california

Secretary of the U.S. Department of Transportation under George W. Bush, Mary Peters recently told the Austin-San Antonio Corridor Growth Summit that the country needs to move toward a vehicle miles traveled (VMT) tax to replace the failing gas tax. At the same time, a new survey conducted by the Mineta Transportation Institute at San Jose State University shows drivers warming to a mileage tax if lower emission vehicles get discounted rates. At issue is how to pay for maintenance and expansion of roads and transit systems after 40 years of vast growth in system use, and looking toward a tricky double-whammy. More population and jobs in coming decades will strain metro-region surface transportation systems, while flattening per-capita miles driven and greater fuel efficiency are curtailing growth in the per-gallon gas tax revenues that have traditionally been the prime source for surface transportation funding.
Broad implementation of the mileage tax is at least 10 years off, maybe 15. In the nearer term, variable-rate, electronically tolled express lanes are needed aside free lanes on major metro region highways, along with expanded opportunities for public private partnerships and other local and regional funding tools. Eventually, the mileage tax could be levied for travel on arterial and feeder roads, plus highways, with discounts for less congested routes, and possibly, lower emission vehicles. Incentives such as pay-per mile car insurance and meter-less, ticket-less parking could help compensate for privacy concerns. With a slew of VMT pilot projects, technical studies and surveys completed and more underway or coming, this bold policy initiative continues to gain momentum. Here’s the San Antonio Express-News on Peter’s remarks:

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When Congress passes a new $450 billion six-year surface transportation reauthorization sometime in the next 18 months or so, it would directly yield $90 billion per annum, split nationwide over its term. That probably sounds like a lot of money, but it’s not. As the House Transportation and Infrastructure Committee’s blueprint for the reauthorization bill notes on p. 7, needed U.S. road and transit projects require $225 billion to $340 billion per year in public and private investment over each of the next 50 years – this according to the National Surface Transportation Policy and Revenue Study Commission. Even scaled-down needs identified by the National Surface Transportation Infrastructure and Finance Commission – also cited in the committee’s reauthorization blueprint – are sizable: $200 billion per year in public investment to maintain and improve the most essential components of the nation’s highway and transit systems.
The expected $48 billion in 2009 ARRA stimulus bill spending on transportation makes only a minor dent in either amount. Despite the possibility of some additional leveraged funding via an envisioned infrastructure bank that could be rolled into the reauthorization bill, it’s increasingly clear that manna from Washington – though important – isn’t a stand-alone solution.
That’s because of deepening maintenance and construction needs resulting from four decades of robust growth in passenger and freight vehicle miles traveled, plus simultaneous under-investment in infrastructure, and continuing population growth. And so across the U.S., more and more states and regions are grappling with difficult political choices to pay for fixing eroded transportation infrastructure, and for building new capacity and instituting other strategies to ease traffic congestion as the economic recovery unfolds in the next several years.
The first step is realizing you have a problem. There’s a fair amount of that going around.

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But Lessons Learned Will Bring Changes
Andrew Bary’s recent piece “The Long and Binding Road,” in Barron’s  has been widely noticed. “The credit market collapse and political opposition have all but killed the U.S. highway privatization trend,” the respected commentator opined in his article.  What is more, Bary wrote, the Indiana Toll Road deal “was one of the most illogical prices paid for any major piece of transportation infrastructure during the bubble period of 2005 to 2007,”  suggesting that Macquarie made a huge miscalculation.  Gov. Mitch Daniel’s comment  (“It was the best deal since Manhattan was sold for beads…”) did not help, implying that the State got the better of the naive Macquarie. The article concluded, “for toll road investors, what had promised to be a pleasant ride has turned into a painful trip,” citing Macquarie’s shares tumbling 50% in the past year.

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(Article as published at Crosscut) When California recently resolved its mammoth budget deficit, it presciently moved to ease restrictions on transportation public-private partnerships, which over the long run could help control costs to taxpayers of improving overloaded roads, rails and freight facilities. P3s, as the arrangements are called, draw from among construction, engineering, highway management firms – plus infrastructure investment groups often funded partly by public employee and building trades union pension funds – to form consortiums that get important transportation projects built more efficiently, and sooner versus later or never. A P3 consortium may provide consolidated services such as designing and building a toll bridge or highway section, and can also provide upfront capital if public funds are constricted, Read More ›

But The Real Challenge Is Regional Leadership Though the details are far from settled, a federal economic stimulus package of roughly $600 billion to $800 billion has strong support from President-elect Barack Obama. Congress, including the fiscally conservative Blue Dog Democrat caucus, is bound to register concern over more borrowing. Still, something will pass and everyone will be grabbing for their share. As much as $300 billion of the stimulus could be set aside for infrastructure, primarily surface transportation. Hammered by declining tax revenues tied to the economic downturn, plus tight credit markets and growing transportation infrastructure needs, states are feeling needy, and many are voicing great hopes for stimulus package aid. But the stimulus money has to be spent Read More ›

Last Thursday June 26, our Cascadia Center hosted the West Coast Tolling and Traffic Management Workshop at the Bell Harbor Conference Center on Seattle’s waterfront. Speakers came from up and down the West Coast, Washington, D.C. and London to share with a capacity crowd the latest developments in regional tolling policy, tolling and traffic management technology, and transportation public-private partnerships. First, our own quick-take on the event. Then some handy links to media coverage, and speaker PowerPoints. Discussion Highlights Democratic State Senator Ed Murray, a member of the legislative majority in Olympia and the ranking majority member of the Senate Transportation Committee, voiced strong support for public-private partnerships as one important tool to help fund the approximately $50 billion backlog Read More ›