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A Few Questions Concerning the President’s FY 2012 Budget Submission on Transportation

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Thumbnail image for Thumbnail image for Ken-Orski-Headshot.pngFebruary 16, 2011

The President’s FY 2012 Budget submission on transportaton has raised more questions than has offered answers.  The President said he will make sure that his transportation program will be “fully paid for” and pledged to work with Congress to ensure that funding for surface transportation will not increase the deficit. But  these  vague expressions of intent are hardly appropriate in a Budget message which traditionally was meant to offer Congress and the public concrete explanations on how  the Administration intends to fund its proposed program initiatives.
 
Here are a few questions that beg for more specific answers. Since the Republican House leadership has already announced its intent  to limit the future surface transportation budget authority to tax revenues deposited into the Highway Trust Fund,  where will the additional  money come from to fund the proposed FY 2012  surface transportation program of $107 billion  or the six-year surface transportation bill amounting to $556 billion? The tax revenues generated by the gas tax are estimated to total  $36.8 billion in FY 2012 and $230 billion over the next six years according to the latest projections of the Congressional Budget Office. How does the President propose to bridge the $70 billion funding shortfall in FY 2012 and the $326 billion shortfall over the life of the next reauthorization?
 
The President has proposed a Passenger Rail account to be added to a new unified Transportation Trust Fund. What will be the source of revenue for the Passenger Rail account? Will it be a tax on rail tickets? And what will be the source of funds for the proposed $30 billion National Infrastructure Bank. Again, the President’s Budget is silent on it. 

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Transportation Report Calls for Discipline and Focus

Transportation policy specialists at the Bipartisan Policy Center (BPC) have released a new report that offers guidance for future transportation spending. The report, “Strengthening Connections Between Transportation Investments and Economic Growth,” critiques the current thinking about the correlation between infrastructure investments and job creation. The report’s authors, Douglas Holtz-Eakin and Martin Wachs, provide suggestions on how the federal government should move forward. “The future of transportation policy is central to economic policy. Despite what has long been argued, investments in transportation infrastructure are not guaranteed to create jobs and simultaneously grow the economy. We must ruthlessly focus on economic growth, immediately and in the future,” said Dr. Holtz-Eakin. “The need for investment is clear: our roads are deteriorating and our Read More ›


What Lies Ahead for Transportation in the 112th Congress?

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January 21,  2011

As Congress gets back to business and awaits the President’s State of the Union address and his Budget Message, here is how informed observers view the prospects for transportation in the days ahead. Our prognosis is  based on published reports and informal conversations with members of the Washington transportation community, congressional sources and fellow journalists and reporters  

Congressional action on transportation this year, including the shape of the next surface transportation bill, will be inevitably influenced by the changed political geography of the 112th Congress. Not only will the level of funding for transportation be dictated by new, fiscally conservative House majority , but the program priorities will be influenced by a newly elected GOP representation that largely hails from small-town and suburban America.

The
freshly re-constituted House Transportation and Infrastructure
(T&I) Committee is comprised of 33 Republicans and 26 Democrats, a
net decrease of 16 members. Of the 33 Republicans, 20 are newly elected
House members and only 13 are committee veterans with transportation
experience. A majority of the new GOP members come from the heartland
and none of them represent big city transit-oriented districts.  The
closest to a major urbanized areas that any of the Republican members
come from, are Oklahoma City and Charleston SC. The new chairman of the 
House Highways and Transit Subcommittee, John Duncan, represents
Tennessee’s conservative 2nd congressional district and the chairman of
the House Transportation Appropriations subcommittee, Tom Latham, comes
from a  rural district of Iowa.   

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LaHood’s Brain Teaser on Investing in Passenger Rail

The following is reprinted with permission from Federal Transportation Issues, a blog of the Washington State Department of Transportation. The views expressed do not necessarily represent those of Cascadia Center of Discovery Institute. 

By Larry Ehl

Last week Secretary LaHood offered this brain teaser related to the
current debate over investing in high speed rail: What if President had
“waited until he had all the cash on hand, all the lines drawn on a map,
and all the naysayers on board.” His answer:

“America would not boast the state-of-the-art interstate highway system
we have today. . . .When it comes to high-speed rail, we stand at a
similar crossroads. And, if we fail to prepare for the decades ahead by
taking similarly innovative steps to add capacity to our infrastructure,
we will shortchange future generations and deprive them of the tools
they will need to compete in a global economy.”

LaHood goes on to say that “With our population expected to swell by 70
million over the next 25 years, continuing to rely on congested highways
and overburdened airports is simply unsustainable and would constrain
America’s economic growth.”

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Cascadia in the News: When Rail, Coal and Politics Collide

The Cascadia Center was quoted in a Crosscut story about the possible collision of interests in coal production and export, passenger and freight rail, and political interests in Washington state. Bruce Agnew, who is heading a passenger-train “modeling” exercise for the Cascadia Project and Whatcom County governments, says, “It is clear that expansion of coal trains from the Powder River Basin through Northwest ports to China is their (BNSF) major strategic initiative.” Agnew is trying to find ways to double or triple the number of passenger trains scheduled from Seattle to Vancouver, B.C., but hits serious obstacles north of Everett, where every train runs on a single track with limited sidings. Of particular note is the narrow rail bed below Read More ›


Tunnel Contract to Be Signed

Seattle will soon be one step closer to constructing a tunnel to replace to Alaskan Way Viaduct. As reported in the Seattle Times, by the close of business today, the state Department of Transportation will have signed a “$1.1 billion contract…for construction of its proposed Highway 99 tunnel.” The four-lane passage from Sodo to South Lake Union would be drilled by a 58-foot-wide boring machine — the world’s widest — through glacial soils that are mostly stable, but abrasive and laced with groundwater and small boulders. The state chose Seattle Tunnel Partners for its contract. Read more about the Viaduct and Seawall Replacement project here.


Federal Transportation May Skid Off the Road

Proposals are under consideration to change the way transportation is funded nationally, and the consequences are not very promising for transportation, or, for that matter, the federal budget. The reforms put forward by Republicans Bud Schuster and Don Young, and enacted by a Republican Congress, a dozen years ago guaranteed transportation trust fund spending levels. The rules change proposed by the new House GOP leadership would allow the guaranteed level to be lowered by the Appropriations Committee, thereby essentially putting the Transportation Trust Fund budget–still funded mainly by transportation taxes–into the same pot as other general expenditures. It is a poor idea, but more important, it seems like a bootless enterprise, and a potentially time consuming one. It would cost Read More ›


A Fresh Look at the Prospects for Transportation in the New Congress

Last month we conducted an informal survey among colleagues in the transportation community about the outlook for the federal surface transportation program in the year(s) ahead. (“Prospects for Transportation Legislation and Other Infrastructure Ventures,” InnoBriefs, October 29). One comment from a veteran transportation insider summed up concisely the collective mindset: “There will be nothing ‘transformational’ about the future program,” he opined. As more details begin to emerge about the Republican strategy in the next Congress, his observation is proving to be right on target. What follows is a fresh look at the prospects for the transportation program in the 112th Congress, based on new information — and in some cases, speculation — from congressional and other Washington-based sources.

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Cascadia Urges Northwest to Seek Unused Rail Funds

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Following the news that several governors-elect in the Midwest are indicating they will opt-out of high-speed rail funds from the federal government, Cascadia Center and advocacy group All Aboard Washington have urged Northwest leaders to act fast in case those funds might be reallocated to other corridors, such as the Cascadia Corridor. From a letter signed by Cascadia and All Aboard Washington and addressed to Governor Gregoire:

We are proud of the direct role you took in helping convince the Canadian government to continue to waive the inspection fee for the second Amtrak train to Vancouver, B.C. Your letter to Public Safety Minister Vic Toews that articulated the economic benefits to B.C. helped save the day.

We again need your advocacy for future high-speed rail (HSR) on the Amtrak Cascades corridor from Eugene, Ore. to Vancouver, B.C. We request that you share with U.S. Department of Transportation Secretary Ray LaHood, Federal Railroad Administrator Joe Szabo and Talgo executive Antonio Perez that Washington state has an interest in any reprogrammed HSR funding that might result from other states rejecting their funding allocated in the Recovery Act.
Our state’s excellent technical applications secured nearly $640 million in the first two rounds of funding, and we believe they should receive an equitable proportion of any redirected funding.

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Branson’s Virgin Group Steps Into U.S. Rail Arena

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Photo Source: Virgin Group

There are entrepreneurs. And then there is Richard Branson. Branson,
who waded into the U.S. transportation world with Virgin America
Airways (which just reported its first quarterly profit), appears ready
to try his hand at a less-proven transportation mode — at least for
the U.S., anyway. The Virgin Group founder has, according to The Wall
Street Journal
, “joined an all-European consortium that plans to bid
for Florida’s planned high-speed rail line.”

Virgin, which operates a rail franchise in the U.K., sees the market as
a natural extension of its existing U.S. transport activities, which
include Virgin Atlantic Airways–a big player in the Orlando airline
market–and Virgin America.

Whether or not Branson and others have a chance to bid on anything may still be up in the air. As
National Public Radio reports, “high-speed rail may be among the
casualties of last week’s midterm elections.”

The newly elected
governors of Ohio and Wisconsin have indicated they don’t want the
money allocated for high-speed rail to their states. In Florida,
according to The Wall Street Journal, the group Branson is joining for the bid “would be among eight potential bidders for the main portion of the
84-mile-long project.” The Florida project “could be the first such
project to move off the drawing board in the
wake of the Obama administration’s high-speed rail push, provided it
isn’t scuttled by the state’s new governor-elect, Republican Rick
Scott.”

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