Under current hours-of-service rules, truckers can drive 14 hours a day before going off-duty. Sometimes drivers spend almost an hour looking for parking, resulting in “about $5,500 in direct lost compensation—or a 12% cut in annual pay.” Approximately 96% of truckers have to park in areas not designated for trucks because of a lack of safe truck parking capacity across the country, according to Trucker Path. Per the latest Bureau of Transportation Statistics data, there are 39,803 parking spots at rest areas on the Interstate Highway Network and some 273,000 parking spaces in private lots. Yet there are 4.06 million Class 8 trucks (trucks with a gross vehicle weight rating of over 33,000 pounds) spread out across the country. The need for more safe parking in and around rest areas for truckers is clear, especially if we want to keep supply chains around the nation safe and stable.

The 2021 Infrastructure Investment and Jobs Act (IIJA) helped push truck parking capacity to the forefront of conversations at the state level. Section 21104 of the IIJA focused on guidelines for states updating or developing freight plans, which had the most relevant sections for addressing truck parking capacity. The bill mandates that states must assess the following:

• The capabilities of both the state and the private sector to provide adequate parking facilities for vehicles engaged in interstate transportation;
• The volume of commercial motor vehicle traffic in the state; and
• Whether there are areas in the state with a shortage of adequate commercial motor vehicle parking facilities and provide an analysis of what factors could be contributing to that shortage.

However, the law does not require states to take any actions, it merely mandates further analysis of the problem.

In contrast to the IIJA, two bills emerged during the 117^th Congress, which ended in January, unsuccessfully attempted to address this critical parking capacity shortage more directly: H.R. 2187, introduced by Rep. Mike Bost (R-IL), and the Senate’s companion bill, S. 5169, by Sens. Cynthia Lummis (R-WY) and Mark Kelly (D-AZ). Neither passed its respective chamber. While H.R. 2187 did make it through committee, it did not receive a vote on the House floor. S. 5169, titled the Truck Parking Safety Improvement Act (TPSIA), was referred to the Committee on Environment and Public Works, where it died.

TPSIA would have allocated $175 million for truck parking for the 2023 fiscal year and $580 million for fiscal years 2024-2026 in grants issued by the secretary of transportation if they met strict project requirements. These requirements would’ve included having projects that are on a federal-aid highway, on a facility with reasonable access to a federal-aid highway, or at a freight facility. To be eligible for grant funding under TPSIA, projects would have needed to provide new parking or maintain existing parking in rest areas. The bill’s provisions would have also provided strict spending criteria. For example, only up to 25% of any grant given could be used for the pre-construction phase, be it on cost/benefit analyses, feasibility analyses, environmental reviews, or preliminary engineering and design work.

However, TPSIA was far from flawless. TPSIA placed a ceiling on the amount of each fiscal year’s annual appropriation for existing facilities, limiting maintenance of existing capacity to 10% of the overall grant budget. It might have helped provide the resources to build new parking capacity, but it also punished states that had the forethought to build parking. 

While an updated TPSIA could serve as a good framework for a federal grant program, any increased federal spending should be a last resort for any sort of capacity expansion, especially when there are better options on the table for policymakers.

The best congressional option would be a repeal of the ban on commercial services at Interstate rest areas. In 1960, Congress banned all commercial services from being provided at rest areas on Interstates. If this ban were repealed, state departments of transportation could engage in revenue-financed commercial parking facilities at rest areas across the country.

This isn’t a new idea either, at least when considering toll roads. As Robert Poole, director of transportation policy at the Reason Foundation, wrote, “many toll roads have rebuilt and modernized their service plazas, often using long-term public-private partnership (P3) procurements.”

Public-private partnerships offer many advantages over federal grants for funding new parking capacity and rest areas. Most notably, the financial risk of failure is borne by the private sector entity that wins the bid for the contract, not the taxpaying public. Providing parking at these rest areas would help to provide a consumer base for the commercial services they’d be offering at renovated locations.

The commercial interest in participating in these service plaza P3s should also be encouraging news for policymakers trying to address these issues on a dime. There’s plenty of private interest, as evidenced by the success of the service plazas along toll roads, so federal policymakers ought to work to remove barriers, like the commercial rest areas ban, preventing the private sector from acting on it.

Some states’ toll roads have already started using long-term P3 agreements for service plaza financing, rebuilding, and operating, including Indiana, Maryland, and New York, to name a few. All types of businesses, including truck stop operators, might be interested in bidding for rest areas.

By repealing, or at least loosening, the ban on commercial services at rest areas on Interstates, policymakers can effectively open the door to expanding truck parking across the country and reduce taxpayers’ costs by shifting the financial responsibility to the private sector.

The post The urgent need for more truck parking spaces appeared first on Reason Foundation.

Liquefied natural gas costs have gotten so high that it has become cheaper for New England states to import LNG from overseas than from the Gulf Coast, which produces natural gas in abundance. For example, according to a 2011 Department of Transportation Study, a Jones Act-compliant ship costs around $20,000 a day to operate, while a foreign-flagged ship only costs $7,400 per day to operate.

While pipeline permitting issues are largely to blame for New England’s limited supply of natural gas, the Jones Act compounds this problem by raising costs and limiting access to the next-best alternative.

Normally, the Jones Act hurts island states and territories, such as Hawaii, Alaska, and Puerto Rico, far more than states that are a part of the mainland U.S., but New England is unique when it comes to its energy grid. With limited pipeline capacity, New England finds itself at the mercy of maritime shippers when demand spikes for energy.

Figure 1: New England Energy Grid Resource Mix

With 35% of the New England energy grid reliant on natural gas, the region has been left out in the cold for an antiquated, protectionist law. The Jones Act is currently protecting a domestic maritime industry that does not exist. The U.S. Jones Act-compliant fleet currently has zero LNG tankers, making it impossible to meet demand with domestic capacity.

The reason for the total absence of a Jones Act-compliant liquefied natural gas tanker fleet is unfavorable economics. A Government Accountability Office report in 2015 found that U.S. carriers would cost about “two to three times as much as similar carriers built in Korean shipyards and would be more expensive to operate,” and costs associated with transport would be higher. Instead of relying on other nations’ comparative advantages in shipbuilding, the United States has effectively isolated itself from international competition in a market in which it makes no effort to compete.

Historically, when the Jones Act hinders U.S. responsiveness to crises, as it often does, temporary waivers have been the answer. For example, U.S. Sens. Angus King (I-ME) and Jeanne Shaheen (D-NH) said they were working on legislation that would “authorize the President to issue a limited, short-term Jones Act waiver,” but Jones Act waivers have become even more difficult by recent congressional actions.

In recent years, Congress has used the annual reauthorizations of the National Defense Authorization Act (NDAA) to narrow Jones Act waiver eligibility. In the 2021 fiscal year NDAA, Section 3502 changed the Jones Act’s waiver requirements so that waivers can no longer be issued “broadly” and now must be related to an “adverse effect on military operations.”

This year, the domestic maritime industry received another Christmas gift buried deep within the 2023 NDAA: more Jones Act waiver restrictions. Under the latest National Defense Authorization Act, Jones Act waivers can be granted no earlier than 48 hours after the waiver request has been published online. It also imposed new restrictions on ships already carrying cargo, effectively requiring them to unload, apply for a waiver, wait at least 48 hours, and then be on their way.

For a law made to shore up domestic U.S. capacity in case of emergencies, the Jones Act has seemingly made matters worse. Considering the frequency with which it needs to be waived, Congress should reconsider whether the Jones Act should be a law. From being waived by President Franklin D. Roosevelt five days after the Japanese attack on Pearl Harbor in 1941 to being waived by President Donald Trump after Hurricane Maria in 2017 to President Joe Biden’s far more restrictive individual waivers following Hurricane Fiona, and the many times it was waived in between, the Jones Act has served as a hindrance, even on the grounds by which it was originally rationalized.

Repealing the Jones Act is the best solution to bolstering energy-insecure New England’s grid during crises in lieu of pipeline infrastructure. But short of outright repeal, smaller steps could be taken to lessen the negative impact of the Jones Act in times of emergency.

As Cato Institute’s Scott Lincicome and Colin Grabow wrote in RealClearPolicy, these steps would include streamlining the waiver process, undoing the waiver restrictions made by the 2021 and 2023 National Defense Authorization Acts, and granting automatic waivers for any region subject to a national emergency declaration.

Given the Jones Act’s track record for exacerbating disasters rather than mitigating them, it is in the national interest to lessen its impact on maritime commerce.

The post The Jones Act contributes to New England’s energy woes appeared first on Reason Foundation.

CAPSTONE was not designed, built, or even operated by NASA. In fact, it’s not owned by NASA. It is owned by its developer, Colorado-based Advanced Space. The CAPSTONE launch and development ended up being far cheaper than other lunar launches thanks to the terms of NASA and Advanced Space’s contract.

Historically, NASA has contracted work via cost-plus contracts wherein NASA pays for all the expenses of a project plus a fixed fee to serve as the profit for the contracted company. This approach often leads to cost overruns, as companies are able to spend as much as they want on a project. The CAPSTONE project, however, had a fixed price, ensuring more efficient project design and delivery within set budgetary constraints. This approach mirrors existing contracts between NASA and SpaceX, which help enable the transportation of astronauts to the International Space Station.

Giving Advanced Space ownership and control over CAPSTONE also helped the company cut through the red tape NASA would have otherwise faced. While traditional NASA projects involve a complex government approval process, CAPSTONE only required approval of the initial fixed fee.

This arrangement allowed Advanced Space the breathing room necessary to bring in partners throughout the process. Terran Orbital Corporation helped with designing and producing the hardware that flew on CAPSTONE as well as its assembly. Stellar Exploration provided the propulsion system design, testing, and manufacturing. Rocket Lab gave CAPSTONE a rideshare of sorts; they flew the CubeSat on an Electron Rocket flight to put it on its path toward near-rectilinear halo orbit.

Due to the nature of the contract and Advanced Space’s ownership, the company was also able to innovate freely on the CAPSTONE satellite as long as it remained within budget. And if costs went over, it would be the company’s responsibility, not NASA’s—or taxpayers—to pay for it.

This type of private sector control can also lead to innovations. For example, when Advanced Space decided to add an atomic clock to the CubeSat, without needing to go through a lengthy NASA approval process, the company gained the ability to compare the time on the atomic clock with what was broadcast from Earth so that Advanced Space could more easily pinpoint the satellite’s location in space.

CAPSTONE stands out financially in two ways. First, compared to other lunar orbit launches, CAPSTONE turned out to be far cheaper. CAPSTONE’s development cost $13.7 million, and the launch of the satellite cost $9.95 million, bringing the project’s overall costs to roughly $23.65 million. In comparison, NASA’s 2018 Transiting Exoplanet Survey Satellite launch, which sought to also to orbit the moon, had a far bigger overall price tag of $87 million to launch on a SpaceX Falcon 9. Beresheet, an effort to land on the moon spearheaded by SpaceIL—an Israeli nonprofit—cost nearly $100 million and failed.

Second, CAPSTONE’s fixed-price contract was less expensive than its cost-plus alternatives. While CAPSTONE reached the finish line for $23.65 million, the Space Launch System (SLS), NASA’s next moon rocket being developed by Boeing, cost about $20 billion to develop, and NASA far underestimated launch costs which have increased from $500 million to $4.1 billion per launch. The Orion spacecraft, also negotiated under a cost-plus contract, has cost $12 billion.

By contracting out the design, development, and operation of CAPSTONE, NASA and Advanced Space achieved an incredibly cost-efficient project. Bill Nelson, NASA’s administrator, gave reassuring signs that this form of NASA contract could be increasingly used by NASA in the future: “It’s another way for NASA to find out what it needs to find out and get the costs down.” In the past, Nelson has also referred to cost-plus contracts as a “plague” on NASA.

We can continue to expand the final frontier without breaking the bank so long as NASA continues contracting with fixed prices rather than rewarding cost overruns. By taking some of the red tape out of space exploration and development, NASA has helped open a promising new frontier for more than just the ongoing Artemis Project but for all of their projects going forward.

The post Fixed-cost contracts save NASA and taxpayers money appeared first on Reason Foundation.

The Jones Act restricts all domestic shipping to U.S.-flagged, built, owned, and staffed vessels, making it harder for cheaper foreign vessels to transport goods around the United States, particularly to the remote states and territories of Hawaii, Alaska, and Puerto Rico. It also raises shipping costs by shielding domestic carriers from international competition.

The Biden administration waived the Jones Act for one ship carrying diesel fuel to Puerto Rico after Hurricane Fiona. This week, almost a month later, the Biden administration lifted Jones Act requirements for liquefied natural gas (LNG) imports to the island. This most recent waiver revealed exactly how the Jones Act hurts those it was intended to help. The U.S. Jones Act-compliant fleet has zero LNG carrier ships, so the Jones Act is currently working to protect an industry that doesn’t exist domestically while Puerto Ricans suffer as a direct result.

Previous presidential administrations have also waived the Jones Act in the aftermath of other natural disasters, including the Obama administration following Superstorm Sandy in 2012 and the Trump administration after Hurricanes Harvey and Irma in 2017. But the history of these waivers points to a troubling trend: Lacking voting power in Congress, Puerto Rico has no say in whether the Jones Act should be waived or repealed.

Despite widespread political divisions on other issues, namely statehood, “Puerto Rican politicians […] are in agreement that the Jones Act only harms Puerto Rico’s ability to import goods,” writes Carlos Edill Berríos Polanco.

Imports are critical to Puerto Rico. The island imports 85% of its food and all of its petroleum, the latter being critical to keeping grocery stores and hospitals operational after a hurricane like Fiona. In Puerto Rico, where 40.5% of the population lives in poverty, the cost of energy averages around 22.7 cents per kilowatt hour—7.2 cents more than the U.S. average—largely due to the high cost of importing petroleum.

The costs of importing goods from the mainland United States to Puerto Rico (on U.S. ships) are so high that the island has come to rely on international carriers for their lower transportation costs. As the Congressional Research Service (CRS) noted in 2017, “Puerto Rico and Hawaii now receive more cargo from foreign countries than they do from the U.S. mainland.”

Due in large part to the Jones Act, it is cheaper and easier for Puerto Rico to import goods directly from Europe or Columbia than the U.S., despite Puerto Rico being part of the United States.

The Jones Act’s worst impacts have been seen after recent natural disasters, but even during the best of times, this law hurts Puerto Ricans. A study by John Durham & Associates found that Puerto Rico paid $568.9 million more for shipping, and prices were $1.1 billion higher than they would be without the Jones Act. Paired with the projected job creation a free market for ocean freight would have provided, the study concludes that the Jones Act costs Puerto Rico nearly $1.5 billion a year.

More ships and carriers would increase competition and lower costs, helping alleviate these problems. But, the Jones Act has had the opposite effect on U.S. domestic shipbuilding capacity while also banning foreign competition. Figure 1 below shows that the domestic Jones Act fleet has been shrinking rapidly, from 434 ships in 1950 to 99 in 2018.

The domestic fleet’s size has recently started to stagnate, and shipbuilding capacity has suffered due to the Jones Act. U.S. shipbuilding costs are much higher, with American-built merchant marine vessels costing “4-5 times as much as those built abroad.” The CRS found that the oceangoing Jones Act–compliant fleet is almost entirely operating “in areas where shippers have little alternatives.” Thanks to the scarcity of compliant vessels, shipping costs have risen sharply while capacity has plummeted. 

Colin Grabow, a research fellow at the Cato Institute, explains: 

The Jones Act U.S.-build requirement has incentivized American shipyards to orient themselves away from the competitive international market and toward this captive domestic shipbuilding market. This, in turn, means reduced output, […], less competition, and the failure to develop a specialized market niche.

Repealing the Jones Act would have major benefits. A study by the Organization for Economic Co-Operation and Development (OECD) found that repealing the Jones Act would increase shipbuilding output and demand and produce “significant economic gains.”

The Jones Act is an expensive failure. The two Jones Act waivers issued by the Biden administration, while helpful at the moment, should not have been necessary in the first place. Long-term relief for Puerto Rico can best be secured through the wholesale repeal of the Jones Act.

The post Biden administration grants Puerto Rico a waiver, but the Jones Act should be repealed appeared first on Reason Foundation.

The Harbor Maintenance Trust Fund (HMTF) is funded by the Harbor Maintenance Fee (HMF) imposed on imported cargo, domestic cargo, passengers on cruise ships, and ships entering a foreign trade zone. Created in 1986, the Harbor Maintenance Fee was originally a 0.04% tax on the goods being loaded and offloaded at ports. The fund quickly grew to cover 100% of the U.S. Army Corp of Engineers (USACE) port operations and maintenance expenditures across the country and to split the costs with ports and other local users of new project construction.

But the fund has significant faults. From excluding some beneficiaries of ports and harbors from paying into the HMTF to forcing larger, more cargo-intensive ports to subsidize smaller ports, the Harbor Maintenance Fee and Harbor Maintenance Trust Fund are plagued by inefficiencies. Reforming the Harbor Maintenance Fee to be a user fee based on the maintenance costs imposed by a vessel would provide the Harbor Maintenance Trust Fund with a more robust funding mechanism, allowing greater spending flexibility and providing more value.

The problem of cross-subsidization is an element of the HMTF that is ripe for reform. Ports with low cargo traffic are major HMTF recipients, despite cargo vessels generating the lion’s share of HMTF revenues. These other ports are used by commercial fishers and recreational boaters who use the smaller, shallower waterways and contribute almost nothing to the HMTF. A 2011 Congressional Research Service report found many examples of ports receiving little cargo shipping, such as Yaquina Bay and Harbor in Oregon. However, Yaquina Bay is essential for commercial fishing and is considered a major recreational port. It received over $25 million in HMTF funds from 2001 to 2011 but has not had a cargo ship pass through in years.

Instead of using the Harbor Maintenance Trust Fund to sustain these shallow-draft ports, policymakers should use the Sports Fish Restoration and Boating Safety Trust Fund to keep these smaller commercial fishing and recreational waters safe and navigable. It is a fund to which these groups of beneficiaries already contribute through taxes on fuel and fishing equipment, making it a logical source of replacement funding.

But ports with limited cargo traffic are not the only ports benefiting from the HMTF without equal contribution. The Eastern Seaboard and Gulf Coasts have naturally shallower coastlines than much of the West Coast, making harbor development and depth maintenance more expensive than their West Coast counterparts. While these East and Gulf Coast ports—if they receive cargo— do contribute to the HMTF, their maintenance costs are much higher than those on the West Coast due to the costs incurred from dredging them to often unnecessary depths to accommodate deep-draft cargo vessels that rarely, if ever, use them.

In contrast, naturally, deep ports tend to receive high cargo traffic and generate massive amounts of revenue for the HMTF. They have had a specific designation since the Water Resources Reform and Development Act (WRRDA) of 2014: donor ports. These ports, which generate at least $15 million in Harbor Maintenance Fee revenue in a year, tend to receive very little HMTF money in return. The ports of Los Angeles and Long Beach are good examples. In 2012, for every dollar traffic at these ports generated for the HMTF, the ports received less than one cent back.

The best solution to this cross-subsidization would be to guarantee a share of the HMTF revenue generated by ports for their own improvements. This would ensure that the ports with higher cargo traffic receive more equitable funding from the HMTF. As it stands, however, that money cannot be used for any purpose aside from dredging.

By expanding the uses of HMTF money for these ports for projects like pier and wharf repairs, we can incentivize their continued success and end much of the cross-subsidization problem in port development. It would also send a key market signal to developers. Not every port needs to be able to receive deep-draft cargo vessels, and reserving a share of HMF revenue for the ports that generate it would ensure port development takes place only where it makes economic sense.

Another problem facing the HMTF is the high costs of maintenance dredging. The U.S. faces substantially higher dredging costs than ports around the world. A study for the state of Louisiana from 2011 found that the volume of material dredged around the globe had increased dramatically—by 1,400% in the Middle East, 260% in Australia, 170% in China, and 150% in Europe—and costs per unit of material dredged had declined.

In contrast, the U.S. has observed increasing prices and decreasing dredge volumes. The overall price of dredging in the U.S. has increased from $2.43 in 1970 to $10.33 per cubic yard in 2020 (adjusted for inflation), or by 325%. These higher prices have not led to a larger volume of material being dredged. This difference is due to many factors, chief among them the Foreign Dredge Act of 1906, which, functioning similarly to the Jones Act’s impact on shipping, bans cheaper foreign dredges from U.S. waters.

Due to reduced competition, dredging work in the U.S. costs a lot more. USACE data shows that one of four U.S. firms is the sole bidder on more than 33% of dredge contracts. This is not solely due to a lack of domestic competition. Foreign dredging firms use semi-submersible heavy-lift vessels to move dredge fleets efficiently between projects, but none are available in the U.S. Jones Act-compliant fleet.

Prices for dredging will likely continue to rise as long as international competition is barred from U.S. waters. The HMTF is overfunded, and funds are poorly allocated. Adjusting the current HMF to a user fee, directly tied to the costs incurred by each vessel type, would ensure that all beneficiaries are paying for the services that benefit them and would keep the Harbor Maintenance Fee within its constitutional obligations as a user fee and not a tax.

By ending cross-subsidization between ports, the U.S. can once again begin to encourage port development where it makes the most sense and operates most cost-effectively, as well as giving Harbor Maintenance Trust Fund donor ports greater access to the funds they generate.

The post How to reform harbor funding appeared first on Reason Foundation.

The decline of the inland waterways system has other economic and environmental impacts. Problems with waterways are shifting freight to trucks, which is worsening traffic congestion on roads and highways and increasing greenhouse gas emissions. 

The Inland Waterways User Board (IWUB) consists of 11 members representing all geographic areas on the inland waterways system and is tasked with developing the United States Army Corps of Engineers (USACE) budget proposal, including the prioritization and selection of projects, as well as monitoring the Inland Waterways Trust Fund (IWTF). 

Under the status quo, capital projects and operations and maintenance (O&M) are funded differently. For capital projects, the costs are split 65/35 between the Inland Waterways Trust Fund and general fund taxpayer revenues until fiscal year 2031, up from a 50/50 split that existed since 1986. However, the Water Resources Development Act of 2022 (WRDA) proposed lowering the IWTF share to 25% permanently. For operations and maintenance, general fund expenditures cover 100%.

The biggest problem with how waterways are funded stems from the large subsidies from federal taxpayers to the waterway system. Taxpayers reap none of the direct benefits of the inland waterway system. By changing the IWTF’s funding structure to a lock-usage fee in which all users of the waterway system would pay and removing all federal subsidies from cost-sharing agreements, waterway users would pay their fair share for the services from which they benefit. 

The first problem to solve is how the IWTF is funded. When it was first created by the Inland Waterways Revenue Act of 1978, the IWTF funding mechanism was simple: a $0.04 per gallon diesel fuel tax. However, because diesel tax rates were not indexed to inflation, the IWTF quickly found itself running dry. According to a Government Accountability Office (GAO) report in 2018, if rates had been indexed to inflation starting when the fuel tax was raised to $0.20 a gallon in 1994, it would have raised about $400 million more through 2014. While construction and rehabilitation costs have increased, fuel tax revenue has stayed about the same. Today the diesel fuel tax is $0.29 per gallon, which will not fund the ever-growing backlogs of capital construction projects. 

A fuel tax has many shortcomings in terms of being a sustainable revenue source for the inland waterways system. First and foremost, as vessels become more and more fuel efficient over time, fuel tax revenue decreases even if commercial activity stays constant. 

Additionally, the only vessels that pay the fuel tax are commercial vessels, but they are not the only users of the waterway system. Recreational users, who often use smaller waterways and locks, made up around 22% of all lock uses in 2020. This group does not contribute any funding to the system. Replacing the diesel fuel tax with a fee paid by a vessel each time it uses a waterway lock would provide a more stable revenue stream and ensure all users contribute to the projects that benefit them.

A lack of sustainable funding is not the only problem; the cost-sharing agreements that have enabled IWUB and USACE to spend recklessly must be remedied. In the current system, taxpayers subsidize what are often poor investments made in the inland waterway system. With a lock-usage fee, the IWUB board, which advises and decides where resources should be invested, would be spending its own money on these projects, encouraging more careful project selection. 

The current subsidy level is only possible due to the Water Resources Development Act of 1986 (WRDA), which enabled the existing cost-sharing agreements: a 50/50 split between general funds and the IWTF for capital projects and 100% taxpayer funding for operations and maintenance. 

In 2010, IWUB proposed higher taxpayer subsidies with other cost-sharing agreements, such as: 

• 100% federal funding for major rehabilitation projects;
• 100% federal funding for major rehabilitation projects below $50 million;
• 50% federal, 50% IWTF for locks; 75% federal, 25% IWTF for dams;
• 75% federal, 25% IWTF for capital projects; and
• 50% federal, 50% IWTF for locks; 100% federal for dams.

Recently, IWUB got their wish. In WRDA 2020, the general fund share was temporarily increased to 65% for capital projects and may be further increased to 75% in WRDA 2022. The current cost-sharing agreements have been discarded for some expensive projects. One of the most recent examples is the Olmsted Lock and Dam megaproject in Illinois and Kentucky, which was 85% funded by federal taxpayers instead of the usual 50/50 split. 

In addition, there are far more system needs than available funds. There is an $800 million backlog of ongoing unfunded projects and planned construction costs of over $6 billion. The current cost-sharing agreements have forced taxpayers to pay for the majority of capital projects, from which they reap few, if any, of the direct benefits.  

Taxpayers fare even worse with waterway O&M costs, for which they fund 100% of expenditures. With the fiscal year 2020 O&M costs totaling $815 million, the five-year average fuel-tax revenue between 2015 and 2020 of $115 million would barely scratch the surface of annual operation and maintenance costs. Simply removing the cost-sharing agreements and making the already strained IWTF fund both O&M and capital projects would further increase the funding gap.

Another critical issue is how these waterway projects are conducted in the current system. USACE depends on annual appropriations for core project funding, relying on a sluggish and often politically motivated Congress. Major capital projects should be financed long-term by issuing bonds. The current process leads to many delays in construction, maintenance, and rehabilitation projects. 

For example, the Kentucky Lock Addition estimated completion date has been delayed from 2008 to 2024. Its original cost in 1992 was estimated to be $393.2 million. More recently, USACE estimates it will cost “$229 million more” than when it was initially proposed. These delays raise costs, with unscheduled maintenance delays costing “up to $739 per hour for an average tow, or $44 million a year.” 

In addition to the congressional appropriations process, another major problem is USACE’s lack of an agency-wide definition of deferred maintenance. A 2018 GAO report found that each of the eight regional offices defines routine maintenance differently. For example, some offices may consider painting lock components to avoid corrosion to be routine maintenance while other offices may not. USACE’s deferred maintenance definitions need to be standardized to reduce delays and costs.

Substantive reforms need to be made to many aspects of the inland waterways system. The most important reform would be implementing a user fee for all locks, paid by all direct users. The new funding mechanism for the inland waterway system should be funded by users, totally detached from general taxpayer support and freed from the burdensome congressional appropriations process. 

Additionally, the U.S. Army Corps of Engineers should standardize its deferred maintenance definition across all eight regional offices and 38 local district offices to better coordinate project activity and assess their needs. 

If enacted, these changes would start to create a sustainable, financially self-supporting inland waterways system designed to accommodate the evolving needs of carriers, shippers, and consumers. It would also put waterways shipping on a far more level playing field with its competition, including railroads and trucking.

The post Users, not taxpayers, should pay for the inland waterways system appeared first on Reason Foundation.

One increasingly popular approach to addressing the spike in traffic-related deaths has been adopting a Vision Zero (VZ) program. The concept originated in Sweden in 1997 and sets a goal of zero traffic fatalities and serious injuries. VZ was adopted by Chicago in 2012, San Francisco in 2014, and Los Angeles in 2015. However, the success of VZ has been uneven at best and the superior approach for lower traffic fatalities lies in data-gathering, local partnerships, community education, and re-engineering when necessary.

For cities, zero traffic fatalities and serious injuries are not obtainable short or long-term goals. The VZ approach calls for discarding cost-benefit analysis and the “whack-a-mole” approach of fixing one intersection at a time. Instead, it calls for making sweeping changes to all of a city’s High Injury Network (HIN), defined as areas where fatalities are disproportionately high. Claiming that no price can be placed on human life is a noble approach, but one that is unrealistic in a world where policymakers have limited resources to solve problems.

Efforts to reduce traffic fatality rates in the last 10 years have varied, making it hard to label what exactly constitutes a VZ program. Examples of VZ measures that cities have taken to reduce fatalities include:

• requiring safety skirts on the side of the street;
• adding buffer zones between bike lanes and traffic lanes, often narrowing or outright removing a travel lane in the process;
• closing travel lanes during peak hours;
• identifying locations with possible conflicts between pedestrians and cars to lessen injury severity.

Many of VZ’s proposed changes, such as limiting lane use during peak hours, would slow traffic and worsen conditions for drivers and lower-income commuters in these cities. By increasing the duration of commutes, and making some people late for work, cities inadvertently reduce the economic well-being of lower-income people. Instead of making roads worse for drivers, the goal should be to make them safer and more efficient for everyone involved—be they a driver, a cyclist, or a pedestrian.

As noted, several U.S. cities have adopted VZ plans. In 2012, Chicago launched its program with then-Mayor Rahm Emanuel stating a goal of “zero traffic deaths by 2022.” The city’s approach was outlined in a 100-page Action Agenda, which was little more than a statement of principles. Five years later, the city started work on VZ implementation and reset the 10-year counter from 2022 to 2027. Chicago aimed to improve some “300 intersections to make them safer for pedestrians.”

In September 2019, Chicago Mayor Lori Lightfoot announced that $6 million was being allocated to their West Side VZ plan, a stark difference from a statement she made as a candidate when she said she would, “reallocate $20 million from existing Chicago Department of Transportation funding” towards VZ projects. For a city frequently finding itself short on funds, especially for projects this transformative and wide in scope, VZ’s costly approach makes little sense. Even after all of that money was allocated, Chicago’s 2020 traffic fatality rates remained about the same as in 2012, before VZ was implemented.

In 2014, San Francisco announced and implemented its own VZ program. The program, which has been relatively successful in reducing traffic deaths, began with a comprehensive push for more accountability and better data-gathering to help paint a clearer picture for policymakers looking to address traffic fatalities. With San Francisco’s clearly defined HIN and the city’s Quick-Build program, San Francisco was able to make changes relatively quickly and cheaply. San Francisco’s fatalities decreased significantly in 2019 and 2020. Overall, San Francisco has been more successful than other major cities in lowering fatalities but recreating the city’s success may be more difficult in more automobile-reliant cities.

Los Angeles’ VZ program was started in 2015 and has been the least effective at reducing fatalities. In 2016, Los Angeles’ pedestrian death rate “was twice that of San Francisco, Chicago, and New York, and four times that of Seattle,” per Bloomberg. In the three years following VZ adoption, pedestrian fatalities increased by 75%. Things didn’t look good for drivers either: In 2017, Los Angeles ranked as the “most congested city in the world”, the sixth year in a row it received that ranking. Conditions for drivers were already nightmarish, with drivers spending hours upon hours in congestion, but fatalities remained high on top of those conditions.

Los Angeles did implement some changes such as exclusive pedestrian traffic signal phases which halt all vehicular traffic for a time as a means of lowering fatalities. While fatalities have been decreasing, they are still above the 2015 numbers when the program started.

Most VZ policies in the U.S. have been expensive failures, with negligible effects on overall traffic fatalities. Outliers such as San Francisco have a few advantages that made a VZ approach more realistic – namely less reliance on driving to commute. In San Francisco in 2018, 40.2% of people drove to work whereas in Los Angeles in 2015 nearly 80% drove alone and 10% carpooled, and 77.4% of Chicagoans in 2018 relied on automobiles for their commute.

While auto-averse solutions may work in cities that are not so reliant on cars (like San Francisco), making conditions worse for drivers in cities like Los Angeles and Chicago is often met with political pushback. In Los Angeles, for example, drivers are already spending massive amounts of time in slow-moving traffic. Some streets need to keep their higher speeds to allow for a shorter, more efficient commute through cities.

To reduce traffic fatalities more effectively, cities should begin with detailed analyses of their high-injury networks instead of heavy-handed reform for every part of the road system. In Orlando, drivers were failing to yield to pedestrians at crosswalks. Following a partnership with local law enforcement, officers started issuing warnings near crosswalks during a three-month enforcement period. It was determined that a few low-cost engineering solutions would be sufficient: moving yield signs 30 feet, adding medians and refuge islands, and some other changes. Following two rounds of enforcement and re-engineering, driver yield rates went from 5% to 28% for a price far lower than most VZ projects.

Cities do not need to take the Vision Zero all-or-nothing approach when a more customizable set of solutions is available.

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Amtrak takes in extensive federal subsidies, fails to make a profit, and has a notorious history of being anything but cost-efficient. Rather than pour billions more into Amtrak, taxpayers’ money could’ve been better spent on alternatives, such as more cost-efficient intercity bus service and further improvements to existing highway infrastructure. Private bus operators have demonstrated the ability to alter their routes and schedules make bus routes a more appealing alternative to frequently delayed Amtrak lines. 

Instead of identifying cost-effective transportation solutions, the unprecedented funding boost for Amtrak in the infrastructure bill was marketed as a means to “modernize” the aging rail system. Not even Amtrak’s most used and popular Northeast Corridor, which runs through eight states with fast Acela service between Washington, DC, and New York City, among others, is self-sustaining. The Northeast Corridor alone had a $38 billion maintenance backlog as of 2017.

Amtrak says it will spend a portion of the infrastructure bill’s funding on the Northeast Corridor. Amtrak hopes to spend a lot of the remaining money trying to emulate the Northeast Corridor in other parts of the country, which should be met with apprehension.

The most recent example of Amtrak’s efforts to expand rail service is its push to restart the Gulf Coast line, a twice-a-day route between New Orleans, Louisiana, and Mobile, Alabama. The route had the highest taxpayer subsidies of any Amtrak route before service was suspended due to Hurricane Katrina in 2005.

Amtrak’s Gulf Coast line proposal would make taxpayers prop up a financially unsustainable service. Amtrak’s fiscal year 2022-to-2027 forecast for this route found it would operate at a loss of $27 million each year, or $373.4 per passenger of the 72,200 projected to ride annually by 2027.

Typically, Amtrak participates in an impact study to see how a proposed rail service would affect an area, but they’ve abandoned the study for the Gulf Coast line and are trying to move ahead. Proponents of the line hope it will have a positive economic impact, but given the projected $30.5 million annual costs to keep it operating in 2027, that seems unlikely.

But two of the states on the route offered their own money to match the $33 million in federal cash: Louisiana pitched in about $10 million and Mississippi around $15 million. The states would have to pay the full bill in five years’ time, with the federal government providing 20% less funding each year. States would be picking up the tab for a twice-a-day passenger rail line with only about 197 passengers a day.

In judging Amtrak, it is important to note that the true cost of Amtrak is often hard to calculate, thanks to the accounting tricks used to cover Amtrak’s losses. Despite being run as a “for-profit” entity in a government-ensured monopoly, Amtrak has never actually made a profit and has two methods to mask its losses from the public eye, rail critic Randal O’Toole, a former senior fellow at the Cato Institute, noted in 2019.

The railroad inflates its revenues by considering subsidies from 17 states as passenger revenues. In 2020, Amtrak’s profited 50 cents per passenger-mile in revenue, according to the Bureau of Transportation Statistics, but that is based on Amtrak’s phony accounting, which also fails to include depreciation in its expenses, despite maintenance problems needing to be addressed. Amtrak also enjoys special treatment under federal law. Freight railroads must allow Amtrak to use their tracks and give Amtrak trains priority over freight trains on the tracks. Amtrak only owns about 3% of their track, nearly all of that in the Northeast Corridor.

With the importance of freight rail for supply chains across the U.S., we must also consider economic activity potentially lost due to freight trains being delayed. The Port of Mobile has generated around $26.8 billion in economic value for the region. Jim Lyons, chief executive officer of the Alabama Port Authority, said that freight company CSX makes up about 65% of the rail activity in the Port of Mobile, and the past passenger rail caused “big headaches for freight activity in Mobile.” Lyon’s opposes the Gulf Coast line.

In the Gulf Coast line’s case, if the goal is to expand passenger rail service in the region, it would be easier if Amtrak tried to foster a cooperative relationship with freight railroads. Yet Amtrak has had a strained relationship with Norfolk Southern and CSX, the two rail companies that own the rails between New Orleans and Mobile. When the rail companies asked Amtrak to better accommodate both passenger and freight rail without as many delays, Amtrak called it a “ransom,” and their approach has been far from collaborative.

More broadly, many proponents of passenger rail in the United States want to try to copy the European approach of large passenger rail subsidies but rail is far more critical for freight movement in the U.S. than it is in Europe. In 2020, freight rail carried 27.4% of all cargo weight in the U.S., whereas in the EU, it carried 16.8%.

By operating its rail lines primarily for passengers, Europe ended up having to rely more on trucks for cargo, and trains for people. The U.S. did the opposite and relies on freight to move goods. Thus, when freight railroad tracks are forced to prioritize passenger rail, everybody loses. Crowding freight rail could also lead to greater traffic congestion on highways if freight companies have to ship even more goods via truck.

Amidst numerous supply-chain issues leading directly to American consumers paying more for everyday items, weakening a critical link in our supply chain seems ill-advised.

Instead of asking taxpayers to prop up more money-losing routes across the nation, we should look to alternatives that require no (or smaller) per-passenger subsidies and less interference with freight rail.

Intercity bus carriers, for example, require almost no subsidy compared to Amtrak’s roughly $0.36 per passenger mile. Travel times are comparable in many regions. And, in some corridors, including along the Gulf Coast, intercity bus is faster than rail.

The Gulf Coast line is a poor use of taxpayers dollars, but it’s just one example of Amtrak’s wasteful ineffectiveness. The billions in additional Amtrak spending already approved could’ve been put to better use improving existing infrastructure that more people use. Now, other states should examine the Gulf Coast line before contributing their own funds to Amtrak expansion projects that they could find themselves subsidizing for years to come.

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