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Surface Transportation News: Losing the User-Pays Principle, Biden’s Broadband Plan and More

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This issue of Surface Transportation News is also available online here.

In this issue:

Whatever Happened to User Fees for Infrastructure?

Here are some recent developments concerning highway infrastructure:

  • After suggesting that charging for highway use per mile driven could replace per-gallon fuel taxes, Transportation Secretary Pete Buttigieg was forced to walk back this idea as inconsistent with President Joe Biden’s no-new-taxes pledge.
  • In Connecticut, a free-market think tank and essentially all Republican legislators are staunchly opposing toll-financed reconstruction of aging highways.
  • In Pennsylvania, a bill to forbid PennDOT from using toll finance to replace nine aging Interstate highway bridges has passed the state Senate.
  • In Alabama, a revised proposal to replace the aging Mobile River Bridge on I-10 that would charge tolls only to trucks is gaining support, after a previous plan to toll all vehicles was shot down.
  • And in Texas, plans for more express toll lanes in the three largest metro areas are still in limbo as the state legislature continues its ban on new toll projects.

The common element in these developments is loss of support for the users-pay/users-benefit principle. That principle was the foundation of the per-gallon fuel tax, invented in Oregon in 1919 and adopted by all 48 states within a decade thereafter. It was also the foundation of the 1956 legislation that created the federal Highway Trust Fund, with new highway user taxes dedicated to the construction of the Interstate Highway System.

Users-pay/users-benefit is also the principle of toll roads worldwide. It is also the basis of the Passenger Facility Charge that airports use to improve and expand their terminals. And it is how Americans pay for utilities such as electricity, natural gas, telecommunications, and water service. So why has it lost so much ground in highway transportation?

One factor is the ongoing erosion of the “users-benefit” portion of the concept. Many state legislatures over the past 40 years have authorized ongoing diversions of revenue from what used to be called state highway trust funds. These days they are mostly “transportation” funds (the “trust” is gone) and can fund just about anything legislators think will help their re-election prospects. Congress has done the same thing to the Highway Trust Fund, about 25 percent of which now goes to non-highway purposes.

Legislatures have also turned some toll roads into cash cows, including Pennsylvania’s notorious Act 44 which, in effect, taxes the Pennsylvania Turnpike’s customers some $450 million a year in excess tolls to subsidize urban transit. No wonder there is political opposition to new tolls. And tolling proponents in Connecticut have invited opposition by proposing to toll first and then (maybe) rebuild and widen congested Interstates. Rhode Island legislators likewise imposed tolls first (and only on trucks) rather than toll-financing bridge replacements but charging (all) highway users for newly improved bridges.

The underlying problem seems to be that much of the American public thinks somebody else should pay for the highways they drive on. This bad idea is reinforced by bills in Congress to give states “free” federal money, such as the $115 billion proposed for highways and bridges in President Biden’s American Jobs Plan. If Santa Claus in Washington can give us a billion dollars to replace our decrepit bridge, legislators figure, why go through the painful process of developing a toll-finance plan?

A recent Associated Press story reported that many state legislature are holding back on transportation funding measures this year, waiting to see what windfalls Congress may provide.

Fortunately, there are still advocates of users-pay/users benefit involved in the debate. Sen. Tom Carper (D-DE), chairman of the Senate Environment and Public Works Committee, recently told an event sponsored by The Hill, “I think things that are worth having are worth paying for. For years we have taken a user-pay approach. If you use roads, highways, bridges, you have to help pay for that. I think that’s sound policy and one that we should continue.”

He also suggested that electric vehicles should be paying directly to use the roads they are driven on and that charging all vehicles per-mile-driven will become necessary, perhaps 10 years from now.

Last month, a number of think tank officials and two former Department of Transportation (DOT) Secretaries—Andrew Card and Sam Skinner— signed a letter to Congress urging a return to the users-pay/users-benefit principle for highway funding, itemizing a number of virtues of this approach. The letter also endorsed the future replacement of per-gallon fuel taxes with per-mile charges.

Last month, the bipartisan 58-member Problem Solvers Caucus in Congress released its “Rebuilding America’s Infrastructure” report. Rather than supporting massive general-fund spending, it calls for restoring user-pays for the Highway Trust Fund, beefing up tax-exempt private activity bonds and the Transportation Infrastructure Finance and Innovation Act (TIFIA) to encourage states to make greater use of long-term public-private partnerships (P3s), thereby leveraging limited federal funds, and also supports the need to transition to per-mile charging. The U.S. Chamber of Commerce has expressed support for this approach, and more recently so has the American Trucking Associations.

I hope these efforts bear fruit. The message to state legislatures and highway users should be: there is no Santa Claus. Users should pay for improved highways and bridges and their user payments should be used for their direct benefit.

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Electric Vehicle Charging at Interstate Rest Areas Gets FHWA Approval

Well, that was fast. Last month’s lead article in this newsletter featured my new Reason Foundation policy paper calling for the removal of the long-standing federal ban on commercial services at Interstate highway rest areas. On April 28, the Federal Highway Administration (FHWA) issued a sweeping notice, “State DOTs Leveraging Alternative Uses of the Highway Right-of-Way Guidance.” The focus is to encourage state DOTs to make productive use of their long-distance highway rights-of-way in the interest of reducing CO2 emissions, etc. Among the specific uses allowed out is “electric vehicle (EV) charging within the highway ROW [right of way],” and this includes Interstate highways.

Actually, this policy change was being advocated by a number of environmentally-oriented organizations, with one of the most expansive visions laid out by a relatively new nonprofit group, TheRay based in Atlanta. Its position papers have called for using highway ROW to host solar panels, long-distance high-voltage electricity transmission lines, and fast EV charging. Also of interest, the day before FHWA’s guidance was announced, the Department of Energy announced new financial support for building high-voltage electric lines along highway ROW. Its analysis identified more than 20 major transmission projects, many of which might be located along highways, thereby avoiding numerous battles over land acquisition, etc.

The new FHWA guidance explains that for Clean Energy and Connectivity (CEC) projects in the ROW of a federal-aid highway, there are two alternative paths for approval: either for “accommodation as a utility” or as an “alternative use of the ROW.” Under the first, it announced that existing commercial activity restrictions (as on Interstate rest areas) will not apply to CEC projects unless the project qualifies as an “automotive service station” within the meaning of the statute. And under the second approach, electric vehicle charging is explicitly permitted as one of the “acceptable alternative uses” of Interstate right-of-way, if it complies with federal property management regulations.

This is a significant step toward commercial services at Interstate rest areas and is a big win for environmental groups. It does not address the other pressing need for on-Interstate commercial services: much more—and safer—overnight parking for over-the-road trucks, preferably with real food services, showers, and electrical hookups so the sleeper cab does not have to run its motor all night to provide heating or air conditioning. Still, with the barrier to electric vehicle charging now removed, the long-impregnable barrier to commercial services now has a large crack. Let’s hope the trucking industry—or significant portions of it—decides to build on this good start.

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The Coming Conflict Between Freight Rail and Amtrak Expansion
By Marc Scribner

“I believe that the best days for Amtrak and for rail and for America are ahead. I really believe that,” said President Joe Biden at an April 30 event in Philadelphia to celebrate the 50th anniversary of Amtrak. President Biden has, for decades, been one of Amtrak’s most consistent and vocal supporters. True to form, his administration has proposed to spend $80 billion on intercity rail as part of its American Jobs Plan. While the details are lacking, presumably much of that would be directed toward Amtrak. However, intercity rail in the U.S. primarily moves freight. An ongoing dispute between Amtrak and freight carriers may foreshadow serious difficulties in achieving the Biden administration’s goal of significantly expanded intercity passenger rail service.

When Hurricane Katrina hit the Gulf Coast in 2005, Amtrak suspended its Sunset Limited service when the storm washed away much of the track between Louisiana and Alabama. This line is owned by freight carrier CSX, and Amtrak and host freight carriers have been discussing service restoration since 2015. This has involved several studies analyzing infrastructure needs to ensure freight and passenger rail can coexist without negative impacts to service.

These studies resulted in a wide range of estimates for required improvements, from a low of $91 million in a 2017 study conducted by the Gulf Coast Working Group to a high of $2.3 billion in a 2016 HDR study commissioned by CSX. Confronted by this large disparity, the Florida Department of Transportation commissioned its own study from HNTB in 2018, which found that corridor improvements needed to sustainably relaunch Gulf Coast Amtrak service would cost between $1.2 billion and $1.3 billion. In 2020, Amtrak, CSX, and Norfolk Southern agreed to commission a new Rail Traffic Controller (RTC) modeling study of the route from HDR that was set to be completed in December 2020. But after HDR encountered a software error and notified the railroads that redoing its work would cause a multi-month delay in finalizing the report, Amtrak backed out of the RTC study project.

Then in March 2021, Amtrak filed a petition with the Surface Transportation Board (STB) to require CSX and Norfolk Southern to grant Amtrak access to their tracks for the purposes of restoring passenger service between New Orleans and Mobile, Alabama. The host freight railroads have objected, and local ports, farmers, miners, and other rail customer groups have called on the STB to deny Amtrak’s request. For its part, Amtrak has lined up tourism groups and local chambers of commerce to support its petition. Sen. Roger Wicker (R-MS), the ranking member of the U.S. Senate’s Commerce Committee, has sided with Amtrak. In contrast, Sen. John Kennedy (R-LA) has urged STB to withhold approval of Amtrak service restoration until the RTC study is complete.

At issue is access to 160 miles of single track owned by CSX. Under federal law, Amtrak trains have priority over freight trains that operate on track owned by freight carriers. Slower-moving freight trains would be forced to give way to faster passenger trains. On a single shared track, freight railroads and their customers expect that resumed Sunset Limited Amtrak service would cause delays and raise shipping prices—as well as divert more traffic to over-the-road trucking competitors.

This type of situation is not unique to the Gulf Coast and additional dustups may be on the horizon. More than 95 percent of Amtrak’s route miles are owned by freight railroads. It is also worth noting that nearly all of Amtrak’s routes lose money and require taxpayer support. In contrast, freight rail is largely unsubsidized. America’s private freight railroads also produce far fewer emissions than truck competitors on public highways, where trucks have been estimated to produce several times more greenhouse gas emissions per ton-mile when compared to freight rail. And this was before the COVID-19 pandemic struck and reduced Amtrak passenger demand by roughly half for FY 2020. Amtrak received billions of dollars in COVID-19 bailouts while freight rail received essentially no government assistance during the pandemic.

Absent additional subsidies to expand rail facilities along the Gulf Coast, Amtrak’s legal priority will make freight rail less attractive to customers, some of whom will switch to more polluting trucks. And regardless of new infrastructure subsidies, Amtrak’s renewed Sunset Limited operations will almost certainly be subsidized. And herein lies the problem for the Biden administration’s rail agenda: prioritizing Amtrak expansions at the expense of freight rail may reduce the social and environmental benefits of rail transportation overall.

A useful international rail comparison is between the U.S. and Europe. In the U.S., private railroads were largely freed from inefficient and unprofitable passenger service mandates in the 1970s. As a result, America’s railroads offer the most extensive and robust freight rail service in the world. In contrast, European countries prioritized and heavily subsidized intercity passenger rail. Today, rail constitutes just 18 percent of inland European freight ton-miles. In the U.S., freight rail’s share of ton-miles is 33 percent. European countries recognize this has put them at a disadvantage in terms of climate policy, so they are implementing aggressive policies in an effort to achieve a freight rail mode share of 30 percent by 2030—still below the U.S.’s 2018 mode share achieved through no direct policy intervention.

In response to the Biden administration’s proposed $80 billion in new intercity rail subsidies, Amtrak released an expansion plan called Amtrak Connect US. Under this plan, Amtrak says it would like to add 30 or more routes by 2035, and increase service on 20 or more existing lines. There are scant details on how much of this system enhancement would take the form of dedicated passenger rail track—the “plan” is little more than a modified route map—but most of these new operations would presumably take place on infrastructure owned by freight railroads, sharing track with freight trains.

Prior to embarking on any major passenger rail expansions, Congress should conduct close oversight of Amtrak’s COVID-19 relief funding. The administration and Congress should carefully observe ridership trends as the country recovers from the pandemic. The impact of additional passenger train operations on freight service, and how those negative service impacts may generate new environmental harms, should be considered going forward. Finally, over the longer term, if Congress determines that the benefits of passenger rail service are outweighed by the costs—both private and social—it may be time for legislators to revisit Amtrak’s legal priority over freight rail and the future of Amtrak itself.

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More Toll-Roads-as-Cash-Cows News

Politicians in two states have upped the ante on toll roads, requiring them to divert more money to non-toll road projects. New Jersey and Harris County (TX) are in effect levying a tax on customers of their toll roads, in one case to subsidize mass transit and in the other to support flood control.

Last month, the New Jersey state legislature approved a measure to divert more than $3.5 billion to NJ Transit over the next seven years. The agreement between the New Jersey Turnpike system and NJ Transit appears to be the price the toll agency had to pay to get approval of its $16 billion long-term construction program and the accompanying 36 percent increase in toll rates. The $3.5 billion is a huge increase in toll revenue diversion; during the previous five years, the total diversion was only $820 million. But transit advocates were hardly satisfied. The diversion is “still nowhere near what the authority could afford to pay, particularly without the highway expansion, or what NJ Transit needs,” said John Reichman of the Blue Wave NJ environment committee.

As I previously reported (Issue #206, December 2020), last year in Texas, the Harris County governing board (called the Commissioners Court) voted 3-2 to take over the formerly independent Harris County Toll Road Authority (HCTRA), a well-run agency that has built and managed an impressive urban tollway system. They changed HCTRA from a self-funding authority to a government corporation so as to divert toll revenue to things like flood control and deepening the Houston Ship Channel. In order to preserve its bond rating, HCTRA will need to increase toll rates, in effect taxing its customers to pay for unrelated government projects.

Last month, the Commissioners Court voted to use toll revenue to plug a $1.4 billion hole in the bond-funded county flood control program. It also approved a “backstop” plan to use $315 million of HCTRA bonds or toll revenues for drainage projects in case expected federal matching funds do not arrive. Houston toll road customers should not assume this is the end of the diversions. The full cost of the planned program to protect the metro area from 100-year floods is $30 billion. So the initial $2.5 billion flood control bond program is just the start. How much more will HCTRA toll payers be taxed to pay for in coming years?

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Ride-Hailing Companies and Traffic Congestion
By Baruch Feigenbaum

Transportation Network Companies (TNCs) have been controversial since they began operating in U.S. cities in 2010. The taxi industry wanted the services banned and some cities tried to regulate them out of existence. In 2016, Uber and Lyft temporarily left Austin after the City Council and voters required that drivers be fingerprinted. But TNCs, by and large, have thrived by offering better, cheaper service than most taxis.

More recently, researchers have tried to determine TNCs’ effect on urban mobility. One recent study, Impacts of Transportation Network Companies on Urban Mobility, by Mi Diao, Hui Kong, and Jinhua Zhao in the journal Nature Sustainability. The study used the year that TNCs started service in a metro area to assess the impact of TNCs on traffic congestion, transit ridership, and vehicle ownership. The study used data from FHWA’s National Performance Management Research Data Set (NPMRDS) and TNC entry of service time between 2012 and 2016.

Based on the model results, the study found that TNCs increased the travel time index (the time required to make the trip during peak hours versus the time required in off-peak hours) by 0.9 percent, which was not statistically significant. TNCs also increased the duration of congestion (measured in hours) by 4.5 percent. Further, TNCs led to an 8.9 percent decline in transit in metro areas. In the top ten metro areas, TNCs were correlated with a 1 percent decrease in vehicle ownership.

However, another study of TNCs found very different results. The second study by Ziru Li, Yili Hong, and Zhongju Zhang titled An Empirical Analysis of on-demand Ride Sharing and Traffic Congestion used data from the Texas A&M Transportation Institute (which used a combination of NPMRDS and INRIX data) and found that TNCs decreased congestion.

Given the major limitations in federal congestion data, I have more confidence in the Li study that was supplemented with INRIX data. And, even in the Diao study, the increase in peak-hour commuting time was not statistically significant. Further, the decrease in vehicle ownership is positive if those commuters can get the mobility they want without owning a vehicle.

Traffic congestion is annoying and hurts the economy. But in many cases, riders using ride services can also be a sign of a thriving economy— with trips taken to jobs, shopping malls, restaurants, and other activities leading to real economic benefits and more employment.

Let’s assume that the main negatives of TNCs are the 4.5 percent increase in the duration of traffic congestion and the 8.9 percent decrease in mass transit usage. And let’s assume each is valid and statistically significant.

For transit, the fact that so many people are substituting TNCs for mass transit says more about the state of transit than anything else. In New York City, which many transit advocates would view as the transit system that other major US cities should emulate, the price of a subway ride in New York City is $2.75 while the average price of an Uber X (the cheapest option) is approximately $2.25 per minute. If the average Uber trip is 10 minutes, which may be on the low side, Uber would be around eight times more expensive than the subway. One reason somebody would pay eight times more is if the cheaper option is far less convenient and inferior. In New York, the decision to use services like Uber may be a result of several factors, including frequent train breakdowns and unreliable service due to a lack of proper maintenance. But if that is the case, perhaps New York MTA should spend its resources on maintaining/rebuilding existing subway lines instead of building the multi-billion dollar 2nd Ave subway.

In other metro areas, the answer is less clear-cut. Many communities could redesign their bus networks so they provide better service. In other cities, the transit agencies could partner with TNCs not just for first mile/last mile service but also for existing fixed-route service in low-density areas where passenger volumes don’t warrant service on 60-foot buses.

For traffic congestion, there are several options that would help address the problem. One ill-advised approach is to ban or restrict TNC usage. For example, London tried to ban Uber because “unauthorized” drivers were allowed to pick up passengers. In that case, a judge intervened. Banning or placing a cap on the number of TNCs arbitrarily limits consumer choice. And such caps rarely reflect accurate demand for the services.

In the US, regulators have also talked about banning TNCs in New York City to help reduce congestion. Currently, the city has a hard cap on the number of TNCs. But rather than banning TNCs or treating them differently from other vehicles, regulators can solve the congestion problem through pricing. Currently, most roadways are not priced correctly. Central cities such as New York City and San Francisco could benefit from cordon pricing, in which a fee is paid to enter or drive in a congested downtown area.

Cities that don’t have a large number of employment centers downtown, as well as suburbs, could benefit from variably-priced mileage-based user fees once the technology matures. While MBUFs are not yet ready for a nationwide rollout, they would allow congestion pricing. Finally, many of today’s urban freeways could benefit from variably-priced express toll lanes. One key is for the pricing, regardless of type, to be used to improve the roadway system either through funding ongoing maintenance and operations or going towards adding additional capacity, and not be diverted to some other purpose.

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The Problems with President Biden’s Broadband Plan

While many critics fault President Biden’s American Jobs Plan for funding all kinds of programs that are not physical infrastructure, broadband has become basic infrastructure, much as electricity did in the first half of the 20th century. The Biden plan is modeled after the New Deal’s Rural Electrification Program, which provided federal funding to foster government-run or co-op electric utility providers, many of which still operate in rural areas. And that is a primary problem with the proposal. A growing array of critical comments point out three fundamental concerns with the plan, as follows:

  1. By seeking to “future-proof” rural broadband, the proposal essentially requires (a) fiber optics only, and (b) “symmetrical” upload and download speeds, typically 100 MB per second for both downloads and uploads.
  2. It prioritizes broadband that would be government or co-op-owned and implies a monopoly provider.
  3. By referring to high prices and downplaying competition, it suggests future price regulation in what is now a competitive market.

In low-density rural areas, fiber optics is generally the most costly option, compared with wireless or satellite broadband. And insisting on symmetrical 100/100 uploads and downloads would be overkill for the vast majority of customers, who need much faster speeds to download than to upload data. Today only 4.3 million U.S. households lack 25 Mbps download/3 Mbps upload (25/3) internet access. Were the Biden plan adopted and 100/100 became the standard, more than 64 million households would be defined as underserved (although many have access to such service, but choose not to pay a lot more for that high-end option).

In a recent commentary, technology expert Andrea O’Sullivan pointed out that government-run internet services have not resulted in lower costs and sometimes led to higher costs. She explains:

“It is because government-run internet providers don’t feel pressure to turn a profit that costs and service suffer. One reason is implied in the fact sheet itself: the network is run for the benefit of employees and incumbents rather than the community it is supposed to serve. These government-run networks tend to end up as a hand-out for the people lucky enough to get the largesse, not the community as a whole.”

The potential of entrenching municipal or co-op broadband utility monopolies comes at a time when competition to provide rural broadband is increasing. SpaceX, as of last month had 1,355 of its planned 12,000 Starlink satellites in orbit, while OneWeb has 146 of a planned 300 of its broadband satellites in space. Amazon, last month, purchased nine rocket launches from United Launch Alliance for the first nine batches of its 3,200-satellite Kuiper network. The Starlink system has been in beta testing with about 10,000 mostly rural U.S. users for a number of months. CNBC reported mostly rave reviews from those customers, praising the superior service they are getting for $99/month. Users reported download speeds of between 60 and 150 Mbps, with some reporting peak speeds near 200 Mbps.

With at least three satellite broadband companies competing with each other within the next few years and also competing with fiber, wireless, and in some cases cable, it seems a bizarre time to spend $100 billion of federal taxpayers’ money on a program that would fund very costly fiber-optics and work toward a regulated monopoly model rather than a competitive market. Let’s hope Congress gets some heavy-duty briefings on what is really going on in this market before it makes a very costly mistake.

Remembering Marty Wachs

Last month, my friend and mentor Marty Wachs died, far too early, at 79. I say mentor, even though I was never his student at either UCLA or UC Berkeley, though he did honor me by inviting me to give a guest lecture to his grad students once at each campus, many years apart.

Over a long teaching career, primarily at UCLA, Marty taught and mentored a huge number of today’s transportation planners and researchers. He was universally praised as the ideal of what a professor ought to be, and his numerous mentees have gone on to transportation careers across the country.

He was also highly respected in the transportation research community, having served on various committees of the Transportation Research Board, and actually chairing the TRB board at one point. One of my best memories of working with Marty was in 2005 when we served together on the TRB special committee that addressed the question of whether per-gallon fuel taxes were long-term sustainable as the primary surface transportation funding source (our answer was no).

Marty maintained his sterling reputation in transportation despite sometimes speaking truth to power. His much-cited article many years ago, on the tendency of transportation megaprojects to experience large cost overruns and less than projected usage was titled, “When Planners Lie with Numbers.” I learned from reading the many tributes to Marty on the UCLA ITS website that this article inspired Bent Flyvbjerg to do the research that led to his influential book and database on megaprojects, Megaprojects and Risk.

Another example of Marty’s willingness to challenge the powers-that-be concerns the initial rail transit projects in Los Angeles County. When what is now LA Metro began devoting large sums to rail, it cut back bus service and raised bus fares. Marty was one of an informal group of transportation scholars who assisted the Bus Riders Union in assembling data for that group’s suit against the agency—which the bus riders eventually won, getting them 10 years of fare reductions and increased bus service.

Although Marty only wrote one transportation study for Reason Foundation (in 1992), his imprint is on a number of our studies right up to last year, thanks to his service as a peer reviewer on many occasions. He was tough but fair in his assessments of draft studies.

I last spent time with Marty (along with colleague Brian Taylor) in November 2018 when he and Brian hosted a book talk for me at UCLA in connection with my then-new book, Rethinking America’s Highways. We had lunch afterward, catching up on various things.

We have lost a great man, to whom a great many of us in transportation owe so much.

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News Notes

Roadis Proposes I-25 Concession in Denver
Global toll road company Roadis, wholly owned by a major Canadian public pension fund, has made an unsolicited proposal to Colorado DOT’s P3 agency (HPTE). Under the proposal, Roadis would take over, finance, design, build, and operate improvements to I-25 in segments 3, 4, and 5 between northern Denver suburbs and Fort Collins. HPTE is reviewing the proposal, and if it finds it to be feasible, the next step would be to solicit competing proposals.

Miami Expressway Authority Still Fighting Termination
The county commissioners of Miami-Dade County, FL, have not given up in the fight to keep their local toll road provider, the Miami-Dade Expressway Authority (MDX). As reported here last month, an appeals court overturned a previous court decision that voided 2019 legislation that would abolish MDX and replace it with an emasculated, state-controlled “Greater Miami Expressway Authority”—GMX. At its May 4 meeting, the county commissioners voted 12-1 to pursue an appeal, on grounds that the legislation violated the county’s home-rule charter. The 2019 law was passed at the behest of populist, anti-toll Republicans from the Miami area.

Bid Protest Filed on Maryland Express Toll Lanes P3 Project
Back in March, one of the two losing bidders on the $4 billion P3 project to replace the American Legion Bridge and add express toll lanes to portions of I-495 (Capital Beltway) and I-270. The protest came to light in a Washington Post news story by veteran transportation reporter Katherine Shaver. Maryland DOT selected the Transurban/Macquarie team over competing proposals from teams led by Cintra and Itinera. The protest came from Cintra and has recently been rejected by Maryland DOT. The company has filed an appeal of that decision.

Research Finds Increased Long-Distance Car Travel with Autonomous Vehicles
A research team at the University of Texas, Austin, has published “Anticipating Long-Distance Travel Shifts Due to Self-Driving Vehicles,” in issue 82 of the Journal of Transportation Geography (2020). The paper was originally presented at the 2018 Transportation Research Board annual meeting. The researchers modified an accepted model of personal mode-choice for inter-city travel (rJourney), to take into account the characteristics of automated vehicles. They found a significant reduction in short-haul air travel, an increase in highway vehicle miles of travel (VMT), and an increase in the average distance of inter-city trips. Projections of future highway capacity should take into account the possibility of these kinds of increases (as should investors in short-haul airlines).

NY Thruway Rest Areas P3 Reaches Financial Close
A $310 million DBFOM project to rebuild and modernize all 27 service plazas on the New York Thruway reached financial close on March 30. The long-term financing includes $40 million in equity and $269.5 million in tax-exempt private activity bonds (PABs), rated by Fitch as BBB-. Empire States Thruway Partners received a 33-year lease on the service areas, 23 of which will be replaced and another 4 will be renovated. ESTP has the authority to add EV charging facilities for passenger vehicles but gas stations remain the responsibility of an existing company. The project illustrates that capital is available for projects to build or rebuild full-service plazas on long-distance Interstate highways.

Per-Mile Electronic Tolling Debuts in Greece
Drivers on the A8 Athens to Patras motorway used to be charged at fixed points along the route, no matter how few miles they actually drove on it. Under the new approach, the Hybrid Multi-Lane Toll System records the kilometers from the entry tolling point to the next tolling point. But if the car exits prior to the next tolling point, the charge retained on their account is only for the actual number of km they drove on the motorway. The new system is optional for toll road customers and requires an on-board unit that records the actual km driven on the road. This saves the operator, Attica Tollway Operations Authority, the expense of adding electronic readers at each exit. The system was developed by Kapsch TrafficCom.

Georgia DOT to Request Qualifications for Truck Lanes P3
A long-studied project to add truck-only lanes to a stretch of I-75 between Macon and the southern Atlanta suburbs is now getting started. It would add two northbound lanes but none southbound. The project’s aim is to better serve heavy truck traffic (originating primarily from the Port of Savannah) on that portion of I-75. An industry forum is planned for June 1, and a request for qualifications from interested teams is scheduled for release in August. Since no tolls will be charged, the DBFOM P3 will be financed based on availability payments from GDOT. The project cost is estimated at between $1.23 and $1.36 billion.

Don’t Prohibit Highway Capacity Increases, Coalition Urges
A group led by Associated General Contractors of America (AGC) sent a letter to Congress last month urging that any forthcoming infrastructure or highway reauthorization bill not rule out adding capacity to highways where needed by projected growth. “Build Back Better”—in contrast to creating new highways—should deal with both reconstructing worn-out highways and bridges and also adding additional lanes where cost-effective—including express toll lanes to address chronic congestion and dedicated truck lanes on routes where commercial trucking is expected to increase significantly.

Scholars Call for Ending Automobile Direct Sales Bans
In April, an open letter signed by 75 prominent law and economics professors made the case for repealing legal prohibitions on the direct sale and service of electric vehicles (EVs) by manufacturers. The signatories argue that indirect sales mandates—which require consumers to purchase and seek service through franchised dealers—unduly restrict consumer choice and raise prices. In the case of new EV manufacturers such as Tesla, Rivian, and Lucid, the indirect sales and servicing franchised dealership model is proving to be a high barrier to entry.

FedEx Plans All-Electric Delivery Fleet by 2040
In March, FedEx doubled down on its previous order for 500 electric delivery trucks from GM’s BrightDrop electric vehicles business. By 2040, the company announced, its entire 200,000 vehicle fleet will be electric. Local delivery is probably the easiest segment of commercial trucking to electrify, since these vehicles seldom drive more than 100 miles per day and can be recharged overnight at central depots. Since the announced investment in electrification is $2 billion, the average cost of each vehicle appears to be only $10,000, which is highly unlikely to be possible.

LA Metro Still Committed to Express Toll Lanes Network
Last month’s article on monorails mentioned that two rail alternatives were being considered by LA Metro for the highly congested I-405 Sepulveda Pass corridor (through which I used to commute when I lived in Los Angeles). I assumed that the elevated monorail alternative (vs. the heavy rail subway) would preclude express toll lanes in the I-405 median, but Metro’s Joshua Schank hastened to point out that “Metro has in no way decided against HOT lanes on the 405. These are still in the works and are critical to the mobility of the corridor.” Also of note is that in February LA Metro signed a 33-month contract with Parsons Transportation Group for a 33-month study of express toll lanes on I-10. Parsons will do a preliminary design and environmental review as well as assessing a P3 alternative to conventional procurement. The project would extend the current I-10 express lanes eastward to the San Bernardino County line.

Louisiana DOTD Seeks INFRA Grant for I-10 Bridge P3 Project
For the $600-800 million replacement of the aging Calcasieu River Bridge on I-10 in Lake Charles, the Department of Transportation & Development has submitted a request for a $100 million federal INFRA grant to help with the likely toll-revenue based financing plan. The bridge opened in 1952 and still has only four lanes, compared with I-10’s six lanes on either side, creating a serious traffic bottleneck. The state has also committed to $85 million for the project. Together, the federal and state contributions would reduce the amount to be toll-financed, permitting tolls to be lower than would otherwise be required. This suggests a way Congress could leverage federal funds to help states toll-finance many other needed Interstate bridge replacements.

Thoughts on Banning Non-Electric Vehicles
Michael Sena, editor/publisher of the excellent monthly newsletter The Dispatcher, has a thought-provoking article on the move of governments to ban the production of vehicles powered by internal combustion engines. He cites a provocative paper by three academic economists raising questions I had not thought about before. The article, “To Ban or Not to Ban: Should That Be the Question?” is in the May 2021 issue.

Podcast on Florida Transportation Funding
TEAM Florida, an organization representing Florida’s toll roads industry, invited me to record the first in a series of podcasts, this one dealing with how highways and other transportation are funded in this state. It launched on May 11 and can be found here.

CRS Report on Transportation P3s
The Congressional Research Service has updated an earlier report on public-private partnerships in transportation. It discusses the benefits and limitations of such P3s, the current federal role in such projects, and an array of policy issues including asset recycling, infrastructure banks, and P3s for toll-financed Interstate reconstruction. The report, dated March 26, 2021, is R45010 and is available here.

Zero-Based Transportation Policy
Cato Institute transportation policy researcher Randal O’Toole has produced a new policy analysis, “Zero-Based Transportation Policy.” Whether one agrees with his policy perspectives or not, this report is a treasure trove of data on nearly all the principal modes of U.S. transportation. I wrote “save” on the front of my printed copy and expect to refer to its data in future writings.

National Research Council on Electric Vehicles
I only recently came across a 2015 study by the National Research Council of the National Academy of Sciences: Overcoming Barriers to Deployment of Plug-in Electric Vehicles. It is available in printed form for purchase but can also be downloaded as a PDF at no charge. It is available here.

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Quotable Quotes

“There has been bipartisan agreement for decades that user fees—and indirect user fees such as gasoline taxes—should cover the cost of infrastructure investments, not tax hikes. Even Ronald Reagan was willing to raise the gas tax, but that won’t raise much revenue if everyone is in an electric car. Real-time electronic tolling makes user fees easy to implement. That would reduce congestion, improve the environment, and raise plenty of revenue.”
—Kevin Hassett, former chairman of the Council of Economic Advisers, “The Biden Plan for Economic Sclerosis,” The Wall Street Journal, April 9, 2021

“It is not yet clear whether it will be possible to fashion a bipartisan compromise on President Biden’s jobs and investment proposal. The debate over whether elements of it are or are not ‘infrastructure’ seems silly and irrelevant. The real issue is what should be in the transportation portions of the proposal. Republicans will likely have to accept that this will be new money, on top of reauthorizations of existing surface, air, and water infrastructure programs. But if so, the Biden proposal is too big. And like its highway portion, money for transit, and for commuter and intercity passenger rail (including Amtrak) should be limited to ‘fix-it-first’ and, selectively, to modernization and efficiency improvements. Since we have no idea what ridership and needs will be for these modes in a post-Covid world, this is not the time to undertake significant new capacity-expansion transit and passenger rail projects. On the other hand, both Republicans and Democrats are going to have to consider continuing operating subsidies for large transit agencies indefinitely, since the pandemic has dramatically exposed inequities in access and mobility, and demonstrated how dependent lower-income and essential workers are on transit, as their transportation mode of last resort. Finally, if there is to be a bipartisan compromise on the transportation portion of the proposal, it will have to include significant measures on climate change, including electrification of the automobile fleet and enhancing resilience of transportation infrastructure. These are fundamental goals of President Biden and ones that he seems unlikely to surrender.”
—Emil Frankel, former assistant secretary for policy at the U.S. Department of Transportation, in an email to Robert Poole, May 3, 2021

“On its side of the [American Legion] Bridge, Virginia is moving toward adding a final, three-mile segment of toll [lanes] that would end at the Potomac, in addition to improved general purpose lanes; construction is scheduled for completion in 2024. On its side, Maryland’s planning is mired in controversy. [Gov. Hogan’s] plan makes sense, and the decision to choose Transurban, if finalized, would ensure a seamless connection between the states. Yet unlike Virginia where there is a strong consensus for expanding highway capacity, along with better transit options, Marylanders are at each others’ throats over the project. The usual objections to high-occupancy toll [lanes] are weak arguments. Yes, in rush hours the toll lanes would be pricey, but no one would be forced to use them, and the existing lanes would be rebuilt and remain free of charge. Yes, the highway expansion would not “solve” traffic [congestion], but without it, congestion would go from bad to unbearable.”
Washington Post Editorial Board, “As Virginia Finds Consensus on Expanding Highways, Marylanders Are At Each Others’ Throats,The Washington Post, April 24, 2021

“[AV] companies still need a strong pitch, which helps explain why trucking ventures are at the front of the line. Many in the industry think trucks will beat passenger cars to autonomy. This isn’t so much because the technology is easier—trucks drive at higher speeds with much heavier loads than taxis, creating some complications—as because there is a clearer commercial case for running trucks without drivers, who are increasingly hard to hire in the U.S. Just helping truck drivers drive better may be a good start. Plus [a truck AV startup] says its system—which initially turns drivers into supervisors, a bit like airline pilots—can reduce freight companies’ fuel bills by one-fifth. It plans to launch the technology commercially this year and reach higher levels of autonomy only after it gathers more real-world driving experience.”
—Stephen Wilmot, “Self-Driving Cars May Be Too Speculative,” The Wall Street Journal, April 8, 2021

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Source: https://reason.org/transportation-news/user-fees-for-infrastructure-the-coming-amtrak-freight-rail-conflict-toll-road-cash-cows-and-more/


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