Monthly Archives: March 2012

Congress Extends Transportation Bill 90 Days

The Senate reluctantly agreed to a 90-day extension of the 2005 transportation bill. This means the federal government will continue to spend more money on transit and highways than it collects in gas taxes and other highway fees.

Senate Democrats rancorously blamed the 90-day extension, as opposed to the two-year extension passed by the Senate, on laziness. “They run off on their vacation and leave the people twisting in the wind,” said Barbara Boxer (D-CA). “They sent out a signal that America should be ready for hardship,” she continued.

But, as noted here before, it is less laziness than it is a fundamental difference in views. For the past several years under the 2005 bill, Congress has been spending more than it takes in. This means it has three choices: raise taxes, cut spending, or continue to deficit spend. No one is talking about raising taxes, at least not while the economy is still recovering.

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Brinkmanship

Having failed to pass a reauthorization bill, Congress has only a few hours to extend the current law, which expires on Saturday. On Tuesday, however, the House failed to pass a 90-day extension to the law. On Wednesday, it failed to pass a 60-day extension to the law.

Supporters of an extension are are making all kinds of dire predictions of what will happen if the law isn’t extended: states won’t get federal dollars, so they will have to cancel or postpone projects, which will put people out of work, etc. No doubt these claims are exaggerated: states typically borrow money and eventually repay it with their share of federal formula funds. A delay of a few days is not going to make much of a difference.

Curiously, the main opponents of an extension are Democrats who are holding out for the House to support the Senate bill. But, as Ken Orski describes in two articles, the Senate bill is unsustainable and Congress will have to face budget shortfalls by raising taxes, increasing deficit spending, or reducing spending.

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Hiding in the Bills

One of the special-interest provisions in the transportation bill that passed the Senate a couple of weeks ago is a requirement that operators of passenger trains be licensed by the Surface Transportation Board. There is one and only one exception: Amtrak.

Supposedly, this could give Amtrak an edge when it competes with other companies for contracts for local commuter-rail service. Since Amtrak has lost business to Veolia and other private rail contractors in many cities, some people think this provision was written to support Amtrak and the transit unions that represent Amtrak employees.

While this seems sinister, it is nowhere near as bad as a provision in the supposedly fiscally conservative House bill that would direct the federal government to write a National Freight Policy. The provision is based on legislation written by the ironically named Representative Adam Smith (D-WA).

It isn’t enough that federal control or funding has made Amtrak and the transit industry some of the least productive parts of the nation’s economy. Now they want to ruin the freight sector as well. That alone made it worthwhile to kill the bill.

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Dreams of Trains

Speaking of dreams, some of the Antiplanner’s best dreams involve riding intercity trains, particularly riding in a dome car. I had my first ride in a dome car when I was a young boy and my family took the Northern Pacific North Coast Limited from Portland to Fargo, during which trip I spent most of the daylight hours in the dome.

Since then, I’ve been in domes on the Great Northern Empire Builder, Canadian Pacific Canadian, Rio Grande Zephyr, Southern Crescent, and almost every Amtrak and VIA route that ever carried domes. Not to mention the Alaska Aurora, whose domes came from the Union Pacific. I will forever believe that riding in a dome is the most elegant way to travel.

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Semi-Driverless Cars Available Soon

Continental Automotive, a company that makes tires and other parts, has put together a semi-driverless car for Nevada. Under the rules in that state, which legalized driverless cars last year, a car must successfully go 10,000 miles without an accident before being marketed in the state. Continental’s car, which is based on a Volkswagen Passat, should pass that mark this week.

Continental’s car is not completely driverless. Instead, it takes over the driving on an urban or rural highway, steering within the lanes, keeping pace with traffic, and avoiding collisions with other vehicles. A human driver has to take over to change lanes or exit the highway.

Still, this is a good first step. While the Google driverless car is equipped with an expensive, spinning laser beam that detects all other objects in a 360-degree circle around the car, the Continental car uses lower-cost sensors that are already standard on many high-end cars. Once certified in Nevada, it is likely that a car like this will be on the market in a couple of years.

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Crony Infrastructuralism

Last night, the Antiplanner dreamed that Apple, the company with the highest market capitalization in the world, was spending some of its $97 billion in cash on roads, bridges, and other local infrastructure. A crazy idea, I know, but then, in the dream, some politician says, “What a great idea! Let’s create some TIF and special assessment districts so other corporations can help our infrastructure too.”

Somewhere between dreamland and waking up, I tried to explain why this was a bad idea. Suppose a town has two business districts, I said, and one is doing poorly compared to the other, possibly because it is older. Shops, restaurants, and other tenants turn over frequently, vacancy rates are high, and the shops that do exist tend to be downscale, including thrift stores and antique malls. The other district, perhaps because it is newer, is doing much better.

Suppose the city creates a special-assessment district around the older area and uses the funds to update the infrastructure. Unfortunately, the assessments, i.e., taxes, paid by the property owners in the district force them to raise rents, which causes even more turnover. The other district will probably complain and demand its own infrastructure improvements, which the wealthier property owners will more easily afford and thus give that district an even greater advantage over its rival.

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FTA Questioned Honolulu Rail Boondoggle

Internal emails reveal that Federal Transit Administration officials were skeptical of Honolulu’s plan to spend $5.3 billion on a 20-mile rail transit line. City voters approved this line only after an expensive and hard-fought campaign. One FTA email accused the city of Honolulu of “lousy practices of public manipulation” and argued that the FTA should not only avoid being associated with it, it should “call them on it.”

This and other documents were turned over to plaintiffs in a lawsuit arguing that the city’s environmental impact statement (EIS) failed to consider a full range of alternatives. In a 2006 comment on the city’s plans to write the EIS, FTA staffer James Ryan noted, “We seem to be proceeding in the hallowed tradition of Honolulu rapid transit studies: never enough time to do it right, but lots of time to do it over.” Another FTA official, Joseph Ossi, replied, “This isn’t an FTA issue. Let the city deal with it. They have produced 3 failed projects and are well on their way to a fourth, so why is FTA wasting time on the City’s problems?”

“This is different,” a third FTA staffer, Raymond Sukys, answered. “This time [thanks to a tax increase] they have a huge cash flow which will build something. It seems likely that we will get involved in litigation again especially since we have an erroneous NOI out there. I do not think the FTA should be associated with their lousy practices of public manipulation and we should call them on it.” The “NOI” is the “notice of intent” to prepare an environmental impact statement, and Sukys apparently thought Honolulu’s NOI was insufficient because it failed to identify a full range of alternatives.

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Shooting Themselves in Their Feet

After fiscal conservatives successfully scuttled a House transportation bill that would have ended pork and allowed Congress to minimize deficit spending, the Senate has passed a bill that is full of pork and will practically mandate deficit spending. The good news, such as it is, is that the bill only reauthorizes federal spending for two years, meaning–if the House passes a similar bill–the whole debate can begin again in a year-and-a-half.

The Washington Post calls this bill an “overhaul” of federal transportation programs, but the Huffington Post points out that it is hardly “transformative.” Instead, it is basically the 2005 bill with a few minor tweaks here and there, none of which should please fiscal conservatives. These include disincentives for states to lease their roads to private toll concessionaires, increased funding for “TIFIA” loans, and greater federal safety oversight of public transit and tour bus companies.

Most importantly, the bill keeps continues to fund most transit programs out of gasoline taxes, which means transit agencies will remain almost completely divorced from transit riders. When 80 percent of your funds come from taxes, not user fees, you just don’t have much an incentive to cater to users. Despite claims of “soaring transit ridership, ridership has essentially been flat for the past six years (compare 2010 and 2011 with previous years on p. 10).

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Interlude

The Antiplanner came away from a trip to Las Vegas last week with a sense of awe that such a place actually exists and a feeling that Las Vegas is what America will be. At least, the retail portions of America, from WalMart to Krogers to Penneys to Macys, will have to be as exciting as Las Vegas if they are to compete against the Internet. (One retailer who has long understood this is Jungle Jim’s International Farmer’s Market, outside of Cincinnati, but that’s another blog post.)

Unfortunately, I also came away with a bad head cold, so in lieu of a regular post here are some links to some recent PowerPoint shows and other noteworthy articles.

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