- Trucks need a better deal on tolling
- Transportation trends and planning during the pandemic
- Separate lanes for automated vehicles?
- About those high tolls on I-66 in Virginia
- What are “green bonds” for transit?
- Making sense of highway fatality data
- News Notes
- Quotable Quote
The trucking industry’s primary policy organization, the American Transportation Research Institute (ATRI), is republicizing a detailed report it released in January 2020, “A Financial Analysis of Toll System Revenue: Who Pays and Who Benefits.” Its basic message is that trucking companies are getting a raw deal from America’s toll roads—basically paying way too much. They have some legitimate concerns, along with several blind spots.
The ATRI researchers focused on 21 major toll road systems, which they estimate generate 82% of all U.S. toll revenue. They include major facilities such as the New York Thruway, Indiana Toll Road, the Ohio and Pennsylvania Turnpikes, and smaller entities including E-470 in Denver, Elizabeth River Crossings in Virginia, and the Foothill/Eastern toll roads in California. Table 5 in the report compares their annual toll revenue in 2018 and 2009. The 10-year increase ranges from a low of 13.68% for the Delaware Turnpike to 189.77% for the North Texas Tollway Authority (NTTA). Four of these, including NTTA, increased more than 100% (or more than 10% per year).
The report does not present figures that seek to explain the different percentage increases. But from my general knowledge of these providers, many of these increases occurred in high-growth states or metro areas—Dallas/Ft. Worth, Houston, Orlando, and Florida overall, where the toll network was, and is, being expanded.
Another factor, which the report criticizes, is the trend of toll road providers indexing their toll rates to inflation, generally via the consumer price index (CPI). This is a responsible thing to do, to keep pace with the rising costs of construction and of operations and maintenance. The same trucking industry that bemoans the 27-year absence of any increase in federal fuel taxes unfairly attacks toll roads for doing what they urge Congress to do.
Yet another reason for the increases at some of the 21 toll providers is that many of them are required by elected officials to divert significant portions of toll revenue to other transportation and non-transportation uses. Table 9 in the report lists nine offenders (including the New York City MTA, the Port Authority of New York & New Jersey, the Pennsylvania Turnpike, and the San Francisco Bay Area Toll Authority). The $3 billion in transfers from these nine constitute 20.5% of all 2018 toll revenue from the toll roads in the study. The actual number is higher than that since the report’s Table 9 omitted two long-time revenue diverters that were included in the 21 providers: the New York Thruway and the West Virginia Parkway.
The ATRI report also complains that “facility costs” are high. The pie chart breakdown shown in Figure 4 of the report shows that facility operating costs are 32.4% of 2018 toll revenue, while “interest expense”—which means debt service on the revenue bonds that provided the pavement and bridges themselves—is another 26.8%, so that 59.2% of the toll revenue covers capital and operating costs, with another 17.2% accounted for by depreciation. So three-fourths of the toll revenue is for the toll road infrastructure. If we could get elected officials to back off on transferring 20.5% of the revenue to unrelated purposes, some toll rates could be 20% lower.
One other noteworthy finding is that for these 21 toll systems, the cost of toll collection (included in operating costs) averaged 15.8% of the revenue. That is about half the 30% still being alleged by some trucking groups when they attack proposed toll projects around the country. (For example, the Pennsylvania Motor Trucking Association last month told reporters that the cost of toll collection exceeds 20 to 30%.) And that 15.8% number is already obsolete. The data used in the ATRI study come from 2018 or earlier, before the recent COVID-induced conversions to cashless tolling in major providers like the New York Thruway, Pennsylvania Turnpike, and Bay Area Toll Authority. Done right—with 90% or more of the customers using transponders linked to prepaid accounts—cashless toll collection can require as little as 5% of toll revenue. We aren’t there yet, but that is clearly where we are heading.
The ATRI report also points to the disparity between what trucks pay on toll roads and what they pay in federal and state fuel (and other truck-related) taxes. For the 21 toll systems in the study, the researchers estimated a heavy truck pays $0.596 per mile in tolls, compared with their estimate of $0.146/mile in federal/state user taxes. Yet we all know—partly because the trucking industry keeps reminding us—that federal and state fuel taxes are not covering the capital and operating costs of America’s highways, while tolls are doing that (and more, including the unfair diversions to other uses).
Besides ending those diversions, the trucking industry should be seriously advocating the end of what they call “double taxation”—paying both tolls and fuel taxes for the same highway. It is widely accepted that during the inevitable transition from per-gallon fuel taxes to per-mile charges, or mileage-based user fees (MBUF), those paying the MBUF must get rebates of the fuel taxes they pay (assuming that the MBUF is phased in on some roadways while fuel taxes continue to be charged). That is already happening in Oregon, under its road user charging program.
Despite legislatively-imposed revenue diversion in some cases, toll roads are generally better built, better maintained, and safer than non-tolled roads of the same category. They provide value to the thousands of trucking companies that make use of them. ATRI and the trucking industry should give credit where credit is due while pushing hard for truck-friendly 21st-century tolling.
Here are a few of the many recent headlines expressing angst over the future of U.S. mass transit during the COVID-19 pandemic:
- “Bus, Subway Avoidance Vexes Cities,” The Wall Street Journal, Dec. 5, 2020
- “Remote Work Pushes Transit Agencies to Rethink Monthly Rail Passes,” The Wall Street Journal, Jan.18, 2021
- “The Pandemic Could Devastate Mass Transit in the U.S.,” Politico, Jan. 23, 2021.
A return to the status quo ante is the least-likely scenario for all modes of transportation. With so much uncertainty, what we need is a sober assessment of the available data, as a basis for the rethinking process. The best research paper I’ve seen thus far on travel patterns and upcoming challenges is “COVID-19’s Effects on the Future of Transportation,” by Steven Polzin and Tony Choi of the Department of Transportation (DOT) Office of the Assistant Secretary for Research & Technology, using data from DOT’s Bureau of Transportation Statistics (BTS) and from transportation data firm INRIX.
The report begins by documenting the pre-pandemic status quo, via text, tables, and figures. For example, a chart of person miles of travel by mode shows the following:
|Domestic air travel||13%|
|Amtrak and transit||1%|
Those numbers all obviously changed dramatically in 2020 during the coronavirus pandemic, and the report breaks down those changes, including a bar graph (Figure 3 in the paper) comparing 2018 and 2020 work-at-home figures by seven levels of household income. While the overall average for work-at-home changed from 5.4% to 34%, that fraction reached 54% for households between $100K and $149K, 64% for those between $150K and $199K, and 73% for those at $200K and above. Before analyzing potential futures by mode, the authors caution that “in the near term, the challenge for transportation will not be expanding capacity to accommodate growing demand, but rather sustaining the infrastructure system and services so they do not diminish mobility.” But also, “policymakers will need to examine if an excess supply of, or inefficiently operated public transportation services are consuming scarce public funding, causing excessive emissions, using too much energy, or otherwise wasting resources.”
The study’s Figure 6 and Table 2 offer possible travel recovery scenarios for 2021 through 2024, without a full explanation of how they were derived. They project little recovery for all modes except passenger vehicles in 2021, but a significant recovery in 2022, with modest further gains in the following two years. By 2024, they show passenger vehicle miles of travel (VMT) down only 3.3% from 2019 levels, airlines down 1.7%, transit down 10.2%, intercity bus down 4.7%, and Amtrak down 8.7%.
The remainder of the report goes into detail for each of the modes. I will confine the rest of this article to personal vehicles and urban transit. Part of this analysis is based on residential trends predating but accelerated by the pandemic—increasing suburbanization and preferences for single-family housing construction. When the report sums up the conflicting forces affecting personal VMT (such as less VMT due to more work-at-home, but more VMT due to suburbanization), there are as many factors that will increase VMT as decrease it. Using Bureau of Transportation Statistics (BTS) data on personal VMT, for example, the authors show that if work-at-home reduces auto commuting by 10%, this would reduce overall VMT by 2%, other things equal. (Likewise, a shift of 6% of person-miles of travel from airline to roadway would increase VMT by 1%.)
The picture for transit is more dire. Among the changing conditions are the gradual introduction of automated vehicles (AVs) and the growing fraction of electric personal vehicles. Mobility services using AVs could reduce transit use, while a growing fraction of cleaner electric cars will “remove the comparative energy efficiency and environmental motivations for transit use.” This section also includes a graph (Figure 21) of transit mode use by household income category. It shows that bus transit is highest for groups with household incomes below $70,000, while subway and commuter rail use increases steadily with household income. So the overall transit use by income graph is bowl-shaped, with the highest uses at both extremes of household income. Putting together the various factors that will reduce or increase future transit ridership, there are seven leading to less use and two leading to more use.
The report’s last section discusses implications for transportation planning. Clearly, business-as-usual planning no longer makes sense. Planning data must be updated, forecasting models should be recalibrated, and performance metrics updated. “Future service levels need to be scaled to demand, to optimize their cost-effectiveness, energy efficiency, and emissions profiles.” They also note that “Already a huge share of personal vehicle travel is more energy- and emissions-efficient than the vast majority of transit services.” And that “Underutilized public transportation does not save energy, reduce emissions, or support the productivity of the economy.” I was also glad to see their recommendation that planners explore user-side subsidies, which makes sense when the wealthy can easily afford to pay higher fares to ride subways and commuter rail.
This report is a must-read for every state department of transportation, every metropolitan planning organization (MPO), and the new team at the U.S. Department of Transportation.
Relatedly, Reason Foundation and the Washington Policy Center recently released “Transportation and COVID-19: A State Guide to Policy and Priorities.” In it, experts from several think tanks and I address what state policymakers can do amidst the coronavirus pandemic, discuss using transportation public-private partnerships, how to reinvent transit, the future Amtrak subsidies, users-pay funding, telecommuting, infrastructure resiliency, and innovation-friendly regulatory policies. You can register here for a Feb. 17 event and webinar on the report and “tackling state transportation policy during and after COVID-19.”
As developers continue to work on their automated vehicle (AV) prototypes, the profile of seemingly far-off AV infrastructure interaction issues has been raised within the research community. If AVs could be wirelessly coordinated, traffic operations and safety could in principle be significantly improved while increasing traffic volumes on the same physical capacity. Readers of this newsletter will recall a recent discussion of Michigan’s Connected and Automated Vehicle Corridor Concept (CAV-C) that aims to test the feasibility of creating dedicated AV lanes along U.S. Route 12 and Interstate 94 between Detroit and Ann Arbor (“Cautions on Proposed Dedicated Lanes for Connected and Automated Vehicles,” Sep. 2020). The central question for these types of projects is: when will the AV fleet penetration rate be sufficient to justify dedicating scarce road space to exclusive AV lanes?
Archak Mittal, a transportation modeling and research engineer at Ford Motor Company, presented his new research at the 2021 Transportation Research Board Annual Meeting. Rather than focus on limited-access highways, which is where much of the policy discussion today is focused, Mittal examines a 1-mile segment of Michigan Avenue in Detroit’s Corktown neighborhood to see how dedicated CAV infrastructure might work on typical local roads and how dedicated CAV lanes could be implemented without significant changes to existing infrastructure.
The current lane configuration of this stretch of Michigan Avenue is two traffic lanes in each direction, a curbside parking lane on either side, and a center left-turn lane, for a total of seven lanes. Mittal’s microsimulation of the 1-mile Corktown corridor segment considers several scenarios in which existing lanes are converted to dedicated CAV lanes.
The results suggest dedicated CAV lanes will improve the traffic flow in the corridor only at very high CAV market penetration rates, with Mittal reporting that material impacts to traffic flow were observed only at 80% penetration or above. At a 100% fleet penetration rate, converting the central left-turn lane to a dedicated CAV lane was modeled to produce speed improvements of up to 11% and reduce delays by as much as 50%. But even this positive infrastructure treatment in the simulation raises new questions, such as how would vehicles turn left if the center left-turn lane is converted to an exclusive CAV lane?
Mittal notes that capacity is not the biggest problem. Rather, traffic operations appear to be the bigger problem, and resolving these issues will be complex and difficult. Repurposing existing infrastructure may partially solve some problems, but may also generate new problems in a mixed-fleet environment. For instance, Mittal’s simulation found that converting the parking lanes to traffic lanes has a relatively small impact on traffic flow. If those parking lanes are converted to dedicated CAV lanes and signals along the segment are optimized, merging problems from non-CAVs attempting to turn right from the CAV lanes will still reduce CAV lane performance and negatively impact CAV operations such as platooning.
Mittal’s research suggests dedicated CAV lanes are no silver bullet and that local road attributes present far more serious challenges. Moreover, with positive traffic flow impacts appearing only at very high CAV penetration rates that optimistically would be decades away, road managers should proceed with caution when considering dedicated AV infrastructure improvements.
While not directly analogous to Michigan’s recently launched CAV-C pilot project on U.S. Route 12 and Interstate 94 between Detroit and Ann Arbor, since that pilot focuses on the viability of dedicated CAV lanes on limited-access highway segments, Mittal’s and similar simulation research raise serious questions related to efficient lane configurations in a partially-AV world. To be sure, dedicated CAV infrastructure offers great long-term promise, but these infrastructure interventions may only become efficient decades from now. Dedicating lanes to AVs before AVs reach a certain market penetration threshold risks wasting valuable road space that could otherwise be more efficiently used to move conventional automobiles.
Michigan’s CAV-C pilot is still in its first phase, which takes place in laboratory settings, as opposed to making real-world infrastructure modifications in the field. Prior to advancing the CAV-C pilot into the field, the Michigan Department of Transportation should publicly release simulation results that show modeled traffic operations and safety improvements for the entire corridor at various CAV market penetration rates. A novel project such as CAV-C calls for a high level of transparency so road users can be assured that CAV infrastructure modifications are actually improvements, and the disclosure of assumptions baked into phase 1 CAV-C modeling will be crucial for evaluating the pilot project and building public trust in these technologies and policies.
Note: Registered attendees of the 2021 TRB Annual Meeting are able to view a recording of Archak Mittal’s presentation through the online conference platform until Feb. 16. Mittal’s presentation was titled, “Enhancing Managed Lanes Operations using V2X Capabilities,” and occurred on Jan. 22 during Workshop 1026, Adapting Managed Lanes in the Era of Transformational Technologies and Unforeseen Events.
Quite a few times I’ve had to refute claims that express toll lanes in general charge sky-high tolls that are somehow unfair. The highest tolls being charged today are on the 11-mile segment of I-66 in northern Virginia, from the I-495 Beltway to the Theodore Roosevelt Bridge. All lanes on this stretch operate as high-occupancy toll (HOT) lanes during the four-hour AM peak eastbound and the four-hour PM peak westbound. All the rest of the current and planned express lanes in this entire metro area are free only to HOV-3s, but for political reasons, this one stretch is based on HOV-2, until the new express lanes now under construction on I-66 outside the Beltway begin operation, at which time the inside-the-Beltway I-66 will convert to only HOV-3s going free.
A new study sheds some light on who is paying the sometimes-very-high tolls on this 11-mile corridor. “Travel Patterns of Frequent and Non-Frequent Users on I-66 High-Occupancy Toll Lanes and Implications for the Value of Time Estimation” was researched by a team from two universities and Argonne National Laboratory. It was presented at the TRB Annual Meeting last month (at session 1060). The authors used INRIX data on every trip made during a three-month period and were able to compare high-occupancy vehicle (HOV) and single-occupancy vehicle (paid) trips, as well as frequent versus non-frequent users, with separate analyses for the AM and PM periods. Their data come from more than 460,000 trips during the three-month period. They defined as “frequent” users those who made more than one trip per week in a given direction.
Interestingly, the majority of HOV trips are by frequent users, likely people who were already carpooling when these lanes were HOV-only prior to being converted to high-occupancy toll lanes several years ago. By contrast, the majority of SOV/paid trips are by non-frequent users. This is very much in keeping with paying customers deciding when it is worth using the HOT lanes, because of the value of time savings (measured in the study) and the value of reliable trip times (not measured). Comparing the paying customers in the AM period, in the first two hours (5:30 to 7:30 am), frequent users are the majority, departing early to avoid the higher prices after 7:30 am. In the 8:30-9:30 am period, non-frequent users constitute 79% of the paying customers. And in the PM period, only 30% of paying customers are frequent users, with more than two-thirds paying to use the lanes only for especially valuable trips.
To estimate the value of travel time savings, the researchers compared HOT lane travel times with travel times on the two principal alternative routes: US 29 and US 50. For eastbound (AM peak) trips, the average value of time-saving is $62 per hour for non-frequent users, which exceeds the cost of the toll during each of the four hours. For frequent users, the time savings average $45 per hour, which likely reflects the majority’s choice to travel earlier in the day to avoid the higher tolls later on.
The travel choices made by paying customers on these HOT lanes illustrate a careful assessment of when it is worth using the lanes, which reflects the difference between travel time savings and the cost to use the lanes. Unfortunately, the presentation did not provide data showing whether most or all of the paid trips actually had a value of time-saving greater than the cost of the toll. People may not always estimate correctly what the toll will be at the precise time they will be on the facility, but my guess is that the large majority are experiencing net benefits.
The Transportation Research Board recently released “An Analysis of Green Bond Financing in the Public Transportation Industry.” I was part of the oversight panel for the report written by Cadmus Group, First Environment, and Red Brow LLC.
A green bond is specifically earmarked to raise money for climate and environmental projects. Overall, green bonds can be useful tools, but they can also be used in “greenwashing”— marketing a project as green that does not improve the environment. The report also assumes that all transit agency actions are green. But in reality, the environmental benefits depend on the power source (coal, oil, natural gas, wind, solar, or water) and the number of passengers using mass transit. If transit ridership is low, then a vanpool, carpool, or even conventionally powered automobile could be better environmentally.
The report provides an overview of green bonds. The project team interviewed 13 green bond experts to help guide their research. The interview participant process contained only two interviews of transit agency employees. Transit agencies are the main audience for this work, and more interviews, especially of employees at smaller agencies, would have been helpful. The report includes an introductory chapter and chapters defining green bonds, the costs and risks, the benefits, alternatives, practical tips, and case studies.
Overall, green bonds are similar to other types of bonds. They have four additional nonfinancial disclosures, specifically: Use of Proceeds, Process for Project Evaluation and Scoring, Management of Proceeds, and Reporting. The added cost in staff time to issue a green bond is about $10,000.
Green bonds attract three different types of investors: those who are committed to supporting environmentally sound securities, those who believe the issuance of a green bond is indicative of strong management and good corporate governance, and investors who place no value in the “green” element but are interested in the asset class. Green bonds also provide transit agencies with the ability to make a statement about their commitment to sustainability.
Green bonds are growing but are a small subset of the overall market. In 2019, the green bond market reached $257.7 billion. Yet green bonds were only 3% of the total $8.1 trillion U.S. bond market. The transportation sector was 20% of the total bond market.
There are two main barriers to the issuance of more green bonds. First, there is a lack of clarity about what makes a bond green. Second, first-time issuers may think issuing green bonds is more difficult than issuing traditional bonds.
A variety of projects can qualify for green bonds: transit projects that do not burn fossil fuels, station upgrades or other aesthetic improvements, and replacing less-fuel efficient assets with more-fuel efficient assets. However, there are several instances when issuing a green bond does not make sense: if the issuance process has already begun, if the environmental impacts are not clear, and when the cost associated with reporting or receiving a second opinion increases the net cost of funding.
There are also several alternatives to green bonds. One is to use the proceeds of bonds issued for social equity, public health, community resilience, or marine conservation. Another is taxable green bonds. When interest rate differentials are narrow it might make sense to issue a taxable bond. A third alternative is results-based financing, in which repayments are linked to the impact achieved by the investment. An environmental impact bond is one example of this type of financing. Another alternative is a green loan, which could make sense for small projects developed by smaller agencies.
The report provides a number of recommendations for agencies that decide to offer green bonds: decide early to issue the bond, ensure that the funded projects and assets are green, develop a green bond program, adhere to the green bond framework, identify internal/external expertise, and use lessons learned from other agencies to leverage available resources.
The report illustrates via several case studies. In Boston, the Massachusetts Bay Transportation Authority (MBTA) issued the first “sustainability” bond for projects that redesigned a seawall to protect a bus facility, prevented erosion, and procured natural gas buses to replace diesel buses. The sustainability bond received a better market response than the traditional bond and it was recognized as Bond Buyer’s 2017 Northeast Regional Deal of the Year.
In New York, the Metropolitan Transportation Authority (MTA) issued its first in a series of green bonds in February 2016. Proceeds were used for electrified rail assets, procurement of subway cars, and expansion of stations. Station expansion may not be particularly green, since drilling underground can be very resource-intensive.
Green bonds are a nascent industry and quality research is lacking. Thankfully, the report includes five recommendations for future research: explore the challenges that small agencies face, examine green bonds outside the U.S. to determine best practices, investigate how the process model can be leveraged, compare taxable versus tax-exempt bonds, and conduct a cost-benefit analysis.
Green bonds can be a valuable tool for transit projects. However, the project should legitimately reduce greenhouse gas emissions. Many mass transit projects have limited environmental benefits. Further, green bonds should not be used to justify transit projects that don’t make sense from a cost/benefit perspective.
Recent news headlines have noted that the death rate due to highway crashes increased last year, which struck many people as odd since driving (vehicle miles of travel—VMT) was down significantly due to the COVID-19 pandemic. In fact, the National Highway Traffic Safety Administration (NHTSA) estimates that highway fatalities decreased by 2% in 2020, but the rate—fatalities per million VMT—increased by 18% due to the smaller denominator.
Some further insights are provided in a January 2021 report from INRIX, “COVID-19 Effects on Interstates and Highways in the U.S.,” by analyst Bob Pishue. The report focuses on freeways, Interstates, and arterials in the largest 25 metro areas. The analysis focuses on two periods: April-July, when driving was far below the previous year’s numbers, and August-October, when driving increased considerably. In the first period, the median VMT change was -35% compared with 2019, the median speed change was +33%, but the median collision change was -42%. By contrast, in the second period, VMT was only 22% less than in 2019, speeds were up by 22%, and collisions were down by only 9%. Looking at the 25 metro areas individually, only four had an actual increase in collisions in the second period: Chicago (4%), Los Angeles (5%), Miami (9%), and Portland (1%). But it appears that more people drove recklessly in the second period, leading to a lot more crashes than in the first period, and more fatalities (though the INRIX report does not track fatalities).
Last month also saw a less-noticed report published on the increase in pedestrian fatalities between 2009 and 2018, which grew by an astonishing 53% (after having been on a three-decade downtrend). This report was produced by AAA’s Foundation for Traffic Safety: “Examining the Increase in Pedestrian Fatalities in the United States, 2009-2018.” It provides statistics on those who were killed, on the drivers involved, the vehicles involved, and the roadway circumstances.
Pedestrian victims were from all age groups, with the largest increase in those aged 60-69 and an actual decrease among children and teenagers. As for the drivers, the largest percentage increases were for those ages 60-69 and 70-79, but the largest absolute increases were for drivers 20-29 and 30-39 years old. The majority of the drivers in these incidents did not have elevated blood alcohol levels. As for vehicles, the largest percentage increases were SUVs, but passenger cars accounted for the largest increase in numbers.
To get a handle on what roadway providers might do about pedestrian fatalities, the study identified where and when most pedestrian fatalities occurred. The large majority occur at night on urban arterials, and at non-intersection locations. More pedestrians were killed attempting to cross the road away from intersections/crosswalks than those simply walking alongside the road. And speed was a factor: two-thirds of the increase in fatalities occurred on arterials with speed limits of 40 miles per hour and above.
The simplistic answer is just to reduce the speed limits on major arterials. It’s true that the higher the speed (and the heavier the vehicle), the more likely a collision between vehicle and pedestrian will be fatal. But another alternative, noted in the study, is “separate pedestrians from vehicles in environments in which high vehicle speeds are intended.” Major (four-to-eight-lane) urban arterials are often state highways, intended as a supplement to the freeway system. Transportation departments have invested in sophisticated traffic signal timing systems aimed at providing “rolling green” lights in the peak direction, to keep traffic flowing smoothly while reducing tailpipe emissions from decelerating, idling, and accelerating again. To increase safety, they have added raised medians, protected left-turn lanes, walk lights at signalized intersections, and reduced direct access to businesses alongside the arterial.
The question that needs to be addressed is this: should a high-speed urban arterial be considered a “complete street” that must include sidewalks and bike lanes? It is likely that bicyclist-pedestrian safety would be significantly improved if bicyclists and pedestrians used sidewalks and bike lanes on parallel roadways, not on high-speed arterials. At the very least, we should be having conversations about the trade-offs involved.
Why Private Investment Could Be Part of a Bipartisan Infrastructure Bill
In my column in the January issue of Public Works Financing, I presented a case that—-given the make-up of the House and Senate—any major infrastructure bill will likely need to be based on bipartisan agreement. And that will obviously require compromise from all political sides. It should also give the business community and fiscal conservatives in Congress some leverage to insist that private infrastructure investment be part of the funding of “Build Back Better,” at least in the transportation sector.
Bipartisan Bill to Increase PABs Cap Introduced
With the original allocation of $15 billion in tax-exempt Private Activity Bonds (PABs) used up as of December 2020, last month saw the introduction of a bill that would double the federal cap to $30 billion. The Better Utilization of Investments Leading to Development Act, HR 2541, was introduced by Reps. Earl Blumenauer (D-OR) and Rodney Davis (R-IL). In addition to doubling the cap, the measure emphasizes that projects financed using PABs must comply with Davis-Bacon Act provisions regarding union labor. The bill is supported by an array of organizations, including the American Association of State Highway and Transportation Officials (AASHTO), the American Society of Civil Engineers (ASCE), the Association for the Improvement of American Infrastructure (AIAI), several labor unions, the National Stone, Sand & Gravel Association (NSSGA), and the U.S Chamber of Commerce.
Renewed Push for Infrastructure P3s in Texas
With the Texas legislature now in session, a group of business leaders and former public officials launched the Invest Texas Council (ITC) to build support for using public-private partnerships (P3s) for infrastructure. In transportation, the last two biennial legislative sessions failed to approve any of the dozens of transportation P3s proposed by Texas DOT. ITC’s news release noted that Texas is home to 11 of the country’s top 100 truck bottleneck interchanges, more than any other state. It also cited testimony to the House Transportation Committee supporting P3s from the American Legislative Exchange Council (ALEC). More information is available from email@example.com.
Fate of Miami-Dade Expressway Authority in Hands of Appeals Court
Oral arguments were to be heard today, Feb. 9, in Florida’s First District Court of Appeals over a recent Florida law that would abolish MDX, which operates 34 miles of toll roads in Miami-Dade County and has $1.5 billion of toll revenue bonds outstanding. Last year, a Leon County Court ruled that the measure was unconstitutional, violating the home rule authority of the county. The Florida House and (amazingly) Florida DOT have appealed that decision.
I-10 Mobile River Bridge Replacement Back in Play
The two Metropolitan Planning Organizations (MPOs) on either side of Alabama’s Mobile River want Alabama DOT to consider a new plan for replacing the aging Mobile River Bridge on I-10. Opposition to a proposed $6 one-way toll for a more ambitious Alabama DOT P3 bridge replacement project doomed that plan in 2019. The new concept would replace only the existing bridge and would put tolls only on that project, leaving an existing tunnel and causeway un-tolled. The MPOs are asking ALDOT to assess the feasibility of this concept, in hopes of limiting the new bridge’s toll to something like $2 for cars and $10 for heavy trucks.
I-69 Ohio River Bridge to Be Toll-Financed
Indiana DOT released word last month that its preferred alternative for the needed bridge to cross the Ohio River at the border with Kentucky will be a toll bridge. The $1.5 billion bridge will complete the construction of I-69 in Indiana and will facilitate its completion in Kentucky. The two states will jointly develop the project. The preferred alternative will leave a non-tolled existing US 41 bridge for local traffic.
Maryland Selects Preferred Express Toll Lane Options
Maryland DOT officials, last month, announced that the preferred option for adding express lanes to the I-495 Beltway, the American Legion Bridge, and I-270 is two express lanes each way. Three teams were shortlisted in December for phase one of this project, led by Cintra, Itinera, and Transurban. The winning team would design, build, finance, operate, and maintain the new lanes under a long-term revenue-risk P3 concession. Maryland is also extending northward the existing express toll lanes on I-95.
Maryland DOT Researching Truck Parking
With assistance from the Texas A&M Transportation Institute (TTI) and INRIX, Maryland DOT studied when and where over-the-road trucks parked at the I-95 welcome center in Laurel, MD. The researchers geo-fenced the area where trucks could legally park, but also tracked where and when they parked illegally on places such as ramps and shoulders. This information will help MDOT’s effort to develop a more sophisticated truck parking management system. There is a nationwide shortage of safe overnight parking spaces for heavy trucks, due in part to stricter federal enforcement of hours of service (HOS) rules.
Departing Transportation Pioneers
Last month brought changes to two of the most dynamic providers of new tolled highway projects. Jennifer Aument, CEO of Transurban North America, announced that she had accepted an offer to head AECOM’s global transportation business. At Transurban, she led the introduction of a network of express toll lanes in northern Virginia, and her team is one of the finalists for phase one of Maryland DOT’s $9 billion express lanes project. She will be succeeded as CEO by Transurban veteran Pierce Coffee. In Austin, the long-time Executive Director of the Central Texas Regional Mobility Authority (CTRMA), Mike Heiligenstein, announced his retirement after 17 years leading the agency from its inception. Under his leadership, CTRMA introduced the first toll roads in the Austin metro area and followed up with its first express toll lanes. His successor, starting June 1, will be James Bass, currently the executive director of TxDOT.
Ferrovial Launches Two Technology Ventures
Global infrastructure company Ferrovial (parent of Cintra) has announced two technology-based ventures. In December it signed a “framework agreement” with Hyperloop Transportation Technologies to jointly analyze hyperloop project opportunities in the United States. And in January, the company announced a “5G Roads” initiative aimed at developing smart roads. Named AIVIA, it includes Microsoft, 3M, and Kapsch TrafficCom. The aim is to develop solutions for “roads of the future” that have improved safety, reliable travel times, and in-vehicle infotainment.
Brightline West Plans New Bond Issue
In a Jan. 4 letter to the Nevada High-Speed Rail Authority, Brightline West said that construction on its 170-mile line from Las Vegas to Victorville, CA, could begin in the second quarter of 2021. The letter said that a revised financing plan would include more equity and a new bond sale. It also said it has contracted with Siemens Mobility to provide its Velaro trains for the project. Last year’s $2.4 billion bond offering did not attract any buyers.
Thruway Plans PABs for Service Plaza Modernization
The New York Thruway plans a $450 million, 33-year P3 project to rebuild, modernize, and operate the 27 service plazas along the toll road’s 570 miles. The modernization includes the installation of electric vehicle charging stations. To help finance the project, the state’s Transportation Development Corporation held a public hearing on Feb. 3 to discuss a potential $350 million issue of private activity bonds (PABs). The transaction needs the approval of both Comptroller Thomas DiNapoli and Attorney General Letitia James.
Low-Cost Federal Loans Available for Transportation Projects.
In a January 2021 policy brief from the Mineta Transportation Institute, Martin Klepper points out that the U.S. DOT’s Build America Bureau has lots of available low-interest loan capacity. The TIFIA program has $70 billion of unused loan capacity, while the Railroad Rehabilitation and Improvement Financing (RRIF) program has $30 billion. Klepper is the former head of the Build America Bureau.
North Carolina FIRST Commission Backs Tolling and P3s
In its Jan. 8 report to NCDOT, the 13-member commission recommended beginning the transition from per-gallon fuel taxes to per-mile charges with electric and hybrid vehicles, with a full transition to mileage-based user fees by 2030. It also urged the legislature to remove the current three-project limit on public-private partnerships. The only current P3 project is the I-77 express toll lanes, which have been in operation since late 2019.
Kansas Considering Express Toll Lanes Project
Last month Kansas DOT held a public meeting on congested US 69, one of the state’s busiest four-lane highways. The agency is considering adding an express toll lane each way on this section of the highway in Overland Park. The project website is https://69express.org.
California High-Speed Rail Project Out of Control, Say Builders
In a blistering 36-page letter to the California High-Speed Rail Authority, the team of contractors led by Tutor Perini listed numerous unresolved problems that have remained unresolved for years, including failure of the agency to obtain needed rights of way, failure to secure needed agreements with utilities and freight railroads, and repeated turnover of senior officials. “It is beyond comprehension that as of this day, more than two thousand and six hundred calendar days after [official approval to start construction of the mid-state project] that the Authority has not obtained all the right of way,” the letter said.
“Public transportation aims to provide ‘common carrier’ service, i.e., low-priced service to the general population. This mission has led to capital-intensive, long-lived, long-lead-time projects on the theory that at full capacity, the cost per rider will be low. There is a proclivity toward inflexible rail transportation and large buses that cannot adapt to changing market conditions and that are largely empty outside of rush hour. These modes depend on high occupancy rates to produce real benefits. The growing evidence that public transit ridership levels will not return to pre-COVID levels even after the health risk has passed will make them generally even more uncompetitive and unproductive.”
—Steven Polzin and Tony Choi, “COVID-19’s Effects on the Future of Transportation,” January 2021
“I knew communications would be a challenge. After 22 years in public office, I thought I was ready. But not one thing in the political world prepared me for the tolling world, where facts did not matter to the opposition. A small faction was down on tolling (they saw themselves as getting something free), and they were going to do whatever they could to stop it, whether their statements were true or not. It was the first wave of fake news, and it was really difficult to go through—particularly for the board, who didn’t deserve that as 15 volunteers. But we got through it. The opening of the first project was probably the biggest thing that turned things around for CTRMA. Once it was up and operating, it was a success. People began to see how tolling worked and the benefits to the community. Time savings became understood in a region drowning in congestion.”
—Mike Heiligenstein, in Bill Cramer, “Relationships, Momentum, and Patience: Heiligenstein Traces Four Decades of Achievement,” IBTTA Tolling Points, January 26, 2021
“Good News: [GM] Zero emission vehicles. Bad News: From where cometh the marginal electricity that enables that zero-emission vehicle to move, and what carries that electricity to the point on the road where that electricity is used to power that zero-emission vehicle? Until we have a ‘zero-emission battery’ and all electricity is created using zero emissions, GM cannot produce, nor sell, zero-emission vehicles that actually move (other than downhill, a la Nikola). So please tout the whole story! Will these EVs be less polluting than an ICE [internal combustion engine]that GM could build and sell ‘by 2035’ is the real question. The answer depends on where we are with electricity production and distribution, the efficiency and makeup of batteries, and the improvement of ICEs, (I didn’t mean to imply that it was a simple question, but the NY Times should be more than click bait.)”
—Alain Kornhauser, “GM Will Sell Only Zero Emission Vehicles by 2035,” Smart Driving Cars, Jan. 29, 2021
“Suppose you actually cared about climate change. You would not throw episodic subsidies at things that can survive only as long as you are subsidizing them. You would try to set in motion long-term trends that have the advantage of being in accordance with current needs. Mr. Obama, instead of the climate speech he gave in 2013, would have sought bargaining between Democrats and Republicans over how both could realize their tax policy goals with a carbon tax. A carbon tax would spread a low-carbon incentive through every transaction in the economy, not just the handful that government gets permission to subsidize directly (e.g., electric cars). You could implement such a tax in a pro-growth way to make the example attractive to other countries whose emissions (86% of the total and growing) will actually determine the climate outcome. You would use the proceeds to cut taxes on work and investment because, as the UN’s Intergovernmental Panel on Climate Change documents, socioeconomic and technological progress are the critical factors steering the world away from the worst-case emissions path known as RCP 8.5.”
—Holman W. Jenkins, Jr., “Biden’s Age of Climate Decadence,” The Wall Street Journal, Jan. 27, 2021