Surface Transportation News: Value-Added Tolling, Biden’s Plan, Lexus Lane Claims, and More
ID 153263415 © Ifeelstock |

Surface Transportation Innovations Newsletter

Surface Transportation News: Value-Added Tolling, Biden’s Plan, Lexus Lane Claims, and More

Examining conservatives' concerns about tolling, data on who uses toll lanes, truck platooning, looking at Joe Biden's infrastructure plan, and more.

In this issue:

Conservatives and Highway Tolling

As of today, using toll finance to rebuild part or all of a state’s Interstate highways is under discussion in 14 states that I know of. In some states, these discussions are bipartisan, but in other states, some conservative legislators have become outspoken opponents of tolling. Current examples include Connecticut (where Republican legislators are fighting hard against tolls), South Florida (where Miami Republicans have gotten anti-toll measures through the legislature), and Texas (where the governor and conservative legislators have forbidden TxDOT from putting any state funds into new toll projects).

I’m concerned about this for two main reasons. First, I think increased use of tolling is essential if we are going to fix the major shortcomings of our highways and freeways. And second, I think tolling can and should be consistent with basic conservative principles, as I explain in a new Reason policy brief, “A Conservative Case for Tolling,”.

In that brief, I discuss five of the main reasons conservatives give for opposing tolls, as follows:

  1. Tolls seem, to them, to be no different from taxes;
  2. They say it’s unfair to have to pay tolls and gas taxes on the same road or bridge;
  3. Governments (e.g. Pennsylvania) divert toll revenue to other uses, making toll rates higher than they should be;
  4. Many see governments as slapping tolls on existing highways, with only vague statements about improving those highways (maybe, someday); and,
  5. A lot of the revenue is consumed in the costs of collecting tolls (compared with the low cost of collecting gas taxes).

Some of these points have merit, as I discuss in the policy brief (which I hope you will read). Tolls ought to be, but today often are not, pure charges for service, like your electric bill or phone bill. You pay for what you get, you know who the provider is, and you can hold them accountable. That’s how traditional toll roads operated, including the thousands of private toll roads in 19th century America and Britain.

Nobel Prize-winning economist Milton Friedman wrote a paper about the poor management of U.S. highways, which I quote in the policy brief. He concluded that tax-funded U.S. highways are inefficient state-owned enterprises that aren’t accountable to their customers. “When the state goes into business, nobody worries much whether people are getting what they are willing to pay for, or whether the people doing the paying are those who are receiving the services,” Friedman noted. I cite a number of other conservative thinkers and policymakers who see tolls as far better than gas taxes.

My conclusion is that America needs to re-think tolling as it evolved in the 20th century, to come up with a new approach, which I call value-added tolling. It would have five key features:

  1. Charge a toll or a fuel tax for a highway, but not both (no double-charging);
  2. Build a better facility first, and only then start charging (no user costs until there are user benefits);
  3. Dedicate all toll revenues to the tolled facilities (no revenue diversion);
  4. Guarantee proper maintenance for the useful life of the facility; and
  5. Reduce the cost of toll collection to the lowest possible extent.

The policy brief explains each of these features.

The point of these provisions is to create a genuine value proposition for all cases where tolls are used to finance reconstruction or replacement of aging facilities. Perhaps eventually they could also be applied to existing tolled facilities, but that’s a longer-term objective. I contend that if these principles were followed, it would open the door to enough new funding to deal with the large backlog of needed projects that are mostly not being built these days. I also argue that this kind of funding would be more sustainable long-term, and would be fairer than gas taxes because people who use major (costly to build) highways would pay more per mile than those who only use inexpensive two-lane highways and local streets, which today’s fuel taxes can pay for.

I hope you will read the full policy brief (.pdf) and let me know what you think.

» return to top

California’s Contradictory Policies on Transportation and Land Use

Increasingly over the past decade, California policymakers have focused their transportation policy on the threat of global warming. Motor vehicles are a major source of CO2 emissions, so policy measures are increasingly designed to reduce the amount of travel by cars and trucks. Reducing vehicle miles of travel (VMT) has become a major goal of public policy, leading to things like restricting single-family housing development, trying to achieve jobs/housing balance, spending increasing fractions of gas tax and other money on transit, cycling, walking, etc., and spending what might be $100 billion on a north-south high-speed rail system.

Let me pose an important “what if” at this point. What if cars and trucks were zero-emission? After all, that is another policy track being aggressively pursued in California, with subsidies and production mandates for electric vehicles, as well as ever-higher mpg requirements beyond those of the federal CAFE regulations. What happens if and when those policies succeed and all cars and trucks are zero-emission electrics?

Last month I came upon an article from the now-defunct Transportation Quarterly, published by the Eno Transportation Foundation. Its Summer 1998 issue included Brian Dudson’s article, “When Cars Are Clean and Clever: A Forward-Looking View of Sustainable and Intelligent Automobile Technologies.” Dudson took seriously both greenhouse gases and conventional tailpipe emissions. He, therefore, expected that cars would eventually be required to be “clean” as well as increasingly automated and connected. But he also appreciated the enormous benefits of personal mobility that the automobile provides.

Consequently, his vision of a “clean and clever” urban transportation future retained automobility and the preference many people have for decentralized living. His future Los Angeles featured networks of “auto-ways” bringing commuters in their automated, non-polluting vehicles, to a central terminal in each major job center, while the vehicles would drive away to large parking structures at the periphery, to be summoned back when needed.

My point is not necessarily to embrace Dudson’s specific vision but only to point out that if zero-emission and increasingly automated vehicles actually are our future, then the current California focus on reducing VMT and imposing “stack-and-pack” densification is not required. Devoting what might become several hundred billion dollars’ worth of rail transit and high-speed rail systems in the name of stopping auto pollution is throwing out the baby with the bathwater. Those systems would take two or three decades to build out (using tax money for which I’m sure there are many alternative uses). Over that same time frame, it is entirely plausible for electric and increasingly-automated vehicles to displace today’s CO2-producing cars and trucks.

In other words, there is no need to restrict mobility or force people into a high-density lifestyle if the environmental goal can be met without losing the many benefits of personal auto-mobility. Isn’t it about time we started questioning those policies?

» return to top

Biden’s Disappointing Infrastructure Plan
By Baruch Feigenbaum

With the 2020 presidential campaign ramping up, many of the Democratic candidates have released policy positions for primary voters. Transportation, which is not considered sexy, has received little attention thus far. One exception is former Vice President Joe Biden, who released an infrastructure plan in mid-November. Unfortunately, his current transportation plan somewhat resembles the Obama administration’s American Recovery and Reinvestment Act stimulus plan to create jobs during the Great Recession.

I had high hopes for Biden’s plan. As the leading moderate Democrat in the race, and somebody with a track record of prioritizing infrastructure, I hoped for a plan with a national focus, sensible and cost-effective transit, and realistic funding and financing methods (tolling, mileage-based user fees, public-private partnerships, etc.). Instead, Biden’s plan largely focuses on local—not national—priorities, doubles down on the Obama administration’s interest in building high-speed rail, and relies on a fantasy tax on billionaires.

Biden’s $1.3 trillion proposal, described by his campaign as a plan to invest in the middle class, combines transportation, energy, resilience, water, broadband, and schools. Each of the components is focused on three goals: creating union jobs, reducing greenhouse gas emissions, and revitalizing communities. It is unclear how much of the total funding transportation would receive. Transportation is divided into six categories: highways, rail, transit and planning, smart cities, aviation, and freight.

The plan seems targeted at public employee unions, environmentalists, and working-class communities. By focusing on these three groups, the plan ignores the broader message that transportation improves America’s competitiveness and grows the economy.

I don’t agree with strengthening labor protections, but even for those who do, this is a secondary issue in transportation. We shouldn’t build transportation projects to create a bunch of temporary jobs; we should invest in transportation to improve mobility and the economy, and then the robust economy creates jobs. Further, Biden’s plan reads as though we are still in the throes of the Great Recession of a decade ago, not at the record-low unemployment we are now experiencing.

The plan includes some roadway projects, but even that funding seems intended more for cycling and walking than for cars and trucks. The document justifies providing direct funds to cities (rather than state transportation departments) based on the claim that cities and towns own most of the roads. Yet in several states such as North Carolina and Virginia, the state owns all of the roadways. And in most other states, the state, not the city, maintains most of the higher-volume, high-priority roadways.

The plan assumes that investing in high-speed rail (HSR) and light rail would reduce greenhouse gas emissions. Yet, studies have shown that bus, not light rail, is more effective at reducing greenhouse gas emissions since most light rail vehicles have few riders outside of peak periods. High-speed rail is extremely energy-intensive to build. The California high-speed rail project would have needed to operate for 71 years at average capacity to neutralize the emissions needed to build the line. If Biden’s goal is to reduce greenhouse gas emissions, there are much easier and cheaper ways to do so than building HSR and light rail.

The inclusion of light rail and HSR won’t help working-class communities, either. Building light rail lines typically leads to gentrification, which increases home prices and forces low-income minorities to move. (The new residents use light rail less frequently than the displaced residents). HSR is frequented primarily by wealthy business travelers. Lower-income residents use intercity buses, which benefit from improved highway conditions, not rail upgrades.

But even if we assume that Biden’s plan to, “Spark the second great railroad revolution,” is good policy, the proposed implementation is flawed. The plan proposes to shrink the travel time from Washington, DC, to New York in half, expand the Northeast Corridor to the south, and construct a nationwide end-to-end high-speed rail system. The plan seems like a reprise of the Obama administration’s failed HSR vision. One reason that approach failed is that it spread federal funding to more than 35 states instead of targeting a few mega projects. As a result, no actual HSR lines were built. And with a cost of at least $100 million per mile, most states were left with lines that they could not afford to build.

It’s not just my impression that the Obama administration’s HSR approach failed. Reports from the Congressional Budget Office, Congressional Research Service, Government Accountability Office, and Office of Management and Budget highlighted the drawbacks of this approach. The most relevant criticism came from Rail Forward, a high-speed rail advocacy group. In 2016 testimony before the House Oversight Committee, President Tom Hart explained that while his group strongly supports HSR, the Obama administration’s plan was a case study of how not to build high-speed rail.

Perhaps the worst part of the plan is its funding source. Biden says every cent of his $1.3 billion plan would be paid for by tax increases on the super-wealthy and corporations. The plan appears to move away from the longstanding users-pay/users-benefit mechanism. The users-pay principle is fair, proportionate, self-limiting, predictable and an investment signal. It is supported by almost every transportation stakeholder in the country. Users-pay has worked well at the federal and state level for more than 50 years. Most importantly, surface transportation has a dedicated user tax free of the political dynamics in the general budget process. Under Biden’s plan, transportation would be competing with other policy areas since it is mathematically impossible for billionaires to pay for all government programs. The last time transportation competed against other policy areas, in the 2009 stimulus, transportation received only five percent of the funding, well below its proportionate share, which might explain the strong bipartisan support for the users-pay principle.

I realize that it is early in the campaign season, and his proposal is in part a political document. But I would urge the Biden campaign and all Democratic candidates to develop an implementable plan that is realistically funded and focuses on genuinely federal transportation priorities.

» return to top

Priced Express Lanes Benefit All Income Levels, New Study Shows

I still bristle whenever I hear priced express lanes characterized as “Lexus Lanes.”  Most state DOTs with such lanes in use have compiled data showing that the vehicles driven in them are a cross-section of the overall personal vehicle fleet, with Toyotas, Hondas, Fords, and Chevys vastly outnumbering luxury cars. But we now have far more detailed big data on one of the country’s newest express lane corridors, I-405 in the Seattle metro area. The research project was carried out by a six-member team from the University of Washington eScience Institute, headed by Mark Hallenback and Vaughn Iverson. Details here.

The study’s headline finding is that people with higher incomes use express lanes more often than those with lower incomes, but the latter benefit more from their paid trips than those with higher incomes. The unprecedented study analyzed all usage on the I-405 express lanes during 2018. During that year, the lanes generated $31 million in revenue, provided $50 million in benefits to users, and saved 800,000 hours of travel time.

The study team divided users into six groups, depending on how often they used the lanes in 2018:

Group Frequency Fraction of Users Daily Composition
Single users 1 trip/year 48.4%   2.9%
Monthly users 2-40 trips/year 43.9% 20.6%
Weekly users 41-120 trips/year   4.7% 20.0%
Regular users 121-250 trips/year   2.1% 22.4%
Daily users 151-600 trips/year   1.0% 23.5%
High users Over 600 trips/year   0.0% 10.6%


As you can see from the third column, the rule of thumb many of us have used to debunk “Lexus Lanes”—that 90 percent of users are in the lanes only occasionally while 10 percent use them very often—holds up pretty well. On the other hand, the fourth column shows the composition of users on a daily basis, which explains how the lanes could generate $31 million due to enough people from every group showing up in the lanes each day.

One of the most important findings of the research is that high-income travelers, who use the lanes a lot, tend to avoid the peak of the peak and end up paying lower tolls, on average. The lower-income people who use the lanes only when being somewhere on time is clearly worth more than the cost of the toll, are paying higher average tolls. But this is their choice, and they are making rational choices, such as when a $10 peak toll is worth paying to avoid a $20 daycare late fee.

The researchers were also able to estimate the average value of time of all people using the express lanes: $53/hour. Separately, the average value of reliability (of trip times) was found to be $26/hour. That is in part because reliability matters (to most people) far more during the morning peak than in the evening peak. Also of interest is that the average net benefit per trip was significantly higher for the lowest-income users.

Assuming that these findings are representative of priced express lanes in general, this study should serve to put to rest the “Lexus Lanes” canard once and for all.

» return to top

The Potential of Auto-Follower Truck Platooning

A number of skeptics have criticized truck platooning as lacking a viable business case. They cite 5-to-9 percent fuel savings as insufficient to justify the investment and also question the viability of finding trucks going in the same direction for long enough to form a platoon. But truck automation could dramatically increase the business case for platooning.

A good overview of this potential is offered by consultant Richard Bishop in a recent post. Auto-follower platooning envisions a driver only in the lead truck, with the following trucks equipped to Level 4 autonomy capability. A 2018 study by McKinsey estimated that a two-truck platoon of this kind would yield additional cost savings of 10 percent (and the savings would be even greater with two or three driverless trucks following the human-operated lead truck). Bishop sees Peloton Technology as the U.S. company furthest along on auto-follow truck platooning. As I noted earlier this year, at a session during the 2019 Annual Meeting of the Transportation Research Board, presenters from Europe and Japan discussed prototype truck platooning systems doing on-road testing and noted that every major truck manufacturer there is developing automation technology, with auto-follow platooning being taken very seriously. Scania Trucks and Volvo are among the leaders in Europe, and Singapore has a pilot program underway with Scania and Toyota Tsusho.

As for the question of which trucking fleets might be early adopters, here is Bishop’s assessment:
“[P]latooning is a perfect fit for ‘hub-to-hub’ operations. Here, drivers run regular out-and-back routes, in many cases leaving about the same time; therefore, dispatching two trucks together with the intent to platoon causes no disruption to a fleet’s highly tuned operations. To make this argument stronger, it would be helpful to have an estimate for how many trucks run hub-to-hub nationwide, but since major fleets like FedEx and UPS do it, this could easily be in the tens of thousands. So just a couple of large fleets adopting platooning provides reasonable scale quickly.”

One concern noted in the January TRB session was the risk of car drivers cutting in between trucks in a platoon. To quantify this, a research team at the University of Virginia headed by B. Brian Park recruited 11 participants to simulate car drivers cutting in between trucks in a platoon, using current cooperative active cruise control (CACC). The simulations tested truck headways ranging from 0.6 seconds to 1.4 seconds and found that even the longest headway—1.4 seconds—had a 16.2 percent probability of a car-truck crash, and even that long headway situation was judged to be “unsafe” 37.8 percent of the time.

I can see two ways of dealing with this problem. One would be a faster-responding system than today’s CACC, if such is feasible. The other is to add dedicated truck lanes on those long-distance Interstate highways with the highest fractions of current and projected truck traffic. That would eliminate car-truck interactions while the trucks are operating in platoon mode, and would facilitate longer platoons of 4, 5, or 6 trucks. Dedicated truck lanes would also permit existing longer combination vehicles (LCVs), such as turnpike doubles and triples, to operate in many states where they are currently not allowed, fostering fuel savings and increased productivity.

» return to top

Revisiting Connecticut’s Gas Tax Diversion
By Baruch Feigenbaum

Last month I wrote an article on gas tax diversions, detailing how many states divert gas tax revenue to non-roadway purposes. Some of these diversions fund transit or “active transportation” projects, while others have nothing to do with transportation, funding general budget or fish-barrier removal projects.

In the initial calculations, Connecticut had the highest diversion rate at 57.8 percent due to more than 40 percent of gas tax revenue funding general state debt. But as former Connecticut Department of Transportation Commissioner Emil Frankel pointed out, even though Connecticut places the funding in the general budget account, it uses that funding for roadways. I checked the other 49 states, and no other state uses this budgeting process. As a result, Connecticut’s actual diversion rate is lower than what I reported, although still high compared to other states.

Connecticut’s diversion rate is a sensitive topic. The governor has proposed tolling to help rebuild I-95, which is congested up to 12 hours per day and suffers from deteriorating pavement quality. Republicans and some Democrats in the state legislature have expressed skepticism or outright hostility to the governor’s plan. Connecticut DOT ranks below average in several metrics in Reason’s Annual Highway Report, and the DOT is under pressure to improve its efficiency.

Therefore, it is important to determine the actual diversion rate. Connecticut’s motor fuel tax revenue is composed of a traditional fuel tax and a per-gallon oil tax. That revenue along with sales and use taxes, motor vehicle receipts, licenses, permit fees, and other miscellaneous sources is deposited into the special transportation fund. To determine the diversion, I had to separate out the gas tax revenue from the other sources, and then determine the amount spent on transit operations, transit bonds, and other non-roadway programs.

The revised numbers show that Connecticut diverts 25 percent of motor fuel tax revenue to transit operations, of which 11 percent is for rail operations, 10 percent is for bus operations and 2.5 percent is for paratransit. Additionally, about 25 percent of all transportation bonds support transit capital projects. And there are some small but odd line items such as funding for the Department of Energy and Environmental Protection and the Temporary Assistance for Needed Families (TANF) welfare program. As a result, a conservative estimate of Connecticut’s overall diversion rate is 37 percent. While 37 percent is far better than 58 percent, Connecticut still has the third-highest diversion percentage among all states, which is not something to celebrate.

Finding a sustainable revenue source for transit is key to reducing the diversion rate. Ideally, Connecticut should use general funds, sales tax revenue, and value capture around its commuter rail stations to fund its transit system. Realistically, the state is going to continue to use some gas tax revenue. However, transit riders, particularly upper-income commuter rail passengers should provide more of the funds. A realistic approach would be for the state to use value capture and other revenue sources combined with increased fares to reduce diversions to transit by half.

Fixing Connecticut’s transportation system is going to require some hard choices. Enacting tolling and improving DOT efficiency are needed over the long-term. But a reduction in gas tax diversions to transit would be a good start.

» return to top

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.

National Conference of State Legislatures 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.

Texas Infrastructure: The Heartbeat of Business Success, Jan. 28, 2020, Dallas, TX, Union Station (Baruch Feigenbaum speaking). Details here.

» return to top

News Notes

Bridge Replacement Breakthrough for DC Express Lanes Network
The governors of Maryland and Virginia announced a breakthrough agreement to rebuild and expand the American Legion Bridge on the Beltway (I-495). Virginia is extending its priced express lanes on the Beltway up to the bridge, and Maryland is planning express lanes on its half of the Beltway, but the existing bridge is the region’s largest traffic bottleneck. The plan now is to rebuild the bridge with the addition of two priced express lanes in each direction, matching what will be on the Beltway on either side in both states. My analysis of this announcement and its importance is here.

Mixed Support in Massachusetts for Tolls, Gas Tax Increase
A MassINC poll asked voters about 15 possible proposals to increase revenue for transportation. The highest support was for the generic “new revenue” option, at 77 percent. Tolling did pretty well, with 56 percent supporting tolled lanes and a higher 73 percent supporting discounted off-peak tolls. Only 43 percent supported a 15-cent gas tax increase, the same level of support for “tolls on highways that don’t have them now.” Unfortunately, 50 percent supported “state border tolls”—in effect, making other people pay for the highways residents drive on.

Federal Grant Support for Electric Recharging “on” I-80 in the Midwest
The states of New Jersey, Pennsylvania, Ohio, Indiana, Illinois, and Iowa have each received a $70,000 federal grant, which each will match with $10,000, to implement electric recharging and natural-gas refueling on I-80. But only in Ohio, Indiana, and a small part of Illinois can these facilities be located at service plazas right on the Interstate. A 1956 federal law bans commercial services at “rest areas” on non-tolled Interstates, so electric vehicle operators with range anxiety will have to get off the Interstate in New Jersey, Pennsylvania, Illinois, and Iowa to find one of these recharging/refueling providers.

Back on: Replacing Aging I-5 Bridge Between Oregon and Washington
The governors of Oregon and Washington signed an agreement to resume serious planning to replace the obsolete bridge on I-5 between Portland and Vancouver, WA. Oregon’s previous insistence on adding a light-rail line to the bridge has been softened to requiring “high-capacity transit”—but Washington Gov. Jay Inslee insisted that if that capacity is provided by bus rapid transit (BRT), it must have its own lane. That ignores the synergy between a priced express lane and BRT. As a pioneer of priced express lanes, the Washington State DOT can likely make this case to Gov. Inslee.

Alaskans Cannot Use Their Own Natural Gas
New plans to tap Alaska’s large northern natural gas fields will yield bizarre results. Since there is no gas pipeline from where the gas is to where most people live (Anchorage), the gas will be transported as liquefied natural gas (LNG), by ship. Unfortunately, the protectionist Jones Act requires that any shipping between two U.S. ports must be carried out in U.S.-built, U.S.-owned, U.S.-crewed ships. That’s far too expensive to be practical, so Alaska’s LNG will be shipped to other countries, depriving Alaskans of their own gas. For more on this topic, see this analysis.

Charging More for Labor-Intensive Toll Collection
It costs two or three times more for a toll road to process cash tolls or to do license-plate billing that the low-cost method of using transponders linked to prepaid accounts. Most toll agencies charge somewhat more for cash or billing, but generally far less than is enough to cover the real costs. Two recent exceptions are in the news, however. In Seattle, the new SR 99 tunnel beneath downtown is charging $2 more for non-transponder tolling on tolls that range from $1 (nights and weekends) to $2.25 (pm peak). And India’s National Highway Authority is charging double for those not using prepaid accounts linked to transponders. India was scheduled to roll out all-electronic tolling nationwide on Dec. 1.

Army Corps’ Soo Locks Project Will Not Be a P3
The Soo Locks replacement project in Michigan had been selected as one of four public-private partnership (P3) projects by the Army Corps of Engineers. Alas, it will not be done as a P3 after all. Last month Michigan DOT withdrew its support for doing the project as a P3, without any public explanation. An observer emailed me suggesting one possibility is that the iron ore and steel industries that benefit from using those locks at no charge may have pressured MDOT and the Army Corps to drop P3 procurement for fear they might end up paying tolls to use the new locks. Incidentally, tolls to use locks were a major source of revenue to finance the multi-billion-dollar expansion of the Panama Canal.

Daimler Scaling Back Its Autonomous Vehicles Program
Ola Kallenius, chairman of Deimler-Benz, announced last month that the company plans to “right-size” its program to develop autonomous vehicles. Reuters quoted him as saying, “There has been a reality check setting in here,” as many autonomous vehicle experts acknowledge that true (Level 5) autonomy is turning out to be a far more difficult challenge than many thought it would be. Daimler’s announcement is similar to a similar statement by Ford CEO Jim Hackett earlier this year. Autonomy in limited domains (e.g., university campuses, retirement communities) seems more achievable within the next decade than AVs capable of operating on all kinds of roads in all kinds of weather.

Two North Carolina Highway Milestones
Last month saw two milestone events for North Carolina highways. In Charlotte, the final stretch of priced express lanes on I-77 opened to traffic. This project was the state’s first such express lanes and its first highway project delivered under a DBFOM P3 procurement. I-77 Mobility Partners financed and built the 26 miles of express lanes and will operate and maintain them for 54 years. In Raleigh, ground was broken for the final segment of the I-540 loop, which will be extending the tolled Triangle Expressway at an estimated cost of $2 billion.

The Outcome of Three Revenue-Risk Toll Concession Bankruptcies
Chapter 4 of a new book on public-private partnerships is “Case Studies of Financially Distressed Highway Public-Private Partnerships in the United States” by Michael J. Garvin of Virginia Tech. It covers in detail the South Bay Expressway, the Indiana Toll Road, and Texas SH 130, Sections 5 and 6. The book, which also includes chapters by me and by my colleague Baruch Feigenbaum, is just out from Springer: Public Private Partnerships, edited by Robert M. Clark and Simon Hakim.

Georgia and Wisconsin DOTs and America’s Transportation Awards
Georgia’s Northwest Corridor Express Lanes Project was the People’s Choice Award winner at the annual America’s Transportation Awards sponsored by AASHTO, AAA, and the U.S. Chamber of Commerce. The $840 million project is dramatically reducing congestion on that part of the Atlanta freeway system, leading to increased support for GDOT’s plans for a whole network of priced express lanes. One of the finalists was Wisconsin DOT’s reconstruction of the bottleneck Zoo Interchange, a $986 million project and one of only a handful of such interchanges to have been redesigned and rebuilt for current and projected levels of traffic.

India’s Third Highway Asset Recycling a Success
Under its Toll-Operate-Transfer program, the National Highways Authority of India has been offering long-term P3 leases of groups of highways, using the proceeds to improve other highways where toll financing is impractical. The third TOT auction, last month, yielded $771 million from winning bidder Cube Highways, beating lower bids from NIIF and IRB Infrastructure. The nine highways, in various states, total 566 km (352 miles).

Cross-Border Tolling Deal Agreed
The New York State Thruway Authority and the province of Ontario have agreed on a plan to facilitate electronic toll collection from Canadian users of New York’s Grand Island Bridge and the Thruway’s toll roads. For billing and enforcement purposes, the Thruway will be able to access the addresses of Ontario vehicle owners, based on their license plate numbers. The agreement went into effect in October.

California Judge Overturns State Override of Local Zoning
A District Court judge in San Mateo County ruled that recent state legislation to override local zoning laws (so as to promote higher density) cannot be imposed on charter cities in the state. About 25 percent of cities have their own charters; the others are called general-law cities. Some anticipate a move by many of the latter to convert to having their own charters.

Who Pioneered Lithium-Ion Batteries? Exxon Mobil
One of the three scientists who won this year’s Nobel Prize in chemistry, for the invention of the lithium-ion battery, is Stanley Whittingham, who did the first research that resulted in working prototypes. According to an article in the Oct.12 edition of The Economist, Exxon Mobil was initially interested in commercializing it, “but when oil prices fell back, the company lost interest.”

» return to top

Quotable Quotes

“[When I left Washington in 2010,] something was deeply broken in our federal government. It was dysfunctional, and only getting worse with each ensuing year. . . . As [Chicago] mayor, I concluded that a major shift was happening. The national government was in retreat and cities were emerging as the new power centers, filling the void.”
—Rahm Emanuel, The Nation City, quoted in Gerald F. Seib, “Taking City Hall Skills to the White House,” The Wall Street Journal, Nov. 12, 2019

“The revenue generated by per-mile pricing could be used to both increase capacity and to maintain the highway system. This revenue-producing result of demand pricing isn’t merely a nice side effect; it is precisely how a utility works. Over time, drivers would pay the cost—no more and no less—for the facilities and capacity they consume. . . . Allowing any road to be used beyond its capacity is not only a systems failure; it is a failure of public policy and leadership. People like to use roads for free, but letting that desire overwhelm a sensible approach amounts to the kind of democracy that H. L. Menken described: ‘the theory that the common people know what they want and deserve to get it good and hard.’”
—Scott Lazenby, “Why We Should Pay for the Highway Miles We Use,” Governing, July 17, 2015

“Gas taxes also have the fault of charging higher fees to users of local roads, and then essentially turning much of their funding over to highways, interchanges, and bridges. This is one reason why tolls make sense: assigning a cost to going on a particular piece of infrastructure is more optimal than having a kind of gas tax slush fund that RIDOT can use at its discretion. The tolling requires, by federal law, that those bridges that are tolled are the only ones that can be paid for. This is truly GOP thinking if there ever was such a thing.”
—James Kennedy, quoted in Angie Schmitt, “A Conservative Case for Truck Tolls,” Streetsblog, Oct. 9, 2015

“Defenders say the Jones Act is needed to save U.S. shipbuilders who can be called on in wartime. In reality, the law is suffocating them. After finishing a container ship in March, the Philly Shipyard had zero orders. The trouble, as the Journal reported at the time, is that Jones Act ships ‘cost four times more than vessels built by foreign competitors,’ yet they serve a limited market. Foreign competition would force U.S. shipbuilders to ‘reduce vessel prices by at least 50%,’ says the OECD. More ships would be built, with specialization and economies of scale. The OECD study estimates the industry’s output could rise by 71% through an ‘increased number of new ship orders.’”
—Editorial, “America First? Kill the Jones Act,” The Wall Street Journal, Nov. 4, 2019

“The whole British Empire, and especially England, which, sixty years ago had as bad roads as Germany or France then had, is now covered by a network of the finest roadways; and these, too, like almost everything else in England, are the work of private enterprise, the State having done very little in this direction. Before 1755, England possessed almost no canals . . . But now, [in 1845] in England alone there are 2,200 miles of canals and 1,800 miles of navigable river. In Scotland, the Caledonian Canal was cut directly across the country, and in Ireland several canals were built. These improvements, too, like the railroads and roadways, are nearly all the work of private individuals and companies.”
—Friedrich Engels, Condition of the Working Class in England (1845), quoted by Stephen Hicks.

» return to top