Surface Transportation News #140

Surface Transportation Innovations Newsletter

Surface Transportation News #140

Traffic rebounds in first-quarter 2015; Interstate tolling controversy

In this issue:

Traffic Rebound: First-Quarter VMT at Record Level

The Federal Highway Administration’s latest monthly report on vehicle miles of travel (VMT) found that in first-quarter 2015, Americans drove 720.1 billion VMT, up 3.9% over first-quarter 2014 and the highest level reached in any year’s first quarter (2006’s record high was 705.7 billion VMT). The increase was even greater in the 13 western states, whose VMT increased 5.3% in March compared with the previous year.

These increases are due to the economic recovery, after America’s deepest recession since the Great Depression. In a presentation at the annual meeting of the American Planning Association in Seattle, in April (prior to the latest FHWA numbers being released in mid-May), commuting expert Alan Pisarski provided some perspective on what is happening with U.S. trip-making. He pointed out that median income as of 2013, in inflation-adjusted dollars, was still well below the level of 2007. And employment (share of workforce actually working) was also well below that of 2007. Yet even with this weak economic recovery, the 2014 VMT numbers were trending upward.

It’s important to keep in mind, as Pisarski reminded his audience, that the long-term trend of increasing VMT per capita (from the 1960s through 1990s) is almost certainly over. That increase came about due to the Baby Boom, the huge movement of women into the work force, the car boom during the same period, etc. Anti-auto people these days focus on the peaking and subsequent modest decrease in VMT/capita to argue that the need for increased highway capacity is over. But how much capacity we need is a function of total VMT, not per capita VMT, and with the economic recovery continuing, total VMT is growing again, as more people are employed and hence drive more. Total VMT seems well-correlated with population growth and economic growth.

Pisarski also pointed out that every competent projection, including detailed work by FHWA’s Freight Analysis Framework, shows truck traffic increasing over the next 30 years at about twice the rate of car traffic. Between 2011 and 2040, truck ton-miles are expected to grow by 66%, and the value of truck freight by 103%.

In looking ahead, Pisarski identified five trends that will affect the growth of VMT. They are:

  1. Diminished growth in the available work force;
  2. Increased specialization of demands and the need to attract skilled workers;
  3. Diminishing differences between men and women and among racial and ethnic groups in work travel;
  4. High-value goods and high-value people;
  5. Job/worker ratios in the suburbs and center cities are both moving toward 1.0.

In explaining these factors, his point was that the future of travel will not be a simple extrapolation of the past.

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Interstate Tolling Stirs Controversy

There is a growing interest in tolling as part of the solution to under-investment in America’s highway system. But getting to “yes” on using this powerful financing tool will depend on a far more carefully drafted policy than most advocates are now talking about.

Brookings Institution analysts Joseph Kane, Patrick Sabol, and Robert Puentes posted a useful piece on April 6th, “Tolls on the Rise as Highway Funding Dries Up.” They cited federal statistics showing that over the decade from 2003 to 2013, the miles of tolled U.S. highway increased by more than 15% to 5,400 miles. By comparison, total highway miles grew only 3.6% over that same period. They also reminded readers that for the second year in a row, the Obama Administration’s transportation proposal includes lifting the long-standing federal ban on tolling “existing” Interstates.

Over the past year or so there has been growing interest in Connecticut in bringing back tolls, which were used originally to build much of I-95 in that state (known as the Connecticut Turnpike when I lived there in the late 1960s). Gov. Dannel Malloy has talked about toll-financed widening of I-95, which also needs major reconstruction and bridge replacement. Legislators in that state still seem enamored of the idea of border tolls, hoping to make out-of-staters pay tolls while locals would drive for free-an idea that almost certainly violates the Interstate Commerce clause of the Constitution.

And just last month Rhode Island Gov. Gina Raimondo announced a plan to issue $700 million in bonds for bridge repairs, paid for by tolls charged only to trucks using bridges on I-95, I-195, and I-295, as well as several state highways. The plan is aimed at reconstructing or replacing 150 structurally deficient bridges and improving another 500. Also last month, two West Virginia state senators proposed “adding tolls” to the state’s 23 miles of I-81, to raise new revenue for the state’s ailing transportation infrastructure.

All these state proposals-besides not being legal under current federal law-face fierce opposition from the American Trucking Associations, whose long-standing position is to prevent the spread of tolling, on several grounds: that it costs too much to collect tolls compared with fuel taxes, that charging both tolls and fuel taxes on the same road amounts to paying twice, and that tolls are often used as cash cows by legislatures and state DOTs.

ATA is the primary force behind a coalition called the Alliance for Toll-Free Interstates, which has denounced the Administration’s Interstate tolling proposal, pointing out that, “The plan would also let states redirect toll revenue to completely unrelated projects, abusing public trust and exploiting highway drivers with a tax on Interstates to pay for trolleys, public transit, and unspecified environmental projects, all without solving the transportation funding problem.” ATA was also quick to oppose the Rhode Island proposal, in that case for singling out trucks as the only highway users required to pay tolls.

I’m sympathetic to the truckers’ arguments, despite being convinced that tolls as a pure user fee are far superior to fuel taxes for highway funding. It is almost certain that open-ended Interstate tolling, along the lines of the Administration proposal, will not pass muster with Congress. But that said, what might it take to gain the support of highway user groups such as AAA and ATA?

The challenge is to create a genuine value proposition, not merely for state DOTs and their transportation budgets but for the highway users expected to pay the bills. That could involve a number of provisions that take seriously those users’ concerns. For example:

  • Don’t ever “add tolls” to an existing highway simply as a means to capture revenue. Use tolls only to reconstruct an aging highway or bridge and properly maintain it thereafter.
  • Don’t start charging tolls until the replacement pavement or bridge is finished and ready to accept traffic.
  • Don’t play games by trying to make only some users pay tolls. All highway users benefit from the highway, so all should be paying for it.
  • Provide rebates of the fuel taxes paid by those using the newly tolled highway or bridge. (This was cumbersome to do in the era of cash tolling, but is simple to do with today’s all-electronic tolling.)
  • Use only all-electronic tolling, where the cost of collection via transponders can be less than 5% of the revenue generated, vastly below the 20-25% in the cash tolling era.
  • Guarantee that the toll revenues are used only for the capital and operating costs of the newly tolled highways (or set of highways within a state-e.g., all its long-distance Interstates).

Provisions such as these should be added to the existing three-state pilot program for reconstructing/replacing aging, worn-out Interstate highways. Other revisions should include increasing the number of states to at least 10, and adding a use-it-or-lose-it provision to prevent a state sitting on its slot without using it.

I’ll close by refuting a very common misconception. The Wall Street Journal‘s Capital Account columnist Greg Ip, in a May 21st column on infrastructure spending, matter-of-factly wrote, “The Interstate highway system, for example, only needs to be built once,” so infrastructure priorities can and should be elsewhere. Wrong! Originally built with a 50-year design life, the aging Interstates are wearing out, and nearly all will have to be replaced with modern pavement and bridges over the next two decades. The cost will be at least $1 trillion. And that is where toll financing offers a way out of an otherwise impossible funding dilemma.

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Will Virginia Forego P3 Benefits on I-66?

Virginia’s planned I-66 project would add express toll lanes to 25 miles of congested I-66 outside the Capital Beltway. Over the last several months, it has become more and more apparent that Virginia DOT Secretary Aubrey Lane is gearing up to have the state fund and manage the $2.1 billion project, rather than doing it as a long-term public-private partnership (P3) like the I-495 and I-95 express lane projects. After hinting at taking the project in-house in statements before the Commonwealth Transportation Board this spring, Layne upped the ante in a May 19th briefing. It included a summary chart, apparently from a financial analysis by Public Financial Management, claiming that Virginia would benefit in two ways from funding the project itself as a design-build (DB) procurement, rather than as a toll concession. First, he said, the state’s up-front public investment in the DB project would be about $500 million, versus about $950 million for a toll concession. Second, by doing the project itself, Virginia hopes to capture long-term excess toll revenues in the range of $200 to $500 million.

Needless to say, the more than a dozen companies that have expressed interest in doing the project as a P3 would like to see the details and assumptions that underlie those conclusions. I can think of a whole array of questions to ask and assumptions that should probably be challenged, so what follows is necessarily a preliminary critique, without benefit of the unreleased PFM report.

Point number 1 is that the VDOT analysis implicitly assumes the project’s construction cost is the same $2.1 billion regardless of whether it’s done as a DB project or as DBFOM (toll concession). There is powerful evidence against that assumption. In the February issue of this newsletter, I summarized a research paper presented at the International Conference on Public-Private Partnerships last month at UT-Austin documenting substantial cost savings-totaling nearly $2 billion-on two express toll lane projects in Texas: the LBJ (I-635) project in Dallas and the North Tarrant Express project in Fort Worth. After explaining the details, the paper summed up why this occurred as follows:

“The main drivers of innovation and efficiency [leading to lower cost] are the integration of activities (design, construction, finance, operation, maintenance, revenue management) with a life-cycle perspective, plus the private enterprise incentive when interests are properly aligned between the Private Developer and the Public Owner, to achieve the project purpose. . . . These innovation and efficiency drivers are more powerful and produce even better results when revenue risk is effectively transferred to the Private Developer.”

The I-70 Value for Money Report prepared for HPTE (Colorado DOT’s P3 unit), explains it as follows: “Approaching the market as if there is a single fixed cost of delivery of a particular asset or service creates a division of the cost between the various participants in a transaction [which] becomes a zero-sum game.” It cites the flexibility to develop innovative solutions in a P3 procurement as a key to adding value. Several pages later it presents a table of 10 recent DBFOM projects in the United States and Canada, in each case comparing actual project cost with the cost estimated by the procuring agency if the project were developed traditionally (the Public Sector Comparator). For the six in which the comparison was for the initial project (construction) cost, the results were as follows:

I-595, Florida 14.3% lower than PSC
A30, Quebec 33% lower than PSC
FasTracks, Denver 13% lower than PSC
Port Tunnel, Miami 12.5% lower than PSC
Goethals Bridge, New York 13.7% lower than PSC
Presidio Parkway, San Francisco 20% lower than PSC

The other four comparisons were of life-cycle costs, in which the measure is the net present value of all costs over the lifetime of the concession period. Those results were:

SE Stoney Trail, Alberta 63% less than PSC
5 highway projects, Alberta 27% less than PSC
Windsor Essex Parkway, Ontario 15% less than PSC
LBJ Express, Dallas 15% less than PSC.

A second factor that may or may not be included in the PFM/VDOT analysis is proper valuation of the risk transfer involved in the two alternatives. In a design-build project, the DB contractor typically takes on the risks of both late completion and construction cost overruns, an important benefit. But in addition to those two, in a DBFOM concession, the company also takes on operating and maintenance risks. And if the DBFOM is of the toll concession kind (the only kind legal in Virginia), the company also takes on the traffic and revenue risk-and that, too, must be quantified in a proper Value for Money analysis. It’s not clear from the summary numbers released by VDOT whether they include any valuation of risk transfer. Nor is there any mention of valuing the corporate income tax revenue that a concession company would pay to Virginia during all the years in which it was making profits during the life of the concession agreement.

And that question-profits-brings us to what Secretary Layne is dangling before legislators and taxpayers: the potential of $200-$500 million in surplus revenues during the out-years, when the express toll lanes are mature and are having to charge high tolls to keep traffic flowing freely. His implicit argument seems to be that the prospect of the state netting all those future revenues offsets the risks it would be taking on during the early years when traffic and revenue are very difficult to forecast.

As I wrote in Public Works Financing‘s April issue, express toll lane (“managed lane”) projects are inherently risky ventures. Ask anyone who does toll traffic and revenue forecasts for a living: these are by far the most difficult of all toll projects to accurately project revenues for. In 2012, rating agencies Fitch and Standard & Poor’s each released reports on P3 managed lane projects as toll investments. Both judged early-years traffic and revenues to be highly volatile, and requiring “higher liquidity levels throughout the life of the debt” to help support cash flow during periods of economic weakness. That doesn’t sound to me like a low-risk proposition for a state DOT! Both rating agencies, along with toll revenue forecasters, agree that these projects, if carefully selected and located, have high long-term revenue prospects-but only if they survive their early years.

Indeed, the Capital Beltway I-495 Express Lanes project has had a relatively slow “ramp-up” period during its first two years of operation as a toll concession. Fortunately, its developer/operator Transurban stepped in last year to provide an additional $280 million in equity to compensate for below-forecast toll revenues. Is that the kind of thing Virginia is prepared to do on I-66?

There is a way for Virginia to have its cake and eat it too on this and other express toll lane projects. The answer is to procure them as toll concessions (assuming the Value for Money analysis does make a positive case) and include in the agreement a revenue-sharing provision. Such provisions are becoming common, and are included in the DFW and NTE projects in Texas and in Virginia’s own I-95 and I-495 concession agreements. That way the state would transfer all the downside risks, but still be able to share in the upside in the longer term (as well as pocketing the income tax revenue).

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Telecommuting Beats Transit in Most Metro Areas

Data from the Census Bureau’s 2013 American Community Survey show that working at home has a higher commuting mode share than transit in 37 of the 52 metro areas with a population over 1 million. Excluding New York (always a huge outlier in transit data), nationwide there are 1.25 telecommuters for every transit commuter. And if the other six largest transit metros are excluded (Los Angeles, Chicago, Philadelphia, Washington, Boston, and San Francisco), twice as many people telecommute as commute to work by transit.

The details, including a table for all 52 metro areas, are provided in demographer Wendell Cox’s May 30th NewGeography.com piece, “Working at Home: In Most Places the Big Alternative to Cars.” He notes that the strongest telecommuting markets are technology hubs, such as Denver (7.14% telecommuters), Austin (6.78%), Portland (6.40%), San Diego (6.38%), Raleigh (6.16%), and Atlanta (5.96%). All of them except Raleigh have built rail transit systems, but in every case they fit the general pattern of a higher mode share for telecommuting than for transit. (Only in Portland is the difference tiny, with 1.01 telecommuters per transit rider.)

The metro areas where telecommuting is relatively the weakest, compared with transit, are primarily the older metros that have retained their large pre-auto-era central business districts. Their ratios of telecommuters to transit commuters tell the story: New York (0.13), Boston and Washington (0.35), Chicago and San Francisco (0.37), and Philadelphia (0.40). Even though several of these have lots of telecommuters (e.g., San Francisco’s 5.94%), their transit ridership is far above the large-metro-area average.

These findings strengthen the point that for transportation policymakers looking for cost-effective ways to reduce the number of people on the freeways during commuting hours, encouraging telecommuting has a very high benefit/cost ratio. It might not cost anything to encourage cities to rescind zoning or building regulations that make it difficult or even illegal for people to work full-time at home. MPOs could also work with business organizations such as chambers of commerce to encourage employers to be more receptive to either part-time or full-time telecommuting. (Disclosure: I have been a full-time telecommuter since 2003, and Reason Foundation is very supportive of telecommuting.)

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Would Solar Roads Be Practical?

Like me, you may have seen several glossy online presentations of an imagined future in which highways are paved with solar panels generating electricity, in some scenarios even feeding power to electric cars. My immediate reaction to these proposals is-give me a break! What about dense traffic shielding 90% of the roadway surface from sunlight? What about night-times, winter, rainy days, fog, smog, etc.? What about the ability of solar panels to support the weight of 18-wheelers? And, pray tell, what about the cost?

So I was pleased to come across a calm assessment from EfficientGov.com early this month, titled “Could Solar Panels Replace Concrete or Asphalt Roads?” Writer Mike Barnard reviews the material produced by a group called Solar Roadways-and not to put too fine a point on it, politely rips it to shreds. In addition to the questions I noted above, he finds costly and impractical their idea of replacing paint striping with LEDs-adding energy consumption, heat, and cost compared with inexpensive and functional paint.

In places where it snows, Solar Roadways apparently claims the panels will melt the snow away. Barnard notes the need for externally powered heating coils, and assumes that in cases of heavy snow, ordinary snow plows will be required. And those plows would likely wreak havoc on the solar road’s textured surface. Frost heaves could shift some panels out of alignment, causing tire damage and leading to potholes with sharp edges.

Due to the lack of reliable, high-intensity sunlight much of the time, the solar road would need significant power input from the electricity grid, adding yet another cost. There is also the impact of rubber skidmarks, which will degrade the panels’ ability to absorb sunlight. And on it goes.

Toward the end of his post, Barnard notes that Solar Roadways has been encouraged to test the idea on parking lots and driveways before trying it on actual streets or highways. But since most parking lots are covered with cars during daylight, he makes the sensible suggestion that it would be far less costly to put the solar panels on inexpensive roofs over the parking spaces, keeping the cars shaded from the sun while getting full sun exposure via the panels overhead.

This is the kind of idea that would make a good exercise for second-year engineering students to critique. I don’t see any likelihood of it becoming a sensible alternative to concrete or asphalt paving.

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Access to Jobs Is Key to Upward Mobility, Say New Studies

The Census Bureau last month released its County Business Patterns data for 2013, with comparisons to earlier years. They show a continuation of the long-term trend of suburbanization of employment. From 2010 through 2013, in the 52 largest urban areas, the average share of employment growth in each portion of the metro areas was as follows, according to an analysis by Demographia.com:

Urban core/CBD 11.8%
Inner ring 7.3%
Earlier suburbs 31.9%
Later suburbs 37.1%
Exurbs 11.9%

In general, that is bad news for low-income people who are dependent on transit to get to work, because-as we know from research at Brookings and at the University of Minnesota, reported previously in this newsletter-only 30% of metro area jobs are accessible via transit within 90 minutes (Brookings), whereas 100% of jobs are accessible by car within 30 minutes in 31 of the largest 51 metro areas, and 100% are accessible by car within 60 minutes in all 51 of them (U. of Minnesota) .

How important that is for upward mobility is dramatized in two recent studies, both summarized by David Leonhardt in The New York Times, May 7, 2015 (“Transportation Emerges as Crucial to Escaping Poverty”). The first, done by economists at Harvard University, is an ongoing study of upward mobility. Leonhardt quotes study co-author Nathaniel Hendren as finding that commuting time is the single strongest factor in escaping poverty-more important than crime, elementary-school test scores, or the fraction of two-parent families.

Another study reached essentially the same conclusion, using a somewhat different analysis. Researchers at the Rudin Center for Transportation at NYU compared neighborhoods by the types and amounts of transportation access and the number of jobs reachable within one hour. Those with many jobs reachable by transit did OK, as did those with poor transit but access to cars. The lowest incomes and highest unemployment rates were for those with relatively poor access to cars and transit.

Given the ongoing suburbanization of employment, and the great difficulty of expanding transit systems to provide timely access across that vast landscape, a small but growing literature finds that the most cost-effective way to increase employment opportunities for low-income people is to assist them to obtain a personal vehicle.

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Upcoming Transportation Conferences

27th Annual ARTBA PPPs in Transportation Conference, July 15-17, 2015, Hyatt Regency Washington, Washington, DC. Details at: www.artbap3.org

2015 Transportation Summit, Floridians for Better Transportation, July 22-24, 2015, Casa Monica Hotel, St. Augustine, FL. (Robert Poole speaking). Details at: www.bettertransportation.org

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News Notes

Poole HTF testimony. On June 17 I was one of three witnesses testifying about the future of the Highway Trust Fund, at the invitation of the House Ways & Means Committee; the other two witnesses were Chad Shirley of the Congressional Budget Office and Bill Graves, president of the American Trucking Associations. My written testimony is online at: http://reason.org/news/show/how-congress-can-fix-the-highway-tr. Also a video of the whole 2.75 hours(!) is online at http://www.ustream.tv/recorded/64033572

IFM Takes Over Indiana Toll Road. It’s official: winning bidder Industry Funds Management took over operating and maintaining the Indiana Toll Road on May 28th, after its bid of $5.7 billion for the remaining 66 years of the concession was formally accepted. Those funds all went to creditors of the bankrupt Indiana Toll Road Concession Company. In addition to that sum, IFM plans to spend $260 million on improvements over the next five years, including replacing the “dilapidated” travel plazas, repaving worn-out pavement and ramps, and adding dynamic message signs.

Texas Toll Opponents Mostly Lose in Legislature. Out of 78 anti-toll bills offered in this year’s biennial legislative session, only four were passed, all somewhat watered down from their original versions. The most directly threatening one, HB 2612, started out as a measure that would eliminate all toll roads in the state, but ended up only requiring a TxDOT study on the possible early retirement of the debt on toll roads partly funded by the state (which exempts self-funded local/regional toll authorities).

Illiana Expressway Cancelled. Illinois Gov. Bruce Rauner early this month directed Illinois DOT to remove the planned Illiana Expressway from its multiyear plan and to suspend all related contracts. The $1.5 billion, 47-mile toll road would have connected I-55 in Illinois to I-65 in Indiana. Though planned as a P3 concession, it was to have been financed via availability payments, since projected toll revenues were far below what would have been needed for a toll concession.

Dual-Mode Trucks for LA Port Highway? The South Coast Air Quality Management District in April announced the start of construction on two miles of what it calls an eHighway serving the ports of Los Angeles and Long Beach. Overhead trolley wires will be provided so that dual-mode trucks can operate on electricity while on the eHighway, switching to conventional internal combustion power thereafter. The project’s initial goal is a four-mile route between the ports and a nearby railroad yard. Longer-term, the idea is to extend the eHighway along I-710 (Long Beach Freeway), a major truck route. Volvo is providing the dual-mode truck tractors for the initial project.

U.S. Hybrid Sales Plummet. Sales of hybrid vehicles have dropped significantly due to lower gasoline prices, reported Edmunds.com last month. According to a May 14th story in The New York Times, 55% of hybrid owners are switching to a gasoline-only vehicle at trade-in time, “the lowest level of hybrid loyalty since Edmunds.com began tracking such transactions in 2011.” In a related development, Honda announced in mid-June that it is discontinuing the hybrid versions of its Civic and Accord models, along with the CNG-powered Civic, due to low sales.

85 mph Texas Toll Road Doing Better. SH 130, the P3 toll road between the southern Austin suburbs and the northern suburbs of San Antonio, has seen 18% higher auto traffic and 20% higher truck traffic this year, compared to the same period last year. As the economy has improved, congestion on parallel I-35 has gotten worse, which increases the value proposition of using the tolled alternative. In 2013 the concession company made debt service payments late, and its bond rating was downgraded. Negotiations with lenders are under way to revise payment terms, based on the highway’s improved traffic and revenue.

$10 Billion Highway Tunnel to Link Denmark and Germany. An 11-mile highway tunnel beneath the Baltic Sea would link Denmark’s Fehmarn Island and Germany’s Lolland Island, at an estimated cost of $10 billion. Called the Fehmarn Belt Fixed Link, it would dramatically reduce driving time between the two countries. Almost certain to be developed as a toll concession, the project received an initial OK from the Danish parliament last month, but has yet to receive approval from the German government. If it goes forward, the tunnel could open in 2024.

Receivership for Troubled MBTA Approved. Both houses of the Massachusetts legislature last month approved creation of a Finance Control Board to essentially serve as the de-facto receiver for Boston’s insolvent Massachusetts Bay Transportation Authority, which suffered a major performance breakdown earlier this year. The measure has strong backing from Gov. Charlie Baker.

Mississippi Applies for New Interstate. The Mississippi Transportation Commission has authorized the state DOT to submit a formal application to the Federal Highway Administration to re-designate US 78 in northern Mississippi as I-22. Congress has already agreed to the change, and if approved, the highway will be upgraded to Interstate standards. Incidentally, colleague Chuck Fuhs pointed out recently that two of the largest metro areas in Texas still lack a direct Interstate connection: Austin to Houston and Austin to El Paso.

$6 Billion Toll Concession Under Way in Turkey. The 421 km. tolled motorway between Gebze on the north shore and the port city of Izmir on the Aegean Sea received a $4.73 debt package from nine banks this spring. Construction is already under way, via a 22-year build-operate-transfer concession. Completion is expected by 2018.

Longer Doubles Approved by House Appropriators. The $53.3 billion transportation appropriations bill passed by the House appropriations committee includes approval for trucking companies to operate twin 33-foot trailers, in addition to currently allowed twin 28-footers. As I reported here last year, a study commissioned by FedEx and Con-way found that the extra capacity would increase trucking productivity and reduce fuel use (and emissions) per ton-mile hauled. It also found that operational performance would be similar to that of current 28-foot tandems.

Automakers Ahead of Schedule on MPG Standards. The Union of Concerned Scientists released a study last month finding that, on average, new autos and light trucks are about 1 mile per gallon ahead of federal Corporate Average Fuel Economy (CAFE) standards. And about 10% of those vehicles are five or more years ahead of schedule, already meeting targets for 2020 or later. These include versions of six of the top 10 best-selling cars and light trucks.

Nevada Legislature OK’s Unfunded High Speed Rail Line. In an exercise of what must be wishful thinking, the Nevada Legislature enacted SB 457 that would create a Nevada High-Speed Rail Authority, which is to select a firm to build and operate a line linking Las Vegas to Southern California. The only known applicant is XpressWest, whose previous plan depended on raising nearly its entire cost from a low-interest federal RRIF loan; the Federal Railroad Administration rejected its application. The price tag has now increased to $6.9 billion, which the company claims will be funded by a combination of private investment and federal grants, claiming that the financing is “almost completed.” Excuse me for doubting that.

EC Will Challenge Germany’s Toll-Foreigners Plan. The European Commission has announced that it will challenge Germany’s plan to charge tolls to non-German drivers on the country’s autobahns. Commission president Jean-Claude Juncker told the Sueddeutsche Zeitung that the plan appears to conflict with European Union rules that prohibit discrimination against foreigners.

Transportation Experts Back Interstate Tolling. The 2015 edition of the annual publication Tolltrans carried a debate between Rex Davis of the Alliance for Toll-Free Interstates and J. J. Eden, president of the Alliance for Toll Interoperability. At the end of the debate was an invitation for readers to vote which argument they agreed with. Of the 1,184 votes cast, 65% believed that states should have the right to use tolls to reconstruct and maintain the aging Interstates.

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Quotable Quotes

“[Some] suggest the primary purpose of transit is reducing auto travel, rather than serving people who want to or must use transit. In other words, building transit is good because it reduces traffic congestion. . . . That is at best a secondary benefit, a benefit which could be achieved much more simply and less expensively through prices, as we do with almost all other scarce goods in society, even necessities like water. Transit today is, in almost all U.S. markets, slower than driving. People who depend on transit can reach fewer jobs than those who have automobiles available. Some people use transit by choice, for instance to save money (if they need to pay for parking), and the rest without choice. In my opinion, it is more important to spend scarce public dollars to improve options for those without choices than to improve the choices for those who already have alternatives. . . . The idea that transit is for the other person is true for the 95.5% of people who don’t use transit regularly. But it warps thinking that the aim of public transit funding is to benefit those non-transit users.”
-Prof. David Levinson (University of Minnesota), “Who Benefits from Other People’s Transit Use?” New Geography, May 24, 2015

“Zoning codes were conceived as a way to balance the social good of a growing, productive city and the private costs that growth sometimes imposes. But land-use rules have evolved into something more pernicious: a mechanism through which landowners are handed both unwarranted windfalls and the means to prevent others from exercising control over their property. Even small steps to restore a healthier balance between private and public good would yield handsome returns.”
-Editorial, “Space and the City,” The Economist, April 4, 2015

“A shift of financial responsibility to the state or local level would give politicians an incentive to consider the total costs of a project before moving forward. With state or local funding, closer scrutiny of projects would eliminate many of the wasteful expenditures of the current federal funding system. We can reduce the incentives to move forward on high-cost, low-benefit projects if we stop waving federal dollars in front of state and local officials. Federal transportation dollars often come with strings attached. For example, some funds for road repair are tied to the addition of bike lanes. Local officials have an incentive to go after these funds whether it makes sense or not. Reducing the federal role in transportation funding would introduce a higher degree of accountability and flexibility in spending. If Jackson, Wyoming, wants to spend its tax dollars to build bike trails to attract tourists, it can. If fast-growing Houston wants to focus transportation spending on expanding highway capacity, it can, without having the funding tied to unwanted bike lanes.”
-Prof. Robert Kroll (Cal State Northridge), “Time to End the Federal Government’s Role in Highway Funding,” The Hill, May 27, 2015

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.