director, Bruce Blanning, said handing over more highway projects to private companies would be a mistake. 

“They don't have the public interest at heart; they have the profit motive at heart,” Blanning said.  

Some of the California PPPs have been problematic. However, this was because the public government signed a poor contract or because of the economic recession that disproportionally affected certain California locations. These specific projects in the 2012 economy will help California pay for highway projects and reduce cost-overruns and delays that often accompany state-run projects.

PPPs have many advantages. They deliver needed additional transportation infrastructure and they raise large new sources of capital for toll roads. Since partnerships are attractive to investors, these projects supply financing not merely funding. PPPs shift risk from taxpayers to investors; they provide a business-like approach; and they encourage innovations. Value pricing, where prices rise and fall based on congestion, was first created and tested in California. 

Why does the state engineers’ union oppose the project? It has little to do with the profit motive and more to do with the salary motive—of the engineers. When private companies undertake the work, they use their own employees. The engineers’ union dislikes this for two reasons. First, it breaks their monopolistic hold on construction work in the state. Second, by opening the process up it reduces the artificially high wages that California state employees receive. PPPs in California should reduce the project costs. Lower costs will reduce the contributions of taxpayers. This will benefit 38,000,000 instead of only 13,000.

Both former Governor Arnold Schwarzanegger and current Governor Jerry Brown support the project. Neither the state nor the Metropolitan Transportation Commission, the metropolitan planning organization, has made a decision but both organizations see many positives in additional PPPs. PPPs are an excellent way to make needed improvements to California highways. 

More details are available from The Bay Citizen.

I-85 Managed Lanes are A Success

Posted on March 16, 2012, 2:17pm | Baruch Feigenbaum

Despite the initial bumpy ride, the conversion of a stretch of I-85 in Dekalb and Gwinnett counties from a high-occupancy vehicle lane to a managed lane has been a major success. As first reported by my colleague Bob Poole in his Surface Transportation Newsletter, speeds in the I-85 lane have increased compared with speeds before the conversion. The below table compares “before” traffic conditions which includes the months of August and September with “after” traffic conditions which include the months of November, December, and January. Both time periods include seasonal lulls: early August before school starts and late December between Christmas and New Year’s Day. 

Unfortunately a rocky launch, limited information, and continued negative media coverage may be dooming managed lanes projects in other GA locations.

The state had plans to add two new managed lanes in the northwest corridor (I-75 and I-575.) The managed lanes would be open to 3+ person carpools and other drivers who wished to pay a toll. Buses, vanpools, and emergency vehicles would have used the lane for free. The north by northwest project had many of the same benefits as the I-85 project: the choice of a congestion-free ride and reliable transit service. It had the added benefit of new capacity that should dramatically improve travel times. The PPP project was killed for several reasons. One of the main reasons was a media report indicating that two new lanes would increase congestion. This would be the first time in transportation engineering history that adding capacity increased congestion. What did the report really say? 

The proposed project would have added two reversible lanes. In the peak direction, commuters in the regular lanes would have saved between 1-4 minutes on the 18-mile trip the year the project opened. By 2035, with more congestion, the new lanes would save travelers 16 minutes. These commuters would not have had to pay a toll; they could have chosen to ride for free in the general-purpose lanes or they could have chosen to carpool, vanpool or use transit and cut their travel times in half. Congestion in the peak direction would decline substantially saving commuters time in both the general and managed lanes. 

Where would congestion increase? Congestion would increase for drivers traveling against the flow of traffic. At five of the nine locations traffic would theoretically worsen. But traffic would still travel above the 65 mile per hour speed limit. Instead of averaging 75 it would average 67. Only in Atlanta is traffic that is moving faster than the speed limit considered a significant congestion problem. Incidentally, the state considered adding four lanes, two in each direction. However, the costs would force higher toll rates and since I-75 is congested only in one direction at a time, there was not a significant need.

GDOT has other plans for managed lanes. A reversible lane on I-75 south of Atlanta between SR 155 and I-675 is currently in preliminary design. Conceptual studies and conceptual design will finish next month. A managed lane system on Georgia 400 is being presented in several open houses over the next two weeks. Unfortunately, some citizens in Tuesday night’s hearing had several misconceptions. Many were under the misconception that the I-85 managed lane is not working and some were convinced that the state planned to toll existing lanes. Not true. Only new lanes would be tolled. Others were convinced this was some sort of scam to enrich state leaders. Wrong on so many levels. One note on Georgia’s separation of powers: GDOT is overseen by the legislature and SRTA by the Governor. 

To move forward on transportation we need citizens who understand that states have limited financial resources and consider all options instead of hearing the word “tolls” and screaming, “No, No, No.” We need accurate media coverage that reports honestly on how managed lanes have improved congestion instead of enforcing a negative perception of managed lanes. The I-85 project shows managed lanes are a success. But in order to improve traffic congestion on other corridors we need an accurate discussion that highlights the success of the I-85 conversion.

Insights on Transportation Funding From AASHTO

Posted on March 8, 2012, 11:16am | Baruch Feigenbaum

The United States transportation sector faces a perfect storm of dwindling resources and growing needs. Over the past five years numerous panels and blue-ribbon commissions have been created to study how to fund our transportation system. There is no shortage of transportation proposals. However, many of the proposals are unrealistic or politically impossible.

While federal programs funding local pet projects should be eliminated. Eliminating all of these programs and dedicating the funds to national needs will not net sufficient transportation revenue.

In my February 2012 interview with Associate Director for Finance and Business for the American Association of State Highway and Transportation Officials (AASHTO) Joung Lee, we discussed the association's views on transportation funding priorities, current funding mechanisms and funding options offering the most potential over the next 20 years.

According to Lee, generally AASHTO favors a robust mix of transportation options including gas taxes, vehicle miles traveled (VMT) taxes, bonds, Transportation Infrastructure Finance and Innovation Act (TIFIA) loans, toll-roads and public private partnership. AASHTO wants to provide states the maximum flexibility to choose the funding option best for each state. And AASHTO is against federal restrictions on tolling or VMT fees.

The biggest challenge to finding sufficient revenue for transportation is political. While funds are always limited, we have many different revenue sources to choose from. While none is perfect, together they can raise many times the amount of revenue that we need. Below is a portion of the interview. The full interview is available here.

Baruch Feigenbaum, Reason Foundation: Our primary funding resource, the federal gas tax, no longer provides a steady stream of revenue for several reasons. First, a small but significant portion of the tax supports transit and non-motorized transportation projects. Second, the tax is not indexed to inflation. The same $18.4 cent tax yields significantly less than in 1994. Third, vehicles are becoming more fuel-efficient. Is the gas tax still the best funding option? Is there another more optimum solution?

Joung Lee, Associate Director for Finance and Business: With increasing political gridlock in Washington, there is no one optimal solution. There is no perfect funding mechanism. AASHTO believes a mix of funding sources including gas taxes, VMT fees, bonds, PPPs and toll-roads is the best approach.

Feigenbaum: Is making changes to one transportation funding stream more realistic than another?

Lee: In years past, changing the gas tax was considered easier than changing other mechanisms. Today, making any financial change is difficult. Although, recently several legislators in both parties have suggested either increasing the gasoline tax or indexing it to inflation. Still, this will be a hard sell to Congress and the President as a whole.

Feigenbaum: Researchers have suggested more than 20 different funding streams. I want to ask you about some of the most common. Please detail the funding streams and the advantages and disadvantages of each one: Increase the gas tax by 10-15 cents?

Lee: Increasing the gas tax is easier than implementing a new funding mechanism. It is a long-standing successful revenue stream. The administration costs are low and the yield per rate change is high. For example, increasing the tax by one cent for both gasoline and diesel raises $1.8 billion per year. At the same time, with increasing fuel-efficient vehicles, the tax will not collect as much per cent as in the past. The gas tax is also somewhat regressive.

Feigenbaum: What is the potential of VMT fees?

Lee: VMT fees have a lot of potential. First, they are as technically perfect a user fee as you can get. They do a stronger job of paying the actual costs of travel than fuel taxes. (With fuel taxes the amount a motorist pays depends on the fuel-efficiency of his vehicle, not how far he/she travels.) There are some privacy issues, but since people do not seem to mind being tracked on their smart-phones the privacy issues especially for the younger generation may not be as big a problem. The biggest problem may be the administration costs. Estimates range from 15% to 40% of the total amount collected will go towards administration. There are 200,000,000 drivers and each one will need to have an account. Contrast this with the fuel tax that only requires the 1400 fuel distributors across the country to have accounts. 

Feigenbaum: What are the advantages of TIFIA Loans?

Lee: The biggest advantage for TIFIA loans is that the cost of capital does not get any lower. The cost matches the treasury rate; the loan comes subordinated at this very low rate. TIFIA loans have ten times the amount of leverage of other loans. TIFIA loans are different from loans by a commercial bank that by nature has a profit motive. There are negatives. With any loan there has to be some sort of revenue stream. Also, we do not want TIFIA to become a geographic issue in which only certain states take part. This will turn it into a political issue. 

The complete interview is available here

Next Transportation Bill Should Say Bye-Bye to Byways

Posted on March 7, 2012, 1:19pm | Baruch Feigenbaum

Since 1991 the Scenic Byways Program has been redirecting federal gas tax revenue from funding national highways to funding scenic byways. USA Today reports that federal and conservation officials are protesting the House of Representatives American Energy and Infrastructure Jobs bill, which is now in limbo, that proposes to eliminate byway funding from the next transportation bill. 

The House bill is controversial for other reasons. Its proposal to move transit funding from the transportation trust fund supported by gas taxes into the general appropriation process drew howls of protest from transit advocates. Transit should not be supported by gas taxes; however, at least transit’s primary purpose is to move people from point A to point B. The same cannot be said for the Scenic Byways Program.

There are at least three major problems with federal funding for the National Scenic Byways Program. First program funds are dedicated. Municipalities cannot spend these federal resources on other uses. If a state has its own scenic byways program, the state cannot redirect federal funds to interstate highways. This has two perverse effects. First, it encourages states not to spend state money on local priorities. Second, it reduces funding for critical infrastructure. 

Second, scenic byways are local roads that should be funded at the local level. National highways move people and goods throughout the country. Byways provide access to local recreational areas. Many states including Georgia, Vermont, and Washington already have state scenic byway programs. These states will likely continue funding byways even without a national program. 

Third, these byways have nothing to do with transportation. Byways must be regionally significant in one of the following characteristics: archaeological, cultural, historical, natural, recreational, or scenic. As the USA Today explains most Scenic Byways are used for recreation and tourism purposes:

The program has awarded $470 million in grants to help create safety improvements, facilities, resource protection and marketing for the USA's 150 scenic byways, says Anaise Berry, president of the National Scenic Byway Foundation and director of the 291-mile Illinois River Road National Scenic Byway.

"This is an economic development program," Berry says. "It's not just a matter of placing signs along the road. … It creates jobs and attracts small business."

If national policymakers want to create an Economic Development fund and can find some user supported tax to fund these projects, then the federal government can support this program. But taking money from national important transportation resources and giving them to local economic development projects is not the purpose of a national transportation bill. With our growing national debt, it is also a program we can no longer afford. The next long-term transportation bill should eliminate the Scenic Byways Program.

The Highway Bill Debate Sheds Light on the Future of Transportation Funding

Posted on March 5, 2012, 3:10pm | Robert Poole

National Journal's Transportation Blog asks about the status of the highway bill and whether the debate in Congress over surface transportation has changed substantially.  I’m not surprised that crafting a reauthorization bill in 2012 is more contentious than usual. Given the out-of-control growth in annual budget deficits and the national debt, the size and cost of the federal government will likely be cut back in coming decades—and transportation will be no exception.

This context explains why there is more similarity between the House and Senate bills than you would imagine based on most pundits’ commentaries. Here is a short list of similarities, drawn from my recent article in Public Works Financing:

• Program consolidation—both bills would dramatically reduce the number of separate programs, letting states make more choices in how to spend federal funds;
• Optional “Enhancements”—both bills would no longer require a set percentage of the major highway program to be spent on things like bike paths, scenic trails, and other “transportation enhancements”;
• Environmental streamlining—both make further attempts to reduce the convoluted and time-consuming process of getting large projects through the review process;
• No high-speed rail funding—neither bill provides funding for the Administration’s signature HSR program;
• No infrastructure bank—neither would create a new grants and loan entity for transportation projects;
• TIFIA expansion—both would greatly expand TIFIA, a remarkable shift from grants to loans, so as to make limited federal dollars go further.

And perhaps most significant of all, neither bill would increase real annual funding beyond the levels of the last several years—the first time this has been the case since the program was created in 1956. These similarities all reflect the federal government’s dire fiscal situation and the need to start limiting—rather than endlessly expanding—the federal government’s role in transportation.

That context also explains the most radical element of all: the House proposal to shift transit funding out of the Highway Trust Fund. There are several reasons for this proposal.

First, given the miniscule growth in highway user-tax revenue, House budgeteers are seeking to make those limited funds do as much as possible for our under-resourced highway system. (This also explains their emphasis on the National Highway System, rather than scenic byways and bike paths.)

Second, with the Federal Transit Administration’s increased emphasis on justifying projects in terms of sustainability, smart growth, and economic development, the idea that transit investment helps motorists by reducing traffic congestion is less and less credible.

Third, in order to insulate the Highway Trust Fund from future across-the-board spending cuts, the Budget Control Act requires that at least 90% of a trust fund’s revenue come from user taxes. Going back to the original concept of a highway trust fund makes it easier to meet that test.

While that shift may end up being too radical this time around, it’s a sign of the times, indicating that business-as-usual in federal transportation funding is no longer an option. However the current bills turn out, the process of creating them offers us a preview of the transportation future that’s staring us in the face. It’s a future in which state and local governments will be taking on more of the burden, with non-federal user taxes and user fees (tolls and other mileage-based user fees) becoming a far more important part of the funding picture.

Technology Can Help Reduce Traffic Congestion

Posted on February 29, 2012, 9:43am | Baruch Feigenbaum

As first reported in The Wall Street Journal automakers are using the power of technology to reduce road congestion. This technology can help reduce traffic congestion and accidents. While fully automated cars will not arrive tomorrow, adaptive technology that assists the driver may become widely available.

Ford, Volkswagen and BMW are three automakers with big plans:

For instance, the auto maker (Ford) will invest in systems for its vehicles that will lead to cars that avoid traffic jams, reserve parking spaces and, under certain conditions, drive themselves, in an effort to cut down on global gridlock. The company also is moving to expand the use of crash-avoidance technology and will broaden its collaboration with car-sharing companies such as Zipcar Inc.

Mr. Ford—who has been speaking out for the past two years about the need to address urban traffic—envisions a future in which fully autonomous cars are connected to a database that coordinates automobile travel with public transit and other transportation methods and parking. Mr. Ford wouldn't say how much money the company will invest in these efforts. But last year, Ford said it doubled its investment in vehicle-to-vehicle communications and created a 20-member task force to help implement the technology in its vehicles.

Other auto-makers are exploring ways to address the problem. Some are working on developing standards for technology to allow vehicles to signal each other on the road in order to avoid collisions and feed more information to systems designed to minimize highway congestion. BMW AG has launched a fund to invest in mobility start-ups to gain access to new technology and ideas. 

"We think that the technology we are coming up with will help us avoid gridlock," said Wolfgang Steiger, Volkswagen AG's director of future technology. Mr. Steiger said it is likely that major cities will react to current traffic through development planning and public transit, lessening the problems. 

There are actually two concepts involved. The first is the possibility of driverless cars. While driverless cars may seem more science fiction than fact, some of the technology is already available. According to several sessions at the past Transportation Research Board conference, Google has driven several cars more than 150,000 autonomous miles and successfully lobbied Nevada to legalize driverless cars. The short-term goal is to reduce the number and severity of crashes through intermittent automated braking or steering. Automated cars may also improve productivity by reducing congestion and crashes. But completely automated cars are some years away. Transitioning to driverless cars will have Technological, Economic, Insurance, Psychological, Sociological, Legal and Political issues 

Driverless cars are only prototypes and the technology is very expensive. The system has a few glitches; the technology that guides Google’s cars get confused in certain types of driving conditions. This could be dangerous in real-world conditions. As the average vehicle on the road today is ten years old, replacing all the vehicles with driverless cars could take 30 years. And that assumes government action and a starting date of tomorrow. There might be safety issues if passenger operated and machine operated cars are on the same highways.

The second concept is vehicle-to-vehicle communication. Various studies have found vehicle-to-vehicle communication can improve emergency vehicle responses by reducing travel times to the emergency room, creating a system that alerts drivers when they are too tired to drive, and lessening the amount of pollution from vehicles. While totally automated cars are not currently realistic, advanced safety and technology features built into the GPS system can improve the driving experience today.

Technology by itself cannot solve all of our transportation challenges. Automation is no short-term replacement for new highways, cost-effective transit service, and other safety research. But technology is a small part of the solution. Any new vehicles that can brake to avoid a crash or route its driver around traffic congestion is one part of the solution.

Toll Road Forecasts Come Under Scrutiny in Virginia

Posted on February 26, 2012, 3:59pm | Samuel Staley

An important discussion is taking place in Northern Viriginia over the veracity of traffic and revenue forecasts for the Dulles Tollroad. The forecasts are critical for this corridor because higher toll rates have been justified based on their ability to finance a the extension of the Washington, DC Metro to the Dulles Airport (and beyond).

According to Tollroadsnews.com (Feb 24, 2012), the forecasting company, CDM Smith (formerly Wilbur Smith Associates), has made over 200 forecasts for 100 projects. In a response to criticism that the CDM Smith forecasts suffered from "optimism bias," the company's CEO writes (in a letter available at Tollroadsnews.com):

"The previous traffic and revenue studies undertaken for the DTR [Dulles Toll Road] highlight our continued success and reliability in effectively forecasting its traffic and revenue potential. Comparison of CDM Smith’s 15yr forecast for the DTR in 1989 with the actual performance indicates that actual 2003 transactions were 98.2% of forecast (the 2004 toll increase was not assumed in 1989).

"The 2009 study forecasts also compare favorably to the actual revenues following the 2010 and
2011 toll adjustments:

- 2009 Study 2 yr forecast: Actual 2010 revenue was 100.7% of forecast

- 2009 Study 3 yr forecast: Actual 2011 revenue is expected to be 97.5% of forecast

"The 2005 DTR Study cannot be tested against actual performance as none of the toll scenarios in that study were implemented."

This is very important issue, and we've written about this elsewhere (see here). Given a few high-profile bankruptcies (e.g., the South Bay Expressway in San Diego, Southern Connector in South Carolina), and the rising important of public-private partnerships in financing these projects, the accuracy and reliability of these forecasts are critical, and I personally have worried that the forecasting track record hasn't received enough public scrutiny.

The article at TollroadsNews does a good job of exploring the complexity of these forecasts. In many ways, it's more art than science. Nevertheless, decisions about long-term infrastructure need to be bounded, and forecasts are an essential part of evaluating risk and uncertainty. But they also have to be subjected to independent scrutiny and the full range of uncertainties in these forecasts need to be part of the public decisionmaking process.

Thanks to TallroadsNews for helping to broker this public discussion.

US Department of Transportation Secretary Should Know Something About Transportation

Posted on February 24, 2012, 3:11pm | Baruch Feigenbaum

In 2009, President Obama shocked the transportation world by choosing Ray LaHood as Secretary of Transportation. President Obama chose the Republican House member from Illinois for his Washington experience, his ability to reach across the aisle to Republicans and because the President wanted a Republican member of his cabinet. Transportation groups across the political spectrum reacted the same way when Obama announced LaHood—Who? 

Most transportation professionals have been less than thrilled with LaHood’s tenure as Secretary of Transportation. LaHood, who will be retiring in less than a year, has focused much of his energy crusading against distracted driving. Safety is important but it is a very small part of a very large field. Most transportation types are more interested in enacting a long-term transportation bill, or creating an economically sustainable transportation system. LaHood is a nice enough guy, but his lack of transportation knowledge is a problem.

The Secretary of Transportation’s job is to explain to the President why transportation is important. His or her role is part expert and part booster. Most Presidents have no experience in transportation preferring sexier issues such as health care or taxes. Has LaHood been effective? What has the Obama-LaHood team brought us? Three plus years into the President’s term we still do not have a surface transportation bill. Congress recently passed an Aviation bill but not before the President created an additional hurdle by changing the unionization rules. Worse, we have no transportation vision. What is the federal government’s proper role in transportation? What is the future of transportation? 

To be fair, the problem did not start with LaHood. However, the expiration of SAFETEA-LU provided an excellent opportunity to start the conversation. The White House missed a golden opportunity. Congress has started discussing the issue but the White House has either stayed silent or proposed totally unrealistic legislation. The President’s 2012 Transportation budget was so unrealistic that both Democrats and Republicans dismissed it. Again, the White House included its version of a transportation bank that is really a loan program in disguise. This “infrastructure bank” has failed to pass either chamber multiple times. Recently, the White House signaled it would be happy with most any multiyear transportation bill that the Senate passes. Is this vision? Is this leadership? Would we be in this situation with a Secretary of Transportation with 10-20 years of experience in the Transportation field? It is doubtful.

LaHood served on the Transportation and Infrastructure Committee from 1995 until 2000 when he chose to move on to other issues. As a member of the House Appropriations Committee he did not work on transportation funding. In researching LaHood’s congressional activity, there is little actual transportation work. Prior to being appointed Secretary, LaHood replaced a rail right of way with a greenway and helped secure funds for the improvement of a road in his district. He sponsored a bill easing the process of claiming tax exemptions for transit ridership and argued against Amtrak serving Peoria. That’s about it. Members who never served on a transportation-related committee have more impressive transportation backgrounds than Secretary LaHood.

What were the backgrounds of the past Secretaries of Transportation?

Republican Mary Peters, George W Bush’s 2^nd Secretary of Transporation, led the Arizona Department of Transportation, was a top leader in the Federal Highway Administration (FHWA) and was active in both the American Association of State Highway and Transportation Officials (AASHTO) and the Transportation Research Board. She won the Women’s Transportation Seminar person of the year award in 2004. Before becoming secretary she served as national director for transportation policy and consulting at HDR. 

Democrat Norman Mineta, George W Bush’s first Secretary of Transportation, chaired the House Public Works and Transportation Committee, was principal author of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), headed the National Civil Aviation Review Commission and was awarded the Presidential Medal of Freedom.

Democrat Rodney Slater, Bill Clinton’s second Secretary of Transportation, was Secretary and Chairman of the Arkansas Highway Commission and served as Federal Highway Administrator where he enabled airline and railroad mergers and helped avert a strike at AMTRAK. 

Democrat Fredrico Pena, Bill Clinton’s first Secretary of Transportation, was Mayor of Denver where he oversaw of Denver’s new International Airport, worked in transportation pension reform and served on Clinton’s transportation transition team.  

Republican Andrew Card, George H.W. Bush’s second Secretary of Transportation, was a structural design engineer. Mr. Card attended the Merchant Marine Academy, produced a White Paper on Transportation that focused on intermodal transportation and created transportation policy with Samuel Skinner.

Republican Samuel Skinner, George H. W. Bush’s First Secretary of Transportation, was head of the regional transportation authority of Illinois and transportation advisor to James R Thompson.

While their transportation experience varied, all of these secretaries had more experience than LaHood. They each served in elected or appointed transportation positions for a minimum of five years before they were appointed U.S. Secretary of Transportation. 

No U.S. president would appoint a Secretary of State with no foreign policy experience or a Secretary of Defense with no military knowledge. Why should the President appoint a Secretary of Transportation with no professional transportation experience? 

With LaHood’s retirement, whoever wins the 2012 election will choose a new Secretary of Transportation. Let us hope they choose one with an actual transportation background.