Surface Transportation Newsletter #120

Priced managed lanes are proliferating, Making sense out of autonomous vehicle claims, Should fuel taxes be replaced by sales taxes

In this issue:

Priced Managed Lanes Proliferate Nationwide

Since I last reported on priced managed lane projects, their number has proliferated, with California, Florida, and Texas being particular hot spots. We are also seeing increased emphasis on priced-lane networks, and there are several planned projects for elevated reversible managed lanes. In contrast to the early stages when most projects were conversions of existing HOV lanes (usually allowing two-person carpools to use the lanes at no charge), nearly all the new projects represent lane additions, generally financed based on the projected toll revenues.

In a brief report last May, bond rating agency Moody's found that although such projects entail unique risks such as "higher revenue volatility," nevertheless "managed lanes projects are capable of achieving investment-grade ratings, even in the construction phase, through strong liquidity packages, higher debt service coverage ratios, and larger debt service and other reserves." ("Managed Lanes Are HOT! Unique Risks and Benefits versus Traditional Tolling," Moody's Investors Service, May 2013)

These new managed lanes projects are being procured via three different models: design-build, with the procuring agency taking on traffic and revenue risk as well as O&M risks; toll concession, with the concession company taking all of those risks; and availability-pay concession, in which the procuring agency takes traffic & revenue risk but the concession company takes O&M risks.

California, which implemented the first priced managed lanes concession (on SR 91, in 1995) has two new projects under way. In a billion-dollar project, Riverside County is extending those SR 91 express lanes east to I-15. Financial close on the financing took place in July. LA Metro is in the procurement process for ARTI, its first large PPP project, which includes the addition of priced managed lanes to I-5 in northern Los Angeles County. And the Orange County Transportation Authority is considering adding priced lanes to I-405 between John Wayne Airport and the LA County line.

Colorado has a priced ML project under way on US 36 between Boulder and Denver; a team headed by Plenary was selected in July and hopes to complete the financing by the end of this month. And Parsons Corp. has submitted an unsolicited proposal for a $3.5 billion project to add reversible express toll lanes and bus rapid transit to 53 miles of I-70 in and west of Denver.

Florida DOT is in the procurement process for an availability-pay concession for its $2 billion "I-4 Ultimate" project to add two express toll lanes each way to highly congested I-4 in Orlando. In South Florida, the extension of Miami's I-95 express toll lanes to Ft. Lauderdale is under way, aiming to open in 2014, with further extensions into Palm Beach County in the planning stages. FDOT has also authorized the start of construction next year to add express toll lanes to I-75 in Broward County and SR 826 (Palmetto Expressway) in Miami-Dade County. In addition, the Turnpike will add premium express toll lanes to its Homestead Extension in southern Miami-Dade County.

Georgia DOT has two toll lanes projects under way. It has already awarded a contract to add express toll lanes to I-75 in Henry County, south of Atlanta. And it is in procurement for a $950 million project for such lanes on I-75 and I-575 in Atlanta's northwestern suburbs. Both projects are being procured as design-build.

North Carolina is a new entrant in this field, with plans approved for 26 miles of express toll lanes to be added to congested I-77 in Charlotte. It will be procured as a 50-year toll concession. Opinion polling showed 56% favoring tolls for new lanes, versus only 10% supporting a gas tax increase.

Texas has the largest number of toll-lane projects. Public Works Financing reports that PPPs in the Dallas/Ft. Worth area alone add up to $10 billion, with the latest being the financing last month of NTE Phase 2, a $1.1 billion project to add toll lanes to I-35W as a toll concession by the same Cintra/Meridiam consortium that is doing NTE Phase 1. By contrast, the express toll lanes for I-35E will be added as part of a $1.1 design-build-maintain contract to reconstruct the first phase of what will eventually be a 28-mile, $4.8 billion project. And for the SH 183 $876 million Airport Freeway project, TxDOT plans what amounts to an availability-pay concession, using "pass-through" funding. In Houston three consortia are competing for a $500 million toll concession for express lanes on 10 miles of SH 288. And in Austin, the Central Texas Regional Mobility Authority is self-funding the addition of a tolled express lane each way on the MoPac expressway, the north-south alternative to congested I-35.

In Virginia, construction is under way on express toll lanes on I-95 south of the Beltway—a $925 million toll concession by the same Transurban/Fluor team that financed and developed the express toll lanes on the Beltway (I-495) that opened last fall.

Three planned express toll lanes projects will be elevated. North of Tampa, Florida DOT is seeking competing bids for an unsolicited proposal that would add elevated express lanes above SR 54 in Pasco County. Phases 1 and 2 would be 22 miles, with a possible Phase 3 adding another 11 miles. The full project would link New Port Richey on the west with I-275 and I-75 on the east. The new government of Puerto Rico is planning reversible elevated express toll lanes to the PR-22 toll road between Hatillo and Aguadilla. The $1 billion project is to be procured as a toll concession. Lastly, the Harris County Toll Road Authority is beginning advance construction efforts for an elevated extension of its Hardy Toll Road to connect it to US 59 south of I-10 near downtown Houston. Actual construction of the elevated facility is expected by 2020.

Possible future express toll lanes are being discussed in the following areas:

  • An extension of Virginia's Beltway express lanes across the river into Maryland as far north as I-270;
  • Adding HOT lanes to a nine-mile stretch of Route 3 south of Boston;
  • Adding express toll lanes to C-470, the only non-tolled portion of the beltway around metro Denver;
  • Adding HOT lanes to Chicago-area expressways, including the Eisenhower, Kennedy, and Ryan;
  • And, more speculatively, converting the still incomplete HOV lanes on the Staten Island Expressway and Verrazano Bridge into the first HOT lanes in the hugely congested New York metro area.

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Making Sense Out of Autonomous Vehicle Claims

After a 30-mile ride in a GM driverless car prototype, House Transportation & Infrastructure Committee chairman Bill Shuster was enthusiastic, saying that such vehicles are "the future of transportation." The committee plans a hearing on "the future role of autonomous vehicles in U.S. transportation," presumably once Congress figures out how to get the federal government back into operation.

As a graduate engineer, life-long technology buff, and science fiction reader, I appreciate the potential of autonomous vehicles. But I am amazed and appalled at some of the hype about likely benefits being spread by people who should know better. Here are some examples (with the names withheld to prevent embarrassment) from various transportation and general media over the last six months or so:

Autonomous vehicles (AVs) will be so safe that cars can delete their current crash-worthiness features, becoming super-lightweight eco-cars. At a minimum, this would only apply if all vehicles on a given road were lightweight AVs and there were no 18-wheel Big Rigs to collide with. If this were ever realistic, it would be many decades into the future when every single vehicle, car and truck, was a super-reliable AV.

There will be no need to own vehicles, since whenever you need one, you can summon an AV to your door. This completely ignores the reality that at certain times of day, nearly everyone needs a vehicle, so ready availability at those times is highly unlikely. I'm still waiting for a large-scale simulation model showing how this would work in a large metro area.

There will be little or no need for onsite parking, with everyone making use of on-call vehicles. In addition to the above concern, this supposes that AVs will be so superior that no one will choose to own a vehicle, conventional or AV.

Expressways won't need to be expanded, since AVs can operate at high speeds at twice the density considered safe today. Buried in this claim is the assumption that all vehicles are AVs, which would require either AV performance so superior that no one would want to own a non-AV or that no one would be allowed to own and drive one.

Roadways will be reconfigured with various electronics to serve as backups for situations the AV equipment cannot handle, such as snow. Where are the cost estimates for outfitting the 8.6 million lane-miles of US roadway with such electronics?

Some of the more realistic advocates of AVs resist making such grandiose claims and write about an evolutionary path toward increasing levels of driver assistance (lane-keeping, adaptive cruise control, parking assist, etc.). Under this kind of scenario, an AV would still need a capable driver in place, ready to resume control whenever the vehicle's auto-pilot could not handle certain situations. That strikes me as a far more realistic scenario than one that touts game-playing, sleeping, or conducting business while the AV does all the driving.

Yet because of my work on aviation policy (in addition to surface transportation), I read a great deal about concerns over the growing trend of cockpit automation. MIT human factors expert Bryan Reimer told a Driverless Car Summit in June that the more that people rely on automation to perform a set of tasks, the worse they get at performing them themselves. "Automation in the cockpit has caused many accidents when the pilot is no longer capable of managing the situation," he said. The loss of basic flying skills among airline pilots is an ongoing topic of concern in aviation circles, and appears to be implicated in several major accidents, including the Air France crash in the South Atlantic and the recent Asiana crash in San Francisco. A thoughtful discussion of this problem appeared on The Economist's "Babbage" blog in August. (www.economist.org/blogs/babbage/2013/08/cockpit-automation)

 Let me recommend two other thoughtful pieces on various AV issues. Increased safety is an obvious potential benefit, but it's not as straightforward as you may think. Patrick Lin, director of the Ethics & Emerging Sciences Group at Cal Poly San Luis Obispo writes about the ethical dilemmas that will arise. AVs, when working as planned, will eliminate many deaths caused each year by human error. But since no technology is perfect, failures of AV tech will also cause some deaths. How do we assess these trade-offs? (www.wired.com/opinion/2013/07/the-surprising-ethics-of-robot-cars)

The other is a week-long set of postings by Bryant Walker Smith on the complicated set of legal issues that must be worked out for various versions of AVs. Stanford Law School's Smith is an AV advocate, but is far more thoughtful than those writing typical AV hype. Be sure to read all five days' worth. (www.volokh.com/2013/09/30/driverless-golf-carts-coming-sooner-driverless-cars)

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Replace Per-Gallon Fuel Taxes with Sales Taxes?

Like many people, I was surprised when Sen. Barbara Boxer (D, CA) proposed replacing per-gallon federal taxes on motor fuels with what amounts to a sales tax (a percentage of the price of the fuel) imposed at the wholesale level. There are a lot of drawbacks to this idea, as I noted when the Republican governor of Virginia made that switch earlier this year.

A new report from the Congressional Research Service, "Funding and Financing Highways and Public Transportation," (7-5700, dated Sept. 23, 2013) points out two of them. The first is that a sales tax would be volatile, going down as well as up in response to swings in the price of oil. CRS reminds us that "Many states which tied fuel taxes to prices after the price shocks of the 1970s encountered revenue shortfalls in the 1980s, when fuel prices fell dramatically. Over a 20-year period, most of these variable state fuel taxes disappeared." When I served on the TRB special committee on the long-term viability of fuel taxes for transportation funding last decade, we considered and rejected that alternative, for volatility and other reasons. CRS also points out, as did the TRB committee, that a sales tax still ties funding to petroleum use, which is highly unlikely to keep pace with highway use in coming decades.

Joshua Schank of the Eno Foundation released a thoughtful commentary on the Boxer proposal early this month. He agrees that it would likely do a better job of keeping pace with inflation than politically-set per-gallon fuel taxes, but points out what I consider to be three major disadvantages. First, a wholesale tax is less transparent, and we already suffer from most people having no idea what they pay for highways. Second, as CRS noted, a sales tax is vulnerable to decreases in oil prices and would therefore be a less reliable funding source for state DOTs. And third, a sales tax at the wholesale level would be seen as even less of a user fee than current fuel taxes (which CRS correctly calls more of a "proxy for a user fee" than the real thing).

Where I differ with Schank is in my recommendation that we need to fund highways with real user fees, since highways are a network utility with many similarities to other such utilities—electricity, natural gas, water, cable, etc. In network utilities, people get monthly bills from the utility, based on how much they have used of its various services. Their payments go directly to the utility, to pay for its capital and operating costs. People know exactly what they pay each month, and can adjust their consumption and/or their service package accordingly. We don't have anywhere near the chronic under-funding problems in these other network utilities that we have in the far more politicized highway system. Schank, by contrast, has written elsewhere in favor of scrapping highway user taxes and having transportation compete for general fund allocations with all other government programs. In my view, that would further politicize the situation, making a bad situation even worse.

I doubt if Boxer's proposal will go anywhere, but if it starts to catch on, I hope highway users will oppose it for the reasons set forth above.

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Suburbia Not Only Not Dying—It's Thriving

Fortune magazine's Leigh Gallagher got a large amount of publicity over the summer for her book, The End of the Suburbs: Why the American Dream is Moving. Major newspapers did articles repeating her claims, and she expounded them on various blogs and talk shows: Millennials hate the suburbs, Baby Boomers are moving back to downtowns, people want to not have to use their cars, etc. Whether these things are true has important implications for transportation, so let's look at what the data tell us.

Demographer Wendell Cox took issue with the claim of a large migration of Baby Boomers from suburbs to downtowns. Using Census data for the 51 largest metro areas comparing 2010 with 2000, he found net out-migration of Boomers from the core city for all but a handful—and large net out-migration of Boomers from Chicago, Los Angeles, New York. Overall, the share of Boomers living in core cities declined by 10% over that decade.

Other evidence of people's preferences comes from the 2011 Community Preference Survey commissioned by the National Association of Realtors. When respondents were given an array of housing choices, 80% preferred the single-family detached house, while only 8% chose an apartment or condo. And 61% preferred a place where "houses are built far apart on larger lots and you have to drive to get to schools, stores, and restaurants" over the 37% who chose a place where "houses are built close together on small lots and it is easy to walk to schools, stores, and restaurants."

Given those findings, I was not surprised by findings released in August by the Commerce Department that the median house size rose to an all-time record high of 2,306 sq. ft. in 2012, slightly above the previous record of 2,277 sq. ft. at the height of the housing bubble in 2007.

Urban expert Joel Kotkin reported last month that America's fastest-growing counties between 2010 and 2012 were suburban and exurban—places like Loudon County, VA (up 7.9%), Fort Bend County, TX (7.2%), and Osceola County, FL (7.0%). Kotkin comments that "It now seems clear that the preference for single-family houses did not change in the recession, but was just stunted by it. With construction starts up again—more than two-thirds single family—this trend is beginning to re-assert itself." Mortgage lending is now at its highest level in five years. And the return of housing development in suburbs and exurbs is taking place even in the trendy San Francisco Bay Area and the formerly ailing Inland Empire east of Los Angeles.

Last spring Cox also analyzed Census data showing that U.S. suburbs are approaching jobs-housing balance. Suburban areas with more than one million population in 2011 now have 0.89 jobs per resident, compared with 1.35 in historic core municipalities. Overall, for major metro areas, 65% of all jobs are now in the suburbs, where 74% of all workers live. As Cox points out, prior to widespread auto ownership, metro areas were monocentric, with commuters riding streetcars and buses from suburbs to jobs in the central city. But thanks to cars and expressways, jobs have followed people to the suburbs in a major way. Again, this has major implications for urban transportation. It helps to explain why average commute times have not increased over the decades, despite increased traffic congestion. People and businesses relocated, facilitating shorter commutes in a polycentric metro area. And from the standpoint of transit systems, the old radial pattern, with all lines converging on "downtown," is now less efficient than a grid system that connects everywhere to everywhere.

Sound urban transportation policy requires a solid grounding in how and where people and businesses choose to locate. Propagating (or believing) myths about the death of suburbs does not help in achieving cost-effective transportation.

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High-Speed Rail and Opportunity Costs

Matt Ridley, one of the most cogent thinkers on current issues of science, economics, and policy, wrote a provocative blog post in July about the planned £50 billion (that's about $75 billion) HS2 project, aiming to provide faster passenger rail trips between London and Birmingham. ("Hadrian's Wall Was a Marvelous Mistake; So Is HS2," www.rationaloptimist.com/blog/hadrian's-wall-was-a-marvellous-mistake-so-is-hs2.aspx)

His basic point, first illustrated with the Romans' wall separating England from the savage north, is that we need to take seriously what economists call "opportunity costs" when considering massive infrastructure projects. In the case of HS2, the main benefit of the higher speed is to reduce the journey time to Birmingham by 20 minutes, 17 years from now. An economist will point out that £50 billion is a scarce resource that has numerous alternative uses. Choosing to use it for purpose A means the £50 billion is not available for projects B, C, D, etc.

To illustrate the point in connection with HS2, Ridley limits his proposed alternative uses to the transportation sector. Here is his list of what else that £50 billion could buy:

  • £5 billion toward a large backlog of potholes and other deferred maintenance on highways;
  • £2.6 billion on a whole set of improvements to conventional passenger rail (called 51M), with an estimated benefit/cost ratio greater than 5.0 (vs. an estimated B/C for HS2 barely above 1.0);
  • £7.4 billion for other passenger rail improvements;
  • £10 billion on highway improvements to reduce congestion and increase safety, for the 95% of Brits who use highways rather than trains for inter-city travel;
  • £17 billion for the much-needed third runway at Heathrow;
  • £6 billion for improving UK broadband networks, to increase the attractiveness of telecommuting.

Ridley also points out that most of these improvements could be completed within the next decade, rather than nearly 20 years from now in the case of HS2. I hold no particular brief for Ridley's project list, but I think it amply illustrates the principle of opportunities forgone when public funds are concentrated on a single mega-project.

Interestingly, Public Works Financing reports that Brazil's proposed $15 billion high-speed train between Rio and Sao Paulo, which has failed several times to attract serious PPP bids, is likely to be "replaced with a plan for a medium-speed train, cutting the cost in half." And Innovation Briefs editor Ken Orski recently pointed out that the U.S. DOT seems to have dropped the term "high-speed rail" to describe the Administration's passenger rail program, opting instead for "higher-performing rail."

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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.

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/.

9th Annual Preserving the American Dream Conference, Oct. 27-29, Doubletree Washington, Washington, DC (Baruch Feigenbaum and Robert Poole speaking). Details at: www.americandreamcoalition.org/?page_id=3250

FIU/MIT Transportation Infrastructure Sustainability Summit, Oct. 29, Kovens Conference Center, FIU, Miami, FL (Robert Poole speaking). Details at www.ohlsc.fiu.edu/sustainability

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

Living Up to Return Expectations, LP Summit 2013, Dec. 5-6, Westin Times Square, New York, NY (Robert Poole speaking). Details at: www.peimedia.com/Product.aspx?cID=7441&pID=305778&contType=2

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News Notes

Millenials' Travel Not that Different, Says UCLA Study. A research paper from UCLA researchers Evelyn Blumenberg, Brian Taylor, et al. looks into the question of whether the Millennial generation is driving less than prior generations. They find that economic factors, which have hit younger people harder than others, are the primary determinants of driving behavior, and that new information and communications technologies are complements to, rather than substitutes for, driving among younger Americans. "What's Youth Got to Do with It? Exploring the Travel Behavior of Teens and Young Adults" was released as UCTC-FR-2012-14 by the University of California Transportation Center.

E-ZPass Turns 20. The program that coordinates inter-operable electronic tolling in 15 eastern states celebrated its 20th anniversary this year. Last year the 14 million customers in those states made 2.4 billion E-ZPass transactions, with a market share of 77% of all toll transactions in member states being done via the 25 million E-ZPass transponders. The organization is working to expand electronic tolling inter-operability to other states, with Florida nearing such an agreement.

Hong Kong's Profitable Mass Transit Railway in Media Spotlight. Two recent articles have highlighted the hugely successful MTR Corporation, the government-owned rail transit agency in Hong Kong. The Atlantic's Neil Padukone focused on how large-scale land-ownership by MTR generates a major fraction of its overall revenue—the kind of "value capture" that US subway systems can only dream about. Yet farebox revenue alone covers 185% of subway operating costs, a percentage unheard of anywhere else. Jeffrey Ng's Wall Street Journal article highlighted MTR's move overseas, bidding to run subways in Asia, Australia, and Europe. Both articles are well worth reading.

Toll Road Sector Mostly Unchanged from Last Year—Moody's. Rating agency Moody's Investors Service released its 7th annual report on the 42 US toll roads whose bonds it rates. Based on this set of toll roads, it finds that 2012 saw a 0.5% increase in transactions and a 7.7% increase in revenue per transaction, which improved liquidity significantly over 2011. There was a significant increase in median debt per toll road mile, but median debt per toll transaction was almost unchanged from 2011.

I-5 Columbia River Toll Bridge Revived. Despite the Washington State legislature's failure to approve funding for what was to have been a bi-state project, Oregon DOT has produced a revived plan to fund the bridge itself. On Sept. 19th, Washington's attorney general ruled that his state can enter into an agreement with Oregon to build the bridge with tolls being collected by Oregon in both directions. The revised plan needs Washington Gov. Jay Inslee's approval as well as the approval of the Oregon legislature.

Private Passenger Rail Projects Moving Forward. Private-sector projects to develop higher-speed passenger rail in Florida and Texas are moving forward. All Aboard Florida recently reached agreements on right-of-way with the Orlando/Orange County Expressway Authority and for a station at Orlando International Airport, among the last milestones needed for the project to proceed. Less far along is Texas Central High-Speed Railway, a joint US-Japanese venture that plans initial service between Fort Worth and Dallas, with follow-on service from Dallas to Houston.  TCHSR says environmental studies will begin early next year.

Buyer Found for Bankrupt Brisbane Tunnel. The $2.8 billion CLEM7 toll tunnel project in Brisbane filed for bankruptcy after its first year of operation, due to traffic levels far below those forecast in its financing model. Fortunately for Australian taxpayers, the project was a toll concession, so investors have taken the loss. And as usually happens in such cases, a buyer came forward and negotiated a deal to acquire the property for $618 million. The agreement reached early this month still requires government approval. The facility has remained in operation during the period of receivership.

NCHRP Report on Tolling and Pricing. The National Cooperative Highway Research Program has released NCHRP Report 722, "Assessing Highway Tolling and Pricing Options and Impacts," in two volumes. It is available through the Transportation Research Board.

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Quotable Quotes

"The only strategy that can solve for congestion is an operational strategy using the congestion pricing concept with deployment strategies like priced managed lanes. Not only do priced managed lanes provide a mobility option for automobile customers; they also provide a reliable transit corridor for buses at a much lower cost than traditional fixed-rail transit."
—Matthew Click, quoted in "HNTB Exec Makes Sharp Case for Toll Managed Lanes," Tollroadsnews.com, April 26, 2013 (www.tollroadsnews.com/node/6526)

"It is well documented that pension funds, private equity funds, and other alternative sources of capital are able and willing to put billions into infrastructure projects in this country. Now, more than ever, we as policymakers should be creating an environment and providing tools to incentivize these pools of funding infrastructure projects."
—Sen. Jay Rockefeller (D, WV), hearing of Senate Commerce Committee, Sept. 24, 2013

"The real fallacy of the [DOT Strategic] Plan is the belief that low-density development 'forces' people to drive, when it in fact liberates people with automobiles to have access to jobs, low-cost housing, and other consumer goods that they couldn't have if they didn't have cars. We can't simply rebuild cities to early 20th-century standards and expect people to stop driving. This leads to the second major fallacy of the plan, which is an assumption that urban redesign would allow people to do everything they do today with less driving. Many urban planners fervently believe this myth, yet it was disproven by certain other urban planning researchers as early as 1995. Many, if not most, economists who have studied this issue agree that urban design has little impact on driving."
—Randal O'Toole, "DOT's Livability Plan Ignores Real Life," The Antiplanner, Sept. 16, 2013

"Although the evidence on the specific outcomes on intensification [increased density] is currently limited, the weight of evidence reviewed here suggests that an inelastic negative relationship between population density and vehicle use is common, across several developed countries. This implies that planning policies which increase population densities will, under 'normal circumstances,' reduce overall vehicle use but increase its concentration in the intensified areas, causing a range of local environmental and social problems, unless significant steps are taken to constrain the generation of additional traffic. It is important that this paradox of intensification is recognized, to avoid false expectations."
—Steve Melia, Graham Parkhurst, and Hugh Barton, "The Paradox of Intensification," Transport Policy, No. 18, 2011

"Britain needs more houses . . . the number of households in England alone is rising by roughly 230,000 per year. And yet the number of new homes build in England in 2012 was just 107,820 . . . . Those that are built are tiny: since the 1920s the size of the average new house has halved, reckons the Royal Institute of British Architects. They are unusually costly, too. Per square meter, housing costs more in London than anywhere else in Europe except Monaco. . . . The real problem is not a shortage of demand but a shortage of suitable land. Thanks to Britain's strict green belts, developers are all but banned from building on the fringes of big cities. . . . In some places—around London or near Oxford and Cambridge—land with planning permission can cost 200 times more than agricultural land."
—"Road Blocks," The Economist, Aug. 31, 2013

"[P]icture two identically sized freighters. One is full of crude oil from the Persian Gulf, the other full of iPads from China. Since an iPad comes in a box with padding, the same volume of oil weighs much more, so the oil tanker will be much heavier, and as a result, will sit lower in the water and require more clearance from the sea floor of the port. These are the costs that the Harbor Maintenance Tax is supposed to recoup—the costs of dredging deep draft ports for the vessels with the deepest draft. But the way the HMT is constructed, the freighter full of tablet computers would pay about a thousand times more in taxes than would the oil tanker . . . even though the freighter with tie iPads has a more shallow draft and therefore is using less of the Corps' dredging service. From this perspective (the 'benefit taxation' model, upon which the gasoline, diesel and aviation excise taxes were constructed), the HMT as currently structured makes little sense and bears almost no resemblance to a true 'user fee'."
—Jeff Davis, "The Inland Waterways Trust Fund and the Harbor Maintenance Trust Fund," Transportation Weekly, Sept. 18, 2013

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





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