Advice for Mary Peters

Transportation Secretary nominee can lay the basis for a new era in transportation

Like most readers of this newsletter, I was delighted to learn that Mary Peters had been nominated by President Bush to be the next Secretary of Transportation. During her time as Federal Highway Administrator, and since then in the private sector, she has been an outspoken supporter of tolling and public-private partnerships. She has contrasted the customer-serving behavior of market-driven telecommunications networks with the inward-looking focus of much of the state-owned highway sector. And she has emphasized the need to rethink the federal role in surface transportation.

That’s all music to our ears, but by the time she is confirmed by the Senate, Mary Peters will have a little over two years of this Administration remaining-not a lot of time to re-shape surface transportation, especially since the next reauthorization bill is several years beyond that. So her challenge as Secretary will be to continue to lay the basis for a new era in transportation, making maximum use of the tools available. Here’s one example.

Shortly before leaving office, Secretary Mineta unveiled a sweeping national congestion-reduction strategy. One of its key elements is the Corridors of the Future Program (CFP): multi-state corridors for freight and passenger travel that are impacted by congestion and can be improved via public-private partnerships. DOT posted a notice in the Federal Register on Sept. 5th inviting preliminary applications for what could be as many as five such projects.

Unlike most federal programs, this one does not offer gobs of new money. Instead, what DOT has to offer states and their private partners is:

  • Coordination of inherently complex multi-state projects;
  • Inclusion in the Administration’s list of environmental streamlining priority projects;
  • Use of SEP-15 to grant waivers that facilitate PPPs;
  • Access to the TIFIA and Private Activity Bond programs;
  • Priority access to existing federal tolling programs.

While those are all useful things, it’s not clear to me that they will be sufficient to make any of these projects gel. Two core elements of CFP are goods-movement and PPPs. That means charging tolls to trucks—and none of the assistance listed above will make paying tolls any easier for the trucking industry to accept. But unless the most important (from a revenue standpoint) customers are willing to use a CFP project, it will not be financially viable.

The underlying rationale for the Administration’s overall initiative is congestion reduction. And while congestion is increasing in some of the key truck-route Interstate corridors, it’s not clear that (outside of urban areas like Atlanta and Los Angeles) truckers are prepared to pay very much for reduced congestion. Far more important to major trucking companies are higher payloads, which translate directly into higher productivity (more ton-miles per driver and per rig). There are strong indications that such firms would pay significant tolls in exchange for permission to use higher-capacity rigs (“longer combination vehicles” such as long doubles and triples) in key states where such rigs are banned, either by state or federal law. The 1991 ISTEA reauthorization law froze all state size and weight regulations as they existed as of that time.

Dedicated toll truck lanes engineered to take LCVs could dramatically expand the routes on which such bigger rigs could operate, and would be ideal candidates for the CFP. The simplest to do would be missing-link projects that involved only two states. For example, putting toll truck lanes on I-90 to link the Ohio Turnpike with the New York Thruway (which would involve only Ohio and Pennsylvania), adding toll truck lanes to I-75 between Tampa and Atlanta (just Georgia and Florida) or I-75 from Atlanta to Knoxville (Georgia and Tennessee), and adding toll truck lanes to I-80 across Iowa and Illinois. Each of these would link to turnpikes or Interstates that already allow LCV operations, and each is already a major truck route. There are other corridors that involve five or six states (e.g., I-70 and I-81) that make equally good sense, but would be far more complex, given the number of states that would have to agree.

But the key to making any of these happen would be legislation to permit exemptions from the 1991 LCV freeze for such projects. That’s not as impossible as it may sound. Highway safety groups have long opposed any expansion of LCV operations, but in 2002 the National Safety Council endorsed Reason Foundation’s proposal for LCV-friendly toll truckways, separated from regular Interstate lanes by concrete barriers. Railroads have likewise opposed any expansion of LCVs, but the railroads have their own hopes for investment-friendly federal legislation, and may be amenable to a deal.

Here is where leadership from a new, market-oriented DOT Secretary could make all the difference. Over the past year the Administration has already done outreach to retailers and shippers over the need for greater goods-movement capacity and a higher-performance highway system. DOT could build on those efforts to stimulate a goods-movement coalition in favor of high-productivity toll truck lanes as a model to be tested by CFP. Who better than Mary Peters to take on this challenge?

Robert Poole is director of transportation studies at Reason Foundation and has advised the last four presidential administrations on transportation issues. An archive of his work is here and Reason’s transportation and tolls research and commentary is here.