Search Results for: rail projects

FAST Act Repoliticizes Transportation

By | | Transportation
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Last week’s Congressional passage of the 1,301-page Fixing America’s Surface Transportation (FAST) Act represents, for the most part, a five-year extension of existing highway and transit programs with several steps backwards. Once a program that was entirely self-funded out of dedicated gasoline taxes and other highway user fees, over the past two-and-one-half decades the surface transportation programs has become increasingly dependent on deficit spending. The FAST Act does nothing to mitigate this, neither raising highway fees (which include taxes on Diesel fuel, large trucks, trailers, and truck tires) nor reducing expenditures.

If anything, deficit spending will increase under the FAST Act, which will spend $305 billion ($61 billion a year) over the next five years. Highway revenues, which were $39.4 billion in F.Y. 2015, are not likely to be much more than $40 million a year over the next five years, so the new law incurs deficits of about $20 billion a year. The law includes $70 billion in “offsets”–funding sources that could otherwise be applied to reducing some other deficit–which won’t be enough to keep the program going for the entire five years.

Aside from deficit spending, the greatest mischief in federal surface transportation programs come from competitive grants. When Congress created the Interstate Highway System in 1956, all federal money was distributed to the states using formulas. But in 1991 Congress created a number of competitive grant programs, supposedly so the money would be spent where it was most needed. In fact, research by the Cato Institute and Reason Foundation showed that Congress and the administration tended to spend the money politically, either in the districts represented by the most powerful members of Congress or where the administration thought it would get the greatest political return for its party.

The 2012 surface transportation law contained no earmarks and turned all but two major competitive grant programs into formula funds, thus taking the politics out of most transportation funding. This upset some members of Congress because they could no longer get credit for bringing pork home to their districts. So it is not surprising that the FAST Act goes backwards, putting more money into political grants than ever before.

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The Art of the Deal

By | | Transportation, Urban areas
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Over at Market Urbanism, economist Emily Washington argues that Washington, DC’s Silver Line was the result of a deal between property owners, urban planners, and Washington Metro (WMATA). The result was a new rail transit line that harmed just about everyone except those who were party to the deal.

Washington’s tale is correct in general, but my memory of it differs in the particulars. She is right that the main pressure for the Silver Line came from the owners and developers of Tysons Corner, who wanted to build more high-rise housing, hotels, retail, and office space. Fairfax County wouldn’t approve these plans because the area wasn’t served by adequate transportation.

Far from favoring the rail project, however, Fairfax County planners recognized that too few people would ride the rail line to support the proposed new developments. Though the planners questioned the new plans, they were overruled by the county supervisors.

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Higher Cost = Less Affordable, Not More

By | | Housing
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Portland columnist Steve Duin laments that the city is not doing more to make housing affordable. He proposes to either tax new homes and use the money to build affordable housing or to mandate that developers to sell or rent a certain percentage of their new homes at below-market prices (inclusionary zoning).

The problem with either of these policies is that they create a few “affordable” homes by making housing more expensive for the vast majority of renters and homebuyers. Taxing new homes obviously makes them more expensive. But like the rising tide lifting all boats, it also raises the price of existing homes because sellers of those homes see that their competition–new homes–is more expensive so they can ask for more too.

Research has shown that inclusionary zoning leads developers to build fewer homes and then to sell the market-rate homes they do build for higher prices to make up for the losses on the below-market homes. Since inclusionary zoning pushes up market rates for new homes, that same rising tide makes all other homes less affordable as well.

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Three Months of Work for a Three-Week Bill

By | | News commentary, Transportation
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After three months of debate, Congress has agreed to extend federal highway and transit spending for three weeks. Authority to spend federal dollars (mostly from gas taxes) on highways and transit was set to expire tomorrow. The three-week extension means that authority will expire on November 20.

Many members in Congress hope that the three-week delay will allow them to reconcile the House and Senate versions of a six-year bill. Among other things, the Senate version spends about $16.5 billion more than the House bill, $12.0 billion on highways and $4.5 billion on transit. The two bills also use different sources of revenue to cover the difference between gas tax revenues and the amounts many members of Congress want to spend.

To cover this difference, the Senate bill, known as the “Developing a Reliable and Innovative Vision for the Economy Act” or DRIVE Act, provides three years of funding by supplementing gas taxes with new customs, air travel, and mortgage-backed securities guarantee fees. The House bill, called the Surface Transportation Reauthorization and Reform Act, doesn’t offer any source of funds; instead, House Transportation & Infrastructure Committee Chair Bill Shuster merely expressed hope that the House Ways & Means Committee would find a source of funds.

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A Businessman for President?

By | | News commentary
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Donald Trump leads in the polls with 23 percent of Iowa Republicans, while Rand Paul, the most libertarian candidate of the bunch, scores a measly 4 percent. Perhaps the “libertarian moment” is already over.

The Antiplanner won’t comment on many of the things candidate Trump has said, other than they are often ridiculous. But one thing said about Trump is that he would make a better president because he is a businessman, not a professional politician. People apparently imagine that Trump’s business experience would make him a better guardian of taxpayer dollars.

In fact, there’s no reason to expect that. People who think business people would make good political leaders are confusing business with economics. Economists ask, “are the benefits greater than the costs?” and “who benefits and who pays?” Business people don’t ask these questions; they only ask, “can we generate revenues greater than costs?”

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Why Transit Systems Are in Such Bad Shape

By | | Transportation, Urban areas
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“Why are our transit systems faltering just as more people than ever want to use them?” asks Thomas Wright of the Regional Plan Association, which has advocated urban planning in the New York metropolitan area since 1922. His answer is that it has to do with “with the way our government institutions are structured.” He is right in general but wrong on the particulars.


New York City subway and elevated train fares cover more than 60 percent of operating costs, but no maintenance costs. Wikipedia commons photo by AEMoreira.

Transit, at least in the New York metropolitan area, did just fine, he says, until the 1950s, when “the federal government started building the interstate highway system, offering big subsidies to states to connect to it.” When that happened, “mass-transit operators struggled to compete with these roads and started going bankrupt.” They were unwillingly taken over by the government, which “merged the workings of mass transit and toll roads to provide cross subsidies.”

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Back in the Air Again

By | | Transportation, Urban areas
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The Antiplanner was in Phoenix this week debating light rail with proponents of a ballot measure that would increase sales taxes in order to expand that city’s rail system. In addition to a public forum, a brief debate was televised and is available on video.

After the Antiplanner’s review of the existing light-rail line debunked claims that the line stimulated $7 billion in economic development, Valley Metro published a new paper claiming that it stimulated $8.2 billion in development. This $8.2 billion still includes projects that haven’t yet (and may never be) built. However, the new paper does not provide a complete list of the developments supposedly built because of the light rail, and the agency has been unresponsive to requests for such a list, but it is clear Valley Metro merely counted anything that happened to be built within a half mile of a light-rail station without asking whether those projects would have been built without the rail line.

In their campaign for the ballot measure, proponents claim the increased sales tax will provide money for repaving and improving streets. It is clear from the city’s transportation plan, however, that most if not all of the street money will be used to reduce the capacity of streets for cars in favor of more room for buses and bicycles (see exhibit A on page 18). Even if the city intended to improve streets, any light-rail cost overruns would quickly eat up most of the street money.
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What’s Conservative about Big Government?

By | | Transportation
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Continued and increased federal funding of highways and transit is vitally important, says Jack Schenendorf in a paper titled, The Case Against Transportation Devolution. Devolving transportation to the states “would conflict with the nation’s long and unbroken history of federal transportation investment, balkanize the nation’s transportation networks, cause a substantial drag on the economy, and bring about a host of other serious problems.”

Schenendorf may be a Republican, but that doesn’t make him a conservative, at least not in the fiscal sense. He was the chief of staff for the House Transportation and Infrastructure Committee from 1995 to 2001. Those happen to be the years when committee chair Bud Shuster (R-PA) made himself known as “one of the most shameless promulgators of pork-barrel spending in all of Congress.” Shuster has all sorts of highways, museums, and buildings named after him throughout his district and state, and he paved the way for his son, Bill, to take his seat when he retired. Today Bill also chairs the House T&I Committee.

Also during those years, Congress passed the 1998 transportation bill, TEA-21, which happened to be the first law that mandated increased spending every year even if revenues did not keep up. While that only became a problem in 2007, it is the main reason why Congress is gridlocked today. In other words, Schenendorf is part of the reason why the federal transportation funding process has broken down.

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Is All Aboard Florida a Scam?

By | | Transportation
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All Aboard Florida is a plan by the Florida East Coast Railway (FEC) to run moderate-speed passenger trains from Miami to Orlando. Where a highway trip over the route takes about four hours, FEC promises train times of just three hours. While an airline trip is just an hour, when an hour is added for going through airport security, FEC thinks their route will be competitive.

The railway’s ridership study estimates the operation will attract 4 million riders per year by 2019 and that the fares these riders will pay will be enough to operate the line as well as cover the capital cost of building 40 miles of new rail between the FEC’s current tracks in Cocoa and Orlando Airport. However, a counter-study by Brown University economist John Friedman and funded by Citizens Against Rail Expansion, which opposes the train, disagrees.

Friedman estimates the line will only attract 1.5 to 2.0 million passengers a year and the fares they will be willing to pay will come nowhere near covering the railroad’s costs. As a result, it will have losses of more than $100 million per year and will soon default on the debt it plans to incur to build the new line.

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Still Gridlocked

By | | Transportation
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The Antiplanner is in Washington, DC, today, where Congress remains as gridlocked as ever over federal transportation programs. Though Congress traditionally passes highway and transit bills for six-year periods, the last six-year bill was passed in 2005 and since it expired in 2011 Congress has passed something like two dozen short-term extensions. The longest of these, MAP-21, made a few changes to the 2005 bill but lasted only two years. Shorter extensions, including the two-month extension passed last month, merely continue the status quo.

The federal government takes in about $40 billion in gas taxes per year, and these are dedicated to the Highway Trust Fund which funds both highways and mass transit. The problem is that Congress has been spending something like $52 billion on highways and transit per year and doesn’t know where the other $12 billion will come from. Congress is divided between those who want to cut spending to equal revenues, those who want to increase gas taxes to equal spending, and those who want to find some other source of revenues to cover spending.

Oregon Representative Earl Blumenauer, who favors a gas tax increase, wants to stop the pattern of short-term extensions to force Congress to make one of the three choices. Considering both the administration and most Republicans oppose a tax increase, his proposal was a bold move, and I can’t help but respect him for his stand even if I disagree with him on most federal transportation policies.

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