• What to do about highways that split neighborhoods
• FHWA has not approved EV charging on Interstates
• A new half-trillion dollar passenger rail proposal
• Utah’s plan to replace fuel taxes
• Getting serious about Interstate reconstruction
• How smart was “Smart Columbus”?
• Dueling studies on high U.S. rail transit costs
• News notes
• Quotable quotes

What to Do About Highways That Split Neighborhoods

Many transportation experts are concerned by congressional and U.S. Department of Transportation (DOT) efforts to deem expressways that were built 50 years ago through low-income areas in cities as civil rights and environmental justice issues. The U.S. Department of Transportation has intervened in Texas DOT’s planned $7 billion widening of I-45 in Houston, and both the Biden administration’s American Jobs Plan and the House’s surface transportation reauthorization bill include funding for “reconnecting communities.”

Many years ago I read Robert Caro’s massive biography of Robert Moses, The Power Broker, and gained an appreciation for why “freeway revolts” broke out in the 1970s over planned urban Interstates, some of which ended up being cancelled. And despite being an advocate for better highways, I do have concerns over the massive property takes proposed by TxDOT for the I-45 project. And even the Transportation Research Board (TRB) special committee report on the future of the Interstates suggested that some urban segments could be candidates for removal, while also calling for adding some new Interstate corridors and selectively widening many long-distance routes.

What would be a sensible approach to existing urban freeways that divided low-income neighborhoods 50 years ago? Here are some points to keep in mind.

• The urban Interstates built through low-income areas were not part of the original plan, which was strictly inter-city. When the 1955 bill to create the Interstate program failed in Congress due to lack of support from urban members, the federal Bureau of Public Roads created a set of conceptual plans for urban Interstates, called the Yellow Book. Mayors and legislators were then keen on the prospect of 90% federally funded urban expressways, so the 1956 version of the Interstates plan passed almost unanimously.
• Low-income areas were generally selected because the land values were lower, limiting the cost of acquiring the right of way via eminent domain. Many of these areas were multi-ethnic immigrant communities; this was before much of the move to the suburbs from many such neighborhoods. There may well have been a racial and/or ethnic elements to the selection process in some cases, but the right-of-way (ROW) decisions appear to have been based mostly on engineering and fiscal considerations. Another factor was widespread support at that time for so-called “slum clearance” and redevelopment.
• Although we have no definitive data on who lived in bisected communities then, it seems likely that most of those whose lives were affected have either died or moved elsewhere. There is no way to re-create the former neighborhoods with their former residents. And recent in-depth articles on such former neighborhoods in New Orleans and Syracuse, for example, found many current residents concerned about gentrification if the aging freeways there were removed.

Any proposed remediation must consider both the residents of the affected area and the impact of replacing a limited-access expressway with local streets on overall metro area traffic flows. The Congress for a New Urbanism has touted a handful of “freeway removals” as big successes, claiming that former freeway traffic just melted away. Actually, nearly all the cases these groups cite are stubs—short portions of freeways that were planned but never built. Examples include the Park Freeway in Milwaukee and the Embarcadero Freeway in San Francisco. They never carried much traffic, so replacement surface streets sufficed. But that does not mean tearing out a freeway that is an integral part of a metro area’s multi-modal (bus, car, and truck) highway system could be done without major impacts on traffic over the whole system. Any significant facility modification must be based on its current importance to the whole community, including its neighbors but also freight impacts in terms of ports, factories, etc. and impacts on interstate commerce.

In short, any proposed freeway removal requires careful analysis of actual neighborhood impacts as well as metro-area traffic impacts. And each situation is likely to be different from the others. I addressed this subject in Chapter 10 of my book, Rethinking America’s Highways. Here are some examples of solutions adopted in various large metro areas.

Decks and Lids: Removing aging elevated freeways and replacing them with below-grade freeways, covered over by decks or lids, is a solution adopted both overseas and in U.S. metro areas, including Dallas, Duluth, Phoenix, and Seattle. Currently under way in Denver is the reconstruction of I-70 between downtown and the Denver International Airport. The elevated section has been torn down and is being replaced by depressed lanes decked over with a park that will link the formerly divided communities on either side. The cost of this project is $1.2 billion.

Tunnels: Two major urban areas, Boston and Seattle, replaced aging elevated freeways with tunnels. Both projects maintained previous traffic flows on critically important links while opening up the surface area to new development. Both of these projects experienced large cost overruns, with Boston’s huge Big Dig ending up at $14.8 billion and the Seattle tunnel at $3.3 billion. Neither was carried out as a design-build-finance-operate-maintain (DBFOM) public-private partnership (P3), unlike the Port of Miami tunnel which was delivered on-budget ($863 million) and nearly on-time, so tunnels should not be ruled out.

Widening Within the Existing Footprint: When the decision was made to add express toll lanes to the congested LBJ Freeway in Dallas, TxDOT faced a dilemma. During a previous widening, it had made a commitment to the city that this would be the last widening of the LBJ’s footprint. TxDOT’s RFP therefore suggested that the new lanes be added in a tunnel beneath the freeway. But the winning P3 proposal called for depressing the new lanes below the median and rebuilding the regular lanes cantilevered over the express lanes. The project cost was $2.6 billion, and it has been a big success. Note: it strikes me that something like this could be applied to the I-45 project in Houston, reducing or eliminating the need to expand its footprint and condemn 600 private homes, 486 units of public housing, 344 businesses, five churches, and two schools.

Rebuilding Better: In Miami, construction is about halfway complete on rebuilding a major interchange between north-south I-95, the east-west Dolphin expressway on the west and the I-395 causeway to Miami Beach on the east. The original 1960s construction cut a low-income minority community in half. Since this interchange is vital to numerous traffic flows, the key was to rebuild the interchange better. That is being done by replacing the ugly elevated east-west segment with a much higher signature bridge and an expansive park underneath. You can read a description and watch a video of this project. The project cost is $818 million.

Again, there are solutions that can reconnect communities and preserve regionwide mobility, but they are often costly. In some cases, these options may well be worth pursuing.

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FHWA Has Not Approved EV Charging at Interstate Rest Areas

In the May issue of this newsletter, I cheered an announcement from the Federal Highway Administration (FHWA) that it was changing its interpretation of the 1960 law that prohibits commercial services at rest areas on non-tolled Interstate highways. FHWA’s announcement stated that under its Clean Energy and Connectivity (CEC) initiative, there would be two alternative paths for approving electric vehicle (EV) charging at such rest areas.

One path was for the EV charging to be “accommodated as a utility.” Under this approach, commercial activity restrictions would not apply unless the project qualified as an “automotive service station,” which is explicitly forbidden by the statute. The other path would consider a CEC project as an “alternative use of the right of way.” Under this approach, EV charging would be permitted as an “acceptable alternative use” of Interstate ROW if it complies with federal property management regulations.

However, a sharp-eyed former FHWA chief counsel emailed me to point out that I (along with the EV charging community) had been snookered. After reading the FHWA announcement more carefully than I had, he emailed the following:

“I think FHWA may have given with one hand and taken with the other. Based on the 4/27/21 memo, if using ‘accommodation as a utility,’ CEC projects are not subject to 23 USC 111 [the commercial activity ban] unless they are subject to 23 USC 111 (see first sentence on p. 3 of the memo). If using ‘alternative use of the ROW,’ CEC projects must comply with 23 US 111. If only Truth in Advertising applied to federal guidance!”

Two days later, my informant emailed again, to report “I did confirm with FHWA counsel that the ROW memo does not do anything re: 23 USC 111. No real commercialization is still the law of the land.”

Needless to say, this news sped through the electric vehicle charging community and seems to have led to the formation of an ad-hoc coalition favoring not just EV charging but full repeal of the 1960 ban on commercial services at Interstate rest areas. This may sound surprising, but there is a clear rationale for taking the broader perspective. For example, I am told that a leading EV charging provider opposes locating chargers at current rest areas—even if this were legal—because they are seen by many travelers as dangerous places at night, with no security and no other services, unlike turnpike service plazas. So legalizing only electric vehicle charging is unlikely to draw in private providers and would risk potential federal EV charging funds being wasted on chargers that would get little use.

The “INVEST in America” surface transportation reauthorization bill that recently passed the House does include (in Section 1211) repeal of the commercial services ban as it applies to EV charging, “fringe and corridor” parking facilities, and park & ride lots—but not any other commercial services such as restaurants and other shopping. So there is still a lot of work for the new coalition to do.

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A New High-Speed Rail Proposal That Dwarfs California’s

If you live in the Northeast, how would you like a train going 200 miles per hour that would get you from Boston to New York in a bit over 90 minutes? It would have tunnels under part of Long Island and under Long Island Sound. And best of all, it would be part of a region-wide passenger rail network spanning New England. And all for $105 billion, just a bit more than the likely $98 billion cost of California’s still unfunded Los Angeles-to-San Francisco high-speed rail (HSR) project. If this sounds too good to be true, read on.

The project is called the North Atlantic Rail (NAR) project and it is being promoted in Congress by Rep. Annie Kuster (D-NH) and Rep. Chris Pappas (D-NH). Several weeks ago I was contacted by Michael Graham of InsideSources.com and invited to tape a podcast about this project. To to be able to comment intelligently, I spent most of a day reviewing the text and maps on the North Atlantic Rail website and also collecting recent unit cost data on various forms of passenger rail. That’s because the NAR proposal includes three forms of passenger rail: a new main high-speed New York-to-Boston corridor with those tunnels (Penn Station-Jamaica-Ronkonkoma-New Haven-Hartford-Providence-Boston); a set of Amtrak upgrades called a high performance inter-city network; and some new regional rail lines.

To get a ballpark estimate of the cost of this plan, I used the North Atlantic Rail “Early Action Projects” map, which includes the high-speed rail route, the Amtrak upgrades, and the earliest regional links to the Amtrak line—New Haven-Pittsfield, Springfield-Brattleboro, and Boston-Beverly). For the high-speed rail mainline, I used the cost per mile estimated in an Amtrak study several years ago: $1.3 billion per mile, for all-new right of way (as in the NAR plan). For the upgraded Amtrak lines, I drew on average unit costs from the Obama-era grants for such projects: $3 million per mile. And since the type of passenger rail intended for the initial regional rail projects was not specified, I used Federal Transit Administration (FTA) data for recent light rail lines at $105 million per mile. So here is how the early action projects penciled out:

That’s a bit more than NAR’s estimate of $105 billion. And this is before adjusting these costs for typical rail megaproject cost overruns. In his well-known database of 258 global highway and rail megaprojects, Bent Flyvbjerg (Oxford University) and colleagues found that the average passenger rail project cost over-run was 45%. So if we apply this factor to the total I estimated above, the likely actual cost is more like $538 billion. That’s the cost, which presumably would come from federal taxpayers since there is no prospect of such a rail project generating revenues sufficient to cover debt service on construction bonds. So what are the offsetting benefits?

Faster travel times are always put forth for fast rail projects, but people can already fly from Boston-to-New York in less than an hour and a half via airlines whose airports and air traffic control system are almost entirely supported by user taxes, not by general taxpayers. (Rail proponents typically argue including time spent in airport security and at the airport would make rail’s times somewhat more competitive.) High-speed rail is also touted as a much greener mode than car, bus, or airline but those findings depend a great deal on how many passenger miles each mode carrier and their average load factors. In terms of CO2 emissions, a much cited 2010 study of the carbon footprint of the California high-speed rail project by Mikhail Chester and Arpad Horvath of UC Berkeley estimated that the carbon emissions from the project’s construction phase (all that concrete and steel) would take 71 years to be offset by potential savings from trips shifted from highways and air travel. Moreover, studies like that assumed that petroleum-fuel cars would continue in operation for the next 70 years, when the likely reality is that electric vehicles could already make up half or more of the U.S. vehicle fleet by 2050.

One other argument high-speed rail proponents are fond of is that passenger rail is discriminated against in federal subsidies. The numbers used to support this point to highway grants of up to 90% of some project costs and urban transit grants of up to 50% of project costs—all compared to the small annual sums Amtrak gets from the federal till. What is ignored in this comparison is that federal highway user tax revenue (until recent annual general-fund bailouts of the Highway Trust Fund) covered slightly more than federal highway spending. And, as noted above, commercial aviation gets almost zero federal subsidies. But Amtrak passengers pay no federal ticket tax like airline passengers do, and no federal fuel taxes like motorists and truckers pay. In fact, a recent update of a U.S. DOT study estimating the actual federal subsidy by mode (federal spending minus the mode’s user taxes) found the following:

These numbers show the nonsensical nature of periodic calls for creation of a federal Passenger Rail Trust Fund, to pay for expanded Amtrak and high-speed rail projects. What some rail supporters want is what transit got in 1982: a guaranteed percentage each year of federal highway user tax revenues. There is already a huge loss of public trust in the Highway Trust Fund, since it no longer adheres to the users-pay/users-benefit principle. Extracting even more highway user tax revenue for non-highway purposes would take these diversions to a new level, leaving even less funding for highway maintenance and repair.

Note: This information about the cost of the rail proposal in this section is incorrect. Please see an update and correction here.

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Assessing Utah’s Plan to Replace Gas Taxes
By Baruch Feigenbaum

Oregon was the first state to begin studying mileage based user fees (MBUFs) in 2001. Ten years later, the state began testing the technology and five years after that it implemented a permanent program open to 5,000 drivers. Over the last 10 years, six other states and two multi-state coalitions began testing mileage based user fees. Over the last five years Utah began studying mileage-based user fees and it recently implemented an MBUF for electric vehicles only. But last month, Utah unveiled the first proposal in the country that would require all automobile drivers to pay MBUFs by 2031. Unfortunately, being first is not always best, and Utah could learn a lot from Oregon.

The Utah Department of Transportation (UDOT) has long been one of the premier state transportation departments, winning awards from the American Association of State Highway and Transportation Officials (AASHTO) and placing in the top 20 in Reason Foundation’s Annual Highway Report every year. The state has a culture of good governance where political leaders engage in consensus building instead of confrontation. But that does not mean Utah’s approach to mileage-based user fees is best or its conversion will be easy.

Due to the gas tax’s declining purchasing power, Utah is expecting to fall behind on highway construction and maintenance. The state’s population has grown almost 20% over the past decade and it needs more infrastructure to accommodate that growth. But while the costs to build and maintain roads grow at 7% per year, gas tax revenue has grown at 1% per year. Over the next 30 years, UDOT projects that gas tax revenue will cover only 85% of the projects in Utah’s Unified Transportation Plan. 

UDOT examined two MBUF scenarios. Scenario A, which has a very aggressive timeline and uses manual odometer readings to report miles driven—likely when vehicle registration is renewed. Utah-registered vehicles with a fuel-efficiency rating over 20 miles per gallon (mpg) would pay the fee starting in 2024. Less fuel-efficient vehicles would be enrolled over the following seven years.

Scenario B, which uses the same technology, has a less aggressive timeline. In 2024, vehicles with fuel efficiency ratings over 30 miles per gallon would pay the mileage fee, with less fuel-efficient vehicles added in two-year increments. Scenario B also offers real-time technology-based features such as trip planning and monthly payment options as opposed to paying one large fee at vehicle registration renewal.

While Scenario A brings in $182 million more, Scenario B’s slower rollout is likely to improve public opinion of MBUFs. Further, paying a lump sum and annual registration fee at the same time could create equity problems. Out-of-state drivers and commercial vehicles would continue paying a gas tax.

I’m glad to see Utah adopting such an aggressive mileage-based user fees timeline. But I have a few concerns about the state’s approach.

First, it is critically important that UDOT refund all of the state gas tax to those paying MBUFs. Fears of double taxation are one of the primary obstacles to public support for mileage-based user fees. When a legislator asked how the state would ensure that people charged by the mile don’t also pay a gas tax, UDOT said it was unsure and that it would be up to the legislature to solve. One approach is to give fuel tax credits to participants, but it is unclear how much those tax credits might provide. Right now, it sounds as if only some of the gas tax revenue would be refunded by Utah. The transition to a MBUF system is intended to replace gas taxes, not supplement them.  If motorists perceive the change as a revenue grab, public support will plummet.

Second, the Utah system is one-size-fits-all. It is never ideal to force taxpayers to make a change while giving them only one option. The proposal does not offer a choice of technology. In contrast, Oregon offers drivers the choice of using an odometer reading, a GPS mileage based system without time of day features, and a GPS-mileage based system with time of day features.

The Utah system features one payment option, an annual payment. The Oregon system features pay as you go, post-pay, and quarterly payment options. It’s unclear who will operate the Utah system, but it could be the state. This would be a mistake, since pilot project participants in other states indicate that they are more likely to trust the private sector than the government with their personal information. Oregon has several private operators, including Azuga and Emovis, which handles the back office services of the state-run option as well.

In addition, the gold standard mileage-based user fee is a location-based GPS system that monitors the vehicle’s movement in real time. But given understandable privacy concerns drivers may have with the government potentially knowing their location, having a simple odometer reading is important for customers who do not feel comfortable with a GPS-based system. In Oregon, these customers are charged a slightly higher mileage rate. But for Utah not to offer a location-based system is stunning because a location-based GPS system is what allows some of the largest benefits of MBUFs. The system can charge variable rates to manage congestion, much as tolls do on over 60 priced express lanes around the country, including on I-15 in Utah. Current technology cannot offer this pricing option outside of freeways. The rate could also vary based on type of roadway, with Interstates and primary arterials having higher rates and local streets having the lowest rates. Currently, drivers pay the same gas tax regardless of how much they use each type of roadway.

Such varying rates help solve policy problems. Residents in rural areas pay less because, while they may travel further to work, they travel on roads that are less congested and less expensive to maintain. Lower-income residents typically travel in older less fuel-efficient vehicles, paying a higher share of gas taxes. Mileage-based user fees would reduce what they pay and allow for vouchers based on the number of miles driven where needed.

Finally, there is no mention of heavy-duty vehicles. The Utah plan is right to leave them towards the end, but heavy-duty vehicles need to start paying by the mile as well. Electric trucks are on the horizon, and given that trucks wear out roads much faster than cars, there is no reason that they should get a free pass.

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Getting Serious About Interstate Reconstruction

A number of environmentally-focused organizations, including Transportation for America, have emphasized America’s huge backlog of deferred transportation maintenance, arguing that a key element of any new infrastructure plan (and the pending reauthorization of the federal surface transportation program) should be a commitment to “fix it first,” i.e., to focus on rebuilding the infrastructure that already exists (though they somehow make an exception for transit and high-speed rail). And President Joe Biden’s infrastructure slogan is “build back better.”

You would think, therefore, that the aging of America’s most important public-sector surface transportation infrastructure—the Interstate Highway System—would be at or near the head of the line for being built back better. Yet the only explicit mention of the aging Interstates is the proposal discussed above to potentially remove portions of urban Interstates. Congress is seriously at fault on this, for ignoring the major study of the Interstate system’s future that it asked for in the 2015 Fixing America’s Surface Transportation (FAST) Act, and which the Transportation Research Board delivered in December 2018. I’m sure members of Congress were shocked at the report’s estimate of the cost of rebuilding and modernizing the Interstates: about $1 trillion over the next two decades. Yet on an annual basis, that seems like small change in this age of multi-trillion-dollar new-spending proposals.

Into the breach comes transportation research nonprofit TRIP with a very timely report: “America’s Interstate Highway System at 65.” The executive summary alone should be required reading for every member of Congress and every staff member in the Office of the Secretary of Transportation. This 48,482-mile system includes 2.6% of all highway lane-miles but handles 26% of vehicle miles of travel. Last month, June, was the 65th anniversary of President Dwight Eisenhower signing the legislation that created dedicated highway user taxes and the federal Highway Trust Fund to build the system on a users-pay/users-benefit system.

The TRIP report updates some of the data found in the 2018 TRB study. For example, it provides tables showing which states have what fractions of Interstates in poor condition. No, they are not “crumbling,” but Hawaii leads the states with 23% of its Interstates in “poor” condition and 11 more with 5 to 9% in poor condition. Interstate bridges in poor or structurally deficient conditions are worst in West Virginia (13%) and Rhode Island (12%), and another eight states (including Michigan, Massachusetts, and New York) have between 5% and 8% of their Interstate bridges in that dismal shape. Eighteen states have between 50% and 87% of their urban Interstates defined as “congested,” with California leading the pack at 87% of its urban Interstate miles. Reason Foundation’s Annual Highway Report examines similar bridge, pavement, and traffic congestion data and ranks states on their performance and cost-effectiveness. 

TRIP also reports that the most recent U.S. DOT Conditions and Performance Report (released in 2019 but based on 2014 data) found that the backlog of Interstate improvements that can pass DOT’s benefit/cost test totaled $123 billion, which included $54 billion for pavement conditions, $37 billion for bridges, and $33 billion for needed lane additions. But DOT’s methodology has never considered a major need identified by the TRB special committee report: to replace aging sub-pavement and rebuild a large fraction of the overall system. That’s why the TRB report’s estimate of needed investment reached the $1 trillion level. And the TRB report did not include an estimate of redesigning and rebuilding the 50 to 100 bottleneck intersections across the country, nearly all of which are on urban Interstates. A recent report by ARTBA’s chief economist Alison Premo Black estimated that these bottlenecks cost trucking companies $42 billion worth of delays in 2019.

In my recent Wall Street Journal op-ed on the subject, I suggested that if Congress won’t include major Interstate reconstruction and modernization projects, in either a one-time infrastructure bill or the coming surface transportation reauthorization bill, then the least it could do is give states the tools to start doing the job themselves.

A growing number of states are doing studies on toll-financing the reconstruction and modernization of their Interstates, yet the House reauthorization bill (the Investing in a New Vision for the Environment and Surface Transportation in America Act, or the INVEST in America Act) would abolish the one federal program devoted to this process, the Interstate Reconstruction and Rehabilitation Pilot Program (ISRRPP). It has never been used due to a built-in flaw. Besides being open to only three states, it would allow each to rebuild only one Interstate using tolls. As we saw when North Carolina tried to do this for its aging I-95, those who use that highway protested mightily against being the only state where residents were being singled out to pay tolls to finance Insterstate reconstruction. Instead of abolishing ISRRPP, it should be liberalized: opened to all 50 states and to any participating state setting forth a phased program to toll-finance the rebuilding and modernizing all its Interstates. (Note: Reason Foundation has drafted legislative language to implement this alternative, available on request.)

Thanks to TRIP for reminding us of the need to invest in our aging Interstates, and shame on Congress and U.S. DOT for ignoring this critically important need.

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Smart Columbus and the Limits of Smart Cities
By Marc Scribner

May 2021 marked the end of a five-year, federally funded Smart City Challenge experiment in Columbus, Ohio. The final report on the Smart Columbus Demonstration Program was released in June, and documents the challenges faced by the city to integrate new technologies and practices in a field dominated by marketing hype. Taken together, the results of the Smart City Challenge are very modest and suggest a much more cautious and selective approach is needed to harness new urban transportation technologies and practices in a way that adds value to communities.

In 2015, the U.S. Department of Transportation created the Smart City Challenge, which asked mid-sized cities to propose “ideas for an integrated, first-of-its-kind smart transportation system that would use data, applications, and technology to help people and goods move more quickly, cheaply, and efficiently.” The Department held out $40 million to the winning city. After 78 cities applied, DOT narrowed that down to seven finalists, with Columbus being announced the winner in June 2016 and entering into a formal agreement with DOT in August of that year.

Columbus had initially proposed 15 projects. However, after one year, the Smart Columbus Program was reorganized, and the number of projects was cut to nine. In 2019, that fell to eight, as Truck Platooning was removed, with managers citing technological limitations and complications with the private partner. The final eight projects evaluated during the demonstration program were:

• Smart Columbus Operating System, a data exchange and analytics platform;
• Connected Vehicle Environment, made up of more than 1,000 vehicles and 85 enabled intersections;
• Multimodal Trip Planning Application, a smartphone app called Pivot that centralized payment and booking over multiple modes, including ride-hailing and scooter-sharing;
• Mobility Assistance for People with Cognitive Disabilities, a smartphone app called WayFinder by AbleLink for the elderly and people with cognitive disabilities to help them navigate the city’s bus transit system;
• Prenatal Trip Assistance, a program for pregnant women to schedule transportation to medical appointments;
• Smart Mobility Hubs, six locations with interactive kiosks and space for multimodal transportation staging;
• Event Parking Management, improvements to the city’s ParkColumbus app allowing for better parking facility reservation integration and improved routing during large events; and
• Connected Electric Autonomous Vehicles, two mixed-traffic corridor demonstrations of low-speed automated shuttles.

The Smart Columbus Operating System was the most expensive project, costing $15.9 million. Smart Columbus managers were able to fold existing and new data into this new platform, increasing access for various participating agencies as well as open more data for independent analysis. The city plans to continue maintaining the platform, at least for the near-term, with surveys finding more than 70% of users were satisfied with the Smart Columbus Operating System.

Other projects showed less promising results. The Connected Vehicle Environment cost $11.3 million. While more than 1,000 vehicles participated, only approximately one-third of those were private vehicles. The system relied on an early connected vehicle protocol known as Dedicated Short-Range Communications (DSRC), which is likely to be phased out of America’s airwaves by the Federal Communications Commission. Of the transit, freight, public safety, and private vehicle participants, 40% would not recommend the Connected Vehicle Environment.

The city spent $2.3 million developing the Pivot multimodal trip planning smartphone app. It was publicly deployed in December 2020 during the pandemic. By the end of March 2021, only 1,103 people had downloaded it to book 447 trips—or a cost of more than $2,000 per download or $5,000 per reserved trip. The city plans to maintain this app, which should improve cost-per-download and cost-per-trip metrics over time, but it remains to be seen what problem Pivot really solves. Smartphones themselves, by allowing users to operate multiple reservation apps and payment systems, already offer a centralized platform that Pivot is designed to create.

The Mobility Assistance for People with Cognitive Disabilities cost $494,000. It was used by just 31 travelers (along with 27 caregivers) to complete 82 trips over a full year, at an annualized per traveler cost of nearly $16,000 or $6,000 per trip. The few participants were generally satisfied, but Smart Columbus managers have not yet decided whether to or how to maintain a similar project into the future.

The city spent $1.3 million on Prenatal Trip Assistance. This project saw higher utilization than others, with 143 participants making 1,158 trips over 1.5 years. Still, this amounted to a $9,000 cost per participant or $1,100 per trip. Participants were satisfied with the project, but evaluators were unable to detect any positive health outcomes.

The $1.3 million spent on six Smart Mobility Hubs managed to facilitate just 1,084 bike-share trips during eight months, at a cost of $1,200 per bike trip. The $1.3 million spent on upgrading the ParkColumbus app may break even in the future if it generates greater parking net income for the city. One of the two Connected Electric Autonomous Vehicle deployment demonstrations was cut short after just two weeks when a passenger was injured. But even during operation, the shuttles were frequently stopped or slowed by precipitation, car exhaust during cold months, and sun glare. The service was relaunched in July 2020 as a food panty delivery service during the pandemic, which distributed 129,528 meals during its eight months of operation.

Taken together, the results of the Smart Columbus Demonstration Program are underwhelming. The benefits that did materialize were primarily in the form of lessons learned. Mobility for actual residents was barely impacted at all. While new transportation technologies offer a great deal of promise to improve the safety and efficiency of America’s transportation networks, most of these technologies are not ripe for deployment. Rather than pursue grandiose visions of smart cities, policymakers ought to focus on core responsibilities such as infrastructure state of good repair and access to proven transportation options. These conventional actions may not garner as much buzz, but they are much more likely to improve the lives of residents.

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Assessing Dueling Studies on the High Costs of U.S. Rail Transit Projects
By Baruch Feigenbaum

One of the challenges of building new infrastructure in the U.S. is very high construction costs. This is certainly a problem for roadways but the problem is especially bad for rail transit lines.

Yet whether those high costs are all that different from the costs of building similar projects across the rest of the world is up for debate. Two different think tanks—the Eno Center for Transportation and the Marron Institute at New York University—have compiled data on rail transit projects and reached two different conclusions. According to Eno, except for tunneling, U.S. rail projects are largely in line with or less costly than those around the world. According to the Marron Institute, U.S. rail projects are twice as expensive as rail projects around the world. Who is correct? The answer lies in which projects are included.

The Eno database includes 171 projects. Countries surveyed are limited to the United States, Canada, Europe, and Australia. According to Eno, U.S. costs average $162 million per kilometer compared to $138 million per kilometer for non-U.S. projects.

The Marron Transit Cost database includes 577 projects. Countries on all six of the inhabited continents are included. Average worldwide rail transit construction costs are below $300 million a kilometer, while in the U.S. they are more than $500 million a kilometer.

Eno limited its findings to the U.S., Canada, Europe and Australia because of comparable political culture, government structures, and infrastructure development. Certainly, it is challenging to compare the U.S. to the Philippines or Uzbekistan, but a better comparison would be developed countries and developing countries. Eno managed to leave out many developed Asian countries including Japan, South Korea, and Taiwan that manage to build rail projects for far less than the worldwide average.

Eno includes 24 U.S. projects, compared with Marron’s 13 US projects. Eno includes more light rail projects, which are likely to be less costly to build than heavy rail projects. However, most of these projects were begun in the 1990s and 2000s. While some of these projects took more than 10 years to complete, important work including land acquisition and pre-engineering was completed before the project began. As transportation construction costs have exceeded inflation for the past 17 years, including projects from these earlier decades is problematic.

The majority of projects in the Eno database are light rail, and the majority of new U.S. rail lines are light rail.  The average cost of a light rail project receiving a Federal Transit Administration capital investment grant (CIG) in 2021 is more than twice the cost of a light rail project in Eno’s database. By one metric, between 1980 and 2020 the costs of light rail projects have increased by 700%. By including so many older projects, the Eno database gives the impression that light rail projects constructed today will be far cheaper than their actual cost.

Eno’s report has several takeaways. One Eno takeaway that I found curious is that light rail is not always cheaper than heavy rail. The rule of thumb has been that light rail is 25% less expensive per mile to build than heavy rail. In Eno’s database, light rail seems more expensive because several of the lines have heavy-rail-like characteristics, such as a separated right-of-way (Los Angeles Green Line). Additionally, streetcars, which are considered light rail in the National Transit Database, are not included in Eno’s database.

Both reports agree that the U.S. pays a premium for tunneled projects. According to Eno, projects that are more than 80% below ground cost $756 million per mile, which is more than three times the $215 million for non-U.S. projects. Marron found that five New York City heavy rail projects averaged $3.6 billion per mile, while eight other U.S. heavy rail projects averaged $872 million per mile.

While Marron’s Transit Costs database is more up-to-date and therefore more useful for examining proposed projects, it has two major weaknesses. It includes fewer U.S. projects and thus has a smaller sample size for U.S. interests. I think the more up-to-date, smaller sample size is preferable to a larger sample size that includes older projects with costs not relevant to today’s projects. But neither option is ideal. Additionally, the database does not distinguish between heavy rail and light rail. The two types of rail are different and separating projects out by type would make apples to apples comparisons easier.

The databases have other strengths and weaknesses. The Eno approach is helpful for researchers analyzing past projects. It can answer questions such as why did it cost more to build a light rail line in Dallas than Houston. By including a large number of U.S. projects it might also spotlight some case studies. But since Marron’s includes more recent projects and many more countries, I am more intrigued its database. And I’m hoping transportation researchers can start better answering the next question: how do we reduce these project costs? There are many reasons for the high costs: land acquisition costs, environmental reviews, special-interest delay tactics, public employee unions and special work rules, etc. How much does each of the factors add to the costs in the United States? And how have other countries better kept these costs in line?

Reducing rail transit construction costs is important for the few places in the U.S., such as New York City, in which new rail lines make sense. For everywhere else, the escalating costs of rail projects are one more reason to invest in bus rapid transit (BRT) instead. Mass transit agencies can build BRT for one-third to one-ninth of the cost of light rail lines. These bus lines have the same short headways, premium features, and land-use benefits as light-rail. BRT is the better, more cost-effective transit choice for most U.S. regions. 

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News Notes

Georgia Launches First Revenue-Risk P3 Projects
Georgia DOT recently announced that the next links in its expanding express toll lanes (ETL) network will be procured as a toll-financed design-build-finance-operate-maintain public-private partnership (P3) project. This procurement model is now planned for three ETL projects on I-285, known locally as the Perimeter (around central Atlanta): I-285 Eastside, I-285 Top End, and I-285 Westside. The shift also include changing the plan from one ETL each way to two, and using barrier separation rather than pavement striping. The projects will be procured and managed jointly by GDOT and the State Road & Tollway Authority (SRTA).

Troubled Italy Toll Road Concession Gets New Owners
A consortium of Blackstone Infrastructure Partners, Macquarie Asset Management, and state-owned CDP Equity (a sovereign wealth fund) are buying 88.06% of Autostrade per l’Italia, for $10.9 billion. Autostrade is Italy’s largest P3 toll road company but suffered public and political opprobrium after the tragic 2018 collapse of a major bridge on its toll road in Genoa (caused by failures in design, inspection, and government oversight). CDP will own 51% of the joint venture, with Blackstone and Macquarie each holding 24.5%. Autostrade’s credit rating is expected to be improved following the sale.

MPO Blocks Maryland Express Toll Lanes Project
The Washington (DC) Council of Governments Transportation Planning Board voted last month not to include Maryland’s huge express toll lanes project in its long-range transportation plan, specifically the upcoming air quality analysis of that plan. A project must be part of such a plan in order to get a federal Record of Decision, allowing it to proceed. This may be a temporary setback, and hearings are being held by the Maryland legislature regarding the project’s future. The Maryland project has strong support on the Virginia side of the Potomac, partly because it includes replacement of the bottleneck American Legion Bridge as well as eventually completing the express toll lanes network on the Maryland portion of the I-495 Beltway.

Express Toll Lanes Moving Forward in Sacramento
Officials in Sacramento and Yolo County have received an $86 million federal grant to begin planning and design of the region’s first express toll lanes, to be added to congested I-80, the only major highway between state capitol Sacramento and the San Francisco Bay Area. ETLs have been under consideration by the Sacramento Area Council of Governments for several years. The project would add one priced lane each way on 17 miles of I-80.

Connecticut Enacts Truck Weight-Distance Charge
After years of studies of potential toll-financed reconstruction of its major highways, without gaining legislative approval, the Connecticut Legislature approved a heavy-trucks Highway User Fee, to begin in January 2023. Not a toll, the new tax would be based on vehicle gross weight and miles driven. Truck operators are supposed to apply to the state for a permit and report their annual mileage to state tax officials. There is both opposition and skepticism within the trucking industry over the plan’s workability and projected revenues. Like Rhode Island’s truck-only tolls, the Connecticut truck fee will likely face trucking industry litigation.

New Border Toll Road for San Diego
Caltrans, the San Diego Association of Governments (SANDAG), and Mexican government officials signed an agreement on June 28 for development of a new port of entry linked to a new four-lane toll road (SR 11) to connect the entry port to the state highway system. It will be California’s first new toll road since the SR 125 project 15 years ago, also in San Diego County.

Boring Company Tunnels Open in Las Vegas
Operations began the second week of June on the 1.5 mile tunnel loop developed and operated by the Boring Company beneath the Las Vegas Convention Center. The tunnel’s capacity is stated as 4,400 vehicles per hour at a speed of 35 mph. Users travel in Tesla electric cars among the three stations in the sprawling convention center. The company says the cost of building the loop was $48.7 million. It hopes to expand the tunnel to hotels and casinos on the Strip and to the nearby McCarran International Airport.

Kansas Express Toll Lanes Approved
Both the Kansas Turnpike and the State Finance Council gave unanimous approval to the Overland Park City Council’s requested project to add express toll lanes to congested U.S. 69.  The project will add one ETL each way between 103rd and 151st Streets. Once the new lanes are operational several years from now, Kansas will be the 12th state with ETLs in operation.

Dedicated Truck Lanes Planned for New Toll Bridge
The 5-mile, $4.5 billion Gordie Howe Bridge between Detroit, MI and Windsor, ON will include a number of advanced features, including dedicated truck lanes, traveler information systems, and an on-site weather monitoring station, project officials told the Detroit Free Press last month. The project is under construction with completion scheduled for late 2024.

Texas Central Signs $16 Billion Construction Contract
The privately financed start-up railroad company aiming to build a high-speed passenger rail system linking Houston and Dallas, last month announced that it has signed a $16 billion contact with Webuild, the Italian construction company that recently acquired U.S. company Lane Construction. No financing plan has been disclosed by Texas Central, which told ENR that it is “wholly focused on securing permanent funding, followed by the start of physical construction.”

Brightline West Announces, then Delays, New Bond Offerings
Two weeks after the company that plans to build a high-speed rail line between Las Vegas and Victorville, CA applied for $200 million in tax-exempt private activity bonds (PABs) from the state of California, the company withdrew the request, saying it would wait until 2022; it said the same thing to the agency in Nevada that can authorize PABs. Earlier that month, California Treasurer Fiona Ma sent a letter to leaders of the Senate Commerce and House Transportation & Infrastructure committees urging federal policy changes that would enable private passenger rail companies to better compete with public agencies. Included was easier access to Railroad Rehabilitation & Improvement Financing (RRIF) loans.

Bestpass Expands to Alabama
The company that provides consolidated toll management services for trucking fleets, Bestpass, announced in June that its toll coverage now extends to Alabama. Toll roads and bridges there have been developed and are operated by American Roads, using the 6C protocol. Bestpass works with each of the several electronic tolling protocols around the country and offers a 48-state transponder that is compatible with all the protocols.

Florida Cabinet Approves Extension of MDX Toll Road
A 14-mile north-south extension of the east-west Dolphin Expressway to serve the Kendall area of Miami-Dade County received the Cabinet’s approval, in a 3-1 vote, to proceed with the next step in developing the project, which is bitterly opposed by environmentalists. Opponents claim the expressway would be built “in the Everglades,” rather than just a few hundred feet beyond the county’s existing Urban Growth Boundary. The Cabinet rejected a 2020 administrative law judge’s ruling against the project.

Spain Announces Plan to Toll All Major Highways
In exchange for EU recovery funds, the Spanish government has agreed to turn all government-managed highways into toll roads by 2024, according to a May 5th report in Catalan News. The aim is to ensure that users themselves pay for the highways they drive on. This is reportedly one of the conditions the EU is demanding from member states in exchange for the European recovery funds. Spain has a huge highway network, including some 12,000 km of high-capacity roads. A number of those highways are already toll roads, some of them operating under long-term P3 concessions.

Elaine Chao Joins the Board of Start-up Truck Automation Company
Former U.S. Secretary of Transportation Elaine Chao has joined the board of Embark, a developer of software for automated trucks. Embark Trucks is one of the latest companies to go public via a special purpose acquisition company (SPAC), raising $5.2 billion. Rather than developing automated trucks itself, Embark’s business plan calls for developing and selling automation software to existing original equipment manufacturers (OEMs) of trucks.

Highways Predominate in $905 Million INFRA Grants
At the end of June, U.S. DOT announced the recipients of 24 grants under its INFRA program, totaling $905 million. Of the projects listed in the DOT’s announcement, 15 were highway or bridge projects, six were for port projects, two for railroads, and one for ITS (traffic signal improvements). Of the five largest grants, four were for improvements to Interstate highways, ranging from $50 million to $86 million.

Revising the Federal Highway Grants Formula
Since 2005, despite large changes in population and vehicle miles of travel (VMT), the congressional formula for dividing highway user tax revenue among the states has been unchanged. This is short-changing fast-growing states such as Arizona, Florida, and Texas. Sen. Mark Kelly (D-AZ) and Ted Cruz (R-TX) have introduced the Highway Modernization Formula Act to develop a new, data-based formula for highways and bridges. Since this is essentially a zero-sum game, it’s likely that losing states would outnumber winning states.

Adaptive Cruise Control May Pose Risks
The Insurance Institute for Highway Safety several months ago released the results of a study which found that drivers using adaptive cruise control (ACC) were more likely to set their desired speed above the speed limit due to their perception that ACC would protect them from collisions. But that increased speed, the researchers found, resulted in a 10% higher risk of a fatal crash than manual drivers experience. The study was small, involving only 40 ACC drivers in the Boston area, and the crash-risk increase was estimated based on statistical analysis.

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Quotable Quotes

“Any car manufacturer who decides today that their future depends on car sharing or cars-on-demand, and who begins to wind down their sales, service and parts business to meet this future will not be around in ten years. I began writing The Dispatcher almost eight years ago with the message that driverless vehicles would not be the future of the car industry by 2020. As we have seen, it wasn’t then and won’t be for a very long time. I’m saying now that the future of the car industry will not be based on delivering mobility to people living in big cities. It will be based on delivering vehicles that people will drive or be driven in, just like they are today, until people can figure out a way of moving by the force of their own will rather than by an external force.”
—Michael L. Sena, “The Future of Mobility Is Slowly Coming Into Focus,” The Dispatcher, June 2021

“Today, state and local leaders are incentivized to ignore maintenance (which is typically not visible to the public), so they can spend those funds elsewhere. Yet poor maintenance practices damage the long-term quality of infrastructure and result in a maintenance backlog that must be met by future taxpayers. Not surprisingly, delaying maintenance also markedly increases overall life-cycle costs. As Larry Summers neatly summarized: ‘Prevention is cheaper than cure. Waiting for the road or bridge to collapse is much more expensive than buttressing the bridge before it collapses.’ In addition, estimates show that investing in maintenance pays off considerably with a 25 to 40 percent economic rate of return, potentially more in some cases.”
—D.J. Gribbin, “On Paving the Way for Funding and Financing Infrastructure Investments,” Testimony before the House Ways & Means Committee, Jan. 29, 2020

“This [millennial] demographic has long resisted many of the traditional generational norms, things like home ownership. But the pandemic has shocked this generation and accelerated their embrace of these types of activities. There continues to be a net migration out of urban areas largely driven by the millennial segment.”
—Hal Lawton, in Cathy Morrow Roberson, “Rockin’ the Suburbs,” The Journal of Commerce, June 21, 2021

“Since Amtrak’s ‘Connects Us’ map (published yesterday in response to Biden’s plan) includes a proposed route from Los Angeles to Las Vegas, I looked up bus and airline schedules. As near as I can tell, there are several dozen buses a day run by four different companies and several dozen planes a day run by eight different airlines between the two cities. Bus fares start at $20 and plane fares start at $20—not a misprint. The fastest buses take 5 hours 10 minutes. Planes take 70 to 80 minutes. When Amtrak last ran trains on that route, they took 6 hours 50 minutes. Amtrak simply won’t be able to compete. If Amtrak can’t compete on that route, how will it compete anywhere else? The bus industry needs to do a better job of letting people know that buses are often faster, with lower fares, and emit less than half as many grams of CO2 per passenger mile as trains.”
—Randal O’Toole, email to transportation colleagues, April 1, 2021

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The post Surface Transportation News: Highways Splitting Neighborhoods, Replacing Fuel Taxes, a High-Speed Rail Proposal and More appeared first on Reason Foundation.

• Commercial services on Interstate highways
• Urban transit when the pandemic is over
• What we still don’t know about per-mile highway charges
• Does automation threaten truck drivers’ jobs?
• Assessing new monorail proposals
• News notes
• Quotable quotes

It Is Time for Commercial Service Plazas on Interstate Highways

Only 5% of all Interstate highways, only those on the Interstates that are operated as toll roads, offer full services (food, fuel, parking, electric vehicle charging) for motorists. On the other 95% of Interstate highways, federal law prohibits any commercial services at “rest areas,” except vending machines.

In a new study, Reason Foundation suggests three reasons for Congress to repeal the long-standing ban. First, the Interstates need to be equipped with electric vehicle (EV) charging stations, a new national priority. Second, long-distance trucks face a large and growing shortage of safe overnight parking places, especially ones with services like food and showers. And third, state department of transportations (DOTs) are short of funds and plan to shut down some Interstate rest areas that have no available sources of revenue.

The commercial services ban was added by Congress in 1960, to protect small-town gas stations and restaurants that would be bypassed when traffic shifted away from older highways through towns and onto the new Interstates. The ban encouraged locals to build new gas stations and fast-food outlets at or near off-ramps of the new highways. And new companies developed full-service truck stops within a few miles of some of the off-ramps. Their trade association, the National Association of Truck Stop Operators (NATSO), has lobbied hard against all previous efforts to repeal the ban.

NATSO’s argument ignores today’s need for more truck parking, more EV charging, and more food and beverage operations as part of revamped 21^st-century Interstates. NATSO’s argument would be more relevant in a zero-sum world, where every sale at a new service plaza killed a sale at an off-ramp. But today’s and tomorrow’s need is for a large expansion of truck parking and electric vehicle charging. And the study notes that land near off-ramps has become very expensive, according to the Federal Highway Administration, making new or expanded facilities there unlikely.

Another factor is the plight of EV drivers suffering from “range anxiety.” Under current practices, EV charging stations “along” the Interstates can be up to five miles from an off-ramp and still be listed in a federal directory. The last thing an anxious EV driver needs is to get off the Interstate in the dark, in a strange place, and hope she can find her way to the desperately needed charging station.

The study found that existing Interstate rest areas are too small to be converted to commercial service plazas like those on turnpikes. So state DOTs would need to acquire more land for the new facilities. The study cites long-term public-private partnership deals on the Florida Turnpike, Indiana Toll Road, New York Thruway, and other toll roads that are financing the expansion and modernization of their service plazas, based on projected revenues from the revamped plazas. The same approach could be used to develop service plazas on the Interstates.

Previous efforts in Congress to repeal the ban fell victim to NATSO lobbying. The Reason Foundation study cites potential support from portions of the trucking industry (such as independent owner-operators) and likely support from supporters of nationwide EV charging stations. It notes that a House transportation bill that passed last year included an exemption for EV charging stations; that exemption was supported by the progressive Center for American Progress. Perhaps a de-facto coalition including owner-operator truck drivers, women in trucking, and advocates of electric vehicles can gain enough support to repeal this obsolescent ban.

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Urban Transit After COVID-19

Here is a recent set of headlines from a couple of reputable sources, to introduce a discussion of how urban transit will need to change when we enter the post-pandemic period:

• “Remote Work Is Here to Stay. Manhattan May Never Be the Same,” Matthew Haag, The New York Times, March 29, 2021
• “If Rush Hour Dies, Does Mass Transit Die with It?” Henry Grabar, Slate, Feb. 11, 2021
• “Riders Are Abandoning Buses and Trains. That’s a Problem for Climate Change,” Somini Sengupta, et al., The New York Times, March 25, 2021

The reporters of these stories reflect genuine concerns, but my impression is that many in the transportation community have not fully thought through the implications for urban transit in the “after” COVID-19 times.

One expert who has is Steve Polzin, a former transit official, university professor, and most recently as a senior advisor for research and technology at the U.S. Department of Transportation. After reading a detailed paper that he and a colleague produced while at DOT last fall, Reason Foundation commissioned Polzin to write a policy brief focusing specifically on how transit will have to change, and why. The new report, “Public Transportation Must Change after COVID-19,” was published last week and you can find it here.

Polzin first reminds us that in the five years prior to the coronavirus pandemic, transit experienced a significant loss of ridership, before appearing to stabilize at a lower level by 2019. Then the pandemic led to former transit riders avoiding buses and rail transit in favor of cars, bikes, walking, and working at home. Comparing January 2020 (pre-pandemic) with January 2021, unlinked transit trips were 65% less (though transit vehicle miles of service decreased only 23% for the same months).

Alas for those hoping for a post-pandemic return to “normal,” among the factors leading to permanent changes are, of course, some degree of permanent shifts to working from home, either part-time or full-time, along with the continued popularity of network companies like Lyft and Uber, a millennial generation that is getting older and buying houses in the suburbs, and a general movement of people and companies from higher-density to lower-density locations.

Polzin points out that even if many people work at home Mondays and Fridays, but still work in the office mid-week, this will “make it harder to justify peak capacity capital investments and complicate service scheduling.” In terms of permanent work-at-home shifts, he notes that if this share doubles from pre-pandemic levels of 5.7% to about 12% of people working from home, that could mean 15%-to-20% fewer downtown workers, a major change for downtown-focused rail transit systems.

Another section of the brief looks at declining vehicle occupancy by transit mode: bus, light rail, heavy rail, and commuter rail. All four are down significantly, but some much more than others. And this makes a surprising difference in the environmental friendliness of these modes. Here is his comparison of pre-pandemic vs. December 2020 fuel economy of various commuter modes, drawn from the U.S. Department of Energy Alternative Fuels Data Center plus estimated occupancies from the National Transit Database. The metric is passenger miles per gasoline gallons equivalent; hence the highest numbers are best.

*assumed to be unchanged

As of December 2020, the most fuel-efficient means of commuting was the car, followed by light trucks—but only because occupancy embedded in the transit calculations was so drastically low. Obviously, when we get past the pandemic those figures should rise but whether mass transit will be able to rebuild enough ridership to be more fuel-efficient (and hence more carbon-friendly) remains to be seen, and as you can see from the current numbers, transit has a long way to go.

A major premise of the Biden administration’s transportation agenda is to greatly increase federal spending on transit, compared with only modest, constrained increases for highways (with very little scope for adding highway capacity). This approach poses major risks of putting billions of taxpayer dollars into projects that will have costs far greater than their benefits (e.g., light rail systems for medium-sized cities, megaproject expansions of heavy rail and commuter rail systems, etc.).

At the very least, it is premature at this juncture to commit funding for major new rail transit projects before we have some idea of the extent of transit ridership in the first several years after nationwide vaccinations.

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How to Not Win Support for Mileage-Based User Fees

Since serving on a Transportation Research Board special committee on the long-term viability of per-gallon fuel taxes in 2005 (see TRB Special Report 285, 2006), I have supported the eventual need for this country to transition from per-gallon fuel taxes to per-mile charges. The latter was the approach selected after more than a year of study by the National Surface Transportation Infrastructure Financing Commission in its final report released in February 2009; my Reason Foundation colleague Adrian Moore was a member.

Since then, Congress has appropriated modest sums for state-based pilot projects to test various ways of recording and reporting miles traveled by cars and by trucks, coming up with new technologies and trying them out with volunteer drivers, and figuring out what forms of explanation resonate with motorists and truckers about replacing per-gallon with per-mile.

Unfortunately, the general public is still a long way from being sold on the concept. This is partly due to bad reporting, which all too often portrays a mileage-based user fee (MBUF) as a “tax” (which most people believe they would pay in addition to their existing gas taxes) and which generally implies that only a GPS unit in every vehicle can do the job—which people reject as Big Brother in Your Car. Even MBUF-friendly organizations sometimes use loaded words like “tracking your mileage,” which feeds the Big Brother paranoia.

Another bad influence is some advocates of mileage-based user fees (who generally refer to it as a vehicle-miles tax—VMT), who see in this needed change an opportunity to make evil drivers and truckers pay through the nose for all the damages motor vehicles do. I have sat through many TRB presentations that seek to quantify the per-mile costs of every externality they can think of, adding them up to as much as several dollars per mile, with only a few cents of the total dedicated to the capital and operating costs of the roadways themselves. An example of this was the headline on a March 24 webinar sponsored by the Information Technology & Innovation Foundation (ITIF) and the Institute for Policy Integrity: “Addressing the Social Costs of Driving Through a Vehicle Miles Traveled Fee.” This is absolutely the wrong way to win support from motorists and truckers.

Another kiss of death for reaching political consensus is singling out the trucking industry to be first. Some advocates of this point to Germany, where a truck-only toll program began back in 2002 with little fuss. But that ignores the fact that Europe does not have fuel taxes dedicated to highway funding, that a large fraction of the trucks on German autobahns are from other countries, and that they used to pay little or nothing to drive on those costly German highways. Both ITIF and the Congressional Budget Office have published reports suggesting that trucking be the pioneer to be per-mile charged. Just last month Politico reminded us that a senior Republican, Sen. John Barrasso (R-WY), last year proposed a per-mile truck tax, when he was still on the Environment and Public Works Committee.

I have debated this subject at several trucking conferences and I’ve seen first-hand how this industry is deeply opposed to a per-mile charge or tax, especially if it were to be applied first or only to trucks. The depth of this opposition was made plain when the trucking industry research group, ATRI, last month released “A Practical Analysis of a National VMT Tax System,” available on request from TruckingResearch.org. It’s a detailed 50-page analysis, but it appears to systematically err on assumptions and terminology to make a per-mile charge look as costly and impractical as possible.

First, it refers to the charge as a new federal tax (though acknowledging that it might end up being a fee rather than a tax). It downplays the impact of the ever-increasing fuel economy and seems blind to the increasing plans of auto and truck producers to shift to electric propulsion in coming decades. And its graph of federal fuel tax revenue is entirely historical, when credible projections of declining fuel tax revenues are plentiful. In its discussion of technology options, it lists five, all of which have been or are being tested in state and multi-state pilot projects. By defining system requirements maximally, it concludes that only a GPS-based system in every vehicle will suffice.

When it comes to the cost of per-mile charging, the report again seems to err systematically on the most-costly assumptions. First, it repeats the industry’s obsolete claim that the cost of collecting tolls consumes 15 to 30% of the toll revenue, which reflects late 20th-century costs when mostly cash tolling was mixed with some electronic tolling, and all toll systems had cumbersome back-office procedures. Empirical Reason Foundation research on new all-electronic toll roads found collection costs between 5 and 10% of revenue, and projected that all-electronic toll systems with incentives for pre-paid accounts linked to transponders could bring collection costs down to 5% or less.

The report’s long section on deployment, collection of mileage data, administration, and enforcement raises a number of questions, but draws mostly from state pilot projects numbering typically no more than a few thousand vehicles. Economies of scale that could apply in a large state system (California, Texas, Florida), a multi-state region, or a national system are acknowledged but not credibly estimated.

In its assessment of a potential “national VMT tax system,” the report calculates federal highway spending per vehicle mile traveled, for urban and rural roads, and concludes that “urban drivers currently subsidize rural roadways,” at least in terms of federal spending. By contrast, an admittedly dated Reason study of California’s total (state plus federal) highway system in 1995 found that rural motorists driving mostly on low-cost roads subsidized urban motorists driving on high-cost roads, since both paid essentially the same rate per mile via their gas taxes. ATRI’s report draws selectively from several state MBUF pilot projects to raise bizarre objections—for instance, assuming a county or metro area that has its own MBUF and charged time-of-day rates would somehow mean that “through a local VMT tax program . . . local governments could have more power over the nation’s transportation system in terms of collecting and spending revenue.” No, I don’t know what that means, either, especially since state and local governments own and are responsible for nearly 100% of the “nation’s” road system.

One of the report’s most egregious assumptions in doing calculations for a national VMT tax is assuming that 40% of whatever is raised by the tax would be needed for administrative costs, based on the tiny OReGO program in Oregon. This ignores the huge economies of scale likely in any nationwide MBUF implementation. And in its comparison Table 5 on cost to collect $33.5 billion in gross revenue, it pulls out of the air, with no source, a cost to collect the federal fuel tax of 0.2% of the revenue generated, rather than the industry’s usual 1% (and a more accurate 2% according to NCHRP Report 623). This is compared with the ridiculous 40% estimate for MBUF.

I will stop here, with two summary comments. First, it is very clear that at a national level, the trucking industry is seeking to make the case for per-mile charges look as bad as possible, despite the active participation of trucking companies in several state pilots and a more-recent multi-state pilot organized by the Eastern Transportation Coalition, that I summarized in Issue 206, December 2020.

Second, however, the ATRI report does identify numerous questions about technology, policy choices, scope, etc. that are being worked on in the state and multi-state pilot projects. More such research is vitally important, both to address the many unknowns but also to get a much better understanding of what highway users (including truckers) need to see before deciding that per-mile charging is the path this country will—at some point—need to embark on. It is very clear that it is much too soon for any government—state or federal—to implement a change-over from per-gallon to per-mile for all highway users. We have many miles to go and much more to learn.

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Overblown Concerns about Workforce Impacts of Automated Trucking
By Marc Scribner

In recent years, the prospect of automated vehicles has caused concern among organizations representing those in driver occupations. This fear is understandable since automated driving systems (ADS) that can fully automate the entire driving task would surely reduce demand for human drivers. However, the present state of ADS technology and realistic deployment scenarios suggest these fears are overblown. Since deployable ADS for long-haul trucking remains years away, and a gradual phase-in appears much more likely than an overnight switch, any future workforce displacement is likely to be dwarfed by normal driver turnover and attrition.

A recent Journal of Commerce story by William B. Cassidy highlighted growing interest in ADS among major transportation firms (“No assistance required,” Feb. 15, 2021). Automated truck developer “TuSimple announced a new executive advisory board that includes top executives from Schneider, Werner, US Xpress Enterprises, and Canadian National Railway,” writes Cassidy. “Each of these companies has invested in TuSimple, along with Union Pacific, UPS, vehicle manufacturers Navistar, Traton, and Volkswagen AG, and Nikola owner and advisory firm VectoIQ.”

But this interest has been tempered by a growing awareness of the challenges of achieving full automation. “Instead of replacing drivers, think of autonomous technology as ‘enhancing’ a truck driver’s ability to do his or her job, while improving his or her safety,” writes Cassidy. This is to say, lower levels of automation offer the potential to improve truck driver workplace conditions, rather than replace the workforce.

The prospect of completely eliminating the role of human drivers in heavy-duty trucks is likely many years away. Finch Fulton, formerly the deputy assistant secretary for transportation policy at the U.S.DOT and current vice president at automated trucking startup Locomation, recently told FleetOwner (“FMCSA driverless truck message stokes workforce fear,” March 17, 2021), “If you are a trucker today, you are unlikely to lose your job due to automation.”

In contrast, John Samuelsen of Transport Workers Union of America recently wrote to DOT urging a “reboot” on ADS policy to “carefully consider job impacts and workforce training and readiness as you ferret out policy choices around emerging transportation automation technologies.” (“Labor to DOT: Scrap Trump administration’s automated vehicles plan,” FreightWaves, March 24, 2021)

Setting aside the issue that safety regulators at USDOT are generally forbidden by law to take into account the workforce concerns Samuelsen expresses, unions representing drivers would better serve their members by reviewing and communicating the findings of a recent USDOT-commissioned study.

That study (“Macroeconomic Impacts of Automated Driving Systems in Long-Haul Trucking,” Jan. 28, 2021) by authors from DOT’s Volpe National Transportation Systems Center and Australia’s Centre of Policy Studies at Victoria University developed slow, medium, and fast adoption scenarios for ADS deployment in trucks and modeled various economic impacts, including those to the driver workforce. The researchers conclude:

“Assuming the occupational turnover remains near today’s levels, employment levels in the long-haul trucking sector will necessarily fall due to automation but will not force lay-offs in the slow and medium speed adoption scenarios. Only under the fast adoption scenario are lay-offs observed, but they are at most 1.7 percent of the long-haul workforce in a single year and the layoffs only occur during a five-year period. As a result, we conclude that long-haul truck drivers should be able to find employment as short-haul truck drivers, so the issue of lay-offs should not be a significant concern when considering the adoption of automation in long-haul trucking.”

To be sure, no one can predict the future. But absent a major breakthrough in ADS technology that would enable it to be deployed much more cheaply and quickly than experts expect, normal driver attrition from retirements and shifts to non-driver occupations is likely to equal or exceed any future driver layoffs caused by fully automated trucks. Indeed, it is quite possible that unfounded fears stoked by organized labor about imminent automation-spurred driver job losses may reduce the pool of drivers more than ADS technologies, if potential new recruits avoid driving occupations and existing drivers seek out other opportunities.

As required by current federal law, DOT policy should focus exclusively on the safety impacts of driving automation—and the potential of ADS and even lower-level advanced driver assistance features to improve highway safety is large. Claims suggesting imminent truck driver workforce catastrophe are baseless and serve only to degrade the quality of conversation on the societal impacts of automation.

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Monorail Projects Proposed in Los Angeles and Maryland

Some transportation ideas seem to pop up periodically, such as personal rapid transit and monorails. Yet neither has become mainstream, and I think that’s for good reasons. In this article, let’s take a look at recent proposals for a monorail on I-270 in Maryland and on the I-405 in Los Angeles. In both cases the proposed system would interface with an existing heavy-rail system and would be built as an alternative to links in planned networks of express toll lanes.

The I-270 proposal is being advanced by opponents of the governor’s plan for priced express lanes on the I-495 Beltway and I-270. It would extend for 28 miles, serve six stations, and have an average speed (accounting for stops) of about 36 miles per hour The nominal cost is $4.4 billion, which works out to $157 million per mile, which is quite low for rail transit. A study by Maryland DOT found that the project would be “feasible” but would attract most of its ridership from existing transit in the corridor, such as MARC commuter trains and express bus services. And since there is no identified funding source, this project is unlikely to be built.

In Los Angeles, LA Metro has decided against converting the high-occupancy vehicle (HOV) lanes to high-occupancy toll (HOT) lanes in the highly congested Sepulveda Pass portion of I-405, in favor of two competing rail transit alternatives: a subway tunnel underneath the mountains and a monorail built in the I-405 median. It has just signed pre-development agreements with the highest-ranked proposers of each alternative. The monorail would cover 15 miles, serve eight stations, and have an average speed of 37 miles per hour, including stops. At an estimated cost of $9.5 billion, its cost would be $633 million per mile, somewhat less than the subway alternative, which is estimated to cost $10.8 billion. As a point of reference in the DC metro area, the current extension of the Metro system’s Silver Line is $5.7 billion for 23 miles ($248 million/mile), but that project is way over its originally budgeted cost.

Were I asked, I would recommend against the monorail in both cases, on several grounds, even if it turned out to be somewhat less expensive in construction costs than conventional heavy rail. One reason is that it would add another type of vehicle and infrastructure to a region’s transit system. That would likely require separate maintenance facilities, different service workers (electrical, mechanical), and a different parts inventory—i.e., higher operating and maintenance costs. Second, in the event of monorail vehicles being offline for maintenance, heavy-rail cars could not be substituted, since these are two entirely different kinds of rail systems.

In terms of operational effectiveness, far more bang for the buck would be achieved in both Los Angeles and Maryland by express bus service in priced express lanes. This alternative would provide transit service much closer to being door-to-door, rather than from station to station. That’s because a smart express bus system uses the same vehicle to pick up commuters in their neighborhoods in the morning (often from park & ride or kiss & ride lots), speeds them past congestion faster than a monorail, and then drops them off near various employment centers.

From an environmental policy standpoint, remember that major transportation investment decisions that we make today are for projects we expect to be in service for many decades. Early in that time period, a transition to electric buses and personal vehicles will be underway in earnest. And under current review and planning requirements for major projects, neither a monorail, heavy rail or express toll lanes system that we decide upon today would be in operation until a decade or so in the future, and will then be in service for something like 50 years. If much of the Biden administration’s electric vehicle transition goals are achieved, we will be well on the way to an electric vehicle future by 10 years from now.

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News Notes

Conflict Between Restricting VMT and Reducing Carbon Footprint
In my March column in Public Works Financing, I took issue with the idea that federal and state policy should focus on reducing vehicle miles of travel and on not expanding highway capacity, on grounds that motor vehicles are and always will be carbon polluters. Highway modernization is a decades-long process, during which time electric vehicles will increasingly supplant petroleum-fueled vehicles. Likewise, within a decade or two, Level 4 autonomous vehicles will make highway travel more competitive with short/medium-length airline trips. Hence, long-term highway modernization (such as rebuilding the aging Interstate highway system) should continue. The column is posted here.

Texas Bill Would Allow P3 Toll Lanes for Austin’s I-35
The $7.5 billion project to rebuild congested I-35 through Austin could emulate the successful rebuild of a portion of the LBJ Freeway in Dallas, including express toll lanes and being procured as a long-term public-private partnership. That would be allowed if Rep. John Cyrier’s House Bill 2114 is passed in the current legislative session. Since 2017, no TxDOT project involving tolls or public-private partnerships has been allowed by the Texas Legislature, in response to a populist, anti-tolls backlash. Without this legislation, TxDOT plans to build the project without express lanes and to use billions in highway funds that would otherwise be spent on other projects statewide.

Traffic Back To Pre-Pandemic Levels
At the end of March, transportation data firm Inrix reported that daily VMT had exceeded pre-pandemic levels nationwide, though specific metro areas differed. Overall, passenger VMT was 112% of pre-COVID levels for the week ended March 19. Inrix uses anonymous data from cell phones to estimate VMT, and its reports generally predate those of the Federal Highway Administration by several months.

Pennsylvania Legislators Seek to Block Toll-Financed Bridge Replacement
PennDot’s ambitious $2.2 billion program to replace eight major Interstate highway bridges and rehabilitate another—carried out as long-term design build finance operate maintain (DBFOM) P3s and financed by newly authorized tolling—is being challenged in the state legislature. Companion bills in both houses would forbid any public-private partnerships (P3) that involve tolls unless the legislature explicitly approves the project. It would also make other changes to the state’s P3 law, which would constrain PennDOT’s ability to use this procurement method and might make the state less attractive to private infrastructure investors.

Restoring Trust in the Highway Trust Fund
In a recent commentary, I pointed out that the annual gap between federal highway user-tax revenue and federal surface transportation spending is almost entirely due to Congress’s spending on transit and other non-highway programs. The piece, therefore, suggests that if the highway user taxes were spent only on highways (and Congress then directly funded all the non-highway spending), two results might follow. First, highway users might be more likely to accept increases in user-fee taxes for better highways, and, second, there might be more careful scrutiny of surface transportation programs funded out of general funds.

Appeals Court OK’s Death of Miami’s Excellent Toll Road Provider
The Florida legislature’s 2019 law to abolish the Miami-Dade Expressway Authority (MDX) and replace it with a no-expansion, more-politicized Greater Miami Expressway Authority, was upheld by an appeals court on April 1. That ruling overturned last year’s lower-court ruling that the law conflicted with Miami-Dade County’s home rule authority. While MDX is likely to appeal its death sentence, the force of that appeal would likely be diminished because the current county mayor supported the bill to abolish MDX, in contrast to the former mayor, who is now a member of Congress.

Electric Vehicle Transition Needs Massive Electric Power Expansion
Mandates for automakers to produce only EVs, and large federal expenditures for charging stations, will not ensure a viable transition to all-electric mobility. A study released in January by the National Renewable Energy Laboratory found that if 66% of personal vehicles are electric by 2050 (along with increased shares of electric space and water heating), the nation’s electricity system would have to nearly double. (Reuters, “EV Rollout Will Require Huge Investments in Strained U.S. Power Grids,” March 5, 2021). In other words, the challenge is not simply to replace remaining fossil fuel electricity production but to double the size of the electricity industry.

DOT Secretary Endorses Expanded Private Activity Bonds for Transportation
On March 25, Transportation Secretary Pete Buttigieg expressed support for increasing the cap on tax-exempt private activity bonds (PABs) to bring more private capital into surface transportation projects. As reported by Inframation News, his comments were in response to questions from Rep. Daniel Webster (R-FL). Buttigieg also endorsed the creation of a national infrastructure bank, as reported by Debtwire Municipals. In that same congressional session, the secretary also expressed strong interest in a per-mile charge to replace per-gallon fuel taxes, a statement that was later walked back by the White House.

“Could the Pandemic Spell the End of the U.K.’s High-Speed Rail?”
That was the surprising headline in a March 29 article in the New York Times. It focused on growing environmental opposition to HS2, the British high-speed rail project to link London with Birmingham (about 100 miles) and with two future links from there to Manchester and Liverpool. The first phase, under way, has ballooned in cost to $69 billion, and the total would be more than twice that if the later phases are built. Among opponents’ points is that it will take 120 years for the project to become carbon-neutral, due to the very large carbon footprint of HS2’s construction.

Over 220,000 U.S. Bridges Need Repair—ARTBA
An analysis of U.S. DOT’s National Bridge Inventory database reveals that in addition to 45,000 structurally deficient bridges, over 220,000 bridges need major repair or replacement. The American Road & Transportation Builder Association also noted that there is an average of 3,900 daily crossings on each of the 45,000 structurally deficient (SD) bridges. At the current pace of replacement, it would take 40 years to repair or replace the current backlog of SD bridges, but as bridges continue to age, more can be expected to be designated SD each year into the future. The states with the most serious SD bridge problems, in order, are Iowa, Oklahoma, Illinois, Missouri, and Louisiana.

“For Infrastructure Projects to Succeed, Think Slow and Act Fast.”
That was the headline on a March 31 Boston Globe op-ed by infrastructure experts Bent Flyvbjerg and Dan Gardner. Using the California high-speed rail project as an example of failure, they argue for more careful analysis prior to committing to a megaproject and then a streamlined path to approval and construction. It is politics that leads to both hasty approvals without serious benefit/cost analysis and to a convoluted and seemingly endless process of getting final approval to build. Flyvbjerg’s policy paper with many more details is available here.

I-80 Tolling Bill Makes Progress in Wyoming
Senate File 73, which would authorize a toll-financed master plan for redeveloping I-80 across the state—has passed its first vote in that chamber. The Wyoming DOT estimates annual unmet needs of $300 million. Among other things, I-80 needs more truck climbing lanes, and its pavement is aging, like that of most of the 50-60-year-old Interstate system. The bill contemplates the implementation of all-electronic toll collection on I-80 for both cars and trucks, though the 10-fold differential between car rates (2.5 cents/mi.) and heavy trucks (25 cents/mi.) is unprecedented, and this is sure to stimulate robust trucking industry opposition. The measure needs two more votes in the state Senate before being sent to the House.

The Painful Economics of Japan’s High-Speed Rail System
Many Americans, including new Transporation Secretary Pete Buttigieg, would like to see the United States emulate Japan’s national system of high-speed trains. From reading Randal O’Toole’s excellent book, Romance of the Rails, I already knew that this system was far less impressive than most non-Japanese believe. But O’Toole has recently published a fact-filled policy brief, recounting the actual costs, losses, and adverse consequences of this system whose first train began service in 1964. No one interested in a possible U.S. version should miss this brief, “Japan’s Addiction: The Dark Side of the Bullet Train.”

Electric Vehicle Share at Record Levels
According to an assessment by data firm IHS Markit, new EVs registrations in the United States reached 1.8% during 2020, a year with lower-than-normal new car sales. As the car industry began recovering late in the year, EV registrations in December 2020 reached 2.5%, the highest monthly total ever. The data company forecasts that EV sales in 2021 will be 3.5% and reach 10% or more by 2025. Market share is highest in the west, where 4.8% of new registrations are EVs; it’s 11% in the San Francisco Bay Area (which is no surprise to anyone who has driven around near Silicon Valley in recent years).

Ohio Turnpike Moving to Open-Road Tolling
By 2023, the Ohio Turnpike will have eliminated stopping at toll plazas for vehicles equipped with E-Zpass toll transponders, the Turnpike Authority announced last month. However, other major east-west toll roads, including the New York Thruway and the Pennsylvania Turnpike are far ahead. The former has recently eliminated all cash tolling, and the latter is underway on eliminating toll booths, aiming for all-electronic tolling by the end of this year.

Useful Overview of Federal Highway and Transit Programs
With both an infrastructure bill and reauthorization of the federal highway and transit program on this year’s agenda, an up-to-date guide on which federal transportation programs exist and what their revenue and spending data show would be very useful. The Congressional Research Service has done this, with its March 1 bulletin, “Highway and Public Transit Funding Issues.” Unlike some years ago when CRS reports were not readily available to the public, they are now all accessible here.

Should All Highways Be “Complete Streets”?
In another in a new Reason Foundation series of Debatable Ideas, I wrote a commentary explaining that repurposing certain local streets and roads with wider sidewalks and other amenities can make sense. But it takes issue that this concept should be applicable to major (six-lane or more) urban arterials, which serve a vital function as relatively fast supplements to the freeway system for cars, buses, and trucks. Go here.

Correction re Vehicle Occupancy Detection
Alert newsletter reader Brian Patno emailed to correct a statement in my paper on lessons learned from the US experience with HOT lanes, part of an OECD International Transport Forum workshop last fall. The original paper stated that several firms had prototype camera systems to count vehicle occupancy for HOV and HOT lanes, but that none were in regular use. Brian pointed out that Indra’s system is in use on Transurban’s growing system of HOT lanes in northern Virginia, beginning in summer 2020. I am glad to set the record straight on this.

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Quotable Quotes

“The administration (to its credit) is trying to move beyond the traditional framing of infrastructure policy as being all about how much money is spent. By the money metric, $1 billion spent on a project that brings tremendous benefits is the same as $1 billion spent on a dumb project that should never have been approved in the first place, and both support about the same number of construction jobs, which is why construction jobs are a bad metric of success or failure as well. . . . [I]t would be very ahistorical for Congress to give the Administration this much money and just let them choose projects without a very tight set of strings attached. It is doubtful that Congress could get away with actually earmarking projects that large, but a lot of negotiation between the Hill and DOT would need to take place in order to shake anything like that amount of money loose.”
—Jeff Davis, “What’s In the $2.3 Trillion Biden ‘Investment’ Plan?”, Eno Center for Transportation, April 2, 2021

“The New Starts [transit] process has historically been meaningfully influenced by ridership forecasts, which are now very difficult to do with any credibility until we have some sense of a post-COVID ridership/mode-choice response. It will be interesting to see if ridership is ignored and whether the non-federal share expectations change. It will also be interesting to see how communities react as it relates to providing capital match and operating funds. Given the zeal for free truly discretionary monies, we are likely to see some cringe-worthy New Starts applications.”
—Steven Polzin, email to Robert Poole, April 6, 2021 (used with permission)

“‘Intelligence’ needs to be in the [automated] vehicles. The “ways” (roadways in this case) need to be as simple, ‘dumb,’ and as cheap as possible to build and maintain. Consider air transportation: air is the way; consider maritime: water is the way; consider railroads: a couple of pieces of metal, some wood, and gravel is the way; consider pipelines: a pipe is the way; and finally roadways: a reasonably smooth hard surface with some paint is the way. We can barely afford to keep the hard surface somewhat smooth, and the paint situation is really bad. There is zero money to pay for and maintain a lot of gizmos along it to make it ‘intelligent.’”
—Alain Kornhauser, “Analysis: Will Intelligent Roads Finally Move Self-Driving Cars Into the Fast Lane?” Safe Driving Cars, Feb. 26, 2021

“Most toll roads did not need to draw on cash balances to pay debt service or balance financial operations, thus leaving them with solid liquidity positions well into the crisis. The combination of healthy debt service coverage ratios, a rapid traffic recovery, and solid liquidity leave toll roads well-positioned to withstand another potential time-limited shock, such as a period of weaker-than-expected economic growth or a second wave of lockdowns.”
—Scott Monroe (Fitch Ratings), in Kalliope Gourntis, “Demographics Will Also Determine US Toll Roads’ Comeback“, Infrastructure Investor, March 18, 2021

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The post Surface Transportation News: Commercial Services on Interstate Highways, Mileage Fees, Urban Transit After COVID-19, and More appeared first on Reason Foundation.

• 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

Trucking Needs a Better Deal on Tolls   

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.

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Transportation Trends and Planning During, and Eventually After, COVID-19

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:

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.”

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When Will Dedicated CAV Lanes Become Efficient?
By Marc Scribner

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.

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Why Are Some Drivers Paying High Peak-Period Tolls on I-66 Inside the Beltway?

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.

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What Are Green Bonds for Transit?
By Baruch Feigenbaum

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.

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Making Sense of Highway Fatality Data

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.

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News Notes

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 info@investtexascouncil.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.

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Quotable Quotes

“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

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The post Surface Transportation News: Truck Tolling, Transportation Planning During and After the Pandemic, and More appeared first on Reason Foundation.

Of the nation’s most populous states, Ohio (ranked 13^th overall), North Carolina (14^th)—which manages the largest state-owned highway system, and Texas (18^th)—with the second-largest amount of state mileage, are doing the best job of combining road performance and cost-effectiveness. In contrast, New York (ranked 44^th overall), California (43^rd), and Florida (40^th) are in the bottom 10 overall.

The 25^th Annual Highway Report finds the general quality and safety of the nation’s highways has incrementally improved as spending on state-owned roads increased by 9 percent, up to $151.8 billion, since the previous report.  Of the Annual Highway Report’s nine categories focused on performance, including structurally deficient bridges and traffic congestion, the country made incremental progress in seven of them.

However, the pavement condition of the nation’s urban Interstate system worsened slightly. Over a quarter of the urban Interstate mileage in poor condition is in just three states: California, New York, and, perhaps surprisingly, Wyoming.

The study also finds drivers in 11 states spent more than 50 hours per year in traffic congestion, with commuters in the three most-congested states—Delaware, Illinois, and Massachusetts—spending over 100 hours per year in traffic congestion in 2019.

Most states—35 out of 50 —reduced their overall traffic fatality rates. Massachusetts, Minnesota, and New Jersey reported the overall lowest fatality rates while South Carolina, Mississippi, Louisiana, and Arizona had the highest fatality rates.

In the report’s spending categories, Missouri, Mississippi, South Carolina, North Dakota, and Tennessee reported the lowest expenditures per mile. New Jersey, Massachusetts, Alaska, Delaware, and Maryland had the highest costs most per-mile. In total, the 50 states disbursed $151.8 billion for state-owned roads, a 9.2 percent increase from $139 billion in 2016, the previous data available.

The condition of the nation’s bridges improved slightly in 2019. Of the 613,517 highway bridges reported, 46,771 (7.6 percent) were rated deficient. The best rankings go to three states where less than two percent of their bridges are structurally deficient: Texas, Nevada, and Arizona. Meanwhile, Rhode Island reported a whopping 23 percent of its bridges as structurally deficient.

Five states made double-digit improvements in their overall performance and cost-effectiveness rankings:  Arkansas improved from 32^nd to 9^th  overall; Mississippi moved from 25^th to 8^th; Wisconsin went from 38^th to 22^nd; South Carolina jumped from 20^th to 6^th; and Iowa improved from 31^st to 20^th overall.

25th Annual Highway Report Overall Performance and Cost-Effectiveness Rankings

Click a state name for detailed information about its results.

“Although it is tempting to ascribe these ratings to geography or population, a more careful review suggests that numerous factors, including terrain, climate, truck traffic volumes, urbanization and congestion, system age, budget priorities, and management and maintenance practices all significantly impact state highway performance,” says Baruch Feigenbaum, lead author of the report and managing director of transportation policy at Reason Foundation. “The states with the three largest highway systems—North Carolina, Texas, and Virginia—all rank in the top 21 this year. Meanwhile, states with the smallest amount of mileage to manage, like Hawaii, Rhode Island, and New Jersey, are some of the worst-performing states. Prioritizing maintenance, targeting and fixing problem areas, and reducing bottlenecks are among the successful strategies states can use to improve their quality and efficiency.”

Reason Foundation’s Annual Highway Report measures the condition and cost-effectiveness of state-controlled highways in 13 categories, including pavement condition, traffic congestion, structurally deficient bridges, traffic fatalities, and spending (capital, maintenance, administrative, overall) per mile.  The Annual Highway Report is based on spending and performance data submitted by state highway agencies to the federal government for 2018 as well as 2019 urban congestion data from INRIX and bridge condition data from the Better Roads inventory for 2019.

25th Annual Highway Report: Each State’s Highway Performance Ranking By Category

Editor’s Note (Jan. 12, 2021): The Federal Highway Administration (FHWA) has identified an “error in the 2018 HM-64 Highway Statistics table” that it is still in the process of correcting. This FHWA error in the 2018 HM-64 table negatively impacted Wyoming’s pavement condition figures and rankings in the 25h Annual Highway Report. And, as a result, the FHWA data error would have also played a role in Wyoming’s overall ranking falling from 11th overall in the previous report to 36th overall in the 25th Annual Highway Report. 

The post 25th Annual Highway Report appeared first on Reason Foundation.

• How will “remote work” change land-use and transportation?
• Attacks on priced managed lanes have negative consequences
• A new milestone for self-driving cars
• BRT that underperforms
• Brightline West pulls bond offering
• Debating priced managed lanes in Maryland
• News Notes
• Quotable Quotes

Implications of Remote Work for Transportation and Land Use

A report just out from Upwork Global presents new data on the larger impacts of the still-unquantified shift toward significantly more telecommuting—or “remote work” as the author, labor economist Adam Ozimek, terms it. “Remote Workers on the Move” documents surprising shifts in where remote workers plan to live.

Ozimek surveyed 20,000 people to learn about their moving intentions. His report is based on those survey findings, along with census and real estate data. A brief summary of Ozimek’s findings:

• Remote work will increase migration in the U.S. Between 14 and 23 million Americans are planning to relocate as a result of businesses’ increasing acceptance of remote work. As a result, near-term migration rates could be three to four times what they normally are.
• Major cities will see the biggest out-migration. 20.6 percent of those planning to move are in a major city.
• People are seeking less-expensive housing. More than half (52.5 percent) of those planning to move are seeking a house significantly more affordable than their current home.
• People are moving beyond regular commute distances. 54.7 percent of planned moves are to locations more than two hours away from their current location, which is beyond most people’s tolerance for daily commuting.
• The highest-priced housing markets are taking the biggest hits. Rental data from apartments.com shows that the top 10 percent most-expensive markets are losing tenants at a much greater rate than markets in the bottom 10 percent.

Upwork’s interest in these findings is their implications for employers. But my interest is their implications for transportation and land-use policy. So my first task was to see if there is corroborating information from other sources. There’s plenty of that.

Emil Frankel of the Eno Center for Transportation cites outmigration from major cities to their suburbs to suggest that metro areas will become more decentralized, with implications for significant changes in transit systems.

Demographers Wendell Cox and Joel Kotkin, in “America After Covid: What Demographics Tell Us,” draw on census data on migration and several experts’ predictions of possible permanent shifts to greater remote work to suggest a continuing shift from cities to suburbs and from major metro areas to smaller ones.

Reason magazine reporter Christian Britschgi draws on Realtor.com data to document “Massive Rent Declines in America’s Most Expensive Cities Prove, Once Again, that Supply-and-Demand Is Real.”

Wall Street Journal reporter Peter Grant used housing market data to inform his Oct. 14 article, “Renters Flock to Suburbia, Upending an Urbanization Trend.” And fellow WSJ reporter Katherine Bindley found numerous examples of remote workers moving to small towns far from major technology hubs, in her November 2nd article, “Tech Workers, Free to Roam, Put Down Roots in Mountains.”

I kept all of the above in mind as I read a new report just out from Transportation for America (a division of Smart Growth America) titled “Driving Down Emissions: Transportation, Land Use, and Climate Change.” The thrust of this report is that in order to reduce CO2 emissions from motor vehicles, America must reduce the extent of driving and densify urban land uses, creating large amounts of walkable, bike-able live/work neighborhoods. Amazingly, this report ignores the decentralization that has been evident in census data since well before the pandemic, as well as recent shifts to telecommuting. It states as a fact that, “Decades of out-migration from cities has ended in most big cities and most are experiencing a rebirth of new residents and investment,” and even claims that this alleged trend “has not been upended by the COVID-19 pandemic.”

Four years ago, my Reason colleagues produced an analysis of four national studies that assessed the feasibility and cost-effectiveness of this kind of “reduce driving and increase density” strategy for CO2 reduction and concluded that it would be both costly and ineffectual. There are far more cost-effective ways to reduce CO2 emissions from motor vehicles, which, incidentally, are a far smaller part of total U.S. greenhouse gas (GHG) emissions than often claimed. T4A includes a pie chart showing that “transportation” accounts for 28 percent of U.S. GHG emissions—but only 59 percent of that is passenger vehicles. In other words, the personal vehicles T4A is concerned about account for only 16.5 percent of the total. And those emissions are headed steadily downward in the coming decades, without T4A’s preferred policies.

First, as ever-higher federal miles per gallon requirements on new cars lead to fuel-sipping cars replacing old gas guzzlers, annual gallons sold will be on a long-term downtrend in coming decades. That is why state departments of transportation are ramping up pilot projects to test mileage-based user fees as the replacement for shrinking fuel-tax revenues. Second, CO2 emissions are greatest in stop-and-go congestion, compared with steady flow at 45 miles per hour—and that is what variably priced express lanes are delivering (and which pricing freeway general lanes could do even more). Third, electric vehicles—which the report dismisses as not coming soon enough—are already getting federal and state subsidies, and are likely to get more in the next Congress.

And in terms of time frames, even if the remote work was not going to reduce urban densities, the idea of massively densifying the land-use patterns of largely suburban America by 2030 or 2035 is utopian. And it is far less likely to occur than increased government support for the transition to electric vehicles.

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Political Attacks on Priced Managed Lanes Have Negative Consequences

Last month I reviewed the important new report, “Emerging Challenges to Priced Managed Lanes,” originally proposed by the Transportation Research Board’s Managed Lanes Committee and released earlier this year as NCHRP Synthesis 559. That report identified two of the states experiencing a serious political backlash against priced express lanes as Texas and Florida. In the former, the governor and legislature have forbidden TxDOT to use any state highway funds for new tolled projects, and the legislature has refused to approve any new toll-revenue-based public-private partnership projects in recent years. And in Florida, a legislative contingent from Miami-Dade County each year manages to get their statewide colleagues to enact new restrictions on tolling and priced express lanes, nominally affecting only that county but actually having statewide implications. These measures are now inflicting serious damage to plans for regionwide express toll lane networks in Dallas and Houston, as well as in the Miami metro area.

A recent article by Dug Begley in the Houston Chronicle shows how the TxDOT Houston district is responding. Begley summarizes that office’s rationalization by saying that “[TxDOT] officials simply recognize that they are running out of room, cannot rely on toll lanes to curb congestion, and need support from across the region to accelerate projects they are planning.” He quotes TxDOT district planning director James Koch saying, “It’s just real estate out there. We are obviously not going to double the size of the facilities we have, so what do we do with the space we have?”

What seems to be happening is that projects originally planned as priced managed lanes are now being considered as transit lanes or possibly lanes reserved for electric or automated vehicles. The problem with transit-only lanes is that even the most optimistic projections of commuter bus demand would hardly ever lead to more than one bus per lane per minute. Counting a bus as equivalent to 1.5 passenger cars, that is the equivalent of 90 vehicles/lane/hour. Variably priced express toll lanes can handle 1,800 vehicles/lane/hour at a steady 45 mph, so a bus-only “managed lane” would waste 95 percent of its expensive capacity. As for EV-only or AV-only lanes, there is no good reason to separate out those vehicles, and it will probably be a decade or two before there are enough of either kind to use all the capacity of an AV or EV “managed lane.” Plus, there is emerging evidence that mixing AVs with regular traffic can lead to traffic-smoothing consequences (see News Notes).

Begley’s article uses a rectangle of four freeways near downtown as a case in point. TxDOT is considering “express lanes—perhaps elevated” on north-south I-610 for use by cars and buses. And on the stretch of I-10 in this rectangle, the project to add transit lanes “could be redesigned later as managed lanes,” according to a graphic within the article. Another component, for the I-69 portion, suggests “two-way managed or express lanes.” This artful use of terms may reflect a near-term accommodation to the state legislature’s tolling ban, with the hope that by the time such projects reach the construction stage, a legislative majority will have come to understand the value of variably priced express lanes to reduce congestion and improve traffic flow. Or this might suggest projects that are being designed to be converted to pricing after they are built, if and when the politics change. Still, in contrast to the Dallas/Ft. Worth metro area, which was much farther along in creating its express lanes network by the time the tolling ban was imposed, the Houston area has far fewer priced express lane-miles in operation or close to opening.

Redefining express lanes is also on Florida DOT’s agenda in Miami-Dade County. As I noted in the February 2020 issue of this newsletter, in recent years legislators from that county have gained passage of a number of anti-toll laws, most recently in the 2020 session cutting the size of the recently opened express toll lanes on the Palmetto Expressway from two lanes to one lane each way, and requiring an additional entry point. Several years before, they enacted what I have termed a “poison pill” for express toll lanes statewide. It requires the variable price to be cut to the minimum amount (currently 50 cents) for any time period in which the express lanes fail to meet the federal standard of 45 mph 90 percent of the time during peaks. Because of a price cap (which FDOT has not been allowed to increase), the maximum toll of $10.50 during the northbound peak period on the I-95 express lanes is not high enough to cope with a physical bottleneck at the obsolete Golden Glades Interchange. So nearly every weekday afternoon, FDOT can charge only 50 cents when they probably need to charge $15. The resulting congestion lets the anti-toll faction crow that “priced express lanes are a failure.”

Unfortunately, it appears that FDOT is not going all-out to educate the Miami-Dade public about the benefits of priced express lanes or taking the courageous step of raising the price to whatever level is needed to restore free flow (given the lack of funding for a major redesign and replacement of the obsolete Golden Glades interchange). Instead, it appears to be studying ways to get greater use out of the I-95 express lanes by encouraging more carpools and transit to use the lanes. While that might sound trendy and popular, it would add to congestion and make it less worthwhile for current paying customers to continue using the lanes. Destroying the value of what has been one of the country’s most successful priced express lane projects would be a real tragedy.

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Self-Driving Cars Hit Major Milestone, But Uncertainty Still Reigns Supreme
By Marc Scribner

Last month, Waymo made headlines when it announced it would be opening its automated taxi service, Waymo One, to the general public. The Alphabet subsidiary formerly organized as the Google Self-Driving Car Project said on Oct. 8 that it was re-opening fully automated rides (with no “safety driver”) to pre-screened customers and their guests in the Phoenix metro area. Most significantly, the company said that in “over the next several weeks” it would expand ridership eligibility to the general public, who will be able to download smartphone digital hail apps much like they can do today with Uber or Lyft. Waymo’s apparent entry into limited common carrier service raises a number of interesting issues that deserve attention.

Later in October, Waymo published two white papers, Safety Methodologies and Safety Readiness Determinations and Public Road Safety Performance Data, both of which provide a great deal of transparency into how Waymo is developing the safety case for its Waymo Driver SAE Level 4 automated driving system. In contrast, Tesla Motors released a beta version of “autosteer on city streets,” an SAE Level 2 driver assistance system the company envisions as an important stepping stone to higher levels of automation. Tesla has publicly shared very little on how it is building its own safety case. The company’s latest move was harshly criticized by industry group Partners for Automated Vehicle Education (PAVE), which said in a statement, “Public road testing is a serious responsibility and using untrained consumers to validate beta-level software on public roads is dangerous and inconsistent with existing guidance and industry norms.”

Without wading into the debate on Tesla’s beta version release, it is clear Waymo currently has the better automation system, an actual automated driving system the company feels confident enough to use for ride-hailing open to the general public, albeit in a small area of metropolitan Phoenix. Waymo’s entry into common carrier service—or at least something resembling common carrier service—represents an important milestone for automated vehicles.  It also raises a number of questions about Waymo’s ambitions and their interactions with public policy.

First, how rapidly can Waymo One expand its Phoenix service area? Waymo allows interested parties to sign up to be alerted when service is expanded into their areas but is otherwise noncommittal about expansion timelines. The company has indicated that it will soon be bringing back safety drivers in some of its Waymo One service vehicles in order to expand the Phoenix service area. This suggests any expansions will be somewhat labor-intensive and take time.

Second, what impacts might Arizona policy have on future Waymo One service? Arizona currently lacks binding automated vehicle policy, although as I noted in a recent Reason Foundation policy brief, Arizona’s light-touch automated vehicle regulatory environment is underpinned by inaction from the legislature and questionable uses of the governor’s executive order powers. Arizona is largely a policy blank slate that could become supportive or restrictive toward Waymo and others depending on political winds and the whims of politicians. Careful appeals for a form of regulatory certainty that respects innovation will likely be made in the near future.

Third, can Waymo One’s Arizona service be replicated in other states? Waymo states that it has tested its vehicles in 10 states and 25 cities, “from sunny Phoenix, Arizona to rainy Kirkland, Washington, across the snowy Upper Peninsula of Michigan, through Death Valley heat, and in foggy San Francisco to ensure that our vehicles learn to drive in a variety of challenging weather conditions.” That said, a disproportionate amount of that testing has taken place in its current Waymo One operating zone, just 50 square miles in the Phoenix East Valley area. Earlier this year, Waymo announced it would begin mapping Interstates in New Mexico and Texas for its automated heavy trucks, so an expansion into more of the Sun Belt may be on the horizon. The policy environment in the larger Sun Belt is generally similar to Arizona’s, although the weather gets significantly wetter as you move east.

Finally, will future federal policy be supportive or restrictive? There are currently seven active rulemaking projects related to automated driving systems at the National Highway Traffic Safety Administration (NHTSA). A new administration could choose to continue those rulemakings or chart its own regulatory path from scratch. A choice of the latter option would likely delay modernization of federal motor vehicle safety standards that is necessary to allow vehicles equipped with automated driving systems to be produced and deployed in large numbers. Congress has so far failed to enact national automated vehicle legislation, but has indicated that it will begin working on new legislation in early 2021. While there are innovation risks associated with any future federal action, federal inaction has spurred counterproductive actions in a number of states. Policy uncertainty is likely to remain in the coming years until key technical standards and test procedures are published.

Waymo has made a remarkable amount of progress in its few years of existence. Its expansion of ride-hailing outside of the Phoenix East Valley area and its move into highway freight are likely to be cautious and slow. (Don’t plan to let your driver’s license lapse just yet!) This is entirely understandable given the large amount of uncertainty. By the same token, when it comes to automated vehicle policy, legislators and regulators at all levels of government should adopt a corresponding cautious and slow approach.

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Another BRT Project Set to Underperform

Bus Rapid Transit (BRT) and priced express lanes are a high-performance combination. Rather than seeking to maximize person-throughput by exempting carpools from tolls (which reduces the congestion-reducing benefits of pricing), getting long-distance express bus service to use the priced lanes increases person-throughput while maintaining effective pricing to keep all traffic flowing smoothly. In this kind of BRT, the same bus that uses the uncongested express lane corridor begins its trip on surface streets picking up passengers from locations such as park and ride lots (in the AM peak) or from employment centers (in the PM peak). This gives express bus commuters something close to a door-to-door trip.

All too many planned BRT systems, however, seek to emulate rail transit, running only from station to station, which means nearly all of the passengers must use one mode to get to the station, ride the BRT bus to a station somewhere near their destinations, and potentially take a third mode to their real destinations. And unlike the BRT/priced express lane model, this kind of BRT nearly always makes use of an exclusive guideway, whose cost comes from general taxpayers. By contract, in many priced express lane corridors, the toll-paying customers cover most or all the costs of the guideway.

A rail-emulating BRT system is getting close to approval in Miami. It’s the East-West Corridor—part of Miami-Dade Transit’s plan to add six transit corridors under its 2016 Strategic Miami Area Rapid Transit (SMART) Plan. The Miami-Dade Transportation Planning Organization (TPO) board voted this month to select this BRT-only plan as the locally approved alternative (LPA) for this corridor. The project must still be approved by the Miami-Dade County Commission before a funding plan can be developed; the cost is estimated to be $418 million, far less than the rail transit alternative estimated at $2.35 billion. And some BRT funding is likely to be available from the Federal Transit Administration’s Small Starts program. The BRT project is clearly more cost-effective than the rail alternative.

However, consider the downsides. The longest part of the route will use the median of the Dolphin Expressway, the busiest (and often highly congested) east-west toll road in the region. It will use the space that would have otherwise been available for variably priced express lanes, a key missing link in the regional express lanes plan. Instead of offering express service from western suburbs to key destinations such as Miami International Airport (adjacent to the Dolphin Expressway) and downtown Miami, the bus-only service will operate from station to station, with three station stops on the Dolphin itself. That will require building elevated stations to cross over traffic lanes so as to reach bus boarding platforms in the center of the expressway. Hence, what economists call the “opportunity cost” of using the Dolphin’s remaining right of way just for buses is the benefits for auto commuters from having variably priced express toll lanes that they could use in order to avoid chronic congestion on the Dolphin, paying extra for time-sensitive trips.

Three BRT routes are planned for this East-West corridor, each operating at 15-minute headways during peak periods. That would mean four buses per hour for each of three routes, for a total of 12 buses per hour. If the project were instead developed for express bus service, without the three intermediate stops along the Dolphin, and access was provided for variable-toll-paying customers to use the lanes, there would be up to 1,800 paying customers per hour in those lanes—rather than only 12 buses.

I wrote a policy brief on this corridor in 2017, with the aid of a senior traffic and revenue consultant familiar with the corridor. We estimated speeds in the general lanes and a proposed bus/toll lane in 2025, 2030, and 2035, compared with a bus-only lane with various numbers of buses. The bus-toll alternative—with 25 buses per hour plus toll-paying autos—led to significantly reduced congestion in the general lanes, with annual motorist time savings of 1.9 million hours by 2035 and additional revenue from the variable tolls in the bus/toll lanes of $21.7 million per year as of 2035. All that will be given up if the bus-only plan is implemented on the Dolphin Expressway.

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Brightline West Postpones Bond Offering for Victorville to Las Vegas High-Speed Rail

Last month’s issue included a News Note about Brightline West launching an offer to investors for $3.2 billion in “green bonds” for its planned electric train service between Victorville (in the California high desert) and Las Vegas. Morgan Stanley, as the lead book runner, expected the unrated (junk) bonds to be priced and sold by about Oct. 5. Well, it’s now the first week of November and the bonds have not found buyers, and that’s after Brightline (and parent company Fortress Investment Group) took several steps to make them more attractive.

In several stages throughout the month, they reduced the size of the offering from $3.2 billion to $2.4 billion. And they increased the amount of equity Brightline would commit to the deal to more than 30 percent of the estimated $8 billion price tag. By Oct. 23, the allocation of tax-exempt bonds from the California Infrastructure Development Bank had been cut from $2.4 billion to $2.2 billion, and the allocation from the Nevada Department of Business and Industry was cut from $800 million to $200 million. And still no deal.

On Nov. 1, Fortress announced that the project was being postponed, due to the inability to sell the bonds. California Treasurer Fiona Ma said the bond capacity allocated to Brightline West will be returned to the state and used for other projects, such as affordable housing. Just the week before, the company launched a glossy website, brightlinewestconstruction.com.

Why were investors so cool to these bonds? Bloomberg’s Romy Varghese, in an Oct. 7 article, provided some clues, by unveiling some of the information being presented to potential bond buyers. In a video shown to such prospects, the company “predicted profit margins of at least 70 percent.” Its trains would provide a three-hour trip from Los Angeles to Las Vegas, compared with six hours by car. The article also noted that Morgan Stanley “pitched corporate junk bond buyers and overseas investors and suggested yields as high as 7.5 percent”—about four times what the highest-rated state and local government bonds pay.

Note that what is being pitched to these bond buyers is not the $8 billion line between Las Vegas and Victorville (90 miles northeast of downtown LA) but the eventual system (at unknown cost and opening date) from LA’s Union Station. Overseas investors unfamiliar with southern California geography may miss this point.

But they also may be familiar with several governmental high-speed rail providers in Europe that claim to make profits.

First, European high-speed rail companies’ bizarre accounting statements count large operating subsidies as “revenue,” as documented some years ago in a report by Amtrak’s Inspector General. And second, only three HSR lines in the entire world claim to be covering their construction costs as well as operating and maintenance costs from farebox revenues. There are no federal or state operating subsidies for U.S. high-speed rail, so where is the debt service on these bonds supposed to come from?

I also have to question the claim that this project will provide high-speed rail service between (eventually, someday) downtown Los Angeles and downtown Las Vegas. That distance is 258 miles (via the proposed route), and if a nonstop trip takes three hours, that’s an average speed of just 86 miles per hour. Why is the company going to the extra expense of planning to buy locomotives with a top speed of 200 mph, and the higher cost of more-precise track required by such speeds? That’s not what it did with the far more modest Brightline train in Florida, which is sharing track and right of way over most of its route with sister freight rail company Florida East Coast. I’m on record stating that this Florida service, once the northern extension to Orlando is completed, has a chance of being profitable. That seems highly unlikely for Brightline West.

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Debating the Environmental Impact of Priced Managed Lanes in Maryland
By Baruch Feigenbaum

The state of Maryland is currently holding environmental hearings on the first phase of a $9 billion plan to add variably priced express lanes to the Maryland side of the Capital Beltway and I-270. The first phase adds four variably-priced toll lanes to I-270 between I-495 and I-370 and to I-495 between the Potomac River and I-270. The $9 billion project, financed completely by the private sector, would be the largest highway public-private partnership (P3) in the world. (Later phases would add lanes on I-495 to the Woodrow Wilson Bridge and on I-270 to Fredrick).

But opponents in Montgomery County, Maryland, including a gaggle of anti-development groups, are pulling out all of the stops to kill the project.

Under the National Environmental Policy Act (NEPA), all major roadway expansion projects must include a full environmental impact statement (EIS). The EIS must evaluate the benefits of a specific project and the cumulative environmental impacts arising from it. Project sponsors must develop a reasonable range of alternatives that accomplish the purpose and need while considering impacts to socioeconomic, cultural, and natural resources. Some environmental groups believe this means that if there is any harm from the project it should not be built. But the NEPA statute is written only to ensure that any planned project improvements do more good than harm.

Public reviews, particularly community hearings, are a critical part of any megaproject. By their nature, public hearings attract folks with the strongest emotional responses to projects. Drivers and transit users who will benefit from the widened I-270 and I-495 project aren’t going to spend their time praising federal and state governments for their outstanding environmental documentation. But detractors will scour the EIS for any potential flaw.

It is also true that the state will have to buy a limited number of properties for the expansion. And if that limited number of properties happens to include your house, you have a strong personal stake in this project.

But many who spoke at the hearing aren’t individual homeowners. Many do not live anywhere near the first phase of the project. Some do not even live in Maryland. In fact, the vast majority of speakers in the Aug. 25 morning hearings that I attended were from well-organized environmental groups that have both the time and the budget to oppose this type of project. Many of these groups believe any development action, including cutting down overgrown weeds, will harm their quality of life. And some made uninformed, inaccurate statements.

Environmental review meeting attendees are typically the residents with the strongest feelings or the ones with the most free time. But the attendees are not necessarily the residents impacted most by the project. In this case, some claimed that the project would decimate wildlife. Others argued that it would destroy popular parkland. Still others argued that the state should spend money on more rail transit. Let’s examine each of those claims.

Wildlife counts show that Montgomery County has an above-average wildlife habitat for a suburban area. The county may not have the wildlife diversity of Yosemite, but achieving that level of diversity would require a different climate, larger elevation change, and the removal of most of the Montgomery County residents. Montgomery County has far more acres of parkland per capita than the national average. Quantity of parkland is important, but so is quality.

The state is already building light-rail transit with the Purple Line via another public-private partnership. The project is slated to run from Bethesda to New Carrolton about five miles away from the express lanes project. The I-270 and I-495 express lanes are being funded with private financing based on toll revenue. Folks who never take the express lanes won’t have to pay for them. The state is also adding express bus service to make use of the express lanes’ uncongested capacity, which will enable faster and more-reliable express bus service. And the toll-paying passenger vehicles— not the transit agencies— will pay the costs of the new lanes. Building more rail lines, as opponents urge, would require taxpayer funding that the state does not have. Any additional east-west rail project would duplicate the Purple Line.

The public review process can be frustrating for all involved but there are three things project sponsors can do to improve the process. First, construction companies should explain NEPA’s statutory role of weighing the positives and negatives of a proposed improvement. Second, project sponsors should use detailed mapping tools to better inform residents and employees of the district. These folks should be invited to public meetings and online communications. Finally, project sponsors should take comments from all interested parties including environmental groups, but also acknowledge that these groups may be overrepresented at public meetings and may not necessarily represent the will of the community.

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News Notes

$2.1 Billion Sydney Highway Tunnel Offers Traffic-Relief Benefits
On Oct. 31, the new NorthConnex Tunnel opened to traffic in Sydney, Australia. It was built to relieve traffic congestion on a parallel arterial, Pennant Hills Road, which has 21 traffic lights. Though the twin tubes were built to accommodate three lanes each way, the tunnel opened striped for just two lanes in each direction. One of the goals of the project is to remove 5,000 trucks per day from the arterial, by banning them from operating on it during peak periods, which requires them to pay tunnel tolls. The flat-rate toll is $5.60 for cars and three times that for trucks. The construction cost per lane-mile for the 5.6-mile tunnel works out to be $62.5 million, using the built capacity of six total lanes.

Reimagining Transportation Policy During and After COVID-19
What permanent changes may result for transportation once the pandemic is over? In a recent Reason Foundation policy study, analyst Randal O’Toole uses federal data sources to quantify potential changes in telecommuting, auto travel, urban transit (whose numbers all interact) as well as estimates of changes in land use, intercity transportation, and freight. Even modest changes in mode share and locational preferences could produce significant changes in transportation.

Louisiana’s First Highway P3 Paves the Way for Others
That’s the assessment by P3 analyst Eugene Gilligan, writing in the Oct. 2 issue of Inframation News. The first project was the Belle Chasse Bridge and Tunnel Replacement, won by a team led by Plenary Americas. The project reached financial close in December 2019, after the Louisiana Department of Transportation and Development worked out modest toll rates for the replacement bridge, in the face of opposition in relatively low-income Plaquemines Parish. Having negotiated a winning deal, Louisiana DOTD has its sights on a much larger P3 for 2021: replacing the aging Calcasieu River Bridge on I-10. It will once again seek a revenue-risk P3 model, under which the project is financed based on projected toll revenue.

Car Sector Comes Roaring Back, says Wall Street Journal
In a front-page story on October 29, Wall Street Journal reporters found that the U.S. auto industry “has bounced back stronger and faster than many expected” Several auto companies reported record profits for the third quarter. The reporters cited hunkered-down consumers being “willing to splurge more on their vehicles and fixing up their homes.” Other factors include very low-interest rates and in some cases government stimulus payments to consumers.

Fitch Expects Most U.S. Toll Roads to Weather the Pandemic
On Oct. 28, Fitch Ratings released a commentary finding that “most U.S. toll roads have enough financial flexibility to weather the global coronavirus pandemic,” assuming economic conditions continue to improve. Since last year’s peer review of U.S. toll roads, Fitch upgraded two and downgraded two others. It also changed the rating outlook on eight systems to negative, but it has now returned the outlook for two of those to stable after they implemented toll rate increases. One of the two that were downgraded is the Miami-Dade Expressway Authority, which is still legally appealing a 2019 state law that would replace its board and curtail its future bonding.

Proposed Federal Law Would Ban Sale of New Petroleum-Fueled Cars
Seeking to emulate California Gov. Gavin Newsome’s regulatory strategy to make non-electric new car sales illegal after 2035, companion bills to do likewise have been introduced in Congress. The bills, while seemingly unlikely to pass in the short-term, would ban non-electric personal vehicle sales as of 2035 and require half of all new-car sales to be electric by 2025. The House sponsor is Rep. Mike Levin (D, CA) and the Senate sponsor is Sen. Jeff Merkley (D, OR). Merkley had introduced a less-drastic bill several years ago that would have ended non-electric vehicle sales by 2040 as part of an economy-wide shift to non-petroleum energy by 2050.

EV Battery Fires Affect Most Makes
Wall Street Journal reporter Ban Foldy reported (Oct. 20) that BMW, Ford, GM, and Hyundai have joined Tesla in having their EVs and hybrids occasionally catch on fire, due to their lithium-ion battery packs. Foldy reports the National Highway Traffic Safety Administration is investigating reported fires in Chevy Bolt vehicles, while Ford has delayed the launch of its next hybrid Escape due to this problem. Hyundai is recalling 77,000 Kona SUVs in response to about a dozen battery fires, and BMW has recalled about 27,000 plug-in hybrids worldwide.

More Agencies Phasing Out Cash Tolls
Manual toll collection is on its way out at the Port Authority of New York & New Jersey’s three major Hudson River crossings. The Holland Tunnel is within two months of going cashless permanently, while all-electronic toll collection for the Lincoln Tunnel and the George Washington Bridge is expected to be ready within 18 months. A similar process is underway nationwide in Japan, with the Transport Ministry announcing plans to replace all remaining cash tolling on its many tollways with all-electronic tolling. Only 10 percent of its customers still pay with cash, but the cost of collection is much higher for cash tolls.

A Century of Fighting Traffic Congestion in Los Angeles
In an unprecedented historical and analytical overview, UCLA’s Martin Wachs and two graduate students have compiled a history of attempts to reduce traffic congestion in Los Angeles. One surprising finding is just about every proposed solution has been tried and failed—including densification, dispersion, rail transit, jobs-housing balance, and continued capacity expansion. The one policy that has only been tried a bit is congestion pricing, which is the underlying message of this history.

Truck Manufacturers Pursuing Hydrogen Fuel Cells
Despite the negative publicity about electric truck start-up Nicola, a growing number of truck producers are investing seriously in hydrogen fuel-cell production, especially for long-distance, over-the road trucks. Daimler, whose U.S. brands are Freightliner and Western Star, has shifted its fuel-cell efforts from cars to trucks; it has also formed a joint venture with Volvo to develop fuel cells for trucks. Both Toyota and Hyundai are also developing hydrogen fuel cell trucks for the North American market. “The bigger and heavier the truck, the more fuel cells seem to be the better solution,” said Hyundai’s director of product strategy to a Wall Street Journal reporter. Enough lithium-ion batteries to power a long-distance big rig would weigh over 25,000 lbs.—far more than the claimed weight of hydrogen fuel tanks and fuel cells.

Alabama Voters Reject New Toll Road
Voters in Baldwin County on Nov. 3rd voted to reject the proposed Baldwin Beach Express toll road project. The $100-million toll-financed project would have linked an existing toll road to I-65, as a faster route to the beach and as a larger hurricane evacuation corridor.

German Truck Tolls Ruled Excessive by European Court of Justice
In a victory for European trucking companies, the European Court of Justice last month ruled that toll charges must not include the cost of policing the highways. The relevant European Union directive requires that toll revenue be used only for infrastructure costs, and policing is not that kind of cost.

Transit Agency Spent $20,000 per “Bike and Ride” Space
The Department of Transportation Inspector General’s office reviewed the Bike and Ride project of the Washington Metro, at the request of a Senate committee. The analysts focused mostly on the East Falls Church and Vienna Metro stations but also reviewed data for the College Park facility, that was already completed before the audit began. The transit agency spent over $5.9 million on the three facilities, and only two of the three have opened after five years of construction. For the total of 304 bike parking spaces planned, the cost works out to nearly $20,000 per space.

Model Suggests Benefits from Mixing AVs and Conventional Vehicles
What will happen to traffic flow as autonomous vehicles start to enter the fleet? A study that modeled this appears in the Journal of Physics A: Mathematical and Theoretical. Amir Goldental and Ido Kanter’s modeling showed that even as few as 5 percent AVs on a multilane freeway can actually improve traffic flow. The key is for small groups of AVs to self-organize into groups that split the traffic flow into controllable clusters. Their model showed up to a 40 percent improvement in traffic flow and speed. The paper is titled, “A Small Number of Self-Organizing Autonomous Vehicles Significantly Increases Traffic Flow.” This research may call into question the idea of creating separate lanes for automated vehicles.

Truck Platooning Technology for over 1,100 Truck Tractors
Freightwaves reported last month that technology company Locomation has announced a purchase order from Wilson Logistics of Springfield, MO. Locomation will equip 1,120 of Wilson’s truck tractors with its Autonomous Relay Convoy technology, starting in early 2022. The Freightwaves article noted that the second and third trucks in a platoon might not need a driver, but its article did not say whether the system to be installed in the Wilson trucks will have that capability.

Hyperloop Test Track to Be Built in West Virginia
Virgin Hyperloop has announced that its $500 million hyperloop certification center and test track will be built on a former coal mine site in West Virginia, near the Maryland border. The test track will be six miles in length—longer than any existing test track, but it’s not clear what top speed can be achieved in that length, considering both acceleration to that speed and subsequent deceleration. Virgin Hyperloop’s existing test track in Nevada is only 1,640 ft. long.

Transit Agencies Have $49 Billion in Unfunded Retirement Liabilities
A recent commentary by Marc Joffe of the Reason Foundation’s Pension Integrity Project reviewed the financial statements of 30 large U.S. transit systems. The resulting table identifies $31 billion in unfunded pension liabilities and another $18 billion in unfunded post-employment benefit liabilities for these transit systems. By far the largest total—$27 billion—belongs to New York City’s Metropolitan Transportation Authority; in second place is the Massachusetts Bay Transportation Authority, at just over $4 billion in unfunded liabilities.

Think Tank Critiques Proposed Cascadia High-Speed Rail
The Washington Policy Center has released a study challenging many of the assumptions made in a Business Case Analysis of the proposed 466-mile high-speed rail system linking Portland, Seattle, and Vancouver. The critiqued report was produced by a consultant for the Washington State DOT. Having observed the HSR debacle in California, I read this critique with interest, and I think it has raised many serious questions. To see for yourself, go here.

Link Correction Re Last Issue’s BRT Overview
A link in the October issue for Randal O’Toole’s valuable comparative assessment of various bus rapid transit (BRT) systems contained a typo. The best correct link is here. Apologies for the error; please try again to access this excellent assessment, “Rapid Bus: Finding the Right Model.”

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Quotable Quotes

“Connecticut should embrace public-private partnerships (P3s) as a means of accelerating these infrastructure projects. Private-sector partners can utilize the ‘design-build-finance-operate-maintain’ model that has been successful in other states like Colorado, Florida, Pennsylvania, Virginia, and Texas. . . . But the P3 concessionaires want a return on their money. Availability payments use revenue streams like taxes, fees, and tolls to compensate the concession company, based on achieving milestone and operational performance standards. In exchange, the P3 concessionaire accepts certain obligations and risks, including construction cost overruns, late completion, and risks related to operations, maintenance, and rehabilitation. Let’s face it: for highway projects, tolls would need to be the primary repayment source. The decision made against tolls last December will have to be revisited.”
—State Rep. Jonathan Steinberg and Michael Imber, “Connecticut Needs Its Own New Deal to Rebuild Our Broken Infrastructure,” The Connecticut Mirror, Oct. 15, 2020

“I think the pushback on managed lanes is bad branding—the labels focus on negatives like tolls instead of positives like speed. . . . [I suggest] the branding ‘MaX Lanes’ instead, standing for Managed eXpress Lanes, but with a tagline of ‘moving the maximum number of people at maximum speed’—an objective which almost nobody disagrees with. That kind of branding could go a long way in helping to sell these kinds of projects. . . . It’s not copyrighted—anyone can use it.”
—Tory Gattis, founding senior fellow, the Urban Reform Institute, email to Robert Poole, Oct. 14, 2020

“Of course, a streetcar isn’t inherently a racist transportation mode. But because they often cost so much, cover such small areas, and carry heavy associations with racist movies from the 1940s, progressive urbanists tend to see trolleys more as glorified theme part rides than as meaningful transit. And they also don’t do much to combat car dependency, cut congestion, or even improve roadway travel speeds.”
—Kea Wilson, “Study: Streetcars Symbolize the Dangers of ‘Colorblind’ Transit Planning,” Streetsblog, Oct. 26, 2020

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The post Surface Transportation News: Challenges to Managed Lanes, Milestone for Self-Driving Cars, and More appeared first on Reason Foundation.

• Hyperloop, yet again
• Traffic recovery aids toll roads
• Diverting highway money to Amtrak?
• Availability payments are debt, per GASB
• Fiscal impacts of automated vehicles
• Survey misrepresents per-mile user fees
• News Notes
• Quotable Quotes

Hyperloop, Yet Again

The big news for hyperloop advocates was last month’s announcement by the U.S. Department of Transportation (DOT) that hyperloop is a type of railroad, and therefore it will be regulated by the Federal Railroad Administration (FRA) and will be eligible for FRA grants and loans. The rationale is apparently that maglev systems had already been accepted as railroads, and since hyperloop uses maglev suspension and propulsion, it, too, is a kind of railroad. “This is a turning point for the industry,” said Virgin Hyperloop One Vice President Ryan Kelly. “It gives confidence to stakehoelders that this is a priority. It is not a pipe dream.”

Shortly before this announcement, I received an email from Ben Cooke, a media relations person for Hyperloop Transportation Technologies (TT), responding to last month’s article on a feasibility study of the Virgin Hyperloop One proposal for a line from Chicago to Pittsburgh. Cooke provided a link to the “Great Lakes Hyperloop Feasibility Study” of Hyperloop TT’s approach for this same project. Cooke’s email suggested that their study addressed the technical feasibility concerns I highlighted last month, based on a report from Lux Research.

Let’s address the unanswered technical questions first.

• The TT study claims that the energy needed for their hyperloop system will be very low, since maglev systems can recover most of their acceleration energy via regenerative braking at the other end of the trip. I was not aware that maglev can do this, but even if it can, there is still the ongoing energy cost of maintaining the near-vacuum in the tubes through which the pods travel. Lux considers both energy costs to be significant.
• There is no mention in either study of the transition from the near-vacuum travel tube and each station, which must be at normal atmospheric pressure before people can enter or leave the pods. What kind of airlocks will be needed, and what are their capital and operating costs?
• The separate express freight pods will have to exit the main line to serve existing freight terminals near airports and Interstates. Has anyone designed the equivalent of railroad switches/turnouts to allow such exits?
• And once again, no evidence is presented that hyperloop can actually achieve speeds of 600 to 750 miles per hour since no one has built a tube anywhere near long enough for a pod to accelerate to that speed and decelerate to a stop at the other end. How many miles long would that have to be?
• And while both the TT and Virgin studies provide estimated capital costs, how they were arrived at is not disclosed. In the TT case, it is basically “trust us.”

As with any proposal for very high-speed ground transportation, the traffic and revenue modeling are critically important. No one can finance a toll road based on its projected revenue without an investment-grade traffic & revenue (T&R) study, many of which I have perused over the years. The TT study assumes that most of its passengers will be former auto drivers in this corridor and that they will choose hyperloop because it is much faster but also because driving the Interstates between Chicago and Pittsburgh will be a lot more expensive than today and far more congested. One key assumption in this is that the price of oil will be $70 per barrel in 2020 and $114 per barrel in 2050. But Brent crude today is around $40 a barrel. Oil producer BP expects oil to average just $55 per barrel from 2021 to 2050. And a recent Economist article projects that “The world has entered an era of low [oil] prices—and no region will be more affected than the Middle East and North Africa. The other key (but unstated) assumption is that there will be no lane additions between now and 2050 on the Indiana Toll Road, the Ohio Turnpike, or the Pennsylvania Turnpike.” But those toll roads exist to provide a high level of service to their toll-paying customers, so adding lanes as necessary is quite likely.

On a positive note, I think the study’s analysis of the potential for express package service is plausible, assuming the capital and operating costs are in the ballpark the study comes up with. But their freight demand estimates also assume congested turnpikes along the Chicago to Pittsburgh corridor.

The benefit/cost analysis bases its user benefits on value-of-time figures that come from stated preference surveys, which is seldom reliable enough for an investment-grade T&R study. There is also an assumption that the mere presence of hyperloop in the corridor will lead to huge economic growth in the Midwest region bisected by the corridor. If there is evidence of this effect from high-speed rail service in Europe or Japan, that would provide at least a bit of credibility for such benefits. I don’t know of any peer-reviewed studies documenting such development being stimulated by high-speed rail.

Overall, while this study relies on more extensive modeling than was apparent for the Virgin study reviewed last month, it fails to address a number of technical feasibility issues, whose solutions could significantly increase the required investment from the estimated $24-30 billion capital cost. Using those capital costs, and estimated revenue from what is likely a significantly exaggerated T&R estimate, the net present value of user benefits divided by the NPV of all costs is positive at a 3% discount rate but barely break-even at a more commercial 7% discount rate. Only by adding in many billions in questionable environmental and resource benefits can higher B/C ratios be achieved.

My verdict: The case is far from proven, but it may be a tempting target for heavy subsidies from anti-highway politicians, especially now that DOT has blessed the concept in principle.

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Traffic Recovery Aiding U.S. Toll Roads

A new study from Streetlight Data and Boston Consulting Group finds that vehicle miles of travel (VMT) are recovering nicely from the COVID-19 pandemic. Their late-July finding was that VMT in rural counties had recovered to pre-COVID levels, while VMT in urban counties averaged 90% of pre-pandemic levels. Of course, there are variations around the country, but these are national averages. Also positive is that federal highway user tax receipts in July were actually 5% higher than in July 2019.

That is good news for state DOTs dependent on fuel tax revenues, but it is especially important for tolled facilities that have regular debt service payments to make. A new, retrospective report from rating agency Moody’s found that the toll roads which handle mostly passenger vehicles were hardest hit, with a 41% decrease in VMT in April. By contrast, toll roads that serve major truck routes did much better.

Last month, Fitch Ratings released coronavirus stress test reports on three groups of toll facilities: large network toll roads, small network toll roads, and managed lanes. These reports cover only toll facilities whose bonds are rated by Fitch, but they still provide a good snapshot. Worst hit were the small networks, such as the Dulles Greenway and Elizabeth River Crossings in Virginia and the San Joaquin Toll Corridor in Orange County, CA. But even with the several stress tests applied by Fitch analysts, of the 23 small networks in this report, 12 retained A+ or A ratings with stable outlooks; the others were nearly all still investment-grade with BBB+ or BBB ratings, with either stable or negative outlooks; only the Dulles Greenway scored BB- with a negative outlook. Large toll road networks did even better. Of the 10 turnpikes, all but one had some form of A rating (AA, AA-, A+, or A) except the Indiana Toll Road at BBB; it was the only one with a negative outlook. And of the nine large expressway and bridge systems, the picture was similar, with mostly A category ratings and a mix of stable and negative outlooks; the lowest-ranked was the Miami-Dade Expressway Authority at BBB+ but a negative outlook likely due to ongoing political attacks on its existence.

Managed Lanes, as I expected, have mostly BBB ratings, despite the known volatility in traffic during recessions. Highest-rated, as usual, is the 91 Express Lanes in Orange County, rated A+ with a stable outlook. Of the 13 managed lane facilities analyzed, one is rated BBB+ (91 Express in Riverside County), five are BBB, and the remainder are rated BBB-. Ten of the 13 have Stable outlooks, one has a negative outlook (SH 288 near Houston), and one is still under review (Colorado HPTE). The key to these results, despite known revenue volatility, is prudent financial management. Most of these managed lane enterprises have debt service reserve accounts large enough to cover 12 months of debt service, and some have additional backstops.

In another positive sign for the toll industry, the E-470 Public Highway Authority in Colorado in June refinanced $250 million worth of revenue bonds to take advantage of today’s lower interest rates.  The new bonds were rated A by Standard & Poors and A2 by Moody’s.

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Diverting Highway Trust Fund Money to Amtrak?
By Baruch Feigenbaum

When Congress passed the National Interstate and Defense Highways Act of 1956 it created a dedicated users-pay/users benefit revenue source—the gas tax. In this system, those who use the highways pay the full cost, and the user-taxes paid are proportional to use.

Policymakers knew that if highways had to compete with priorities like education and health care, securing the appropriations needed to construct the Interstate system would likely have taken twice as long. They also knew that other interests would want to tap this revenue, so they included a lockbox to ensure gas tax revenue was dedicated to the Interstate system. Yet, starting in 1968 Congress found a way to divert gas tax revenue to non-roadway purposes. Today between 20-and-30% of all federal highway user tax revenue is diverted to other purposes.

At first, these diversions funded transit, including buses, which travel on highways and are used by lower-income residents. But as the years went by, these diversions funded many types of wants: rail projects, environmental desires, economic development, transportation museums, sidewalks, and recreational trails. The justifications for diverting gas tax revenue became weaker and weaker.

Fast forward to 2020 and passenger rail advocates sensed an opening. If other non-highway users are receiving Highway Trust Fund money, why can’t Amtrak? And why ask the mostly high-income users of intercity rail transport to pay for their full Amtrak costs when lower-income drivers paying gas taxes could subsidize them?

Sen. Richard Blumenthal (D, CT) recently introduced Senate Bill 4187 titled the Intercity Passenger Rail Trust Fund. The bill would divert 50% of average general fund transfers and leaking underground storage tank (LUST) revenues to passenger rail. The bill justifies this new diversion from the Highway Trust Fund by listing eight “findings”:

1. Predictable funding is needed;
2. Rail is dependent on annual appropriations;
3. Amtrak’s ridership is growing;
4. Amtrak is effective compared to air, bus, and automobile;
5. Passenger rail offers safety and environmental advantages;
6. The network has capacity needs;
7. Intercity rail will become more popular over time; and,
8. The county needs an Amtrak trust fund.

Before any agency, Amtrak included, asks for more money, it should make sure it is operating as efficiently as possible. Former Amtrak CEO Richard Anderson tried to make needed reforms. He changed Amtrak’s policy to substitute arbitration for costly lawsuits, revamped food/beverage services, and proposed eliminating the worst-performing routes. How was he rewarded? He was forced out by unions and “passenger advocates” who didn’t want to make the changes needed for Amtrak to operate like a business, even though Amtrak is set up as a corporation. Sen. Blumenthal was one of Anderson’s biggest critics, especially on arbitration in lieu of lawsuits. So on one hand, Blumenthal wants better service from Amtrak, but on the other, he’s increased Amtrak’s costs. Increasing costs doesn’t lead to better service; it leads to service cutbacks.

Let’s assume that Amtrak is somehow able to make needed reforms to reduce costs, but more revenue is still needed; that does not make the eight “findings” valid. While predictable funding (finding #1) is helpful, Amtrak passengers should provide this stream by paying for it, as users do in every other intercity transport mode.  Roadway, intercity bus, and aviation subsidies are a rounding error compared to Amtrak’s $1.9 billion in annual subsidies.

It is true that Amtrak is dependent on annual appropriations (#2 and #8 in the findings), and a trust fund would be an improvement, but Congress could disburse all Amtrak fare revenue into a trust fund, similar to trust funds for highways and aviation.

Over the past few years, Amtrak’s ridership has been growing (#3 and #7). That occurred because Anderson ran Amtrak like a business, building on his experience as CEO of Delta Air Lines. On-time departures improved, technology was modernized, and many train interiors were modernized. Amtrak also started offering sales and promotions. It’s unclear if that will continue under new leadership. But Amtrak’s 32.5 million passengers pale in comparison to the 925 million airline passengers and the billions of intercity personal vehicle trips. And given the challenge of coronavirus-related social distancing measures needed on trains in the short-term, Amtrak ridership is likely to be significantly depressed for three years potentially.

Passenger rail can offer safety benefits compared to traveling by car (#5 in the senator’s findings), but rail is significantly less safe than aviation. There have been several high-profile Amtrak crashes in recent years. And looking at a year like 2017, Amtrak had 117 fatalities while commercial aviation had zero. Amtrak may have environmental benefits if the trains are powered by electricity not generated by coal, the trains are full of passengers, and it is being compared to a car or plane that is an older model. But if the train is half empty and electricity is generated by coal and the car or plane it is being compared to is newer, or the car is a hybrid or electric vehicle, the potential benefits change substantially.

There are some parts of the railroad network that have capacity problems (#6), including the Northeast Corridor. But Amtrak could better serve those areas if it eliminated its money-losing, low-ridership, long-distance trains and focused on its most popular corridors. Aviation and intercity buses redeploy their assets from low-demand areas to high-demand corridors. Why can’t Amtrak do the same?

I’m not sure who determined Amtrak is effective (#4 in the report). But providing large subsidies to a mode of transportation that carries relatively few passengers is not effective from a taxpayer perspective.

The bill’s revenue diversion is high enough that all other beneficiaries of Highway Trust Fund spending (auto groups, the trucking industry, urban transit, the construction industry, etc.) would likely see less funding and are likely to fight it. The highway community has never liked diversions, but even with links between transit and Amtrak in some locations, it is difficult to see the transit industry supporting diverting money from urban transit, for example, for this. It’s unclear if Blumenthal views the bill as a serious proposal or a negotiating tactic, but since other Amtrak trust fund conversations haven’t advanced in the last 20 years, the bill faces an uphill climb.

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Availability Payments Are Debt, Rules GASB

Several months ago the Government Accounting Standards Board (GASB) issued a new policy document. GASB Statement No. 94 is titled “Public-Private Partnerships and Availability Payment Arrangements.” It makes the long-overdue judgment that availability payments are debts that should be reported as such on public agency balance sheets. The new provision goes into effect in June 2022.

Barney Allison of the Nossaman law firm (a long-time expert on public-private partnerships (P3s) told Inframation News, “Public agencies may want to consider the rule as guidance, depending on how they’ve booked availability payment (AP) deals so far,” in addition to following it for all future AP concessions. In transportation, Florida has used AP concessions for three major highway projects: the Port of Miami Tunnel, the I-595 reconstruction, and the I-4 Ultimate reconstruction in Orlando. Georgia DOT plans to use an AP concession for its forthcoming project to add express toll lanes to SR 400. And Maryland has an AP concession for its troubled Purple Line light rail project.

In a 2017 Reason Foundation policy study, I looked into the differences between Design Build Finance Operate Maintain (DBFOM) concessions funded via availability payments and those funded by user revenues. I suggested six cases where policy considerations might make an AP concession the better choice but also discussed limitations and shortcomings of this method compared with revenue-risk (RR) concessions—such as less risk transfer to the concession company, weaker safeguards against projects with low benefit/cost ratios, the lack of a customer/provider relationship and the incentives that creates for better service, and (the big one) not bringing much-needed new funding into the highway sector.

My research for that study found that the rating agencies already considered AP obligations to be debt because the government retains the payment risk and is counted on to resort to taxpayers in case of shortfalls in meeting debt service. I already knew that Texas and Virginia policy rejects using AP concessions—I presumed mainly because they have large highway improvement needs but limited resources to commit long-term to availability payments. Florida and North Carolina, I found, were already booking AP obligations as debt, and Florida has a statute that limits the annual amount of availability payments to 15% of available funding in the state’s transportation trust fund. North Carolina also considered AP obligations as debt, but as of 2017 had not entered into any AP concessions. And I reported a 2014 statement from Indiana DOT that it might not enter into any further AP concessions, which already had to be counted as debt on its balance sheet.

It’s unfortunate that some public officials have seemed to regard public-private partnerships done via availability payments as some kind of free money, especially if they could avoid counting them as debt on their balance sheets. That practice will soon be recognized as in violation of proper government accounting standards, as well it should be.

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The Fiscal Impact of Automated Vehicles: Cause for Concern or Blessing in Disguise?
By Marc Scribner

Selika Talbott, a former state and federal motor vehicle regulator and current lecturer at American University, recently wrote an article discussing potential impacts of automated vehicles (AVs) on government budgets (“The Political Economy Of Autonomous Vehicles,” Forbes.com, 23 June 2020). For various levels of government, Talbott writes, “It is possible that the wide-spread use of autonomous vehicles will have an impact on the amount of dollars available to replenish their highway trust fund.”

Talbott is right that AVs are likely to present challenges to traditional revenue streams if government officials do not adjust. The good news is governments seeking stable revenue have a very strong incentive to reexamine taxes and fees that may not be compatible with an AV future. They also have plenty of time to experiment with a variety of potential revenue sources.

For example, Talbott points to Texas’ motor vehicle registration fee revenue and its importance to infrastructure funding, which may decrease if taxi-style AVs become popular and residents forgo possession of personal automobiles. This may not occur, but if it does, it likely will not create serious long-run fiscal problems.

According to the latest annual financial report from the Texas Department of Transportation (TxDOT), it received $1.7 billion during the previous year in vehicle registration fees and certificate of title fees. Interestingly, it received approximately the same amount of revenue from taxes on oil and gas production, which could cause similar fiscal anxieties as the transition away from fossil fuels unfolds.

But this just scratches the surface. These two major Texas transportation revenue sources combined are outweighed by a variety of other revenue sources, the largest other two being from fuel taxes and sales and use taxes that raised $2.7 billion and $4.1 billion, respectively, for TxDOT in Fiscal Year 2019.

The current revenue picture of TxDOT also reflects very recent voter-approved changes to transportation funding in the state, suggesting that government tax and fee collection is adaptable to AVs, electric vehicles, and other transformative technologies and trends that may be heading our way.

In 2014, 80% of Texas voters supported Proposition 1, a constitutional amendment to direct up to half of the state’s oil and gas production revenue previously destined for its Economic Stabilization Fund to highways instead. A year later, 83% of voters supported Proposition 7, another constitutional amendment to transfer billions of dollars in sales and use tax revenue to the State Highway Fund each year. These may not be ideal transportation revenue sources given their dubious connection to the use of public-purpose transportation networks, but they were without a doubt very large shifts in funding supported by supermajorities of Texas voters.

Talbott also highlights parking tax revenue in Illinois and traffic enforcement revenue in Washington, D.C., as other areas of potential concern. What happens when AVs don’t park as frequently—or park where they frequent—or disobey traffic laws?

On the former, AVs may not park the way conventional personal cars do today, but they will still park when demand for their services is low. AVs when used in a taxi-style service also offer promise for road pricing and curb pricing, fees for currently unpriced infrastructure services that could be bundled into full fares in a manner that will likely be more palatable to consumers who would today face separate and more complicated transactions.

On the latter, excessive reliance on revenue from traffic infraction fines can create perverse incentives for law enforcement to engage in predatory and sometimes discriminatory behavior. Talbott in a subsequent piece highlights the potential of AVs to reduce socioeconomic discrimination and disparities in transportation access, but ignores the negative impact that rapacious speed-trap cities, such as Ferguson, Missouri, have had on the lives of low-income and minority residents. Viewing traffic fines as a revenue source to maximize rather than as deterrents to minimize traffic violations is a pervasive problem in America that should be addressed, not a system that should be preserved.

The fiscal impact of automated vehicles does present some challenges in the long-run, but it also presents opportunities to improve inefficiencies and inequities that have long existed in transportation finance. AVs offer the potential to move toward direct user charging for infrastructure services and away from the traditional revenue collection methods that often entail disparate socio-economic impacts.

Government officials have many revenue tools at their disposable and should make careful decisions based on empirical evidence as it materializes. Fortunately, given the current pace of automated vehicle development and deployment, they appear to have plenty of time to get it right.

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Survey Disadvantages Mileage-Based User Fees
By Baruch Feigenbaum

In June, the Mineta Transportation Institute conducted a survey to determine taxpayers’ preferences for various possible federal transportation revenue sources.  Officially titled “What Do Americans Think About Federal Tax Options to Support Transportation?” it is available here. Researchers Asha Weinstein Agrawahl and Hilary Nixon have been conducting a similar survey for the past 11 years.

Before asking about respondents’ preferences on federal gas taxes and mileage-based user fees (MBUFs), the study asked respondents about their top transportation priorities. The 15-item list included new roadway construction, new transit construction, new sidewalks, new cycling lanes, maintenance of existing systems, safety, electric vehicle incentives, and transportation technology. By far the top two categories, cited by 37% and 33% of respondents, respectively, were maintaining local streets and roadways as well as maintaining highways. The third most popular option (24%) was using technology to reduce congestion. At the bottom of the list were building/improving bike lanes (11%) and more charging stations for EVs (8%). Policymakers should note that while the electric vehicle and cycling communities are strong lobbyists, most Americans do not think those “wants” are priorities.

The survey also asked about the quality of roadways. Similar to the findings of Reason’s Annual Highway Report, 75% of respondents rated Interstate and freeway quality as either somewhat or very good. Other infrastructure including local streets and roads, bicycle and pedestrian facilities, and public transit were rated somewhat or very good by 63%, 58%, and 55% of respondents respectively.

According to the survey, support for raising the gas tax exists for all six reasons presented. Seventy-five percent supported raising the gas tax. But I think some of this might be due to the way the survey was framed and choices were offered. Even for folks who are willing to pay more in taxes, in the real world, they must choose between education, recreation, transportation, and more. In this type of survey, respondents were focused on transportation—without real-world tradeoffs—so they are likely more inclined to support funding increases. But when confronted with trade-offs and increases to their own taxes, people tend to choose priorities other than transportation and vote against tax increases, which is part of the reason the federal gas tax has not been increased in 27 years.

Not surprisingly survey respondents who drove the least, supported raising the gas tax the most. Support for increasing gas taxes in the survey is also highest among Democrats.

Only 45% of respondents supported replacing the gas tax with a mileage-based user feee, although more than 50% supported an MBUF for trucks and other commercial vehicles. Respondents preferred a monthly or quarterly MBUF invoice rather than an annual payment. Some preferred to pay an MBUF at the gasoline pump, but with an increasing number of electric vehicles, that may not be a realistic option.

The biggest problem with the survey is that it does not provide an apples-to-apples comparison between the gas tax and MBUFs. Respondents were given a choice of a 10-cent gas tax increase leading to a 28.4-cent total gas tax (the 18.4-cent tax and a 10-cents increase) or converting from the current federal gas tax to an MBUF of one cent per mile. But a one-cent per mile MBUF is equivalent to a 19.0-cent gas tax. So drivers would, on average, pay almost 50 percent more under the increased gas tax than a mileage-based user fee. Perhaps study authors are not counting pickup trucks, or are using California’s fuel efficiency instead of the nation’s average efficiency, but a better comparison would be comparing the one-cent MBUF to today’s 18.4-cent gas tax.

On the other hand, while the survey asks about six different gas tax purposes (including the base case, maintaining streets/roads/highways, reducing accidents/improving safety, reducing congestion, reducing the transportation effects of climate change, and reducing transportation-related greenhouse gas emissions), it includes only two MBUF options. With the six gas tax options, there’s something for every group to like. Swing voters would be more inclined to support an increase. But with MBUFs, there are only two options in the survey, a rate that varies with greenhouse gas emissions and a flat one-cent per mile fee, making swing voters less likely to support an MBUF.

Further, the survey suggests that all MBUF options involve using GPS in peoples’ cars, which may put people off. Yet most of the MBUF state pilots and Oregon’s permanent MBUF provide one or two low-cost, low-tech options. Some states offer the option of an annual odometer reading while others allow drivers to pay a flat fee, equivalent to what they would pay in the gas tax if they drove 20,000 miles per year. The end goal of some MBUF advocates may be a GPS system, but the first step is getting drivers familiar with a non-gas tax option. Overall, I’d suggest the design of the survey questions likely underestimated public support for MBUFs.

Finally, some demographic groups were over-represented in the sample while others were under-represented, and this may have skewed some results. Northeastern residents, whites, people with a college education, and 35-to-44-year-olds were over-represented. The large oversampling of people with college degrees (29% college degree, 16% graduate degree — 45% of people in the survey) compared to Census numbers showing that number should be around 35% probably partially explains the openness to higher taxes. Respondents with less than a college degree are less likely to support new/increased taxes, so this survey may have overstated support for new taxes.

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News Notes

Correction re Traffic Apocalypse Article
Last month’s article on a computer model estimating changes in road traffic after the COVID-19 pandemic brought a response from co-author Dan Work of Vanderbilt University. He explained two aspects of the online calculator that I had misinterpreted. First, setting the slider for telecommuters at 10% does not increase the fraction of telecommuters by 10% (which would be from a current 5% of all commutes to 5.5%) but rather “pulls 10% of the SOVs and carpoolers off the road to telecommute (a large number of people).” Second, the travel times on the vertical axis are the one-way travel times, rather than the change in travel times. He assured me that the descriptions of how the calculator works would be revised to make these points clear.

Maryland Managed Lanes Project’s New Milestones
Last month Maryland DOT announced the four teams shortlisted for Phase 1 of its $9 billion plan to add priced express lanes to the I-495 Beltway and I-270. The teams are led by Itinera Infrastructure, Transurban/Macquarie, Cintra/Meridiam, and ACS. MDOT also released the Draft Environmental Impact Study, a 350-page report with 18,000 pages of appendices. The normal comment period is 90 days, but various groups have requested this be increased to 120 days, given the length of the documents.

Infrastructure Funds Raised $56.8 Billion in First Half 2020
Infrastructure Investor reported that infrastructure investment funds raised a record $56.8 billion in the first half of this year. These funds raise money from limited partners, including insurance companies and public pension funds, to invest as equity in revenue-producing infrastructure. Many such funds have a 10-year life, but others are open-ended and focused more on long-term investment. The total raised by such funds in 2019 was $97.3 billion.

Privately Financed Tunnel Rehab in Canada
A consortium of Vinci and Pomerlau has won a design/build/finance concession to rehabilitate the 1.5 km Louis Hippolyte Lafontaine Tunnel under the St. Lawrence River in Montreal. The estimated investment is $852 million. The project includes widening the A20 motorway which leads to the tunnel plus upgrading an interchange and 25 kilometers of pavement along A20 and A25. The project is financed via equity and bank loans.

FHWA Awards Truck Platooning Research Contract to PATH
California Partners for Advanced Transportation Technology (PATH) of the University of California—Berkeley is the winner of FHWA’s Phase 2 study of commercial vehicle platooning. The research questions to be addressed include human factors impact on truck drivers in long-haul platoons, the behavior of personal vehicle drivers on roads with truck platooning, quantifying the impacts of different gap distances in platoons, and quantifying the benefits of platooning to fleet owners.

More Tunnels Requested by Las Vegas Casinos
Elon Musk’s Boring Company has finished boring the two tunnels it was contracted to build at the Las Vegas Convention Center. Before they are even ready for testing, casino owners Wynn Resorts and Resorts World have filed applications for permits with the county government for their own Boring Company tunnels. The new ones would charge passengers for their use, a two-minute ride compared with a one-mile walk. The convention center tunnels were paid for by that organization and will not charge users.

New York State Announces $750 Million EV Charging Stations Plan
New York Gov. Andrew Cuomo last month announced a plan under which 50,000 electric vehicle charging stations will be built, mostly by electric utilities in the state. About $49 million of the $750 million total will come from the 2017 settlement with Volkswagen (over its diesel emissions scandal). The rest will come from the utilities, which will benefit by charging for the electricity they sell to EV owners. A new study from Boston Consulting Group estimates that EVs will account for one-third of global new-vehicle sales by 2025, up from about 8% today globally, and just 2% last year in the United States. BCG’s projection includes hybrids as well as fully electric vehicles.

A Tale of Two Turnpikes
The Pennsylvania Turnpike is going all-electronic (i.e., cashless) as a way to increase vehicle throughput, avoid bottlenecks at toll plazas, and reduce the cost of collecting tolls. And last month it announced another smart move: increasing the rate charged to non-E-ZPass drivers because it costs far more to collect tolls billed to drivers based on license-plate imaging. Those drivers will now pay a 45% surcharge on the basic transponder toll rate. By contrast, the Ohio Turnpike proudly announced that it is retaining cash and credit card transactions, which account for 35% of its total transactions. Believe it or not, a spokesman for the agency called retaining the costly non-electronic options a benefit: “The bonus is that also, toll collectors will continue to have work at the Ohio Turnpike.”

A Source of Racial Disparity in COVID-19 Deaths: Transit
In a new working paper from the National Bureau of Economic Research, economist John McLaren of the University of Virginia reports on an empirical study of factors linked to significantly higher COVID-19 death rates among various ethnic groups. Using county-level data from 3,140 U.S. counties, he finds: “For all minorities, the minority’s population share is strongly correlated with total COVID-19 deaths. For Hispanic/Latino and Asian minorities those correlations are fragile, and largely disappear when we control for education, occupation, and commuting patterns. For African Americans and First Nations populations, the correlations are very robust. Surprisingly, for these two groups the racial disparity does not seem to be due to differences in income, poverty rates, education, occupational mix, or even access to healthcare insurance. A significant portion of the disparity can, however, be sourced to the use of public transit.”

California-Nevada Higher-Speed Train Wins Additional Bonding
At a July 24 meeting, the Nevada Board of Finance approved $200 million worth of tax-exempt Private Activity Bonds (PABs) for the Xpress West rail project between Victorville, CA and Las Vegas. Virgin Trains USA also has $850 million of PABs authorized by the US DOT and $2.54 billion authorized by the California Infrastructure and Economic Development Bank for the project, whose estimated cost is $4.8 billion.

Texas Central Designated as a Railroad by Surface Transportation Board
The company celebrated a decision by the Surface Transportation Board (STB) that it qualifies as a railroad under federal jurisdiction, even though it is purely intrastate (Dallas to Houston). The justification was that the company has arranged a joint ticketing arrangement with Amtrak. Being legally a railroad enables it to use eminent domain to acquire properties for its right of way. But it also means the company must go through a detailed STB review of its finances.

Dutch Study Finds P3 Benefits
An empirical study by the Dutch infrastructure ministry (Rijkswaterstaat) compared the cost and timely completion data for 65 infrastructure projects, of which 56 were procured traditionally and nine were procured as design/build/finance/maintain P3s. As Eoin Reeves reports in the July issue of Public Works Financing, the P3 projects had an average cost overrun of 9% while the traditional ones averaged 24%. On timely completion, the P3 projects averaged 12% less time than scheduled, compared with about 1% of delay for the traditional projects—but on this metric the differences were not statistically significant. The paper presenting the results is Verweij, S. and van Meerkerk, I. (2020), “Do Public-Private Partnerships Achieve Better Time and Cost Performance than Regular Contracts?” Public Money & Management, DOI: 10.1080/09540962.2020.1752022.

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Quotable Quotes

“The baleful interaction between pandemic fiscal policy and the political economy of central banking will impose an enormous hidden cost on our economy for years. Ultralow interest rates aren’t a free lunch. They stimulate wasteful government spending and fruitless private investment at the expense of genuine investment and innovation to boost productivity. After a point—which we probably crossed some time ago—low rates weigh on growth rather than encourage it.”
–Joseph C. Stromberg, “The COVID Fiscal Crisis Is About Debt and Taxes,” The Wall Street Journal, July 15, 2020

“The gig is up! Yes, most of the [P3] industry is likely in agreement that accounting for [availability payments] as anything other than a long-term obligation never made very much sense. Every ratings agency has passed them through to the balance sheet in some fashion for years. It is generally unfortunate when elected leaders begin considering an AP P3 because of accounting rules rather than risk management and incentive alignment. Like most other accounting gimmicks, reality eventually catches up, and the fact is that APs are, subject to contractor performance, a long-term commitment.”
–Michael Bennon, “GASB 94 Revelation—P3s Not Free Money,” Public Works Financing, June 2020

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The post Surface Transportation News: Diverting Gas Taxes to Amtrak, Toll Road Traffic Recovering, Hyperloop and More appeared first on Reason Foundation.

• Are we headed for a traffic apocalypse?
• A closer look at hyperloop feasibility
• Electric trucks’ infrastructure needs
• Concerned scientists vs. ride-hailing
• How many crashes will AVs eliminate?
• More states testing per-mile charges
• Upcoming Transportation Events
• News Notes
• Quotable Quotes

Are We Headed for a Traffic Apocalypse?

As car travel trended upward in May, we began to see scary headlines, quoting various transportation experts predicting that once the coronavirus pandemic is over, we may see much worse congestion on urban roadways due to many people changing how they commute. Perhaps the most notable paper attempting to quantify this is “Impacts on COVID-19 Mode Shift on Road Traffic,” by Ph.D. candidate Yue Hu and professors from Cornell and Vanderbilt. They built a model and crunched numbers for 100 metro areas to show what might happen due to changes in travel choices, such as:

• Shifting from transit to driving alone (SOV—single occupancy vehicle)‏
• Shifting from carpools to SOV
• Increasing work at home (telecommuting).

The paper uses a widely accepted traffic model (the BPR model) and predicts very large increases in congestion and travel time for most metro areas. In addition, the authors have provided a handy online calculator that enables you to select any of the hundred metro areas and use sliders to set different levels of possible shifts in the above commuting behaviors.

For context, here are the latest journey-to-work data for 2018, which represent the status-quo ante:

These are national averages, and apart from a handful of metro areas that still have a significant fraction of jobs in the historic central business district and lots of transit (New York, Chicago, San Francisco, and a few others), most metro areas have smaller transit and carpool shares than the national averages (which include the handful of transit-intensive metro areas).

When you play with the online calculator, you will be surprised to see that fairly large changes in the adjustable variables don’t seem to have much impact. For example, I selected Houston, a very high-auto, low-transit metro area, and selected various combinations, as follows:

As you can see, the model appears to have a built-in bias toward increased congestion. I think this is because the researchers confused percent increase and percentage point increases. Both telecommuting and transit are small fractions of commuting, so what is important is not their percentage change, but the percentage point changes. Many telecommuting experts suggest that it is likely to at least double, from 5.3% of the commute to 10.6%—a 100% increase. But the sliders on the model allow telecommuting to increase only up to 24%, not 100% or potentially more, given that one-third of all jobs could be performed remotely full-time. And most full-time telecommuters are (and will be) college-educated professionals, as opposed to service workers or skilled tradespeople. Those professionals overwhelmingly commute either by car (SOV) or rail transit (where available), so mostly by SOV. Thus, a mere doubling of telecommuting’s mode share in a metro area would, ceteris paribus, shift up to five percentage points from SOV to telecommute—i.e., from the current SOV average of 76.3% to 71.3%.

Needless to say, the freed-up space on freeways would attract some traffic back into those lanes. But how much of that would be from transit?

If 10% of transit riders switched to SOV, that would add only 0.5 percentage points to the SOV mode share. And if 10% of carpoolers switched to SOV, that would add 0.9 percentage points to SOV’s mode share. It’s hard to see massive increases in congestion from that.

I think the modelers of this paper owe readers an explanation of why they grossly under-estimated the likely large impact of increased telecommuting on traffic congestion. It looks to me that predictions of a traffic apocalypse are quite unlikely.

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A Closer Look at Hyperloop Feasibility

Hyperloop—passenger and cargo pods whizzing between cities in near-vacuum tubes at more than 600 miles per hour—is an exciting transportation concept. But as a degreed engineer with a lot of background in economics, I have two basic questions:

Is it hyperloop technically feasible today and would it be cost-effective (e.g., commercially-viable, or at least having benefits greater than costs)?

The answer to the first question is, potentially, yes. We know how to make tubes with very low air pressure, and magnetic levitation and propulsion have been demonstrated (though not commercially), so something resembling hyperloop is possible in principle. Whether it is ready to be commercialized is a different question.

Recently, a company called Lux Research produced a research report called “Analyzing the Technical Barriers to Realizing the Hyperloop.” Their team analyzed global patent filings of hyperloop startup companies worldwide. Their findings identify two key technical challenges: to minimize leakage of air into the tube (which requires ongoing energy to run the pumps to maintain the near-vacuum) and to come up with a cost-effective tube and support structure design. The study reviews some of the trade-offs involved, on which the startups are presumably working.

The report also points out that none of the companies has actually demonstrated the kinds of high speeds they claim their systems will operate at—often stated as 600 mph, but sometimes as much as 750 mph. That’s because none of them have built and operated a tube anywhere near long enough to get a pod up to such speeds. Among their conclusions is: “A test track long enough to allow pods to reach maximum speeds and able to test tube pressures down to tens of Pa would allow for validation of the concept and refining the design of key subsystems.”

Because of the likely capital and operating costs of hyperloop, Lux Research estimates that it will operate at “a cost premium compared to high-speed rail.” And they opine that “The issue of high costs is the most likely reason hyperloop will fail.”

With this background in mind, I read a “2020 Hyperloop Feasibility Study” produced for the Mid-Ohio Regional Planning Commission. They contracted with AECOM to analyze corridor alternatives and the economic benefits of a hyperloop from Chicago to Pittsburgh (about 460 road miles). The corridor analysis required right of way that could handle 600 mph service, which ended up using some existing rail right of way (ROW) and some highway ROW. No cost estimates were provided for ROW acquisition—or for the infrastructure itself. That should have been a clue to what followed, the “economic benefits analysis.”

Using established U.S. Department of Transportation (DOT) benefit/cost analysis methodology, AECOM’s 38-year assessment (8 years construction followed by 30 years of operation) estimated $19.1 billion in benefits, using a 3% discount rate. Of course they also carried out a non-standard benefits analysis (assumptions and discount rate not stated) which claimed to find “$300 billion in wider economic benefits.”

Since no details are provided on the source of the $300 billion figure, I reviewed the explanation of the analysis conducted via DOT guidelines. Here are the categories:

So the first problem is that the numbers don’t total the claimed $19.1 billion.

Second, the travel time and operating cost savings “for” the commercial truck industry are actually the result of its calculated loss of mode share to freight carried on hyperloop instead of trucks ($336 million of the travel time and operating cost savings); I don’t think the trucking industry will consider those economic benefits.

The cargo diverted to hyperloop is stated as time-sensitive freight such as electronics, pharmaceuticals, and meat/seafood. The study’s graph shows such freight (carried in little passenger-size pods, not standard 40-foot shipping containers) as rising from 40 million tons in 2030 to over 80 million tons in 2059—but hedges this by stating it as “freight capacity,” not actual projected freight traffic.

The vast majority of the travel time/operating cost savings comes from trips diverted from driving and air travel, based on the assumption of much faster travel time and “the affordability of hyperloop.” That is directly contrary to the Lux Research estimate that hyperloop will likely operate at a cost premium to high-speed rail.

But the most telling problem with the estimate of the benefits is the $11.1 billion “state of good repair.” This is defined as “the residual value of the infrastructure” after 30 years, at a 3% discount rate. Using standard interest tables and assuming depreciation at 3% per year, my calculation shows the estimated initial cost of the infrastructure must be $26.9 billion. That cost is much greater than the alleged benefits, whether $18 or $19 billion.

From reading both studies, the clear message is: Hyperloop is not ready for prime time.

By the way, the Lux researchers agree. They think the earliest date for any hyperloop system to be ready to begin operations is 2040.

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Collision Ahead for Electric Trucks and Infrastructure

In May the California Air Resources Board unveiled its Advanced Clean Truck Rule, under which a growing percentage of new truck sales, starting in 2024, must be electric powered. The fractions ramp up over time, until in 2035, 55% of new light trucks, 75% of new heavy trucks, and 40% of tractor-trailers must be all-electric. This was music to the ears of electric-truck companies Tesla and Nikola, and seemed acceptable to the legacy truck producers, all of which have electric prototypes in operation. CARB estimates that by 2035 there will be 300,000 electric trucks on the road in California (about 15% of the total fleet).

The unanswered question for long-haul over-the-road electric trucks is: Where will they recharge (and how long will it take)?

Two recent studies have attempted to answer the first of those questions. The National Center for Sustainable Transportation at the University of California—Davis released a 52-page report in April suggesting that highway rest areas are an ideal location for vehicle charging. The study, which looked into charging for both personal vehicles and commercial trucks, focused on rest areas “because they are situated conveniently at locations alongside highways that facilitate long-distance or intercity travel.” Its modeling focused on personal EVs and sought to model the increased electricity demand based on projected EV penetration by 2050.

The other study, released in June, was more narrowly focused on trucks, and used the multi-state (CA, OR, WA) I-5 corridor. The “West Coast Clean Transit Corridor Initiative Study” was carried out on behalf of electric utilities in the three states. It mapped out locations at 50-mile intervals the length of north-south I-5, with 27 total charging sites. The study also included charging locations along I-8, I-10, I-80, I-210, and I-710 in California, I-84 in Oregon, and I-90 in Washington.

Since the second study focuses on trucks and almost entirely on Interstates, the potential policy collision is between the desire to provide convenient charging sites “along” major Interstate truck routes and the 1956 federal ban on any commercial services at “Interstate Rest Areas.” That ban is mentioned on page 45 of the UC Davis study but is misinterpreted as a mere regulation. Alas, it is embedded in the statute that created the federal program to fund the creation of the Interstate highway system. Hence, it can only be changed by Congress, not by FHWA.

Of course, if the electricity were to be given away, rather than being sold to motorists and truckers, that would not be a “commercial” transaction. But I cannot imagine that the nine utilities which funded the I-5 study plan to give away their electricity. Apart from a change in the law (which is long overdue), the only loophole I can think of is for state DOTs to allow companies to develop commercial service plazas not at existing “Interstate rest areas” but at other parcels directly adjacent to the Interstates in question. Whether that would pass muster is a question for legal researchers, not a mere engineer like me.

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Union of Concerned Scientists vs. Ride-Hailing Services

By Baruch Feigenbaum

Earlier this year the Union of Concerned Scientists (UCS) released a study detailing how ride-hailing is contributing to a climate crisis. But instead of focusing on climate and emissions, the study included a wide variety of concerns ranging from increased traffic congestion to a lack of regulation. Lacking a clear focus, the paper recommends a bunch of heavy-handed government policies that have proven largely ineffective in the past, instead of recommending a simple solution that is more likely to be effective.

The study provides a good overview of the recent history of ride-hailing, which has grown rapidly since 2010.  By 2018, Uber had provided more than 10 billion trips while Lyft provided 1 billion. Ride-hailing trips outnumber taxi trips — in New York City the ratio is two ride-hailing trips for every taxi trip. In San Francisco, the ratio is 12 to one. The study claims that ride-hailing trips account for 2-to-13% of vehicle trips in downtown areas, although the 13% number sounds too high to me.

The UCS piece starts with the premise that travelers who switch to ride-hailing emit 69% more greenhouse gas emissions than they did when using their previous mode. This occurs for two reasons. First, a deadheading vehicle travels more miles (the miles without passengers) and is, therefore, more polluting than a trip in a personal car. The UCS study estimates that single-person ride-hailing generates 47% greater emissions than a private vehicle. Second, ride-hailing is increasing—not replacing—car trips. The study indicates that without ride-hailing, 24% of non-pooled riders would have instead taken transit, walked, and cycled.

However, some of the study’s recommendations won’t reduce emissions. One is for the ride-hailing industry to promote better connections to transit for environmental reasons. Yet the assumption that transit is always more environmentally-friendly is wrong. In 93 of the largest 100 metro areas, cars emit less carbon dioxide per passenger mile than transit buses. And since buses handle a far higher share of travelers than rail, walking and cycling, this difference is significant.

Even when factually correct, the emissions discussion does not consider tradeoffs. Reducing emissions is an important goal. But so is increasing access to economic activities. One advantage of the automobile is it significantly reduces the travel time needed to reach a job. Employees can reach far more jobs (and employers far more workers) by automobile than transit, walking, or cycling. In fact, transit trips take twice as long on average as automobile trips, yet are shorter in miles.

Most workers don’t routinely commute by ride-hailing vehicles. But those vehicles are a good option when those workers are running late or the transit vehicle breaks down, or it is raining (and they don’t want to walk or cycle in the rain).

Ride-hailing services have other economic and safety benefits. Many customers take them to nightclubs and restaurants, which may not be accessible by transit. The alternative is either customers driving home drunk, which is a major safety problem, or customers not going at all, which would create an economic hardship for the industry.

Another of the study’s concerns is traffic congestion. The study suggests that ride-hailing is increasing congestion, citing San Francisco travel speeds declining by 2 miles per hour and Manhattan travel speeds declining by 3 mph in a six-year period. Yet that could be a result of increased travel due to a growing economy between 2012 and 2019. If ride-hailing was the key factor, wouldn’t traffic speeds have declined more in San Francisco, which has a higher share of ride-hailing trips than New York City?

The UCS paper’s third concern is that the ride-hailing industry is a bad actor, simply because it is less regulated than taxis. Yet taxi regulations have failed to reduce emissions, improve safety, or lead to innovation. Those same taxi regulations protected taxis from competition for decades and allowed them for years to ignore customer-friendly features such as credit card readers. The report acknowledges that taxis have the same negative effects on emissions and traffic congestion. If the goal is reducing emissions, how are taxis better?

The most bizarre claim is that, while transportation choices are good, the addition of ride-hailing as a choice is bad. So, following that logic, subsidized choices provided by the government such as transit, cycling, and walking are good but unsubsidized choices, such as ride-hailing are bad. Why? Is it because ride-hailing increases emissions and congestion? Most transit vehicles also increase emissions and congestion. Who makes the arbitrary decision that one mode is better than another and based on what data or logic?

If the Union of Concerned Scientists wanted to develop a cohesive future vision, it could examine linking shared, electric vehicles with automated vehicles. Alain Kornhauser at Princeton University and Dan Sperling at UC Davis have studied these connections. While I am skeptical of some of the environmental claims of the shared-electric-automated future, the concept is a cohesive, logical vision. However, that would require endorsing both automation and ride-hailing services, neither of which this UCS study recommends.

If the UCS paper’s goal was to reduce emissions and encourage ride pooling or transit, it could argue for congestion pricing. Cities could vary road prices based on the level of congestion, encouraging customers to use other modes or to travel at off-peak times rather than rush hours. Cities could charge single-occupant vehicles more and electric vehicles less. Not only are drivers responsive to pricing but implementing this one policy is easier than implementing UCS’s 7 separate regulatory provisions. However, if the real goal is to spend taxpayer funds to control ride-hailing through government regulation (in the guise of environmental and congestion concerns), this laundry list of mostly ineffective policies would do the job.

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Will Automated Vehicles Eliminate Only One-Third of Crashes?

By Marc Scribner

The Insurance Institute for Highway Safety (IIHS) recently published a study (May 2020) finding that automated vehicles (AVs) would prevent just 33.1% of crashes. Compared to the approximately 94% of crashes that involve driver error, this estimated safety benefit of AVs was surprisingly low and predictably led to headlines such as, “Self-Driving Cars May Not Be The Game Changer For Safety We Think” Fortunately, the IIHS study is not nearly as pessimistic as it appears when a key assumption is adjusted to better reflect reality, raising potentially preventable crashes by automated driving systems to around 74%. The IIHS study does an admirable job analyzing National Highway Traffic Safety Administration’s (NHTSA) National Motor Vehicle Crash Causation Survey (NMVCCS) data. It closely examines driver-error crashes contained in the NMVCCS database, assigns them to five categories, and estimates the weighted percent for each driver-related crash factor:

1. Sensing/perceiving (i.e., not recognizing hazards), 22.6%;
2. Predicting (i.e., misjudging behavior of other vehicles), 17.0%;
3. Planning/deciding (i.e., poor decision-making regarding traffic law adherence and defensive driving), 41.3%;
4. Execution/performance (i.e., inappropriate vehicle control), 23.2%; and
5. Incapacitation (i.e., alcohol-impaired or otherwise incapacitated driver), 10.5%.

So far, so good. But the IIHS study then assumes AVs will only prevent “sensing/perceiving” and “incapacitation” crashes, or 33.1% of total crashes. However, the study is clear that this scenario applies only if AVs somehow allow their occupants to prioritize “rider preference” over safety.

In other words, the assumption here is that occupants would have the ability to direct the AV to violate traffic laws so as to speed, tailgate, drive aggressively, or make other expressly illegal maneuvers. As the study notes, “When rider preferences and safety conflict, however, AVs must be programmed to prioritize the latter.”

The good news is that automated driving systems are being programmed to follow the law and the study even highlights one developer’s explicit declaration that this will be the case. There will be no “rider preference” switch in the back of a self-driving taxi that allows passengers to violate traffic laws at their whim. Such a design would present significant—perhaps insurmountable—challenges to being permitted to enter service in the United States in the first place. And if it somehow managed to escape scrutiny from regulators, it would expose AV manufacturers to immense product liability and send them into the open arms of trial lawyers across the country.

Simply put, if a hypothetical irrational engineer employed by an AV developer designed such a rider preference selection device, corporate compliance, federal and state regulators, and the plaintiffs’ bar would quickly make sure such a dangerous technology never made it into the hands of the public.

Given that AVs remain under development, we cannot reliably estimate how much better they will handle “predicting” (17%) and “execution/performance” (23.2%) crashes relative to conventional manually driven vehicles. But we can safely assume that AVs will be programmed to follow traffic laws. Adding these “planning/deciding” crashes (41.3%) to the IIHS study’s stated 33.1% of AV-preventable crashes from “sensing/perceiving” and “incapacitation” errors raises the total crash reduction potential of AVs to 74.4% without changing the study’s general methodology.

Overall, the IIHS study is praise-worthy in its general analysis of driver-error crash factors and the potential for AV crash mitigation, but it deserves criticism for its inaccurate key assumption and how it presented and summarized its findings. Transportation and general news outlets that published articles based on the study’s misleading abstract and accompanying press release without reading the full nine-page study also deserve some criticism—If they had analyzed the full IIHS study, their headlines should have been closer to, “Insurance group finds self-driving cars could prevent the large majority of crashes.”

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More State Projects Will Test Mileage-Based User Fees

On July 9, the Federal Highway Administration announced new grants to five state DOTs for projects that will continue testing various ways of collecting per-mile charges that could eventually replace per-gallon fuel taxes.

Oregon, which is furthest along (by having an ongoing, voluntary program in which motorists are actually paying per-mile charges instead of fuel taxes) received a grant to help fund a project to assess the feasibility of using telematics data from a connected-vehicle system to collect per-mile charges. It won a second grant on behalf of an 11-state consortium to investigate per-mile charges and blockchain.

Utah DOT received two grants dealing with ways of integrating per-mile charges with express lane tolls. Utah is the only state besides Oregon that has collected real (as opposed to simulated) money in its mileage-charge pilot projects.

Washington won the largest grant for the next phase of its seven-year road usage charge program.  The new project will focus specifically on hybrid and electric vehicles, plus the state’s own vehicle fleet. In a January 2020 report on its ongoing program, the Washington State Transportation Commission estimated that its transition from per-gallon taxes to per-mile charges would take place over a 10 to 25-year period.

The I-95 Corridor Coalition (which has just changed its name to The Eastern Transportation Coalition) received a new grant, via Delaware DOT, to address barriers to per-mile charges identified in its several previous pilot projects. The Coalition members include 17 states and the District of Columbia.

Finally, Wyoming DOT received a grant for a truck mileage-charge project. Trucks have been involved in several of the previous pilot projects, including California and the I-95 Corridor Coalition.

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Upcoming Transportation Events

TRB/AUVSI Automated Vehicles Conference, Regulatory Breakout Session, Online, July 27-30. (Baruch Feigenbaum speaking).

Domestic and International Aviation Recovery, TRF-DC, WTS-DC, and YPT-DC, hosted by Reason Foundation, Online August 5, 2020.

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News Notes

Michigan Approves Interstate Tolling Study. Michigan Gov. Gretchen Whitmer recently signed SB 517, sponsored by Sen. John Bizon. It calls for a two-part consultant study of (1) the feasibility of using tolls to pay for modernization and maintenance of major highways in Michigan and (2) a strategic implementation plan, laying out which corridors are good candidates and the possible timing of the phase-in of tolling. The study would be comparable to the pair of studies carried out recently in Indiana. My colleague Baruch Feigenbaum has provided some context on the implications of the planned studies.

State Gas Tax Diversions Identified in New Study. About half the states are diverting portions of their “highway user tax” revenue to non-highway purposes, according to a new study by the Reason Foundation. The largest diverters of state gas tax money to non-road uses are New York (37.5%), Rhode Island (37.1%), New Jersey (33.9%), Michigan (33.9%), and Maryland (32.5%). The diversion of gas tax money away from highways may help explain why some of these same states receive among the lowest scores in Reason’s Annual Highway Report rankings of state highway systems by value and cost-effectiveness (New Jersey ranks last, Rhode Island at 48th, and New York at 45th.) Two of the country’s largest states divert gas tax revenue—Texas diverts 24% of fuel taxes but managed to rank 23rd in the last highway conditions report, and Florida diverts 13.6% of state gas taxes and was 40th in the last Annual Highway Report rankings

How Florida Could Transition from Per-Gallon to Per-Mile. The James Madison Institute, based in Tallahassee, released my policy brief explaining the upcoming decline in state gas-tax revenue and the need to shift, over time, to charging (electronically) per mile. The brief suggests beginning the transition with the state’s limited-access highways (freeways and Interstates), taking advantage of the statewide SunPass electronic tolling system.

Florida and Georgia Join E-ZPass. The Florida Turnpike Enterprise and Georgia’s State Road & Tollway Authority have announced their joining of the multi-state E-ZPass interoperable electronic tolling system. Florida’s statewide SunPass and Georgia’s Peach Pass transponders will now be usable in any of the 18 states in the E-ZPass system, ranging from Maine to Illinois. In June, the Central Florida Expressway Authority (which was already interoperable with E-ZPass) announced that it will offer its customers a new transponder that is usable nationwide, called Uni. It is made by TransCore and is similar to the nationally interoperable transponder offered by Bestpass to trucking fleets nationwide.

HOV-5 Proposed for Los Angeles Express Toll Lanes. As part of its planning for the 2028 Olympics, LA Metro has proposed that its (by then larger) network of express toll lanes require five or more occupants for free passage. Buses, vanpools, and five-member carpools will pay nothing, while carpools with two to four occupants will pay discounted tolls; single-occupant vehicles will pay the full amount of the variable toll. One of the planned express lane corridors is through the highly congested I-405 in the Sepulveda Pass between the LA basin and the San Fernando Valley.

Virgin Trains Making Progress on Victorville to Las Vegas Line. Having acquired the rights to the defunct XpressWest project, Virgin Trains has made progress in financing the $4.9 billion project. It has been approved by U.S. DOT to issue $1 billion in tax-exempt Private Activity Bonds and has received California’s approval for $600 million in tax-exempt bonds, with another $200 million pending in Nevada. Unlike its Miami to Orlando route in Florida, which is diesel-powered, the Victorville-Vegas line will be all-electric. On June 30, Caltrans announced an agreement for Virgin Trains to use the right of way in the median of I-15. The company has also signed a memorandum of understanding with San Bernardino County to study extending the line from Victorville to Rancho Cucamonga, where it could connect passengers to a Metrolink commuter rail station.

Miami-Dade Expressway Wins a Round. In its battle to overturn a 2019 law that called for its elimination, the Miami-Dade Expressway Authority filed suit to have the law thrown out as a violation of the County’s home rule authority. A lower court last year agreed with MDX’s position, but the state appealed. On June 25, Florida’s First District Court of Appeal denied the Legislature a writ that would dismiss MDX’s lawsuit. So the agency’s battle against the Legislature and (amazingly) Florida DOT will continue.

Toll Bypass Tunnel Opens in Australia. The new 9 kilometer M8 twin tunnel project in Sydney opened to traffic early this month. It is part of the A$16.8 billion WestConnex road network which has been under construction for a number of years. The tunnel parallels the congested M5 East expressway (built in 1992) and is expected to cut 30 minutes off the peak-period trip between downtown Sydney and the southwestern suburbs. The variable toll for the new tunnel will be up to A$6.95 for personal vehicles. Both tunnels have the capacity to add a third lane in the future.

Interchange Bottlenecks Being Tackled in Florida and Georgia. Reconstruction of three major interchanges promises future relief from congestion in Atlanta, Orlando, and Tampa.  In Atlanta, a $400 million project has been approved by Georgia DOT for the I-285/I-20 interchange, which is the 24^th most-congested truck bottleneck on the American Transportation Research Institute’s list of the top 100 truck bottlenecks nationwide. (Three other I-285 interchanges rank #2, #5, and #7 on that list.) In Orlando a major personal-vehicle bottleneck is the I-4/SR 408 interchange, which has been redesigned and is being rebuilt at $960 million as part of the $2.4 billion I-4 Ultimate project, to be finished next year. And in Tampa, Florida DOT has approved the $1.4 billion reconstruction of the congested I-275/SR 60 interchange; still to be planned is Tampa’s major truck bottleneck, I-275/I-4 (#91 on the ATRI list).

More Conversions to All-Electronic Tolling in Prospect. Many toll roads eliminated cash tolling during the lockdown phase of the COVID-19 pandemic but considered this a temporary measure.  But in early June, the Pennsylvania Turnpike announced plans to lay off its 500 toll collectors, to make all-electronic tolling permanent, as a growing number of other toll roads did prior to the pandemic. Ten days later, some state legislators asked Pennsylvania Gov. Tom Wolf to overturn the Turnpike’s decision, so the outcome remains in doubt. On the West Coast, the San Francisco Chronicle reported that permanent all-electronic tolling is under serious consideration for the seven state-owned toll bridges in the San Francisco Bay Area, but is unlikely to be implemented until lower-cost billing procedures are worked out for the FasTrak tolling system.

Two New Express Toll Lane Projects Open in Denver. Last month saw the addition of two new express lanes in the Denver metro area. One project adds ETLs to the stretch of I-25, between 120^th Ave. and E-470. The other ETLs are on C-470, across 12.5 miles of the southern portion of the Denver ring road. The latter ETLs will begin variable tolling after an initial period for motorists to get used to driving on them. Consistent with the existing I-25 express lanes policy, only HOV-3 vehicles (and buses and motorcycles) can use the I-25 lanes without charge. But on C-470 (which has been financed based on toll revenues), all personal vehicles will be required to pay.

New Paper Quantifies Value of Urgency. In a working paper released by the National Bureau of Economic Research in April, Antonio Bento, Kevin Roth, and Andrew Waxman used detailed transaction data from the I-10 express toll lanes in Los Angeles to study the prices paid by motorists choosing to enter and leave the lanes during peak periods. They defined a decision variable “value of urgency” to explain those decisions, and estimated that VOU accounted for 87% of the average toll paid by such users. The paper is NBER Working Paper 26956.

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Quotable Quotes

“[Managed Lanes] in congested areas can be extremely effective at delivering increased capacity, superior driving time and reliability, and revenue generation. However, these benefits come with a price that is inextricably linked to the free market. The downside is that toll rates may be very high, and the upside is that the users have an option. Operators that are unwilling or unable to allow the market to dictate ML pricing should be prepared to forfeit the benefits that MLs were designed to deliver.” —Scot Monroe, “Managed Lanes: A Framework for Prudent Pricing,” Fitch Ratings, October 1, 2018

“The toll technology revolution that began several decades ago with the introduction of electronic toll collection has positioned the tolling industry to be at the forefront of the impending revolution on how infrastructure is funded into the future on a much broader scale, as a means to deliver critical infrastructure projects, and even continue to expand its use as a means of congestion management, but I do believe the industry is standing at a precipice. There is tremendous opportunity right now to be the leader in the discussion on finding a sustainable solution to fund ongoing infrastructure needs, both at the federal and state levels. But the industry must be open to change, to expanding its vision, to partnering with new industries and emerging technology leaders. If not, someone else will ultimately fill the void, and today’s industry will be relegated to the sidelines. What’s the saying? Lead, follow, or get out of the way.” —J.J. Eden (North Carolina Turnpike), “Tolling Can Lead Transportation Into the Future,” Traffic Technology Today, January 22, 2020

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The post Surface Transportation News: Coronavirus and Traffic Congestion, Hyperloop Feasibility, and More appeared first on Reason Foundation.

• Good news and bad news on Alabama tolling
• Is no-fare transit a good idea?
• Trucking bottlenecks: why you should care
• Transportation and CO2 emissions
• Putting elevated freeway replacements underground
• Further thoughts on DOT’s ITS policy
• Upcoming transportation events
• News notes
• Quotable quotes

Good News and Bad News on Alabama Tolling

Last fall, responding to populist anti-toll pressure, Alabama Gov. Kay Ivey pulled the plug on a planned $2.1 billion toll-financed public-private partnership to replace the aging and inadequate I-10 bridge and Bayway causeway across the Mobile River. The proposed $6 one-way toll was viewed by many as intolerable for a route that is used by daily commuters as well as long-distance trucks and other out-of-state travelers.

The bad news is that anti-toll advocacy is still very much alive there. Three bills have been filed in the current Alabama legislative session. One would simply require an economic impact study before any tolled facility could go forward, but the other two are slightly different versions of constitutional amendments that would require voter approval in the county or counties to be served by a toll facility.

The good news is that cooler heads in the Mobile area seem to be coalescing around a less-costly $1.2 billion proposal that would rebuild the bridge but leave the existing non-tolled Wallace Tunnel and Bayway as alternatives for those unwilling to pay a bridge toll. The Eastern Shore Metropolitan Planning Organization (MPO), whose removal of the bridge replacement from its transportation plan last fall triggered the governor’s action to kill the project, voted 3-1 last month in favor of the scaled-back $1.2 billion project, which would rebuild the bridge but not the Bayway. It would also add elevated express toll lanes to the Bayway, while leaving the existing two lanes each way as is and not tolled. On the other side of the river, the Mobile MPO would also have to agree on a revised plan, in order for the project to go forward. In January, the Build the I-10 Bridge Coalition said Mobile county officials have been working to build support for an alternative to the original $2.1 billion plan.

The Alabama Department of Transportation (ALDOT) had moved forward on the original project last year, having won federal approval for $420 million in tax-exempt private activity bonds (PABs), an $800 million Transportation Infrastructure Finance and Innovation Act (TIFIA )loan, and a $125 million Infrastructure for Rebuilding America (INFRA) grant, conditional on the project being done as a long-term public-private partnership (P3). ALDOT had also begun the P3 procurement process, resulting in a shortlist of three highly qualified teams, led by Cintra/Meridiam, ACS/Macquarie, and InfraRed/Astaldi. If the revised project moves forward as a public-private partnership (P3) with a revised scope and toll projections, the procurement process would likely have to be re-started, and applications filed again for PABs and TIFIA financing.

Elevated express toll lanes, as proposed for the Bayway, were pioneered more than a decade ago in Tampa, Florida. The Tampa Hillsborough Expressway Authority added three reversible express toll lanes to the median of its Selmon Expressway, at a cost of just $420 million for the 26-mile project. (An illustration of the project appears on p. 263 of my book, Rethinking America’s Highways.)

In other Alabama news, last month, developer Tim James, Sr. gave a presentation on his proposal for a privately-financed 1,600-foot toll bridge over Lay Lake on the Coosa River system, connecting Shelby and Talladega counties. The project includes roadway improvements that would enable the bridge to connect I-65 to U.S. 280. It received unanimous support from Talladega County in January and is currently seeking approval from Shelby County. James’ company developed the Foley Beach Express toll road in Baldwin County, which opened in 2000.

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Is No-Fare Transit a Good Idea?

By Baruch Feigenbaum

One of the current transit trends is fare-free service. Earlier this month, Washington D.C. council member Charles Allen introduced a plan to provide residents $100 in Washington Metropolitan Area Transit Authority (WMATA) SmarTrip credits per month. Last year Kansas City, MO, became the largest city to implement fare-free transit, charging zero for all customers.

While it might seem like a new concept, fare-free transit has been around since the 1960s. Today, more than 40 small agencies offer some type of fare-free transit. But there are real costs to fare-free transit.

The best analysis of fare-free transit is a 2012 National Academy of Sciences (NAS) report. It found that while many mass transit systems offer fare-free zones, discounted service to selected groups, and/or circulator services, very few agencies offer fare-free service to everyone in the service area.

Fare-free services are typically found in three places: small-urban/large-rural areas with low ridership, resort communities, and university-dominated towns. Fare-free service makes the most sense where the farebox recovery rate is low, specifically when the collection costs are higher than the actual revenue. But most systems have farebox recovery rates of 20-to-40 percent, which provides a chunk of change for the systems.  The only large US metro area to implement fare-free transit, Austin, TX, discontinued it after a year, due to disruptive riders and increased costs, although that experiment was 30 years ago (1989-1990).

The NAS study found offering fare-free service has several consequences. Ridership can increase by 20-to-60 percent. But as a result of the subsidies, system costs can increase. The increase in passengers can overwhelm the transit system, and, vagrants have been a problem on certain systems. Additional maintenance and capital equipment may be necessary. Mass transit systems that experience a deterioration in the quality of service may see losses, not gains, in ridership. Finally, most of the new trips result from additional transit travel, not mode change. The modes most likely to switch to transit are walking and cycling. So while these new trips may increase economic activity, they do not reduce traffic congestion or greenhouse gas emissions.

Fare-free transit has a political element as well. The entities studying free transit in large metro areas tend to be central-city governments, not transit agencies. These cities pay the transit agency to build, operate and maintain the service. In the case of Kansas City, the money the city pays does not cover the service costs. As a result, cities are pushing some of the costs onto the transit agencies. The transit agency, unwilling to anger its largest funder, typically accepts the costs. City leaders can then claim a win by giving the public something “free.: But the transit agency that is responsible for the service would likely never propose such an idea and must shoulder the higher costs.

The biggest challenge of fare-free transit is the cost. The Washington, DC, plan would offer residents $100 in SmarTrip (WMATA’s payment system) credits per month and allow an unlimited number of trips. More than 700,000 people live in DC, but many of them do not use transit. Further, several groups are ineligible for the funds: the 60,000 DC residents who receive federal employee transportation benefits and the 46,000 students covered by the Kids Ride Free (KRF) Program. Therefore, city councilman Allen estimates that 118,000 people would use the program and that the cost will be $54 million per year.

Yet the $54 million figure relies on a number of assumptions. Allen believes that the city will get a discount in SmarTrip cards because it is buying them in bulk and that most residents will use less than $100 in monthly benefits. Yet, there is no precedent for WMATA offering such a large discount. A resident commuting from Northwest DC to Union Station during peak periods would pay more than $113 per month using the cheapest Metro pass available.

Further, Allen assumes no growth in demand or population. Basic economics guarantees that reducing the price of something increases the demand for it. And Washington, DC’s population is growing rapidly — increasing by more than 14 percent over the past eight years. By my math, there should be some concern that the program’s cost could likely be closer be $142 million (118,000 residents times $100 per month times 12 months) — far more than double Allen’s $54 million estimate.

Another challenge would be service quality. What happens during the next economic recession, when the city cannot afford the costs? Will service quality decrease? WMATA’s operations suffered over the past 10 years because of train breakdowns. WMATA ended its late-night weekend service to spend more time on maintenance. DC businesses have claimed that they suffered economically as a result. If the system adds more riders with less funding, it will likely generate more service problems.

There are other problems with the plan as well. The proposal provides the benefit to everyone regardless of income. Allen says that he does not want to “other” the Metro (defining it as a service for the poor). Yet Washington, DC, is home to some of the wealthiest folks in the region, some of whom do ride Metro. Low-income residents in Anacostia should not be subsidizing the travel of wealthy residents in Northwest Washington.

Under the proposal, the residents of the core central city (DC) are the only ones with access to free transit. As a result, commuters living in different municipalities in the same metro area would face very different costs while using the same system. This exacerbates regional tensions and harms low-income residents in the suburbs, who have to bear the financial burden the most. This is another reason the transit agency, not the city, should be making the decision on fares.

The economic benefits of the plan are also suspect. Similar to highways and stadiums, the economic benefits of transit are often overstated. Kansas City fare-free proponents claim that it adds $13 million in regional gross domestic product. History suggests that number is likely 30 percent too high, but even if it is accurate, the city’s cost to provide the service is $12 million per year so the economic development benefits are a wash, at best.

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Truck Bottlenecks: Why You Should Care

The American Transportation Research Institute has released this year’s list of America’s top 100 truck bottlenecks. As usual, nearly all of them are at the interchange between an urban Interstate and another major highway (often another Interstate). Even if you are not connected to the trucking industry, you should be concerned about this large and growing problem. Here are a few reasons why.

• Nearly all major truck bottlenecks are also passenger-car and commuter bottlenecks.
• They contribute significantly to urban freeway congestion.
• Air pollution is worse in congested areas and trucks pollute more per vehicle mile than passenger vehicles (and shifting trucks away from fossil fuels will take longer than for cars).
• These bottlenecks are mostly not getting fixed, which is one reason congestion continues to get worse.
• Arguments that adding highway capacity is futile, because “people will just drive more” do not apply to trucks, which drive in response to increasing demand for their services.

I reviewed the ATRI list with some interest. The states with the most bottleneck interchanges for trucks are as follows:

And in terms of which Interstates turn up most often in the top 100, the “winner” is I-95 with 10 bottlenecks, followed by I-10, I-35, and I-75 with six apiece.

Over the past decade or so, only a handful of obsolete urban interchanges have been redesigned and rebuilt: the Marquette and Zoo interchanges in Milwaukee, the Springfield interchange in northern Virginia, and the SR 836/SR 826 interchange in Miami are examples. Several more are under construction, including I-285 at Georgia 400 in Atlanta ($803 million) and I-95/I-395/SR 836 in Miami ($802 million). But the very large cost of such projects makes it difficult for state DOTs to come up with the funding, given limited transportation revenues.

Mega-projects like these are obvious candidates for long-term financing, in which the billion dollars is raised up-front from investors and paid back over time out of user-fee revenues paid by those who benefit from the improved interchange and its smoother traffic flow. In states where all-electronic tolling is becoming widespread, toll-financing major interchange replacement is quite feasible, analogous to replacing a deficient bridge with a toll-financed bridge. Tolling opponents, including the trucking industry, should reflect on the fact that more than two decades of lobbying for large increases in federal gasoline and diesel tax rate increases have not succeeded—and nearly all those obsolete, congested, pollution-generating interchanges are still serving as bottlenecks to commuting and commerce.

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Transportation and CO2 Emissions

The day before Christmas, I was startled by a Wall Street Journal news article headline, “Transportation Is the Next Eco Villain.” Reporter Jon Sindreu cited data from the European Union and the US Environmental Protection Agency showing that transportation—aviation, railroads, highway travel by cars and trucks, ocean shipping, etc.—is the sector that produces the largest fraction of CO2 emissions, at 24 percent worldwide and 34 percent in the United States. He also points out that in the US almost half the transportation emissions come from freight.

Those figures are not in dispute, but some perspective on the overall CO2 picture comes from a recent report from the International Energy Agency. As Reason.com Science Correspondent Ron Bailey summarized the IEA findings: “Carbon dioxide emissions from the energy sectors [which includes transportation] for both the world and the United States have flattened and may have peaked.”

This has occurred because emissions from the EU, Japan, and the US in 2018-2019 dropped sharply thanks to large decreases in the use of coal, and increased nuclear energy production in Japan.

Bailey also reports that in mid-February, the US Energy Information Administration projected that US energy-related CO2 emissions will decrease through the early 2030s and may not again reach 2020 levels until after 2050. That agency breaks down 2018 energy-related emissions into four components, as follows:

The implicit assumption in most policy discussions about CO2 reduction is that every sector must achieve the same degree of reduction over time, to meet an overall target. But that ignores questions of feasibility and cost. For commercial aircraft carrying passengers and cargo, there is no feasible alternative to petroleum-based fuels in the foreseeable future. For ocean shipping and U.S. freight railroads, the outlook is similar, though efficiency improvements are possible (as is also true in aviation). And while electric or hybrid propulsion is possible for trucks, this is still a work in progress, especially for heavy, long-haul trucks.

Transportation produces huge benefits to the US and world economy, so it makes sense to question the premise that every sector must make the same percentage reductions in CO2 per year or per decade. What counts is both the total accumulation of CO2 in the atmosphere and the annual addition from all sources. If reducing some categories of emissions cost $10/ton and others (if feasible at all) cost $500/ton, it makes no sense to invest limited resources in the $500/ton reductions. The transportation community needs to speak up for benefit/cost analysis in CO2 reduction policy.

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Support Grows for Putting Elevated Freeway Replacements Underground

In the 1960s, dozens of urban freeways (mostly Interstates) were built as elevated structures, dividing neighborhoods and inundating them with noise and emissions. As these elevated roadways age and need replacing, there’s a growing movement to put the replacements underground, creating new urban parks and re-uniting neighborhoods. High-profile recent examples include the Big Dig below downtown Boston and the Alaskan Way tunnel beneath downtown Seattle. But as I discuss in Chapter 10 of Rethinking America’s Highways, there are also many examples of decking over freeways that were already below grade: the Klyde Warren Park in Dallas above the Woodall Rogers Freeway, the Hance Park over I-10 in Phoenix, the new park over I-70 in downtown St. Louis, and the under-construction park on the deck being built over a section of I-70 in Denver, to name a few.

The latest development is taking place in Brooklyn, NY, and concerns replacing the aging and decrepit (1941) Gowanus Expressway, which is an elevated freeway (I-278) near the waterfront, from the Verrazano Bridge to the Brooklyn Battery Tunnel. In 2017 a group of residents proposed replacing the elevated section with a six-mile bored tunnel, and decking over a portion that is below-grade, allowing the bisected neighborhoods to be reconnected. The tunnel idea was first proposed by the Regional Plan Association in the 1990s. Last year, the city comptroller proposed an alternative: a trucks-only highway with a park on top of it. This approach would handle the 14,000 trucks per day that use the Gowanus, but ignores the 144,000 passenger cars per day—which are blithely assumed to just fade away.

Fortunately, the City Council has now revived a full-fledged replacement. Based on a study the council commissioned from consulting firm Arup, which analyzed seven possible solutions, the council suggests the two best alternatives:

1. An at-grade replacement highway capped with an extension of Brooklyn Bridge Park ($3.5 billion), and
2. A bored tunnel plus a replacement boulevard and new open space ($11 billion).

Arup’s study cited a number of precedents, including the reconstruction of the Calle 30 ring road in Madrid. Of its 62-mile length, 35 miles are covered, part of it via a deep-bore tunnel that I visited shortly before it opened in 2007.

New York City Mayor Bill de Blasio’s own “expert panel” has recently called for a reduced-lanes replacement, which the mayor rejected as unrealistic, since the traffic has to go somewhere. There are definitely trade-offs between Arup’s options 1 and 2, with the former both a lot less expensive and probably quicker to build. And the Gowanus is in bad shape and needs to be replaced sooner rather than later.

There is also the outrageous costs of recent subway tunnels in New York City, which have cost several times as much per mile as comparable tunnels in London, Paris, and Tokyo.

But it’s encouraging to see the reality sinking in — the Gowanus needs to be replaced, to serve current and projected traffic. Mayor de Blasio has scoffed at the “road diet” idea that traffic will melt away if fewer lanes are provided. “We have to be careful,” he told Gothamist recently. “If we say, ‘Hey, let’s reduce the amount of lanes,’ that’s not a guarantee people get out of their cars; it is a guarantee of traffic jams and other problems.”

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Further Thoughts on DOT’s ITS Policy
by Baruch Feigenbaum

Last month’s article on US DOT’s decision to invest $38 million to equip emergency vehicles, transit vehicles, and related infrastructure with vehicle-to-everything (V2X) communication technology generated a lot of feedback.

In the article, I could have been clearer with my terminology. First, DOT’s decision to equip vehicles with V2X does not require dedicated short-range communication (DSRC) to be used. I believe that most of the vehicles will use DSRC, but they can use another technology. Second, 5G and cellular vehicle-to-everything (CV2X) communications are different technologies. CV2X uses the LTE framework and DSRC uses the Wi-Fi framework. I believe that in the future CV2X will use 5G networks, but that technology is still in the development phase.

The transportation industry is hyper-focused on spectrum use because the Federal Communications Commission (FCC) is taking comments on a Notice of Proposed Rulemaking that would share a portion of the 5.9G GHz spectrum. The proposal would devote the lower 45 MHz to unlicensed operators and permit C-V2X in the upper 20 MHz. DOT is concerned that 20 MHz is not enough space for C-V2X uses.

I remain skeptical that DOT needs all of the spectrum. But FCC has muddied the waters by giving mixed signals on its intent. In 2018, FCC sent a letter to Toyota suggesting that the carmaker use caution when studying DSRC because it is unclear if the technology can coexist with other technologies on the 5.9 GHz spectrum. Yet, when the agency reached out to the information technology services (ITS) community, it noted that it planned to have multiple technologies share that spectrum. The FCC cannot have it both ways. The FCC did not know if sharing spectrum was possible in 2018 (and we still don’t know), but if it believes different technologies can co-exist, it should not have objected to Toyota’s tests.

From my perspective the FCC’s decision to claw back spectrum is premature. I believe that, in the future, technologies will be able to use 5G without relying on the 5.9 GHz spectrum. However, that day has not arrived. Meanwhile, the FCC can wait to take action until there is a demonstrated need for new spectrum. Its plan would harm the ITS community without helping anyone else.

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Upcoming Transportation Events

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

Transportation Research Forum Annual Forum, Jersey City, NJ, Jersey City University School of Business, March 13, 2020 (Baruch Feigenbaum speaking). Details here.

IBTTA/TRB/AASHTO Summit on Finance and Policy, Denver, CO, Hilton Denver City Center, May 7-9, 2020 (Adrian Moore speaking). Details here.

APTA Mobility Conference, San Antonio, TX, Marriott Rivercenter, May 17-20, 2020 (Baruch Feigenbaum speaking). Details here.

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News Notes

Compromise Saves Florida Toll Lanes—Sort Of   
The authors of a bill to convert the new express toll lanes on Miami’s Palmetto Expressway into general-purpose lanes agreed to withdraw their bill in favor of changes agreed to by Florida DOT headquarters. One lane each way of the toll lanes will be converted to a general purpose (GP) lane, a new access point to the express lanes will be added—and the tolls will be temporarily suspended. While the anti-toll legislators celebrated their victory, the toll suspension will likely demonstrate—dramatically—how much worse the congestion will be without variable pricing in those lanes.

Fitch Downgrades Miami-Dade Expressway Authority Bonds
In response to last year’s legislation to abolish the Miami-Dade Expressway Authority (MDX) and make any new bond-financed projects there subject to the legislature’s approval, Fitch Ratings, on Feb. 20, reduced the rating of MDX’s $1.3 billion in revenue bonds from A- to BBB+. And the outlook for the toll agency has been changed to “Negative.” To underscore the larger context, Fitch also stated that the change “takes into account the acute level of political interference into the authority’s governance and rate-setting,” since the bill also reduces toll rates and places a moratorium on toll increases. The law abolishing MDX remains under legal challenge as this is written.

California Toll Bridge Needs Replacing, but Toll Revenues Go Elsewhere
The Richmond-San Rafael Bridge across the San Francisco Bay is—literally—falling apart and needs replacement. The estimated price tag is $8 billion, and the last major bridge replacement across the bay took 25 years to plan and build. The bridge has a modern transponder-based toll system, so what’s the problem? Several years ago Bay Area voters approved a plan to increase tolls on all the region’s toll bridges, aimed at bringing in $5 billion in new revenue. Was any of that earmarked for replacing obsolete bridges? Nope—the proceeds were dedicated to a laundry list of transit and smart-growth projects around the region. Whatever happened to users-pay/users-benefit?

Railroad Competition Coming to France
European Union regulatory change will soon open up rail infrastructure in member countries to competing passenger rail providers. French rail operator RATP is getting ready; it has formed a joint venture with Getlink, the owner of the Eurotunnel, to compete with state-owned rail operator SNCF. In 2018, RATP and Keolis won the bidding to provide service on the forthcoming express rail link to connect Paris with Charles de Gaulle Airport.

More Express Toll Lanes Coming to Charlotte, NC
With traffic in the new express toll lanes on I-77 exceeding forecasts, North Carolina DOT is well along in plans to add another such project. The new electronic toll lanes (ETLs) will be added to congested US 74, with one new lane in each direction, improving access to I-485. The project has the approval of the Charlotte Regional Transportation Planning Organization. The estimated cost of the 6.5-mile project is $900 million. Prior to the start of construction in 2022, NC DOT will be making improvements to parallel routes, which should ease congestion during the express lanes’ construction.

Intercity Bus Service Continues to Grow
“Making Connections: 2020 Outlook for the Intercity Bus Industry in the United States” is the latest annual report on this important segment of intercity passenger transportation. The recent report comes from the Chaddick Institute at DePaul University. There are now three major players with growing regional networks: Greyhound, newcomer Flixbus (from Germany), and Megabus. The report summarizes their growth and new services and also discusses changes in services being offered in this highly competitive industry.

Wyoming Senate Defeats I-80 Toll Proposal
Wyoming State Sen. Michael Von Flatern’s bill to request a slot in the three-state federal pilot program to allow toll-financed reconstruction of an Interstate highway was defeated by a vote of 18-11, despite having been sponsored by the Joint Highways, Transportation, and Military Affairs Committee. Because 2020 is a budget year in the state, non-budget measures require a two-thirds vote. If re-introduced next year, it could pass with a simple majority vote.

Younger People and Driving
The GreenCarCongress released a study on the fraction of Americans with a driver’s license, by age group. Not surprisingly, those below 18 with licenses are still far below their level in 1983—but their fraction has increased since 2014. In fact, every age group has from 1.3 to 5.1 percent more licensed drivers in 2018 than in 2014. One reason for the lower levels among teenagers is that most states, since 1983, have restricted teen licenses in various ways. And the National Association of Auto Dealers points out that sticker shock from today’s larger and higher-tech vehicles may be keeping many younger drivers out of the new car market. J.D. Power reports that the average new car cost $33,600 in 2019, up $1,100 from 2018.

Ride-Hailing and Urban Traffic Congestion
The Feb. 15-16 weekend edition of the Wall Street Journal carried a lengthy article by Eliot Brown, “The Ride-Hail Utopia Got Stuck in Traffic.” It cited a number of recent studies that link increased congestion with the rise of ride-hailing providers such as Uber and Lyft. More stop-and-go traffic on city streets also means less-efficient combustion and hence more emissions The Union of Concerned Scientists released a Feb. 25 study estimating that Uber and Lyft generate 70 percent more pollution than the trips they displace—which are often transit, biking, or walking trips. It’s a positive that both the WSJ and UCS correctly identified the phenomenon under discussion as ride-hailing, not “ride-sharing.”

Bestpass Adds Toll-by-Plate for Truckers
Trucking industry supplier of nationwide electronic tolling transponder and billing services, Bestpass, just announced that it is adding a toll-by-plate function to complement its transponder service. The new feature includes both power unit and trailer plates. Bestpass offers a comprehensive toll management service for trucking companies, which includes consolidated billing and reporting. The company was originally created as an arm of the New York State Trucking Association but now serves customers nationwide.

Amtrak Gains Approval for Portal North Bridge Replacement.
One of the two major projects in the controversial Gateway project to improve passenger rail access across the Hudson River between New York and New Jersey has won Federal Transit Administration (FTA) approval to apply for grant funding. The Portal North Bridge project will replace an antiquated swing bridge with a new $1.7 billion bridge. The other component—the $12.1 billion tunnel project—is still rated medium-low by FTA, making it ineligible for FTA grant funding. But US DOT has indicated it is open to interim repairs to the existing tunnels as a place-holder while alternative funding arrangements for a new tunnel are pursued.

Self-Service Gas Stations Will Not Be Banned in Illinois
A bill that would have required all gas stations in Illinois to have attendants pump gas for people has been withdrawn, a week after it was introduced. Currently, New Jersey is the only state that does not permit self-service gas pumping.

The Incredible Shrinking New York Metro Area
A new academic study from Rutgers University’s Center for Advanced Infrastructure and Transportation finds that the four-state, 35-county metro area centered on New York City has slipped into absolute population decline spawned by domestic outmigration—“a vast exodus of regional residents moving to the rest of the country.” The decline would be far worse if it were not for continued immigration from overseas. While the authors cite “life-cycle movements, lifestyle preferences, and shelter-cost and livability impediments” as factors, they don’t mention the relative tax burdens of those four states compared with the Sunbelt states. “Urbs, Burbs, and the Immigration Locomotive” is by James W. Hughes, Connie O. Hughes, and Joseph J. Seneca.

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Quotable Quotes

“There is no free lunch and there is no free concrete. If the existing revenue does not match the existing need, then the only options are to raise revenue through taxes on all, or tolls on some. Throughout this whole melee, it was interesting to hear public officials and well-meaning citizens rebuke the idea of a toll as somehow being a violation of conservative principles. Here’s a news flash: research by the Alabama Policy Institute clearly indicates that one of the most conservative approaches to funding regional infrastructure is what is often referred to as ‘a user-pays system,’ or more commonly, a ‘toll.’ . . . If you want it, then you have to pay for it. If you have to pay for it, you have to have the revenue. If you have to have the revenue, then you face the choices of increasing taxation and growing government or (wait for it) reasonably establishing a pay-as-you-go system of funding. Any reader who claims to be a fiscal conservative is likely sitting back in their chair smiling now.”
—Phil Williams, “For Whom the Bridge Tolls,” Alabama Policy Institute, Dec. 9, 2019

“Since opponents of the managed lanes don’t have the support needed to kill the project outright, they appear to be imposing so many regulatory barriers and hurdles that the managed lanes become infeasible. Assembly members have filed bills that would ban nighttime construction, require local county consent, prohibit tolling, eliminate property acquisition, and artificially cap tolls so that the revenues would not be enough to fund the project. HR 84 would prohibit nighttime construction of the lanes. Most major highway construction projects feature nighttime roadwork and lane closings as a way to minimize disruptions during peak commute times and reduce costs. Given the existing levels of extreme congestion, closing lanes during the day would cause travel nightmares . . . HR 258 would prohibit the construction of any toll lane in Prince Georges County unless the local delegation approves it. Interstate highways are designed for interstate commerce, and they are owned by the states. While local government sentiment is important, any decision on where to build and how to fund the roadway should be left to the state government.”
—Baruch Feigenbaum, “The Misguided Efforts to Derail Maryland’s I-270 and I-495 Toll Projects,” Feb. 14, 2020

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The post Surface Transportation News: Alabama Tolling, Trucking Bottlenecks, and No-Fare Transit appeared first on Reason Foundation.

• New federal highways report finally released
• More states plan toll-financed Interstate reconstruction
• Increasing prospects for electric trucks
• Discretionary grants: better under Trump?
• Amtrak accounting flaws
• Army Corps drops new lock P3 plan
• Upcoming transportation events
• News notes
• Quotable quotes

At Last, a Federal Conditions and Performance Report on Highways and Transit

For decades, Congress has required the U.S. Department of Transportation (DOT) to produce a biennial report on the conditions and performance of U.S. highways and transit, in part because the federal government funds a considerable portion of the total spending on these modes.

In recent years, these reports have occurred with decreasing regularity. Until last month, the most recent conditions and performance (C&P) report was the 2015 edition, which used data from 2012 and was released in 2016. But last month, those of us waiting for a more-current version were greeted with a new C&P report. It no longer carries a date, instead, it is simply called the 23rd Edition. And the data on which it is based are from 2014. Thus, while the previous report published in 2015 was based on three-year-old data (2012), the 2019 report is based on five-year-old data. Still, it is more recent than the old one and includes revisions to its methodology.

The report is useful for its overview of the extent and composition of the U.S. highway system and the country’s transit systems. For highways and bridges, most of the numbers show modest progress in the condition of highway infrastructure, but (no surprise) worsening performance in terms of congestion. For transit systems, the report points out that the agencies do not collect or report standardized data on the condition of their infrastructure.

From a policy standpoint, I find the greatest value of the C&P reports in the projections of capital investment needs. In contrast to “needs assessments” based on what can better be characterized as wish lists, the Federal Highway Administration’s (FHWA’s) Highway Economic Requirements System (HERS) model runs projected projects through a benefit-cost model with the modest requirement of a benefit/cost (B/C) ratio of at least 1.0. That model continues to be refined over time, so the latest version is likely to be more rigorous than previous ones.

Here is an overview of the three highway and bridge annual investment scenarios from the 2015 and 2019 C&P reports. The numbers are the total of federal, state, and local spending.

I have problems with some of the assumptions built into the performance measures associated with the 2019 scenarios. Both the ‘maintain’ and the ‘sustain’ scenarios claim about an 18 percent reduction in average delay per vehicle mile of travel by 2034 because FHWA assumes that “travel growth gradually slows over time and various highway management and operational strategies are adopted more broadly.” I find that hard to believe, given actual upward trends in travel and congestion over the last 35 years. And by comparison, the ‘improve’ scenario shows only a 19 percent reduction in delay, just one percentage point better than the more-modest spending scenarios. By contrast, when it comes to pavement roughness and poor bridges, the projected improvements are much more dramatic.

Chapter 9 of the 23rd Edition explains ongoing revisions to the forecasts of annual vehicle miles of travel, which are now based on a detailed model developed by DOT’s Volpe Center rather than estimates from each state’s DOT (which FHWA considers less reliable). The national average baseline rates of vehicle miles traveled (VMT) growth used in the models are 1.01 percent/year for passenger vehicles, 1.72 percent for single-unit trucks, and 1.46 percent for combination trucks (tractor-trailer rigs), for an overall weighted average of 1.07 percent. By contrast, the overall average from projections supplied by state DOTs is 1.40 percent. Since the latest 12-month moving average national VMT data released by FHWA in December showed 1.01 percent, I’m inclined to agree with preferring the Volpe model, at least for shorter-term projections.

Another shortcoming of the highway investment scenarios is what is not included. Since all the analytical work very likely preceded the December 2018 Transportation Research Board (TRB) report on the future of the Interstate highways, that report’s finding that most of that aging system needs to be reconstructed over the next two decades (at a baseline cost of about $1 trillion) is not addressed. One hopes that by the time the next C&P report is released, state DOTs will have identified an array of needed (unfunded) Interstate reconstruction and widening projects that can be assessed by the HERS benefit/cost model.

Regarding transit capital improvements, the C&P report dutifully repeats that the Federal Transit Administration’s (FTA’s) claim that its Transit Economic Requirements Model (TERM) also incorporates benefit/cost analysis. Alas, it is widely known that TERM is something of a black box, with little transparency in how it works. (Interested readers can peruse the report of a Transportation Research Board special committee here.) The two transit investment scenarios that go beyond achieving a state of good repair are admittedly flawed, since they assume 1.2 percent annual ridership increase (low-growth) or 1.8 percent annual ridership increase (high-growth). A footnote on the scenarios chart notes that those projections are based on trend data through 2014 and do not take into account recent declines in transit ridership.

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More State Pursuing Toll-Financed Interstate Replacement

By my count, the number of states where either legislators or state DOTs (or both) have expressed serious interest in using toll financing to replace some or all of their aging Interstate highways and bridges is now 14. Connecticut, Indiana, and Wisconsin have completed tolling feasibility studies, and political wrangling over proposed trucks-only tolling is still ongoing in Connecticut, while the current governors of both Indiana and Wisconsin have balked at moving forward, despite considerable legislative support. In other states, Alabama and Louisiana have several major I-10 bridge replacement projects, Illinois is examining a major bridge on I-80 and an adjacent stretch of I-80 that needs widening. Alabama’s bridge project failed to win political support last year, but Louisiana has just authorized a smaller bridge replacement to be financed via tolls and developed as a long-term public-private partnership (P3) project. Oregon and Washington are jointly looking into toll financing to replace the major I-5 bridge across the Columbia River.

Legislation to authorize tolling studies is in prospect this year in Michigan, South Carolina, and Wyoming. In Michigan, Sen. John Bizon (R, Battle Creek) has introduced SB 507 which would assess the feasibility of using toll financing for Interstate modernization and develop a potential implementation plan; this is similar to what Indiana did several years ago. Bizon’s bill was approved by the State Senate’s transportation committee in November and is waiting for a Senate floor vote. South Carolina’s tolling champion, Sen. Hugh Leatherman (R, Florence), is focused on aging I-95, which has only two lanes each direction (compared with three lanes in Georgia). Leatherman is planning to introduce tolling legislation in this year’s session. The champion in Wyoming is Sen. Michael Von Flattern (R, Campbell County). His tolling study bill was approved by the legislature’s Joint Transportation Committee in December and is expected to be debated in the upcoming session.

In all three of the above states, one focus is the extent to which out-of-state travelers use the Interstates in question. In Wyoming, Von Flattern has written that it’s 85 percent of all I-80 travel, and 50 percent of that is long-distance trucks. Legislators in these states hope to structure the toll rates so that local users pay less than through traffic, which was also at issue in Alabama’s proposed toll-financed replacement of the I-10 bridge across the Mobile River. Frequent-user discounts are one proposed approach, while an outright exemption from tolls for locals could well run into legal challenges under the Commerce Clause of the Constitution.

There are also different approaches being considered for federal tolling approval, given that the 1956 law creating the Interstate highway program banned the use of tolls on federally supported Interstates. Toll-financed bridge replacement is already legal, as is tolling all lanes with variable pricing to reduce congestion. Several of the above states are looking into applying to the never-used three-state pilot program that permits a state to use toll financing to reconstruct one Interstate corridor. All three slots in that program are currently open.

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Prospects for Electric Trucks Are Increasing

Are the stars aligning for an electric truck future? I’ve been somewhat skeptical, but there are some signs of change that are worth paying attention to.

First of all, environmental regulations are likely to make it more costly to continue operating petroleum-fueled vehicles indefinitely. Last June, the European Council adopted new CO2 emission regulations for new trucks. By 2025, trucks must emit 15 percent less CO2 than they do in 2020, and 30 percent less by 2030. These regulations apply throughout the European Union. Nothing that stringent exists in the United States thus far, but new fuel-efficiency standards for heavy trucks will be effective as of 2021, just a year from now.

On the positive side, truck makers in Europe, Asia, and the United States are all developing electric trucks of various kinds. Battery electric propulsion seems likely to become the mode of choice for local-service trucks that operate from a central base and traverse 100 miles or so per day. That is within the range limits of battery systems of reasonable size and weight for delivery trucks, dump trucks, garbage trucks, etc.

The bigger challenge is heavy-duty (Class 8) trucks for over-the-highway use. Here the problems with batteries are range, recharging time, and weight—in addition to cost. An interim solution is the diesel-electric hybrid, which companies such as Hyliion are developing. The concept is about the same as long-standing practice for diesel locomotives. They are actually diesel-electrics, in which a smaller than usual diesel engine drives an onboard generator to power electric motors and storage batteries. Since the diesel is smaller and uses less fuel, emissions are reduced compared with comparable conventional diesel Class 8 tractors.

But for pure electric, the competing methods are hydrogen fuel cells producing electricity to drive electric motors or banks of batteries directly powering electric motors. The trade-offs here are becoming well-known. Enough batteries to power an 80,000 lb. (gross weight) big rig are very heavy, reducing the available payload. Nikola, the start-up developing Class 8 fuel cell tractors, says its hydrogen fuel cell system weighs 5,000 lbs. less than the batteries for Tesla’s battery-electric Semi. Range is also a factor, but I have not seen reliable data comparing the range of comparable battery-electric and fuel cell electric Class 8s.

Refueling/recharging might turn out to be a key deciding factor. Tesla claims 30 minutes for its Semi to recharge enough to go another 400 miles. Nikola claims its fuel cell refueling time will be comparable to that of diesel trucks. On the other hand, the refueling/recharging infrastructure for Class 8 electric trucks does not yet exist. Tesla has said it will build a network of Megachargers for its Semis, as it has done with 1100 Superchargers for its passenger vehicles. But no numbers or timetable have been announced. Nikola, on the other hand, has announced plans for 700 hydrogen fuel stations, for use by Nikola’s and others’ hydrogen fuel cell trucks.

And there are quite a few others. Toyota has been developing hydrogen fuel cell technology for years, and is now working with Kenworth Truck Co. to develop 10 heavy-duty hydrogen fuel cell trucks for the Port of Los Angeles. And Hyundai Motor Co. is already in production on a fuel cell heavy truck for the European market, in cooperation with Swiss-based H2 Energy. The estimated range is 250 miles. It is also developing hydrogen fueling infrastructure for Switzerland and later, for other European countries. And at the recent North American Commercial Vehicle Show, Hyundai unveiled its first Class 8 fuel cell concept truck.

My guess is that the hydrogen fuel cell Class 8 will prove to be better, overall, than the battery electric Class 8. But a key factor will be the cost of generating hydrogen to fuel and refuel these trucks. That strikes me as the biggest unknown.

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Are Discretionary Grants Better Under the Trump DOT?
By Baruch Feigenbaum

A recent Government Accountability Office (GAO) report and story by Politico highlighted the political nature of discretionary transportation grants. “How DOT chose which projects is a question the agency couldn’t answer even when the GAO was examining the grant-making process last spring,” Politico reported. Developing a quantitative metric-driven process is challenging and U.S. DOT needs to make changes to increase the rigor of the grant-making process.

Most federal surface transportation programs are funded by formula. For example, in the FAST Act the National Highway Performance Program section awarded each state a lump sum of money based on mileage and population. But formula funding may not reflect actual needs. If Florida is growing more quickly than Rhode Island, it may need more money to widen its highways. Further, formula funding does not provide an incentive to states that are more efficient with taxpayer dollars. If Georgia has an innovative process that allows it to maintain its highways at half the cost of New York, good policy would provide Georgia a bonus for its financial stewardship.

And since the formulas were developed by leaders of the Appropriations and Transportation committees the formulas are written to benefit the districts and states of congressional leadership. The formulas rarely advance specific goals or reflect good transportation policy.

With this reality, the George W. Bush administration, the Obama administration, and the Trump administration created discretionary transportation programs. DOT has found that by dangling a small amount of federal funding, the department can encourage states to make targeted improvements. The Bush administration, for example, used the Urban Partnership Agreement competition and the Congestion Reduction Demonstration Program to promote road pricing that reduced congestion and enhanced bus service. The Obama administration used the Transportation Investment Generating Economic Recovery (TIGER) Grants to promote transit and multimodal projects, and the Trump Administration is using Infrastructure for Rebuilding America (INFRA) Grants to improve rural infrastructure.

However, to be effective, the discretionary grant process has to maximize the use of technical criteria and minimize political decision-making. Unfortunately, rather than focusing on mobility, the Obama administration created TIGER grants in part to help improve the economy during the recession and recovery and fund non-roadway projects. (even after the economy improved, DOT still focused on shovel-ready projects). The quantitative metrics were a secondary consideration. As a result, many of the evaluation criteria were vague. DOT provided limited information to the public, because the agency knew the metrics used were not defensible. DOT funded almost as many projects ranked “Recommended” as “Highly Recommended.” In the early rounds of TIGER, less than 25 percent of the highly recommended projects were actually funded.  And the majority of the unfunded projects were roadway improvements. In terms of where the money was spent, the districts of Democrats in Congress received 70 percent of the funding despite representing less than half of the districts at those times.

GAO issued multiple recommendations to add quantitative metrics to the project review process and explain how DOT selected projects. In response, the Obama administration revised its application guidelines. But the new guidelines didn’t provide for any more information than the original process.

When the Trump administration entered office in 2017, it made a number of changes to the discretionary grant program. DOT renamed the TIGER program INFRA and created a spreadsheet showing the results of the reviews, project scores and a rationale for the scores. GAO reviewed the spreadsheets and found the data reliable. This was a major improvement over the Obama administration, which had failed to release any quantitative data to GAO or the public at large.

Further, after GAO reviewed the process in mid-2017, DOT implemented several of GAO’s recommendations. GAO found that some modal review teams scored projects more generously than other teams. In response, DOT provided discrete numeric rating categories that allowed less subjective interpretation. GAO recommended that DOT provide more documentation to applicants. In response, DOT formally notified unsuccessful applicants and offered a debriefing that showed how the project was rated.

While the Trump administration improved the discretionary grant process, problems remain. Last month, Politico reported, “The $67.4 million grant application for Boone County — a rapidly growing suburban district of political importance to Senate Majority Leader Mitch McConnell, the husband of Transportation Secretary Elaine Chao — was initially flagged by professional staff as incomplete. But after giving the state and local officials behind the application an extra opportunity to submit missing information, Chao chose it as one of 26 grant winners out of an initial pool of 258 applicants.” Boone County wasn’t alone. Forty-two of the 97 applicants with flawed applications received an extra opportunity, but 55 applicants did not. In addition, even though DOT has more-rigorous quantitative information, many projects with a high uncertainty rating relative to cost-effectiveness got funded. These projects may have a benefit-cost rating of less than 1.0. If so, limited resources could be better spent on other projects.

One of the underlying problems is the poor original design of the program. The TIGER grants gave too much power to political officials, allowing less effective projects to be funded. While the Trump administration seems to have improved some metrics, political decision-making remained, both because it is challenging to make major programmatic changes and because political decisions benefit the administration in charge.

Designing a discretionary grant program correctly from the start is key to success. Criteria need to include benefit-cost analysis, national interest, congestion reduction, and economic benefit. Political actors’ influence should be reduced as much as possible.

DOT could take additional steps to improve the INFRA grants. In a number of cases DOT allowed project sponsors to supplement their applications; there should be guidelines for when supplemental information is allowed. Further, DOT’s guidelines for merit scoring are vague. The department needs to use numeric scoring systems for all evaluations.

A better option might be to eliminate discretionary grant programs altogether. Created to fund projects more on merit than formula funding, the results have been mixed at best. The Obama administration’s program supported things like recreational trail programs that were neither transportation-related nor in the national interest. The Trump administration seems to be doing a better job supporting needed infrastructure projects, but questions remain whether the “best” projects are being funded.

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Amtrak Accounting Tricks Cover-Up Losses
by Randal O’Toole

A recent article in the Wall Street Journal claimed Amtrak “had its best year ever,” losing just $29.3 million on claimed revenues of $3.3 billion in 2019. The company is “moving closer to the goal” of breaking even in 2020, says the Journal.

Amtrak claims these figures by using an accounting system that, as the Rail Passengers Association charges, is “fatally flawed, misleading and wrong.” Amtrak covers up its losses with two major accounting tricks. First, Amtrak counts subsidies it receives from 17 states as “passenger revenues” even though the vast majority of taxpayers who pay those subsidies never ride Amtrak.

Second, Amtrak doesn’t count the second biggest operating cost on its expense sheet: depreciation. Depreciation is not just an accounting fiction; it is a real cost indicating how much a company needs to spend or set aside to keep its capital facilities in good working order. After correcting these two tricks, Amtrak lost nearly $1.1 billion in 2019, and none of its trains earned a profit.

Amtrak’s fantasy that depreciation shouldn’t be counted as a cost shows that it is engaged in the old railroad accounting trick of propping up the bottom line by deferring maintenance. For example, Amtrak’s fleet of passenger cars have an expected life span of 25 years, yet their average age is more than 33 years and less than a quarter are under 25 years.

Amtrak claims the Acela, its moderately high-speed train between Boston and Washington, is profitable, but if that were true, Amtrak would have used some of those profits maintaining its infrastructure. Instead, Amtrak admits that the Boston-to-Washington corridor has a $38 billion backlog of maintenance needs. If the route were truly profitable, Amtrak would never have allowed such a backlog to build up.

Amtrak’s biggest trick of all is making people think that intercity passenger trains are vital to our economy. In fact, the average American rode Amtrak just 20 miles in 2017, compared with nearly 15,000 miles by automobile, 2,100 miles by air, and more than 1,100 miles by bus. If Amtrak disappeared tomorrow, hardly anyone would notice, not even in the Northeast Corridor, where Amtrak reluctantly admits it carries just 6 percent of intercity travelers.

There’s a good reason why few people ride Amtrak: passenger trains are expensive. Amtrak fares in 2019 averaged more than 35 cents a passenger mile, compared with average airfares of 13 cents a mile and average driving costs of 24 cents a passenger mile. Federal and state subsidies to Amtrak added nearly 34 cents per passenger mile, bringing the total cost of passenger train travel to nearly 70 cents a passenger mile.

Of course, airlines and highways are also subsidized, and we should end those subsidies as well. But federal, state, and local subsidies to air and auto travel average around a penny per passenger mile. So why does Amtrak deserve subsidies of 34 cents per passenger mile?

Despite the imbalanced subsidies, Amtrak’s already miniscule share of travel is steadily eroding. In the last five years, air travel has grown 23 percent and auto driving 8 percent, but Amtrak’s passenger miles have declined 7 percent.

So what should Congress do about Amtrak? Rather than give it billions of dollars to restore or build infrastructure that it can’t afford to maintain, Congress should simply agree to pay Amtrak a given amount for every passenger mile it carries. This will give Amtrak an incentive to focus on passengers, not politics.

Over time, Congress should reduce that amount until Amtrak receives no more per passenger mile than airlines or highways — by which time it should also eliminate airline and highway subsidies. Any trains that can truly be profitable will survive, but if they do it will be because Amtrak has found ways to efficiently transport people, not because of accounting tricks.

Randal O’Toole (rot@cato.org) is a senior fellow with the Cato Institute and author of Romance of the Rails.

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Army Corps Abandons Proposed P3 for New Lock
By William B. Newman, Jr.

The Soo locks are located on the St. Mary’s River between Lake Superior and Lake Huron in Michigan. Like other inland waterway facilities, they were built and are operated by the Army Corps of Engineers. Only the newer of the two locks—the Poe Lock—is big enough for the 1,000-foot Great Lakes ships that handle iron ore, the main commercial use of these locks. In 2017, 89 percent of the tonnage went through the Poe Lock, most of it iron ore.

Efforts to replace the smaller lock with a second Poe Lock have been going on since 1986 when Congress authorized $227 million for this purpose. While the Corps had previously concluded that the construction of a second Poe Lock did not pass a cost-benefit analysis, it did another cost-benefit analysis in 2018 and concluded that it would yield $2.42 in benefits for every dollar of cost. By that time, the cost of the project had escalated to $922 million in 2018 dollars. Because the project will take seven-to-10 years to construct, the final cost could be over $1 billion.

The initial congressional authorization of the project required 20 percent of the cost to be borne by other-than-federal taxpayers. Over time, the iron ore industry and the steel industry, the major beneficiaries of a second Poe Lock, convinced Congress to drop the requirement for a non-federal contribution and instead, Congress mandated that the project be “100 percent federally-funded.” That mandate notwithstanding, the Michigan government anted up $52 million in 2018 in hopes of speeding up the project. As with all other U.S. waterway locks, users pay not a dime towards operation and maintenance, but unlike users of locks on the Inland Waterway System, users of the Soo Locks also pay nothing for construction, including the $1 billion cost of a second Poe Lock.

Early in 2019, the Corps established a public-private partnership (P3) pilot program with the goals of demonstrating the viability of new delivery methods that can significantly reduce the cost and time of project delivery.

Both the Michigan Department of Transportation (MDOT) and I made submissions recommending that the second Poe Lock project be one of the pilot P3 projects, with MDOT focusing on the timely delivery and quality improvement, and my proposal focusing on the cost benefits to federal taxpayers if the users pay the same 50 percent of the capital costs that users of our nation’s navigable rivers pay, which would require a change in law. Specifically, if the Great Lakes states funded one-quarter ($250 million) of the project, with Michigan having already funded $52 million of that amount, and the federal government funded another quarter of the project, if the remaining half was financed by a third parties using existing federal government lending programs ($500 million), with tolls imposed on the users to repay that loan, the contribution from federal taxpayers could be reduced by 75 percent.

In June, I received an e-mail from the Corps saying my Soo Locks submission had been selected “…for further development as a P3…. Our P3 team will be reaching out to you within the next 60 days to establish a specific path forward to further develop this project.” Shortly thereafter, I learned that the Michigan Department of Transportation (MDOT) had also proposed the second Poe Lock as a P3 project, and it had been selected. I later spoke with several MDOT staffers about the similarities and differences of our respective submissions.

But the Corps soon changed its tune. In September, it wrote to me: “As the operation of navigation structures is an inherently governmental responsibility, moving forward we will only be working with MDOT to analyze the feasibility of P3 delivery for the Soo Locks project.”

What changed? Clearly, the Corps knew when it accepted my proposal that the operation of the lock is inherently governmental. And in December things turned for the worse for taxpayers, federal and Michigan, when MDOT withdrew its support for the project as a P3 candidate. Why did Michigan—which had voluntarily contributed $52 million to this project and whose DOT submitted a P3 proposal—withdraw? Why did MDOT respond in its submission to what the anticipated revenue sources for funding the P3 component of the project might be, “Potential user fees assessed at the locks themselves.”

Was MDOT influenced and/or intimidated by the iron producers and steel producers or other Poe Lock commodity shippers? Why do the commercial lock users continue to get a free ride for the transportation infrastructure they use, with no financial responsibility for the construction, maintenance or operating costs of this infrastructure? Why are Michigan taxpayers fronting the first $52 million and not demanding the users pay anything?
Taxpayers need answers.

William B. Newman, Jr. is a consultant in Washington, D.C., and writes on infrastructure and transportation issues. He is a former executive of Conrail.

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Upcoming Transportation Events

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

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.

Pelican Solutions Summit, Jan. 30, 2020, Baton Rouge, LA, Baton Rouge Hilton (Baruch Feigenbaum speaking). Details here.

TEAMFL Annual Meeting, Jan. 30-31, Orlando, FL Hyatt Regency Orlando International Airport (Robert Poole speaking). Details here.

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News Notes

Gas Tax Revenue Declines 
Higher fuel efficiency of newer vehicles and growing sales of electric vehicles are leading to decreases in gas tax revenue. In FY 2019, gas tax receipts of the federal Highway Trust Fund were down by 8.9 percent from the year before (though diesel tax receipts offset the decline for the Trust Fund total). Reduced current and projected fuel tax revenue in Florida has led to reductions in Florida DOT’s five-year work program. Even fast-growing Virginia suffered a 0.3 percent decrease in gas tax revenue in the most-recent yearly total. These decreases are leading to greater interest in implementing mileage-based user fees as a replacement for fuel taxes.

Louisiana’s First Revenue-Based P3 Approved
The much-needed replacement of the Belle Chasse movable bridge and tunnel in Plaquemines Parish will proceed as a long-term public-private partnership (P3) financed via toll revenues. The plan, advanced by Louisiana DOT, won key legislative committee approval in December, despite objections from local residents to the planned 25-cent toll. The state has already accepted a $45 million grant to help pay for the $162 million project, and DOT Director Shawn Wilson told legislators that the grant was conditioned on the self-help plan involving toll finance.

Road User Charge to Be Constitutionally Protected in Washington State
Plans to phase out fuel taxes and phase in mileage-based user fees (called Road User Charges in Washington) advanced in December when the State Transportation Commission voted to give RUC revenues the same constitutional protection enjoyed by the state’s fuel taxes: the users-paid revenues will be used solely for highway purposes. Transit and environmental groups had argued for letting RUC revenues be used for any and all kinds of transportation projects.

Utah Launches Mileage-Based User Fee
Utah launched a statewide mileage-based user fee (MBUF) program on Jan. 1, 2020. Initially, it applies only to owners of the 51,000 electric and hybrid vehicles in the state. These car owners will benefit from signing up, since the per-mile charge will likely cost them less than the special registration fee that applies to those vehicles to compensate for their use of no, or less, gasoline than other vehicles. Utah DOT is sending out a booklet explaining the new MBUF to all 51,000 of these vehicle owners.

Driver Assistance Tech Can Lead to Distracted Driving
A report from the AAA Foundation for Traffic Safety finds evidence that drivers of cars with advanced driver assistance systems (ADAS) such as adaptive cruise control and lane-keeping assistance are nearly twice as likely to engage in distracted driving while using them, compared with when they are not using them. The work was carried out by AAA and researchers at the Virginia Tech Transportation Institute.

U.S. and China Cut Electric Vehicle Subsidies
A year-end federal spending bill failed to include an expansion of subsidies for the purchase of electric vehicles. As a result, the subsidy will phase out whenever a company’s total electric vehicle (EV) sales reach 200,000. So far, both GM and Tesla have hit that limit. But China has also changed its EV policy, eliminating the purchase subsidy last year, but continuing to impose EV production targets on vehicle producers.

$8 Billion in Toll Projects on Offer in Indonesia
Indonesia’s government announced that four new toll road projects will be offered to investors as long-term P3 concessions. Three of them are on the main island of Java and the fourth is in South Sulawesi. The expected cost of the four is $8.03 billion, according to the Public Works & Housing Ministry.

Truck Automation Pioneer Starsky Robotics Seeking Buyers
Starsky, a leader in developing remotely driven trucks — a driver in a central location takes control of the truck, avoiding the hardships of life on the road — is seeking buyers. The company has been ranked 12th in the FreightTech 25 set of companies developing truck automation, but just before Christmas, it announced that it was in talks with potential buyers. Freightwaves reported that Starsky was “in talks with potential buyers” and also discussing “selling to the highest bidder and giving money back to the bank.”

States Benefit from Using Cost-Benefit Analysis
My Reason colleague Baruch Feigenbaum last month published a short piece reporting that only five or six states systematically use cost-benefit analysis to evaluate transportation projects, among them Georgia, North Carolina, and Virginia. His assessment finds that when used rigorously, cost-benefit analysis leads to better use of always-limited transportation investment funds.

Michigan City to Sell Two Bridges
Obsolete bridges exist across the United States, many of them in small cities and rural areas. Bay City, Michigan, is one such city. Its Independence and Liberty drawbridges need replacing, but the city budget can’t come up with the funds to do so. After discussion and study, the city commission decided to privatize provision of the replacement bridges. The winning bidder is United Bridge Partners, which will pay the city $5 million to take over the bridges and build their replacements, recovering its construction and operating costs from toll revenues. Transponder tolls for Bay City residents will start at 50 cents, while others will pay $2.

OOIDA Asks for Supreme Court Review of Turnpike Tolls
The National Motorists Association and the Owner-Operator Independent Drivers Association have filed a petition asking the U.S. Supreme Court to hear its case against the state law that forces the Pennsylvania Turnpike to hand over $450 million of toll revenue each year to the state DOT to be distributed to urban transit agencies. The 3rd Circuit Court of Appeals last year ruled that the increased tolls needed to pay this subsidy were not excessive and did not violate the Commerce Clause of the U.S. Constitution.

Autonomous Truck Saves 10 percent of Fuel, per University Study
Level 4 autonomous trucks produced by TuSimple reduce fuel consumption of heavy-duty (Class 8) trucks by at least 10 percent. That is the principal finding of a study by researchers from the University of California-San Diego’s Jacobs School of Engineering. The TuSimple trucks were equipped with a black box that recorded driving data over a six-month period, including 122 autonomous runs totaling 6,700 miles. Manually-driven trucks were also outfitted and driven, to provide a fuel-consumption comparison over different speed ranges. The comparison showed fuel savings of at least 10 percent for the autonomous trucks.

Pennsylvania I-81 Project to Be Done as P3
A 4.5-mile section of I-81 near Wilkes-Barre will be widened to three lanes each way and have eight bridges replaced. This will be the latest in a series of non-tolled P3 projects offered by PennDOT’s P3 office. I-81 is a major truck route and is the longest north-south Interstate in Pennsylvania.

Truck Travel Time Reliability Assessed in New Study
A new study from the National Cooperative Highway Research Program used data from a nationwide stated-preference survey of shippers and motor carriers to estimate the value of reliability (VOR) of truck travel time. The study came up with an average value of $160 per shipment per hour of delay, or $9.40 per ton per hour. The report provides an array of VOR figures for different situations. The report is “Estimating the Value of Truck Travel Time Reliability.”

Belated Congratulations to Tyler Duval
Tyler Duval, former acting under secretary for policy at U.S. DOT and later a partner in the DC office of McKinsey & Company was hired last May to be the CEO of the SH 130 Concession Company. That company acquired the 41-mile SH 130 toll road south of Austin, Texas, several years ago after the initial concession company went bankrupt. The current company has a 50-year concession for the toll road.

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Quotable Quotes

“None of these struggles—to recreate human driving, rethink infrastructure, remodel the taxi business, put pedestrians on wheels—are especially surprising. They were born of a hubris that’s easy to understand. The world of software runs on fat margins. Its problems are often solved with keystrokes. The outside world, especially the inescapably physical idea of mobility, is leaner and meaner; it’s harsh to newcomers. The denizens of the tech industry have spent the past decade learning that lesson. Maybe they’ll spend the next one applying it. Or they’ll just concentrate on flying cars.”
—Alex Davies, “When the Transportation Revolution Hit the Real World,” Wired, Dec. 26, 2019

“[I]t is important to take a long-term view when evaluating tolling untolled road-type projects. The value of accelerating replacement of a critical piece of infrastructure by implementing tolling may not be realized in a short-term evaluation. Tolling also makes more sense when taking a long-term view, since improvements in vehicle fuel economy and electric vehicles are putting an increasing strain on fuel tax revenues, a challenge that is expected to become more severe into the future.”
—Ronald Davis, et al., “The Tradeoffs of Tolling Untolled Roads,” Transportation Research Record 1-11, Transportation Research Board, 2018

“Maybe the best way to think about congestion pricing’s fairness is to imagine a world where the roads are already priced—a world where we allocate road space like we already allocate water or electricity or other infrastructure. In this world, drivers would pay for the valuable public land they used; congestion would be far lower and so would pollution; transit would run faster; and governments would use some of the toll revenue to mitigate congestion pricing’s burden on low-income drivers. Now imagine a proposal to make all roads free. Free roads would let the poor and rich drive free, but the rich drive much more than the poor. Congestion would rise, buses would slow, and pollution would increase. The pollution would fall most heavily on the poor, but without tolls, there would be no revenue to compensate the people it fell on. Making the roads free would undermine efficiency (the transportation system would work less well) and equity (free roads would harm the disadvantaged and reward the more advantaged).”
—Michael Manville, in “Pricing Roads, Advancing Equity,” Transform, January 2019

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The post Surface Transportation News: New Federal Highway Report, Future of Electric Trucks, and States Turn to Tolling appeared first on Reason Foundation.

• Congestion pricing: a tale of two cities
• States should stop diverting fuel-tax revenue
• Express toll lanes’ expanding track record
• 2018 commuting: same old same old
• Should trucks be taxed to bail out the Highway Trust Fund?
• Reforming transportation’s governance and institutions
• Upcoming Transportation Events
• News Notes
• Quotable Quotes

Congestion Pricing: A Tale of Two Cities 

A number of major urban areas with heavily congested downtown cores are discussing implementing some form of congestion pricing—a charge either to cross a boundary into downtown during peak hours or a charge on driving within that downtown.

Farthest along by far is Manhattan, where advocates succeeded (after many years) in getting state legislation enacted for such pricing to begin in 2021. Another city with a long history of studying congestion pricing is Seattle, where the Seattle Department of Transportation (DOT) released a preliminary study earlier this year, with more details promised soon.

In July, Seattle also received a study commissioned by Uber Technologies and carried out by ECONorthwest, a respected consulting firm based in Seattle. This study used street-specific data from two Uber databases, one on speeds and the other on travel times. Its researchers used this to estimate demand elasticity and develop a pricing schedule that would meaningfully increase travel speeds and reduce travel times within the downtown zones identified by the data. The maximum daily charge was estimated at $3.80 and the amount of congestion reduction was quantified.

The approach dictated by the New York enabling legislation is very different. The statute requires that the congestion pricing system generate enough annual revenue during its first five years to support issuing $15 billion worth of bonds to refurbish the city’s aging subways and the Long Island Railroad. In response, city number crunchers have estimated an average daily charge of $11.52—three times the level estimated for Seattle.

Is New York City congestion three times as bad as Seattle? The 2019 Urban Mobility Report from the Texas A&M Transportation Institute provides figures on the intensity of congestion in these two metro areas. Here are three relevant measures:

In other words, while congestion is certainly bad in New York City, what’s going on in New York is largely driven by a revenue target, rather than a congestion-reduction target.

That makes it especially egregious for politicians, transportation officials, reporters, and others to describe what New York is doing as “tolling.” A toll is a charge imposed on users to pay for the capital and operating costs of the road, bridge, or tunnel they are using. The planned NYC congestion charge is basically a tax imposed solely on personal and commercial vehicles to pay for major investment in rail transit.

I have searched in vain for any planned investment in the streets or bridges that these vehicles use. It’s not as if there aren’t any such investments that would likely pass a benefit/cost test. How about first-class roadway maintenance, to reduce the $719 per year it costs the average New York City motorist in wear and tear and faster depreciation due to streets and roads in “poor” condition? How about state-of-the-art signal timing systems to improve traffic flow on the major north-south avenues (which would also help many bus routes)?

A thoughtful report from the Regional Plan Association includes a map showing the four principal non-tolled bridges into Manhattan—Queensboro, Williamsburg, Manhattan, and Brooklyn. These aging relics should be replaced, and the obvious way to do this is with toll financing. But that would mean customers using those bridges would receive the same degree of exemption from the congestion charge as users of all the tolled bridges and tunnels. And that would divert a lot of revenue to these new bridge tolls instead of to the subway and commuter railroad.

This focus on a revenue target rather than on producing meaningful congestion relief sets a very bad precedent for other congested downtowns. A recent report by the Eno Center for Transportation on lessons learned from Europe’s approach to congestion pricing cites examples of pricing proposals that failed. For example, in an echo of what New York is doing, Gothenburg, Sweden, officials focused their campaign on generating enough revenue to build a suburban rail tunnel—and failed to gain public support. Streetsblog reports that Chicago Mayor Lori Lightfoot “is considering a congestion pricing plan to fill a hole in the city’s budget” and cites disagreement from Eno’s Rob Puentes on this approach.

Any urban congestion pricing plan should offer benefits greater than its costs, and should include real benefits for the commuters, tourists, and commercial operators who will be required to pay the charges. Yes, reduced congestion is worth something to them, but as the Regional Plan Association notes, charges to use the roads should include paying for the maintenance of highways, bridges, and tunnels—which the New York plan clearly does not do.

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States Should Stop Diverting Fuel Tax Revenue
By Baruch Feigenbaum 

For most of the past 100 years, U.S. transportation policy has been based on the users-pay/users-benefit principle. The biggest advantages of this principle are that it is fair (those who pay the fees receive the benefits), proportionate (those who use highways more would pay more), self-limiting (the tax rate is limited), predictable (consistent from year to year), and an investment signal (indicates how much infrastructure to build).

The motor fuel tax, the most-used funding mechanism, is still users-pay, but users are benefiting less and less. Most of the transportation industry is aware of federal gas tax diversions. The federal diversion grew from 0 percent to 30 percent between 1968 and 1991 and has more or less held constant at that rate. Local transit systems, recreational trails, and invasive weed removal projects regularly receive revenue generated by gas taxes.

But what may surprise many in the transportation world is that more than half of states are also diverting their state motor fuel revenue away for their roads and highways. Thirty-one states divert a portion of their motor fuel tax revenue to non-road-related expenditures, with five diverting over a third of gas tax revenue and an additional five states diverting over a quarter of gas tax revenue.

Northeastern states have some of the largest percentage diversions and Connecticut has the highest diversion rate, 57.8 percent. While Connecticut’s gas tax generated over $506 million in 2018, 40 percent went to fund general state debt and 21.6 percent subsidized transit.

Connecticut’s neighbors are the states with the second, third and fourth highest diversion rates: New York, Rhode Island and New Jersey, respectively. New York diverts 37.4 percent of all motor fuel tax revenue towards mass transit. Only 13.8 percent of New York’s motor fuel tax revenue is dedicated to current highway capital projects, while another 25.4 percent is allocated for NYDOT operations (a category which includes the cost of road maintenance, from salaries to equipment costs, but also administrative uses). Rhode Island allocates 27.9 percent of its motor fuel tax revenue to transit and an additional 2.9 percent to the Department of Human Services (DHS) to cover the transportation costs of veterans and disabled individuals, among others. Those transferred funds, however, are simply deposited into DHS’s operating budget, leaving little accountability over the allocation of motor fuel tax revenue.

New Jersey’s overall diversion rate of 34.0 percent consists of a $676 million allocation of motor fuel tax to NJ Transit and a $2 million allocation to various sidewalk and pedestrian projects meant to transform municipalities into transit-oriented villages.

Many other states also divert revenue to transit. Some such as Maryland and Massachusetts divert a large share, 27.8 percent and 23.7 percent respectively. Others divert a smaller percentage: Michigan, Tennessee, and Vermont divert 1.6 percent, 3.3 percent, and 2.6 percent respectively. Colorado authorizes its municipalities to use 15 percent of their fuel tax on transit, which accounts for 5 percent of overall fuel tax revenue in that state.

Beyond transportation, states frequently use motor fuel tax revenue to fund other state-level executive departments. Michigan diverts 25.9 percent and Texas diverts 24.7 percent of revenue to their respective school aid funds. Kentucky distributed a quarter of its revenue to help balance the budget of any executive department running a deficit. Additionally, many states, such as Colorado, Maine, Pennsylvania, and Vermont use a portion of their respective revenue to fund state police operations.

Small line-item diversions can add-up as well. Washington state, for example, diverts $3.9 million to vanpool services, $11.1 million to bike and pedestrian programs, $9.4 million to bike and pedestrian safety, $4 million to two separate sidewalk programs, and $37.5 million toward fish barrier removal efforts. Combined with other diversions for rail and buses, Washington’s overall diversion rate is 10.2 percent.

Other notable diversions are North Carolina’s 3 percent diversion toward municipal sidewalks and bike programs and Vermont’s 1.2 percent diversion for visitor center construction and maintenance (which is in addition to rest-stop allocations). Interestingly, North Dakota diverted $4.7 million, just under 1 percent of its fuel tax revenue, to the Ethanol Subsidy Fund, effectively subsidizing a component of the very fuel that it’s taxing.

While all diversions are problematic, the larger percentage diversions of gas taxes can take significant funding for roadway capital, maintenance and operations projects and impact those highway systems. North Dakota DOT shouldn’t subsidize ethanol with gas taxes but it can theoretically manage the 1 percent diversion that subsidizes ethanol. Connecticut DOT faces real challenges in losing 40 percent of its revenue to general state debt service. There are a variety of factors in play, but North Dakota ranks first, and Connecticut ranks 44th, in overall performance and cost-effectiveness in Reason Foundation’s most recent 24th Annual Highway Report.

In examining gas tax diversions, New York City has a very high transit mode share; while there are better transit funding mechanisms than the gas tax, New York City transit is a highly used form of transportation. On the other hand, education receives the largest share of general fund revenue in most states. It certainly does not need to be supplemented by the gas tax. And while fish barrier removal may be a worthy cause in Washington state, given the abysmal pavement conditions on its highways, the state cannot afford any diversions and it is not the type of project gas taxes should be funding.

The most troubling fuel tax diversions are those for general debt. States with these diversions need to reduce spending to available tax revenue. But as long as they can bail themselves out by grabbing money from the transportation fund, they have no incentive to clean up their act. While most other diversions can be eliminated, the gas tax diversions for state debt create a cycle of general fund dependency on gas taxes.

Some states are working to reduce their fuel tax diversions. Several, such as Pennsylvania, are examining constitutional amendments or lockboxes that would prevent diversions. But even when states eliminate or reduce diversions, the process can be slow. Georgia passed comprehensive transportation reform in 2015 that eliminated the ability for counties to implement a sales tax on gasoline for non-roadway purposes. Yet, the state’s referendum-authorized sales taxes last for 10 years, so there will be ongoing diversions until 2025.

It’s clear that many states saying they need more transportation funding could increase their highway funding without increasing taxes by reining in their gas tax revenue diversions. Rather than using motor fuel taxes as a slush-fund, states should respect those who pay gas taxes by strengthening their users-benefit/users-pay systems and using that money to improve and maintain roads and highways.

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Express Toll Lanes’ Expanding Track Record

How many express toll lane projects are in operation in the United States today?

As of mid-summer, according to a tally provided by the International Bridge, Tunnel & Turnpike Association’s TollMiner database, there were 51 such projects. Texas has the most (18), followed by California (9), Florida (5), Georgia and Virginia (4 each), Colorado and Minnesota (3 each), Washington (2) and Maryland, North Carolina, and Utah (1 each).

Some of these projects were simple, low-cost conversions of existing high-occupancy vehicle (HOV) lanes. An increasing number of projects are lane additions, requiring serious capital investment. For these projects, a growing trend is issuing toll revenue bonds, sometimes by a state agency (as in Riverside County, CA) but more commonly by a long-term public-private partnership (P3) entity. In my July 2018 column in Public Works Financing, I reported that Fitch Ratings has assigned (low) investment-grade ratings (BBB) to most such bonds, except for the 24-year-old SR 91 ETLs in Orange County, CA, whose revenue bonds are rated A+. That’s because they went through the Great Recession with a revenue decline of only 12 percent and recovered nicely thereafter. Most of the other ETLs opened after that period and have not yet been tested by a recession.

The positive track record is leading to the ongoing expansion of ETLs, with more states considering this approach to dealing with serious freeway congestion. One of these states is Massachusetts, where Gov. Charlie Baker in August said that adding optional priced lanes would be a good idea to deal with Boston-area congestion that has reached a “tipping point.” His Transportation Secretary, Stephanie Pollack, said their DOT will do a feasibility study on this in 2020.

Recent new project announcements have included the planned start of construction to add ETLs to the 101 freeway in San Mateo County, CA; Georgia DOT promising release of a request for quotation (RFQ) for the Georgia 400 ETL project in first-quarter 2020, and several ETL projects either planned or under construction in the Tampa/St. Petersburg, FL metro area. Also in Florida, the Turnpike has opened ETLs on its SR 528 toll road in the Orlando metro area.

Extensions of existing ETLs are under way in at least six states, as follows:

• California: plans are moving forward for more ETLs on SR 60, SR 91, and I-215;
• Florida: construction continues on extending the I-95 ETLs northward from Ft. Lauderdale to West Palm Beach;
• Texas: Austin’s existing MoPac ETLs have been greenlighted for a southward extension;
• Utah: a project extending the existing I-15 ETLs is under way;
• Virginia: extensions ETLs on I-95 north (as I-395) to the DC line and south to Fredericksburg are under way, with the former opening this month; and,
• Washington: a major project under way to add ETLs to I-405 from Renton to Bellevue, as a southerly extension of the existing ETLs going north from Bellevue.

There are ETL problems and conflicts here and there, but I will save those for an upcoming issue of this newsletter.

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2018 Commuting Data: More of the Same

The Census Bureau, last month, released the results of its 2018 American Community Survey (ACS), including details on commuting to work. The results show little change since 2014, except for working at home, which has increased from 4.5 percent to 5.3 percent of workers, on average.

To get a broader perspective, it is worthwhile looking at longer-term trends. As can be seen in the numbers below, driving alone has remained at more than 75 percent of all commuting, while carpooling may have finally leveled off, after a three-decade decline, at about 9 percent (and combining drive-alone and carpool means about 85 percent get to work in a motor vehicle). Transit is also in a long-term decline, though nowhere near as steep as that of carpooling. Walking and other means (bicycle, scooter, etc.) remain less than 2 percent. It is also clear that working at home now exceeds transit nationwide (5.3 percent versus 4.9 percent).

The places where transit continues to play a large role are traditional central business districts (CBDs), primarily in cities whose downtowns were well-established prior to the advent of highways and motor vehicles. These include the following CBDs:

Attempts to shift large numbers of commuters from motor vehicles to transit are unlikely to succeed in metro areas where the vast majority of jobs are not in the central business district but are instead spread widely across the metro area. Here are CBD and metro area transit shares in auto-era metro areas:

For metro areas like this second group (which is similar to nearly all of the rest of America), a far better solution than adding very costly rail transit is to facilitate fast and reliable region-wide express bus service using variably priced lanes on the existing region-wide freeways. That cleverly gets motorists to voluntarily pay most or all the costs of the new lanes, which buses use at no charge, meaning the transit agency does not have to create new infrastructure. All it has to provide is more buses to operate on the virtual equivalent of exclusive busways.

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Should Trucks Be Taxed More to Bail Out the Highway Trust Fund?

In October the Congressional Budget Office (CBO) released a report called “Issues and Options for a Tax on Vehicle Miles Traveled by Commercial Trucks.” The role of CBO is not to propose or recommend policies. Instead, when requested by Congress, it analyzes potential new policies. In this case, given concern about the Highway Trust Fund taking in considerably less user-tax revenue than Congress is determined to spend on highways and transit, some members of Congress asked CBO to look at a new tax on trucks based on their miles traveled. Hence, it focused on questions such as: Which trucks? Which roads? What kind of collection mechanism? And, what level of tax rate?

As is usual for CBO reports, the work was competently done, making realistic assumptions and crunching the numbers to estimate answers to the above questions. For example, a tax of 5 cents/mile applied to all commercial trucks on all public roads would generate $12.8 billion a year, but if applied only to combination trucks (tractor-trailer rigs) that number would be $8 billion. Other scenarios started with various revenue goals, such as not only covering the current annual HTF shortfall but also covering more of trucks’ share of highway wear and tear. Numbers here used rates as high as 7.5 to 9.9 cents/mile and yielded estimated revenues of $16.1 to $19.4 billion per year.

In recent years, the trucking industry has argued that all highway users should be paying more, but they would surely oppose any attempts by Congress to implement the ideas assessed in CBO’s study. What the industry rightly wants is major improvements to (at least) the Interstate highways on which they depend heavily, as well as other key highways that are part of the National Highway System. The problem with a new tax to bail out the HTF is that—politics being politics—the increased revenue would almost certainly be spread over the hundred or more programs that now get annual HTF funding. So what a new trucks-only vehicle mile traveled (VMT) tax would be for the industry is basically all pain with little-or-no gain.

On a more fundamental level, I have long supported the idea that in coming decades this country needs to phase out per-gallon fuel taxes and replace them with per-mile charges (mileage-based user fees—MBUFs). This idea is gradually picking up support in Congress, and some of those supporters might be inclined to see the trucking industry as the place to start this transition. Most highway trucks already have some kind of mileage logging and communications devices, and it is a vastly smaller segment of highway users than individual motorists. And lessons learned from trucking could be generalized later on for per-mile charging for them.

I think that is precisely the wrong way to begin this transition, for several reasons. First, the transition should not be imposed top-down from Washington, either on cars or on trucks. The far wiser way is to continue encouraging states to experiment with MBUF pilot projects (which are starting to include trucks), working to solve technical problems, customer acceptance problems, privacy protections, etc. We need pioneer states to work out what it will take technically and politically to get to yes on converting to an MBUF future.

Second, states are far more credible on transportation with voters than is the federal government. As we all know, federal fuel tax rates have not been increased since 1993, but just about every year, the large majority of local and state transportation funding ballot measures are approved by voters (as happened again this month). This alone argues for letting the states take the lead in a discovery process to find acceptable ways of transitioning from per-gallon to per-mile charging.

Third, since the trucking industry has a long history of opposing weight-distance taxes (which exist in a handful of states), imposing what the industry would see as a national weight-distance tax on trucks is asking for a battle royale. My guess is that the trucking industry would win that battle, and in so doing would set back the needed transition from per-gallon taxes to per-mile charges for a decade or perhaps much longer.

I outlined a possible state transition strategy for shifting from per-gallon taxes to per-mile charges in this recent Reason Foundation policy brief.

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Reforming the Governance and Institutions of America’s Transportation System

Earlier this year, the Eno Center for Transportation and Reason Foundation convened an invitation-only workshop to explore whether the current set of agencies and policies for funding and managing America’s surface transportation system are fit for purpose and, if not, what sort of reforms might make sense. The idea for the workshop emerged from two separate discussions: one between former Federal Highway Administration (FHWA) policy expert Steve Lockwood and me, and the other—independently—between Eno’s Emil Frankel and UCLA’s Martin Wachs. Since we all know one another, these conversations led to the idea of convening an off-the-record workshop in which knowledgeable researchers and practitioners could explore these topics.

You can find a summary of the workshop, including a list of the participants, on the Eno website. To add some color to that summary, here are a few excerpts from my notes as a participant.

Future of the current federal role: There was some degree of skepticism, for various reasons, about whether the current federal role, which is largely about grants to state and local agencies, would continue. There was frustration with political gridlock in Washington, an acknowledgement that de-facto de-federalization has been going on for some time, and general acknowledgment that safety regulation and standard-setting (at least) should continue to be federal responsibilities.

Reform or replacement of agencies: There was a lot of discussion over whether certain kinds of organizations—such as multi-purpose port authorities (like the Port Authority of New York & New Jersey), state DOTs in their current form, and metropolitan planning organizations (MPOs)—are still viable or should be reformed or replaced. Participants were divided on reform vs. replace, and several pointed to poor project delivery and no increase in the productivity of infrastructure construction in decades as symptoms calling for change.

Politicization is a serious problem: Various concerns were raised about large and small decisions being made for political rather than economic reasons—from small things like changes in bus routes to the allocation of state highway funds via the annual legislative budget process. Many agencies have competing or conflicting goals and elected officials may not appreciate new approaches (such as long-term P3s or mileage-based user fees).

Funding and finance: Aging transportation infrastructure implies the need for much greater investment than business-as-usual can provide. Several pointed out that lots of capital is out there, eager to invest in U.S. transport infrastructure, but most states do not have mechanisms in place to attract it. And the current federal program does not properly account for major-project risks. Large pension funds want to invest equity in revenue-generating infrastructure, but find few U.S. projects on offer. Another discussant noted that most transport needs these days are urban, but 70 of 100 Senate members are from largely rural states, which skews funding priorities.

Eno and Reason are hoping the workshop and various summaries of its topics will spur further discussion of our transportation institutions and their governance. If there is enough interest, we hope to pursue these ideas further, via possible research papers and/or additional workshops focused on one or more of the topics discussed at the original workshop.

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Upcoming Transportation Events

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

Heritage Hill Briefing, Nov. 13, 2019, Washington, DC, Dirksen G-11 (Baruch Feigenbaum speaking)

Bond Buyer Finance/P3 Conference, Nov. 14-15, 2019, Denver, CO: Grand Hyatt Denver (Baruch Feigenbaum speaking). Details here.

NCSL Fall Forum, Dec. 9-12, 2019, Phoenix, AZ: JW Marriott Phoenix Desert Ridge (Baruch Feigenbaum and Adrian Moore speaking). Details here.

42nd Annual Kentucky Transportation Conference, Jan. 15-17, 2020, Lexington, KY: Lexington Convention Center (Robert Poole speaking). Details here.

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News Notes

$9 Billion P3 Lease Offer for Denver’s E-470
ROADIS, which is owned by the Canadian pension fund Public Sector Pension Investment Board, has made an unsolicited proposal to the board of the E-470 toll road around the east side of the Denver metro area. It’s the first such asset-recycling proposal for a toll road in over a decade since the Pennsylvania Legislature turned down a $12.8 billion offer from Spanish company Abertis in 2008. The E-470 board voted to reject the offer back in August, but ROADIS continues to argue that there would be tangible benefits to the cities: paying off the toll road’s existing bonds, net proceeds they could use for needed but unfunded transportation projects in the region, a moderate toll regime (including a 3-year initial freeze, CPI-limited increases thereafter, and a new frequent-user discount), and timely investments to improve E-470 itself. ROADIS’s efforts are being championed by former Colorado DOT official Michael Cheroutes. ROADIS manages nearly 1,200 miles of toll roads in Brazil, India, Mexico, Portugal, and Spain.

Hybrids Lose Free Passage in HOV/HOT Lanes in Utah and Virginia
As of October, hybrids will be treated as ordinary vehicles in the HOV and high-occupancy toll (HOT) lanes of Utah and Virginia. For variably priced HOT and Express Toll Lanes, the change should improve traffic flow, since hybrids will now be subject to the variable pricing that is intended to limit the number of vehicles seeking to use these lanes during congested peak periods.

“Medical Records” for Aging Bridges and Tunnels
Startup company Dynamic Infrastructure aims to help state DOTs and other highway operators to monitor the condition of aging bridges and tunnels, alerting the owners to changes that require maintenance or reconstruction. Its method is to compare archived images of each facility with new images gathered via smartphone cameras, laser scanning, and drone flights. The resulting 3-D images can be likened to human MRIs, which alert doctors to changes in internal conditions. The company says its system is being used by Suffolk County, NY, Haifa in Israel, a research institute in Switzerland, and un-named P3 companies.

Feds Rescind “Proprietary Products Rule”
In an action widely supported by state DOTs and infrastructure companies, FHWA scrapped a 1916 regulation that prohibited state transportation agencies from using patented or proprietary materials, specifications, or processes on federal-aid highway projects. The agency explained that its decision is intended to “promote innovation by empowering states to choose which state-of-the-art materials, tools, and products best meet their needs for the construction and upkeep of America’s transportation infrastructure.”

407 ETR Continues Highway Investment
In September, private toll road company 407 ETR announced the opening of none new lane-miles in the eastern Toronto suburbs. Since the highway was privatized in 1998, the company has added 352 lane-miles at a cost of $1.6 billion, via a combination of widenings and extensions. The tollway serves nearly 500,000 drivers and passengers per day. 407 ETR is owned by Canada Pension Plan Investment Board (50.01 percent), Cintra (43.23 percent) and SNC-Lavalin (6.76 percent).

California Governor Shifts Gas Tax Funds from Highways to Transit
Last month California Gov. Gavin Newsom issued an executive order (N-19-19) to redirect billions of dollars in gas tax receipts to “reduce greenhouse gases and emissions.” This comes soon after a massive 2018 increase in gas taxes, sold to voters as a way to improve the state’s potholed highways. When CBS47 queried Caltrans about the cancellation of promised highway projects in the Central Valley, the agency’s reply said: “Caltrans will use available transportation dollars to prioritize projects that manage congestion and reduce vehicle miles traveled in order to curb greenhouse gas emissions.” And, as a slap in the face to the state’s voters who may feel betrayed, the agency added, “Those who claim the state is canceling projects funded by gas tax dollars are incorrect[sic]. Aligning climate goals with transportation goals requires new thinking, not obstructionism.”

Newsom Vetoes California Complete Streets Bill
A bill that would mandate adding “complete streets” treatment to major urban arterials that are state highways was vetoed by Gov. Gavin Newsom. Supporters of SB 127 (Complete Streets for Active Living) argued that the safety of pedestrian and cyclists was at risk, calling for things like “road diets” and protected bike lanes. This ignores the basic distinction between local streets, whose lower speed limits are compatible with walking and biking, and higher-speed, higher-capacity arterials, typically six lanes or more, which function as a vital adjunct to freeways and expressways for region-wide mobility. Bike lanes on such arterials are an inherent safety risk.

Declining Fuel Tax Revenues Lead to Calls for UK Road Pricing
Parliament’s Transportation Select Committee has found that the £40 billion per year generated by fuel duty and vehicle excise duty is “likely to decline sharply in future” as motorists shift to high-mpg and electric vehicles. The committee suggested a national road pricing model to replace the existing fuel and vehicle taxes. Similar concerns have been raised by the Institute for Fiscal Studies, a UK think tank.

Two New Stations Approved for Brightline Trains in Miami
Twice during October, the Miami-Dade County Commission voted in favor of spending county funds to help pay for additional stations in Miami for private-sector train operator Brightline. One will be at the Port of Miami and the other will be at one of the county’s largest shopping malls, Aventura. The latter is close to the existing Brightline/Florida East Coast rail line, while the former will be near the end of the FEC right of way into the Port of Miami, about two miles beyond the Brightline MiamiCentral station in downtown.

Soo Locks Included in Army Corps Initial P3 Ventures
Using new authority granted to it by Congress, the Army Corps of Engineers recently winnowed eight privately-proposed projects down to four. One of them is a $922 million project that would build a second lock on the St. Mary’s River at Sault Ste. Marie, MI, via a DBF or DBFOM procurement. The new lock would replace two obsolete locks that are now closed with a state-of-the-art lock capable of handling 1,000-ft. long vessels. Michigan DOT is supportive of the project. The big question mark is coming up with a revenue stream that will make it possible to do long-term financing of this nearly one-billion-dollar project.

48-State Transponder Offered to RV Owners
For several years, the trucking industry has used a multi-protocol toll transponder from TransCore, called NationalPass. The company last month announced a series of transponders based on the same technology aimed at owners of recreational vehicles (RVs). The RV Toll Pass is offered in three versions: one for motor homes with three axles, another for two-axle motor homes, and a third for two-axle trailer tow vehicles. Accounts for RV owners will be managed by Bestpass, which manages similar toll services for commercial trucking.

Mexico Announces New Highway P3 Program
The leftist government headed by President Andres Manual Lopez Obrador (AMLO) has announced a $974 million highway road concessions program, as part of an expanded highway investment plan. The five projects are in separate states, and include a new urban viaduct, two decongestion projects, one highway widening, and one new highway. The government will also offer hundreds of smaller highway improvements around the country.

Congress Ignores Another Spending Constraint
A long-standing rule against unfunded transportation spending was bypassed late last month in the “minibus” appropriations bill that included transportation. The Rostenkowski Rule triggered an automatic transit spending cut whenever unfunded transit authorizations exceeded projected revenues of the transit account of the Highway Trust Fund over the next four years. The projected cut, of $1.2 billion, was of course opposed by transit agencies. And the American Public Transportation Association helpfully provided a state-by-state listing of where the cuts would occur. An amendment over-riding the rule by Sen. Doug Jones (D, AL) was adopted on October 31.

Indra Lands I-66 Variable Tolling System
Cintra, the developer/operator of new express toll lanes on I-66 outside the Beltway in Virginia, has awarded a contract to Spanish company Indra. The $83 million contract with Cintra’s I-66 Express Mobility Partners calls for a free-flow variable electronic tolling system, with toll rates adjusted every three minutes. It will be Indra’s first to include a vehicle occupancy detection (VOD) system, integrated into each tolling point. The VOD was pilot-tested earlier this year in San Francisco and reportedly scored highest among those tested.

Replacement I-5 Bridge Back on the Agenda in Oregon and Washington
The controversial plan to replace the aging and inadequate I-5 bridge across the Columbia River in Portland is once again under discussion in the states it serves. Congestion has gotten worse, and the bridge continues to age; it reached capacity some 30 years ago. INRIX measures it as the nation’s 10th worst traffic bottleneck. The demand from Portland that the previous replacement include a costly light rail line (opposed by those across the river in Washington) might now yield to some kind of bus rapid transit (BRT) which could share an express lane with other vehicles. And variable tolling is also being discussed. Perhaps this attempt will actually lead to a replacement bridge.

Radical Environmentalists Oppose UK High-Speed Rail
The controversial, over-budget HS2 rail project has been opposed mostly by fiscal conservatives, objecting to its taxpayer cost. But a new opponent surfaced in demonstrations last month in London. Extinction Rebellion, which wants air travel banned, now calls HS 2 a “scar across the belly of the land” that would destroy woodlands and wildlife habitat. Let’s see: if people can’t travel by air or rail, and cars are bad, are they supposed to get from London to Manchester by walking? biking? or what?

Judges Question Rhode Island on Toll vs. Tax Question
The American Trucking Associations has an ongoing lawsuit against the state of Rhode Island, arguing that charging tolls only to trucks is discriminatory. Judges at the federal First Circuit court took exception to the state’s argument that the new truck-only tolls aren’t really tolls but are taxes. This directly contradicts several years of planning and implementation efforts in which Road Island officials always called the charges tolls, which they clearly are. The state maintains that the federal litigation should be dismissed, because state courts should deal with tax cases. My guess is that ATA is going to win this skirmish, as they should.

How China Builds High-Speed Rail in Ways that We Cannot
My Reason colleague Marc Joffe had an excellent op-ed in the Orange County Register on Oct. 23, 2019: “Why California Can’t Compare with China on High-Speed Rail.” For example, the Chinese government can seize right of way without paying compensation—and has seized over 10 million acres of private land between 2004 and 2014. And compared with highly paid U.S engineers and construction workers, workers building China’s HSR lines average about $600 per month. Those are just of few of the reasons China has built more than 18,000 miles of HSR since the turn of the century. There is no way we could or should do likewise.

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Quotable Quotes

“In simple terms, technology now allows us to distribute access to highway capacity through the same kind of marketplace mechanisms that we have traditionally used to distribute access to movie seats and a host of other commodities. These technologies represent an opportunity to finally abandon the crude, inefficient, nonmarket funding mechanisms on which the United States has relied to finance its highways. They present a chance to gradually jettison the ‘Leninist’ practice of time-rationing to control access to highways. Equally important, they enable us to regard those who use highways as customers first and foremost. Yes, customers—not motorists or travelers or taxpayers, but customers.”
—Joseph M. Giglio, “Highway Robbery Is Alive and Well,” Tollways, Autumn 2004

“Folks, we will give you the permits. If you can figure out how to pay for it, go ahead and do it. . . . I hate to say this, but don’t expect too much federal financial assistance. We’d like to say if we had it, we’d give it to you. But we don’t have it. And I wouldn’t give it to you anyway. But you can raise the money privately.”
—Larry Kudlow, in Emile Munson, “White House Says Infrastructure Projects Should Seek Private Funding,” TimesUnion.com, Oct. 24, 2019

“Our past is catching up with us, and the future got here faster than we anticipated. . . .  We need futurists in Congress, so that we can start making policy [with an eye toward what’s happening next, instead of acting] as if nothing’s going to change. . . . Most likely in 20 years we will have self-driving vehicles that can go 200 mph, in which case who is going to take a high-speed train? That doesn’t mean we shouldn’t consider making investments in high-speed rail. But it also means that 30 years from now it might look like the dumbest money we’ve ever spent.”
—Rep. John Yarmuth (D, KY), in “Morning Transportation,” Politico, Sept. 26, 2019

“What the [MIT] researchers found was that dockless scooters generally produce more greenhouse gas emissions per passenger mile than a standard diesel bus with high ridership, and naturally more than a walk or non-e-bike. A survey of users found that only 34 percent of the users would have taken their car or a taxi. Nearly 50 percent would have walked or biked (non-electric), 11 percent would have taken the bus, and 7 percent would not have taken the trip at all. The electricity used to charge the vehicles is one of the smallest contributors to the product’s emissions; around one-half of the emissions come from the raw materials and manufacturing process.”
—Michael L. Sena, “Rental e-Scooters Are Worse than a Nuisance,” The Dispatcher, October 2019

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The post Surface Transportation News: Congestion Pricing, Toll Lanes, Commuting Data and More appeared first on Reason Foundation.

• The Senate reauthorization bill’s pros and cons
• Ten states exploring tolled Interstates
• The disconnect between automated vehicles and planners
• Truck platooning making progress
• How many jobs can be reached by bicycle?
• Suburbs and carbon sequestration
• Upcoming transportation events
• News notes
• Quotable quotes

Senate Surface Transportation Bill: the Good, the Bad, the Missing, and the Ugly

Late last month, just before leaving town for the summer recess, the Senate Environment & Public Works (EPW) Committee approved its five-year surface transportation reauthorization bill. Like most such measures, it’s a very mixed bag, but in amidst continuing most of the dysfunctional status quo, there are several positive changes.

The Good

Sec. 3001 of the bill would continue and expand current federal efforts to encourage states (and groups of states) to do pilot programs testing how to implement mileage-based user fees (MBUFs) to replace declining fuel tax revenues in coming decades. It includes funds for additional state grants, some new federal R&D money, and funds for a federal MBUF pilot for trucks.

Title 2 of the bill, on innovative financing, expands the categories of projects eligible for TIFIA loans and includes some attempts at much-needed streamlining.

Another section would codify Exec. Order 13807, which established the One Federal Decision program to speed federal approvals for major projects.

Sec. 1404 would provide a new congestion relief program for urban areas, offering grants for projects that would toll all lanes of a congested Interstate, provided that (a) the maximum rate for trucks would be no more than five times the rate for cars, and (b) that toll rates not differ based on residency. The latter is consistent with the interstate commerce clause of the Constitution.

Sec. 1507 would require states that do Design Build Finance Operate Maintain (DBFOM) public-private partnership (P3) projects to report to the United State Department of Transportation (US DOT) on the terms of the deal, which sounds harmless to me, and the increased transparency could reduce the hesitancy of some legislatures and DOTs to embrace this important procurement method.

The Bad

Alas, most of the bill continues and expands the ongoing trend of making the federal highway and transit program ever-more detailed and focused on every level of government (federal, state and local), disregarding the sensible principle of subsidiarity (having each level of government do what it is best suited for). Here is just a smattering of hundreds of such provisions.

• Contrary to a modest amount of scaling back of the “transportation alternatives” category two reauthorizations ago, Sec. 1109 would increase its annual funding, from the current $850 million to as much as $1.5 billion by 2025. This is the category that includes such local infrastructure as bikeways, recreational trails, sidewalks, etc. It would also expand the “Safe Routes to School” program to high schools (as if any high-schoolers actually walk or bike to school).
• Along the same misguided lines, Sec. 1208 would increase federal funding for “Complete Streets,” another quintessentially local endeavor. And Sec. 1505 would make grants to facilitate the use of bicycles as emergency evacuation vehicles.
• Two separate sections would divert highway user tax revenue to waterway projects. In Sec. 1115, the Congestion Mitigation and Air Quality (CMAQ) program would now include projects to modernize a lock, dam, or marine highway, and the new National Highway Freight Program (NHFP) would be able to do likewise.
• Among the missed opportunities, in Sec. 1405, the NHFP would require state DOTs to assess the extent of parking and rest facilities for trucks—but would make no change in the 1956 ban on offering commercial services (such as electricity hookups, showers, and restaurant services) at Interstate highway rest areas.
• Likewise, among the new climate-change provisions in Sec. 1401, there are grants for EV recharging and alternative fuel services along designated “alternative fuel corridors,” but again no mention of locating any of this right on the Interstates, where these services are most needed.

The Altogether Missing

Several key policy changes of great relevance to increased use of DBFOM P3 concessions were not included in the Environment and Public Works (EPW) bill.

• Private Activity Bonds (PABs): The $15 billion cap that Congress legislated over a decade ago is nearly used up, and the program is no longer an experiment. The cap should be removed, making surface transportation PABs comparable to those used for other infrastructure, such as airports and seaport facilities, for which there is no cap. In addition, as recommended last year by the White House infrastructure proposal, PABs should be made applicable to P3s to rebuild and modernize existing infrastructure, rather than just for new (greenfield) P3 projects. (Note: this item may be within the jurisdiction of the Senate Finance Committee, which would account for its absence from this bill.)
• Tolling flexibility: With nearly a dozen states discussing or considering toll-financed projects to rebuild aging Interstate highways and bridges, removing the 1956 ban on using toll financing on these facilities should be a priority.
• P3 incentives: Both the White House proposal and ARTBA’s recommendations for the 2020 reauthorization bill include various federal incentives for states to enact workable P3 enabling acts and to actually use them for much-needed projects.

The Ugly

The worst part of the bill is that—like its last two predecessors—it would ramp up spending without an offsetting increase in user-tax revenue. It calls for spending $287 billion over five years, a 28 percent increase over the previous authorization. To be sure, EPW is not the Finance Committee, where tax increases must come from. But there is no sign of any coordination between EPW and Finance on this subject, nor have any serious revenue proposals seen the light of day. For the sad history of how politics led to such irresponsible outcomes, you should read Jeff Davis’s superb 2018 account in Eno Transportation Weekly, “Ten Years of Highway Trust Fund Bankruptcy: Why Did It Happen, and What Have We Learned?” Spoiler alert: nothing.

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Ten States Explore Interstate Tolling

Though Congress seems oblivious, at least 10 states are having discussions, and in some cases heated debates, overusing tolls to modernize and/or deal with congestion on some or all of their Interstate facilities. The interest is driven by a combination of factors: the very high cost of reconstruction, widening, and bridge replacement, along with the lack of anything like the original 90/10 federal/state funding that built most of the Interstates originally. After a brief recap of where things stand in each of the 10, we will zero in on the debate going on in Alabama.

Alabama needs to replace the major bridge on I-10 over the Mobile River, and Alabama DOT sees no way to do this $2.1 billion project without toll financing. More details below.

Connecticut has had several years of detailed studies, followed by a fierce partisan debate in the legislature over tolling all the Interstates and several other major highways to pay for reconstruction, widening, and possibly other things. When the 2019 legislative session ended without a bill, Gov. Ned Lamont called a special session and hopes to reach agreement on a scaled-back plan that would toll only at key highway bridges that need reconstruction.

Indiana DOT last year completed a strategic plan for the toll-financed reconstruction of all its long-distance Interstates, but the plan was greeted by Gov. Eric  Holcomb saying, in effect, ‘Not on my watch.’ Transportation observers in the state hope that once he is re-elected next year, he will agree to move forward with the plan.

In Illinois, support is building for a project to convert 45 miles of I-80 to a toll road, to pay for a $1.25 billion project that involves lane additions and replacing aging bridges over the Des Plaines River near a key intermodal facility. Both Illinois DOT and the Illinois Tollway favor the project, and there is significant local support due to the age and congestion on this stretch of I-80.

Louisiana has two major bridge-replacement needs, both on I-10. It has a P3 enabling law and a DOT director who favors using it. Both are billion-dollar-scale projects, one across the Mississippi River at Baton Rouge and the other further west in the Lake Charles area. Louisiana DOT is also proceeding with a much smaller P3 project, to replace the Belle Chasse Bridge.

Minnesota in January 2018 released a statewide tolling feasibility study, looking at a number of major corridors. So far, no specific projects have been identified for implementation.

Oregon DOT is in discussions with FHWA on using the federal value pricing program to toll all lanes of I-5 in Portland, and possibly using the bridge provision in federal law for toll-financed improvements to I-205 in the Portland area.

In South Carolina, Sen. Hugh Leatherman has proposed toll-financed reconstruction and widening of I-95, increasing it from two lanes each way to three, the configuration of I-95 across the border in Georgia.

Wisconsin’s 2019 legislature passed a transportation bill that included a phase two Interstate tolling study (similar to Indiana’s), but Gov. Tony Evers vetoed that provision in July.

Wyoming’s Joint Transportation committee called for a new study of tolling I-80 to pay for improvements and ongoing maintenance.

The debate in Alabama is furthest along since the I-10 bridge needs replacing, and ALDOT has done considerable study to estimate both the cost and the potential toll rates. The project includes rebuilding both the aging bridge across the Mobile River and the 7.5-mile Bayway that leads up to it, which needs to be elevated above potential flooding in future years. That total project is estimated at $2.1 billion, and the toll to go the full length (Bayway plus bridge) is estimated as $6 (though shorter trips, at lower tolls, would be possible).

That toll has become a major concern, given the lower incomes in Alabama compared with most other states that have major toll bridges, and the fact that a great many people in the Mobile metro area use the bridge and Bayway for daily commuting. Suburban city councils are passing anti-toll resolutions and suggesting any number of inadequate or unrealistic funding sources—including a letter to President Trump asking the federal government to pay most of the project’s cost. ALDOT has refuted many of these claims, but the opposition continues.

At the ARTBA P3 conference last month, state Sen. Chris Elliott suggested that the project might be scaled back to just the bridge replacement, which would significantly reduce the cost and the toll. ALDOT has proposed a frequent-user discount, available to commuters but not to the 60 percent of bridge traffic that is long-distance and mostly from out of state. I also suggest a peak/off-peak toll schedule that would give a break to commuters willing or able to use the bridge before or after the peak period. The frequent-user discount would not discriminate against out-of-state users, per se, since some of the commuters live across the border in Florida.

Opponents of tolling seem to imagine that, somehow, somebody else will pay for the bridge, relieving them of the obligation to pay for what they use. But actually, the toll plan is the best available way to accomplish that. Apart from an unobtainable windfall from Congress, all non-federal funding of the bridge would come mostly from Alabama funding sources. Yet with 60 percent of the traffic on the I-10 bridge being long-distance and mostly from out of state, non-Alabamans would be paying for nearly 60 percent of the bridge’s cost. I don’t think ALDOT has stressed that point enough. And the same is true for many long-distance Interstates.

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The Disconnect Between Automated Vehicles and Planners
By Baruch Feigenbaum

When automated vehicle (AV) development and research kicked into high gear in 2012, dozens of companies issued breathless press releases promising mass-produced Level 5 AVs within five years. (Automation levels are defined by the Society of Automotive Engineers (SAE), with Level 5 being full automation.) Last year many pundits claimed Waymo was close to developing a Level 5 AV. Nissan and Tesla continue to claim they will have a fully automated vehicle within two years.

At this year’s 8th Annual AV conference sponsored by TRB and AUVSI, most attendees offered a more sobering analysis. Carmakers such as Volvo questioned whether Level 5 AVs were possible. Even the most optimistic AV proponents, such as Nvidia, admitted that Level 5 AVs are at least 10 years away. Original equipment manufacturers (OEMs) and tech firms were honest about the technology failures in bad weather (rain and snow), multimodal environments (people and cyclists crossing streets) and other operating challenges. One breakout session examined how current laws require an AV to rigidly adhere to the speed limit even when human drivers do not.

At the same time, many AV experts still expect Level 4 AVs to become more widespread over the next five years. But Level 4 vehicles are only automated in some situations such as in managed lanes or on streets with speed limits of 25 miles per hour (mph) or less. And many Level 4 vehicle services still operate with a safety driver. Embark runs automated trucks on I-10 between California and Texas but has a safety driver in every vehicle in part due to disengagements that occur in bad weather. The biggest benefit to Peloton’s current platooning technology, which includes safety drivers in each vehicle, is fuel savings. And while many cities including Arlington, TX,  have self-driving shuttles, they generally operate at 10 mph or less and need detailed markers for wayfinding.

While this may sound sobering, the adoption of automated vehicles can still reduce fatalities, provide mobility to seniors and the disabled and improve productivity. But it’s not going to happen overnight or next year, or even in five years.

Yet not all AV stakeholders appear to be paying attention. While engineers and policymakers are revising their timeline and short-term goals for AVs, some planners and urbanists appear to be doubling down on unrealistic goals.

Last month, The New York Times and the Washington Post, published very different articles on AVs. The Times focused on the technical aspects of AVs, writing why AVs are “Way in the Future.” Author Neal Boudette included several telling quotes by auto executives such as Ford’s CEO Jim Heckett, who agreed the industry “overestimated the arrival of autonomous vehicles,” and Argo AI’s chief executive Bryan Salesky who argued driverless cars are “way in the future.” The article details the challenge of AVs predicting human behavior such as a bicycle riding the wrong way or a street sweeper ignoring a traffic signal. Such “infrequent” events can affect 50 percent or more of trips, particularly in big cities.

The article noted that many companies which promised to roll out self-driving vehicles “at a very aggressive pace” have blown by deadlines and refused to provide a new timeline. AV development is moving more slowly in China, which is important because the AV market is global. And self-driving vehicles need to behave like conventional vehicles, or customers won’t be interested. Nobody is going to buy a vehicle which slams on the brakes every five seconds.

By contrast, the Post article focused on how, “self-driving Vehicles,” could “correct mistakes of the 20th-century auto.” Written by Katherine Shaver, the piece discusses the drawbacks of automobiles (congestion, greenhouse gas emissions and sprawl) without any discussion of the positives (better goods movement, more access to leisure activities and quicker commute times). The article also focuses on major metro areas such as Los Angeles and Washington without acknowledging that AVs are likely to affect mid- and small-sized metro areas differently.

My bigger concern is whether many of the changes discussed in the article are realistic in the next 30 years or ever. The article cites AVs traveling closer together, allowing cities to narrow lanes and increase space for cyclists and walkers. Yet vehicles traveling closer together need both connected vehicle technology and advanced Level 4 or Level 5 capability where the human driver never has to take control. That combination of technologies is years away—and roads will have to handle a mix of AVs and non-AVs for decades after real AVs first hit the market. Other planners worry that AVs could reduce transit usage. Yet, transit usage is already declining in almost every metro area due in part to ride-hailing services. A better approach might focus on redesigning transit systems for 21st-century cities instead of worrying what AVs will do to bus systems that have not been redesigned in 50 years.

The article makes several good points. Driverless cars may eventually change the location and amount of parking (though it’s far too early to start reducing parking capacity). And policies such as congestion pricing are the most effective way to manage congestion. (We could implement congestion pricing today; we don’t need automated vehicles).

But much of the article speculates on the future. And if transportation researchers could actually predict the future, we would be working on Wall Street, not in transportation. The best parts of the article were quotes from two experienced, respected planners. Florida State’s Tim Chapin argued that the “built environment” tends to be “very sticky” and slow to change, especially in comparison with the pace of technology. And Maryland’s Uri Avin, noted that “Everyone is guessing about future behavior and costs.”

Ten years ago few predicted that ride-hailing companies would disrupt the taxi industry. Two years ago few predicted the advent of electric scooters. We don’t know what transportation innovations will occur over the next 10, 20, or 30 years. Urbanists might be trying to solve a problem that won’t even exist in the future. Given the slow pace of AV development, it might be more productive for planners to focus on short-term challenges rather than their long-term desires.

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Truck Platooning Is Making Progress

At the Transportation Research Board’s annual automated vehicles (AV) conference last month in Orlando, truck automation pioneer Peloton Technologies announced that it is developing Level 4 technology to permit platoons with a human driver in the lead truck but no driver in the following truck. Thus, one driver would control two big-rigs, doubling the ton-miles per driver and helping the industry address its perennial driver shortage. This would be a substantial improvement in the business case for platooning, which thus far focuses only on fuel savings.

Peloton’s current Level 1 Platoon Pro system, with a driver in both trucks, is averaging more than 7 percent fuel savings in operations by six fleet customers in real-world conditions, as reported by FleetOwner magazine. Peloton CEO Josh Switkes declined to identify the companies or the states where they are using Platoon Pro, “but hinted that much of the activity has taken place in Texas.” He also noted that there is surprisingly little cutting in by motorists between the two trucks in these platoons (to which the trucks automatically adjust by increasing the spacing).

Platooning is still not allowed in the majority of states. Last month the Competitive Enterprise Institute released its fourth annual edition of “Authorizing Automated Vehicle Platooning: A Guide for State Legislators.” It identifies 20 states that have authorized some version of commercial AV platooning, and assesses the legislation of each. Ten of the states are rated as “green,” meaning platooning can take place without unnecessary restrictions on operations. The other 10 are in the “yellow” category, which means some degree of platooning is allowed, but with what CEI judges to be poorly justified restrictions. The remaining 30 states have no meaningful provisions for platooning.

Despite the encouraging news from Peloton, the United States lags behind Europe and Japan in truck platooning, as I learned during a session at the Transportation Research Board Annual Meeting in January. Rather than testing just two-truck platoons, officials and companies in both regions are testing or planning to test platoons ranging from four to seven trucks in length. In limited highway testing thus far, the problem of motorists cutting into multi-vehicle platoons has been observed and is considered a potentially serious problem. In both Europe and Japan, the plans call for these longer platoons to eventually have a driver only in the lead truck, with the automation system handling all the following trucks.

In the TRB presentations, there was no explicit mention of barrier-separated dedicated truck lanes (DTLs)—but one slide in the presentation from truck producer Scania showed a platoon in such a lane. If the future of platooning really is for multi-truck platoons with only a lead driver, I think there is a very strong case for adding DTLs to those Interstate highway corridors that are now (or are projected to be) major truck routes over the next several decades. Even with conventional 18-wheel big rigs, the safety benefits of DTLs are quite large, given how deadly car-truck collisions often are. Add to that the productivity gains from being able to operate longer combination vehicles (LCVs) in such lanes on Interstates where LCVs are currently banned, plus the safety and fuel-saving benefits of multi-truck platooning, and the case for DTLs is very strong.

That’s true even if multi-truck AV platooning is a decade away from commercial service. Designing, financing and rebuilding an aging Interstate—ideally with revenue bonds based on electronic toll revenues—will not likely lead to the first rebuilt corridors opening for business for about a decade. The time to start planning for such corridors is now.

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How Many Jobs Can Be Reached Via Bicycle?
By Baruch Feigenbaum

Seeking to build on its previous research on highway and transit job accessibility, last month the Accessibility Observatory at the University of Minnesota released a new study examining how bicycles connect workers with jobs. The study measures how many jobs can be reached by bike within a given amount of time in the 50 largest cities.

Researchers used the ‘Level of Traffic Stress’ metric that categorizes streets based on their attractiveness to cyclists by classifying cyclists into four groups: lowest stress, low stress, medium stress and high stress (The metric relies on many characteristics including bike lanes, street lane configuration and speed). The lowest stress group applies to children and adults not interested in cycling. The low-stress group is interested in cycling but unwilling to bike in or near busy traffic. The medium stress group is willing to tolerate busy traffic if there is designated space while the high-stress group is willing to bike regardless of traffic conditions. The study used OpenStreetMap road networks to determine the number of jobs that a worker can reach in 10, 20, 30, 40, 50 and 60 minutes one-way by bike. The study weighted jobs that can be reached in 10 minutes the highest with each succeeding time interval slightly lower since commuters are more likely to cycle for shorter trips than longer trips. The authors included a weighted average of job travel time and the number of jobs for each time interval.

The report focused on the low-stress and medium-stress commuters since they make up the majority of cyclists. As expected, cities with more jobs (and logically more jobs that could be reached by cyclists) ranked near the top with a few exceptions. For the low-stress cyclists, the top five cities are New York, San Francisco, Chicago, Denver, and Philadelphia. For medium stress cyclists, the top four cities are the same, but with Washington, DC, replacing Philadelphia.  Each of those top cities ranks in the top seven for total jobs, except Denver which ranks 18th. All of the cities in the top 10 for cycling access to jobs also rank in the top 20 for total jobs except for Portland, OR and San Diego.

The report tries to build on the accessibility by automobile and transit reports that the University of Minnesota released previously. But unlike the former modes, which are used for medium-long distance commutes, bicycles are used for short-distance trips. As numerous researchers, including Alain Bertaud of the World Bank and Solly Angel of NYU, have shown, the most effective way to increase job access is to reduce travel times, not travel distance. Large metro areas work well because of their very large number of employment options. Higher-speed travel options allow employees to reach many more jobs more quickly and provide employers with a larger, more skilled workforce.

Since bicycle speeds are generally less than half those of automobiles and transit vehicles, commuters will never be able to reach the same number of jobs they can by auto or transit. Compare the numbers below for high-density New York and lower-density Atlanta.

The magnitude of the difference illustrates how automobiles predictably provide superior access to jobs compared to bicycles. The accessibility advantage of commuting by auto is one reason it is the dominant mode choice. Eighty-six percent of Americans commute to work by car, while five percent use transit and 0.6 percent cycle to work. Eight times as many people work from home today than cycle to work. While bicycling can be good exercise and is cheaper than driving, it is not a realistic option for the vast majority of commuters.

A laser focus on reducing travel distances sounds good, but it ignores many real-world factors. Residents choose housing based on many considerations: distance to jobs, price, parks, school quality, and access to shopping and entertainment. Some may make the tradeoff to buy a smaller house or live in a weaker school district, but others will not. One of the most popular development trends over the past 10 years has been mixed-use properties, in which folks theoretically live and work in the same area. However, retail employees generally cannot afford the housing in these developments and residents may not find suitable employment there.

Even if we assume that walking distance to jobs is a good metric, the study has other problems. Using the total number of accessible jobs and not the percentage of accessible jobs is biased against smaller metro areas. For example, New York City is rated the most accessible because it has more jobs than any other metro area. Logically, if there are more jobs, more can be reached via cycling. But New York City is far from a cycling mecca. Census data shows New York City’s cycling mode share is the same as the national average—0.6 percent. Percentage of jobs would give a higher rank to metro areas such as cities typically viewed as cycling-friendly, like Portland and Minneapolis, and be fairer to metro areas of all size.

Accessibility to jobs is critical for economic productivity. But we need to accept that automobiles do a far better job of connecting people with jobs than bikes, and focus on making roadway travel faster and easier.

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Could Suburbs Play a Role in Carbon Sequestration?

In 2008, the California legislature enacted SB 375, which might be considered declaring war on suburbia in the name of fighting climate change. The logic went like this: People who live in suburbs must drive to work; driving generates greenhouse gases; therefore we must restrict suburban growth and get people to live in denser urban areas where they can ride transit or bike to work instead of driving.

This logic is mostly wrong, given that today’s jobs are increasingly in the suburbs and most commuting is from suburb to suburb, rather than suburb to downtown. Over the next several decades, personal vehicles will be far more fuel-efficient, and a growing fraction will be electric. There is some evidence that the beefed-up infrastructure required to accommodate higher urban density would be more costly than suburban infrastructure. And some functions, such as electricity, can be provided by decentralized solar power.

But another potential argument for suburbia is its potential for carbon sequestration. Last month saw the publication in Science magazine of a major study on the potential of expanded tree cover to suck carbon out of the atmosphere. Researchers Thomas Crowther and colleagues from the Swiss Federal Institute of Technology in Zürich estimated that there is space for more than one trillion new trees on 3.5 million square miles of land worldwide. And if aggressively planted over the next few decades, those additional trees could absorb nearly 830 billion tons of CO2 from the atmosphere—about as much as humanity has released over the past 25 years. This new paper is the latest in a string of such research papers in peer-reviewed journals, dating back to at least 2009.

Another new study, by Robin Chazdon of the University of Connecticut (published in Science Advances) found that the largest carbon sequestration potential from added tree cover (called afforestation) would be near tropical rainforests in places like Brazil and Indonesia. But Chazdon also found that every part of the world has regions with potential for productive tree planting.

Which suggests to me that both existing and new suburban residential developments could accommodate far more trees than they currently harbor. The suburb in which I live has a long history of encouraging robust tree cover—and it shows. Foes of “suburban sprawl” seem to think of suburbs as sterile places, largely devoid of wildlife. But my suburb seems to abound with wildlife: ducks, wading birds, squirrels, possums, raccoons, and even (recently) coyotes. Most suburbs could likely be home to far more trees if policymakers made this a priority. As conservation biologist Thomas Lovejoy of George Mason University told an AP reporter covering the Crowther study, planting more trees would also help stem the loss of biodiversity.

Carbon sequestration is a critically important part of dealing with global warming. While reducing the output of CO2 and other greenhouse gases must proceed, once carbon is in the atmosphere it resides there for decades. Reducing that accumulated carbon is what carbon sequestration is all about. I have not seen any reliable estimates of the cost per ton of carbon removed, but my guess is that it will be lower than the cost per ton of many of the policy measures proposed for reducing the output of carbon from fossil fuel use and other sources.

If the suburbs can play a meaningful role in carbon sequestration, that is all the more reason for other states to avoid California’s ill-conceived policies against suburbia. Instead of the pejorative term “suburban sprawl,” maybe we should start thinking of Green Suburbia.

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Upcoming Transportation Events

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

Rethinking America’s Highway Institutions, Sept. 13, 2019, Institute for Transportation Studies, UC Berkeley, Berkeley, CA (Robert Poole speaking). Details here.

Road Diets and Complete Streets Conference, Oct. 5, 2019, American Dream Coalition, Los Angeles, CA (Baruch Feigenbaum speaking). Details here.

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News Notes

Florida Opens Express Toll Lanes on Toll Road
Urban expressways get congested, even when they are operated as toll roads, as many are in Florida. Rather than increasing all toll rates during peak periods, Florida’s Turnpike is adding express toll lanes to several of its urban corridors, giving customers a choice. The first to open, last month, was a four-mile stretch of SR 528 in Orlando. The agency is planning similar ETLs on toll roads in Miami-Dade County, the Tampa metro area, and on some stretches of the Turnpike mainline where widening projects are planned.

Ending HOV Discounts for Hudson River Bridge and Tunnels
The Port Authority of New York & New Jersey is implementing all-electronic tolling on the George Washington Bridge and the Holland and Lincoln Tunnels. Once this conversion is complete, and there are no more human toll collectors, the long-standing HOV discount will be eliminated—because there will be no one to count the number of occupants in the vehicles. It turns out that only about three percent of the bridge and tunnel customers were making use of the discount.

Asset Recycling Continuing Overseas, Pleasing Infrastructure Investors
Although Australia pioneered and named the concept known as infrastructure asset recycling (selling or long-term leasing a revenue-producing infrastructure asset and using the proceeds to build or improve existing infrastructure that lacks a robust revenue stream), the successful federal incentive program Down Under ended several years ago. But Infrastructure Investor reports that two state governments—New South Wales and South Australia—are urging a revival of the policy. Meanwhile, both India and Indonesia continue to sell long-term P3 concessions for existing toll roads, with five such roads currently on offer in the latter.

New Toll Road Begins Construction in California
The long-planned SR 11 in San Diego County had its ground-breaking late last month. The $100-million project is supposed to complete the last section of this four-lane highway, linking the Otay Mesa border crossing with regional expressways SR 125 and SR 905. Tolls will be all-electronic and congestion-priced.

Portland Road Diet Worsened Congestion, Study Finds
The Cascade Policy Institute released a detailed study of a road diet plan whose effects include worse traffic congestion, less transit service, and no significant increase in bike and pedestrian traffic that had been projected. The study, “The New Sellwood Bridge: Promises Unfulfilled,” is a valuable case study of how the local politics of transportation and smart growth led to unfortunate outcomes.

Colorado Adding New Mountain Toll Lane
The world’s only part-time express toll lane opened in 2015 on I-70 west of Denver. It serves eastbound traffic returning from ski resorts mostly on weekends, significantly relieving congestion. The new project, for which ground was broken last month, will provide a westbound counterpart ETL, extending 12 miles from the Veterans Memorial Tunnels in Idaho Springs to Empire Junction. The new $70-million lane is expected to open in the spring of 2021.

What Do Electric Vehicles Replace?
That is the question a new working paper from the National Bureau of Economic Research seeks to answer. Authors Jianwei Xing, Benjamin Leard, and Shanjun Li modeled vehicle purchase data, using a large data set, and found that the vehicles that a new electric vehicle (EV) replaces tend to be relatively fuel-efficient, averaging 4.2 mpg above the fleet-wide average. They also found that federal income tax credits increased EV sales by 29 percent, but that 70 percent of the credits go to households that would have bought an EV anyway. The paper is NBER Working Paper 25771, issued in April 2019.

Millennials Flock To Suburbs—The Wall Street Journal
A front-page article on July 2nd documented a trend I’ve been writing about for several years—but which seems to have missed the attention of far too many transportation planners. There is ever-growing evidence that married couples of the millennial generation are seeking affordable housing in suburbia, especially in the Sunbelt. The article, “A New Generation Escapes City Life for the Suburbs,” provides examples along with data from the Census Bureau and the Brookings Institution on this large-scale trend.

Will Tolling Survive in Texas?
The 2019 legislative session made no changes in the populist anti-toll policies that have been in effect for several years, forbidding the use of tolls on any new project receiving state funding and also prohibiting any new long-term public-private partnership concessions. The results have been mixed. One major project—rebuilding and widening I-635 East in Dallas—is going forward with the existing express toll lanes being rebuilt as part of it. And new toll roads developed by regional mobility agencies continue: the tolled SH 45 Southwest opened to traffic last month in the Austin metro area. But plans for the last few segments of the Grand Parkway (the tolled outer beltway of the Houston metro area) are in question, with a decision required this year by the Texas Transportation Commission on whether to include these tolled segments in its 10-year highway plan. Local officials strongly support completion of the Grand Parkway, for which toll finance is necessary.

Miami-Dade Expressway Authority May Survive, Court Says
On August 9th, Leon County Circuit Judge John Cooper ruled that in enacting legislation earlier this year to wipe out the Miami-Dade Expressway Authority (MDX), the Legislature violated a Miami-Dade County home-rule provision in the state constitution. For now, the Expressway Authority will continue to operate its five toll roads while awaiting a predicted state appeal to the 1st District Court of Appeal. The offending bill (HB 385) stemmed from long-standing populist opposition to MDX’s tolling policies.

Electric Vehicle Growth Depends on Battery Technology
The April 20th issue of The Economist included an article documenting the growing investment by nearly all the world’s major auto companies in battery-electric vehicles. Included was a projection by Bloomberg New Energy Finance that worldwide new-vehicle sales of EVs may approach 60 million (out of about 108 million total) by 2040. But a July 19 article in the Wall Street Journal (“Electric Vehicle Face a Big Roadblock”) points out that current lithium-ion batteries are a potential obstacle. They currently account for 35 to 45 percent of the vehicle cost, and while battery costs have been trending downward, it is not clear how much lower they can go, partly due to the high cost of materials such as cobalt. “If the cost of batteries doesn’t continue to fall, long-range affordable EVs will remain a pipe dream,” the article concludes.

Maryland May Reduce Some Toll Rates
The Maryland Transportation Authority is considering several changes that could save its customers $28 million over five years. One would allow toll-by-plate customers to have pre-paid accounts linked to a credit card, at the same lower toll rate that applies to transponders. Another would reduce the toll rate for motorcycles. That would be a welcome relief for cyclists, who object to the nearly standard policy of long-distance toll agencies that charge the same rate for motorcycles as for passenger vehicles (on the grounds that motorcycles also have two “axles”?).

New Study of Pension Fund Investing in Infrastructure
As I reported last month, there is a growing worldwide trend of public pension funds seeking to increase their overall investment rate of return by adding revenue-producing infrastructure to their portfolios. There is a small but growing amount of research on this phenomenon. A recent working paper by Clive Lipschitz and Ingo Walter of NYU assesses this trend as positive but also notes some potential pitfalls. I’ve started to read the whole paper, but you might want to start with a good overview of it by my Reason colleague Marc Joffe of our Pension Integrity Project. His article is, “New Research Shows Opportunities and Perils of Pension Fund Investing in Infrastructure.”

Dedicated Truck Lanes on New Doha Ring Road
Doha, the capital city of Qatar, is under way on a multi-billion dollar 195 km ring road. It will have five general lanes in each direction, plus two dedicated truck lanes each way. A World Highways cover story (June 2019) cites two reasons for the truck lanes: increased safety and better traffic flow. The same benefits would apply if dedicated truck lanes were added to truck-intensive Interstate highways here in the United States.

Interoperable Electronic Tolling in Oklahoma and Texas
Customers with an Oklahoma Pikepass can now use that transponder on nearly all Texas toll roads, including those operated by TxDOT, the Central Texas Regional Mobility Authority, the Fort Bend County Toll Road Authority near Houston, and the North Texas Tollway Authority in Dallas/Ft. Worth. Pikepass is also interoperable with the Kansas Turnpike Authority’s toll roads.

Misleading Headline on Transit and Obesity
The headline read, “Transit Use Reduces Obesity Rates.” But that’s not what the article said. It summarized research from the University of Illinois and Georgia Tech which found a correlation between increased transit use in a metro area and lower obesity rates in that metro area (comparing 2001 and 2009), and the summary made clear that the results do “not necessarily [show] that transit use reduces obesity on an individual level.” Unfortunately, the misleading headline was on a news brief in the May-June issue of TR News, the magazine of the Transportation Research Board.

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Quotable Quotes

“If suburban residents think traffic is bad now, let there be no delusions about the future without major road improvements: It will be unimaginably worse, no matter how many tens or hundreds of millions of dollars are invested in better subway, bus, and commuter- rail service. That will deepen the day-destroying commuter travails of hundreds of thousands of area residents. . . . In fact, Maryland has been making transit strides under [Gov] Hogan, a Republican who was instrumental in greenlighting the Purple Line light rail project and finding hundreds of millions of dollars from the region to improve Metrorail. Local elected officials in Montgomery and Prince George’s counties who oppose his plan to widen the Beltway and I-270 conveniently never mention this. In demanding better transit but no major road improvement, they ensure a future defined by failure and economic anemia.”
—Editorial Board, “To Make a Dent in Commutes, Maryland Officials Need to Focus on the Roads,” The Washington Post, May 9, 2019

“The most crucial question is whether having a smart city will make us meaningfully better at solving urban problems. Data and algorithms alone don’t actually add very much on their own. No matter how much data a city has, addressing urban challenges will still require stable financing, good management, and effective personnel. If smart data identifies a road that needs paving, it still needs people to show up with asphalt and a steamroller. . . . Rather than chasing the newest shiny smart-city technology, we should redirect some of that energy toward building excellent dumb cities—cities planned and built with best-in-class, durable approaches to infrastructure and the public realm. For many of our challenges, we don’t need new technologies or new ideas; we need the will, foresight, and courage to use the best of the old ideas.”
—Shoshanna Saxe, “I’m an Engineer, and I’m Not Buying Into ‘Smart’ Cities,” The New York Times, July 16, 2019

“Mass-market OEMs are heading toward extinction, right? We all know that they will be killed by Tesla and robo-taxi companies like Cruise, Uber, and Waymo, who are just quarters away from developing perfect ‘self-driving’ technology—aren’t they? Let’s take a look at the 2018 production volumes for an indication of where the power really lies here:

Does anyone seriously believe the traditional OEMs will supply robo-taxi companies in sufficient quantities to bring about their own demise? No, me neither. The threat from Tesla and mobility start-ups has been so massively overstated in these last five years—media hype and ambitious timescales cannot disguise the fact that ‘self-driving’ technology remains firmly in the R&D phase and is nowhere close to commercial deployment.”
—Colin Barnden, “For Mass-Market Cars, Forget L3-L5 Autonomy,” EE Times, June 24, 2019

“Overall, data suggest that we are not seeing a great ‘return to the city’ but, with few exceptions, a continued movement out to the suburbs and less dense cities, notably in the sunbelt. The spurt of urban core growth that occurred immediately after the housing bust turned out to be remarkably short-lived, with the preponderance of metropolitan growth—roughly 80%—returning, as has been the case since at least the late 1940s, to the suburbs and exurbs. Indeed, at no point did Census Bureau estimates show net domestic migration from suburbs to core cities, only a reduced rate of migration in the opposite direction.”
—Joel Kotkin, “The New Shame of Our Cities,” American Affairs, May 20, 2019

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The post Surface Transportation News #190 appeared first on Reason Foundation.

• PIRG targets more “highway boondoggles”
• Lots of project finance available—for P3s
• The case for managed lane connectors
• Think tanks on next highways and transit bill
• Fixing what ails MPOs
• German tolling plan vetoed by European court
• Upcoming transportation events
• News notes
• Quotable quotes

PIRG Deems Highway Mega-Projects “Boondoggles”

Ever since 2014, the anti-highways Public Interest Research Group (PIRG) has published periodic “highway boondoggle” reports. The fifth such report, “Highway Boondoggles 5,” was released last month. In 42 pages (with 186 endnotes) it reviews some of its previous targets and then critiques these nine new projects:

• Complete 540, North Carolina
• North Houston Highway Improvements, Texas
• High Desert Freeway, California
• I-75 Improvements, Michigan
• Tri-State Tollway Widening, Illinois
• Connecting Miami, Florida
• I-83 Widening, Pennsylvania
• I-5 Rose Corridor Widening, Oregon
• I-81 Widening, Virginia

The complaints about these projects fall into five main categories. I’ll briefly discuss those, followed by a review of the Miami project, since that’s the one I know the most about.

PIRG’s first point is that highway mega-projects “saddle states with debt,” and the report includes a graph showing state DOT debt nearly doubling from 2008 to 2015. But for most people, buying a house also saddles them with debt. In fact, it makes good sense to finance major projects and have people pay for them over the many years during which they enjoy the benefits. And PIRG fails to point out that projects done as toll-financed public-private partnerships (P3s) do not saddle the state with any debt—the P3 company is solely responsible for debt service on the toll revenue bonds.

A bizarre claim is that a “new roadway is expensive to maintain.” Compared to what—an old, potholed roadway? That is just silly. If highway projects are procured (as they should be) based on minimizing their life-cycle-cost, rather than on the lowest construction cost, our infrastructure would be more durable and would need less maintenance than traditional lowest-bid projects.

One of PIRG’s major complaints is that adding highway capacity doesn’t “solve congestion.” As evidence, the report cites the past 40 years of capacity expansion while noting, correctly, that congestion is much higher today than it was in 1980. That’s true, but our population is 44 percent greater, our GDP is nearly three times as much, and annual vehicle miles of travel (VMT) has more than doubled. Highway/freeway lane-miles have nowhere kept pace with this growth. The report also cites the alleged “fundamental law of road congestion,” which claims that any added capacity is quickly filled up and hence is self-defeating. I critiqued the much-cited paper on which this claim is based in my book, “Rethinking America’s Highways,” and will be glad to send that excerpt to readers on request.

Another complaint is that suburban highway expansion fosters “sprawl.” Well, it does provide the transportation access that enables people who prefer suburban living to get to and from other parts of the metro area. And as extensive research has demonstrated, allowing residential and commercial expansion at the urban fringe is the best recipe available for keeping a metro area’s housing costs affordable. (Compare housing costs in car-restricting Los Angeles and San Francisco with housing costs in suburbia-friendly Atlanta, Dallas, Houston, Phoenix, etc.)

PIRG also plays a bit loose with the facts in citing “our car-dependent transportation system” as the country’s “leading source of global warming pollution.” Yet it’s the overall transportation sector (airlines, trucks, buses, seaports, ferries, Amtrak trains, etc.)—not just cars—that contributes the largest share of U.S. CO2 emissions, which PIRG supposedly means. And except on page 15, PIRG largely ignores the significant trend toward electric propulsion, not just for cars but also for medium and heavy trucks.

Also in the report are: (1) the silly claim that if a freeway is eliminated, the traffic it formerly carried will just “melt away,” (2) false claims that P3 projects which entered bankruptcy were bailed out by taxpayers, and (3) out-of-date claims about millennials being in love with transit (rather than becoming the largest share of new-car buyers in recent years).

Now let’s look at the Connecting Miami project, one of PIRG’s 2019 boondoggles. The project aims to fix a horrendous interchange in downtown Miami where three expressways converge: the SR 836 tollway, the I-395 link to the MacArthur Causeway (to Miami Beach and the Port of Miami), and north-south I-95. This interchange handles 450,000 vehicles per day, far more than it was designed for. And when it was built more than 50 years ago, it bisected several low-income communities.

The purpose of this $802 million project is to fix both problems, relieving serious congestion and re-connecting those communities. It does this via a number of lane additions, double-decking a stretch of 836, and creating a signature bridge with an expansive park underneath to reconnect the formerly separated communities. PIRG’s report denounces the park as a scam and claims people will be “strolling just feet from high-speed traffic under I-395” when that traffic on is a several-lane off-ramp to Biscayne Boulevard (whose traffic will be waiting at a stop light much of the time, not whizzing past).

I contacted James Wolfe, the Florida Department of Transportation’s district director for the Miami region, who hadn’t seen the PIRG report. He was not amused, and commented, “I find it inconsistent [of PIRG] to criticize the original construction of I-395 in Miami for dividing neighborhoods in the ‘60s, but to oppose the current project that is reconnecting those neighborhoods. The pedestrian, bicycle, and public space features of the I-395 underdeck have been universally applauded by both the neighborhoods it serves and the city of Miami that will maintain and operate it.”

Here is an artist’s rendering of a portion of the planned park area. More views are available here. You can get a better idea of the project’s scope and traffic flow improvements by watching this video here.

Portion of New Park Beneath Rebuilt I-395, Miami

Source: Florida DOT

By the way, at the end of the report, PIRG provides a kind of scorecard on the current status of the 42 projects it defined as boondoggles in previous reports. Of that total, 18 have been completed or are under construction, 18 more are still under study or “being revised,” three are on hold, and only three have been cancelled.

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Abundant Infrastructure Financing Is Available—If Only We Had the Projects

I speak at many U.S. conferences on transportation and infrastructure. At those focused mostly on transportation, the common refrain is that there is so much need (e.g., for “rebuilding crumbling highways and bridges”) but so little funding. But when I attend or speak at infrastructure investment conferences, the message is just the opposite: the global infrastructure investment funds have raised tons of money, but can find only a handful of U.S. transportation projects to invest it in.

I have laid out some of the dimensions of this mismatch in a new Reason Foundation report: “Annual Privatization Report: Transportation Finance,” released last month. Here are some of the highlights.

First, the annual amount raised by infrastructure investment funds reached a new high in 2018—over $80 billion. Infrastructure Investor’s tabulation of the 50 funds that have raised the most money over the past five years shows a total raised just by these funds of $386 billion. There is no comprehensive dollar figure for the total raised by all such funds, but I speculate that it is well over $500 billion. Some of that gets invested each year, but as long as more keeps being raised, there continues to be a huge pot of money looking for financially sound infrastructure projects to invest in.

Nearly all these funds seek to invest equity (though there are some funds seeking to provide debt). Depending on the project, equity could range from as low as 5-10 percent to as much as 40-50 percent of a project’s total cost. Since it is not possible to invest equity in a public-sector airport, seaport, or toll road, what equity investors are looking for is either assets that are or about to be privatized (e,g., London Gatwick Airport) or in a great many U.S. cases, assets to be developed as long-term P3 concessions.

Public pension funds are a more-recent investor in these kinds of infrastructure, with the trail blazed by Australian fund managers such as IFM Investors and large Canadian pensions such as Canada Pension Plan Investment Board (CPPIB) and Ontario Municipal Employees Retirement System (OMERS). In the past five years or so, large and medium U.S. pension funds, seeking to diversify their investment portfolios and increase their overall rate of return, have also begun to invest equity in private and P3 infrastructure. The largest of them, CalPERS, now owns 12.7 percent of London Gatwick Airport and 10 percent of the Indiana Toll Road Concession Co.

Infrastructure investors understand that greenfield projects (e.g., a new toll road) tend to be higher-risk than brownfield projects (reconstructing an existing Interstate highway). So the global infrastructure investment funds tend more toward greenfield projects while pension funds tend more toward brownfields. A table in the report shows the major U.S. transportation greenfield P3 projects over the last 25 years: $5.4 billion of equity invested in revenue-risk P3s and $1.3 billion in availability-payment P3s. Those amounts would likely have been much larger if more states had adopted workable P3 enabling legislation; 28 projects in just 11 states make up that entire table.

With all the discussion about the need to “rebuild crumbling infrastructure,” as well as the growing interest of pension funds to invest in relatively lower-risk brownfield reconstruction, state and federal policy should put greater focus on P3s for brownfield reconstruction, as has been carried out successfully in Australia via the policy I’ve written about previously, infrastructure asset recycling. There’s a discussion of that in the new Reason report, as well.

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The Case for Managed Lanes Connectors

By Baruch Feigenbaum

Metro areas around the county are adding variably-priced managed lane networks. As a result of growing traffic congestion, Atlanta, Dallas, Houston, Los Angeles, San Francisco, South Florida and Washington DC are converting High Occupancy Vehicle (HOV) lanes to High Occupancy Toll (HOT) lanes and building new express toll lanes (ETLs) on their freeway networks. Commuters who use multiple congested freeways to travel to work benefit from a managed lanes network that provides an uncongested travel alternative for the entire trip. Commuters are less likely to pay a toll to use a managed lane on one freeway if they know they will have to sit in congestion on another freeway.

But while state departments of transportation (DOTs) are building managed lane networks, many of the new managed lanes (MLs) end before freeway interchanges, and others lack direct connectors to MLs on the next freeway.

When the managed lane on one freeway ends before the interchange with the managed lane on the second freeway, vehicles must merge from the managed lane to the general purpose (GP) lane, then exit onto the second freeway, and then merge from the GP lane back to the managed lane. One example is the I-95/I-595 interchange in Florida in which the managed lanes on I-595 eastbound end one exit before the I-95 interchange. To travel from the I-595 eastbound ETLs to the I-95 southbound HOT lanes vehicles must cross eight lanes of traffic, four (from left to right) on I-595 and four (from right to left) on I-95.

Another example is the I-105/I-110 interchange in Los Angeles, where the northbound I-110 HOT lanes do not connect to the I-105 HOV lanes. Therefore, to travel from the I-110 northbound HOT lanes to the I-105 westbound HOV lanes, vehicles must cross nine lanes of traffic, five on I-110 and four on I-105.

The decision to extend managed lanes and add direct connectors comes down to cost and right of way. Building the ramp for I-595 eastbound to I-95 southbound could cost $90 million. While the managed lanes tolls can fund some of the ramp costs, adding ramps for all movements can easily cost more than $300 million. If additional right of way is needed, that adds more costs. DOTs have the option of adding a fourth level of ramps to an interchange, but those have their own costs. As a result, it’s easy to justify not adding ramps for certain movements or to delay construction decisions.

But at almost every interchange, extending managed lanes or adding ramps passes the benefit/cost test. Completing the managed lanes increases the number of customers as well as the toll revenue. Similar to how toll-paying customers are less likely to use a managed lane that covers only part of the trip, customers are less likely to use the managed lane if they have to move into the GP lanes to exit or enter onto another freeway. Entering and exiting the GP lanes can add 15 minutes to a trip. And since customers must factor in unpredictable GP lane delay to their trips, the managed lanes have less value. As a result, DOTs receive less toll revenue necessitating more gas tax revenue to build and operate managed lanes.

Adding connectors and extending managed lanes has other benefits. It increases the frequency and ridership of express bus service. Transit agencies may start new bus rapid transit lines to take advantage of the improved travel time reliability. Customers will value the lanes more. A mother picking her child up from daycare late will appreciate not having to transfer back into the GP lanes. The lanes will improve economic development. Businesses may be more likely to move to or expand in the region if executives know their people can make it to meetings on time.

Further, extending managed lanes and adding direct connectors will eliminate the congestion and crashes caused by drivers weaving and merging across eight or nine lanes of traffic. This will benefit both GP and managed lane users alike. The merging reduces traffic speeds by 10-20 miles per hour near the interchanges. These lower speeds increase travel times and reduce the overall throughput of the expressways, exacerbating peak-period congestion. Interstate crashes are highest near interchanges and merging causes at least 50 percent of these accidents. In addition to property damage and a small number of fatalities, crashes increase congestion substantially.

Many DOTs have plans to extend managed lanes and add direct connectors. Georgia DOT is planning on adding connectors between managed lanes on I-75 and I-285 and those on SR 400 and I-285. Florida DOT has a long-range plan to fix the I-95 and I-595 interchange, and the Virginia DOT project to add managed lanes to I-66 outside the Beltway will include connectors to the I-495 managed lanes. Yet other agencies, such as California’s CalTrans, seem less concerned. No new infrastructure is cheap, but the improvement in mobility, choice, economic development and safety makes extending managed lanes and adding connectors a smart decision throughout the country.

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Some Think Tank Ideas for the 2020 Reauthorization Bill

Transportation analysts at two market-oriented think tanks last month released policy briefs on provisions they’d like to see in the upcoming reauthorization of the federal surface transportation program. Since both the Senate Environment & Public Works Committee (EPW) and the House Transportation & Infrastructure Committee (T&I) are already working on the bill—which supposedly must be enacted by Sept. 30, 2020—these briefs are timely. While they overlap to some extent, their focus differs somewhat.

Randal O’Toole’s Cato Institute brief, “Principles for the 2020 Surface Transportation Reauthorization,” advances three guiding principles:

• Pay as you go—in other words, spend only as much as comes in from transportation taxes;
• User fees—at both federal and state levels, strengthen the users-pay principle; and,
• Subsidiarity—stop spelling out how states must use federal highway and transit funds.

Marc Scribner of the Competitive Enterprise Institute urges Congress to:

• Restrict federal highway spending to major freight corridors (or at least allow more of the federal money to be spent on deferred maintenance of highways and transit);
• Establish a mileage-based user fee pilot program to research shifting away from fuel taxes;
• Eliminate federal tolling restrictions;
• Increase federal financial tools for infrastructure P3s; and,
• Eliminate cost-increasing federal regulations on highway and transit projects.

There are some commonalities in these proposals, despite their different emphases. Both, for example, urge Congress to scrap the 1956 restrictions on using toll revenues to finance the reconstruction of aging Interstate highways. And both would significantly reduce the 100-odd federal highway and transit programs, allowing state and local governments to decide for themselves how to spend the federal funds in those two categories. And both favor a transition from fuel taxes to mileage-based user fees, but whereas Scribner suggests a federal pilot program, O’Toole disagrees, seeing the shift from fuel taxes to per-mile charges as a state responsibility, with a potential federal role only in setting standards for things like inter-operability and enforcement across state lines (and I tend to agree). Scribner includes some thoughtful ideas on protecting privacy in MBUF systems.

O’Toole does not discuss expanding P3s to finance and manage highway and transit modernization, but that it one of Scribner’s priorities. He stresses the key role played thus far in P3 financing by tax-exempt Private Activity Bonds (PABs), which help level the financial playing field between state government toll finance and P3 project finance. He calls for eliminating (rather than just increasing) the federal cap of $15 billion worth of such bonds, a total that is close to being met. But he misses an equally important point: as currently authorized, PABs can be used only for greenfield projects. Yet the main infrastructure problem we face is not new capacity: it is refurbishing and modernizing aging existing capacity (such as the Interstates). Those are brownfield projects.

The 2018 White House infrastructure plan included not only removing the cap on PABs but also expanding their use beyond highways and transit and to encompass brownfield reconstruction as well as greenfield projects. As noted above, such P3 projects would be more attractive to public pension funds, since they are lower-risk than most greenfield projects. For my money, the two most important infrastructure reforms in the 2020 bill should be PABs expansion and eliminating the anti-tolls provision of the 1956 Interstate highways act. Together, these changes would open the door to toll-financed P3 Interstate reconstruction and modernization.

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Time to Consolidate Metropolitan Planning Organizations
By Baruch Feigenbaum

Metropolitan Planning Organizations (MPOs) were established as part of the Federal Highway Aid Act of 1962 and strengthened under the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 to improve regional transportation planning. However, as the country’s population grew and new metro areas formed, the number of MPOs multiplied. Rarely did MPOs consolidate, even as two metro areas merged to become one larger metro area. As of 2016, there were more than 400 MPOs, many of them local in nature.

For example, the Metro Atlanta metropolitan statistical area (MSA) includes 29 counties. Yet the MPO, the Atlanta Regional Commission, represents only 10 of them. Worse is the situation in South Florida. The Miami MSA includes Miami-Dade, Broward and Palm Beach counties. Yet each of the counties has its own MPO. In fact, Florida has 27 different MPOs with many of them dealing with one county only.

To be effective MPOs need to be the same size as labor markets and commuter sheds. An MPO’s goal is to engage in comprehensive planning and undertake the benefit/cost analysis of potential projects to allocate scare resources to the most valuable projects. Yet many MPOs lack the geographic reach and financial resources to conduct this kind of analysis. In fact, many small MPOs duplicate the functions of county and city governments, wasting taxpayer resources.

Frustrated with the lack of consensus among the multiple MPOs in his home state of North Carolina, in 2016 then-U.S. Secretary of Transportation Anthony Foxx introduced a regulation requiring metro area MPOs to consolidate. The regulation aligned practice with the federal definition of MPOs. It required some MPOs to adjust their boundaries and others to merge. Some large MPOs could remain separate as long as they coordinated activities.

Unfortunately for Foxx, reaction from MPOs was largely negative. Some argued that the regulation transferred power from local officials to Washington bureaucrats. Others argued that it was a one-size-fits-all solution. The regulation was so unpopular that Congress overturned it in 2017, using the Congressional Review Act.

Yet most MPO leaders agree that regional planning needs improvement. With federal surface transportation legislation expiring next year, policymakers need to start developing a technically-sound, politically-palatable plan for MPO reform.

Some of the criticisms of Secretary Foxx’s rule were valid while others were excuses to protect the status quo. Creating a new approach requires separating the excuses from the valid criticisms and understanding those criticisms to effectively reform MPOs.

One common excuse was that MPOs are almost always the right size. In a 2016 op-ed for the Eno Foundation, Barry Seymour of the Delaware Valley Regional Planning Commission (DVRPC) argued that state-level planning is too big and local planning is too small. But by definition, then, county-level MPOs function as local planning entities so aren’t they “too small”? While DVRPC is a true regional entity, Forward Pinellas, (the Pinellas County, FL MPO) which covers less than one-third of the Tampa-St. Petersburg metro area, is a local entity. A logical approach would keep DVRPC the same size, but consolidate the Tampa metro area into one MPO.

Another excuse was that small MPOs work well with each other. In a separate op-ed, Carl Mikayska of the Florida MPO Advisory Council argued that the South East Florida Transportation Council (SEFTC) is proof that MPOs can work together. SEFTC, which coordinates much of the transportation planning in the region, won an FHWA award for freight planning. But SEFTC, which is composed of Miami-Dade, Broward and Palm Beach counties, is the ideal size for a regional MPO. And the fact that it conducts its own transportation planning shows the problems with county MPOs. Further, if SEFTC works well, why do we need county level MPOs that duplicate some functions of local governments? If local governments work so well together, we should eliminate MPOs altogether.

Another excuse was that county MPOs coordinate land uses, but in Florida other entities cannot. Yet, those same powers could be given to a regional MPO. Creating a separate entity for land-use planning is the kind of balkanization that MPOs are supposed to prevent.

But other MPO leaders, such as now-retired Steve Heminger of San Francisco Bay Area’s MTC, pointed out real problems with the 2016 consolidation process. The biggest was political. For MPOs forced to consolidate, there would be a loss of power for certain counties and elected officials. State governors would have been tasked with overseeing consolidation, creating political concerns. Finally, the rule was released on Secretary Foxx’s way out the door during a time of DOT transition to a new Administration. As a result, there was limited agency support and knowledge to implement the rule. The new Trump Administration was not going to use political capital to implement an Obama Administration rule.

A better approach would be to reform MPOs using carrots instead of sticks. DOT could encourage MPO consolidation by withholding 25 percent of some federal funds (both highway and transit) from MPOs that do not consolidate. DOT could redistribute those funds to MPOs in that comply.

Alternatively, DOT could use the Urban Partnership Program as a model. In that program, regions competed against each other to receive a small DOT grant to reduce congestion. The regions with the most innovative approaches received the funding. For MPOs, DOT could provide a small amount of funding for MPOs that focus on regional priorities, such as reducing congestion on primary arterials. Since regional MPOs have a track record of reducing congestion more than county MPOs, they would be more likely to receive the funding.

MPO reform needs to be a priority during the upcoming transportation reauthorization. Stakeholders must develop a regional planning process or be prepared to answer the question of whether MPOs are worth the money.

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German Tolling Plan Vetoed by European Court

A plan to start charging all car users of the Autobahns (the equivalent of the U.S. Interstate highways) was shot down last month by the European Court of Justice. That court accepted the argument brought by the Austrian government that the plan discriminated against non-Germans. How so? While all drivers would pay the same charge to use the Autobahns, the German legislation authorized a cut in existing motor vehicle taxes (paid only by Germans) that would be “at least equivalent” to the amount of the Autobahn charge. EU rules prohibit discrimination on grounds of nationality, so the Court’s ruling was understandable.

Tolled motorways are common in only four European countries: France, Italy, Portugal, and Spain. Although most EU governments charge very high fuel taxes, the proceeds are general government revenue and bear no relationship to spending on highways. Hence, introducing tolls would seem to be a step in the direction of a fairer system, in which users would pay directly for the costs of the roads they use.

But the plan the court shot down was not really that. It came from the Christian Social Union (CSU), a populist/conservative party found only in Bavaria, and was focused on “making foreigners pay.” It was clearly at odds with EU transport policy, which calls for “fair and efficient pricing in transport.”

So what happens now? To get some perspective on this, I contacted Dr. Andreas Kossak, who was a scientific advisor to the Pällmann Commission, appointed in 2000 by the federal government to recommend a better way of financing the federal transportation infrastructure. Germany’s well-known truck tolling system (TollCollect) was intended by the commission as the first step in a transition toward users-pay/users-benefit for all vehicles, at least on all German federal highways. He assured me that the TollCollect system was not affected by the court’s decision since it does not discriminate against foreign truckers. And that system is still planned to be extended beyond the Autobahns to all federal highways.

He also reminded me that as a follow-up to the Pälmann Commission, he was asked by a subsequent commission to develop a “migration plan” to transition Germany to a mileage-based user-fee (toll) system, compatible with EU transport policy, for all vehicles and all roads, including urban roads. Alas, that plan was not followed, and it is not even not posted on the internet. Andreas told me it resides in the library of the Bundesrat, as an attachment to the report of the Daehre Commission, titled “Zukunft der Verkehrsinfrastrukturfinanzierung.” He sent me a copy of a presentation on it that he gave at the 2013 Annual Meeting of the Transportation Research Board in Washington, DC. I hope German transport policy people will review this impressive document as they work to come up with a replacement for the failed “Bavarian foreigner toll.”

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Upcoming Transportation Events

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

Automated Vehicles Symposium, July 15-18, 2019, Orlando World Center Marriott, Orlando, FL (Baruch Feigenbaum speaking). Details here.

ARTBA P3 Conference, July 17-19, 2019, Grand Hyatt, Washington, DC (Robert Poole speaking). Details here.

Trucking Association Executive Council Annual Meeting, July 21-25, 2019The Ritz-Carlton, Amelia Island, FL (Robert Poole speaking). Details here.

Brookings Autonomous Vehicle Conference, July 25, 2019, Brookings Institution, Washington, DC (Baruch Feigenbaum speaking). Details here.

NCSL Legislative Summit, Aug.5-8, 2019, Music City Center, Nashville, TN (Robert Poole speaking). Details here.

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News Notes

Florida Governor Signs Anti-MDX Bill
At the start of the July 4th weekend, Gov. Ron DeSantis signed the bill to dissolve the Miami-Dade Expressway Authority and replace it with a politically controlled Greater Miami Expressway Agency, with mandated toll reductions and limitations on new bond issuance. MDX officials have filed for an injunction to prevent the takeover, and the bond rating agencies have already warned of rating decreases. The bill follows several years to legislative actions aimed at micro-managing the toll agency.

Wisconsin Governor Vetoes New Tolling Study
While approving the 2020 state DOT budget, Wisconsin Gov. Tony Evers vetoed a provision that would have authorized a $2.5 million study of Interstate tolling and mileage-based user fees. In his veto message, he falsely claimed that “the motor fuel tax is the most effective way to approximate a user fee of roadway use.”

Remotely Driven Truck on Florida’s Turnpike
Within two weeks of Gov. Ron DeSantis signing new legislation to permit on-road testing of autonomous trucks in Florida, Starsky Robotics remotely drove a class eight big-rig over nine miles on the Florida Turnpike, maintaining a 55 mph speed, prior to exiting at an off-ramp. In this version of autonomy, there was no human in the cab, but the rig was piloted by a remote driver at a Starsky facility. The start-up company has a fleet of 36 conventional trucks, in revenue service, and three remotely piloted ones. For a video of this initial test on the Turnpike, go here.

Ohio Turnpike Opens First Two Electric Charging Stations
One of America’s major tolled Interstates has opened electric vehicle charging stations at two of its service plazas (Wyandot and Blue Heron) and announced that two more plazas will be equipped by the end of June. Unfortunately, this is illegal to do on about 95 percent of Interstate highway miles, due to a 1956 federal law that bans commercial services at Interstate rest areas. As states begin the toll-financed reconstruction of existing non-tolled Interstates, that archaic ban needs to be repealed.

PayTollo Offers Tolling App in Five States
Start-up tolling service company PayTollo last month announced that its mobile app enabling electronic toll payments is now available in California, Colorado, Florida, Texas, and Washington State. Based on the GPS information in the customer’s smartphone, the app recognizes the upcoming toll collection point and pays the toll. The company’s intention appears to be to offer nationally interoperable electronic tolling without requiring either (a) a 50-state transponder, or (b) retrofitting most toll collection systems to a common standard.

New York City’s Sky-High Infrastructure Costs Exposed—Again
Last year the New York Times ran a series of articles detailing how New York’s multiple bureaucracies and job-maximizing union work rules make the cost of building subways more than three times as high as comparable projects in major cities in Europe and Japan. Now New York magazine has done its own exposé, “Why New York Can’t Have Nice Things: It costs three times more to build a subway station here than in London or Paris. What if we could change that?” The new ground broken by this article is to discuss the “opportunity costs” of massively wasteful spending—namely, the other valuable transportation projects that are foregone because the boondoggles eat up all the available funds.

Charlotte Adding Tolled Highway Capacity
The past six months have seen two express toll lanes projects open in the metro area of Charlotte, NC. Many people knew of opposition to adding ETLs on 26 miles of I-77, leading into downtown, the first portion of which opened last month. There has been far less notice of the 18-mile Monroe Expressway which opened last November. It is a tolled bypass of congested US 74, making it the equivalent of express toll lanes added to that highway, except displaced a short distance away. That project, too, faced initial opposition, but according to a June 27th article in the Charlotte Observer, it is now a popular, time-saving “route to the beach.” North Carolina DOT is moving forward with a new Charlotte project, to add ETLs to I-485 between I-77 and US 74.

Oregon’s MBUF Program Expanding Statewide
After several years as a program limited to 5,000 participants, the OReGO program that allows motorists to pay a 1.7 cents/mile fee instead of fuel taxes has been opened to nearly all motorists. The only limitation is that the vehicles involved must get at least 20 miles per gallon—to avoid gas-guzzlers paying significantly less toward roadway costs. All proceeds of the per-mile charge are to be spent on road and bridge projects.

Vietnam Planning $5.2 Billion Investor-Financed Toll Road
The project is the long-planned North-South Expressway, at an ultimate length of 1,200 km. Inframation reported last month that 40 local and international investors have bought bidding documents for Phase 1 of the project, covering 654 km. It will be a P3 procurement, with the government putting up 47.5 percent of the cost and investors financing the rest. A short-list of qualified firms is promised by August, with the winning bidder to be selected by March 2020

Study Finds Ride-Hailing Has Increased New York City Congestion
A new study by the city’s Taxi & Limousine Commission has found that average speeds in mid-town Manhattan have declined from 6.1 mph in 2010 to 4.3 mph in 2018, with the tripling of ride-hailing vehicles over this time period a contributing factor. The report estimates that these new vehicles are spending 40 percent of their time empty of passengers and cruising for business.

San Bernardino County Adding Express Toll Lanes to I-10
Financing has been arranged for a $929 million project to add ETLs to 10 miles of I-10, from the Los Angeles County line on the west to I-15 on the east. The project received approval for a federal TIFIA loan of $225 million in May. When the new lanes open in 2024, they will comprise another link in the emerging ETL network in the greater Los Angeles metro area. Riverside County is underway adding ETLs to north-south I-15, and San Bernardino County plans to extend those lanes northward from the Riverside County line in a future project.

Bestpass Expands Toll Coverage to South Carolina
Trucking service provider Bestpass, which offers weigh-station bypass and electronic tolling services, announced recently that it is expanding its toll services to South Carolina. That state currently has one toll road, the Southern Connector, but its legislature is looking into toll-financed reconstruction and widening of I-95, which would mean a much larger market for Bestpass’ toll services.

Hampton Roads, VA, Expanding Express Lanes Network
This busy metro area centered around Norfolk and its port system already has eight miles of express toll lanes in operation and another 22 miles under construction or in procurement, to open in 2022 (10 miles) and 2025 (12 miles). With another 15 miles under study, the overall network could be 45 miles. All the ETLs are being added to I-64 under current plans.

Paris Clamping Down on Electric Scooters
Reuters reported on June 24 that the city government has imposed legal restrictions, in response to 20,000 e-scooters from a dozen companies (and projections of 40,000 by year-end. There are now fines for driving scooters on sidewalks and parking them in inappropriate places such as doorways. Transport minister Elisabeth Borne told Le Parisien that the situation amounted to “the law of the jungle.”

Concession Company Repaves Indiana Toll Road
Engineering News-Record reports that the ITR Concession Company has recently completed a major pavement-reconstruction project on 73 miles of the toll road, at a cost of $220 million. It included upgrades of 53 bridges and nine interchanges, as well as the installation of a fiber-optic backbone for an intelligent transportation system (ITS). The project was carried out under a design-build contract.

Atlanta Express Lanes Gaining Respect
A news article on the expanding network of express toll lanes on the metro area’s freeways (June 17) made a number of important points. First, data show that corridors with ETLs are moving faster than before—in both the new lanes and the general-purpose lanes. Second, as Georgia Tech researcher Randall Guensler has documented, these are not “Lexus Lanes”—rather, Guensler told the Atlanta Journal-Constitution, “they are Honda Accord, Toyota Camry, and Ford F-150 lanes.” Third, the network of ETLs will provide the backbone for region-wide express bus service, GDOT Commissioner Russell McMurry told reporter David Wickert.

Managed Lanes Research in New TRB Publication
Issue 14 of Transportation Research Record 2672 includes papers dealing with toll lane access violations, the safety of various express lanes cross-sections, estimated incident clearance time, and other aspects of the design and operation of managed lanes. The journal is published by and available from the Transportation Research Board of the National Academies.

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Quotable Quotes

“A one-time [infrastructure] splurge of the kind being discussed is the wrong approach to these recurrent problems. Though it might forestall an imminent crisis, it would also encourage unnecessary projects, raise long-term maintenance costs, diminish the impetus for states to help themselves, and in all likelihood leave many vital-but-unglamorous needs unaddressed. By festooning the projects with federal red tape—such as ‘Buy American’ provisions and restrictive labor rules—it will also ensure that they cost more than they should.”
—Editorial Board, “Big-Bang Solutions Won’t Fix U.S. Infrastructure,” Bloomberg.com, June 10, 2018

“As for who bears the burden, tolls force drivers from other states to bear their fair share of the costs of using our roads. All other New England states (except Vermont) impose tolls on Connecticut residents when we drive on some of the major roads in those states. It’s only fair that drivers—especially heavy trucks from other states—should pay for the wear and tear that their driving causes to our roads. And because the nutmeg state is located between Boston and New York, out-of-staters are major users of our highways.”
—Ian Ayres, Steven Berry, Kenneth Gillingham, and Barry Nalebuff, “How We Learned to Love the Toll,” Hartford Courant, June 14, 2018

“Hyperloop can’t be a solution to any current transportation problem, as it doesn’t exist. This is like the Wright Brothers pitching airports before they’d flown an airplane—it’s a bit premature. Magnetic levitation technology has been around for years, and we’ve had pneumatic tubes since the 1800s. Putting these two technologies together doesn’t work at this time. There’s no reason public agencies should propose to build lines until they’ve built a test track that functions. Long tubes of metal are going to expand and contract. You can imagine shorter ones connected by rubber or something, but what’s the loss of vacuum? We don’t know. Nobody’s built one. Since they’ve never put a person in a hyperloop, they have no idea how people are going to react. In addition to not having technology, they don’t have a business case. How do they get the passenger flows that justify the cost? This isn’t faster than anything that has come before—we have airplanes. They haven’t come up with a market where this works better than anything we already have.”
—Prof. David Levinson, University of Sydney, “Hyperloop Is Not a Reality, and It May Never Be,” Transportist, June 11, 2019

“How do we actually make moving people around safer and more efficient? Buses are great, trains are great when there really is a concentration of where you want to go from and to, but it turns out we don’t live our lives mostly like that. We live our lives going from my house to my office, and there’s exactly one person who wants to make that trip every day. From my neighborhood to my office, maybe there’s a half-dozen people who want to make that trip. So I think it’s really about finding the right platform, the right vehicle, that optimizes how many trips we’re making so that it can be efficient. Where you’ve got a 50-passenger bus at 2 in the morning, and there’s a driver and one passenger, that’s incredibly inefficient. And similarly, one of the challenges with transit routes is where do you put the route, where does the bus drive. It’s also suboptimal for almost everybody, whereas if we could have, say, a four- or five-person transit vehicle that’s automated, because now we can actually go point to point to point, and then pull those people and take them where they want to go if it’s nearby, that now starts to become a really compelling transit option. And with this [AV] technology, I think you can do that in a way that’s cost-effective.”
—Chris Urmson, quoted in April Glaser, “How Close Are We to Self-Driving Cars, Really?” Slate.com, June 13, 2019

“At the beginning, [major] cities aren’t a good place for driverless vehicles. Cities have too much invested in their hopelessly poor, hopelessly bankrupt transit systems. No one working in any transit system dares to create a welcoming environment to a potential competitor. Communities, smaller cities, and transit deserts are the place to start. It is easier technologically and socially.”
—Alain Kornhauser, “Why Aren’t Cities Getting Ready for Autonomous Vehicles?” Smart Driving Cars, June 8, 2019

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The post Surface Transportation Newsletter #189 appeared first on Reason Foundation.

• What if there is no infrastructure bill?
• Should transportation P3s be regulated like electric utilities?
• Getting someone else to pay for needed bridge replacements
• APTA embraces Bus Rapid Transit
• Should governments transfer infrastructure to ailing pension funds?
• Inside the Princeton autonomous vehicles conference
• Video games on in-car displays?
• Upcoming Transportation Events
• News Notes
• Quotable Quotes

 What If There Is No Federal Infrastructure Bill?

President Trump’s walkout from the White House meeting with Sen. Schumer (D, NY) and House Speaker Rep. Nancy Pelosi (D, CA) has led a number of observers to conclude that a 2019 infrastructure bill—let alone a $2 trillion one—is not going to happen. That was the initial reaction of House Transportation & Infrastructure Committee Chair Peter DeFazio (D, OR), who announced that he and his colleagues will focus their attention on reauthorizing the surface transportation program, which expires on Sept. 30, 2020.

A $2 trillion (over 10 years) bill was always something of a pipedream, in part because of the huge price tag. The only two ways to pay for it would be (1) some kind of massive tax increases, or (2) increasing the national debt by another $2 trillion, at a time when the federal budget is already on a fast track to insolvency.

For the tax increases alternative, Jeff Davis of Eno Transportation Weekly (Week of May 6th) ran some numbers for raising $2 trillion over 10 years, as follows:

• Increasing federal gasoline and diesel taxes: increase each by $1.50 per gallon immediately.
• Tax only the rich: increase the two top rates, respectively, from 35% to 51% and from 37% to 53%.
• Eliminate all itemized deductions: would raise only $1.3 trillion over 10 years.
• Increase everyone’s income taxes: a 2.2% increase in every tax bracket would do this.

That’s a lot more specificity than I’ve seen in any of the various infrastructure proposals offered by presidential candidates or various congressional groups. But I don’t see any of those as realistic possibilities.

Another reason why a major infrastructure bill is questionable is one of timing. Many advocates of such a bill keep citing the need to create jobs, as if this were the Great Depression or the Great Recession. But the United States is at full employment these days, and the kinds of companies that build or rebuild infrastructure are having trouble finding qualified people.  Pumping hundreds of billions of dollars into a full-employment economy is unlikely to expand employment, but would likely increase wages significantly, thereby increasing the cost of infrastructure projects and creating shortages of workers in many other industries.

There is also a federalism case involved here. Nearly all the infrastructure we are talking about—roads and bridges, seaports, electric power, water and wastewater systems, etc.—is owned and operated by state and local governments or the private sector. Historically, those owners have had the responsibility to build, operate, maintain, and improve/modernize those important facilities. The relatively poor condition of much of this infrastructure is a failure of stewardship by those owners. Large-scale windfall funding from Uncle Sam would, in effect, reward those stewardship failures.

If there is no overall infrastructure bill, Congress could still help out, but in ways that do not require major new federal expenditures. Regulatory reform, better financing tools, and incentives for greater use of long-term P3 concessions would all be constructive measures enabling state and local infrastructure owners to deliver more bang for the buck, and improve their stewardship of these assets. For example:

• Expanding tax-exempt private-activity bonds (PABs) to include brownfield reconstruction rather than just new (greenfield) transportation projects would greatly expand the scope for long-term P3 concessions to “rebuild crumbling infrastructure.”
• Federal incentives for infrastructure asset recycling (as used successfully in Australia) would leverage federal dollars significantly, leading to rebuilding aging assets as long-term P3s while freeing up state/local funds for new infrastructure.
• Adding taxpayer safeguards to the RRIF loan program (such as those in TIFIA requiring investment-grade ratings and limiting such loans to 33% of the project cost) would make that program more viable and less risky to taxpayers.
• Allowing states to use toll financing to rebuild and modernize aging Interstate highways and bridges would accelerate the needed reconstruction of these vital corridors—but that permission must be conditioned on provisions that ensure the tolling is customer-friendly.

These are just a few examples. Last year’s White House infrastructure plan included quite a few other policy changes that could pay big dividends. Many of these could be included in the upcoming surface transportation reauthorization, and others in mode-specific bills (seaports, waterways, water and wastewater).

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Should Transportation P3s Be Regulated Like Electric Utilities?
By R. Richard Geddes

Last year the International Transport Forum (ITF), which is part of the OECD, produced an important report entitled, “Private Investment in Transport Infrastructure Dealing with Uncertainty in Contracts.” At 125 dense, single-spaced pages, the report represents an important contribution to the growing literature on private investment in infrastructure via public-private partnerships (P3s). Indeed, it should be required reading in university classes on that topic.

The report misfires, however, when in Chapter 5 (“Dealing with Uncertainty in Long-Term Contracts”) it promotes a regulatory asset-base (RAB) model for regulating private investment in infrastructure. The authors suggest that the RAB model can be usefully applied in network industries that possess natural monopoly characteristics and face little competition.  It appears to take its inspiration from standard commission-based models of utility regulation, such as those applied to electricity or water. The authors argue that the RAB model would be a “comprehensive solution” to several challenges associated with private infrastructure investment, and would create incentives to pursue life-cycle efficiency, among other benefits.

The authors themselves point out some serious problems with the RAB approach. For example, rather than advocating traditional rate-of-return regulation (which effectively sets prices to allow the firm to realize a pre-set return on invested capital), they suggest the more-flexible price-cap approach. They also note that “Capex bias” (called the “Averch-Johnson effect” in regulatory economics), arises when the regulator sets the allowed rate of return above the opportunity cost of capital. That causes the firm to overcapitalize (or undercapitalize if the allowed rate of return is too low).

Moreover, they stress that utility-style regulation often incorporates conservative estimates of funds required to ensure the regulated firm can pay back debt. That may distort the firm’s capital structure, resulting in excessive leverage.  They refer to this as “financial engineering.”

I have more-vital critiques of this approach, however. Several stem from the different P3 experiences in the United States versus European jurisdictions. In Europe, nearly all P3s utilize availability payments rather than financing based on user-generated revenues. Revenue risk is one of the most important risks in any infrastructure project. Since this risk is not part of most European concessions, there appears to be no possibility of a European concession going bankrupt. Revenue risk is a standard feature of any market. The absence of this risk in European concessions blunts the firm’s incentive to deliver best value for its actual customers.

There are several added (unaddressed) reasons to reject an RAB model for infrastructure. Such concerns are based on decades-long U.S. experience with RAB-type models regulating traditional U.S. utilities.  In recent decades, our country has moved away from such models in favor of approaches making greater use of market forces.

Perhaps most fundamentally, RAB-style regulation requires a regulatory body, such as the typical U.S. public utility (or “public service”) commission. Thus, all major regulatory decisions, even under price-cap regulation, must pass through that body. This creates substantial administrative costs and more opportunity for rent-seeking compared with the contract-based oversight incorporated in typical U.S. long-term P3 concession agreements.  In addition to direct administrative costs, regulatory decisions would occur only slowly relative to contractual provisions, introducing the problem of “regulatory lag.” Also, it is hard to reconcile focused incentives to pursue life-cycle cost efficiency with any type of commission regulation.

Although a full discussion is beyond this article’s scope, a commission is unlikely to allow the private investor to face bankruptcy and default on debt.  Thus, one of the strongest disciplinary forces active in most markets is effectively removed. This is not an idle point, as some revenue-risk DBFOM concessions in both the United States and Australia have in fact gone bankrupt. Examples include the Lane Cove Tunnel in Australia and the SR 125 toll road in San Diego.  Although sometimes portrayed as “P3 failures” in the media, those examples prove that risk was actually transferred from taxpayers to private investors. That is a good thing: one cannot then accuse the P3 structure of “privatizing the gains while socializing the losses.” Less appreciated is that the threat of bankruptcy generates strong cost-efficiency incentives for the provider compared with commission-style regulation.

Another concern is how commission-style regulation would interfere with key policy tools to address one of the most formidable challenges facing humanity today: rising traffic congestion. As Peter Cramton, Axel Ockenfels and I showed in recent research published in Nature, real-time, network-wide road pricing is the only proven way to reduce congestion. The use of variable road pricing, or tolling, is rising in the United States. There are now 42 variably priced express toll lanes projects around the country that are using pricing to maintain free flow during peak periods. About a dozen of those are long-term revenue-risk P3 concessions. It is critical that P3 policies not interfere with such efforts.

RAB-style price regulation, with its cumbersome administrative procedures, inhibits price movement in the name of controlling market power. In transportation, that means variable tolls. To my knowledge, there are no compelling academic studies that reconcile utility-commission regulation with the price flexibility required for effective congestion pricing.

Both the Virginia and Texas Departments of Transportation (DOTs) have developed a relatively simple solution to this problem within the context of P3 concessions: pre-negotiated revenue-sharing. Under this approach, a baseline expectation of gross revenue over the term of the concession is included in a detailed P3 agreement. In any year where gross revenue exceeds that projection, the overage is shared between the private company and the state’s DOT. That is important because gross revenues are typically more transparent than net revenues. Moreover, revenue sharing occurs on a sliding scale: the greater gross revenue is above the projection, the higher the share that goes to the DOT. The private company absorbs any revenue shortfalls, however.

The above critiques of a regulatory asset-base, commission-style approach to private investment in infrastructure are cursory treatments of a very complex topic. They nevertheless suggest an old adage to any policy analyst considering commission-style regulation in transportation: proceed with caution!

Prof. Geddes teaches policy analysis and management at Cornell University and is founding director of the Cornell Program in Infrastructure Policy.

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Getting Someone Else to Pay for Bridge Replacements

Three likely P3 bridge replacement projects are being debated in Alabama and Louisiana. Since a toll revenue stream is planned in each case, political debate has been escalating in all three cases—over whether tolls should be used, as well as over how high the rates should be and who should pay what.

The smallest of the three is replacing the obsolete Belle Chasse Bridge in Plaquemines Parish southeast of New Orleans—a $165 million project. No one has proposed that tolls be the sole funding source. A $45 million Rebuilding America grant has already been obtained, and the current funding plan calls for only $70 million (42% of the cost) to be covered by tolls. And the toll would be only 50 cents for passenger cars with a transponder, but with annual CPI inflation adjustment as is becoming fairly common on tolled facilities. Yet the argument that tolls are unfair continues to rage.

A much bigger project is replacement of the existing I-10 bridge at Lake Charles, LA, estimated at $600 million and planned as a tolled P3 project. A bill to dedicate to the bridge project whatever amount of compensation money the Parish receives from the 1994 Conoco-Phillips spill recently passed the state legislature with only a single negative vote. Due to debates over tolling, a bill to create a Calcasieu Parish Toll Authority was put on hold as premature.

By far the largest bridge replacement is the I-10 bridge across the Mobile River in Alabama, weighing in at $2.1 billion. It would build a new 2.5-mile bridge and replace the 7.5-mile Bayway with a new elevated route as a hedge against rising water levels. ALDOT Director John Cooper has said that the project cannot be paid for without tolls, and noted that 50 to 60% of those using the existing I-10 bridge are from out of state—and likely paying little or no Alabama fuel taxes.

But that has not stopped elected officials from going all-out to figure out who else might be tapped to pay for a large part of the $2.1 billion. ALDOT itself has proposed a 15% frequent-user discount, and charging separately for the bridge and the Bayway, so people can use one without having to pay for the other. But that’s not enough for the critics. Besides possible oil spill money, legislators are hoping for a $150 million federal INFRA grant, and have drafted a letter to President Trump asking him to include this project in “his” $2 trillion infrastructure bill.

One idea that has not been proposed for any of these bridges, as far as I know, is peak/off-peak toll rates. That would give an additional break to local commuters who are willing to travel outside peak periods. That would also help spread out peak flows, permitting faster and more reliable trips during those peak periods.

Overall, Americans have no idea how much rebuilding aging and obsolete Interstate highways and bridges will cost. Ever since they were begun via 1956 legislation, users of the Interstates have paid for them via federal gasoline and diesel taxes, which are largely invisible to them. The revenues from those sources are far short of what’s needed to rebuild the aging Interstates, the minimum cost of which is around $1 trillion, according to the expert study commissioned by Congress and released by the Transportation Research Board last December. Elected officials should explain these facts to their constituents, rather than continuing to search for somebody else to pay the bills.

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APTA Embraces Bus Rapid Transit
By Baruch Feigenbaum

The recent American Public Transit Association (APTA) Mobility conference in Louisville revealed an organization that is growing more enthusiastic about Bus Rapid Transit (BRT) and bus in general. While the organization has long supported light rail, BRT received less attention. But APTA’s executive changes, federal policy, an increased number of BRT projects, and enthusiastic staff are pushing BRT to greater prominence.

When New York City Metropolitan Transit Authority (MTA) quit APTA in 2016 arguing that it did not find value in membership, APTA needed to make some major changes. Transit-wise, New York City is more of a European city than an American one, and MTA has a sophisticated government affairs team. Therefore, MTA gets less out of membership than a mid-sized region focused on bus and light rail, such as Denver. But MTA was also frustrated that the agency hadn’t done enough to promote cost-effective transit projects instead of many white-elephant projects. APTA’s focus on shiny new light rail and trolley projects instead of bringing existing systems to a state of good repair was not helping New York City. And since the New York region is responsible for more than a third of the transit trips in this country, the loss of MTA was bad for APTA.

New York’s withdrawal led to management changes at APTA. With a new CEO the organization redesigned some of its conferences; it appears to be focusing more on policy. BRT has been one of the beneficiaries. APTA point person Rich Weaver and the entire staff developed an excellent program for Louisville, attended by almost 100 people. Past BRT tracks at APTA events were lucky to have 50.

In addition, APTA has expanded the bus conference from a pure mode-based event to one that includes ride-sharing and automated vehicles. As mobility as a service (MaaS) becomes more widespread, transit agencies don’t want to be left out of the discussion. Like ridesharing and AV companies, transit agencies want to help shape the transition to make it more transit-friendly.  There were at least five sessions on mobility management including managing the curb, impacts of connected and autonomous vehicles, and a special session by bus system re-designer Jarrett Walker.

In the session focused on community outreach during project development and construction, Amy Cummings of RTC Washoe County discussed the construction of a BRT line extension from downtown Reno to the University of Nevada Reno. Construction required a temporary road closure, and the agency worked with the business coalition to reduce traffic congestion. The agency created temporary parking for businesses. RTC held downtown events during construction to promote downtown business. They partnered with Lyft to provide a 50% discount off trips to downtown. They kept the press informed of changes to the project. And they made sure construction activity was visible. During a previous project, there were gaps in the construction schedule. The public perceived construction as taking too long and lost confidence in the transit agency.

In the session focused on economic development, Justin Stuehrenberg of IndyGo described that agency’s plans for three BRT lines that will increase service by 70% in Indianapolis. The 50 miles of BRT will be in dedicated lanes 75% of the way. Transit oriented development is a key part of the plan. Incorporating lessons from Houston’s bus network redesign that showed bus riders want reliable service seven days a week, the Indianapolis Red Line will operate for 20 hours every day. The Purple Line service replaces an existing local bus route. Finally, the Blue Line will connect downtown with the airport. Marion County is changing the zoning along the route to support transit oriented development. The agency has developed a design guide, steering plan, and shared-use mobility plan to ensure sufficient ridership when the lines open.

APTA offered tabletop presentations (small groups sitting around a table) on BRT Branding, Service Design, Stations/Stops, ITS and Running Ways. I attended the service design discussion that examined the value of fixed guideways (necessary for routes with very frequent service in congested traffic but not in other cases), the seven features of BRT (running ways with priorities and transit signal priority, level boarding, off-board fare collection, unique station design, BRT branding, larger vehicles, and higher quality of service), the difference between BRT in the U.S. context and the international context, and BRT system planning.

During the Federal Transit Administration (FTA) update, Peter Mazurek briefed attendees on FTA’s BRT definitions: Fixed Guideway and Corridor Based. While both require substantial investments in a corridor, Fixed Guideway requires bidirectional service on weekdays and weekends and a dedicated right of way a majority of the time.  While both types of BRT projects are eligible for Small Starts grants, only Fixed Guideway can receive the larger New Starts Grants. During the BRT committee meeting, a board member from Denver’s Regional Transit District (RTD) suggested APTA support ending the fixed guideway requirement for New Starts funding. He discussed how the US 36 freeway BRT project between Denver and Boulder is one of the country’s most-successful BRT projects and yet was unable to qualify for New Starts funding.

While APTA will need to bring this proposed change to its members, the change makes a lot of sense. Corridor-based BRT projects are cheaper; for the same amount of federal funding, many more projects could be built.  The fixed guideway “majority of the time” rule does not guarantee better service. Las Vegas created a BRT system that was in a dedicated corridor more than 50% of the time. The problem is that the dedicated portion is on a non-congested side street while on Las Vegas Blvd the system operates in slow mixed traffic. The agency could not build a fixed guideway on Las Vegas Blvd. Yet, since a fixed guideway was needed for New Starts funding, the agency spent extra money on the part of the system on the side street where the guideway provides no appreciable service improvement. Further, the BRT requirements were written before the creation of freeway BRT service. Freeway BRT operates in a semi-dedicated right of way that cars pay to use (express toll lanes). Buses have the first priority and a guaranteed travel speed and time. Yet, because cars use this right of way, freeway BRT cannot qualify for New Starts funding. This needs to change.

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Should Governments Transfer Infrastructure to Ailing Pension Funds?

In 2017 the New Jersey legislature gave the state lottery to the state’s badly under-funded public employee pension system, amidst cautions expressed by bond rating agencies Moody’s and S&P Global Ratings. Several other state and local governments are looking into doing likewise. And a group called American Public Infrastructure is advocating public-to-public asset transfers as an alternative to a P3 lease of an aging infrastructure asset with the up-front or ongoing proceeds transferred to pension funds. That may sound like a small difference, but there are very profound differences between the two approaches.

Besides promoting the New Jersey Lottery transaction, advocates of public/public asset transfers like to cite the Queensland Motorways case in Australia. I read the detailed case study (from the Global Projects Center at Stanford University) on this 2011 asset transfer. That report makes it very clear that this was a special case, unlikely to be duplicable in the United States.

Several major pension funds in both Australia and Canada have developed considerable expertise in infrastructure, amassing expert staff in order to build investment portfolios in both traditional private-sector infrastructure (railroads, utilities, etc.) and P3 infrastructure. Queensland Investment Corporation is one of those. Following the bankruptcy of several P3 highway mega-projects in the Brisbane metro area, QIC purchased them as potential long-term investments, acquiring them for a fraction of their construction cost. QIC subsequently acquired several more tolled highways in the area, and configured them all into a priced motorway network. In late 2013, QIC’s board decided that this now-very-large investment was no longer consistent with the balanced portfolio it wanted to maintain, and put Queensland Motorways Ltd. (QML) up for a long-term P3 lease. It received $6.6 billion in up-front lease payments from a consortium of a leading toll road company, an Australia-based global infrastructure fund, and a sovereign wealth fund.

While this sounds like a real win for public-public transfers, the authors of the Stanford study make clear how non-generalizable this case is. “The operational improvements at QML [which greatly increased its value] were possible only due to the rare capability at QIC as a state-level pension fund manager to directly invest in and manage infrastructure assets. This internal capability is rare in public pensions.” Also, “It is unclear whether a similar transaction could be replicated [here] in which the public pension uses some kind of external management contract with a service provider to assess and operate the in-kind asset without losing the competitive advantages that QIC’s internal team enjoyed.”

These issues were discussed in a Bond Buyer webinar in late April, “Leveraging Public Assets for Pension Solvency.” Inframation News quoted presenter Len Gilroy (director of the Pension Integrity Project at Reason Foundation) on the problems with direct asset transfer to pension funds. Among them:

• Governments often don’t even have a complete inventory of owned assets;
• Governments struggle with valuing public assets, and tend to over-value relative to the market;
• Governments may book future revenues before they materialize;
• Pension funds that are given infrastructure assets will be taking on revenue risk, capex risks, regulatory risks, environmental risks, etc., which they are poorly equipped to manage.

A more detailed discussion of this subject is included in my forthcoming Annual Privatization Report: Transportation Finance, set for publication by Reason Foundation within the next month.

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Highlights from the Princeton Automated Vehicles Conference
By Baruch Feigenbaum

The 3rd Annual Princeton Smart Driving Cars Summit featured innovative speakers and outside-the-box thinking. Here are some highlights of sessions on (1) mobility for disabled commuters, (2) partially automated driving features, and (3) the potential of ride-sharing.

Proponents tout automated vehicles’ (AVs’) ability to provide mobility to seniors, children, and the disabled.  But there has been little research on the potential hurdles to using AVs for these purposes.  Workshop participants compared their current commute to a mobility-challenged commute (such as if they were blind, deaf, physically disabled, etc.). As an able-bodied commuter, I become annoyed when the Washington Metropolitan Area Transit Authority (WMATA) escalators and elevators are not working. For a disabled traveler, non-working elevators could make travel impossible.

Cecilia Feeley of Rutgers discussed the importance of disabled commuters knowing how to travel. For example, a low-vision commuter uses fixed-route bus service but has to know what route to walk to a bus stop and how to request a stop. Most of us can make split-second decisions, but a low-vision commuter has to plan the route ahead of time and know how to find and use the request-a-stop function on the bus.

Feeley noted that some types of disabilities require completely automated (SAE level 5) vehicles that are many years away, so much current research is focusing on other groups such as the autistic who can benefit from lower levels of automation. The dominant travel mode (more than 70%) for autistic adults is by car with a family or friend driving. Walking is the next most popular followed by paratransit service and then taxi/ride-sharing. Almost two-thirds of autistic adults have never use fixed-route transit. Transit’s lack of service from origin to destination is a major concern for the disabled, as it is for the rest of us. Current paratransit service is far from ideal. Vehicles often arrive late or without needed equipment, such as a wheelchair lift.

Partially automated vehicles have great promise for improving mobility for the disabled. Technology such as braille-enabled smart phones can allow disabled passengers to carpool in AVs. Massachusetts Bay Transportation Authority (MBTA) is partnering with Uber and Lyft to offer paratransit service for the disabled. While there are challenges such as ensuring drivers pick up physically disabled passengers, the service is more popular and cheaper to provide than existing paratransit. Automating selected trips on campuses or on freeways could reduce costs further.

What about the partial AV features showing up in some of today’s cars? David Kidd from the Insurance Institute of America (IIA) shared some troubling findings. He and his colleagues tested partially automated vehicles (level 2 automation) and surveyed drivers of the BMW 5-series, Mercedes E-class, Tesla Model S, Volvo S90, and Infiniti QX50. More than 60% of those drivers trusted each of the vehicles’ adaptive cruise control to maintain speed and distance. But the lane-keeping numbers varied. More than 60% trusted the Mercedes and Infiniti to keep them in the center of the lane, but less than a third trusted the other three vehicles. Only in the Mercedes did drivers think the automated vehicle features were an improvement over manual (human) driving. The Tesla’s system performed the worst; it was described negatively by more than 75% of all drivers using words such as squirrely, stressful, erratic, and obstinate.

IIA examined adaptive cruise control and lane centering of the Tesla Model 3, Tesla Model S, Mercedes E Class, BMW 5 Series and Volvo S90 on its test track near Charlottesville, VA. Vehicles with automatic emergency braking (AEB) were more likely to crash into another vehicle than human-driven vehicles. For lane centering both the Tesla 3 and Mercedes S remained in their lane more than 80% of the time. The Volvo and Tesla Model S did worse staying in their lane: only 50 and 25% respectively. Finally, the BMW stayed in its lane zero percent of the time. Why did the lower-priced Tesla perform better than the high-end model, and why did the BMW fail the test? Tesla updates its automated driving software every year; while the Model 3 had 2018 software the Model S had the 2017 version. BMW designs its cars to be responsive to drivers, which is why they are so enjoyable to drive. Lane centering removes some of the sportiness from the vehicle, which would make a BMW a different type of car. BMW does not want to degrade vehicle performance so its current system is less than perfect.

The takeaway from Kidd’s presentation is that, for most vehicles, even low-level AV technology is still a work in progress. The top-end models have the most AV features, but those features are as much a marketing gimmick as an actual safety improvement. The technology is improving quickly but it’s not something to trust your life with yet.

On ride-sharing, conference attendees were mostly bullish. Many believed that ride-sharing will become widespread almost everywhere, and some floated the idea of banning privately owned automobiles. I asked Alain Kornhauser, the Princeton professor and conference organizer, three questions:

1) Is it realistic to expect everybody to give up car ownership? He replied that was unrealistic. Yet, many AV promoters promote this fantasy.

2) Will there be enough interest and availability of vehicles for most people to ride-share at 5 PM from work to home when those same people will not carpool today? Alain believes this can be solved with technology, but I think that the number of vehicles needed is a large hurdle.

3) Is ridesharing a realistic option in exurban areas? Alain believes it will become realistic over time, and I agree, but that could take a long time.

Technically, widespread ride-sharing could happen. But just because it can happen does not mean it will happen. Errands on the ride home such as picking up a child from day care or stopping at the grocery store complicate ride-sharing and suggest potentially inherent limitations.

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Video Games on In-Car Displays?

The Verge matter-of-factly reported that Tesla has added “another” video game to its in-car displays. While author Andrew Liptak added a parenthetical comment that drivers would play with the games “presumably while parked,” there was no confirmation of that from Tesla. Control of the games is via “the touchscreen, steering wheel buttons, and Xbox/PS controllers.”

Clearly, the driver is intended to be the one playing these games. Given the hot-rodding behavior displayed by some Tesla drivers mis-using the car’s Autopilot function, adding video games strikes me as grossly irresponsible of Tesla. Consumer Reports recently found that the latest Autopilot software “requires significant driver intervention” and “doesn’t work very well and could create potential safety risks for drivers.”

Where is the Society of Automotive Engineers (SAE) on this subject? Where is the National Highway Transportation Safety Administration (NHTSA)?

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Upcoming Transportation Events

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

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

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

ARTBA P3 Conference, July 17-19, 2019, Grand Hyatt, Washington, DC (Robert Poole speaking). Details from: https://artbap3.org/annual-conference

Trucking Association Executive Council Annual Meeting, July 21-25, 2019The Ritz-Carlton, Amelia Island, FL (Robert Poole speaking). Details from: https://business.alabamatrucking.org/events/details/2019-taec-annual-meeting-114

Brookings Autonomous Vehicle Conference, July 25, 2019, Brookings Institution, Washington, DC (Baruch Feigenbaum speaking). Details from: https://www.brookings.edu/events/autonomous-cars-science-technology-and-policy

NCSL Legislative Summit, Aug.5-8, 2019, Music City Center, Nashville, TN (Robert Poole speaking). Details from: http://www.ncsl.org/meetings-training/ncsl-legislative-summit-2019.aspx

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News Notes

South Carolina Considering Toll-Financed Interstate Reconstruction
In April the South Carolina DOT released a study finding that it would be feasible to use toll revenues to finance the reconstruction and widening of I-95 in that state. Most of that aging highway still has only the original two lanes in each direction. Sen. Hugh Leatherman of Florence, SC has announced that he will support tolling legislation for this purpose.

Express Toll Lanes Open in Two States
In recent weeks, express toll lanes opened on I-295 in Jacksonville, Florida—part of Florida DOT’s planned network of such lanes in this metro area. A second phase is expected to open later this year. At almost the same time, the first stretch of privately financed express toll lanes on I-77 in Charlotte, North Carolina opened to traffic; the balance of that project is expected to open by September.

Belgium to Convert Ring Roads to Non-Tolled Managed Arterials
To reduce congestion on the R4 East and West ring roads around Ghent, the transportation agency is embarking on a DBFM P3 project to add grade separations where there are now signalized intersections—at a cost of $555 million. But no tolls will be charged for the improvements. Instead, the national government will cover the 30-year capital and maintenance costs via availability payments, totaling $1 billion.

GM and Bechtel to Collaborate on EV Charging Stations
On May 28th, Bechtel and General Motors announced that they will partner to develop fast-charging stations nationwide for electric vehicles. So far, only a memorandum of understanding (MOU) has been signed, with the business model still to be worked out.

Polling Data Support Users-Pay Transportation Funding
A nationwide survey found that 55% of Americans prefer that transportation be user-funded, with even larger majorities agreeing that a high-quality transport system is vital (78%) and that highway infrastructure investment is very important (66%). The survey was conducted by Russell Research on behalf of engineering firm HNTB.

New Interstate Highway Moving Forward in Arizona
A new north-south Interstate highway—I-11—has long been simply a line on the map, connecting Tucson, Phoenix, Las Vegas, and Reno. A small section is in operation near Las Vegas, but until recently little progress had been seen in Arizona. That has changed, with studies now under way on a 280-mile stretch from Nogales (on the Mexican border) to Wickenburg, northwest of Phoenix. Arizona DOT has completed a draft environmental impact study, which will lead to hearings and debates over the specifics, including the exact right of way. Currently, Las Vegas and Phoenix are the two largest metro areas that lack an Interstate highway connection.

Virgin Trains Begins Phase 2 of Florida Rail Project
On May 21st, Virgin Trains USA (formerly known as Brightline) formally began construction of its second link, from West Palm Beach to Orlando. The company expects nonstop service between South Florida and Orlando to begin in 2022. The project is privately financed, using tax-exempt revenue bonds (Private Activity Bonds) that were issued this Spring. The Orlando station will be the new intermodal center that is already open at Orlando International Airport.

Two Major Toll Roads Moving to Electronic Toll Collection
Recent announcements by the Ohio and Pennsylvania Turnpikes will be music to the ears of motorists and truckers that use these major east-west toll roads. The Ohio Turnpike announced on June 2nd that it will spend $200 million over the next two years to replace toll plazas with electronic toll collection. A similar announcement was made by the Pennsylvania Turnpike in April. It still has 500 toll collectors on its payroll, and has yet to work out a transition plan for them.

New Paris Rail Lines Will Link Suburbs
Suburbanization of housing and jobs is a reality in France, as it is in the USA. So it’s encouraging to see that RER—the regional rail transit system serving the Paris metro area—is departing from its historic suburb-to-CBD focus by developing several billion dollars’ worth of new lines linking suburban locations (including Saint Denis, La Defense, Versailles, Paliseau, and Orly Airport) to one another.

New Toll Roads Continue in Texas
Although the Texas Legislature completed its 2019 session without ending its previously imposed ban on tolls being used on any project using state funding, local transportation agencies continue to develop needed additions to the highway system funded by tolls. On the first weekend in June, the Central Texas Regional Mobility Authority opened the new SH 45 Southwest toll road in the Austin area. And in April CTRMA announced a 6-mile extension of Toll 183A, with formal approval from Williamson County officials.

Survey Shows Strong Local Support for Maryland Express Toll Lanes
The Washington Post on May 12th reported that a new public opinion poll found that 61% of residents in the DC metro area support Maryland Gov. Larry Hogan’s plan to add express toll lanes to the Maryland half of the I-495 Beltway and also I-270 from the Beltway to Frederick, MD. Looking only at metro-area residents on the Maryland side, support was 55%. Surprisingly, support for expanding the American Legion Bridge—currently a major bottleneck on I-495, was only 46%, suggesting lack of knowledge about how the highway system works. On June 5th, the Maryland Board of Public Works approved going forward with the $10 billion P3 projects.

“Ride-Share Vehicles Are Big Germ Carriers”
That was the headline of an article reporting a study by insurance company Netquote that found bacterial counts on Uber and Lyft vehicles to be 219 times as high as the average taxi. Volunteers rode ride-hail vehicles, taxis and rental cars, swabbing the seats in each and sending the swabs to a lab for analysis. Bacteria commonly found included ones linked to skin infections, blood infections, and food poisoning.

India Enters Third Round of Highway Asset Recycling
The Economic Times of India reported last month that the National Highways Authority will soon offer long-term P3 leases of another 550 km of highways. In exchange for up-front lease payments, the winning bidder(s) will collect tolls and manage the highways for 30 years. The NHAI is hoping for a bid of at least $800 million. In 2018 the winning bid for a larger set of highways was $1.5 billion. NHAI will use the proceeds to develop and upgrade other highways.

Asset Recycling Proposed in Michigan
House budget language in Michigan calls for the state DOT to solicit proposals from potential buyers of the Blue Water Bridge, a toll bridge across the St. Clair River north of Detroit. If such a sale goes through, the proceeds would be used for other transportation projects in the state, where there is increasing political and public pressure to “fix the damn roads.”

“Does Your Robocar Come Home After It Takes You to Work?”
Another thoughtful piece by robo-taxi thought leader Brad Templeton explores some of the trade-offs facing individuals once fully autonomous vehicles are on the market. What faction of people will choose to own an AV versus relying on Mobility as a Service (MaaS) is highly speculative, and Templeton reviews some of the trade-offs people will face in this piece. https://ideas.4brad.com/does-your-robocar-come-home-after-it-takes-you-work

Another Streetcar Failure, This One in Detroit
A long investigative article by Metro Times in Detroit was accurately subtitled, “A Streetcar Named Disaster.” An early sentence in the lengthy article by Steve Neavling sums up what $187 million has bought: “The sleek, shiny streetcars have been beset by delays, infrequent stops, low ridership, mechanical failures, accidents, and a ballooning budget.” The article goes on to point out that for the money it spent on the 3.3-mile streetcar line, the agency could have bought 68 new buses, which would have provided far greater mobility for those without cars.

Postal Service Testing Autonomous Trucks
On a 1,000-mile mail route between Dallas and Phoenix, the U.S. Postal Service is testing autonomous big-rig trucks provided by start-up TuSimple. Trips will be made over a two-week test period, with a safety driver and an engineer in each cab. The route connects postal distribution centers and takes 22 hours. It is currently operated by outside companies using two-driver teams to comply with federal Hours of Service regulations.

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Quotable Quotes

“Successful and sustainable P3s take a balanced approach, with specific risks assigned to the partner best positioned to manage them. For example, governments protect taxpayers when they shift traffic risk on toll roads to a private partner with the expertise and technology required to predict trends over decades. In contrast, public-sector professionals often have far better experience and leverage than their private counterparts in securing certain regulatory or environmental approvals.”
—Jennifer Aument, “Q&A, Jennifer Aument, Transurban,” Transportation Builder, March/April 2019

“Instead of sending gas tax money to Washington, which keeps some and returns only part of the money to the states, Congress should end the program. Scale back the 18.4 cent-a-gallon federal levy to a few cents a gallon . . . . With the bulk of the tax eliminated, states would be responsible for levying their own taxes to build and maintain their transportation systems. . . . Washington could also help by removing regulations that prohibit state-collected tolls on Interstate highways and keep states from privatizing rest areas.”
—John Kasich, “Road and Bridges Can Bridge the Parties,” The Wall Street Journal, May 8, 2019

“Kick-scooters, like the one I rode that morning, have well-known drawbacks. The passenger-to-vehicle weight ratio makes them inherently unstable. They are well-suited neither for pedestrian-filled sidewalks, where they interfere with foot traffic, nor for automobile-clogged streets. There is no obvious place to park them, and no incentive for users to avoid cluttering pedestrian walkways. Their use on sidewalks annoys and even endangers pedestrians. Helmets are not provided, and therefore rarely worn. Under ideal circumstances, such as a protected bike lane, they can be practical for trips of one or two miles, but are not comfortable to go much further. And while they beat walking, they are still limited to about 15 mph.”
—M. Granoff, “Maniv Is Reveling in Micromobility,” in Smart Driving Cars, June 1, 2019

“The FL legislature recently passed (and the governor may sign) legislation that would strip the Miami-Dade Expressway assets from Miami-Dade County for transfer to a new entity that would operate with thinner debt service coverage targets and diminished toll-setting flexibility. . . . Accordingly, outstanding MDX bonds have already been downgraded, and should the proposed transfer occur, outstanding bond ratings could fall into the BBB category. . . . At least with respect to tolls, FL is demonstrating a growing problem with willingness to pay: a long-term concern for holders of all state and local toll revenue bonds in the state.”
—“MDX Seizure Highlights Rising Risk in FL Toll Revenue Bonds,” Municipal Market Analytics, May 20, 2019

“Most [LA] Metro customers live below the poverty line and can’t afford a car. Though Metro talks about attracting ‘choice’ riders—people who own a car, yet choose to ride transit—a report last year from UCLA shows LA transit riders are increasingly choosing to drive as soon as they can afford to. Fully 79% of former Metro riders now primarily drive alone.  What if—a radical concept here—instead of focusing on new riders, Metro improves the system for those who use it now. If it can entice current riders to stay, former riders might return and new riders might be more inclined to give up their cars.”
—Mehmet Berker, “Metro Is Hemorrhaging Riders. It Needs to Stop Studying Obvious Fixes and Start Acting,” Los Angeles Times, May 17, 2019

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The post Surface Transportation Newsletter #188 appeared first on Reason Foundation.

• A top-down mileage fee program?
• Lessons from state MBUF projects
• Benefits of highway expansion
• Progress toward zero-emission trucks
• Second thoughts on a federal infrastructure bill
• New information on Genoa bridge collapse
• Upcoming Transportation Events
• News Notes
• Quotable Quotes

New Report Calls for Top-Down Mileage Fee Program  

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

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

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

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

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

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

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

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Lessons from State MBUF Pilot Programs
by Baruch Feigenbaum

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

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

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

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

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

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

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

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

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

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

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

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What If Highway Expansion Made America Better Off?

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

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

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

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

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

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Progress Toward Zero-Emission Trucks

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

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

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

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

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

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

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

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

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Second Thoughts on a Federal Infrastructure Bill

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

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

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

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

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

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New Information on Genoa Bridge Collapse

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

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

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

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

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Upcoming Transportation Events

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

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

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

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

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

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

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

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

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

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

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News Notes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Quotable Quotes

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

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

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

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The post Surface Transportation Newsletter #187 appeared first on Reason Foundation.

• Toll-financed Interstates could solve two major problems
• Environmental benefits of truck-only lanes
• Concerns about LA Metro’s “28 by 28” plan
• Might Congress consider federal asset recycling?
• Anti-toll populism in South Florida
• Solving the Pennsylvania Turnpike’s Act 44 Debacle
• Upcoming Transportation Events
• News Notes
• Quotable Quotes

How Toll-Financed Interstate Reconstruction Could Address Two Major Problems

The two largest problems facing America’s highway system are (1) the need to reconstruct and modernize the aging Interstate highway system and (2) the need to start replacing per-gallon fuel taxes with per-mile charges.  In the January issue of this newsletter, I suggested that the Transportation Research Board (TRB) Future Interstate Study Committee had missed an opportunity to propose addressing both problems simultaneously. That committee discussed but did not recommend long-term financing of Interstate modernization based on per-mile electronic tolling. In that article, I did not discuss how such a transition could be launched, but that is the subject of a new Reason Foundation policy study, released today.

“The Case for Toll-Financed Interstate Replacement” draws heavily on the case made by the TRB Committee that the Interstates need both major reconstruction and selective widening. Our new study also explains why long-term financing is wiser than pay-as-you-go funding out of annual revenues, and that depending on a huge increase in federal gasoline and diesel taxes would be unwise as well as politically unlikely. It also explains that if we expect highway users to pay (over several decades) for a trillion-dollar modernization program, they will need to get real value for the per-mile charges they will pay. And that, alas, is not what the TRB Committee report offered to motorists and truckers. Under its mid-range scenario, after 20 years of spending $57 billion per year on Interstate modernization, they project that both poor pavement and traffic congestion would worse than today.

With political control of Congress now divided, the political climate is not promising for major new infrastructure funding. And agreeing on either a serious federal effort to switch from per-gallon to per-mile highway fees or a mandated switch to tolled Interstates seems highly unlikely. Instead of proposing either, our report proposes a voluntary program to be offered to all 50 states. For any states that wanted to move to toll-financed Interstate replacement, Congress would lift the 1956 federal bans on tolling and on commercial rest areas (i.e. service plazas), but only if the state agreed to a set of provisions that would create a genuine value proposition for motorists and truckers. Here are the six conditions, and the reason for each:

1. Tolls must be collected electronically and charged per mile traveled. (This begins the transition from per-gallon to per-mile.)
2. Tolls on a segment would be instead of, not in addition to, fuel taxes—meaning fuel-tax rebates from the state would be required. (This reinforces per-mile charges as the replacement for fuel taxes.)
3. Toll revenues would be used only for the capital and operating costs of the state’s Interstate highways, bridges, and tunnels. (This prevents tolled corridors being used as cash cows.)
4. Tolls on a segment would begin only after that segment is reconstructed or replaced and opened to traffic. (This ensures that users pay only for something better than the status quo.)
5. Tolls must apply to all vehicles using the rebuilt Interstates. (This prevents discrimination against trucks and is fair since all users will benefit from the rebuilt Interstates.)
6. For a given category of vehicle, tolls must be the same for in-state and out-of-state customers. (This ensures no discrimination in interstate commerce and travel.)

As I watch the debates going on in states where Interstate tolling is being considered, I’m often dismayed by several aspects. First, there is far too much emphasis on revenue generation and far too little concern on the value for newly-tolled customers. Second, there is a focus on getting toll collection in place as soon as possible—without assurances that those who will pay the tolls can count on meaningful benefits from doing so. There is no consideration that per-mile tolls can and should be the first step in converting to mileage-based user fees—which are premised on (and promised to be) a replacement for fuel taxes, not an add-on. There is also still too much talk about charging only trucks, and there are all kinds of proposed schemes to make out-of-state Interstate users pay far more than in-state users.

Congress created the Interstates as a way to facilitate inter-state travel and commerce. If, as seems highly likely, Congress does not come up with the funding to replace the first-generation Interstates, it still has an obligation to make sure the system remains a national system that does not discriminate between in-state and out-of-state users, and that all users pay for this immense and much-needed make-over. The above conditions are an attempt to make sure that states taking advantage of this voluntary program do so in a way that both adds value for all users of the replacement corridors and preserves a seamless Interstate system that facilitates inter-state travel and commerce.

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 The Environmental Benefits of Dedicated Truck Lanes

Ever since Reason Foundation’s first study of dedicated truck lanes (DTLs) back in 2002, I have been impressed by the potential economic and safety benefits of DTLs. Economic benefits would come from the ability to operate longer combination vehicles generating more ton-miles per driver, and safety benefits would result from reduced car/truck crashes. I’m pleased to report on two recent studies that quantify energy and air quality benefits of improvements focused on trucking.

The first study is “Energy and Air Quality Impacts of Truck-Only Lanes: A Case Study of Interstate 75 between Macon and McDonough, Georgia,” dated November 2018. It’s a joint effort of the Georgia Tech School of Civil & Environmental Engineering and the National Center for Sustainable Transportation. That stretch of I-75 is a major truck route, bringing trucks from the Port of Savannah (which traverse I-16 to Macon and then I-75) to the southern outskirts of metro Atlanta. Georgia DOT several years ago proposed adding a northbound DTL to that corridor, and this study is part of the evaluation of this proposed addition to I-75.

The study used a traffic simulation model to study changes in traffic flow and two widely-used models to assess energy and emissions. Traffic speed was improved for vehicles in the general-purpose lanes and for trucks using the DTLs, by 5.3 percent and 5.5 percent, respectively, and this reduced total vehicle hours of travel in the corridor by 5.2 percent to 6.9 percent, depending on traffic demand projections. There were also reductions in fuel consumption (2.7 percent to 3.7 percent), leading to significant emission reductions: CO2, 2.7 percent; CO, 8 percent; and NOx, 4.4 percent.

The second study, released in March 2019, was done by the American Transportation Research Institute (ATRI), which focuses on trucking-related highway issues. ATRI publishes annual tabulations on the most-congested portions of the Interstate highway system, based on data collected from GPS-equipped trucks that make use of these vital corridors. One of its conclusions is that just 12 percent of the Interstate system accounts for 89 percent of the trucking industry’s congestion costs. In January ATRI published its latest annual rankings of the Interstate system’s choke-points, and number two on its list was Spaghetti Junction, the five-level interchange in Atlanta where I-85 and I-285 cross. (Number one was I-95 at SR 4 in New Jersey.)

The new ATRI report is a case study of Spaghetti Junction. Based on data on the emissions and fuel use of trucks traversing this bottleneck (sometimes at speeds as low as 14 miles per hour (during peak periods), the study estimates the improvements that would occur if the interchange were redesigned and rebuilt to permit speeds to average 55 mph (probably unrealistic, but this yields an upper-bound estimate). For all vehicles (cars as well as trucks) using the interchange, the savings would include 4.5 million gallons of fuel per year, plus reductions of 17 percent in fine particulates, 8 percent in CO2, and 5.5 percent in NOx.

Only a handful of major bottleneck interchanges have been redesigned and rebuilt in recent years, including the Springfield interchange in Virginia (I-95/I-495), the Marquette (I-43/I-94) and Zoo (I-94/I-894) in Milwaukee, and the Betsy Ross (I-95) in Philadelphia. The costs of these projects ranged from $676 million in Virginia to $1.6 billion in Philadelphia. The cost of replacing the rest of these obsolete interchanges was not included in the TRB Future Interstate Study Committee’s report.

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Concerns About L.A. Metro’s 28 by 28 Plan
By Baruch Feigenbaum

In late February, the Los Angeles County Metropolitan Transportation Authority (known as Metro) formally adopted a plan to build 28 major transportation projects in time for the 2028 Olympics. Originally proposed by L.A. Mayor Eric Garcetti, the plan includes a mix of projects throughout the county. Most are transit improvements but several are managed lane projects and two are bicycle paths.

Building so many projects in such a condensed time window is a major challenge. After studying the proposal, transit consultant Thomas Rubin and USC professor James Moore began writing a series of 16 briefs for Reason Foundation warning of the problems with such an undertaking.

A number of the briefs are already available on our website here. The remainder will be available in the next few weeks. Below are a few highlights of the authors’ findings.

The biggest problem is that Metro may not have sufficient resources to build all of these projects. Metro sales tax collections have not met the agency’s predictions. It started collecting the new Measure M sales tax in FY 2018. For 2018, Metro projected collections of $860 million, but actual revenue was only $775 million. For 2019, the agency projected $908 million but is on track to collect $844 million. If these shortfalls continue for 30 years, they will total close to $3 billion for Measure M alone. Metro also has three other half-cent sales taxes (from Measures A, C and R), so the total funding gap could be as much as $12 billion.

The agency has a history of overestimating sales tax revenue. Metro’s 13 projections between 1983 and 2018 were 67 percent higher than its actual collections. Yet despite this poor record, the agency has not altered how it projects revenue.

To build all 28 projects, Metro acknowledges that it needs more money than the sales taxes will generate. As a result, the agency also plans to use revenue from managed lanes, cordon pricing, mileage-based user fees, and corridor pricing to fund transit. Metro assumes it will garner all the revenue from all of these fees (rather than, for example, letting managed lanes be self-supporting from variable toll revenues), which violates the users-pay/users-benefit principle. Regardless, Metro’s projected revenues make some unrealistic assumptions.

By assuming that every managed lane project in the region generates the same amount of revenue as the highly congested I-110 facility, Metro probably overestimates managed lane revenue. The agency plans to implement a $0.12/mile mileage-based user fee, which is six times what is being used in MBUF pilot programs. Metro intends to implement cordon pricing (charging all vehicles to enter a given area) and corridor pricing, neither of which has been implemented in the U.S. And it assumes that there will be political acceptance for adding all of these additional charges.

There are other concerns beyond the funding. Most of the Olympic venues are clustered in an area stretching from UCLA through downtown and USC. A transportation plan for the 2028 Olympics would focus on improvements in this area. But light rail lines in the East San Fernando Valley and North San Fernando Valley don’t serve any Olympic venues. The bicycle network will not serve the Olympic spectators. Building these projects is about politics, not Olympics-related transportation.

The agency’s plans to speed up project delivery may not be feasible. Southern California does not have the labor to build all of these projects in such a short period of time. Metro also doesn’t have the management and engineering staff to manage this array of projects. Speeding up project delivery increases costs; the benefits may outweigh the costs for emergency repairs such as replacing a deficient bridge. But speeding up delivery for projects that have nothing to do with the Olympics is not a good choice.

It is no surprise that rail advocates are using the Olympics to justify more rail construction. And it’s no surprise that rail projects experience major cost overruns. What’s frustrating is that the last 25 years have shown—in Los Angeles and other cities— that expanding bus service increases transit ridership while expanding rail service decreases transit ridership. Further, bus is almost always cheaper than rail. Even premium express bus and bus rapid transit services cost one-third to one-ninth as much as the most cost-efficient light rail lines. Yet L.A. leaders, who should know better, continue to push for rail.

Unfortunately, this is true in many places across the country. When Houston built a multi-billion-dollar light-rail network, total transit ridership (including bus) declined. A few years ago, Houston redesigned its bus network for a minimal additional cost, which led to an increase in bus ridership. The redesign, which included adding service on weekends, helped transit-dependent riders reach jobs they could not previously access on weekends. Yet Houston politicians have responded by calling for more rail funding.

Seattle used to have one of the best bus networks in the country. Yet local leaders decided that they needed rail to be a “world-class” city. Policymakers have redirected highway funding and increased the sales tax to 10.1 percent to build several new light rail lines, projected to cost $50 billion over the next 25 years. They have also eliminated bus routes. The increased tax burden and reduced bus service have forced many low-income residents to leave Seattle and the region. Despite rapid population growth and spending billions of dollars on transit improvements, transit ridership has not increased and per capita transit usage has decreased.

However, some regions are learning. Gwinnett County in suburban Atlanta created a transit plan built around bus, technology and private sector participation. Unfortunately, the March 2019 election on this plan, with its confusing ballot and inclusion of a heavy-rail extension (which reduced the number of BRT routes) led to the plan’s defeat at the polls. Regardless, Gwinnett provides hope that leaders can focus on improving transit for those who use it rather than building expensive rail.

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Might Congress Consider a Federal Asset Recycling Incentive?

As this newsletter reported last year (and as I documented in a Reason policy study), Australia’s several-year federal asset-recycling incentive program was effective in generating improved infrastructure at the state and local level. It also expanded the federal corporate income tax base. The Embassy of Australia suggested the outlines of an American adaptation of their program back in 2017. Now that the White House and Congress are once again discussing an infrastructure program, it’s worth taking another look at this approach.

The underlying concept is that some number of government-operated revenue-generating infrastructure enterprises are not really run in a businesslike manner. This could be remedied by selling or long-term leasing them to investor-owned companies with experience in financing, improving, operating, and maintaining such enterprises. And the net proceeds from the sale or lease (after paying off existing bonds) could be used to build other needed infrastructure that does not have its own revenue stream. The companies operating the revenue-producing assets would, if profitable, pay federal and state corporate income taxes, adding to federal and state tax bases. Two notable transportation examples are the long-term leases of the San Juan International Airport and the Indiana Toll Road, both of which were poorly managed and have now been significantly revamped via private investment.

The Australian document (“Rebuilding America 20/20 Infrastructure Program”) suggests the following:

• The federal government sets up an Asset Recycling Fund aiming to deliver $1 trillion worth of new state/local infrastructure.
• It would set aside $100 billion in a draw-down facility, funded by new federal bonds tied to the Fund.
• State and local governments would apply to the Fund for a 20 percent bonus on the sale/lease proceeds if applied to new infrastructure.
• The Fund would pay 10 percent of the bonus at the time of the sale/lease of an existing asset and the other 10 percent on completion of the new infrastructure.
• The program would be time-limited, e.g., that all applications and agreements must be completed by a fixed date (e.g., 2 or 3 years from the program’s launch).
• The federal government would receive new federal tax revenues from newly sold/leased assets that currently do not pay taxes, which would provide for debt service on the Fund’s bonds.

As I re-read this 2017 document prior to writing this article a potential high-profile use of sale/lease proceeds occurred to me: the New York/New Jersey Gateway project to replace aging and obsolete bridges and tunnels on the passenger rail lines linking New Jersey to Manhattan. Neither Amtrak nor the commuter rail lines could possibly pay for the $13 billion replacement tunnels—but there are major revenue-generating transportation assets in the region that could be leased under long-term public-private partnership (P3) agreements, with the proceeds going to this new and much-needed infrastructure improvement if the political will is there.

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Anti-Toll Populism in South Florida

Florida is one of America’s fastest-growing states. Its policymakers have done a better job than most in keeping the state’s highway capacity growing along with population growth, primarily by supplementing fuel-tax funded highways with over 3,500 lane-miles of toll-financed expressways, beginning with the well-run Florida Turnpike in 1957. Tolled expressways (and a growing number of express toll lanes) exist in all four of the state’s largest metro areas. Yet, one of the best-run urban toll systems, the Miami-Dade Expressway Authority (MDX) is threatened with demise by a bill in the Florida legislature.

The bill, by Sen. Manny Diaz (R, Hialeah) and Rep. Brian Avila (R, Miami) would dissolve MDX, turn its five existing toll roads over to the Florida Department of Transportation (FDOT), and remove its tolls once the existing revenue bonds are all paid off, circa 2045. The bill is the latest legislative attack on MDX, which in previous years has been hit with restrictions on its tolling and mandates to transfer “surplus revenue” to the county government. This year’s effort is the strongest assault yet.

The roots of this anti-tolls fervor date back to last decade, when MDX converted to all-electronic tolling (AET). Previously, it had charged tolls using toll booths at mainline barriers on each of its toll roads. Since there were many places to get on and off, about half the users of these toll roads paid nothing to use them. But the switch to AET “closed” the system, and all those former free-loaders had to start paying. That gave birth to a populist anti-tolls movement.

At the annual meeting of TEAM Florida in January, there was considerable concern over this year’s escalated legislative assault on tolling. To be sure, this is only one metro area with its own quirky politics, but abolishing a successful and cost-effective tollway provider would set a terrible precedent for a state that needs more, not less, tolling. And if the Diaz-Avila bill were to pass, it’s not clear that Florida’s new and well-regarded Republican Gov, Ron DeSantis would veto it. His running mate, Lt. Gov. Jeanette Nunez, is a former anti-tolls legislator from Miami.

Miami-Dade Mayor Carlos Gimenez, who chairs the MDX board, has proposed an alternative that may be worse than Diaz-Avila. It would also dissolve MDX but replace it with a new Miami-Dade Transportation Authority that would keep the MDX toll roads and acquire (for free) the Turnpike’s Homestead Extension (HEFT), thereby operating all the toll roads in the county. The plan would use “surplus revenues” from HEFT to reduce existing MDX tolls by 20 percent and keep those lower rates unchanged through 2053. There would be no new bonds and no expansion of the MDX network for 35 years of continued population growth—a perfect recipe for much worse traffic congestion.

And that’s not even the worst part. The board of the new agency would be composed entirely of elected officials, rather than including business leaders and others with subject-matter knowledge. And true to its identity as a “transportation” authority, the initial plan would shift $1.8 billion in toll revenues toward planned but currently unfunded rail transit corridors. Thus, politicization would lead directly to turning a static set of toll roads into cash cows for rail transit.

This proposal ignores everything we’ve learned about the need to provide faster region-wide travel as a key to an urban area’s economic productivity and about the ability of variable pricing to keep traffic lanes free-flowing. It would demolish the users-pay/users-benefit principle that has until now been preserved in Florida’s toll roads and toll lanes. And it would ignore the need to begin shifting highway funding from per-gallon fuel taxes to per-mile charges.

Ironically, at the very time when the Florida legislature is considering the destruction of MDX, bills are moving forward in both houses to fund feasibility studies for three new toll roads in the western part of the state: an extension of the Suncoast Parkway north to the Georgia border, an extension of the Turnpike to the Suncoast Parkway, and a new north-south toll road to relieve I-75. It would be tragic for the legislature to expand tolling with one hand while crippling it with the other hand.

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Solving the Pennsylvania Turnpike’s Act 44 Debacle
By Baruch Feigenbaum

In 2007, Pennsylvania legislators wanted to provide additional state funds to public transit agencies, primarily in Philadelphia and Pittsburgh. The state passed Act 44, which required its Turnpike Authority to toll I-80 users and send an annual fee to PennDOT for local transit. (While states should rebuild their worn-out, congested Interstates with tolling, simply adding a toll to existing highways to fund transportation services outside of the corridor is a violation of the users-pay/users-benefit principle and is poor policy.) However, due to the Interstate tolling laws, then-U.S. Secretary of Transportation Ray LaHood needed to approve the agreement. Finding it to be inconsistent with federal law, LaHood rejected Pennsylvania’s proposal.

The decision placed the Turnpike Authority in a bind. It was legally required to divert money to transit but did not have any surplus revenue. Therefore the agency was forced to increase toll rates on the Turnpike (I-70/I-76) in order to send the required revenue per year ($450 million in 2017) to Pennsylvania DOT.

Pennsylvania’s Turnpike has struggled to make the annual payments. And toll road users have paid the price. Motorists now pay $58.30 to drive the 360 miles between Ohio and New Jersey. The per mile toll of 16.2 cents is 50 percent higher than the country’s next-most-expensive toll road, the New Jersey Turnpike, and three times the rate of the New York State Thruway, which is similar in size to the Pennsylvania Turnpike. The high tolls have reduced Turnpike traffic volumes at a time when volumes on similar toll roads are increasing.

Despite the increased tolls, the Turnpike debt continues to increase. At $11.8 billion, the debt reduces the Authority’s credit rating. More than half of the agency’s revenue is used for debt servicing. A recent state Auditor General report warns that the current toll increases are not financially sustainable. If Pennsylvania officials don’t address the problem, the state may need to use funds intended for other purposes to bail out the Turnpike.

In addition to creating a hardship for the Turnpike and increasing the commonwealth’s debt, the current approach requires Turnpike users, many of moderate incomes, to subsidize urban transit users in Philadelphia and Pittsburgh systems, who have higher incomes. (Customers who use rail lines  have above-average incomes). In addition to violating the users-pay/users benefit principle, cross-subsidies to higher-income people is very poor public policy.

Solving the problem includes adopting both a short-term and long-term strategy. In the short-term, policymakers need to adopt the Auditor General’s recommendation to end the diversion to PennDOT. Several years ago, legislators increased Pennsylvania’s gas tax by 24 cents. As a result, the state’s $0.58 per gallon gas tax and $0.71 diesel tax are the highest in the country. PennDOT could use a portion of its own revenue to fund local transit systems, although it should be less than $450 million per year.

Additionally, transit agencies need to increase their farebox recovery ratios. Both the Southeastern Pennsylvania Transportation Authority (SEPTA) and the Pittsburgh Port Authority recover only about 20 percent of their costs through fares. This is a very low rate, particularly for SEPTA, which provides service in a high-density transit-friendly region. Part of the problem is the agency’s low fares. Seniors pay $1.00 to ride commuter rail anywhere in the state. While nobody wants to burden seniors, an 18-mile trip between Wayne (a Philadelphia suburb) and downtown Philadelphia by car would cost $10.50. Having seniors pay $5.00 would help close the funding gap. SEPTA and the Port Authority should also examine charging for parking and using value capture to fund transit.

Local transit agencies need to increase system efficiency as well. Local property tax revenue or general funds could help support these local systems. As a last option, instituting a local transportation sales tax, as many other regions have done, would provide needed revenue.

While these changes would solve the immediate problem, future lawmakers may once again try to use the Turnpike as a piggybank. Therefore, the state needs to enter into a public-private partnership (P3) to safeguard the system’s revenue. The long-term P3 company would redesign, upgrade, finance, operate and maintain the Turnpike system.

P3s have many advantages. They deliver needed infrastructure when it is needed; parts of the Pennsylvania Turnpike are more than 70 years old and need to be modernized today, not 30 years from today. P3s tap new sources of capital to pay for infrastructure improvements and shift risks from taxpayers to investors. They bring in innovation that typically offers better service and lowers costs.

In the Pennsylvania situation, a P3’s biggest advantage is removing politics from the process. A public toll entity is responsible to the Legislature and/or Governor. A private toll operator is responsible to its customers, the toll road users. As a result, a private toll operator is not going to spend its toll-road revenue 300 miles away or charge inflated toll rates that cause potential customers to take another facility. A private operator wants to increase its customers, not exploit them.

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Upcoming Transportation Events

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

Public Affairs Research Council of Louisiana 9th Annual Conference, April 11, 2019, Crowne Plaza, Baton Rouge, LA (Bob Poole speaking). Details from: http://parlouisiana.org/annual-conference

5th Annual George Mason P3 Forum, April 23, 2019, George Mason University, Arlington Campus, Arlington, VA (Bob Poole speaking). Details from: http://p3policy.gmu.edu/index.php/2019/02/19/5th-annual-p3-forum

Future of Transportation in Wisconsin, April 26, 2019, Harley Davidson Museum, Milwaukee, WI (Bob Poole speaking). Details from: https://thompsoncenter.wisc.edu/upcoming-conference-b

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

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

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

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

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

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

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News Notes

Congestion and Potholes Spark Proposed B-W Parkway Transfer
Maryland Gov. Larry Hogan received two boosts for his plan to add express toll lanes to three major corridors: I-270, the I-495 Beltway, and the potholed Baltimore-Washington Parkway. On March 21st, The Road Information Program (TRIP) found Maryland’s major expressways to be the country’s most congested, and the B-W Parkway so potholed that its owner (the National Park Service) just proposed cutting the speed limit to 40 mph to reduce damage to vehicles. Hogan wants to include the Parkway in his $9 billion plan for privately financed express toll lanes, a move that has received support from AAA, the country’s largest motorist association.

Sen. Lee Proposes Repeal of the Jones Act
The 1917 law that prohibits most commercial shipping between the U.S. mainland and overseas locations such as Guam, Hawaii, and Puerto Rico, greatly increasing the cost of living on those islands. Sen. Mike Lee (R, UT) has introduced the Open America’s Waters Act of 2019. It would allow any otherwise qualified vessel to engage in trade between U.S. domestic ports, including the above islands.

More Express Toll Lanes for Charlotte, NC
With the new express toll lanes on I-77 set to open sometime this year, North Carolina DOT has awarded a contract to create the second leg in a potential network of such lanes. The contract with Blythe Construction will add one ETL each way on I-485 from I-77 to US 74. Ground-breaking is expected by this summer.

$9 Billion Honolulu Rail Project Dissected in Wall Street Journal
With its cost nearly doubled from $5 billion to an estimated $9 billion, and a federal grand jury looking into irregularities, this over-ambitious project made the front page of the March 23rd issue of the Wall Street Journal, continuing on a full page inside, including a map and photos. Part of the high cost is the line’s fully-elevated guideway. As Randal O’Toole has pointed out, “In choosing to combine grade separation with short train platforms, Honolulu has effectively picked the worst aspects of both technologies: the high cost of heavy rail and the low capacity of light rail.”

US VMT Reaches All-Time High, per FHWA
The December 2018 issue of FHWA’s Traffic Volume Trends reports an estimated 2.3 trillion vehicle miles of travel for 2018, an increase of 0.4 percent over 2017. The Northeast led the way in VMT growth at 2.7 percent, but other regions grew at less than 1 percent. The report notes that these are preliminary figures, subject to revisions after further analysis.

Level 4 Automated Truck Claimed to Be in Revenue Service
FleetOwner’s March 2019 issue reports that a Level 4 automated truck developed by TuSimple is making depot-to-depot deliveries serving 12 customers in Arizona. The article says the automation system is based on a “camera-centric perception solution” that can operate in bad weather as well as good. Lidar was rejected as a primary sensor in favor of cameras.

Labor Department Says Truck Driver Shortage Is a Myth
Although the long-distance truck industry has experienced very high (up to 100 percent annual) driver turnover for decades, the Bureau of Labor Statistics says this does not constitute a labor shortage. Labor supply in trucking responds to market demand over time, the report said, and “the market for truck drivers appears to work as well as any other blue-collar labor market.” Hence, “there is no reason to think that, given sufficient time, driver supply should fail to respond to price signals in the standard way.” In other words, trucking companies should continue to improve driver pay and working conditions.

Another Texas P3 Express Toll Project Nearing Start-Up
In response to last month’s recap of recent express toll lane expansions, Fred Kessler of Nossaman points out that a project to add 7.2 miles of ETLs to I-35W in the Fort Worth metro area will reach commercial and financial close in May. This will be Segment 3C of the North Tarrant Express, much of which is already in operation.

Widespread Electronic Tolling Planned for Iceland
With the projected decline in revenue from per-gallon gasoline and diesel taxes, a bill moving forward in Parliament would put electronic tolls on all major highways leading in and out of Reykjavik, all tunnels, and major new projects such as bridges. The plan is to use license-plate billing rather than transponder accounts. Tolls would likely not begin until 2020.

Former Senator Proposes Asset Recycling of Illinois Tollway
Jeff Schoenberg, former assistant majority leader in the Illinois Senate, has proposed a long-term P3 lease of the 274-mile Illinois Tollway system, with the proceeds being used to shore up the state’s grossly underfunded public pension systems. In an op-ed in Crain’s Chicago Business (March 5th), Schoenberg cites the billions paid for the Chicago Skyway and Indiana Toll Road leases last decade and suggests that the Illinois Tollway could be worth in excess of $24 billion.

Canada Plans EV Charging Network
Former state-owned firm PetroCanada has announced plans to install 50 electric vehicle charging locations along the 4,860-mile Trans-Canada Highway by 2020. The company (now part of Suncor Energy) has 1,800 retail and wholesale locations across the country, but it did not announce which would host the charging stations. The planned chargers can recharge an EV’s batteries to 80 percent in 30 minutes—which means those locations should have food and drink available.

Federal Court Dismisses Suit Against Rhode Island’s Trucks-Only Tolling
A U.S. District Court judge ruled that a federal court cannot restrain the collection of “state taxes,” which is how it described the truck-only tolls, despite the fact that all the revenue is dedicated to bridge repair or replacement. That decision leaves the American Trucking Associations with the choice of appealing to a higher federal court (on grounds of interference with interstate commerce) or trying its luck in state court. The ATA lawsuit argued that the truck-only tolls are discriminatory and in violation of the interstate commerce clause of the Constitution. On March 29th, ATA announced that it is appealing the decision.

Illinois Bill Would Toll Eastern I-80
A heavily congested stretch of I-80, from I-294 on the east to Rt. 47 in Morris (west of Joliet) would be rebuilt and widened in a $1.5 billion project that Illinois DOT cannot afford. There is local support for the project, though its chances of passing are uncertain. If it does pass, the next challenge would be obtaining federal permission.

Means-Tested Fares to Be Trialed in San Francisco Bay Area
The region’s Metropolitan Transportation Commission last year approved a Means-Based Fare Pilot Program Framework last year. In February 2019, the board of commuter rail operator Caltrain agreed to join the pilot project. The idea is to provide discounts to low-income riders using the Clipper card to pay their fares. This could be a first step toward the long-proposed idea of charging market-based fares to middle- and upper-income riders and providing subsidized rides only to low-income people.

Ohio Turnpike Finally Plans Removal of Toll Gates
The Ohio Turnpike & Infrastructure Commission has announced plans to remove the entrance gates to the east and west ends of the Turnpike, as well as exit gates at E-ZPass-only lanes. Unfortunately for its customers, these overdue changes will not be completed until late 2021 or early 2022.

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Quotable Quotes

“When it comes to [re]charging for commercial battery electric vehicles, we are having one of those chicken and egg discussions. Fleets are concerned about buying electric vehicles because they are not sure how they will be able to charge them. And folks who might consider investing in charging infrastructure are concerned that there are not enough trucks to make the investment pay off. What’s the answer? I don’t know with 100 percent certainty, but I do know that in the past the market has found a way to work things out. . . . Remember, there were no gas stations when Henry Ford started building automobiles.”
—Michael Roeth, “The Chicken and the Egg of Electric Vehicle Charging,” FleetOwner, March 13, 2018

“Many citizens and policymakers still do not realize the significance of what has been going on. Some presume the ridership decline is a cyclical phenomenon. Others assume it is a result of underinvestment and can be reversed with more money. Still others are reticent to talk about the issue, as they worry it might undermine public support for public transportation. Segments of the public transportation planning community realize that there are no easy answers. Service reconfigurations, new investment in service and amenities, and other actions, while certainly supportive, are unlikely to quickly reverse the trend of the past several years nor enable public transportation to return to the productivity levels it has enjoyed in the past.”
—Steven Polzin and Jodi Godfrey, “Understanding Ridership Trends in Transit,” Final Report, Center for Urban Transportation Research, University of South Florida, February 2019

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The post Surface Transportation Newsletter #186 appeared first on Reason Foundation.

Importantly, the bill sticks to a users-pay/users-benefit concept. Such a system is fair, proportional to use, limits fee increases, is predictable, and provides investment signals.

The bill would consolidate Georgia’s gasoline excise tax and gasoline sales tax into one. The current gas sales tax is problematic: Gas sold for $4 a gallon generates twice the amount of tax revenue as a gallon at $2.00. Yet the infrastructure needs remain the same. Creating one 29-cent per gallon excise tax that cannot easily be diverted to non-transportation purposes helps solve this problem.

The bill would also index the new tax to inflation and federal fuel efficiency standards. Federal standards require all new vehicles sold to average 54.5 miles per gallon by 2025. Increased fuel efficiency has many benefits, but it substantially reduces transportation revenue.

It is also vital that electric and alternative fuel vehicles, which are able to avoid today’s gas taxes, pay their fair share of road construction and maintenance costs. While these vehicles do have environmental benefits, they still use and inflict wear and tear on the state’s roads. A $200 annual electric vehicle fee for passenger vehicles and a $300 fee for commercial vehicles ensure that these drivers start to pay their fair share towards road construction and maintenance.

However, the House transportation plan can be improved. While transit is an important long-term infrastructure component for Georgia, funding transit with the electric vehicle fee would violate the users-pay/users-benefit principle. A better way to fund transit is with a dedicated line item in the state budget. Based on increased revenue collections from an improving economy, Georgia could find $120 million per year in the general budget for transit and index that funding to inflation.

Since the transportation bill would allow local governments to continue collecting local option sales taxes until they expire, the higher gasoline excise tax should be phased in over five years.

Local sales taxes on gasoline spent on non-transportation purposes are a violation of the users-pay/users-benefit rule. Lawmakers at every level of government should treat the gas tax as a user fee intended to maintain roads.

While the House plan is a good midterm funding solution, Georgia needs a long-term strategy.

Mileage-based user fees, which would charge drivers based on the number of miles driven on state roads, are being studied throughout the country, including in neighboring Florida. New technologies promise to remove most of the obstacles to mileage fees, including the “big brother” and privacy concerns. Georgia should follow other states in offering a voluntary mileage-based user fee pilot program that includes various options for privacy and refunds gas taxes and vehicle fees to avoid double taxation.

Baruch Feigenbaum is a transportation policy analyst for Reason Foundation. This article originally appeared in the Atlanta Journal-Constitution

The post GA House Transportation Plan a Step in Right Direction appeared first on Reason Foundation.

Denver is at a crossroads in terms of transportation policy. Implementing the current 2035 Metro Vision Regional Transportation Plan will lead to a future of dramatically worsening congestion, in which the average peak-period trip is projected to take 80% longer than at off-hours (compared with 40% longer, as of now). That approach would continue to spend substantial transportation resources on rail transit and non-motorized transportation. While both have benefits, they are not the key to reducing congestion.

By contrast, we have developed a comprehensive transportation system consisting of road and transit improvements that reduce congestion and increase mobility more effectively and more cheaply than the DRCOG 2035 plan. By including the congestion reduction components of the 2035 Metro Vision Regional Transportation Plan and replacing the rail and non-motorized projects with additional projects to reduce congestion, our plan more effectively increases mobility.

Our plan for the state and regional highway totals $22 billion. Assuming the Denver Regional Council of Governments (DRCOG) chooses to spend an additional $15 billion on local roads and an additional $15 billion to provide transit services, the 30-year total would be $52 billion. This $52 billion plan spends only 39% of the $133 billion in the DRCOG 2012 long-range plan and covers a longer time period of 30 years (from 2015-2044) compared to 24 years (2012-2035) for the DRCOG plan. More importantly, our plan has a realistic funding and financing source, filling a $6 billion hole with the transition to a mileage-based user fee, while the current DRCOG plan has a $40 billion hole that the entity has no realistic way of funding. Unlike the DRCOG’s 2035 plan that hopes to spend $133 billion dollars and still results in worse congestion, our plan significantly reduces congestion and saves money.

Our plan includes the following components:

• Making major investments in dynamically priced express lane capacity
• Making minor investments in general purpose capacity
• Developing a network of managed arterials
• Improving the operation and management of the system through operational changes
• Creating an express bus network running on the ETL network
• Creating a bus rapid transit network running on managed arterials

Our plan also offers motorists a choice of paying tolls on express lanes and managed arterials in exchange for faster and more reliable trips or using free lanes that operate at lower traffic speeds. Our plan offers a transit option that provides quick, reliable service using electronic toll lanes, overpasses and underpasses, express lanes and managed arterials for commuters who choose to use transit at a cost-effective price. Our plan also offers continued free lanes on freeways and arterials for motorists who do not choose to take advantage of the express lanes in their car or as a transit rider. And our plan offers each of these three choices cost-effectively.

Congestion threatens to strangle Denver, destroying its viability as a place to live and work, as well as its position as a major economic center. But as former Transportation Secretary Norman Mineta said, “Congestion is not a scientific mystery, nor is it an uncontrollable force. Congestion results from poor policy choices and a failure to separate solutions that are effective from those that are not.” The policy choices recommended in this report would put Denver on the road to greatly increased mobility by 2040.

Attachments

• Reducing Congestion in Denver: A New Approach to Increasing Mobility

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To eliminate road congestion and restore the primacy of an efficient, dynamic, and progressive transportation network as a core component of urban life.

The Case for Congestion Elimination

1. The major cities of the United States and most of the developed world will die by 2050 from “clogged arteries”—commercial and passenger vehicle gridlock—unless steps are taken now to eliminate congestion and redirect public and private capital onto a path of enabling long run improved urban mobility. Goods and people are already seriously compromised. Every ordinary citizen sees it. An inevitable civic fatality is apparent.
2. This threat to city life is bound to the substantial depreciation of its commercial and personal property values due to their early-on inaccessibility. Without adequate transportation access, commercial and residential property loses its economic value. As entire swaths of cities become inaccessible due to gridlock, property markets will implode.
3. The city-wide property depreciation is avoidable just as human cardiac and orthopedic surgery can sustain the vitality of our personal bodies. The essential main new procedures and solutions will be:
   • Prosthesis – prefabricated, ready to install fly-overs and queue jumpers of existing and prospective time delaying intersectors.
   • Major new arteries – many underground tunnels, elevated parkways, and new functional classes of roads with convenient parking terminals embedded within the network our metropolitan and suburban areas. Many of the new arteries will employ electronic tolling, some with variable rates vis-a-vis loading, to finance new investment and manage the flow of traffic.
4. Private capital will be instrumental to the redesign and implementation of a congestion-free transportation network. An enlightened private sector–institutions and individuals–will take timely ownership of the problem and its prospects in its self interest to honorably protect the useful value of its property and deservedly profit from an affordable, uncongested, toll service. New business will appealingly open the entire city and region to timely, cost effective deliveries, unstressful job accessibility and unrestricted family activities from shopping, to school, to soccer, to social ties.With the right political and institutional reforms, a substantial new industry will be founded. Little or no public funds will be required in countries like the U.S., Australia, New Zealand, U.K. and others. International competition has already emerged investing in this emerging business sector, creating many new jobs as this new strategy generates new wealth country wide.
5. Any city that ignores the threat will become an economic and personal-existence wasteland by mid-century. Any previously developed country that thinks it will be immune from this threat will blight itself and do a disservice to other countries it should support and serve. We must want most cities and all countries to responsibly succeed.

Getting From Here to There

Restoring the primacy of a congestion free and continuously improving transportation network will require substantial investment in existing and new technology, including:

Short term

• Widening surface roads where possible.
• Expanding public transportation for its limited applications.
• Assigning High Occupancy Toll (HOT) lanes on existing and new road facilities
• Assigning truck only routes where justified on existing and new road facilities.
• Synchronizing traffic signals.
• Improving accidents and road incident clearings.

Intermediate term

• Assigning and creating “bypass” roads that provide quick, efficient access to locations within neighborhoods and cities.
• Building and financing new conventional roads, financed through tolls and private capital, to meet increasing travel demand in cities and regions.
• Metering ramps.
• Adopting traffic circles and modifications in interchange designs.
• Minimizing political manipulation.

Long term

• Adding new physical road capacity by investing in tunnels, elevated expressways and building new functional classes of roads the move regional traffic more quickly.
• Investing in new technologies such as composite materials and off site, pre-fabricated construction to reduce the cost and increase the speed of investments in new capacity and infrastructure.
• Encouraging the adoption of new technologies to increase the safe travel speeds of cars, trucks, and other vehicles on roads including adaptive cruise control, GPS lane and speed monitoring.
• Others technologies and strategies that have yet to be identified.

Timeline

Avoiding the economic “death” of cities by 2050 will require putting these primary changes in process now and implemented by mid-century.

Implications of Inaction

U.S. cities can not afford to wait. Congestion must be eliminated to ensure the economic competitiveness and viability of our cities. More importantly, transportation policy must be redirected and refocused on the goal of sustainably improving mobility over the long run. Indeed, the aggregate of the depreciated value of all its properties will be multi-times the congestion-elimination investment.

While ambitious, numerous industries have achieve similar and lesser hurdles by harnessing the capital and creative energy of the private sector, including Air Travel, Cell Phones, Computers, Medical Solutions, etc. Congestion free ground travel may best them all!

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This project is premised upon the conviction that the consequences of ignoring this threat will be dire. Inaccessibility leads directly to the depreciation of commercial and personal property values. This along with the gridlock will lead to the death of major cities in the United States and elsewhere in the developed world by mid-century if dramatic change is not implemented. But just as cardiac surgery can sustain our circulatory systems, we can prevent these clogged arteries that will stop the economic heart of cities from pumping.

The Galvin Project and the Reason Foundation have joined forces to develop practical, cost-effective solutions to traffic congestion, a policy initiative that will save our cities and significantly increase our urban mobility through innovative engineering, value pricing, public-private partnerships, and innovations in performance and management.

The old canard “we can’t build our way out of congestion” is not true. Adding innovative new capacity and improving the management of roads can eliminate chronic congestion.

A substantial new industry is developing as the private sector captures the opportunity in the value of our time wasted in traffic and seeks to profit from affordable and uncongested tollways. Public-private partnerships to build and operate these toll facilities have sparked innovations in engineering and design, overcoming obstacles such as limited right-of-way and noise pollution. Capital markets also provide access to much needed investment capital and ensure that new highway capacity is built where it is most needed.

In addition to adding road capacity, changing the way highways are managed can help to maximize the use of the capacity we have. The introduction of Intelligent Transportation System technologies can speed resolution to traffic delays, and electronic toll collection technologies can make extensive tolling practical. More importantly, variable pricing of lanes can keep traffic flowing all day by responding to changing demand.

Any city that ignores the threat and refuses to take up the challenge of eliminating congestion will find itself at an economic standstill by mid-century. We can solve our congestion woes. We can upgrade to an innovative, market-driven, world-class transportation infrastructure. We can change the institutions that guide our transportation decisions to create greater responsiveness, robustness, and efficiency. This project provides the ideas and tools needed to make change happen.

Getting From Here to There

Restoring the primacy of a congestion free and continuously improving transportation network will require substantial investment in existing and new technology, including:

Short term

• Widening surface roads where possible.
• Synchronizing traffic signals.
• Improving accident and road incident clearings.
• Building networks of congestion-priced lanes on existing freeway networks to provide “congestion insurance” to travelers.
• Assigning truck only routes where justified on existing and new road facilities.
• Expanding public transportation for its limited applications.

Intermediate term

• Assigning and creating “bypass” roads that provide quick, efficient access to locations within neighborhoods and cities.
• Building new limited-access highways, financed through tolls and private capital, to meet increasing travel demand in cities and regions.
• Metering highway access ramps to regulate traffic entering the roadway.
• Adopting traffic circles and modifications in interchange designs.

Long term

• Adding new physical road capacity by investing in tunnels, elevated expressways and building new functional classes of roads the move regional traffic more quickly.
• Investing in new technologies such as composite materials and off site, pre-fabricated construction to reduce the cost and increase the speed of investments in new capacity and infrastructure.
• Encouraging the adoption of new technologies to increase the safe travel speeds of cars, trucks, and other vehicles on roads including adaptive cruise control, GPS lane and speed monitoring.
• Others technologies and strategies that have yet to be identified.

Implications of Inaction

U.S. cities can not afford to wait. Congestion must be eliminated to ensure the economic competitiveness and viability of our cities. More importantly, transportation policy must be refocused on the goal of sustainably improving mobility over the long run.

Avoiding the economic death of cities by 2050 will require putting these primary changes in process now for completion by mid-century.

While these goals are ambitious, they are not unattainable. Numerous industries have made equally spectacular accomplishments by harnessing the capital and creative energy of the private sector. Consider air travel, cell phones, personal computers, medical advancements, etc. Congestion free ground travel may best them all!

The post Galvin Project to End Congestion: Project Description appeared first on Reason Foundation.