- Congestion pricing: a tale of two cities
- States should stop diverting fuel-tax revenue
- Express toll lanes’ expanding track record
- 2018 commuting: same old same old
- Should trucks be taxed to bail out the Highway Trust Fund?
- Reforming transportation’s governance and institutions
- Upcoming Transportation Events
- News Notes
- Quotable Quotes
Congestion Pricing: A Tale of Two Cities
A number of major urban areas with heavily congested downtown cores are discussing implementing some form of congestion pricing—a charge either to cross a boundary into downtown during peak hours or a charge on driving within that downtown.
Farthest along by far is Manhattan, where advocates succeeded (after many years) in getting state legislation enacted for such pricing to begin in 2021. Another city with a long history of studying congestion pricing is Seattle, where the Seattle Department of Transportation (DOT) released a preliminary study earlier this year, with more details promised soon.
In July, Seattle also received a study commissioned by Uber Technologies and carried out by ECONorthwest, a respected consulting firm based in Seattle. This study used street-specific data from two Uber databases, one on speeds and the other on travel times. Its researchers used this to estimate demand elasticity and develop a pricing schedule that would meaningfully increase travel speeds and reduce travel times within the downtown zones identified by the data. The maximum daily charge was estimated at $3.80 and the amount of congestion reduction was quantified.
The approach dictated by the New York enabling legislation is very different. The statute requires that the congestion pricing system generate enough annual revenue during its first five years to support issuing $15 billion worth of bonds to refurbish the city’s aging subways and the Long Island Railroad. In response, city number crunchers have estimated an average daily charge of $11.52—three times the level estimated for Seattle.
Is New York City congestion three times as bad as Seattle? The 2019 Urban Mobility Report from the Texas A&M Transportation Institute provides figures on the intensity of congestion in these two metro areas. Here are three relevant measures:
| Seattle | New York City | Difference | |
| Yearly delay/auto commuter | 78 hours | 92 hours | +18% |
| Travel time index | 1.37 | 1.35 | -1% |
| Congestion cost/auto commuter | $1,410 | $1,780 | +26% |
In other words, while congestion is certainly bad in New York City, what’s going on in New York is largely driven by a revenue target, rather than a congestion-reduction target.
That makes it especially egregious for politicians, transportation officials, reporters, and others to describe what New York is doing as “tolling.” A toll is a charge imposed on users to pay for the capital and operating costs of the road, bridge, or tunnel they are using. The planned NYC congestion charge is basically a tax imposed solely on personal and commercial vehicles to pay for major investment in rail transit.
I have searched in vain for any planned investment in the streets or bridges that these vehicles use. It’s not as if there aren’t any such investments that would likely pass a benefit/cost test. How about first-class roadway maintenance, to reduce the $719 per year it costs the average New York City motorist in wear and tear and faster depreciation due to streets and roads in “poor” condition? How about state-of-the-art signal timing systems to improve traffic flow on the major north-south avenues (which would also help many bus routes)?
A thoughtful report from the Regional Plan Association includes a map showing the four principal non-tolled bridges into Manhattan—Queensboro, Williamsburg, Manhattan, and Brooklyn. These aging relics should be replaced, and the obvious way to do this is with toll financing. But that would mean customers using those bridges would receive the same degree of exemption from the congestion charge as users of all the tolled bridges and tunnels. And that would divert a lot of revenue to these new bridge tolls instead of to the subway and commuter railroad.
This focus on a revenue target rather than on producing meaningful congestion relief sets a very bad precedent for other congested downtowns. A recent report by the Eno Center for Transportation on lessons learned from Europe’s approach to congestion pricing cites examples of pricing proposals that failed. For example, in an echo of what New York is doing, Gothenburg, Sweden, officials focused their campaign on generating enough revenue to build a suburban rail tunnel—and failed to gain public support. Streetsblog reports that Chicago Mayor Lori Lightfoot “is considering a congestion pricing plan to fill a hole in the city’s budget” and cites disagreement from Eno’s Rob Puentes on this approach.
Any urban congestion pricing plan should offer benefits greater than its costs, and should include real benefits for the commuters, tourists, and commercial operators who will be required to pay the charges. Yes, reduced congestion is worth something to them, but as the Regional Plan Association notes, charges to use the roads should include paying for the maintenance of highways, bridges, and tunnels—which the New York plan clearly does not do.
States Should Stop Diverting Fuel Tax Revenue
By Baruch Feigenbaum
For most of the past 100 years, U.S. transportation policy has been based on the users-pay/users-benefit principle. The biggest advantages of this principle are that it is fair (those who pay the fees receive the benefits), proportionate (those who use highways more would pay more), self-limiting (the tax rate is limited), predictable (consistent from year to year), and an investment signal (indicates how much infrastructure to build).
The motor fuel tax, the most-used funding mechanism, is still users-pay, but users are benefiting less and less. Most of the transportation industry is aware of federal gas tax diversions. The federal diversion grew from 0 percent to 30 percent between 1968 and 1991 and has more or less held constant at that rate. Local transit systems, recreational trails, and invasive weed removal projects regularly receive revenue generated by gas taxes.
But what may surprise many in the transportation world is that more than half of states are also diverting their state motor fuel revenue away for their roads and highways. Thirty-one states divert a portion of their motor fuel tax revenue to non-road-related expenditures, with five diverting over a third of gas tax revenue and an additional five states diverting over a quarter of gas tax revenue.
Northeastern states have some of the largest percentage diversions and Connecticut has the highest diversion rate, 57.8 percent. While Connecticut’s gas tax generated over $506 million in 2018, 40 percent went to fund general state debt and 21.6 percent subsidized transit.
Connecticut’s neighbors are the states with the second, third and fourth highest diversion rates: New York, Rhode Island and New Jersey, respectively. New York diverts 37.4 percent of all motor fuel tax revenue towards mass transit. Only 13.8 percent of New York’s motor fuel tax revenue is dedicated to current highway capital projects, while another 25.4 percent is allocated for NYDOT operations (a category which includes the cost of road maintenance, from salaries to equipment costs, but also administrative uses). Rhode Island allocates 27.9 percent of its motor fuel tax revenue to transit and an additional 2.9 percent to the Department of Human Services (DHS) to cover the transportation costs of veterans and disabled individuals, among others. Those transferred funds, however, are simply deposited into DHS’s operating budget, leaving little accountability over the allocation of motor fuel tax revenue.
New Jersey’s overall diversion rate of 34.0 percent consists of a $676 million allocation of motor fuel tax to NJ Transit and a $2 million allocation to various sidewalk and pedestrian projects meant to transform municipalities into transit-oriented villages.
Many other states also divert revenue to transit. Some such as Maryland and Massachusetts divert a large share, 27.8 percent and 23.7 percent respectively. Others divert a smaller percentage: Michigan, Tennessee, and Vermont divert 1.6 percent, 3.3 percent, and 2.6 percent respectively. Colorado authorizes its municipalities to use 15 percent of their fuel tax on transit, which accounts for 5 percent of overall fuel tax revenue in that state.
Beyond transportation, states frequently use motor fuel tax revenue to fund other state-level executive departments. Michigan diverts 25.9 percent and Texas diverts 24.7 percent of revenue to their respective school aid funds. Kentucky distributed a quarter of its revenue to help balance the budget of any executive department running a deficit. Additionally, many states, such as Colorado, Maine, Pennsylvania, and Vermont use a portion of their respective revenue to fund state police operations.
Small line-item diversions can add-up as well. Washington state, for example, diverts $3.9 million to vanpool services, $11.1 million to bike and pedestrian programs, $9.4 million to bike and pedestrian safety, $4 million to two separate sidewalk programs, and $37.5 million toward fish barrier removal efforts. Combined with other diversions for rail and buses, Washington’s overall diversion rate is 10.2 percent.
Other notable diversions are North Carolina’s 3 percent diversion toward municipal sidewalks and bike programs and Vermont’s 1.2 percent diversion for visitor center construction and maintenance (which is in addition to rest-stop allocations). Interestingly, North Dakota diverted $4.7 million, just under 1 percent of its fuel tax revenue, to the Ethanol Subsidy Fund, effectively subsidizing a component of the very fuel that it’s taxing.
While all diversions are problematic, the larger percentage diversions of gas taxes can take significant funding for roadway capital, maintenance and operations projects and impact those highway systems. North Dakota DOT shouldn’t subsidize ethanol with gas taxes but it can theoretically manage the 1 percent diversion that subsidizes ethanol. Connecticut DOT faces real challenges in losing 40 percent of its revenue to general state debt service. There are a variety of factors in play, but North Dakota ranks first, and Connecticut ranks 44th, in overall performance and cost-effectiveness in Reason Foundation’s most recent 24th Annual Highway Report.
In examining gas tax diversions, New York City has a very high transit mode share; while there are better transit funding mechanisms than the gas tax, New York City transit is a highly used form of transportation. On the other hand, education receives the largest share of general fund revenue in most states. It certainly does not need to be supplemented by the gas tax. And while fish barrier removal may be a worthy cause in Washington state, given the abysmal pavement conditions on its highways, the state cannot afford any diversions and it is not the type of project gas taxes should be funding.
The most troubling fuel tax diversions are those for general debt. States with these diversions need to reduce spending to available tax revenue. But as long as they can bail themselves out by grabbing money from the transportation fund, they have no incentive to clean up their act. While most other diversions can be eliminated, the gas tax diversions for state debt create a cycle of general fund dependency on gas taxes.
Some states are working to reduce their fuel tax diversions. Several, such as Pennsylvania, are examining constitutional amendments or lockboxes that would prevent diversions. But even when states eliminate or reduce diversions, the process can be slow. Georgia passed comprehensive transportation reform in 2015 that eliminated the ability for counties to implement a sales tax on gasoline for non-roadway purposes. Yet, the state’s referendum-authorized sales taxes last for 10 years, so there will be ongoing diversions until 2025.
It’s clear that many states saying they need more transportation funding could increase their highway funding without increasing taxes by reining in their gas tax revenue diversions. Rather than using motor fuel taxes as a slush-fund, states should respect those who pay gas taxes by strengthening their users-benefit/users-pay systems and using that money to improve and maintain roads and highways.
Express Toll Lanes’ Expanding Track Record
How many express toll lane projects are in operation in the United States today?
As of mid-summer, according to a tally provided by the International Bridge, Tunnel & Turnpike Association’s TollMiner database, there were 51 such projects. Texas has the most (18), followed by California (9), Florida (5), Georgia and Virginia (4 each), Colorado and Minnesota (3 each), Washington (2) and Maryland, North Carolina, and Utah (1 each).
Some of these projects were simple, low-cost conversions of existing high-occupancy vehicle (HOV) lanes. An increasing number of projects are lane additions, requiring serious capital investment. For these projects, a growing trend is issuing toll revenue bonds, sometimes by a state agency (as in Riverside County, CA) but more commonly by a long-term public-private partnership (P3) entity. In my July 2018 column in Public Works Financing, I reported that Fitch Ratings has assigned (low) investment-grade ratings (BBB) to most such bonds, except for the 24-year-old SR 91 ETLs in Orange County, CA, whose revenue bonds are rated A+. That’s because they went through the Great Recession with a revenue decline of only 12 percent and recovered nicely thereafter. Most of the other ETLs opened after that period and have not yet been tested by a recession.
The positive track record is leading to the ongoing expansion of ETLs, with more states considering this approach to dealing with serious freeway congestion. One of these states is Massachusetts, where Gov. Charlie Baker in August said that adding optional priced lanes would be a good idea to deal with Boston-area congestion that has reached a “tipping point.” His Transportation Secretary, Stephanie Pollack, said their DOT will do a feasibility study on this in 2020.
Recent new project announcements have included the planned start of construction to add ETLs to the 101 freeway in San Mateo County, CA; Georgia DOT promising release of a request for quotation (RFQ) for the Georgia 400 ETL project in first-quarter 2020, and several ETL projects either planned or under construction in the Tampa/St. Petersburg, FL metro area. Also in Florida, the Turnpike has opened ETLs on its SR 528 toll road in the Orlando metro area.
Extensions of existing ETLs are under way in at least six states, as follows:
- California: plans are moving forward for more ETLs on SR 60, SR 91, and I-215;
- Florida: construction continues on extending the I-95 ETLs northward from Ft. Lauderdale to West Palm Beach;
- Texas: Austin’s existing MoPac ETLs have been greenlighted for a southward extension;
- Utah: a project extending the existing I-15 ETLs is under way;
- Virginia: extensions ETLs on I-95 north (as I-395) to the DC line and south to Fredericksburg are under way, with the former opening this month; and,
- Washington: a major project under way to add ETLs to I-405 from Renton to Bellevue, as a southerly extension of the existing ETLs going north from Bellevue.
There are ETL problems and conflicts here and there, but I will save those for an upcoming issue of this newsletter.
2018 Commuting Data: More of the Same
The Census Bureau, last month, released the results of its 2018 American Community Survey (ACS), including details on commuting to work. The results show little change since 2014, except for working at home, which has increased from 4.5 percent to 5.3 percent of workers, on average.
To get a broader perspective, it is worthwhile looking at longer-term trends. As can be seen in the numbers below, driving alone has remained at more than 75 percent of all commuting, while carpooling may have finally leveled off, after a three-decade decline, at about 9 percent (and combining drive-alone and carpool means about 85 percent get to work in a motor vehicle). Transit is also in a long-term decline, though nowhere near as steep as that of carpooling. Walking and other means (bicycle, scooter, etc.) remain less than 2 percent. It is also clear that working at home now exceeds transit nationwide (5.3 percent versus 4.9 percent).
| Mode | 1980 | 1990 | 2000 | 2010 | 2018 |
| Drive alone | 64.4% | 73.2% | 75.7% | 76.6% | 76.3% |
| Carpool | 19.7% | 13.4% | 12.2% | 9.7% | 9.0% |
| Transit | 6.2% | 5.1% | 4.6% | 4.9% | 4.9% |
| Walk | 5.6% | 3.9% | 2.9% | 2.8% | 2.6% |
| Other | 1.8% | 1.4% | 1.3% | 1.7% | 1.9% |
| Work at home | 2.3% | 3.0% | 3.3% | 4.3% | 5.3% |
The places where transit continues to play a large role are traditional central business districts (CBDs), primarily in cities whose downtowns were well-established prior to the advent of highways and motor vehicles. These include the following CBDs:
| City | CBD transit share | Metro area transit share |
| Boston | 32.2% | 14.3% |
| Chicago | 28.3% | 13.1% |
| New York | 55.9% | 32.5% |
| Philadelphia | 26.4% | 10.7% |
| San Francisco | 33.5% | 19.5% |
| Washington | 34.4% | 15.2% |
Attempts to shift large numbers of commuters from motor vehicles to transit are unlikely to succeed in metro areas where the vast majority of jobs are not in the central business district but are instead spread widely across the metro area. Here are CBD and metro area transit shares in auto-era metro areas:
| City | CBD transit share | Metro area transit share |
| Atlanta | 10.0% | 3.4% |
| Dallas/Ft Worth | 3.8% | 1.6% |
| Houston | 3.8% | 2.3% |
| Los Angeles | 8.7% | 5.0% |
| Miami | 8.9% | 3.1% |
| Phoenix | 3.0% | 1.9% |
| San Diego | 3.7% | 2.7% |
For metro areas like this second group (which is similar to nearly all of the rest of America), a far better solution than adding very costly rail transit is to facilitate fast and reliable region-wide express bus service using variably priced lanes on the existing region-wide freeways. That cleverly gets motorists to voluntarily pay most or all the costs of the new lanes, which buses use at no charge, meaning the transit agency does not have to create new infrastructure. All it has to provide is more buses to operate on the virtual equivalent of exclusive busways.
Should Trucks Be Taxed More to Bail Out the Highway Trust Fund?
In October the Congressional Budget Office (CBO) released a report called “Issues and Options for a Tax on Vehicle Miles Traveled by Commercial Trucks.” The role of CBO is not to propose or recommend policies. Instead, when requested by Congress, it analyzes potential new policies. In this case, given concern about the Highway Trust Fund taking in considerably less user-tax revenue than Congress is determined to spend on highways and transit, some members of Congress asked CBO to look at a new tax on trucks based on their miles traveled. Hence, it focused on questions such as: Which trucks? Which roads? What kind of collection mechanism? And, what level of tax rate?
As is usual for CBO reports, the work was competently done, making realistic assumptions and crunching the numbers to estimate answers to the above questions. For example, a tax of 5 cents/mile applied to all commercial trucks on all public roads would generate $12.8 billion a year, but if applied only to combination trucks (tractor-trailer rigs) that number would be $8 billion. Other scenarios started with various revenue goals, such as not only covering the current annual HTF shortfall but also covering more of trucks’ share of highway wear and tear. Numbers here used rates as high as 7.5 to 9.9 cents/mile and yielded estimated revenues of $16.1 to $19.4 billion per year.
In recent years, the trucking industry has argued that all highway users should be paying more, but they would surely oppose any attempts by Congress to implement the ideas assessed in CBO’s study. What the industry rightly wants is major improvements to (at least) the Interstate highways on which they depend heavily, as well as other key highways that are part of the National Highway System. The problem with a new tax to bail out the HTF is that—politics being politics—the increased revenue would almost certainly be spread over the hundred or more programs that now get annual HTF funding. So what a new trucks-only vehicle mile traveled (VMT) tax would be for the industry is basically all pain with little-or-no gain.
On a more fundamental level, I have long supported the idea that in coming decades this country needs to phase out per-gallon fuel taxes and replace them with per-mile charges (mileage-based user fees—MBUFs). This idea is gradually picking up support in Congress, and some of those supporters might be inclined to see the trucking industry as the place to start this transition. Most highway trucks already have some kind of mileage logging and communications devices, and it is a vastly smaller segment of highway users than individual motorists. And lessons learned from trucking could be generalized later on for per-mile charging for them.
I think that is precisely the wrong way to begin this transition, for several reasons. First, the transition should not be imposed top-down from Washington, either on cars or on trucks. The far wiser way is to continue encouraging states to experiment with MBUF pilot projects (which are starting to include trucks), working to solve technical problems, customer acceptance problems, privacy protections, etc. We need pioneer states to work out what it will take technically and politically to get to yes on converting to an MBUF future.
Second, states are far more credible on transportation with voters than is the federal government. As we all know, federal fuel tax rates have not been increased since 1993, but just about every year, the large majority of local and state transportation funding ballot measures are approved by voters (as happened again this month). This alone argues for letting the states take the lead in a discovery process to find acceptable ways of transitioning from per-gallon to per-mile charging.
Third, since the trucking industry has a long history of opposing weight-distance taxes (which exist in a handful of states), imposing what the industry would see as a national weight-distance tax on trucks is asking for a battle royale. My guess is that the trucking industry would win that battle, and in so doing would set back the needed transition from per-gallon taxes to per-mile charges for a decade or perhaps much longer.
I outlined a possible state transition strategy for shifting from per-gallon taxes to per-mile charges in this recent Reason Foundation policy brief.
Reforming the Governance and Institutions of America’s Transportation System
Earlier this year, the Eno Center for Transportation and Reason Foundation convened an invitation-only workshop to explore whether the current set of agencies and policies for funding and managing America’s surface transportation system are fit for purpose and, if not, what sort of reforms might make sense. The idea for the workshop emerged from two separate discussions: one between former Federal Highway Administration (FHWA) policy expert Steve Lockwood and me, and the other—independently—between Eno’s Emil Frankel and UCLA’s Martin Wachs. Since we all know one another, these conversations led to the idea of convening an off-the-record workshop in which knowledgeable researchers and practitioners could explore these topics.
You can find a summary of the workshop, including a list of the participants, on the Eno website. To add some color to that summary, here are a few excerpts from my notes as a participant.
Future of the current federal role: There was some degree of skepticism, for various reasons, about whether the current federal role, which is largely about grants to state and local agencies, would continue. There was frustration with political gridlock in Washington, an acknowledgement that de-facto de-federalization has been going on for some time, and general acknowledgment that safety regulation and standard-setting (at least) should continue to be federal responsibilities.
Reform or replacement of agencies: There was a lot of discussion over whether certain kinds of organizations—such as multi-purpose port authorities (like the Port Authority of New York & New Jersey), state DOTs in their current form, and metropolitan planning organizations (MPOs)—are still viable or should be reformed or replaced. Participants were divided on reform vs. replace, and several pointed to poor project delivery and no increase in the productivity of infrastructure construction in decades as symptoms calling for change.
Politicization is a serious problem: Various concerns were raised about large and small decisions being made for political rather than economic reasons—from small things like changes in bus routes to the allocation of state highway funds via the annual legislative budget process. Many agencies have competing or conflicting goals and elected officials may not appreciate new approaches (such as long-term P3s or mileage-based user fees).
Funding and finance: Aging transportation infrastructure implies the need for much greater investment than business-as-usual can provide. Several pointed out that lots of capital is out there, eager to invest in U.S. transport infrastructure, but most states do not have mechanisms in place to attract it. And the current federal program does not properly account for major-project risks. Large pension funds want to invest equity in revenue-generating infrastructure, but find few U.S. projects on offer. Another discussant noted that most transport needs these days are urban, but 70 of 100 Senate members are from largely rural states, which skews funding priorities.
Eno and Reason are hoping the workshop and various summaries of its topics will spur further discussion of our transportation institutions and their governance. If there is enough interest, we hope to pursue these ideas further, via possible research papers and/or additional workshops focused on one or more of the topics discussed at the original workshop.
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.
Heritage Hill Briefing, Nov. 13, 2019, Washington, DC, Dirksen G-11 (Baruch Feigenbaum speaking)
Bond Buyer Finance/P3 Conference, Nov. 14-15, 2019, Denver, CO: Grand Hyatt Denver (Baruch Feigenbaum speaking). Details here.
NCSL Fall Forum, Dec. 9-12, 2019, Phoenix, AZ: JW Marriott Phoenix Desert Ridge (Baruch Feigenbaum and Adrian Moore speaking). Details here.
42nd Annual Kentucky Transportation Conference, Jan. 15-17, 2020, Lexington, KY: Lexington Convention Center (Robert Poole speaking). Details here.
$9 Billion P3 Lease Offer for Denver’s E-470
ROADIS, which is owned by the Canadian pension fund Public Sector Pension Investment Board, has made an unsolicited proposal to the board of the E-470 toll road around the east side of the Denver metro area. It’s the first such asset-recycling proposal for a toll road in over a decade since the Pennsylvania Legislature turned down a $12.8 billion offer from Spanish company Abertis in 2008. The E-470 board voted to reject the offer back in August, but ROADIS continues to argue that there would be tangible benefits to the cities: paying off the toll road’s existing bonds, net proceeds they could use for needed but unfunded transportation projects in the region, a moderate toll regime (including a 3-year initial freeze, CPI-limited increases thereafter, and a new frequent-user discount), and timely investments to improve E-470 itself. ROADIS’s efforts are being championed by former Colorado DOT official Michael Cheroutes. ROADIS manages nearly 1,200 miles of toll roads in Brazil, India, Mexico, Portugal, and Spain.
Hybrids Lose Free Passage in HOV/HOT Lanes in Utah and Virginia
As of October, hybrids will be treated as ordinary vehicles in the HOV and high-occupancy toll (HOT) lanes of Utah and Virginia. For variably priced HOT and Express Toll Lanes, the change should improve traffic flow, since hybrids will now be subject to the variable pricing that is intended to limit the number of vehicles seeking to use these lanes during congested peak periods.
“Medical Records” for Aging Bridges and Tunnels
Startup company Dynamic Infrastructure aims to help state DOTs and other highway operators to monitor the condition of aging bridges and tunnels, alerting the owners to changes that require maintenance or reconstruction. Its method is to compare archived images of each facility with new images gathered via smartphone cameras, laser scanning, and drone flights. The resulting 3-D images can be likened to human MRIs, which alert doctors to changes in internal conditions. The company says its system is being used by Suffolk County, NY, Haifa in Israel, a research institute in Switzerland, and un-named P3 companies.
Feds Rescind “Proprietary Products Rule”
In an action widely supported by state DOTs and infrastructure companies, FHWA scrapped a 1916 regulation that prohibited state transportation agencies from using patented or proprietary materials, specifications, or processes on federal-aid highway projects. The agency explained that its decision is intended to “promote innovation by empowering states to choose which state-of-the-art materials, tools, and products best meet their needs for the construction and upkeep of America’s transportation infrastructure.”
407 ETR Continues Highway Investment
In September, private toll road company 407 ETR announced the opening of none new lane-miles in the eastern Toronto suburbs. Since the highway was privatized in 1998, the company has added 352 lane-miles at a cost of $1.6 billion, via a combination of widenings and extensions. The tollway serves nearly 500,000 drivers and passengers per day. 407 ETR is owned by Canada Pension Plan Investment Board (50.01 percent), Cintra (43.23 percent) and SNC-Lavalin (6.76 percent).
California Governor Shifts Gas Tax Funds from Highways to Transit
Last month California Gov. Gavin Newsom issued an executive order (N-19-19) to redirect billions of dollars in gas tax receipts to “reduce greenhouse gases and emissions.” This comes soon after a massive 2018 increase in gas taxes, sold to voters as a way to improve the state’s potholed highways. When CBS47 queried Caltrans about the cancellation of promised highway projects in the Central Valley, the agency’s reply said: “Caltrans will use available transportation dollars to prioritize projects that manage congestion and reduce vehicle miles traveled in order to curb greenhouse gas emissions.” And, as a slap in the face to the state’s voters who may feel betrayed, the agency added, “Those who claim the state is canceling projects funded by gas tax dollars are incorrect[sic]. Aligning climate goals with transportation goals requires new thinking, not obstructionism.”
Newsom Vetoes California Complete Streets Bill
A bill that would mandate adding “complete streets” treatment to major urban arterials that are state highways was vetoed by Gov. Gavin Newsom. Supporters of SB 127 (Complete Streets for Active Living) argued that the safety of pedestrian and cyclists was at risk, calling for things like “road diets” and protected bike lanes. This ignores the basic distinction between local streets, whose lower speed limits are compatible with walking and biking, and higher-speed, higher-capacity arterials, typically six lanes or more, which function as a vital adjunct to freeways and expressways for region-wide mobility. Bike lanes on such arterials are an inherent safety risk.
Declining Fuel Tax Revenues Lead to Calls for UK Road Pricing
Parliament’s Transportation Select Committee has found that the £40 billion per year generated by fuel duty and vehicle excise duty is “likely to decline sharply in future” as motorists shift to high-mpg and electric vehicles. The committee suggested a national road pricing model to replace the existing fuel and vehicle taxes. Similar concerns have been raised by the Institute for Fiscal Studies, a UK think tank.
Two New Stations Approved for Brightline Trains in Miami
Twice during October, the Miami-Dade County Commission voted in favor of spending county funds to help pay for additional stations in Miami for private-sector train operator Brightline. One will be at the Port of Miami and the other will be at one of the county’s largest shopping malls, Aventura. The latter is close to the existing Brightline/Florida East Coast rail line, while the former will be near the end of the FEC right of way into the Port of Miami, about two miles beyond the Brightline MiamiCentral station in downtown.
Soo Locks Included in Army Corps Initial P3 Ventures
Using new authority granted to it by Congress, the Army Corps of Engineers recently winnowed eight privately-proposed projects down to four. One of them is a $922 million project that would build a second lock on the St. Mary’s River at Sault Ste. Marie, MI, via a DBF or DBFOM procurement. The new lock would replace two obsolete locks that are now closed with a state-of-the-art lock capable of handling 1,000-ft. long vessels. Michigan DOT is supportive of the project. The big question mark is coming up with a revenue stream that will make it possible to do long-term financing of this nearly one-billion-dollar project.
48-State Transponder Offered to RV Owners
For several years, the trucking industry has used a multi-protocol toll transponder from TransCore, called NationalPass. The company last month announced a series of transponders based on the same technology aimed at owners of recreational vehicles (RVs). The RV Toll Pass is offered in three versions: one for motor homes with three axles, another for two-axle motor homes, and a third for two-axle trailer tow vehicles. Accounts for RV owners will be managed by Bestpass, which manages similar toll services for commercial trucking.
Mexico Announces New Highway P3 Program
The leftist government headed by President Andres Manual Lopez Obrador (AMLO) has announced a $974 million highway road concessions program, as part of an expanded highway investment plan. The five projects are in separate states, and include a new urban viaduct, two decongestion projects, one highway widening, and one new highway. The government will also offer hundreds of smaller highway improvements around the country.
Congress Ignores Another Spending Constraint
A long-standing rule against unfunded transportation spending was bypassed late last month in the “minibus” appropriations bill that included transportation. The Rostenkowski Rule triggered an automatic transit spending cut whenever unfunded transit authorizations exceeded projected revenues of the transit account of the Highway Trust Fund over the next four years. The projected cut, of $1.2 billion, was of course opposed by transit agencies. And the American Public Transportation Association helpfully provided a state-by-state listing of where the cuts would occur. An amendment over-riding the rule by Sen. Doug Jones (D, AL) was adopted on October 31.
Indra Lands I-66 Variable Tolling System
Cintra, the developer/operator of new express toll lanes on I-66 outside the Beltway in Virginia, has awarded a contract to Spanish company Indra. The $83 million contract with Cintra’s I-66 Express Mobility Partners calls for a free-flow variable electronic tolling system, with toll rates adjusted every three minutes. It will be Indra’s first to include a vehicle occupancy detection (VOD) system, integrated into each tolling point. The VOD was pilot-tested earlier this year in San Francisco and reportedly scored highest among those tested.
Replacement I-5 Bridge Back on the Agenda in Oregon and Washington
The controversial plan to replace the aging and inadequate I-5 bridge across the Columbia River in Portland is once again under discussion in the states it serves. Congestion has gotten worse, and the bridge continues to age; it reached capacity some 30 years ago. INRIX measures it as the nation’s 10th worst traffic bottleneck. The demand from Portland that the previous replacement include a costly light rail line (opposed by those across the river in Washington) might now yield to some kind of bus rapid transit (BRT) which could share an express lane with other vehicles. And variable tolling is also being discussed. Perhaps this attempt will actually lead to a replacement bridge.
Radical Environmentalists Oppose UK High-Speed Rail
The controversial, over-budget HS2 rail project has been opposed mostly by fiscal conservatives, objecting to its taxpayer cost. But a new opponent surfaced in demonstrations last month in London. Extinction Rebellion, which wants air travel banned, now calls HS 2 a “scar across the belly of the land” that would destroy woodlands and wildlife habitat. Let’s see: if people can’t travel by air or rail, and cars are bad, are they supposed to get from London to Manchester by walking? biking? or what?
Judges Question Rhode Island on Toll vs. Tax Question
The American Trucking Associations has an ongoing lawsuit against the state of Rhode Island, arguing that charging tolls only to trucks is discriminatory. Judges at the federal First Circuit court took exception to the state’s argument that the new truck-only tolls aren’t really tolls but are taxes. This directly contradicts several years of planning and implementation efforts in which Road Island officials always called the charges tolls, which they clearly are. The state maintains that the federal litigation should be dismissed, because state courts should deal with tax cases. My guess is that ATA is going to win this skirmish, as they should.
How China Builds High-Speed Rail in Ways that We Cannot
My Reason colleague Marc Joffe had an excellent op-ed in the Orange County Register on Oct. 23, 2019: “Why California Can’t Compare with China on High-Speed Rail.” For example, the Chinese government can seize right of way without paying compensation—and has seized over 10 million acres of private land between 2004 and 2014. And compared with highly paid U.S engineers and construction workers, workers building China’s HSR lines average about $600 per month. Those are just of few of the reasons China has built more than 18,000 miles of HSR since the turn of the century. There is no way we could or should do likewise.
“In simple terms, technology now allows us to distribute access to highway capacity through the same kind of marketplace mechanisms that we have traditionally used to distribute access to movie seats and a host of other commodities. These technologies represent an opportunity to finally abandon the crude, inefficient, nonmarket funding mechanisms on which the United States has relied to finance its highways. They present a chance to gradually jettison the ‘Leninist’ practice of time-rationing to control access to highways. Equally important, they enable us to regard those who use highways as customers first and foremost. Yes, customers—not motorists or travelers or taxpayers, but customers.”
—Joseph M. Giglio, “Highway Robbery Is Alive and Well,” Tollways, Autumn 2004
“Folks, we will give you the permits. If you can figure out how to pay for it, go ahead and do it. . . . I hate to say this, but don’t expect too much federal financial assistance. We’d like to say if we had it, we’d give it to you. But we don’t have it. And I wouldn’t give it to you anyway. But you can raise the money privately.”
—Larry Kudlow, in Emile Munson, “White House Says Infrastructure Projects Should Seek Private Funding,” TimesUnion.com, Oct. 24, 2019
“Our past is catching up with us, and the future got here faster than we anticipated. . . . We need futurists in Congress, so that we can start making policy [with an eye toward what’s happening next, instead of acting] as if nothing’s going to change. . . . Most likely in 20 years we will have self-driving vehicles that can go 200 mph, in which case who is going to take a high-speed train? That doesn’t mean we shouldn’t consider making investments in high-speed rail. But it also means that 30 years from now it might look like the dumbest money we’ve ever spent.”
—Rep. John Yarmuth (D, KY), in “Morning Transportation,” Politico, Sept. 26, 2019
“What the [MIT] researchers found was that dockless scooters generally produce more greenhouse gas emissions per passenger mile than a standard diesel bus with high ridership, and naturally more than a walk or non-e-bike. A survey of users found that only 34 percent of the users would have taken their car or a taxi. Nearly 50 percent would have walked or biked (non-electric), 11 percent would have taken the bus, and 7 percent would not have taken the trip at all. The electricity used to charge the vehicles is one of the smallest contributors to the product’s emissions; around one-half of the emissions come from the raw materials and manufacturing process.”
—Michael L. Sena, “Rental e-Scooters Are Worse than a Nuisance,” The Dispatcher, October 2019
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