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Reason Foundation

Surface Transportation Newsletter #119

Reconstructing the Interstates with toll finance, Continued debate over traffic growth, Harbor tax reform worse than the status quo, and More...

Robert Poole
September 12, 2013

In this issue:

Reconstructing the Interstates with Toll Finance

For several years I have thought that, given the non-sustainability of fuel taxes for highway funding, the only way we are likely to be able to reconstruct the Interstate highway system as it reaches the end of its 50-year design life is via toll finance. And with the evolution of relatively low-cost all-electronic tolling (AET) and nationwide tolling interoperability, the major unanswered question was this: What kind of toll rates would it take to do the job? How feasible would doing this actually be?

To answer that question, more than a year ago I embarked on a large quantitative study. First it was necessary to develop a defensible estimate of what it would cost to reconstruct all the existing lane-miles, and second, to figure out which specific corridors need widening (best done when reconstructing). The final piece would be to develop a tolling proposal and project traffic and revenue. That would enable a comparison of the net present value (NPV) of toll revenue with the NPV of reconstruction and widening costs as an initial indicator of toll-feasibility.

The resulting study, "Interstate 2.0: Modernizing the Interstate Highway System via Toll Finance," is being released this week. The bottom-line finding is that it appears feasible to finance the reconstruction and selective widening of nearly the entire Interstate system via moderate toll rates collected via AET. Overall, on a nationwide basis, the NPV of net toll revenue equaled 99% of the NPV of cost (including the cost of AET equipment on the whole Interstate system). Net toll revenue is defined as 85% of gross toll revenue, assuming 10% dedicated to operations and maintenance and 5% for AET collection costs.

More interesting to me than the aggregated national finding is the state-by-state assessment. All the analysis was done on a state-specific basis, producing cost and traffic & revenue spreadsheets for each of the 50 states plus the District of Columbia. All data on route-miles, lane-miles, and unit costs came from FHWA, most of it from their Highway Statistics tables (available online) but some details provided to me, on request, by FHWA. The study also makes use of unit-cost data on reconstruction and on lane additions, from FHWA's Highway Economic Requirements System (HERS), customized for each state by taking into account that state's terrain and the size categories of urban areas traversed by Interstates. Since the HERS unit-cost data are national averages, I also created an index of state-specific cost factors, to better take into account differences in underlying unit construction costs among states.

Estimating traffic and revenue was a huge task. I relied on state-specific estimates of annual vehicle miles of travel (VMT) growth rates based on an approach developed at US DOT's Volpe Center, with separate growth rates for light vehicles and heavy vehicles for each of the 51 jurisdictions. For the basic tolling model, I used 3.5¢/mi. for cars and 14¢/mi for trucks, adjusted annually by an assumed CPI increase of 2.5%. Annual inflation adjustment is a key factor in generating enough revenues to finance the approximately $1 trillion cost of reconstruction and widening laid out in the study.

In an effort to overcome concerns about "double taxation," the study employed what I have been calling "value-added tolling." That means tolling would be applied only when an Interstate corridor has been reconstructed (and widened, if necessary). In addition, assuming fuel taxes are still in existence at the time (somewhere in the next two decades) tolling on a rebuilt corridor begins, I suggest that those paying the tolls on the modernized Interstate be given rebates for the fuel taxes they paid for driving those specific miles, which is easy to do with an AET system. In addition, since those who pay tolls expect premium service, the lane-addition criteria used in the study were Level of Service C for rural Interstates (most state DOTs wait until conditions have degraded to LOS D before adding lanes) and LOS D for urban Interstates (most use LOS E or F). And toll rates on urban Interstates would be higher during peak periods to reduce peak-period congestion.

Returning to the state-by-state toll-feasibility results, 30 of the 51 jurisdictions had NPV of revenues greater than NPV of costs, using the baseline toll rates. Of those 30, nine (mostly southern and western states) could do it with somewhat lower rates than the baseline. Another nine had ratios of 80-90%, suggesting they would need slightly higher toll rates than the baseline rates. Six heavily urbanized states with high construction costs would need significantly higher toll rates, but not out of line with those now being charged on new urban toll roads. There left just six problem states, where toll-financed Interstate modernization would be a stretch. In five of these (MT, ND, SD, VT, and WY) car tolls of 6-10¢/mi. would likely be needed and truck tolls of 25-40¢/mi. Those rates may or may not be deemed acceptable in those states. The remaining problem is Alaska, where the NPV ratio showed baseline toll revenues covering only 24% of the cost.

The study makes only one major policy recommendation: that Congress allow tolling of Interstates for the specific purpose of reconstruction and widening, with the toll revenues used only for those purposes (plus operating and maintenance costs). This would essentially constitute mainstreaming of the existing three-state pilot program for Interstate reconstruction using toll finance, broadening it (1) to all states and DC, and (2) to apply to all the Interstates in a state, not just a single project in each.

I'll be discussing other aspects and implications of the study in future newsletters. Meanwhile, I encourage you to download and read it, and let me know your thoughts. (http://reason.org/studies/show/modernizing-the-interstate-highway)

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Further Debate on Changes in Driving

The debate on whether vehicle miles of travel (VMT) have peaked in the United States has continued over the summer. Public Interest Research Group (PIRG) released a follow-up to its earlier report claiming that VMT has begun to trend downward, thanks to changed driving behavior of Millenials. Their new report, "Moving Off the Road: A State by State Analysis of the National Decline in Driving," presents a statistical analysis of whether a state's change in VMT per capita (not, you will note, total VMT) is correlated with the change in its unemployment rate between 2005 and 2011. Since the analysis showed no correlation, PIRG takes this as evidence that behavior change, not economic distress, is probably the causal factor. And, as predictable as night follows day, they recommend that government should be diverting funds from highways to transit, bikeways, sidewalks, etc.

There is a lot more going on here than Millenials' behavior. First, Don Pickrell and David Pace at DOT's Volpe National Transportation Systems Center addressed the question of whether VMT has begun a downtrend in a recent workshop there. They find that young adult driving has declined more than that of older people, but that women in their mid-30s to mid-60s are driving more over the past decade, as are seniors of both genders. High fuel prices have a larger impact on younger and less affluent drivers than on others, so that may be blurring the effect of unemployment as a factor.

Another indicator is that traffic congestion, after declining for several years, has been climbing again, as monthly updates from INRIX have documented. Their July report, released at the end of August, found traffic congestion up an average of 7.4% this July, compared with July 2012, in the hundred largest urban areas, with the greatest increases in the Midwest.

Demographer Wendell Cox posted a detailed assessment on Newgeography.com in May following the initial PIRG report, teasing out whether there was actual evidence of a shift from driving to other modes during the Great Recession. Using FHWA and FTA data for 2005 and 2011 he calculated the per-capita reduction in driving at 900 miles. But transit ridership per capita increased by just 15 miles. Cox's assessment is that people simply economized on their traveling, rather than shifting from cars to other modes.

American Community Survey commuting data for 2011 were released last fall and showed trivial changes between 2010 and 2011 in mode share. More interesting for identifying trends are the differences between 2000 and 2011, summarized here:

Mode

2000 ACS

2011 ACS

Drive alone

75.70%

76.40%

Car/van pol

12.19

  9.68

Transit

  4.57

  5.03

Other

  4.18

  4.55

Work at home

  3.26

  4.34

Driving for commuting purposes actually increased modestly during that decade. The two major changes were a large decrease in car/van pooling and a significant (33%) increase in working at home. Now let's compare the above data with the same commuting data for just those ages 16-24:

Mode

ACS 2000

ACS 2011

Drive alone

66.9

69.7

Car/van pool

17.4

12.6

Transit

  5.4

  5.8

Other

  8.9

  9.3

Work at home

  1.4

  2.6

We see here the same general trend as with the larger commuting population—increased driving alone, greatly reduced car/van pooling, a slightly larger increase in transit, and a near doubling of telecommuting      

Just about everyone I know in transportation thinks that VMT per capita has probably topped out over the past decade, and that future growth in total personal VMT will be driven mostly by increases in population (with truck VMT driven more by economic growth). That's why the VMT growth rates that I adapted from the Volpe modeling (for use in the Interstate 2.0 study) are more moderate than many previous VMT projections based on extrapolating historical trends.

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Harbor Tax Reform Worse than Status Quo

In the bad old days, Congress used to subvert the users-pay/users-benefit principle in highways and aviation by each year only appropriating a portion of the amount generated by, respectively, federal highway and aviation user taxes. That would make total federal receipts greater than total federal spending in that area, making the total federal budget look closer to being balanced. Reforms in the highway and aviation programs stopped that reprehensible practice in recent years—but it's still a way of life for those operating America's seaports. Each year Congress appropriates only about half the amount generated by the Harbor Maintenance Tax, despite significant need for harbor dredging projects around the country. Fixing this has long been a priority for the ports community.

Unfortunately, the proposed Maritime Goods Movement Act for the 21st Century would attempt to fix this problem while making the overall program worse. It would repeal the existing Harbor Maintenance Tax (HMT) and replace it with a "Maritime Goods Movement User Fee" that would apply to all containers entering the United States, whether by ship or by rail. The aim here is to tax containers landed at new, efficient ports in Canada and Mexico and shipped by intermodal rail to the United States. A handful of US ports in the Pacific Northwest have been calling for relief from the "unfair competition" from these ports, because cargo there is, of course, not subject to the U.S. Harbor Maintenance Tax. The proceeds from the new tax would be used, like the HMT, for port projects (with the bill claiming, via unspecified means, that it would ensure that all the funds collected would actually be spent each year). It would also designate a portion of the funds for "low-use, remote, and subsistence ports"—a recipe for reducing the productivity of US goods movement or perhaps worse, creating sheer waste of that portion of the user tax dollars.

The National Retail Federation opposes the proposal, not only because it would increase the cost of imported goods but also because it would violate NAFTA and World Trade Organization rules, both of which the United States is legally committed to uphold.

I agree that the Harbor Maintenance Tax should be abolished, but instead of replacing it with this protectionist measure, Congress should replace it with: nothing. Instead, if there is any legal doubt about ports being able to charge their customers for the costs of harbor dredging and maintenance (something the Federal Maritime Commission should certainly know), Congress could clarify that ports can do this. Ideally, the basis for such a user charge would be the draft of the ship, not the value of the cargo, since it is ever-deeper drafts that require most of the costly dredging projects.

And this measure would, in fact, help ports like Seattle and Tacoma to compete with Vancouver and Prince Rupert in Canada and Lazaro Cardenas in Mexico. Because Seattle and Tacoma are naturally deep-water ports, their dredging needs are minimal, so their replacement user fees would also be minimal. Getting rid of the Harbor Maintenance Tax—period—would solve their competition problem.

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Is Positive Train Control Worth What It Costs?

Back in 2008, a distracted locomotive engineer on Southern California's Metrolink commuter rail system ignored a red signal, leading to a head-on collision with a freight train in Chatsworth that killed 25 and injured over a hundred. Less than a month later Congress enacted the Rail Safety Improvement Act of 2008. That law mandates that 25 passenger rail systems (Amtrak and commuter rail) and all major freight railroads implement Positive Train Control (PTC) by Dec. 31, 2015. PTC is a complex system of hardware, signaling, and software. PTC would definitely improve railroad safety. The question is whether spending billions on PTC would produce benefits exceeding its costs.

The Government Accountability Office estimates its cost will be somewhere between $6.7 billion and $22.5 billion. The Federal Railroad Administration, which is charged with overseeing PTC implementation, currently estimates it will cost freight railroads $13 billion and transit agencies another $2 billion. How much reduction in deaths, injuries, and property damage would that expenditure generate?

To begin with, a DOT analysis of the causes of rail accidents over the past decade found that only 35% were due to human error (like the Metrolink crash).  Nearly as many (32%) were caused by faulty track, with a variety of other factors responsible for the rest. PTC would reduce or eliminate only the initial 35%. But addressing the other causes of accidents also requires major investments, and many railroads and commuter lines are putting off other capital investments in favor of PTC, due to the federal mandate.

I know of two reputable sources of benefit/cost analysis on PTC. Cass Sunstein, the University of Chicago academic who until recently headed OMB's Office of Information & Regulatory Affairs (one of whose jobs it is to assess the benefit/cost ratio of proposed federal regulations) told a hearing of the House Energy & Commerce Committee that "the monetizable benefits were lower than the monetizable costs" of PTC. That may be a serious understatement, since the Federal Railroad Administration's 2009 benefit/cost analysis concluded that the cost would be 15 times as great as the economic benefits from prevented accidents. As reporter Ted Mann pointed out in a long Wall Street Journal article on PTC (June 18, 2013), FRA's analysis followed standard DOT methodology, including use of the DOT-wide figure of $9.1 million as the value of a saved life (VSL)—a calculation that has been widely vetted by safety researchers in academia.

One other factor that must be considered in deciding whether PTC is worth doing is opportunity costs. Every billion that is spent on PTC is a billion that could, in principle, be invested in other safety improvements, such as the 32% of rail accidents caused by faulty track. At this point in time, the railroad industry is divided. Metrolink, Amtrak, and BNSF appear to be far along in implementation, while a number of commuter rail operators are arguing for making investments in other needed improvements first. FRA itself last year recommended that Congress extend the PTC implementation deadline as well as allowing FRA to grant various exemptions. Sen. John Thune (R, SD) has introduced legislation to extend the deadline. And the Association of American Railroads supports a longer implementation period rather than scrapping the regulation.

Whether or not PTC's benefits will exceed its costs, the railroads--having already invested about $3 billion in it-- have decided not to fight the mandate. But because they want to do it right—and face numerous obstacles along the way, including some big problems at the FCC—it's only realistic to extend the PTC deadline, as FRA itself favors.

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Availability-Pay Concessions vs. Toll Concessions

The popularity of long-term highway projects procured as availability-payment concessions, rather than traditional toll concessions, has been increasing over the last year. At the ninth annual InfraAmericas US P3 Infrastructure Forum in New York in June, several speakers noted the trend. Peter Allison of InfraAmericas was quoted in a long article (by the Council of State Governments) as saying that "our estimate is that availability deals could move from funding for a third of the market . . . to two-thirds in future deals." In the highway sector, at least, I hope that prediction is not borne out, for several reasons.

First, let's make clear the differences among the several different types of long-term concessions. The model used for highways by most countries (France, Italy, Spain, Australia, Brazil, Chile, etc.) is the long-term toll concession. The winning consortium, based on a detailed concession agreement, goes into the capital markets to finance the deal, raising the entire construction cost up front, with the revenues to service the debt and (they hope) to provide a return on their equity investment coming from tolls that the company charges to customers of the project.

By contrast, a pure availability-payment concession is structured very similarly in terms of the long-term agreement, but the financing raised by the company is based on a schedule of annual payments to be made by the public-sector partner over the N years of the concession. This is the model used for the Port of Miami Tunnel project, where for policy reasons, the sponsoring governments judged charging tolls to be counter-productive to its objectives of getting heavy trucks to use the tunnel instead of local streets. This model has also been used in the U.K. where the government thought they had no political support for tolling, and for some highway projects in Spain, Portugal, and Germany.

A hybrid model includes tolls as at least part of the funding mechanism, but has the government as the toll collector, while compensating the concession company via annual availability payments. This is the model adopted for the I-595 reconstruction project in Florida, where only the three new reversible express lanes are being tolled, but the project cost includes rebuilding the entire freeway. It's also the model Indiana adopted for the new tolled East End Crossing of the Ohio River.

In terms of benefits, all three of these models shift the risks of construction cost overruns and of late completion to the concession company, and they also put the responsibility for maintenance on the company. In the case of the hybrid model, tolls provide a new revenue stream to pay for at least part of the project cost, but the government takes on the traffic and revenue risk. Whether it is prudent for taxpayers, as opposed to sophisticated investors, to take that risk is a key question.

Some of those in the construction industry who are championing the availability-pay approach argue that very few companies are willing or able to take on traffic and revenue risk. I think that's an exaggeration, with some evidence to the contrary from Texas. In three recent RFQs for major highway projects in Texas last year and this, the question of using the toll concession model was left open. For the Grand Parkway in Houston, five consortia said they would be interested in doing it as a toll concession, versus seven proposing a simple design-build approach. For I-35E in Dallas, four proposed using a toll concession versus five favoring design-build. And for SH 183, announced as a toll concession, there was only one interested bidder—which may well suggest that the traffic and revenue potential does not lend this project to the toll-financed model.

I am generally opposed to the pure availability-pay approach for highway projects, except for those rare cases (like the Miami tunnel project) where a real policy reason argues against tolling. In most cases, limited-access projects represent premium capacity that responsible governments cannot prudently go into debt for (which is what a pure availability-pay agreement amounts to). The larger a government's use of AP concessions, the larger the set of long-term liabilities it builds up. And that is the opposite of what state governments, already burdened with massive unfunded pension liabilities, should be doing. Portugal's large commitment to AP-concessioned highway projects is being painfully unwound, as that government digs its way out of fiscal disaster. Those concessions are in the process of being converted to toll concessions, in which the users, rather than taxpayers, will pay the costs.

I'm less concerned about the hybrid model, which is what a number of recent concession projects are following, including Florida's I-4 express toll lanes and several projects in Texas (if TxDOT can gain legal authority to do this type of concession). The greatest single problem in highway infrastructure today is lack of sufficient funding, so tolling should be an integral part of just about every limited-access project from now on.

For those projects, like SH 183 in Dallas that are unlikely to generate enough toll revenue to fully pay for the project, the alternative to the hybrid model is for the state to buy down the amount that must be financed based on toll revenue. In effect, the state would invest equity in the project alongside the private sector, with both parties hoping to earn equity returns on their investments after bondholders get their returns. That way, the concession company would be the party running the road as a business, and establishing the customer-provider relationships that a highway business ought to have. The state would be taking far less traffic and revenue risk in that model, compared with taking 100% of it in the typical hybrid model being advanced these days.

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Upcoming Conferences

Note: I don't have space to list all transportation conferences that might be of interest. Below are those that I or a Reason Foundation colleague are taking part in.

Florida Leaders Summit, Sept. 12, Marriott Orlando Grande View, Orlando, FL (Adrian Moore speaking). Details at: www.sayfiereview.com/FloridaLeadersSummitAnnounce.

IBTTA 81st Annual Meeting, Sept. 22-25, Vancouver Convention Center, Vancouver, BC (Robert Poole speaking). Details at: www.ibtta.org/events.

AASHTO 2013 Annual Meeting, Oct. 17-21, Sheraton Denver Downtown, Denver, CO (Robert Poole speaking). Details at www.aashtoannualmeeting.org

Association of Metropolitan Planning Organizations Annual Meeting, Oct. 25, Embassy Suites, Portland, OR (Adrian Moore speaking). Details at www.ampo.org/news-events/2013-ampo-annual-conference-2/.

Contracting Issues in the Public & Private Sectors, Nov. 7-8, Wake Forest University, Winston-Salem, NC (Robert Poole speaking). Details at: http://events.wfu.edu/event/privatization_conference_contracting_issues_at_the_intersection_of_the_public_private_sectors#.UiehHjakodM

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News Notes

New Atlanta Study from Reason Foundation. My Reason colleague Baruch Feigenbaum is the author of a new study on improving both highways and transit in metro Atlanta, released on August 28th. "Practical Strategies for Increasing Mobility in Atlanta" offers an updated managed lanes network, a plan for improving Atlanta's dismal arterial system, and a major restructuring of the region's bus and rail system, based on the latest research. (http://reason.org/files/atlanta_transportation_plan.pdf)

Early Success for North Carolina Tollway. The Triangle Expressway in Raleigh, the first modern-day toll road in North Carolina, opened in three phases between December 2011 and December 2012. Since then, traffic and toll revenues have been running at 150-190% of target, according to the NC Turnpike Authority. About half the customers are using transponders and the other half using video tolling.

Do Streetcars Promote Economic Development?. In a recent post on Streets.MN, University of Minnesota transportation researcher David Levinson reviews recent research findings on this subject, as well as the experience of the Twin Cities, to conclude that "We have no evidence that streetcars, of themselves, promote economic development in the context of present-day U.S. cities," and that "Streetcars are an amenity, like stadiums, festival marketplaces, entertainment blocks, and new convention centers. Are they the best amenity? Are they the best transportation service possible? Or do they drain resources that would otherwise be spent on something else, like maintaining and improving existing transit systems or serving many more passengers with Arterial BRT?" (www.streets.mn/2013/08/26/do-streetcars-promote-economic-development)

New Transportation Institute at University of Florida. The University of Florida announced last month that it has created the UF Transportation Institute to house four existing transportation centers at the university: the Transportation Technology Center, McTrans, the Transportation Research Center, and the STRIDE Regional University Transportation Center. UFTI will hold an event on Oct. 4th on the campus in Gainesville to formally unveil and explain the new institute.

Smart Growth and Goods Movement. A new report from the National Cooperative Freight Research Program explores the relationships and tensions between the needs of urban goods movement and the desires of planners to reshape the urban landscape along smart-growth lines. NCFRP Report 24, "Smart Growth and Urban Goods Movement," is available on the Transportation Research Board website.

New Findings on Global Warming. A study published in the journal Nature Climate Change finds that 37 models used by the Intergovernmental Panel on Climate Change overestimated warming over the past 20 years. While the study itself is behind a paywall, Reason science correspondent Ron Bailey provides a good overview quoting extensively from the study and including a graphic that compares projected temperatures from each of the 37 models with actual lower troposphere temperatures over the past 20 years. This study reinforces previous findings by other researchers that the "climate sensitivity" parameter used in many such models has been set higher than is justified by data. (http://reason.com/blog/2013/08/30/observed-rate-of-global-warming-half-of)

Project Eliminates Major Freight Rail Bottleneck. A $93 million rail overpass at Colton Crossing, near the huge railroad yards at Colton, CA east of Los Angeles, has eliminated a major daily railroad traffic jam where the main lines of the Union Pacific and the BNSF railroads formerly crossed at-grade, causing up to several-hour delays at certain times of day. Originally estimated to cost $202 million, competitive bidding led to a much lower price, and the project was finished eight months ahead of schedule. It was developed as a PPP involving both railroads, the San Bernardino Association of Governments, the City of Colton, and Caltrans. Funding came from the railroads plus state and federal sources.

I-95 Express Lanes Need Peak Toll Increase. The express toll lanes on I-95 in Miami-Dade County are so successful that the peak toll rate during the busiest periods—capped at $7—needs to be increased. Median peak-period toll rates are much lower than that (between $2.47 and $2.72 in May), but during some peaks the rate needed to keep traffic free-flowing has hit the $7 ceiling significantly more often this year than last. Tollroadsnews.com reports that since October 2012,"toll ceiling hits" have averaged 11.5 per month, compared with about 1.3 per months for the previous 32 months. The $7 cap was included in the state legislation authorizing the express lanes project. FDOT is now seeking an increase in the cap to $10.50.

Colorado E-470 to Convert Toll Plaza to Service Plaza. The tolled E-470 beltway around the eastern half of metro Denver converted to all-electronic tolling several years ago, eliminating the need for toll booths. But it still owns the land on which the toll plazas were built. The Bond Buyer reported last month that the E-470 Authority is considering the conversion of the 15 acres formerly used for Toll Plaza B into a service plaza, offering at least a convenience store and gas station. And if the first conversion works well, it will consider doing likewise at one or more of the other four former toll plazas.

Another South Florida Toll Road Going Cashless. The Sawgrass Expressway, a tolled western bypass around metro Fort Lauderdale operated by the Florida DOT, is the latest toll road in the region that will be converted to all-electronic tolling (AET), the agency announced in July. Work has begun, and cash tolling will cease early in 2014. The Homestead Extension of Florida's Turnpike is already cashless, as are three of the five urban toll roads of the Miami-Dade Expressway Authority. The Turnpike has also begun work converting its mainline toll plaza at Golden Glades in northern Miami-Dade County to AET.

New Report on PPPs for Infrastructure. Stanford University's Collaboratory for Research on Global Projects has released a useful 98-page report called "Public-Private Partnerships for Infrastructure Delivery." It includes a discussion of "myths and misconceptions" about PPPs, guidelines on maximizing value for money, and a good discussion of how Infrastructure Ontario has dealt with such PPPs. Also included are six case studies, including three toll roads and two real estate projects (papers.ssrn.com/sol3/papers.cfm?abstract_id=2149313)

Update re Amtrak and Intercity Bus Paper. The report that Reason Foundation co-sponsored, comparing Amtrak and intercity bus service (noted here last issue) is now available on the Reason Foundation website. Go to http://reason.org/news/show/comparing-buses-amtrak.

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Quotable Quotes

"Federal funding may have been necessary to coordinate the design of the Interstate system and to fund it in many states. But the Interstates have been located and built, and differences in state income levels were much greater in the 1950s than they are today. Federal funding may be enough to finance needed repairs and upgrades, [as Ken] Orski argues. But, he goes on, 'as for large-scale reconstruction and system expansion projects . . . let them be financed with long-term credit and private investment capital.' Tolls, another form of user fee, would provide the revenue. This . . . is already happening in many states—the Beltway HOT lanes in Northern Virginia, New York's Tappan Zee Bridge replacement, the East End Crossing over the Ohio River near Louisville. . . . The point here is that states and localities know their needs better than the federal government can. Private capital is available for investment in toll roads and bridges and can better assess profitability than logrolling members of Congress."
—Michael Barone, "It's Time to Use Private Capital to Invest in America's Roads," Investor's Business Daily, August 20, 2013

 "Even if the Keystone XL pipeline is completed, almost no oil now moving by rail would be shifted to that or any other pipeline. Oil from the Bakken region does not even have access to a pipeline, and refineries have made it quite clear that they like the ability to divert oil from one refinery to another as it moves across the country. A lot of oil would have no other way to travel if rail was removed from the mix, quickly shutting down refineries on both coasts. There is simply no other method of transportation that an keep the North American energy boom from going bust. Besides, even with the Lac-Megantic wreck, rail is still as safe as, and probably safer than, pipeline transportation."
—Don Phillips, "Lac-Megantic was a Terrible Tragedy—but Crude Oil Must Still Move, and Neither Railroads nor Regulators Will Slow It Down," Trains, August 2013

"[T]here was no grand celebration this month as Silicon Valley marked 25 years of light rail. The near-empty trolleys that often shuttle by at barely faster than jogging speeds serve as a constant reminder that the car is still king in Silicon Valley—and that the Valley Transportation Authority's trains are among the least successful in the nation by any metric. Today, fewer than 1 percent of the county's residents ride the train, while it costs the rest of the region—taxpayers at large—about $10 to subsidize every rider's round trip."
—Mike Rosenberg, "25 Years Later, VTA Light Rail Among the Nation's Worst," San Jose Mercury-News, August 19, 2013

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Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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