transportation

A Lasting Solution to the Transportation Funding Dilemma

Ken Orski — Sun, 21 Apr 2013 10:41:00 -0400

President Obama's FY 2014 budget request includes $77 billion for the Department of Transportation and an additional $50 billion "for immediate transportation investments." His next transportation bill to follow the current MAP-21, calls for a 25 percent increase in funding over current levels and assumes a transfer of $214 billion to the trust fund over six years "to maintain trust fund solvency and pay for increased outlays." To offset this spending, the Administration proposes using the "savings" or "peace dividend" from winding down the war in Afganistan.

House T&I Committee Chairman Bill Shuster (R-PA) was not impressed. "The President's budget," he said, "repeats his call to increase spending without identifying a viable means to pay for it. .... You can't just keep on spending money that you don't have." "A proposal we have seen three times before," observed Rep. Tom Latham (R-IA), House Transportation Appropriation Subcommittee chairman referring to the $50 billion request. With massive stimulus spending politically out of fashion, the Administration is repackaging it as "transportation investment." Bill Graves, president of the American Trucking Association, spoke for many stakeholders when he remarked, "For five years, we've waited for President Obama to clearly state how we should pay for these critical needs and, I'm sad to say, we continue to get lip service about the importance of roads and bridges with no real road map to real funding solutions." As for the "peace dividend," the idea has been dismissed as "budgetary gimmickry" by congressional Democrats and Republicans alike.

In sum, a large segment of congressional and public opinion has pronounced the White House proposals variously as "vague", "repetitive," "unrealistic," "implausible" and "politically unachievable." Even the President's most loyal supporters in the transportation community, the liberal advocacy groups, seemed disappointed and circumspect in their comments.

This said, no one disputes President Obama's and the infrastructure advocates’ claim that some of America’s transportation facilities are reaching the limit of their useful life and need reconstruction. Nor does any one disagree about the need to expand infrastructure to meet the needs of a growing population. But fiscal conservatives among infrastructure advocates (and we count ourselves among them) contend that this does not rise to the level of a national crisis requiring a massive $50 billion federal crash program as proposed in the President's budget message, or the expenditure of more than $100 billion per year as recommended by the American Society of Civil Engineers (ASCE) in its latest "Report Card."

Instead, as we have argued in recent columns, the challenge can be met if each state did its part to progressively bring up its transportation facilities (including its Interstate highway segments) to a "state of good repair," using its own tax revenues and its formula allocation of the Highway Trust fund dollars (which are expected to total $38-41 billion per year over the next decade.) As numerous news dispatches attest, that's precisely what is happening (see below). A large number of states are not waiting for the federal government to come to the rescue. They are using their own resources and raising additional revenue to pay for reconstruction and modernization of their aging facilities and to maintain their transportation systems in good working condition. "Governors and state legislatures realize that the level of federal assistance beyond 2014 is highly uncertain and they are acting on a credible assumption that federal funding will remain at current levels or may even be cut back," an association executive who is familiar with the thinking of senior-level state officials, told us.

What about large-scale reconstruction and system-expansion projects that require billions of dollars---transportation investments that are beyond the states' fiscal capacity to fund on a pay-as-you-go basis out of annual cash flow? Those investments, provided they are credit-worthy (i.e. are revenue producing or backed by dedicated tax revenue), will be mostly financed through long-term credit instruments and public-private partnerships. The future of capital-intensive infrastructure projects is intimately tied to the financial involvement of the private sector and to a wider use of tolling, "availability payments," and innovative credit instruments such as TIFIA and private activity bonds (PABs), a veteran facilitator of public-private partnerships told us. We list below some of the transportation megaprojects that are being financed (or are planned to be financed) largely with public and private credit rather than with federal dollars out of congressional appropriations.

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Lending credibility to the above funding scenario and hastening its adoption are the new realities underlying the federal role in transportation today. Those realities include: (1) a federal program that no longer has a clearly defined mission or purpose and many of whose functions are properly a state and local responsibility; (2) a Highway Trust Fund that has lost its capacity to support large-scale transportation investments and that has come to depend for its solvency on periodic injections of general funds; (3) a bipartisan absence of political will to raise the federal gas tax and (4) continued inability to identify another credible revenue source to supplement or replace the gas tax.

In sum, having the states assume financial responsibility for fixing their aging transportation facilities and for preserving them in a state of good repair, while employing public and private financing for major capital-intensive infrastructure investments, offers the best solution to the current federal funding dilemma.

NOTE: States that recently have undertaken to raise additional funds for transportation include: Virginia and Maryland (broad transportation funding overhaul that includes a dedicated sales tax applied to the wholesale price of gasoline. A sales tax, it has been argued, is no less a "user fee" than the gas tax since every consumer who pays a sales tax also is served by or "uses" the highway system for goods delivery ); Arkansas (one-half cent sales tax increase to back a $1.3 billion bond issue to fund highway construction over the next ten years); Illinois (six-year $12.6 billion statewide construction program to improve roads and bridges); Massachusetts ($13.7 billion bond-financed transportation plan); Maine ($100 million transportation bond proposal) Michigan ( $1.5 billion road plan funded with vehicle registration fees and a tax on fuel at the wholesale level); Missouri (proposal for a dedicated one-cent sales tax for transportation; the tax is expected to raise $7.9 billion over ten years); New Hampshire (12-cent hike in the gas tax over three years approved by the House; Senate approval uncertain); Ohio (turnpike toll-backed $1.5 billion bond issue for highway and bridge improvements); Pennsylvania ($2.5 billion Senate transportation funding plan; House approval uncertain); Texas (statewide tolling); Wisconsin ($824-million boost to the state transportation fund); Wyoming (10-cent fuel tax increase, the first in 15 years); and California, Oregon and Washington (exploring new mechanisms for project finance through the cooperative West Coast Infrastructure Exchange). In addition, several states which derive significant revenue from their tollroads have raised toll rates. See also, "State Transportation Funding Proposals, AASHTO Center for Excellence in Project Finance, April 2013

Recent major transportation infrastructure projects largely financed,or to be financed, with long-term credit instruments rather than federal dollars include: the I-495 Beltway HOT lanes project in Northern Virginia; New York's Tappan Zee Bridge replacement; the San Francisco Bay Bridge Eastern Span replacement; the I-5 Columbia River Crossing; the Highway 520 floating bridge and the Alaskan Way Viaduct in Seattle, the Midtown tunnel linking Norfolk and Portsmouth, VA; East End Crossing over the Ohio River near Louisville; and the PortMiami Tunnel. Please note that, except for the California High-Speed Rail venture, there are no transportation megaprojects currently being planned whose construction would depend primarily on federal appropriations.

Wanted: A Reasoned Approach to Dealing with America's Infrastructure Needs

Ken Orski — Mon, 18 Mar 2013 12:41:44 -0400

It seems like not a week goes by without fresh warnings about the nation’s”crumbling infrastructure" and renewed appeals to rebuild our aging highways and bridges. President Obama reinvigorated the campaign with his State-of-the-Union proposal for a $50 billion program of infrastructure investments, $40 billion of which would be devoted to a "fix-it-first" program targeted at urgent improvements such as "structurally deficient" bridges. The following day, the House Committee on Transportation and Infrastructure held a hearing on "The Federal Role in America’s Infrastructure," focusing on the importance of infrastructure for the U.S. economy and the federal role in its preservation and expansion. The same day, the U.S. Chamber held a "Transportation Infrastructure Summit," a day-long gathering to explore "transportation infrastructure challenges and promising solutions" with prominent industry representatives. Yet another meeting, this one convened by Rep. Rosa DeLauro (D-NY), a longtime proponent of a National Infrastructure Bank, will explore innovative strategies for financing infrastructure in a March 18 forum on Capitol Hill.

Two recent reports have added to a sense of urgency about America’s deteriorating infrastructure. The Building America's Future coalition has published a report, Falling Apart and Falling Behind, urging development of a long-term national infrastructure strategy, establishing a National Infrastructure Bank and lifting restrictions on tolling. The American Society of Civil Engineers (ASCE) has released a report, Failure to Act: The Impact of Current Infrastructure Investment on America's Future, warning that if the investment gap is not addressed, the economy is likely to suffer $1 trillion in lost business and a loss of 3.5 million jobs. ASCE's 2013 Report Card for America's Infrastructure, a detailed analysis of the performance and condition of America's infrastructure to be released on March 19, may be expected to reinforce this gloomy forecast (a previous "report card," issued in 2009, gave the U.S. infrastructure an unflattering grade of D.)

What kind of impact this flood of warnings and advocacy efforts will have on public opinion and on congressional attitudes and fiscal decisions remains to be seen. They come at a time of severe budget pressures and intense Republican efforts to curb excessive discretionary spending. To be successful, the pro-infrastructure campaign must persuade fiscally conservative lawmakers that there are urgent reasons for a boost in spending on public works that override the imperative to reduce the deficit and get the nation's fiscal house in order.

Further, infrastructure advocates must convince the nation's taxpayers--- who see no visible signs of "crumbling infrastructure"--- that spending more on transportation will not be wasted but will result in concrete benefits in the form of reduced congestion or shorter commutes. Infrastructure alarmists also must contend with a public that lately has grown skeptical about warnings of catastrophic consequences of minor cuts in spending.

Lastly, the advocacy campaign must overcome a cynical perception that pressures to increase funding for transportation are nothing more than special interest pleadings of interest groups that stand to profit from higher levels of public spending. As one transportation advocate at a recent conference observed, "there is an enormous disconnect between us and the American public" --- a disconnect that may not be easy to overcome.

Significantly, improving the nation's infrastructure was not a topic of discussion at the President's meeting with Senate Republicans, according to Sens. Roger Wicker (R-MS) and Orrin Hatch (R-UT), as reported in POLITICO. The President must have come to a conclusion that his $50 billion infrastructure plan stands no chance of winning a favorable Senate vote ---not to mention being an anathema with the House Republicans.

A Reasoned Approach

No one disputes the infrastructure advocates’ claim that some of America’s transportation facilities are reaching the limit of their useful life and need replacing. Nor does anyone disagree about the need to expand infrastructure to meet the needs of a growing population. But fiscal conservatives among these advocates (and we count ourselves among them) contend that this does not rise to the level of a national crisis requiring a $50 billion crash program as proposed by the President, or a two trillion dollar infrastructure investment program over fifteen years as recommended by ASCE .

The condition of infrastructure varies widely from state to state as studies by the transportation research group TRIP and by the Reason Foundation have shown. Most states maintain their transportation assets in a state of good repair and only a few need extensive modernization. "There are still plenty of problems to fix, but our roads and bridges aren't cumbling," said David Hartgen, lead author of the Reason study. "The overall condition of the public road system is getting better and you can actually make the case that it has never been in better shape." Hartgen's conclusion is backed by a detailed study of the condition of America's roads and bridges. The study is based on a variety of sources, primarily from the states themselves as reported to the federal government from 1989 through 2008. ( "Are Highways Crumbling? State and U.S. Highway Performance Trends, 1989-2008, Reason Policy Study 407, February 2013).

The generally acceptable condition of the nation's transportation infrastructure in most places, argues for a more selective approach. Rather than launching a new massive national public works program in the name of "fix-it-first," state-level efforts should be targeted specifically at aging facilities that are in a demonstrable need of replacement or modernization. "The nation simply cannot afford blindly to throw money at the problem," in the words of one senior congressional Republican. "We have learned from the Administration's $8 billion high-speed rail fiasco that scattering resources in an unfocused manner in order to satisfy demands for geographic equity, leads to imprudent, irresponsible and often downright wasteful spending."

To the extent that large-scale multi-year megaprojects demanding billions of dollars still figure on the drawing boards of state DOTs, they can---indeed, they will ---be financed through public-private partnerships, tolling and credit instruments such as TIFIA and state infrastructure banks. They include the I-495 Beltway Hot lanes project in Virginia, New York's Tappan Zee Bridge replacement, the San Francisco Bay Bridge Eastern Span replacement, the I-5 Columbia River Crossing, the Highway 520 floating bridge in Seattle, the Miami Port Tunnel, the Midtown Tunnel linking Norfolk and Portsmouth VA, and two Ohio River bridges in Louisville, a joint undertaking of the Indiana and Kentucky DOTs. All of the above projects will be financed with long-term obligations rather than funded on a pay-as-you-go basis through annual congressional appropriations.

A transition from funding to financing of major transportation infrastructure projects was also the preferred approach of the financial practitioners and analysts assembled at the October 2012 conference on Public-Private Partnerships convened by the American Road and Transportation Builders Association (ARTBA). The most practical way to build future transportation megaprojects, these experts concluded, will be through project financing and public-private partnerships.

In sum, the Highway Trust Fund no longer can serve as a source of capital for new infrastructure, and funding large capital-intensive projects with current user fee revenues on a pay-as-you-go basis is no longer feasible. Instead, look for the states to assume responsibility for remedial "fix-it-first" activities, and for a shift from funding to financing for multi-year construction megaprojects. This may turn out to be the only practical long-term solution to our transportation funding dilemma.

Nerdwallet.com Mixes Apples and Oranges on "Worst Cities for Drivers"

Wendell Cox — Mon, 11 Mar 2013 15:57:09 -0400

The website nerdwallet.com mixes apples and oranges in producing a list of the 10 worst "cities" for car drivers in the United States. The ratings hardly matter, since the nerdwallet.com score is based on a mixture of urban area and municipality data.

The Apples: Nerdrwallet.com uses the Texas Transportation Institute traveled the may delay measures for urban areas. These are areas of continuous urban development that always include far more population than is in the central city or municipality. There is no data for the traffic congestion measures at the central city level. These traffic congestion scores are nerdwallet.com's "apples."

The Oranges: The oranges of the population densities for the core municipalities. For example, the density shown for New York is that of the city, at 27,000 per square mile. The urban area has a density of approximately 5000 per square mile.

The Comparison: The net effect is that nerdwallet.com uses the city of New York, with its 8 million people in approximately 300 square miles to the New York urban area with approximately 18 million people in 3,400 square miles. These are not the same things and any score derived from the mixing of these two definitions is inherently invalid.

This is one of all too many examples of comparisons that are made in the press between "cities," with editors and fact checkers taking insufficient care to ensure that they are using comparable data.

Top GOP Budget Officials Call for Investigation of Xpress West High Speed Train from Victorville to Los Angeles

Wendell Cox — Fri, 08 Mar 2013 14:56:21 -0500

Congressman Paul Ryan, chairman of the House of Representatives Budget Committee and Sen. Jeff Sessions, Ranking Member of the Senate Budget Committee have expressed serious reservations on the proposed taxpayer loan to the Xpress West high-speed rail line that would operate two thirds of the way between Los Angeles and Las Vegas (from Victorville).

A joint letter dated March 7 to United States Secretary of Transportation Ray LaHood called the taxpayer risks untenable. They asked for a Government Accounting Office investigation of the project and asked Secretary LaHood to suspend final determination on the taxpayer loan until the GAO investigation is completed.

Is the Acela Killing America?

Aaron M. Renn — Fri, 14 Dec 2012 10:40:15 -0500

Has the finance industry trainjacked America?

By all accounts the Acela has been a success. Thought it is far from perfect and constitutes moderate speed rail for the most part, it seems to have attracted strong ridership. A midday train was totally packed on both the BOS-NYC leg and NYC-DC leg the last time I rode it. I didn’t see an empty seat anywhere. Which is pretty amazing given how much more expensive it is than the regional, and frankly not that much faster. It does seem to have accomplished its mission of more closely linking Boston, New York, and Washington.

The question is, is that actually a good thing? Or has the improved connectivity the Acela brings had unforeseen negative consequences? I believe you can make an argument that the Acela has actually helped birth the stranglehold the finance industry has over federal fiscal and monetary policies, and thus has hurt America.

I don’t have time to fully develop that here, but to anyone who has been following any of the many excellent sites tracking the financial crisis over the last few years, it is obvious.

There is now a near merger between Wall Street and K Street. During the financial crisis, the government and the Fed have kept Wall Street well supplied with bailouts and nearly free access to capital that allows them to literally print risk free profits by recycling in the free loans into interest bearing government debt, all while Main St. businesses and homeowners have borne the full brunt of a credit crunch, state and local governments fiscally starve, and infrastructure funds dry up. Finance industry insiders have now obtained a near lock on the position of Treasury Secretary. When a president like Bush dares to appoint someone with actual industrial experience, Wall Street’s displeasure is made manifest, and it generally succeeds in undermining him. New laws like Dodd-Frank strangle new entrants to the field while enshrining the privileged status of the too big to fail. The fact that it allows government to seize these “systematically important financial institutions” shows not the industry’s weakness but its strength, as big banks de facto function as instrumentalities of the state, but with profits privatized and losses socialized. Not a single major figure in the events causing the financial meltdowns has gone to jail or even been prosecuted (only a collection of ponzi schemers and insider traders who, despite their criminality, had no systematic impact – the crisis blew up their scams, their scams did not cause the crisis). The list goes on.

The geographic proximity of New York to Washington, with quick trips back and forth on the Acela, facilitates this. Clearly, you could get back and forth on the shuttle without it, but given the Acela’s popularity, it does seem to have some big benefits in shrinking the distance between New York and DC. I’d argue this has been unhealthy for America. If true high speed rail ever came to the NYC-DC corridor, who knows what might happen?

Perhaps you don’t agree and will feed me to the dogs for this post. But I think it’s very clear that transportation networks have vast impact on the structure of society, not just how people and goods get from Point A to Point B. The interstate highway system is proof of that. Indeed, advocates of high speed rail (and I’ve been a qualified one myself, supporting it clearly in the Northeast Corridor but being skeptical about most others) boast of the positive transformational effects of HSR as one of the reasons to build it. But as with the interstate highway system, we need to be aware of the hidden risks as well.

The Acela is perhaps living proof that high speed rail can reshape America. It is literally helping rewrite the geographic power map of America. Unfortunately, at this point don’t think that’s been a good thing.

This piece originally appeared at The Ubanophile.

Higher Gas Tax Unlikely to Gain Support in Congress

Ken Orski — Wed, 28 Nov 2012 11:18:50 -0500

Although some infrastructure advocates are hoping to use the current budget negotiations to win support for an increase in the federal gasoline tax, the idea is unlikely to gain support in Congress or the Administration. While the 2010 Simpson-Bowles deficit-reduction commission proposed raising the federal gas tax by 15 cents/gallon as part of a broad deficit-reduction plan, neither House Speaker John Boehner (R-OH) nor Senate Majority Leader Harry Reid (D-NV) have endorsed the idea. Nor is an increase in the federal gasoline tax popular among the rank-and-file. Most lawmakers see the pressure to raise it as coming only from a narow coalition of liberal advocacy groups and transportation stakeholders that stand to benefit from increased federal transportation spending.

Nor is the Obama administration eager to advocate a gas tax increase whose burden would fall most severely on the middle class ---precisely the constituency it wishes to protect from the pain of any further tax increases. Given this perception, it is almost certain that a federal gas tax increase will remain off the table in the current fiscal cliff negotiations and probably throughout the next session of Congress as well.

Look instead for the states to assume a larger share of responsibility for funding their transportation needs. An early harbinger may be the state of Arkansas whose voters recently approved a half-cent statewide sales tax increase to back a $1.3 billion bond issue to fund highway construction over the next ten years. The measure has been called "the largest infusion of new tax dollars into a state transportation system in recent history." Local referenda supporting public transportation also have appeared on the ballot in numerous states. According to the Center for Transportation Excellence, last November voters approved 70 percent of such initiatives.

In addition to greater local financial participation, look for a shift in emphasis from federal funding to public and private financing of large infrastructure projects. The shift will be fueled by a vastly expanded TIFIA lending authority ---by more than 600 percent, from $122 million in FY 2012 to $750 million in FY 2013---and by a large reservoir of equity in pension funds and private infrastructure investment funds looking for attractive investment opportunities. (TIFIA stands for the Transportation Infrastructure Financing and Innovation Act).

This means an expanded role for tolling, for TIFIA and private sources of capital can only be used to finance facilities that are backed by a dedicated stream of revenue to cover interest payments on the loan and the loan repayment itself. Tolls are viewed by many as a fairer way to pay for new and reconstructed highways and bridges because, unlike the gas tax, they are paid only by the users of the particular tolled facility. In other words, drivers in Montana will not be required to pay for a road or bridge built for and benefiting mainly the residents of say, Texas.

The likely prospect that financing will replace stagnant or dwindling federal funding, dominated discussion among financial practitioners at ARTBA's Public-Private Partnership Conference in Washington on October 10-11. Participants were encouraged to hear that 19 projects worth $27.5 billion have already submitted letters of interest for TIFIA loans in the past three months. Four more projects totaling $1.9 billion have been announced since October. More applications are certain to follow as it becomes clear that the Highway Trust Fund no longer can continue to serve as a source of investment capital for transportation infrastructure.

In sum, rather than hoping for an increase in the gas tax, the transportation community should look forward to three new trends as the most likely response to the perceived inadequacy of current transportation revenue: greater financial participation by state and local taxpayers, a shift in emphasis from federal funding to private and public financing, and an expanded use of tolling.

Finally, A Vegas Train That Makes Sense

Wendell Cox — Sun, 25 Nov 2012 15:31:17 -0500

Las Vegas Railway Express has signed an agreement with the Union Pacific Railroad to operate a conventional speed train from Fullerton, in Orange County to downtown Las Vegas, according to a story by Michelle Rindells of the Associated Press.

This is not to be confused with the proposed Xpress West (formerly DesertXpress) high-speed rail line which would operate from Victorville to Las Vegas, expecting riders to drive through Los Angeles Basin traffic congestion to get to the station. Further, unlike Xpress West, the Las Vegas Railway Express train would require no financial assistance from taxpayers for its largely leisure travelers. As we indicated previously, our analysis concludes that XpressWest revenues are unlikely to be sufficient to repay a proposed federal loan. This could expose taxpayers to a loss of $5.5 billion or more --- approximately 10 times as great as taxpayer losses in the Solyndra federal loan guarantee debacle.

The Las Vegas Railway Express promoters intend to take the full financial risk, as do most entrepreneurs who start businesses. Moreover, the Las Vegas Railway Express train would operate only when demand is substantial, with all trips between Thursday and Monday. The first trip is tentatively scheduled for New Year's Eve, 2013.

Here's hoping the train is successful and that the owners make at least a competitive return on investment, while providing employees commercially funded (not subsidized) jobs, paying, not consuming taxes and with revenues earned from willing customers, rather than relying on public funding. And just as important, if they fail, taxpayers will not be left holding the bag. That's how things should work.

Election: "Stop Portland Creep" Resonates in Suburbs

Wendell Cox — Fri, 09 Nov 2012 23:02:15 -0500

Election results from all three of Portland, Oregon's largest suburban counties indicate a reaction against what has been called "Portland Creep," the expansion of the expansive light rail system without voter approval and the imposition of restrictive densification measures by Metro, the regional land-use agency.

Portlanders in the three largest Oregon counties (Multnomah, Washington and Clackamas) have previously voted against financing light rail extensions, however the transit agency has found ways to continue the expansion and now operates five lines, with a sixth under construction. While urban rail aficionados tout the success of the Portland system, transit use by commuters has fallen significantly in relative terms from before the opening of the first light rail line. At the same time, working at home, which does not need billions in taxpayer subsidies, has caught up to and passed transit (Figure).

The electoral events of the past 60 days could severely limit future expansion.

Clackamas County: Chicanery and its Price

In a September 2012 election, voters in Clackamas County approved a measure by a 60% - 40% majority requiring that any commitment of funding to rail would require a vote of the people. Perhaps fearing a negative result in the election, the pro-rail Clackamas County commission hastily approved $20 million to support the under construction Portland to Milwaukie (Clackamas County) light rail line.

Things were to become substantially more difficult for light rail in the November election. In Clackamas County, the two incumbent commissioners on the ballot, both of whom voted for the $20 million bond issue, lost their seats. Voters rewarded their chicanery by replacing them with anti-rail commissioners, leaving the Clackamas County commission with a 3 to 2 anti-rail majority. The Oregonian characterized the election as "a referendum on light rail."

John Ludlow, who defeated Clackamas County commission chair Charlotte Lehan by a 52% to 48% margin, told The Oregonian:

"I think the biggest boost my campaign got was when those commissioners agreed to pay that $20 million to TriMet" for Portland-Milwaukie light rail four days before the September election. I think that put Tootie and me over the top."

"Tootie" is Tootie Smith, a former state legislator who unseated commissioner Jamie Damon in the same election by a similar margin.

Washington County, Oregon: Taxpayers Take Control

Meanwhile, light rail has run into substantial difficulty in suburban Washington County. In September, voters in King City approved a measure to require all light rail funding to be approved by the voters. In the more recent November election, voters in Tigard, the 6th largest city (50,000 population) in the metropolitan area, voted 81%-19% to subject all light rail expenditures to a vote of the people.

Clark County, Washington: Voters Say No

Portland's transit agency also had its eye on expanding light rail service across the state line and the Columbia River to Vancouver, in Clark County, Washington. The plan was to build a new "Interstate Bridge" (Interstate 5) across the river, which would include light rail. The voters of Clark County were asked in a referendum to approve funding for the light rail system and turned it down soundly according to the Columbian, by a 56% – 44% margin.

But there was more. For some time, citizen activist and business leader David Madore has been working to stop both tolls on the new bridge and light rail service. Madore was elected to the board of commissioners of Clark County at the same time that the light rail referendum was being defeated. Madore, like the two other Clark County commissioners, also hold seats on the transit agency board.

Tri-Met's Death Spiral?

Further, Tri-Met's dire financial situation could be another barrier to future expansion. As John Charles of the Cascade Policy Institute has shown, Tri-Met's fringe-benefit bill is astronomically high, at $1.63 for each $1.00 in wages. This is more than five times the average for public employers, according to US Department of Commerce Bureau of Economic Analysis data. Charles refers to Tri-Met as being in a "death spiral" and says that:

"The agency is steadily devolving from a transit district to a retirement and health-care center, with unsustainable fringe benefit costs that now far exceed the mere cost of wages."

Honolulu Rail Project Legal Problems Mount

Wendell Cox — Sat, 03 Nov 2012 11:21:10 -0400

According to the Hawaii Reporter, Honolulu's rail transit project has lost a major legal test in The Federal Ninth Circuit Court, as Judge Wallace Tashima ruled in HonoluluTraffic.com v. Federal Transit Administration et al that the city of Honolulu had violated federal environmental law on three counts.

The plaintiffs included are a coalition of environmental, civic, political and taxpayer interests, including former Governor and mayoral candidate Benjamin Cayetano, University of Hawaii Law professor Randall Roth, Retired Judge Walter Heen, retired businessman and transportation expert Cliff Slater, Dr. Michael Uechi, Hawaii’s Thousand Friends, Outdoor Circle and the Small Business Hawaii Entrepreneurial Education Foundation.

The plaintiffs and defendants differ strongly on the impact of the ruling, and the defendants are to return to court in December seeking a permanent injunction against the project.

University of Hawaii Engineering Professor Panos Prevedouros told the Hawaii Reporter that the decision would require environmental planning revisions that could take up to 2 years.

This setback is in addition to a previous unanimous Hawaii Supreme Court ruling that had already required construction to be suspended and which could delay project for at least a year, according to the Hawaii Reporter. The Supreme Court in Kaleikini v. Yoshioka, ruled that the city of Honolulu failed to comply with the state's historic preservation and burial protection laws when it did not complete an archeological inventory survey for the 20-mile route before starting construction.

The Future of Passenger Rail in America

Ken Orski — Thu, 25 Oct 2012 12:13:15 -0400

On October 19, an Amtrak passenger train hit 111 mph in a test run on a 15-mile stretch of track between Dwight and Pontiac, Illinois. It was the first tangible return from a three-year $1.5 billion program of improvements funded under the Administration's high-speed rail initiative. The program hopes to shave about an hour off the 5 ½ hour rail trip between Chicago and St. Louis. Transportation Secretary Ray LaHood and Illinois Gov. Pat Quinn who were aboard, called it a "historic" event. They were perhaps unaware, as Chicago SunTimes respected columnist Mark Brown pointed out, that "ten years ago, also on the eve of an election, the same Illinois Department of Transportation offered another demonstration along nearly the same stretch of track, also reaching 110 mph."

Setting this pre-election rhetoric aside, of President Obama’s vaunted HSR initiative that promised to connect 80 percent of Americans with high-speed rail, only two true high-speed rail projects remain. They are the California SF-to-LA Bullet Train and the "Amtrak Vision for the Northeast Corridor." The future of these two projects is discussed below. A condensed version of this commentary appeared in the Wall Street Journal on September 24, 2012.

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High speed trains are hardly new --- they have been crisscrossing France and Japan for over 40 years. But building a nationwide high-speed rail network in America is quite a novel idea. It originated with President Obama who, on April 16, 2009, announced a plan "to give 80 percent of Americans access to high-speed rail within the next 25 years." The program was seeded with an $8 billion grant from the American Recovery and Reinvestment Act of 2009 (ARRA), later supplemented with an additional $2.1 billion in general funds.

But this lofty and extravagant vision soon yielded to practical realities. One such reality is America’s demography. Unlike Western Europe and Japan, the United States, lacks an urban pattern that favors high-speed rail connections. This pattern requires large traffic generating city-pairs that are neither close enough to each other to favor travel by car nor far enough apart to favor travel by air. In Europe and Japan those distances happen to fall in the range of 200-400 miles (Think Paris-Lyon, 290 miles; or Tokyo-Nagoya, 220 miles). The only corridor in the United States that fits this description is the Northeast Corridor. No wonder, the Boston-to-Washington rail line has lately become a focus of high-speed rail planning.

Another reality is that true high-speed rail service requires a dedicated alignment reserved exclusively for passenger trains. Such is the case with the French TGV, the German ICE and the Japanese Shinkansen trains— as indeed, with any train that runs at top speeds of 150 miles per hour or higher. Having high-speed trains share a common track with lumbering freight trains as the Obama Administration has proposed to do, is to invite serious operational conflicts and safety problems. But dedicated rights-of-way for high speed trains require relatively straight and level alignments with minimal curvature. To assemble such rights-of-way in densely populated corridors where land holdings are highly fragmented, would be extremely costly and disruptive if not totally impossible.

Yet another reality is the uncertain prospect for further federal support. Such support is deemed essential for the future of the Administration’s HSR program (but not for the future of privately funded ventures such as the proposed Lone Star HSR line between Dallas and Houston). Congress, by denying White House requests for high-speed rail funds three years in a row, has sent a clear bipartisan signal that states should not count on continued congressional appropriations for high-speed rail. The lawmakers reaffirmed this intention by eliminating Title V of the Senate transportation bill (the National Rail System Preservation, Expansion and Development Act of 2012) from the final version of the surface transportation reauthorization (MAP-21). In the meantime, the $10.1 billion earmarked for high-speed rail has been fully committed.

In sum, high-speed rail advocates, promoters and dreamers need a triple reality check.

Improving Existing Rail Service

But this is not to say that nothing should be done to improve and expand existing passenger rail services, especially commuter rail lines serving major metropolitan areas. Even though such improvements will not result in significant travel time savings, they could lead to more efficient, frequent and reliable transportation service benefitting millions of daily commuters. In 2010, commuter rail systems across the country provided service to nearly 460 million riders.

Improving commuter rail services is indeed, the approach embraced by the California High Speed Rail Authority. Despite its avowed goal to link LA and San Francisco with high-speed trains, almost half of its initial $10 billion first stage of the project will be devoted to upgrading conventional transit and commuter rail services in Los Angeles and the Bay Area, the "bookends" of the high-speed rail line, e.g. through electrification of the SF-to-San Jose Caltrain and "connectivity" improvements in LA’s Metrolink.

The dollars spent on commuter rail improvements will have "an immediate and dramatic effect" according to the Authority’s chairman, Dan Richard. Will Kempton, chief executive of the Orange County Transportation Authority (OCTA) and chairman of the Independent Peer Review Group advising the High Speed Rail Authority concurs. It will be a good investment, he said, whether or not the overall $68 billion high-speed rail project ever gets completed.

Similarly, in the Northeast Corridor where Amtrak has proposed a 30-year $151 billion capital investment program to bring true high-speed rail service between Boston and Washington DC, the initial efforts will be focused on "meaningful incremental improvements" in track, catenary and signals in the New York-to-Philadelphia corridor (the "NEC Upgrade Program"). This stretch of the line was chosen for the initial upgrade because it carries a heavy volume of local commuter traffic in addition to serving long distance trains. As in the case of California’s "bookend" improvements, the upgrades of the 90-mile NY-Philadelphia rail line will not only benefit large numbers of travelers – they also will be far more cost-effective in dollars-per-passenger terms than any eventual improvements raising line speeds over the entire Boston-to-Washington corridor.

Thus, fiscal, economic and political constraints have caused both the California Bullet Train and the Amtrak vision for the Northeast Corridor — the only two projects that have survived on the Obama Administration’s vaunted high-speed rail agenda --- to morph largely into a program of modest near-term improvements in existing commuter rail services. Lack of funds may prevent either project from achieving its avowed goal of providing true high-speed rail service--- in the case of California, reducing travel time between LA and San Francisco to two hours and forty minutes (see Note below). To achieve it, the California project will require $68 billion; the NEC program will need $151 billion.

Is this goal even worth pursuing? Some people think so---in fact they passionately believe in it. They contend that in order to make our cities less auto-dependent we need to invest in high-speed trains. Minor upgrades in existing rail services, they argue, will not make a significant dent in auto use. But many planners beg to differ. They believe that the best chance of persuading current auto users to leave their cars at home is to improve the daily suburban rail commute. Business travelers will continue flying because they look for the fastest way to get to their destination. Families on vacation trips will not abandon their cars in favor of trains because cars offer the least costly and most convenient way to travel to holiday destinations. The only sector of the traveling public that can be influenced to shift to trains in large numbers are suburban commuters.

What of the argument that a great nation like ours---a nation that built the Erie Canal, the transcontinental railroad, the Panama Canal and the Interstate Highway System --- should continue the tradition of visionary grandiose public works.

Regretfully, both ventures have come at a most inopportune time. The nation is recovering from a serious recession and is trying to rein in the deficit and reduce the 16 trillion dollar national debt. At a more distant moment in time, when the economy is growing again and the deficit has come under control, the nation might be able to resume its tradition of pursuing "bold endeavors"---ambitious programs of federally financed public works that benefit the whole nation. When that time comes, perhaps toward the end of this decade, it might be appropriate to revive the idea of high-speed rail--- at least in the context of the densely populated Northeast Corridor where road and air traffic congestion may eventually threaten its continued growth and productivity. For now, prudence, good sense and the nation’s fiscal well-being require that we lower our sights and focus on improving commuter rail connections.

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Note on the Status of the California HSR Project

There is a high likelihood that the LA-SF bullet train project will never get completed. Law suits are pending to stop construction of the first stage of the project---the Central Valley segment from Madera to Bakersfield. A motion for a preliminary injunction has been filed by Madera County, the Madera and Merced County farm bureaus and other opponents. The motion seeks to prevent the rail Authority from moving forward on the initial Madera-to-Fresno section until a trial on the lawsuit is completed. Hearing on the preliminary injunction is set for November 16.

Even if the preliminary injunction is denied, construction on the rail section will not begin until the fall of 2013 according to a legal declaration filed by the Authority in the Sacramento Superior Court. What’s more, the Madera-to-Fresno section will not be electrified before 2022 according to the rail Authority---and then only if more funds become available. Additional legal challenges are expected over the Fresno-to-Bakersfield section of the line. The City of Bakersfield has already announced plans to file a lawsuit contending that the Authority’s environmental impact report doesn’t meet CEQA standards. The cumulative effect of these delays has led to speculations that the Authority may not be able to complete work on the Central Valley segment by September 2017 when the federal $3 billion grant expires. And if the federal money stops flowing, who will step in to fill the gap?