Surface Transportation Newsletter #187
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Surface Transportation Innovations Newsletter

Surface Transportation Newsletter #187

Thoughts on a $2 trillion federal infrastructure bill, the benefits of highway expansion, mileage-based user fees,and more.

In this issue:

New Report Calls for Top-Down Mileage Fee Program  

My Reason colleagues and I have long argued that per-gallon fuel taxes should be replaced by mileage-based user fees (MBUFs). I served on the Transportation Research Board committee that alerted the transportation community to the looming decline of fuel tax revenues, in 2006. My colleague Adrian Moore served on the National Surface Transportation Infrastructure Financing Commission (NSTIFC) that assessed a range of alternatives and concluded that per-mile charges were the best replacement (2009). Adrian went on to help found the Mileage-Based User Fee Alliance, which has encouraged a growing array of state and multi-state pilot projects to test various ways of recording and reporting miles traveled so that the miles can be charged for.

Now the former chairman of the NSTIFC, Rob Atkinson, has released a new report on this important subject. “A Policymaker’s Guide to Road User Charges” restates the case for charging by the mile, debunks several misconceptions about MBUFs, and then proposes a federal effort to implement per-mile charging, with the idea that states could then piggy-back on the federal system to collect state-specific MBUFs to replace their state fuel taxes.

While I disagree with some of what Rob advocates, this report makes a major contribution by showing that many concerns about MBUFs are not supported by the facts. One of the most important is the idea that a system using GPS would “track” everywhere the vehicle goes. He points out, correctly, that GPS is a one-way system: it enables the car to know where it is at all times, but the GPS satellite and its operators do not know. The basic concept is that an on-board unit on the vehicle would total up the miles driven (and which states those miles occurred in) and transmit the totals to the relevant jurisdictions (e.g., New York and New Jersey) so each can levy per-mile charges.

Another oft-heard concern is that because rural residents drive longer distances, they would be made worse off by a miles-charged system. Drawing on research from Rand Corporation and others, Rob’s report explains that rural residents tend to own older, gas-guzzling vehicles compared with urban residents, so most of them would be better off paying by the mile rather than by the gallon. Detailed TRB research papers bear this out. Similar data call into question the equity argument; Rob reminds us that lower-income households tend to drive older, less fuel-efficient vehicles compared with wealthier people. Like rural residents, most low-income urban-area residents would be better off paying by miles driven than by gallons used.

The above points depend, of course, on MBUFs replacing federal and state fuel taxes, rather than being charged in addition to them. And this is where I start to differ from Rob’s top-down, federal mandate as the best way forward. Specifically, he would like Congress to charge the US Department of Transportation to establish a federal MBUF, starting with imposing this on trucks. The next step would be to impose on auto manufacturers the inclusion of a GPS-based on-board unit for per-mile charging in all new vehicles. As older vehicles are scrapped and replaced by new vehicles (over perhaps 20 years), all vehicles would eventually be paying the federal MBUF. States would be free to opt into the federal system, adding a state MBUF to be collected by the same on-board units required in all trucks and all new personal vehicles.

As a strategy for winning hearts and minds to this huge paradigm shift, I think this is exactly backward. The large majority of the public thinks a GPS system is Big Brother in their cars and will mobilize against a federal mandate of this sort. By contrast, the states remain the laboratories of democracy. Surveys of motorists (and truck drivers) who have participated in the pilot projects find that those people come to understand what MBUF is and is not. Thus far the pilots generally offer people a choice of ways to record their mileage, and the miles are reported to a private-sector service provider, not the state government, with strict privacy protections. I think we need more, and larger, state and multi-state pilot projects to learn more about how to build majority support for the transition from per-gallon to per-mile.

State governments have far more credibility with motorists than Congress does, so the odds of gaining a political majority in favor of replacing fuel taxes with mileage charges are much greater at the state level. Once a number of states have figured out a way to implement this transition, Congress would have a better chance of building on states’ success to develop a federal mileage charge.

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Lessons from State MBUF Pilot Programs
by Baruch Feigenbaum

Most transportation revenue and finance experts view mileage-based user fees (MBUFs) as the most promising successor to the gas tax. While the gas tax has been an effective funding source for 100 years, declines in purchasing power due to inflation, increased fuel efficiency standards, as well as growing numbers of electric vehicles and hybrids, promise serious declines in gas-tax revenue.

Before mileage-based user fees can become the main roadway funding source, a great many details need to be worked out. Thus far, state DOTs have taken the lead via pilot programs. Oregon was the first state to institute a gas tax to fund highways in 1919. Within 10 years, every state had enacted a gas tax, almost always dedicated to highways. Yet the federal government did not institute a gas tax until 1932, and that gas tax was not used for highway purposes until 1956. So it’s no surprise that states are experimenting with MBUFs before the federal government.

Oregon conducted the first MBUF research more than 20 years ago. Both liberal Minnesota and conservative Texas have created MBUF focus groups. Currently, nine states (California, Colorado, Hawaii, Minnesota, Missouri, New Hampshire, Oregon, Utah and Washington) have conducted mileage-based user fee pilots. Two multi-state coalitions, the I-95 Corridor Coalition and the Western Road User Charge (RUC) Consortium, are also conducting pilots.

The pilots vary significantly in scope and focus. Oregon’s first two programs were open to all automobiles; program administrators actively recruited participants from around the state. The program encouraged participants to install a device in the car’s OBD II port. However, participants could opt for a fee based on an odometer reading. Utah’s program is much simpler and is aimed at electric and hybrid vehicles only.

Finding the political consensus to create a pilot is challenging enough. Several of the DOTs whose states are part of the I-95 Coalition or RUC West could not participate in those groups’ pilots. Some Republican governors were hesitant because they viewed MBUFs as a tax increase. Rebating gas taxes to program participants has been critical in building support. Certain environmental groups have fought against pilot programs because MBUFs apply to all vehicles, including hybrids and electrics that pay little or no gas taxes in today’s system. Other leaders were willing to test vehicle registration fees or MBUFs for certain types of vehicles but not MBUFs for all vehicles.

The communications and outreach aspects aimed at keeping drivers informed about the pilot programs are crucial. States that hired communication firms were generally more successful than those that handled communications in house. Developing and maintaining an up-to-date website is needed to provide information to the public. Special fact sheets for legislators can help allay political concerns and minimize misconceptions. States that conducted more townhall and in-person meetings with taxpayers faced less resistance to the pilots. Having one or two staffers or consultants dedicated to responding to media inquiries from newspapers, local TV stations, and radio stations resulted in more informed, positive coverage.

Typical concerns about MBUFs have fallen into four categories, three of which have ready solutions.

Double taxation is a big concern on all sides, particularly the political right. Some state officials view MBUFs as a supplemental revenue source while most see MBUFs as the replacement for fuel taxes. In some states, the gas tax does not cover the total cost of highways. However, transitioning to mileage-based user fees and setting the fee at a realistic level is a much better approach than having both a mileage-based user fee and a gas tax.

Privacy is another major concern. MBUF systems report only miles, not detailed location data but this information must be clearly communicated to drivers. There are, and should be, meaningful privacy protections in most pilot programs. Since taxpayers often feel more comfortable with the private sector having data than the public sector, many states use private account managers to collect the data. And most states have multiple managers so there is no single source aggregating all of the data. Since most Americans have been comfortable with tech companies like Apple and Google having vast amounts of data, privacy concerns can be overcome with the proper protections.

Another common concern is that rural drivers will pay more under MBUFs than gas taxes. But pilot programs have shown the opposite to be true. Since rural drivers often have older, less fuel-efficient vehicles, including more trucks, they would actually pay less than many urban and suburban drivers. And if urban congestion pricing is used, rural drivers would likely pay less because there is less congestion in rural areas.

The final concern, which has not yet been fully solved, is security. MBUF systems must not be hackable; some drivers may try to cheat by tampering with the in-vehicle diagnostics. Others may damage the OBD II port that many devices plug into. Software viruses are a problem in banking and data security. States may need to invest in detailed security with outside contractors and ensure that those contractors are liable for viruses or fraud. The MBUF community knows that this problem must be solved, but it is still a work in progress.

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What If Highway Expansion Made America Better Off?

The past several decades have seen growing opposition to expanding the capacity of highways, with mantras such as “we can’t build our way out of congestion” and “we’ve got to get people out of their cars.” One reason for this is tailpipe emissions of conventional pollutants and more recently CO2. But over the next several decades, electrification of the vehicle fleet will likely dispense with much of that concern. And road pricing can make a serious impact on congestion, as we’ve learned from 25 years of variably-priced express toll lanes.

So with those two concerns no longer being show-stoppers, I was intrigued to read the summary of a new study from the National Bureau of Economic Research, “The Welfare Effects of Transportation Infrastructure Improvements” (published as NBER Working Paper No 25487). Economists Treb Allen (Dartmouth) and Costas Arkolakis (Yale) developed a “general equilibrium geographic framework” in order to look at the potential gains in economic welfare from additions of highway capacity between cities. A basic premise is that better highways lower total trade costs between pairs of locations.

Using FHWA data, they built a model showing about 7,000 connections among 900 U.S. cities. They then estimated the economic effects of adding 10 lane-miles to each link. Next, they compared the estimated cost of that capacity addition to the economic benefits, using a methodology that takes into account the type of terrain and other factors that affect highway construction costs. Their estimates of the annualized capital and operating costs of 10 new lane-miles ranged from $1.9 million in rural-flat areas to much higher in urban areas. In nearly all cases, they found that the annual benefits were greater than the annualized costs.

But the most interesting finding to me was the range of these net benefits. In about 75 percent of the cases, the net annual benefits were in the range of $10-20 million per year. But in links that connect hubs in large urban areas, the net benefits were far higher. For example, adding capacity to the Long Island Expressway (I-495W) between Queens and North Hempstead had an annual benefit of $510 million. Of the 10 highway segments with the largest net benefits, seven are in the New York City metro area, one is in greater Los Angeles, and two are in Indiana.

I wonder if the construction cost numbers the authors used for very large urban areas take into account the full costs of acquiring right of way in relatively dense urban areas or the high cost of adding new lane-miles elevated above the existing lanes (as, for example, in San Antonio and Tampa). I’m sure other researchers will look carefully at the assumptions Allen and Arkolakis made, and the validity of their modeling methodology (which is beyond me). That said, this is a provocative piece of work that deserves wider circulation.

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Progress Toward Zero-Emission Trucks

Only a few years ago, in a debate on the likely need for the United States to transition from fuel taxes to mileage charges, a trucking industry person maintained that there was no need for this transition in trucking since diesels would remain the primary motive power in coming decades. But that view is rapidly changing. Here are four representative headlines from last month:

  • “Nikola Unveils New Models, Says Industry Ready for Shift to Zero Emissions,” FleetOwner.com, April 17, 2019
  • “Kenworth, Toyota Present Electric Fuel Cell Truck to UPS,” FleetOwner.com, April 23, 2019
  • “Ford Invests in Electric-Truck Maker Rivian,” Wall Street Journal, April 25, 2019
  • “FUSO on Electric Trucks: You Believe Us Now?” Fleet Owner, April 2019

What’s driving this change is both technology advances and increased regulation of both conventional tailpipe emissions and CO2. The Environmental Protection Agency (EPA) has proposed Phase 2 of its greenhouse gas (GHG) regulations that would require heavy-duty truck tractors to cut CO2 emissions 24 percent by 2027 and local heavy-duty diesel trucks to cut CO2 16 percent by then. Separately, the EPA has issued a proposed Cleaner Truck Initiative that would require further cuts in diesel NOx. Neither of these regulations has been finalized, but both are expected by 2020.

In response to these measures and comparable efforts in other countries, all major U.S. and European truck manufacturers (as well as a number of start-up companies) are developing prototype electric trucks, some of which are already in pilot operating programs. The best overview that I’ve read of zero emission (ZE) truck alternatives is Jim Mele’s detailed article, “Zero-Emission Trucks—Ready or Not,” in the April issue of Fleet Owner. He discusses all three alternatives: battery electric, hydrogen fuel-cell electric, and hybrid electric. None is currently competitive with diesel in terms of the overall cost of ownership, but tons of R&D money is being spent by legacy and start-up producers alike.

Battery electrics seem best suited in the near term (the next decade or so) to local trucks that operate within a single geographic area, cover under 200 miles per day, and return to a central base where they can be recharged. Because batteries are so heavy, there is a weight penalty, despite the reduction of numerous parts (which saves some weight) and lower ongoing maintenance costs. For long-haul heavy trucks, the weight penalty is seen as significant, as is the lack (thus far) of a large network of on-highway recharging stations. (And since rapid recharging a Class 8 truck will likely take an hour or more, food and other commercial services need to be co-located with recharging stations.)

Hydrogen fuel cells can be refueled quickly with liquid hydrogen, but there is no hydrogen infrastructure to bring liquid H2 to dispersed refueling locations along major highways. Hydrogen fuel cell trucks will also have less of a weight penalty than battery electrics, so they will likely be preferable once the hydrogen infrastructure gets developed—but that seems like several decades from now.

An interim alternative may well be hybrid propulsion, similar to what has long existed on railroads. All “diesel” locomotives in use since the 1940s feature diesel engines that generate onboard electricity to drive electric motors that power the locomotive—hybrid propulsion. A cleaner approach for trucks would be a natural gas engine to generate the electricity used by the electric motors, and this might turn out to be the better approach for heavy trucks over the next decade or two.

I conclude with Jim Mele’s closing line. After reviewing both a market-driven and a regulation-driven transition, he writes: “In either case, zero emissions are part of trucking’s future.”

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Second Thoughts on a Federal Infrastructure Bill

Congressional Democrats and President Trump recently signaled interest in $2 trillion worth of infrastructure spending. Echoing a number of my own thoughts on the subject, Politico’s Tanya Snyder recently posted a piece title, “7 Reasons Not to Buy the Infrastructure Hype.” Here are her seven points, and you can get her full explations by reading the original piece online.

  1. No one knows where the money will come from.
  2. Neither side can agree on their own message.
  3. The plan is already too big.
  4. Democrats and Republicans will be uneasy partners.
  5. Trump is unpredictable.
  6. The calendar is working against them.
  7. It may not be $2 trillion, ultimately.

Her seven points are all well-taken, but here is some additional context I’d add.

To the extent that some U.S. infrastructure is “crumbling,” it is not due to lack of massive federal spending. Nearly all such infrastructure is owned by state and local governments (except for investor-owned facilities such as electric and gas utilities, pipelines, railroads, etc.—which are mostly in very good shape). Those highways, water/wastewater systems, public buildings, etc. that are in bad shape represent failures of proper stewardship by their owners, the state and local governments. Massive federal bailouts would, in effect, be rewarding failed stewardship, without reforming the politicization and irresponsibility that led to the “crumbling.”

In addition, the U.S. economy is currently at full employment. If a 10-year, $2 trillion infrastructure bill were to pass this year, it would be impossible to spend an average of $200 billion per year on projects to rebuild decrepit schools, replace aging water systems, and rebuild pot-holed highways. Where would the engineers and construction workers come from? Those who look back fondly on Roosevelt’s New Deal should recall that it was launched during the Great Depression when chronic double-digit unemployment rates prevailed for a decade or more. That is a far cry from today’s robust economy.

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New Information on Genoa Bridge Collapse

Last year’s collapse of the Morandi Bridge in Genoa, Italy—in which 43 people died—has been portrayed as a black eye for long-term public-private partnership (P3) concessions. The bridge was part of a network of tolled motorways operated under a long-term concession by Autostrade, a global toll roads company headquartered in Italy. In reading dozens of articles about the collapse—which populist politicians blamed on highway privatization—I searched in vain to see where the fault lay. Was the company not living up to its stewardship responsibilities? Or did the transport ministry default on its regulatory oversight?

On March 5, The New York Times published a detailed article that finally answered the question. Reporters David Segal and Gaia Pianigiani discovered that there were indeed, regular bridge inspections. But the company that carried them out—Spea Engineering—is owned by Autostrade’s parent company, Atlantia. Moreover, the reporters discovered that Spea’s offices in Rome and elsewhere are housed inside Autostrade offices.

This is a clear conflict of interest. It reflects badly on Autostrade but also on the Infrastructure and Transport Ministry. The reporters state that the ministry “rarely conducted its own inspections of Autostrade properties. Instead, it reviewed documents provided by Spea.” In looking into this further, they found that the terms of the concession agreement “explicitly give the ministry powers to perform checks and inspections,” which is how it should be. They also report that “such conflicts are prohibited in other countries where Autostrade operates,” citing arm’s-length inspections of motorway concession companies in Chile and Poland as examples.

The bottom line here is a failure of governance, in which the concession company essentially arranged for self-regulation and the government agency allowed this to happen. It’s not an indictment of P3 infrastructure, but a lesson in regulatory failure.

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Upcoming Transportation Events

Note: We don’t have the time or space to list all transportation events that might be of interest to readers of this newsletter. Listed here are events at which a Reason Foundation transportation researcher is speaking or moderating.

60th Annual Transportation Research Forum, May 2-3, 2019, Capital Hilton, Washington, DC (Baruch Feigenbaum speaking). Details from: http://annualforum.trforum.org/2019-annual-forum

Auto Haulers Association Spring Leadership Conference, May 6-8, 2019, Atlanta Airport Marriott Gateway, Atlanta, GA (Robert Poole speaking). Details from: http://autohaulersamerica.com/upcoming-events

P3 Policy and Delivery Leaders Summit, May 14-15, 2019, Cosmos Club, Washington, DC (Robert Poole speaking). Details from: www.cityandfinancialconferences.com/P3Infrastructure

Princeton Smart Driving Car Summit, May 14-16, 2019, Princeton University, Princeton, NJ (Baruch Feigenbaum speaking). Details from: http://summit.smartdrivingcar.com

P3 Connect, May 16-19, 2019, Downtown Convention Center, Denver, CO (Austill Stuart speaking). Details from: https://thep3connect.org

IBTTA Summit on Finance and Policy, May 19-22, 2019, Loews Philadelphia, Philadelphia, PA (Robert Poole speaking). Details from: https://ibtta.org/events/summit-finance-policy-0

NCSL State Transportation Leaders’ Summit, June 12-14, 2019, The Curtis, Denver, CO (Baruch Feigenbaum speaking). Details from: http://www.ncsl.org

South Carolina Trucking Association Annual Conference, June 7-9, 2019, Marriott Grande Dunes, Myrtle Beach, SC (Robert Poole speaking). Details from: www.sctrucking.org

Automated Vehicles Symposium, July 15-18, 2019, Orlando World Center Marriott, Orlando, FL (Baruch Feigenbaum speaking). Details from: http://www.automatedvehiclessymposium.org/home

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News Notes

Priced Managed Lanes Between Metro Areas
My Reason colleague Baruch Feigenbaum has authored a new policy study suggesting that for congested Interstate corridors between cities, a near-term improvement could be adding express toll lanes. Adding toll lanes to Interstates is per-se legal, so should be less politically difficult than tolling all lanes to pay for reconstruction and widening. The report analyzes four such corridors: I-5 between San Diego and Orange County, CA; I-85 between Durham and Greensboro, NC; I-95 in Connecticut between the New York state line and New Haven; and I-95 in Virginia between Richmond and the DC metro area. 

$3.8 Billion Expansion of Hampton Roads Bridge-Tunnel
Virginia’s Commonwealth Transportation Board has approved a conventionally financed expansion of the bridge-tunnel (mostly sales taxes and a regional surcharge on fuel taxes). There will also be some toll revenue, since the two-tunnel addition will double the project’s lanes, from two each way to four. Two of those new lanes will be express toll lanes.

Virgin Trains Finances Extension from West Palm Beach to Orlando
In mid-April, Virgin Trains USA (formerly Brightline) sold $1.75 billion worth of tax-exempt private activity bonds to finance 170 miles of track to link its existing Miami/ West Palm Beach passenger line to the new intermodal terminal at Orlando International Airport. The bonds are revenue bonds, which means taxpayers are not at risk should the venture go bankrupt. The bond sale, managed by Morgan Stanley, was four times over-subscribed, with successful purchases by 67 different investors.

Another LA Times Exposé on Out-of-Control California HSR Project
Indefatigable reporter Ralph Vartabedian turned in another stunning report on the factors that led to the California high-speed rail project morphing from a 12-year, $33 billion project that, 10 years later, is $44 billion over budget and 13 years behind schedule. The report names names and dollar amounts of a large array of contracts that have consumed far more than projected and delivered far less. One shocking example is a consultant projection of 90 million annual riders, based on an assumption that 90 percent of motorists between Los Angeles and San Francisco would take the train—contrary to the experience of long-distance HSR elsewhere, which mostly attracts customers from airlines.

Courts Reject Two Challenges to Toll Diversion
In both Northern California and Pennsylvania, highway users challenged large toll increases that were enacted to generate revenues for non-toll-road transportation improvements. A federal judge in a U.S. District Court in Pennsylvania dismissed the lawsuit brought by trucking organization OOIDA, on grounds that there is no controlling precedent on either side of the case. In San Francisco, a large toll increase on the region’s toll bridges was upheld, when a Superior Court judge ruled that the increased tolls were still “usage fees” and were approved by voters by the required two-thirds margin.

Daimler Trucks Moves Ahead with Automation
The world’s largest truck producer, Daimler Trucks, has acquired a majority stake in Torc Robotics, aiming to use its technology to produce highly automated trucks (SAE Level 4). Torc was among the winners in the DARPA Urban Challenge 12 years ago, making it one of the companies with long experience in vehicle automation. One of Daimler Trucks’ goals is to produce a truck chassis optimized for automated operation.

Washington State’s Toll-Financed Expansion of I-405
The state legislature has approved plans to extend the express toll lanes on I-405 from Bellevue to Renton and along SR 167 from Renton to Puyallup. Unlike the existing I-405 express lanes, the new ones will be financed via revenue bonds backed by the projected toll revenues of the expanded corridor.

Are Small Cars Just as Safe as Large Cars?
Federal Corporate Average Fuel Economy (CAFE) standards have led to periodic debates over whether the smaller, lighter vehicles produced to help manufacturers achieve the required average mpg are less crashworthy than larger vehicles. In March, the National Highway Traffic Safety Administration produced a “Research Note” with updated (2016) data that addresses this question. Table 2 in this report shows total occupant fatality rate per 100,000 registered vehicles. Compact cars scored 12.91, compared with full-size cars at 9.53, minivans at 7.28, and mid-size SUVs at 7.10 (partial list). Thus, when it comes to auto safety, size still does matter: NHTSA says so. Incidentally, Daimler just announced that it will stop selling its tiny electric Smart Fortwo in the United States due to low demand.

The Exurbs Are Back, Even for Millennials
About 10 years ago, all age groups were choosing houses closer to downtowns in most of America, fostering the impression of a “return to the city.” But recent data from Zillow show that since 2010-11, there has been an uptrend among all age groups in the distance of purchased homes from downtown. As noted in “A Decade After the Housing Bust, the Exurbs Are Back” (The Wall Street Journal, March 27), the search for affordable housing is again “motivating buyers to drive until they can afford a home,” increasingly in the exurbs. The trend applies to all age groups, with longer distances for those in older age groups. But even Millennials are moving further out.

Why Are So Many Deficient Bridges Still With Us?
Over the last decade there has been a modest downtrend in the reported number of structurally deficient bridges. The general impression is that if only there was greater investment in fixing or replacing such bridges, this problem would soon be behind us. Alas, that is somewhat fallacious. The 2019 Bridge Report from the American Road & Transportation Builders Association provides recent data on the extent of structurally deficient bridges and recent trends. It includes this revealing fact: In 2018, 6,229 bridges that were structurally deficient were repaired or replaced—and hence removed from that category. But 5,660 other bridges were newly categorized as structurally deficient, for an overall net decline of only 567 bridges. Many states have let so many bridges get so old that we can expect a new crop to be added to the list every year. That makes it much harder to reduce the number to anything close to zero.

Are Millennials Different Regarding Vehicle Ownership?
We all know the stereotype: Millennials walk, bike, ride transit, or use Uber & Lyft rather than buying cars. But do the data support that view? Christopher Knittel of MIT’s Sloan School and Elizabeth Murphy of Genser Energy used travel and other data from the Census and other sources to empirically test whether Millennials’ vehicle ownership and use patterns differ from those of previous generations, after accounting for confounding variables. In NBER Working Paper No. w25674, they find that various differences between Millennials and other generations “have a small effect on vehicle ownership, reducing the number of vehicles per household by less than one percent.”

Do Voters Support Tolls? It Depends
With debate still raging in Connecticut over whether to use toll financing to rebuild and modernize that state’s Interstates, the Sacred Heart Institute for Public Policy released results of a public opinion survey on transportation funding in that state. On the basic yes/no question of electronic tolling on major highways, the result was 34.7 percent yes versus 59 percent no. However, when respondents were asked if their answer would be different if the toll revenues went into a “lockbox” to be spent only on roads, bridges, and highways, 36.2 percent were more likely to support tolls. Gov. Ned Lamont’s office hailed those results as indicating potential majority support for dedicated toll revenues.

Canada’s 407 Toll Road May Be Worth $20 Billion
In April, pension fund OMERS Infrastructure acquired a 10 percent stake in the 407 Toll Road Concession from seller SNC-Lavalin. The price in U.S. dollars was just under $2 billion, which implies a total asset value of $20 billion, based on the long-term revenue stream of this major highway in the Toronto metro area.

Toyota Ditches DSRC for Connected Vehicles
The ongoing competition between two different technologies for vehicle-to-vehicle and vehicle-to-infrastructure communications has led to another casualty for the original contender, DSRC, which Toyota had previously intended to use in new vehicles beginning in 2021. General Motors has used DSRC on some Cadillac sedans, but few other automakers have committed to it. Most are waiting to see if the new 5G wireless technology proves to be a better choice for connected-vehicle purposes.

Another Attack on a Toll Agency
Similar to the legislative attempt to neuter the Miami Dade Expressway Authority (see last month’s issue), in California Assemblyman Bill Brough has introduced a bill that would prevent the Transportation Corridor Agencies in Orange County from issuing any new bonds—and hence not financing any expansions of capacity. A similar bill last year failed to get out of a state Senate committee.

Rail Transit Ridership Declined in 2018
The American Public Transportation Association (APTA) reported that 550,585 fewer rail transit trips took place in 2018 than in 2017. Heavy-rail ridership decreased by 2.6 percent in 2018, and light rail ridership by 3 percent. Only commuter rail showed a slight increase of 0.41 percent. Overall, including bus transit, APTA reports 9.9 billion transit trips, down 2 percent from 2017.

New Reports on Transit Contracting
The Transit Cooperative Research Program has released two reports, one on contracting fixed-route bus transit service and the other on contracting commuter rail service. The former (TCRP Synthesis 136) reviews how transit agencies make decisions and set policies for contracting out bus services. The commuter rail document (TCRP Research Report 200) consists of two volumes. The first describes the pros and cons, while summarizing current trends; the second volume profiles 31 U.S. commuter rail services and their practices with contracting and other approaches. Both are available from the Transportation Research Board.

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Quotable Quotes

“Critics have attacked [Maryland’s express toll lanes plan] as a boon mainly to the rich who can afford the new ‘Lexus Lanes’; as a sinister undertaking that will encourage more driving; and as a high-handed state project riding roughshod over localities. Citing Virginia where private partners have successfully built dozens of miles of toll lanes in the suburbs, they cite stratospheric prices imposed on solo drivers on Virginia’s Interstate 66 [inside the Beltway]—forgetting that those drivers were completely banned from that road during rush hour before tolling was introduced two years ago. They insist that Maryland should focus on transit improvements, ignoring the reality that car usage nationally is expanding at roughly twice the rate of population growth. (Think of Uber, Lyft, and the advent of self-driving cars.) The DC area’s population is set to grow by 1.5 million people by 2045—it is folly to believe the existing massively congested road system will suffice. New roads don’t induce population growth; they accommodate it, and sustain the robust economy that attracted all those new people. The alternative is stagnation and job loss.”
—Editorial Board, “Brace Yourselves, Marylanders. Your Commute Could Get Much Worse,” The Washington Post, April 20, 2019

“The phrase that we used over and over in the [2016] transportation transition was ‘national in scope and federal in responsibility.’ It’s the responsibility part that’s overlooked because something is national in scope. The one thing I ever learned in sociology classes is that just because it’s raining all over America government doesn’t owe us an umbrella.”
—Alan Pisarski, personal communication, May 1, 2019

“The Turnpike’s stability is also threatened by a lawsuit brought by commercial trucking groups, demanding that $6 billion in tolls diverted to non-Turnpike needs be returned to the toll-payers. If Act 44 were tossed by the courts, Pennsylvania’s transportation budgets would be gutted, even with two wholesale fuel tax hikes since 2012. Transportation Secretary Leslie Richards says PennDOT couldn’t begin to repay $6 billion—not without ‘catastrophic’ consequences to road, bridge, and mass transit programs across the state. So what’s Pennsylvania’s solution to its transportation Ponzi scheme? The Legislature has milked the Turnpike’s cash cow for too long. A judge might conclude that it’s time to sell the farm. Painful as it may be, Pennsylvania lawmakers have to find a pay-as-you-go transportation funding vehicle, without foisting debt on a third party. Let the Turnpike pay down its debt without fleecing its users.”
—Editorial Board, “Pa. Turnpike Faces Never-Ending Toll Hikes, Everlasting Debt,” Lehigh Valley Express Times, April 21, 2019

[On New America’s “Smart Is Not Enough”] “True, smart is not enough, but neither is this paper. This is largely a continuation of a 1984 techno-view of life which seems to equate a monolithic digital technology with intelligence. One beauty of cities/communities is diversity, which is non-existent in these optimized enclaves. Where is any semblance of enhancement of the individual’s quality of life according to the individual’s own perception of his/her quality of life? As opposed to some ‘imagined’ quality of life of some (hopefully) benevolent planner’s optimal orchestration of everyone else. Yuk! No thank you. Maybe this is good for the Chinese or ‘San Francisco/Silicon Valley.’ No thank you for New Jersey. We have home rule. Worth the cost!”
—Alain Kornhauser, Smart Driving Cars, April 5, 2019

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