Surface Transportation Innovations #90

Interstate tolling, high-speed rail in the Northeast corridor and highway rest areas

In this issue:

·         The real case for Interstate tolling

·         GAO on passenger and freight rail

·         Fiscal conservatives and TIFIA

·         HSR in the Northeast Corridor

·         Commercializing highway rest areas

·         Upcoming Conferences

·         News Notes

·         Quotable Quotes

 

The Excluded Middle in Interstate Tolling

The discussion over possible tolling of the Interstates has almost everyone singing the same tired song: “New capacity yes/existing capacity no.” But that position, repeated alike by DOT Secretary Ray LaHood and House T&I Committee chair John Mica (R, FL) ignores by far the most important role that tolling could play in America’s highway infrastructure: reconstructing worn-out Interstates. I’m not playing word games here, so please bear with me while I explain.

As every highway engineer knows, highways wear out. Even with proper ongoing maintenance efforts, most major U.S. highways have a design life of about 50 years. At that point, the cost-effective thing to do is not yet another pavement overlay but rather complete reconstruction. And when you take on that big (and expensive) a project, it also makes sense to use 21st-century design and performance standards—such as designing for today’s heavier trucks, avoiding practices common in the 1950s such as left-lane exit ramps (which are now considered unsafe), etc. The result of a complete reconstruction project like this is a brand-new road. That brand new road will not come into existence unless the funds can be found to pay for it.

Begun in 1956, portions of the Interstate system are already more than 50 years old. And over the next several decades, most of it will reach that mark. To say that the Interstates “have already been paid for” via federal (and some state) fuel taxes is silly. Yes, the initial capital costs were paid for that way, and ongoing maintenance costs are being paid for that way. But there is no conceivable way that existing federal fuel tax rates could pay for the reconstruction of our 47,000 miles of Interstates, let alone add needed capacity in congested urban areas and on some inter-city routes. In an article in the March issue of Public Works Financing, tolling expert Ed Regan reports that the Interstate system cost $129 billion to complete over a period of about 30 years.  Using samples of recent reconstruction project, he develops a ballpark estimate for system-wide reconstruction of $1.3 to $2.5 trillion.

And that is just to reconstruct the existing lane-miles. That estimate does not include adding missing links between cities too small to matter when the original map was drawn up during the 1940s (such as between Las Vegas and Phoenix), or needed capacity additions in congested urban areas and on many long-haul routes (such as I-70 in the Midwest). The only study I’m aware of that sought to quantify a serious program of rebuilding and modernizing the Interstates carries a May 2007 date. “Future Options for the National System of Interstate and Defense Highways” was the Task 10 Final Report of NCHRP Project 20-24. It defined a 30-year program that would reconstruct the existing 47,000 centerline miles and add 15,000 new centerline miles (mostly by upgrading existing NHS routes), with total capacity rising from 212,000 lane-miles to 385,000 lane-miles. The cost of this program was estimated at $103 billion per year for 30 years—about $3 trillion.

That report, written in the SAFETEA-LU era of expanding federal highway spending, took a cautious approach to the potential of tolling and pricing, suggesting that 6,000 route-miles of high-volume truck routes and up to 8,000 route-miles of urban HOT lanes could be candidates for tolling. In the new era of fiscal constraints, I can see no alternative to using tolling and pricing for a much larger fraction of the system.

But serious debate on toll funding such a massive project will never get off the ground if we persist in mislabeling this as “tolling existing capacity.” If we don’t figure out how to pay for massive Interstate reconstruction, there will be no “existing capacity” to have debates over.

Instead of continuing with these silly rhetorical games, Congress could take just one modest step this reauthorization to set in motion the process of creating a new 21st-century Interstate system. All they have to do is to remove the numerical limits in four tolling and pricing pilot programs enacted during the last three reauthorizations:

·         Value Pricing Pilot Program: expand to all 50 states rather than just the 15 “project partners”;

·         Express Lanes Demonstration Program: remove the limit of 15 projects;

·         Interstate System Reconstruction and Rehabilitation Toll Pilot Program: remove the current limit of three projects.

·         Interstate System Construction Toll Pilot Program: remove the current limit of three projects.

To build a critical mass of support for this reform, it is vital to assure highway users that Interstate tolling will be a true user fee, and not (as Pennsylvania tried to do in proposing to toll I-80) a new tax on highway users, to bail out the entire state transportation program. The conditions placed on the use of toll revenues in the two Interstate toll pilot programs were carefully negotiated with highway user groups, which have accepted them as proper user fees. Those conditions should remain in place as the programs are expanded to all states.

GAO Critiques Passenger and Freight Rail Grants

The Government Accountability Office has provided a valuable critique of federal attempts to shift intercity passenger travel from air to rail, and interstate goods movement from road to rail. Despite the boring title of “Intercity Passenger and Freight Rail: Better Data and Communication of Uncertainties Can Help Decision Makers Understand Benefits and Trade-offs of Programs and Policies,” this report (GAO-11-290) is well worth reading.

The theme of this report is the need for sound benefit-cost analysis of programs that seek to shift people and goods from roads to rail. A Clinton-era Executive Order (No. 12893) requires serious B/C analysis for transportation grant programs of more than $100 million, and estimates of benefits and costs for grants of $20 million to $100 million. The point of this is to try to weed out projects whose cost to taxpayers exceeds their benefits to society. (Nobody worries about this in the private sector, because projects whose benefits to users exceed what it costs those users do not survive.)

The GAO researchers did two things in this report. First, they raised important questions about how likely the intended mode shifts of people and goods to rail may actually be. Second, they reviewed applications to two recent rail-related grant programs (high-speed rail and TIGER) to assess the extent and quality of the benefit-cost analysis carried out by the applicants. The report makes for sobering reading.

On the first question, GAO points out that significant mode shifts could generate benefits, but that many factors will affect whether the intended shifts actually come about. For passenger rail, they make the obvious points about picking corridors that already have heavy intercity air travel and existing or projected congestion, as well as the importance of interconnections with extensive transit systems at both ends. For freight, GAO analysts provide a sort of “Goods Movement 101” lecture about the factors that actually affect which type of commodity goes by which mode. They also ran a couple of scenarios on a DOT model to simulate the impact of a 50-cent increase in per-mile truck rates. Under both scenarios, this 30% increase in truck cost led to less than a one percent decrease in truck VMT due to mode shifts. They also visited Germany and the United Kingdom, where they found little mode shift due to the German truck tolling policy. It led to the use of more efficient trucks, rather than freight shifting to rail. A UK policy to shift freight from truck to rail via targeted grants had modest success on a localized basis. GAO also found that passenger mode shifts to rail in Spain and France were smaller than projected and that “net benefits were less than expected due to higher costs and lower than expected ridership."

The review of HSR and TIGER grant applications makes for dismaying reading. GAO randomly selected 40 applications (20 from each program) to review, finding that many did not quantify benefits, did not appropriately account for benefits and costs, omitted certain costs, and failed to include information on data limitations, methodologies, uncertainties, and assumptions. Many failed to discount costs and benefits to present value, or failed to use appropriate discount rates. The report includes a pie chart from DOT’s own assessment of rail-related TIGER applications, finding that the benefit-cost analyses from 17% of them were not useful and another 45% were only marginally useful. And while HSR applicants were not required to include a benefit-cost analysis, the Federal Railroad Administration found that whatever information they did provide was essentially useless in making such an assessment.

In short, this is about as bad as I’d feared, and we are in GAO’s debt for lifting the lid.

Why Fiscal Conservatives Should Support TIFIA

Supporters of PPP concession projects are worried that fiscal conservatives in Congress, especially newly elected members, may seek to reduce or eliminate the TIFIA credit-support program at U.S. DOT. After all, at first glance it may look to them like just another way of handing out federal money to states and metro areas. In fact, TIFIA (the Transportation Infrastructure Finance and Innovation Act) is a critically important tool to help shift the federal role away from unaffordable grants in favor of loans that have to meet some critically important tests of feasibility.

TIFIA was enacted by Congress in 1998 to provide credit support to relatively big-ticket surface transportation projects. Unlike with federal grants (many of which have no federal performance requirements and which have often been earmarked), a project must meet three tests to qualify for a TIFIA loan:

·         Have a dedicated revenue stream with which to pay back the TIFIA loan;

·         Obtain an investment-grade rating on the project’s senior debt (which is also backed by a dedicated revenue stream);

·         Use the TIFIA loan for no more than one-third of the total project budget.

Thus, TIFIA provides “gap” funding for what are primarily local, self-help projects. Most of these projects, in fact, are public-private partnerships, and a growing number of them are long-term toll concessions. During the credit markets crunch of the last several years, four mega-projects that involve adding express toll lanes to congested freeways have been financed with gap funding from TIFIA. These include the Beltway HOT lanes outside of Washington, DC, the LBJ and North Tarrant Express projects in Dallas and Fort Worth, and the I-595 reconstruction project in Fort Lauderdale.

The total cost of these four projects is $8.4 billion. Had they been funded as federal Interstate highway improvements under the traditional 90 percent federal/10 percent state arrangement, the budgetary cost to the federal government would have been $7.56 billion. By contrast, the TIFIA loans for the four projects totaled $2.87 billion. But wait, it gets better. Because these are loans, not grants, OMB scores TIFIA loans at 10% of the loan amount, based on its assessment of the overall default risk of the TIFIA loan portfolio. Thus, the federal budgetary cost of these $8.4 billion worth of much-needed infrastructure improvements is only $287 million—about 3.4% of the total project cost. And that, my friends, is what is meant by leveraging limited federal funds.

The problem today is that TIFIA is woefully under-funded. The current budget allocation for TIFIA is just $122 million per year. Last month DOT received letters of interest from 34 applicants, proposing TIFIA loans totaling about $14 billion, which at 10% scoring would require $1.4 billion in budget authority. In the pipeline, according to PPP expert Geoff Yarema of Nossaman LLP, is another set of projects expected to request TIFIA loans at the rate of $5.5 billion per year over the next three years. So in addition to retaining the program, Congress ought to substantially increase its size.

I have written a policy brief going into this subject in more detail, and making a number of specific policy recommendations for TIFIA. It should be posted on the reason.org website within the next 10 days or so.

High-Speed Rail for the Northeast Corridor: Fantasy or Realizable?

In a recent interview with The Hill, Rep. John Mica (R, FL), chairman of the House Transportation and Infrastructure Committee, lambasted the Administration and Amtrak for sending the federal high-speed rail program off in the wrong direction. “So many people in the Northeast corridor are wondering what in heaven’s name is the Administration thinking giving away limited money on marginal projects,” he said. “Congress and the Administration threw huge amounts of money in the name of high-speed rail for snail-speed service.” He told The Hill that the Administration should have focused its HSR efforts on the Northeast Corridor, instead.

And indeed, that is what I have been telling reporters who ask me that question. If there is any corridor in the United States that has the high population density, major cities with concentrated downtowns and extensive transit service, and congested air and highway routes, it’s the 453-mile corridor from Boston to New York to Washington. The current Amtrak Acela takes 2 ¾ hours between DC and New York, for an average speed of 81.5 mph. Amtrak’s current master plan calls for investing $5 billion replacing obsolete tunnels and bridges so as to cut that time to 2 ¼ hours (average speed of just under 100 mph). These relatively slow speeds are due in part to the non-high-speed infrastructure (curve radii, especially) but also due to political mandates like stopping at Wilmington, DE (pop. 73,000, including Joe Biden).

Last fall Amtrak announced a visionary plan to provide true HSR in the Northeast Corridor. That would involve essentially all-new right of way, to permit high-speed curves of three-mile radius (compared with existing ones as sharp as a half-mile) and long straight sections to permit steady acceleration to 200 mph. Its plan would include Super Express service making stops only in Philadelphia and New York in between Boston and Washington. The estimated price tag (in 2010 dollars) is $117 billion and the estimated completion date is 2040. So the question before the house is: Would putting $117 billion of general taxpayers money into this project be a good investment?

Amtrak estimates that the improvements in place by 2030 would attract an additional 3.7 million passengers a year by that year, increasing to 10.3 million new riders by 2040 when the system is finished. And it claims that 2040 revenues would exceed 2040 costs (including a $349 million line item for “annual capital renewal costs”) by $928 million. That number is the source for the widely reported “$900 million annual profit” figure. Even assuming all of Amtrak’s assumptions are correct (i.e., no cost over-runs, on-time completion, getting that many new riders, etc.), that alleged profit is highly misleading. First, that number ignores three decades of likely operating losses during the construction period, with that $928 million/year figure applying only from 2040 onward. Second, and far more important, Amtrak includes no financing costs for this $117 billion project, implying that it will not repay even one dollar of that amount to the Treasury. It’s all a sunk cost.

A former infrastructure analyst from the previous Administration shared with me his own assessment of Amtrak’s plan. “Fully amortizing the construction cost (over 30 years at an interest rate of 4.5%--roughly the rate on Treasury debt) adds an additional $7.2 billion in annual costs. The HSR-NEC is therefore designed with a built-in loss of $6.25 billion per year.” Using Amtrak’s 2040 estimate of 17.7 million passengers a year at an average fare of $143 per trip, he calculates that “Each of these trips would have a built-in subsidy of $353 per passenger,” based on including the debt service cost in the calculation. He also did a sensitivity analysis showing that if annual operating & maintenance costs are just 5% higher than Amtrak’s estimate, the $928 million operating profit becomes an operating loss of $757 million/year. In a more-extreme stress test, a combination of 20% higher costs, 20% lower revenue, and including the debt service cost yields a built-in loss of $14 billion per year.

So if there is to be some form of HSR in the Northeast Corridor, there will have to be a Plan B. In that regard, I was intrigued by an op-ed in the Wall Street Journal (March 16th) by Ed Rendell and Peter Peyser, “A Northeast Corridor Bullet Train.” They propose divesting the NEC from Amtrak and turning it over to a public-private partnership owned 51% by the nine states plus DC served by the NEC and 49% by a private consortium. The existing NEC is such a black hole, in their view, that the federal government should pay the new entity, over five years, to take it off the government’s hands. The amount of that payment would be a key factor in deciding the winning private-sector consortium—whichever qualified team required the smallest federal payment. The public-sector partners would have to work out with the consortium how much the former would put into the venture, based on the consortium’s business plan.

The op-ed includes what appear to me to be two contradictory points: that speeds would be upgraded to “200 mph or faster” and that “the dedicated right of way [is] already assembled.” But you can’t safely run 200 mph trains on half-mile curve radii, as far as I know, so perhaps they mean only 200 mph on long, straight segments, which is still better than Acela can do on such segments between New York and Boston. They also stress the potential of the consortium to “take full advantage of the real-estate development opportunities presented by property now owned by Amtrak” in the corridor.

Chairman Mica has long called for private-sector investment to rebuild the NEC and offer something like real high-speed rail there. And since Amtrak’s $117 billion plan will go nowhere in our current era (for the next several decades, at least) of fiscal stress, I’m all in favor of exploring ideas like that put forward by Rendell and Peyser. Perhaps a truly commercial approach can think far enough outside the box to be worth pursuing.

Commercializing Rest Areas?

For the past year I’ve been following an ongoing battle between state DOTs and, of all things, the National Association of Truck Stop Owners (NATSO). The issue dividing them is state proposals to commercialize rest areas along various Interstate highways. With state DOTs having serious budget problems, the idea of generating revenues from their rest areas (by allowing food and fuel vendors to locate there) seems like a no-brainer. Anyone who uses turnpikes (as I do the Florida Turnpike) appreciates the convenience of such facilities.

But NATSO views these proposals as a mortal threat. That’s because it represents not merely truck stops but also many of the small businesses that operate gas-station and fast-food franchises at or near exits on the Interstates. They don’t want the competition from similar operators located right alongside the Interstate—and have no hesitation of invoking the coercive power of the federal government to prevent it. And they were organized enough decades ago to have Congress outlaw commercial activities at any Interstate rest area (except for those portions of the system developed and operated as toll roads, such as the New York Thruway, Indiana Toll Road, Ohio Turnpike, etc.).

NATSO is a master of propaganda on this issue. In a news release dated March 29, 2011, the organization characterizes legalization of commercial activities at rest areas as “government intrusion into the private sector” that “would jeopardize businesses and jobs nationwide.”  As if new competition were not a fact of life in the private sector, which subjects all (or nearly all) businesses to a continuing market test. The news release continues: “The government is not in the business of selling food and fuel; the private sector is already meeting that need. This is a move to expand government, at a cost to businesses, county governments, and consumers.”

That pathetic drivel should be laughed out of court. “The private sector is already meeting that need” is not an endorsement of the free market; it’s a blatant call for protectionism. It’s like existing taxicab companies arguing for no more licenses to be issued because the existing cabbies are providing all the service anyone wants. As John Stossel would say, “Give me a break!”

Yet what NATSO obviously hopes to do by putting forth that kind of rhetoric is to bamboozle free-market conservatives, hoping they know so little about this issue that they will equate NATSO’s position with being “pro-business” and therefore “pro-market.” That is how all too many government interventions into the marketplace get implemented in the first place, or, as in this case, maintained.

Upcoming Conferences

Note: I don’t have space to list all the transportation conferences going on; below are those that I or a Reason colleague am participating in.

Infrastructure Investment World—Americas 2011, April 11-14, 2011, New York, NY, Bridgewaters. Details at: www.terrapin.com/2011/iiwa/index.stm. (Shirley Ybarra speaking)

2011 Transportation Policy Conference, May 10, 2011, Bellevue, WA. Details at: www.washingtonpolicy.org/events/details/2011-transportation-conference. (Robert Poole speaking)

Implementing Partnerships for Infrastructure, May 11, 2011, Lansing, MI, Michigan State University. Details at: www.ncppp.org/calendars/MI_1105/Michigan%20Flyer.pdf (Shirley Ybarra speaking)

Tolling, Trucks, & Traffic: TEAMFL Quarterly Meeting, May 12-13, 2011, Bonita Springs, FL, Hyatt Regency Coconut Point. Details at www.teamfl.org.

(Robert Poole speaking)

InfraAmericas’ 7th Annual US P3 Infrastructure Forum, June 14-15, 2011, New York, NY, Grand Hyatt. Details at: http://bit.ly/P3RFWEBH. (Reason Foundation is a Supporting Organization.)

News Notes

Study Proposes Revised PPP Approach for United States

An interesting paper from the Brookings Institution’s Hamilton Project offers several proposals to reform how the United States uses long-term PPP concessions. “Public-Private Partnerships to Revamp U.S. Infrastructure,” by Eduardo Engel, Ronald Fischer, and Alexander Geletovic, suggests first doing a benefit-cost analysis to see if the project itself makes sense, then using a variable-length concession term to reduce the firm’s risk and reduce the likelihood of opportunistic renegotiations during the concession period. I don’t think this is a one-size-fits-all solution, but it should be one of the alternatives states consider. It is Discussion Paper 2011-2, February 2011, available at www.brookings.edu/projects/hamiltonproject/Issues.aspx.

Testimony on Mileage-Based User Fees

My Reason colleague Adrian Moore testified before the House Subcommittee on Highways and Transit last week, on the subject of mileage-based user fees. He knows a lot about that after having spent a year and a half on the National Surface Transportation Infrastructure Financing Commission. His testimony made specific recommendations for large-scale trials of mileage-based user fees as well as further research and development efforts. His testimony is on the Reason Foundation website at: http://reason.org.

New TRB Report on Road Pricing

“Road Pricing: Public Perceptions and Program Development” has just been released by the Transportation Research Board as NCHRP Report 686. Part 1 of this 146-page report describes six road pricing concepts and provides a planning guide for developing and implementing programs of this type. Part 2 provides supporting material, including interview findings, literature reviews, and extensive resource materials on road pricing strategies. The report is a joint effort of ICF International and K.T. Analytics. (http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_rpt_686.pdf)

Ohio Enacts PPP Enabling Legislation

Gov. John Kasich has signed House Bill 114, which permits both solicited and unsolicited proposals for public-private partnerships in transportation. ODOT Director Jerry Wray told the media that use of PPPs would facilitate risk transfer on larger projects, such as the planned replacement of the Cincinnati bridge that carries I-71 and I-75 across the Ohio River to Kentucky. At the signing ceremony, Gov. Kasich also suggested that privatization of the Ohio Turnpike was still a possibility.

Slanted Survey Finds Public Opposed to VMT Tax

A Rasmussen Reports national telephone survey found that only 15% of Americans responded “yes” to a question that read: “The Congressional Budget Office has just released a report saying that taxing people based on how many miles they drive is a good way to raise funds for highway maintenance.” Well, duh! You would think by now that a knowledgeable survey research firm would at least provide some context—such as that the gas tax is running out of steam and here is a possible replacement. But no, Rasmussen presents it as a new (additional?) tax on mobility. And that question was followed by one asking if people favor increasing the 18.4 cents/gallon federal gas tax “to help fund transportation projects.” Only 10% said yes to that.

A Problem with Raising the Diesel Tax

The American Trucking Associations is on record favoring an increase in the tax on diesel fuel, as long as the additional money goes for highway improvements in freight corridors. That sounds like a good example of users-pay/users-benefit. But fuel taxes are rather crude user fees. Besides increasing fuel costs for (willing) truckers, a diesel tax increase would also hit ordinary motorists who are moving back to new-generation diesel power for cars and SUVs. AAA recently rated diesel engines as one of its “top picks for new vehicle technology” because “Modern diesel engines are clean, quiet, refined, and powerful. They are also economical, often providing a 30 percent boost in fuel economy with a corresponding decline in carbon emissions.” Is that something federal policy should be discouraging motorists from selecting?

VMT Charge for Electric Cars

Autoblog reported last month that legislation will soon be introduced in Oregon, Texas, and Washington State to tax electric vehicles based on their road use, in what could be the first regular use of VMT (vehicle miles of travel) user taxes. (http://green.autoblog.com/2011/03/24)

Priceline for Airport Transportation

A start-up firm in Los Angeles has taken a page from Priceline’s book and applied it to shuttle van service to and from LAX. Shuttle2LAX.com, a travel wholesaler, buys empty seats in bulk from airport shuttle companies such as SuperShuttle and sells them to individual travelers online. They charge a flat $20 anywhere in the Los Angeles metro area (and only $11 more for a companion who rides with you). In their first month, they attracted 5,872 customers, presumably taking a large fraction of that number of cars off the road.

Feedback on Self-Supporting Highways Article

My piece last month on the endless controversy over whether highway users fully pay for highway infrastructure costs brought a lot of comments. Jay Wetmore of AECOM pointed out that Minnesota several years ago passed a constitutional amendment dedicating the sales tax on vehicle sales to transportation—60% for roads and 40% for transit. That’s the only such use of vehicle sales taxes for transportation that I know of. And Kamal Hassan of Skymeter pointed out that if I seek to limit the comparison of user taxes and fees versus infrastructure spending just to highways (as opposed to local streets and roads), then it’s not fair to include on the revenue side the gas tax monies generated from travel on local streets and roads—a good point.

Quotable Quotes

“When high roads, bridges, canals, etc. are in this manner made and supported by the commerce which is carried on by means of them, they can be made only where that commerce requires them, and consequently where it is proper to make them. Their expense, too, their grandeur and magnificence, must be suited to what that commerce can afford to pay. They must be made consequently as it is proper to make them. A magnificent high road cannot be made through a desert country where there is little or no commerce, or merely because it happens to lead to the country villa of the intendant of the province, or to that of some great lord to whom the intendant finds it convenient to make his court.”

--Adam Smith, The Wealth of Nations, Vol. III, 1776.

“The President’s [HSR] proposal came at a most inopportune time, when the nation is recovering from a serious recession and desperately trying to reduce the federal budget deficit and a mountain of debt. In time, however, the recession will end, the economy will start growing again, and the deficit will hopefully come under control. At that distant moment in time, perhaps toward the end of this decade, the nation might be able to resume its tradition of ‘bold endeavors’—launching ambitious programs of public infrastructure renewal. That could be an appropriate time to revive the idea of a high-speed rail network, at least in the densely populated Northeast Corridor where road and air traffic congestion will soon be reaching levels that threaten its continued growth and productivity. For now, however, prudence and good sense and the common welfare dictate that we, as a nation, learn to live within our means. And that includes giving up the impossible vision of a continent-wide high-speed rail network.”

--C. Kenneth Orski, “The End of the Line,” Infrastructure Investor, April 2011

“[T]he challenges facing the [freight] railroad industry go beyond the recent economic downturn. . . . Just as the industry’s recovery can be largely attributed to the growth of coal and intermodal traffic, the railroads appear vulnerable to future structural s hifts that could work to decrease traffic density. A plausible scenario would be a significant lessening of the social appetite for coal, which would diminish the industry’s low-cost baseline load. Likewise, interruptions or contractions of international trade could substantially reduce the railroads’ higher-margin intermodal traffic. Either scenario could reverse the productivity gains achieved from increased [traffic] density, put a greater overhead burden on customers, and worsen the financial condition of the railroads.

--B.Kelly Eakin, et al., “Railroad Performance Under the Staggers Act,” Regulation, Winter 2010-2011, pp. 32-38.

“We’re not entirely comfortable with the idea of the government providing first-class service for well-heeled citizens, either. But in this case [L.A. HOT lanes], the experiment is worth trying. For one thing, government badly needs the revenue. More than that, though, the new system would not only speed up commutes for the people paying to get into the carpool lanes but would ease traffic for those remaining in the other lanes as well (because the tollpayers wouldn’t be there). . . . Another argument for the new system is that even though paying for a full year in the lane would be pricey, paying for one day would be relatively cheap. So if anybody—rich or poor—needs to get to the airport quickly or to a job interview on time, they’d have the option of spending a few bucks to do so (if they have a transponder). That’s to everybody’s advantage.”

“If L.A. Freeways Aren’t Free,” editorial, Los Angeles Times, March 17, 2011.

“Suppose you work in Century City on the west side of Los Angeles and you want to commute to a business meeting on Sand Hill Road in Palo Alto. Would you want to drive to Union Station in downtown LA (over the ever-clogged Santa Monica Freeway), then take a [HSR] train for two hours and 40 minutes to downtown San Francisco, then drive nearly another hour down the Bayshore of I-280 to Sand Hill Road? Or, would you prefer to drive to LAX, wait some annoying length of time (probably 15 minutes) in the security lines, then fly 50 minutes in the air to SFO, and drive the considerably shorter distance down the Bayshore or I-280 to Sand Hill Road? The rail trip is door-to-door five to six hours and maybe more; the airline trip is door-to-door three to four hours. I know which one I’d pick.”

--Michael Barone, “The Lunacy of California’s High-Speed Rail,” The Washington Examiner, March 2, 2011

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





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