Surface Transportation Innovations Newsletter

Surface Transportation Innovations #14

Topics include: Reason's toll truckways study, tolls and the Federal highway reauthorization, transportation costs and sprawl, and other breaking news stories.

In this Issue:


Report Identifies Best Toll Truckways Pilot Projects

In June 2002, two Reason colleagues and I accomplished the seemingly impossible. We persuaded both the American Trucking Associations and the National Safety Council – traditionally on opposite sides of the fence over big-rigs known as Longer Combination Vehicles – to endorse a concept we called Toll Truckways. Our June 2002 report (www.reason.org/ps294.pdf) proposed that these highly productive trucks (long doubles and triples) be allowed to operate into states where they are currently banned by federal law, provided that they operate on new, barrier-separated truck-only lanes designed for heavy-duty service. Our study reported the results of extensive simulating modeling (at CCNY) which indicated that many such truckways would add so much value for trucking companies that they could be self-supporting from tolls. House Transportation & Infrastructure Committee Chairman Don Young (R, AK) liked the idea so much that he arranged a room for our news conference in the Rayburn building, and personally expressed his interest in the idea.

Fast forward 20 months. The pending House reauthorization bill, TEA-LU, contains a provision for truck-only lanes, but thus far no specifics. To help Chairman Young and the Committee fill in the details, Reason is today releasing a new study which identifies the most promising long-distance Interstate corridors where toll truckways would make sense, and offers specific suggestions for what’s needed in TEA-LU to create a pilot program to test the concept during the coming six years. You can find the full report at www.reason.org/ps316.pdf. We have also posted an 8-page summary version at www.reason.org/316polsum.pdf.

What co-author Peter Samuel and I set out to do was to comb through mountains of data to identify which specific trucking corridors seem most likely to succeed as toll truckways, as defined in our 2002 study. The key value-driver of that concept is to give the users (trucking companies) something much more valuable than they can get today, namely the ability to haul up to twice as much payload per driver. That’s what long doubles and triples can do, if allowed to operate into states now covered by the 1991 federal freeze on LCVs, which limited their use to the handful of western states and eastern turnpikes which had allowed them up till then. So we pored over maps showing the existing LCV routes, and mined data in a massive goods-movement database provided to us by Wilbur Smith Associates.

We also went directly to potential key customers of toll truckways: long-haul trucking companies that already operate LCVs in states where they are legal. We surveyed them to ask which routes they would most like to have added to the fledgling LCV network. We added our own missing links to their suggestions, and ended up with 39 possible corridors with high current and projected truck traffic and some potential as new LCV routes. We crunched the numbers, reducing that set to 20 semi-finalists and then the 10 best routes. “Best,” in our analysis, means most likely to be financially feasible as toll corridors and therefore characterized by relatively higher revenues and lower costs to construct than other corridors. And the winners are:

  • I-80 across Iowa and Illinois, linking current LCV operations in the West with those on the Indiana and Ohio turnpikes.
  • I-90 from Cleveland to the New York state line, linking LCV operations on the Ohio Turnpike and New York Thruway.
  • I-15 in California, from the logistics center in Barstow to the Nevada line (where LCVs now operate).
  • I-75 from Detroit to Toledo, a spur off the Ohio Turnpike.
  • I-75 from Toledo south to Florida, connecting both to Tampa and to the Florida Turnpike (where long doubles are legal).
  • I-5 the length of California’s Central Valley.
  • I-94 from Chicago to the Twin Cities.
  • I-65 from Gary Indiana (on the Indiana Turnpike) to Nashville.
  • I-81 from Knoxville, TN to Harrisburg, PA, both major logistics centers.
  • I-76, the Pennsylvania Turnpike, which links directly to the LCV-friendly Ohio Turnpike.

Our study also contains specific recommendations for legislative provisions needed to enable pilot toll truckways to exist, most importantly the legalization of LCV operations on such truckways in states currently subject to the LCV freeze, the ability to charge tolls on the truckways, and a mechanism for interstate compacts to facilitate the majority of such truckways which need to involve more than one state. Chairman Young has just re-affirmed his interest in the concept, so we look forward to the House mark-up of TEA-LU.

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How Tolls Can Get Us to a Highway Reauthorization Consensus

The standoff over how big the federal surface transportation program should be continues. The Senate has passed S.1072, calling for a $318 billion program ($255B for highways, $57B for transit) over six years, but with no fuel-tax increase. The House’s TEA-LU is still officially at $375B (funded partly by a sizeable fuel-tax increase), but over the past week or two that number seems no longer cast in concrete, particularly in light of the Administration’s veto threat over the Senate bill, which the Administration considers an unacceptable drain on general federal revenues. Though S.1072 passed by more than the two-thirds required to override a veto, it’s not clear that GOP leadership in the two houses would actually vote to overturn the President’s first during a presidential election year. Which means the stalemate continues.

In an article in the forthcoming (April) issue of Public Works Management & Policy, I suggest that aggressive expansion of permission for states to use tolls could bridge much of the gap between the White House and congressional transportation advocates.(Go to www.sagepub.com/JournalSample.aspx?pid=137 for information on how to get a sample issue; I’m not sure when the April issue will be posted.) The long and short of it is my estimate that a combination of toll-friendly policies could expand highway investment by something like the $50 billion gap separating the Administration and Senate bills. And since a program the size of the Senate one now seems like the largest that will emerge, this approach really should be pursued.

The Administration’s original SAFETEA bill included several key toll-friendly provisions:

  • The Interstate Reconstruction pilot program, allowing three states to use tolls to rebuild major Interstates (included in S.1072);
  • The Variable Toll Pricing program, which would mainstream TEA-21’s Value Pricing Pilot Program, allowing all states to use variable pricing to address congestion problems (a version of this is in S. 1072);
  • Private Activity Bonds, under which companies doing toll roads under public-private partnership agreements would be allowed to issue up to $15 billion in tax-exempt toll revenue bonds, on a level playing field with state toll agencies (also included in S.1072).

In addition, two other key provisions under discussion are Rep. Mark Kennedy’s FAST lanes proposal and Chairman Young’s truck-only lanes title (the latter discussed in the previous article). The FAST Act would permit all states to add electronically tolled lanes to congested Interstates, but require them to eventually remove the tolls. As I point out in the PWM&P article, that provision would likely cause states with large existing toll systems to decline to participate. And that might cut in half my estimate of $28-50 billion of net new investment if all states took full advantage of FAST lanes (see www.fluor.com/fastlanes for details of my estimate).

Thus, some very careful blending of these various provisions is needed, to give states a menu of options for making use of tolls and public-private partnerships to expand highway investment. The Senate adopted a last-minute compromise blending of FAST and Variable Toll Pricing, which has some important flaws. But further efforts along these lines could give states the means to tap into the billions in private capital that is able and willing to invest in sound toll projects.

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UCLA Dings STPP Report on Transportation Costs and Sprawl

Last issue I summarized two critiques of a paper from the Surface Transportation Policy Project from last July purporting to show that transportation costs pose a large and growing burden to low-income people, especially in low-density metro areas where transit cannot handle most trips. Now comes another critique, this one from Evelyn Blumenberg at UCLA’s urban planning department. She reviewed expenditure data from the Bureau of Labor Statistics and found that the lowest-income quintile spends the least on transportation (17% of income, compared with 18 to 21% for other quintiles). In addition, she tracks this percentage over time, finding that it has generally declined since 1984 for the low-income quintile.

As Blumenberg points out, “Households make trade-offs between housing and transportation costs that include time costs.” And “one cannot draw conclusions regarding the burdens of transportation costs without also considering the benefits of transportation expenditures.” She concludes, “Claims that excessive transportation costs, and more specifically automobile ownership, are directly responsible for reducing home ownership among low-income households are not supported by the data.”

This article was published in Issue 23 of the University of California Transportation Center’s excellent periodical, Access. (www.uctc.net/access/access.asp)

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Correction re London’s Congestion Pricing

In Issue #13, there was a glitch in my report on London’s congestion pricing, which a sharp-eyed reader pointed out. Somehow I wrote that “travel times have markedly increased” within the pricing zone, when what I meant to say was that travel times have markedly improved. That’s quite a different outcome, needless to say! In fact, the new first-year report on London’s congestion pricing program finds that vehicle speeds have increased by 14% and congestion is down by 30%.

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Transportation Finance Summit Next Week

Over 250 people have signed up for the International Bridge, Tunnel and Turnpike Association’s Transportation Finance Summit at the Grant Hyatt Washington next Thursday and Friday, March 4 and 5. But I’m told there are still places available if you aren’t yet among them. An impressive array of speakers, both domestic and from overseas, will discuss an array of highway financing tools. I’m one of the speakers, but I’d be there in any case, given the great line-up of talent and expertise that IBTTA has assembled. Reason Foundation is one of the co-sponsors, along with the American Public Works Association, American Road & Transportation Builders Association, the Eno Transportation Foundation, and others. For more information, and to register on-line, go to: http://ibtta.techriver.net/website/article.asp?id=247#.

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.

Surface Transportation

In the field of surface transportation, Poole has advised the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, National Economic Council, Government Accountability Office, and state DOTs in numerous states.

Poole's 1988 policy paper proposing privately financed toll lanes to relieve congestion directly inspired California's landmark private tollway law (AB 680), which authorized four pilot toll projects including the successful 91 Express Lanes in Orange County. More than 20 other states and the federal government have since enacted similar public-private partnership legislation. In 1993, Poole oversaw a study that coined the term HOT (high-occupancy toll) Lanes, a term which has become widely accepted since.

California Gov. Pete Wilson appointed Poole to the California's Commission on Transportation Investment and he also served on the Caltrans Privatization Advisory Steering Committee, where he helped oversee the implementation of AB 680.

From 2003 to 2005, he was a member of the Transportation Research Board's special committee on the long-term viability of the fuel tax for highway finance. In 2008 he served as a member of the Texas Study Committee on Private Participation in Toll Roads, appointed by Gov. Rick Perry. In 2009, he was a member of an Expert Review Panel for Washington State DOT, advising on a $1.5 billion toll mega-project. In 2010, he was a member of the transportation transition team for Florida's Governor-elect Rick Scott. He is a member of two TRB standing committees: Congestion Pricing and Managed Lanes.

Aviation

Poole is a member of the Government Accountability Office's National Aviation Studies Advisory Panel and he has testified before the House and Senate's aviation subcommittees on numerous occasions. Following the terrorist attacks of Sept. 11, 2001, Poole consulted the White House Domestic Policy Council and the leadership of the House Transportation & Infrastructure Committee.

He has also advised the Federal Aviation Administration, Office of the Secretary of Transportation, White House Office of Policy Development, National Performance Review, National Economic Council, and the National Civil Aviation Review Commission on aviation issues. Poole is a member of the Critical Infrastructure Council of the Los Angeles Economic Development Corporation and of the Air Traffic Control Association.

Poole was among the first to propose the commercialization of the U.S. air traffic control system, and his work in this field has helped shape proposals for a U.S. air traffic control corporation. A version of his corporation concept was implemented in Canada in 1996 and was more recently endorsed by several former top FAA administrators.

Poole's studies also launched a national debate on airport privatization in the United States. He advised both the FAA and local officials during the 1989-90 controversy over the proposed privatization of Albany (NY) Airport. His policy research on this issue helped inspire Congress' 1996 enactment of the Airport Privatization Pilot Program and the privatization of Indianapolis' airport management under Mayor Steve Goldsmith.

General Background

Robert Poole co-founded the Reason Foundation with Manny Klausner and Tibor Machan in 1978, and served as its president and CEO from then until the end of 2000. He was a member of the Bush-Cheney transition team in 2000. Over the years, he has advised the Reagan, George H.W. Bush, Clinton, and George W. Bush administrations on privatization and transportation policy.

Poole is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on privatization, Cutting Back City Hall, published by Universe Books in 1980. He is also editor of the books Instead of Regulation: Alternatives to Federal Regulatory Agencies (Lexington Books, 1981), Defending a Free Society (Lexington Books, 1984), and Unnatural Monopolies (Lexington Books, 1985). He also co-edited the book Free Minds & Free Markets: 25 Years of Reason (Pacific Research Institute, 1993).

Poole has written hundreds of articles, papers, and policy studies on privatization and transportation issues. His popular writings have appeared in national newspapers, including The New York Times, The Wall Street Journal, USA Today, Forbes, and numerous other publications. He has also been a guest on network television programs such as Good Morning America, NBC's Nightly News, ABC's World News Tonight, and the CBS Evening News. Poole writes a monthly column on transportation issues for Public Works Financing.

Poole earned his B.S. and M.S. in mechanical engineering at Massachusetts Institute of Technology (MIT) and did graduate work in operations research at New York University.