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Surface Transportation News: President Biden’s Jobs Plan, New Transportation Finance and Public-Private Partnership Reports

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In this issue:

The Anti-Highway Elements of President Biden’s  Infrastructure Plan

Some transportation groups remain optimistic about the $115 billion devoted to “roads and bridges” in President Joe Biden’s $2.3 trillion American Jobs Plan (AJP), but I am reluctantly concluding that, given the proposal’s overall price tag and priorities, this is more of an anti-highways proposal than an increase in needed investment in America’s aging highways.

Initial clues were provided in a March 18 Associated Press story, “Buttigieg: Biden Plan Will Usher in a New Transportation Era.” In the opening paragraph, Transportation Secretary Pete Buttigieg was quoted saying the plan offers a “once in a century opportunity to remake transportation in the United States, where cars and highways are no longer king.” Further on, Buttigieg noted that while we do need to fix aging roads and bridges, “there are some things that need to be reduced…sometimes roads need to go on a diet.” And Buttigieg added, “Sometimes we do need to add a road or widen one. Just as often, I think we need to subtract one.”

When the details of the Biden administration’s American Jobs Plan were subsequently released, we got some specifics on how the $115 billion for roads & bridges would be allocated:

  • $50 billion for “fix it right” road modernization, to fix 20,000 miles of highways and roads. At an average of $2.5 million per mile; that would repave quite a few city and county roads but only a few miles of urban Interstates.
  • $40 billion for a bridge investment program, somehow divided among the 10 most economically significant bridges needing replacement (most likely all megaprojects) plus 10,000 small bridges. Note that the major projects would lend themselves to toll-financed replacements, which will be off the table if the federal government hands out ‘free’ general-fund dollars for those projects.
  • $5 billion for “community transportation block grants,” so far undefined, but potentially “complete streets” or local “road diets.”
  • $5 billion for “transportation alternatives,” which means sidewalks, bike paths, etc., not roads or bridges.
  • $10 billion for a new “carbon reduction bonus program,” undefined but it could well reward projects aimed at reducing vehicle miles of travel, as is being attempted in California.
  • $5 billion to continue the existing Congestion Mitigation and Air Quality Improvement (CMAQ) Program grants for congestion reduction and air quality.

Hence, actual investment in better roads and bridges is really only $90 billion, just 4 percent of the overall infrastructure plan’s price tag, which is being widely marketed to taxpayers as a serious effort to fix America’s aging highways and bridges. And not a dime of that money would come from highway user payments.

And that’s not all that’s worrying. Under a separate heading of “Restore and Protect Thriving Communities,” the plan has $15 billion for “Highways to Neighborhoods.” That does not mean building highways to get to neighborhoods. Rather, as Jeff Davis explained in Eno Transportation Weekly, “From the sound of the fact sheet, this revolves around tearing down highways and restoring older neighborhoods, or possibly covering highways in some areas to allow more connectivity.”

Then there is the plan’s much larger spending on transit and passenger rail than on highways and bridges. The transit portion of the American Jobs Plan totals $110 billion and intercity passenger rail would get another $80 billion, totaling $190 billion. The plan’s rationale for this is that traveling on rails is environmentally friendly, compared with highways. For example, in Portland where toll-financed widening of parts of I-5 and I-205 is being planned, Aaron Brown of the “No More Freeways” group summed up this approach by telling a local reporter, “Public transportation isn’t cheap, but it actually will solve all our climate goals and congestion goals and our air pollution goals.”

Unfortunately, U.S. transit projects have never led to reduced roadway congestion, and the idea that highways are inevitably pollution generators is false, given the coming electrification of the vehicle fleet (a major emphasis of the Biden plan). As Eno’s Jeff Davis wrote after such claims were made at a recent high-speed rail hearing:

“There was much discussion of how high-speed rail would lower emissions by taking cars off the road for intercity trips over the next 50 years. [But] the key [unasked] question is, what assumptions were made about the average emissions per mile of cars on the road in 2030, 2040, and 2050? If the Biden Administration is successful in its quest to get most internal combustion engines off the roads, decades before anyone as recently as two years ago thought possible, doesn’t that mean those estimates of emissions reductions attributable to HSR are meaningless?”

My final point about the Biden administration’s American Jobs Plan not being a highways-friendly plan is that it completely ignores the 2019 Transportation Research Board Consensus Study Report, Renewing the National Commitment to the Interstate Highway System. This 596-page report, asked for by Congress, documented the deterioration of the underlying pavement on much of the system, its numerous bottleneck interchanges, its horribly congested urban corridors, and the lack of enough lanes for likely growth of long-distance truck traffic in some corridors. The report’s bare-bones estimate of the cost of rebuilding and modernizing our most important and valuable highway resource—the Interstate Highway System—was $1 trillion over the next two decades. Yet nowhere in the Bident administration’s $2.3 trillion infrastructure plan is there any mention of this report and the need for major investment in the Interstate system, essentially to build it back better.

Fortunately, the American Jobs Plan is only a proposal and it can still be improved by Congress and the Biden administration. As the saying goes, the president proposes and Congress disposes. Our only hope may be that either in the upcoming surface transportation reauthorization bill or in a better-focused infrastructure bill, Congress and the administration will begin to take the country’s needs to improve major highways and bridges far more seriously.

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New Reason Foundation Report Shows U.S. Lags in Infrastructure Finance

Many of us in the transportation sphere too often conflate the terms funding and finance when it comes to transportation infrastructure. Funding refers to how a project is paid for (e.g., fuel taxes or tolls), while finance refers to how to obtain the capital investment needed. When most people buy a home, they finance the deal rather than paying in cash. Typically, homebuyers put in some actual money with a down payment and borrow the rest via a mortgage.

It’s the same with infrastructure finance. In the private sector (utilities and railroads) or with public-private partnerships, investors put in equity and cover the majority of the up-front investment via debt (e.g., revenue bonds). Economists and financial analysts explain that for long-lived infrastructure, financing makes good sense. By raising the capital upfront, the project gets built now and its benefits are enjoyed by those who pay as they use it over its long life.

Alas, the United States lags most other developed countries in using long-term financing for major infrastructure projects, such as airports, highways, seaports, and other transportation facilities. Reason Foundation’s Annual Privatization Report 2021—Transportation Finance provides the details. The report, which annually reviews major infrastructure investment fund deals and trends, will be published this Wednesday, but we’re making it available today for readers of this newsletter.

Despite the COVID-19 pandemic, the global infrastructure investment fund industry had a banner year in 2020, raising $103 billion, the second-highest total ever. The report shows the 20 largest greenfield public-private partnership transportation projects financed in 2020, only one (John F. Kennedy International Airport, Terminal One) was in the United States. That’s mostly because many other countries have privatized major infrastructure and/or used long-term public-private partnerships (P3s) far more widely than the United States has.

Until recently, most of the infrastructure funds (about 35 percent of which are based in the United States) were “closed-end,” typically with a 10-year life. But the Annual Privatization Report—Transportation Finance discusses the recent rise of longer-term, open-ended funds whose growth has been a good fit for public pension funds, insurance companies, and other long-term investors who need to match their long-term liabilities with long-term, sustainable revenue streams.

The report also documents the growing trend of U.S. public-sector pension funds investing in P3 and privatized infrastructure. These pension funds seek to invest equity in alternative investments, hoping to increase the average rate of return on their investment portfolios. It’s not possible to invest equity in a public-sector airport or toll road, but the special-purpose vehicle (SPV) created by private developers of P3 toll roads and airports seek equity investors. Australian and Canadian pension funds have been investing in such infrastructure worldwide for several decades, but this is still an emerging phenomenon in the United States. The report provides specifics.

A number of tables in the report provide specifics on funds, companies, and projects that are being financed. Table 9 is a recap of U.S. public-private partnership transportation infrastructure projects, with details on how they have been financed. Overall, there have been 17 revenue-risk toll projects and nine availability-payment highway projects, contrary to the view that availability-payment (AP) projects are the wave of the future. The table shows significant differences in financing, with a much larger share of state funding (averaging 37 percent) in the AP projects compared with just 14 percent in the revenue-risk projects. And as you, therefore, might expect, the equity investment in revenue-risk projects averages 29 percent compared with only 6 percent in AP projects. Hence, revenue-risk investors have significantly more skin in the game.

Finally, a significant takeaway from the Annual Privatization Report 2021— Transportation Finance is that U.S. pension funds and insurance companies would benefit if there were a lot more U.S. public-private partnership infrastructure projects in which they could invest equity. Unfortunately, we have yet to see U.S. public pension funds speak out in favor of policy changes that would lead to more U.S. P3 projects—such as eliminating the federal cap on tax-exempt private activity bonds and overcoming political opposition to the use of tolls in state P3 legislation.

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New Report Finds the U.S. Also Lags in P3 Transportation Projects
By Baruch Feigenbaum

Much of the recent political discussion has been about the need to repair and modernize America’s transportation infrastructure. But, as with many issues, there has been significantly less discussion about how to properly procure and manage long-term infrastructure.

One available option is to increase the number of long-term public-private partnership projects, which continue to grow in other countries. As Reason Foundation’s Annual Privatization Report 2021—Surface Transportation, another section of the annual report we’re making available today for this newsletter’s subscribers, shows, the U.S. did not have any of the world’s 10 largest transportation P3 projects last year. The report examines international trends in surface transportation public-private partnerships, P3-related legislative activity at the state level across the United States, and the federal government’s impact on state governments’ ability to use P3s. It also outlines why we can optimistic that public-private partnerships can generate a lot of the investment needed to reconstruct and modernize aging Interstate highways.

In 2020, four public-private partnership projects with a value of over $1 billion reached financial close, including two of them in Germany. Seven of the 10 largest projects were availability payment public-private partnerships. And four of the largest P3s were mass transit projects.

While French Guiana (population 294,000) and Kazakhstan (population 19 million) are procuring highways through public-private partnerships, state and local governments in the United States (population 328 million) are not tapping the potential of P3s. In fact, for the 2020 fiscal year, there was not a single public-private partnership project valued at $100 million or more in the U.S. that reached financial close. While the COVID-19 pandemic and related federal stimulus funding certainly made 2020 a unique year, the fact remains that the U.S is far behind most of the rest of the world in transportation P3 activity.

In addition to a lack of projects, there was also only one major P3-focused bill introduced in the United States. And that bill, legislation in Pennsylvania that would have allowed counties and cities to procure their own P3s, failed. Further, only three states proposed long-term public-private partnership concession projects.

The Pennsylvania Department of Transportation proposed a $2.2 billion Major Bridge P3 Program to replace 11 aging Interstate bridges, partly modeled on the state’s Rapid Bridge P3 that led to the replacement of more than 500 smaller bridges. The state’s plan to use tolling to finance the reconstruction has led to opposition in the legislature.

Elsewhere, the town of Popps Ferry, Mississippi, proposed replacing an aging bridge via a public-private partnership. And Georgia has shortlisted proponents for the State Route (SR) 400 express toll lanes, the state’s first public-private partnerships, and the first of several planned P3 managed lane projects in the Atlanta suburbs.

Beyond COVID-19, I think there are four reasons why public-private partnership transportation activity is lagging in the United States. First, much of the low-hanging fruit in a few states has already been picked. States with the most workable P3 authority have entered into deals for some of their best projects. For example, Virginia has built or is building, managed lanes, most via P3s, on almost every freeway in Northern Virginia and several freeways in the Hampton Roads area. Similarly, Florida has built a number of P3-managed lane projects. These states can and will enter into more public-private partnerships, but some of the most attractive projects in states with the best public-private partnership laws may have already been completed.

Second, and a bigger factor, many states don’t have workable public-private partnership laws. While 36 states, Washington, DC, and Puerto Rico have P3 authority for transportation projects, full public-private partnerships have been implemented in only 11 states, Puerto Rico, and by the Port Authority of New York & New Jersey. It’s not that the other 25 states and D.C. don’t have multiple potential P3 projects. Instead, the existing laws give preferential treatment to government projects or contain obstacles that disincentivize the private sector. In many states, it is critical that policymakers reform state public-private partnership laws to tap the potential of these projects.

Third, the U.S. has struggled to make mass transit public-private partnership projects successful. Since mass transit projects are subsidized, they must be procured via availability payments. And that kind of P3 does not bring new revenue to the table. But using a P3 for a transit project still has benefits, including, if written properly, risk transfer and assured long-term maintenance. Given that transit projects are more likely than highway projects to be delivered late or over budget, this risk transfer is a real benefit to taxpayers and governments. Unfortunately, both of the country’s existing transit P3s have struggled.

The FasTracks Eagle project in Denver suffered from technical problems with the commuter rail lines that had nothing to do with the public-private partnership structure. Meanwhile, the Purple Line in Maryland suffered from a poorly designed contract that hamstrung both the state and private sector. Other countries have built successful mass transit P3s. In fact, public-private partnerships are how the majority of the world’s new transit projects are being developed. There is no reason why American cities and states cannot create mass transit P3s that work for taxpayers and the private sector.

Finally, federal policy limits the incentives states have to enter into P3s. Many P3s make use of Transportation Infrastructure Finance and Innovation Act (TIFIA) loans. While recent surface transportation bills have provided adequate project funding, the U.S. Department of Transportation has turned what is supposed to be a check-the-box procedure into a de-facto discretionary grant process. Given that projects eligible for TIFIA loans are required to have two investment-grade credit ratings, USDOT does not need to make project sponsors jump through bureaucratic hoops. Some sponsors have forgone loans rather than go through the process. Congress should insist TIFIA revert back to its original purpose.

For public-sector projects, the U.S. has a robust tax-exempt municipal bond market. To level the playing field, Congress authorized tax-exempt private activity bonds (PABs) for surface transportation in 2005. However, the $15 billion lifetime cap has been reached. It is critical that Congress either eliminate the cap or raise it to a minimum of $45 billion to allow eligible public-private partnership projects to use private activity bonds.

Most importantly, Congress needs to allow states to toll more of their Interstates as part of the necessary rebuilding and modernization effort. Toll concession P3s provide a funding and financing tool. Yet, these P3s are largely limited to new capacity because of a federal ban on tolling existing lanes. One current option is to rebuild bridges or tunnels using tolling as Pennsylvania has proposed. Another option is to add variable tolls on all Interstate lanes—after they’re rebuilt— to reduce traffic congestion but, realistically, this option is limited to major urban areas.

However, the most important change Congress could make is to expand the Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP), which allows only three states to use toll financing to rebuild one of their Interstates, to a program that allows all states to use tolling in the effort to rebuild all of their Interstates.

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The Case Against a VMT Tax on Heavy Trucks

With the federal Highway Trust Fund spending far more than it receives in highway user tax revenues every year, there is a growing consensus that if the users-pay/users-benefit principle is to remain the basic principle for highway funding at the federal level, the revenue must match the spending. In an effort to help reach that goal, Sen. John Cornyn (R-TX) has proposed that the federal government levy a 25 cents per mile tax on heavy trucks (over-the-road trucks, known as Class 7 and Class 8 big rigs).

Congress has shown increasing interest in eventually shifting highway funding from per-gallon fuel taxes to some kind of per-mile charge. And both the Congressional Budget Office and, more recently, the Joint Tax Committee have calculated the possible revenue yield of a tax on miles driven by heavy trucks, and at least one think tank has proposed beginning the transition to per-mile charges with trucks.

Needless to say, Sen. Cornyn’s proposal has led to fierce opposition from the two national trucking organizations: fleets, represented by the American Trucking Associations (ATA), and truck owner-drivers, represented by the Owner-Operator Independent Drivers Association (OOIDA). The two groups sent a joint letter on May 25 to Senate Finance Committee Chairman Sen. Ron Wyden (D-OR) and Ranking Member Sen. Mike Crapo, arguing strongly against the proposed trucks-only vehicle miles tax.

I agree that Cornyn’s proposal is a bad idea, while strongly supporting shifting the way we fund our highway system, over time, from per-gallon gas taxes to per-mile charges (generally known as mileage-based user fees—MBUFs).

The trucking industry has long been leery of being taxed per mile driven, likening this to a few states levying weight-distance taxes on heavy trucks. But the industry has been slowly coming around to the idea of replacing fuel taxes with per-mile charges. Trucking companies have been taking part in some of the federally-funded MBUF pilot projects in various states, and more recently in a multi-state pilot managed by The Eastern Transportation Coalition (formerly the I-95 Corridor Coalition). As I reported here last year, one outgrowth of this project was the creation of a motor carrier working group to advise the Mileage-Based User Fee Alliance.

It’s critically important that transportation policymakers continue to involve commercial trucking in these pilot projects, to learn about the unique aspects of commercial trucking and the institutions connected with it that may help or hinder an eventual transition to mileage-based user fees. But forcing one portion of commercial trucking to serve as the guinea pig, when there is no consensus on methods of charging, the best institutional arrangements to carry out the charging, enforcement and accountability measures, etc., is misconceived and unworkable. And if such legislation were actually enacted, it would set back progress toward the eventual transition that we all know is needed.

In particular, a basic premise of Mileage-Based User Fee Alliance and the growing number of pilot projects is that the per-mile charge should replace the fuel tax, whether at the state or the federal level. But Sen. Cornyn’s proposal would violate this by adding the new mileage tax on top of existing federal gas taxes on trucking. No one who wants to see the needed transition from gas taxes to mileage-based user fees actually happen should support adding these fees on top of gas taxes or singling out commercial trucking in this manner.

That said, the ATA/OOIDA letter goes somewhat overboard in making its case. While it presents some figures only for the Class 7 and 8 trucks in Cornyn’s proposal, many of its other claims are based on the entire commercial trucking industry. Second, the letter repeats the old canard that trucks don’t really do significant damage to pavement and bridges, debunking the 1962 AASHO Road Test as flawed and obsolete. In fact, there has been a lot of additional research on the relationship between truck axle weight and pavement and bridge strength and durability. See, for example, the research summarized in chapter two of the 1989 Brookings volume Road Work, by Small, Winston, and Evans. Nearly every civil engineering student learns about pavement strength and durability and learns formulas for the likely performance of both rigid (concrete) and flexible (asphalt) pavement.

The ATA/OOIDA letter states clearly that the industry is willing to pay more so that highways can be better funded, and this is clearly in the industry’s interest. And in my previous work a decade ago, I found that trucking companies willingly pay about four times as much per mile as cars do on U.S. long-distance toll roads, which shows that they understand the need to pay considerably more than cars to use our highways.

Sen. Cornyn and Congress should dump this divisive, trucks-only tax idea before it does irreparable harm to the needed transition from paying for highways per gallon to paying for them per mile.

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Prospects for Federal Automated Vehicle Legislation in the 117th Congress
By Marc Scribner

On May 18, the Consumer Protection and Commerce Subcommittee of the House Energy and Commerce Committee held a hearing titled, “Promises and Perils: The Potential of Automobile Technologies.” Several automotive safety technologies were discussed, but the primary focus was on automated driving systems (ADS) that hold the potential to relieve humans of driving responsibilities. This hearing came a week after another failed effort in the Senate to move forward federal ADS legislation as part of the Endless Frontier Act, with Sen. John Thune (R-SD) blaming opposition from “the trial lawyers and the Teamsters” as the reason why he lacked the votes to attach his amendment. Given that Democrats currently have tenuous control of both the House and the Senate, and that trial lawyers and unions are among the key Democratic constituencies, federal automated driving systems legislation in the 117th Congress faces strong headwinds.

One witness in the May 18 House hearing, AFL-CIO Transportation Trades Department President Greg Regan, indicated his member unions would oppose efforts to integrate highly automated vehicles into the federal automotive safety regulatory regime unless Congress and regulators mandated redundant human drivers to preserve unionized driver jobs. Such a move would contradict long-run automotive safety goals and longstanding safety policy.

Human error and misbehavior are responsible for nearly all crashes, and federal law does not allow speculative economic matters to override safety considerations. Requiring redundant human drivers during all ADS operation in perpetuity would also significantly undermine—if not eliminate entirely—the business case for ADS-equipped vehicles, where most companies investing in these technologies are seeking to eliminate human driver responsibilities and even, in some cases, human driving capabilities with purpose-built vehicles that lack conventional manual controls.

On the Senate side, the American Association for Justice (AAJ), formerly the Association of Trial Lawyers of America, has made shifting demands over the last few years, to the confusion and frustration of lawmakers and ADS developers. Most recently, AAJ has demanded a special rifle-shot exemption from the Federal Arbitration Act of 1925 that would prohibit arbitration clauses in future contracts between ADS-equipped vehicle providers and customers. The current draft bill is silent on—not supportive of—arbitration and the customer contracts at issue likely won’t exist for at least several years as the ADS technologies are developed to enable future commercial services.

The source of AAJ’s ADS arbitration fixation appears to be a major loss suffered by the plaintiffs’ bar in the Supreme Court’s Epic Systems decision in May 2018, which held that class-action waivers in employment arbitration agreements are enforceable under federal law. Prior to the ruling, AAJ had been at most a bit player in ADS policy discussions and its main output on the subject was a 2017 report of theoretical musings around future liability regimes for ADS-equipped vehicles. But even if Congress acquiesced to AAJ’s demand, it is unclear whether the plaintiffs’ bar would support the bill. When bipartisan, bicameral negotiators in December 2018 agreed to ban hypothetical arbitration clauses at the behest of AAJ, the group repaid the favor by publicly urging the bill’s defeat on different grounds that its lobbyists had not previously raised.

The next opportunity for ADS legislation in the 117th Congress is likely the safety title of the forthcoming surface transportation reauthorization. The current extension of the 2015 Fixing America’s Surface Transportation Act (FAST Act) authorization expires at the end of September, so Congress will need to come up with a full surface transportation reauthorization or another extension in the next four months. However, there is no indication that lawmakers are willing to break from special interests, especially as both major political parties seek to amass their campaign war chests heading into the 2022 midterm elections that will determine control of the House and Senate. For transportation policy, this is another disappointing turn of events and an example of unnecessarily partisan and special-interest–driven politics. Readers may recall that the House passed its similar ADS bill, the SELF DRIVE Act, by unanimous voice vote in 2017 but it did not advance in the then Republican-controlled Senate.

If Congress fails to include it in a surface transportation reauthorization this year, prospects for ADS legislation in the 117th Congress will be dim. While regulators at the National Highway Traffic Safety Administration can continue their slow work of modernizing Federal Motor Vehicle Safety Standards without congressional action, ADS developers will likely need to wait until at least 2023 for Congress to make the regulatory reforms they are seeking. The patchwork of state ADS policies driven by impatience with Congress’s failure to adopt uniform national ADS policy is likely to grow. And American developers may increasingly set their sights on more welcoming places abroad.

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Misplaced Critique of Revised Traffic Control Devices Handbook

An informal coalition of city, pedestrian, and bicycle organizations has been campaigning against the latest revision of the engineering document that sets standards and guidelines for traffic control devices. They claim the latest edition of the Manual on Uniform Traffic Control Devices (MUTCD) is biased against pedestrians and cyclists and should be replaced or significantly rewritten.

The very first pavement striping, stop signs, and electric traffic signals were developed ad-hoc between 1911 and 1920 in the early days of the automobile. In the 1920s, auto clubs and fledgling state highway departments recognized the need for uniform standards, and the American Association of State Highway Officials published the first manual on standard road marking signs and signals in 1927, but it applied only to rural roads. Further efforts by a Joint Committee on Uniform Traffic Control Devices led to the first national MUTCD appearing in 1935. Over the years subsequent editions, under the auspices of the Institute of Transportation Engineers (ITE), have responded to changing technologies and ongoing empirical research findings.

Today, while ITE still plays a major role, each new edition is reviewed and approved by FHWA and put out for public comment prior to being finalized. That accounted for the flurry of commentary on the draft of the latest edition, including a May 5 Bloomberg City Lab commentary by new urbanist Angie Schmitt, “Let’s Throw Away These Rules of the Road,” and a June 1 Wired piece by Aarian Marshall, “This Arcane Manual Could Pave the Way to More Human-Friendly Cities.”

Among critics’ claims in the articles were that, “The Manual consistently prioritizes operational efficiency for motor vehicles over safety,” and that “It lets engineers avoid installing Walk signals,” Schmitt quoted the National Association of City Transportation Officials as commenting. And, “It lets speeding drivers determine the speed limit,” a subheading in Schmitt’s commentary said.

A traffic engineer friend and colleague, who asked to remain anonymous, was dismayed by these critiques. First, far from ignoring pedestrians and cyclists, he noted that the word “pedestrian” appears 1,133 times in the new edition of the manual, “bicycle” appears 293 times, and “bicyclist” is mentioned 115 times. Regarding Walk signals, he explains that careful analysis is needed to determine where to place traffic signals in the first place and whether there is enough pedestrian traffic to include ‘walk’ signals (which in many cases increase the signal time to permit pedestrians enough time to cross). There are nine warrants that are to be followed in analyzing such decisions. Two of these nine are specifically based on pedestrian needs, and no warrant subordinates pedestrian safety.

And the much-criticized 85th percentile rule for speed limits is there in order to reduce large variations in speed among vehicles using a road, which are known to increase accidents.

The point is that traffic engineering invariably involves making trade-offs, which, unfortunately, does not seem to occur to some of the critics who bombarded FHWA with identical form letters that asserted defects and presented wishes not based on engineering analysis.

The comment period closed on May 14, so the decisions on any changes to the draft 11th Edition are now up to FHWA. I hope data-based engineering judgement prevails over feel-good critiques.

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News Notes

Benefits of Priced Managed Lanes Top Other Lane Additions
A highly detailed study comparing the social and economic impacts of four highway alternatives found that adding a priced managed lane produced better results than adding a regular lane or an HOV lane or tolling all the lanes of an existing freeway. The paper was presented at the 2020 Transportation Research Board Annual Meeting and has now been published in the Journal of Transportation Engineering, Part A: Systems. “Social Impact Analysis of Various Road Capacity Expansion Options: A Case of Managed Highway Lanes,” by Wooseok Do, et al., is available here.

“Are Electric Cars Better for the Environment?”
That was the headline on a March 25, 2021 article in the Wall Street Journal. The short answer is yes, but not as much as you may think. Drawing on researchers at the University of Toronto, the article compared life-cycle CO2 emissions of gasoline and electric vehicles, including construction, producing the energy source, and operation for up to 200,000 miles for a Toyota RAV4 and a Tesla Model 3. Over a 200,000-mile lifetime, the emissions of the Toyota are 78 tons, compared with 36 tons for the Tesla. Net savings from the Tesla begin at the 20,600-mile point. In addition, the Tesla also comes out slightly ahead in total cost of ownership, according to Consumer Reports.

Alabama Truckers Question Legality of Trucks-Only Toll Bridge
The Alabama Trucking Association sent a letter to the two metropolitan planning organizations (MPOs) on either side of the Mobile River questioning the constitutionality of building the replacement I-10 bridge over the Mobile River as a trucks-only toll bridge. Besides questioning the potential impact on the congested Wallace Tunnel, the trucking group questions the constitutionality of doing so, implying that it might litigate against the plan if it goes forward.

Pennsylvania’s Toll-Financed Bridge Replacements Still in Play
In late April, the Pennsylvania Senate voted to prohibit PennDOT from proceeding with its plans to toll-finance the replacement of nine aging Interstate highway bridges. The Republican Senate members also passed changes to the state’s P3 law that would require legislative approval before PennDOT could proceed with any highway P3 that involved tolling. With passage not assured in the lower house, PennDOT has announced plans to release its request for proposals for the project this month, with the RFP scheduled for December. The project would be done as design/build/finance/maintain with the private partner compensated by availability payments supported by the new toll revenues to be paid to the state.

In Search of Transportation Equity
On May 11, a former USDOT official presented testimony on this emerging topic to the Senate Environment & Public Works Committee (EPW). It is one of the most thoughtful presentations to a congressional committee I have ever read. Steve Polzin discusses the many trade-offs inherent in siting any transportation facility. He also reminds readers that roadways function as parts of a transportation network and must not be analyzed in isolation. And he also points out that removing 50-year-old roadways will inevitably result in shifts of traffic (and its externalities) to other parts of the network. A brief paragraph cannot possibly convey the depth and seriousness of this discussion, which should be required reading for everyone interested in transportation equity.

Parkersburg to Privatize Its Memorial Bridge
Last month, the city council of Parkersburg, WV, gave final (unanimous) approval to selling the aging Memorial Bridge to United Bridge Partners. The company has committed to invest $50 million to rehabilitate the toll bridge and replace cash tolls with modern electronic toll collection. UBP will pay the city $4 million for the bridge, and the city will save at least $15 million in near-term operating and maintenance costs. In recent years, UBP has replaced aging bridges in Virginia and Indiana under long-term P3 agreements and has more recently signed a contract to do likewise in Bay City, MI.

Moody’s Cautious on American Jobs Plan’s Transportation Elements
In a report released April 7, Moody’s Investors Service pointed out that the traditional infrastructure funding in the $2.3 trillion package would only “modestly” address roads, bridges, and highway funding needs over an eight-year period, and would not provide a long-term stable funding solution. The report also notes that the large funding increases for urban transit and Amtrak will face what may be permanently suppressed ridership post-pandemic. The report, “White House Plan Provides Boost for Core Infrastructure Assets, But Not Transformative,” requires registration.

Inflated Job-Creation Numbers for California High-Speed Rail
Intrepid Los Angeles Times reporter Ralph Vartabedian once again delved into the California high-speed rail project, this time finding the project’s job-creation claims are grossly exaggerated. Despite a banner at one of the high-speed rail construction sites reading “5,000 jobs and counting,” the actual number of construction workers employed at any one time has seldom exceeded 1,000. The 5,000 number comes from records of people dispatched to job sites from union halls. “Each time a worker is sent to a job site, whether for one day or hundreds of days, it counts as a job for the purpose of the banners,” Vartabedian reports. He also discovered that of the $6.1 billion spent on the rail project thus far, only $265 million has been spent on construction labor.

Turnpike Service Plaza Company Gets New Owner
HMS Host, which operates service plazas on toll roads including the turnpikes of Delaware, Indiana, and New Jersey, is being acquired by a consortium of Blackstone Infrastructure Partners, Applegreen LTD, and B&J Holdings LTD. Applegreen itself operates 161 service areas in the United States, while Host also operates restaurants and shops in many U.S. airports. The consortium is paying $375 million for HMS Host, and will be its successor in current long-term service plaza P3s with the Delaware, Indiana, and New Jersey toll road providers.

Most Urban Counties Are Shrinking, Per Latest Census Report
Economist Jed Kolko explained in The New York Times Upshot on May 4 that the latest population estimates from the Census Bureau show that most urban areas lost population in 2020 for the second year in a row, while lower-density suburbs grew the fastest in 2020. Most of these changes stem from domestic migration, rather than births or immigration. Among the 10 fastest-growing metro areas last year were Austin, Boise, Cape Coral (FL), and Phoenix. The 10 metro areas that shrank the most include Jackson (MS), Honolulu, San Jose/Sunnyvale, San Francisco/Oakland, Los Angeles/Orange County, and metro Chicago. There are many implications here for transportation planning.

Florida Turnpike Joins E-ZPass
At last, Florida is becoming a full-fledged member of the 19-state E-ZPass consortium. A May 28 announcement by the Florida Turnpike Enterprise informed motorists that they can obtain a SunPass Pro transponder that will work at all 35 member toll agencies of E-ZPass, and can be obtained for $14.95. The Central Florida Expressway Authority joined E-ZPass in 2017.

Kansas May Develop Express Toll Lanes on Congested Highway
The Kansas Department of Transportation and local Overland Park transportation officials are considering the addition of express toll lanes to the congested 69 Highway. Overland Park is located south of Kansas City and has been growing rapidly. The estimated cost of the project is $300 million, with projected toll revenues likely to be sufficient to finance the project.

New Report on Performance of Starlink Broadband Service
A company called Ookla last month released a report on the performance of the SpaceX satellite broadband service, now undergoing beta testing with a large group of customers. With the initial fleet of Starlink satellites (a small fraction of the planned constellation), service is better in the United States than in Canada, and its speeds depend considerably on location. The report says service meets FCC Rural Development criteria and “could be a cost-effective solution that dramatically improves rural broadband access without having to lay thousands of miles of fiber.”

Opposition Mounts to DC-Baltimore Maglev
Two organizations spoke out forcefully last month against plans to spend $14-17 billion in taxpayers’ money to build a maglev train that would make the trip between the two downtowns in 15 minutes. NIMBY opposition is coming from Prince George’s County council members, who are sending a letter against the project to the Maryland congressional delegation, the Maryland DOT, and the Federal Railroad Administration. They say the draft environmental impact statement (EIS) did not reflect negative impacts on their communities, such as land value decreases from a maintenance yard and an electricity substation. The 40-mile route would be partly underground and would have only one intermediate stop (at BWI Airport) between Washington, DC, and Baltimore. And in congressional testimony last month, Amtrak CEO William Flynn argued that tax money would be better spent on improving commuter MARC rail service and replacing Amtrak’s ancient tunnel near Baltimore. If the maglev project experienced a typical cost overrun of 40 percent, its cost per mile would be around $542 million.

New Report Details Post-Construction P3 Performance Measures
Most studies on long-term highway design build finance operate maintain (DBFOM) P3s have focused on the procurement process and the construction phase, but few have dealt with longer-term performance and end-of-concession hand-back provisions. The National Cooperative Highway Research Program has released a new study to fill that gap: “Performance Metrics for Public-Private Partnerships.” The researchers reviewed metrics and the handback criteria for 18 P3 projects in nine states, as well as a survey of 26 state transportation departments. My one concern is that only two of the six case studies were revenue-risk P3s, both of which failed due to overly aggressive traffic and revenue projections. There have been 17 revenue-risk highway P3s thus far, so it’s unfortunate that successful examples like I-495 in Virginia and I-635 in Dallas were not selected.

Commentary Clarifies Types of Private Activity Bonds (PABs)
The public-private partnership community has made extensive and productive use of tax-exempt private activity bonds as part of the financing of nearly two-dozen DBFOM transportation projects, using up the entire $15 billion authorized years ago by Congress. My colleague Marc Scribner discovered in discussing an increase or abolition of that cap that some members of Congress were opposed, thinking these were the kinds of PABs used to finance sports stadiums and other boondoggles. To set the record straight, Marc has written a commentary, on the subject, explaining the different kinds of PABs.

Honolulu Heavy Rail Project’s Ongoing Woes
What can you say about a 20-mile elevated heavy rail transit project that was supposed to cost $5.1 billion and open by January 2020 but is only half-built and is now estimated to cost $12.4 billion and begin service by 2031? My Reason colleague Marc Joffe reviews this project as a cautionary tale of not achieving value for money.

Vehicle Autonomy Is Far Harder than Many Thought
In a recent piece at The Verge, Andrew Hawkins explains recent divestitures and mergers in the automated vehicle world. He assigns blame for this to three hard truths. First, true vehicle automation will take a lot longer to reach mass scale than previously thought. Second, it’s going to be a lot more expensive. Third, going it alone is no longer a viable option. This is a well-informed dose of skepticism about a field noted for relentless hype.

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Quotable Quotes

“Biden warned that U.S. infrastructure is ‘ranked 13th in the world,’ as if that were shameful to outscore about 90 percent of the 141 economies analyzed in 2019 by the World Economic Forum. In fact, 13th place represents an upward shift of about 10 spots since the 2011-2012 WEF survey. . . . Among the 10 geographically largest countries, including Canada, Australia, China, and Russia, the United States places first, based on WEF criteria. The United States is also top among the 10 most populous countries. . . . The ASCE’s 2021 report card gave the United States a C-. But that was the best grade in 20 years. ‘Five category grades—aviation, drinking water, energy, inland waterways, and ports—went up, while just one category—bridges—went down,’ relative to ASCE’s 2017 report card, the organization acknowledged.”
—Charles Lane, “Opinion: No, America’s Infrastructure Is Not ‘Crumbling,’” The Washington Post, April 6, 2021

“In Chandler (AZ), [first best] is your car parked in your garage. You don’t even have to go outside in all that heat. Waymo’s got to be really good to beat that! Waymo might end up getting close to that good, but in the beginning its chances are slim-to-none. Not that the car in the garage doesn’t have an enormous amount of ‘excess baggage.’ . . . ‘Your go-to mobility is your car. Your car allowed you to consider the Chandlers of the world as a place where you want to live. That’s a challenging marketplace for Waymo. A better place for Waymo [and other AV producers] to start is a market where they can easily deliver better service—concentrations of households that have zero or only one car—. . . . which, once they can use Waymo, would substantially improve their lives. . . . The census identifies many communities and inner suburbs that have substantial densities and zero or one-car households. For example, Trenton, New Jersey. Numerous Trenton residents would readily perceive Waymo as the Google in their trip mode-choice.”
—Alain Kornhauser, “Why Hasn’t Waymo Expanded Its Driverless Service?” Smart Driving Cars, May 8, 2021

“For ship [port] calls greater than 6,000 TEU—i.e., most mega-ship calls—it takes 24 seconds on average to load or unload a container at Yangshan, Qingdao, and Yantian, versus 48 seconds at Los Angeles, double the time, according to IHS Markit Port Performance data. In remarks to the JOC’s virtual TPM21 conference, Ocean Network Express CEO Jeremy Nixon noted that ports in Asia operate vessel berths and terminal gates 24/7, or 168 total hours per week, compared with only 112 hours per week for berths and 88 hours per week for truck gates at LA-Long Beach.”
—Peter Tirschwell, “Freight Policy’s ‘Third Rail’,” The Journal of Commerce, April 26, 2021

“Climate court cases are not last-ditch efforts to compel democracies to ensure a livable planet. Instead, they simply shortcut the pesky democratic process to ensure the spending preferences for a subgroup that couldn’t get a majority vote for their proposals. This undermines democracy. Society is about navigating collective wants much larger than the available resources, and voting is how we square that difficult circle. Well-meaning activists shortcutting those trade-offs is essentially a way to force climate action at the expense of all other worthy goals. And for well-meaning judges across the rich world to play along is opening a Pandora’s box for all sorts of litigation. Why shouldn’t thousands of other special interests bypass democracy and appeal directly to the courts to deliver their preferred outcome, from pot-hole-free roads to abundant teachers for children and access to even the most expensive cancer drugs?”
—Bjorn Lomborg, “The Courts Are No Place to Combat Climate Change,” New York Daily News, May 18, 2021

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The post Surface Transportation News: President Biden’s Jobs Plan, New Transportation Finance and Public-Private Partnership Reports appeared first on Reason Foundation.



Source: https://reason.org/transportation-news/president-bidens-jobs-plan-new-transportation-finance-and-public-private-partnership-reports/


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