Metro Jacksonville

Sugar in the Tank

Transportation spending, like pretty much everything else, is totally screwed.


Ben Adler | July 25, 2011

When Representative John Mica, a Republican from Florida and chair of the House Transportation Committee released his proposal for the overdue Surface Transportation Reauthorization bill earlier this month, liberals condemned the plan’s lack of investment in infrastructure. They missed, however, a bigger failing: Transportation spending is not just underfunded in this country; it’s broken, and we can’t afford to wait another six years to fix it. House Republicans, though, haven’t proposed sensible transportation policy changes, even ones conservatives should support.


Smart-growth advocates, unions, and environmentalists had been excited by President Barack Obama’s $556 billion proposal for the six-year transportation bill, but Mica’s plan offers a mere $230 billion because Republicans are unwilling to raise the gasoline tax, which pays for federal transportation spending. They are also unwilling to create new sources of funding such as a tax on vehicle miles traveled (this would be achieved using GPS monitoring). But gasoline-tax revenues are actually declining, not just holding steady, because of lower usage during the recession and increasing vehicle efficiency. Whereas President George W. Bush was happy to cover the shortfall between gas-tax revenues and authorized transportation spending by taking money from general funds, these newly principled Republicans won’t do that. So per-year spending on transportation would decline from $52 billion to $35 billion per year when it should be going up to meet our growing needs.

The commitment to squeezing domestic discretionary spending, however, is more important to House Republicans. Mica actually supports raising funds for transportationâ€"he co-sponsored a much larger proposal with former Chair Jim Oberstar last yearâ€"but he cannot get Republican support for it in the current environment. “He’s collared by the fact that the Ryan budget only allows this much money for [transportation],” says David Burwell, author of a recently released comprehensive report on surface transportation reauthorization from the Carnegie Endowment.

Senator Barbara Boxer, a Democrat from California who chairs the Environment and Public Works Committee, may introduce a two-year extension that would implement reforms while we wait for the economic and political circumstances for raising the gas tax to improve. But House Republicans are going a different route, proposing a full six-year extension that leaves out many of the performance and accountability standards we should adopt. For a party that talks a good game about improving efficiency in government programs, the GOP sure isn’t acting like it.

The truth is that there was little political appetite for a gasoline-tax increase before Republicans took control of the House and, going into an election year, there is none today. The Obama administration has repeatedly poured cold water on rumors that officials were secretly working on a gasoline-tax increase or vehicle-miles-traveled proposal.

But transportation wonks and the Obama administration have a whole list of reforms to include in the transportation reauthorization, which could spend the money we do have more effectively. Most of the proposals floating around in the think-tank world involve bringing the kind of business best practices to federal transportation spending that Republicans claim to love. Most of them have been left out of Mica’s proposal.

Currently, the federal government passes money to states and localities for transportation projects without metrics on what should be achieved. Instead, we should set goals for our transportation policy, such as reducing carbon emissions and dependence on oil, measure whether projects have helped us to meet them, and hold states accountable. The Republican proposal, though, says that formulas will determine 90 percent of funding. You can’t hold states accountable if you can’t withhold their money. Nor is it even clear what goals we would measure progress against.

“Right now, there is no purpose to the program,” explains Robert Puentes, a transportation expert at the Brookings Institution. “Money comes into the federal government and goes out based on public support. It should have an objective, such as bridge repair or reducing carbon emissions, and then choose on that basis and measure success at it.”

Mica’s proposal also did not address how American highways have scarred our landscape and made us dependent on cars. It’s not a given that large roads can’t accommodate pedestrians and bicycles. Urban boulevards from before the mid-20th century have tree-lined sidewalks, bike lanes, and street parking. They work within the street grid and enhance, rather than destroy, neighborhoods. But our federally subsidized highways have generally made no accommodations for other modes of travel. To make matters worse, Mica’s bill would eliminate the 1 percent of transportation spending currently set aside to help communities build bicycle or pedestrian paths.

Mass transit will fair poorly, too. By cutting funding without adjusting the traditional 80/20 formula for roads and mass transit, new projects are almost certain not to get federal support. “It’s pretty bad news for transit,” says David Goldberg, communications director at Transportation for America. “The Mica bill puts emphasis on formula grants to transit agencies, almost to the exclusion of project funding. There’s a bunch of projects in the pipeline now, the new starts program is oversubscribed as it is, and communities are waiting in line. With less money, the waits would be even longer. Pretty much anything new seeking federal funds would be out of luck.”

Providing transportation choices, rather than deciding in Washington that everyone should drive, and foisting that decision on citizens through federal spending that favors roads, is hardly a conservative principle. The conservative principle of disinvestment, though, is more important to many Republicans. As Goldberg notes, “It could have been worse. There were some in Mica’s caucus who would have eliminated transit altogether.”

Another tactic that Republicans should embrace is private-public partnerships. In certain areas, such as suburban Virginia, business owners have seen the benefits of extended mass transit and have volunteered to help fund construction of stations near them. This, though, happens on only a local and ad-hoc basis. While the Republican proposal contains some hand-waving language regarding private-public partnerships, considerable investment in such strategies won’t happen without a plan to leverage them in appropriate ways in different places. Creating a national infrastructure bank to manage and provide seed money for these projects is a good idea that Obama proposed but Mica has not.

Finally, for supposed advocates of local control and the magic of the market, House Republicans have failed to promote either adequately when it comes transportation. Take congestion pricing: Currently, states are not allowed to put tolls on their section of an Interstate highway. But the best way to unclog highways would be with tolling at high-volume times or for single-occupancy vehicles. Some states would do this if given the freedom. Yet Republicans have not proposed letting local governments harness the market’s ability to price a good more effectively.

To be fair, the Republicans’ bill contains bright spots. The GOP would streamline the bureaucracy by combining or eliminating outdated programs, although experts caution that the devil will be in the still-unannounced details. States will be allowed to add tolls to non-Interstate highways that receive federal funding and to toll new lanes on Interstates. Overall, however, the Republicans’ resistance to spending money, or even spending it wisely, means we will continue to fall behind other countries when it comes to building our transportation infrastructure.

http://prospect.org/cs/articles?article=sugar_in_the_tank

Senator Barbara Boxer:

Quote"We are at a critical moment today when it comes to our nation's infrastructure. I am here to shine a light on what is at stake for our nation's economy and American families.
The current surface transportation bill expires on September 30, and Congress must decide in the coming days which path to choose: protect jobs and put people to work, or throw hundreds of thousands of people out of work in a sector that has suffered enormously during the recession.

The Senate is working on an approach that will immediately jumpstart the economy, but we are running out of time and must act quickly.

In contrast, the House has signaled that it intends to go in a direction that will result in overwhelming job losses in the construction sector, which has been devastated during the economic downturn. Congressman Paul Ryan, Chairman of the House Budget Committee, laid out a budget blue print that calls for a 36 percent funding cut for the nation's highway programs.

That 36 percent cut in transportation was passed by the Republican House and unless their Transportation Committee acts to change that, that cut becomes very real.

As Chairman of the Environment and Public Works Committee, I have been working with my Democratic and Republican colleagues to develop a bipartisan transportation proposal that will support current funding levels, and create jobs by expanding TIFIA, which traditionally leverages federal dollars at a 30 to 1 ratio through an already successful loan program.

There is tremendous support from businesses, workers, and the American people for a transportation bill that promotes sound economic growth.

AFL-CIO President Richard Trumka and U.S. Chamber of Commerce President Thomas Donohue have joined together in calling for quick action on a transportation bill that will create jobs and spur an economic recovery.

Under the House passed budget, all fifty states would experience job losses, and the consequences for families across the nation would be devastating.

According to an analysis by the Federal Highway Administration, about 500,000 Americans would lose their jobs in fiscal year 2012 -- just in the highway program alone.

Let's look at the transportation related job losses nationwide under the Ryan budget. (charts with state-by-state data were shown)

Our long term prosperity also requires that we invest in our infrastructure. Our transportation systems used to be the best in the world, but investments have not kept up with the needs, and now we are falling behind.

According to a report by the Department of the Treasury and the Council of Economic Advisors, the United States currently spends 2 percent of GDP on infrastructure, a 50 percent decline from 1960. Meanwhile, China is spending close to 9 percent of their GDP on infrastructure.

A congressionally mandated report in 2008 called for investments of up to at least $225 billion annually over the next 50 years at all levels of government to bring our existing surface transportation infrastructure to a good state of repair. All combined, our States, cities and the Federal Government are spending 40 percent less than that amount.

The underinvestment in infrastructure has led to a crumbling transportation system. The American Society of Civil Engineers' 2009 "Report Card for America's Infrastructure" gave our nation's infrastructure a "D." A "D" is not the grade a world leader with an infrastructure system for the 21st Century would receive.

According to the Department of Transportation, over 50 percent of highway miles are traveled on roads in less than "good" condition and over 70,000 of our nation's bridges are structurally deficient.

The choice is clear.  We must invest in our aging infrastructure for the long-term economic health of this nation, to keep the U.S. competitive in the global marketplace, and to move America forward."

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http://epw.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=004e3ed7-802a-23ad-4333-f7bab7544434

Some further thoughts on slashing federal transportation funding by 35% in this excellent piece:

Quote
No panacea in privatization

By Lisa Schweitzer

Published 10:28 a.m., Friday, July 15, 2011


Greece is having a fire sale of its publicly owned transportation system, with planes, trains and roads all being sold off as the country attempts to dig out of its debt crisis. Americans should watch and learn: We could well be privatizing large segments of our own transportation system soon because of the U.S. debt crisis.

Last week, Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, introduced a bill that would slash transportation spending, limiting it to the amount brought in by federal gas tax revenues and other existing highway fees. That roughly translates into federal spending of $215 billion to $230 billion over six years for highway and transit projects -- about half of what the Obama administration sought last year.

The draconian spending proposal, dubbed "the Republican road to ruin" by critics, comes at a time when groups such as the American Society of Civil Engineers are saying that the United States needs to invest an additional $1 trillion beyond current levels over the next decade just to maintain and repair existing infrastructure.

We are facing a road infrastructure crisis, and it is of our own making. The federal gas tax has been unchanged, at 18 cents, since 1993, even as vehicles have gotten more fuel efficient. Adjusted for inflation, it amounts to a measly 12 cents today. But Americans, according to surveys, don't want to raise the tax.

For politicians like Mica, this opens doors to privatization projects. Last month, he introduced a bill that would put private companies in charge of Amtrak's operations in the Northeast Corridor. Taking that step, he contended, would be the fastest way to get high-speed rail up and running in the United States because it's clear that President Barack Obama's federally sponsored rail plan has little support in Congress.

Maybe Mica is right. But rushing to privatize state-owned assets can lead to terrible infrastructure deals that let private companies walk away with prime assets and leave taxpayers with no guarantee of better services or lower fees.

Unlike the Greeks, who must sell to receive bailout funds, we still have a say in our infrastructure future. But the time for planning ahead and striking strong deals is dwindling, along with our infrastructure funds.

Many European countries and cities have privatized infrastructure and city services. You want to use the highway -- you pay. You want to stroll through a "public" garden -- you pay. You can avoid higher taxes, but if you want the services, you pay the private company that holds the franchise. It is a system that works fine for those with cash to spend.

Scaling down public ownership of transportation networks also means carefully selecting which parts of the system to sell or lease out. Private companies usually desire assets associated with the most demand for services, such as the Northeast Corridor. But if we sell off or lease these assets to get private companies to build a high-speed rail system there, we may also be giving up the only part of a high-speed rail network likely to generate enough cash in the long term to keep a national system running without taxpayer help.

So far, privately run transportation projects show mixed outcomes. For every successful privatization story of service improvement and mounting profits -- Britain's airport privatization, say -- there's a disaster story of poor service and taxpayers left holding the bailout bag. Think the Chunnel or Chicago's privatized parking woes. Privatized transportation projects carry risks for both sides.

So long as Americans refuse to even index gas taxes to inflation, let alone raise the tax outright, we won't be spending enough to maintain our transportation infrastructure, which means that its value will continue to fall. That will make it difficult to attract private investment or get a fair price for state-owned assets if the government opts to privatize its transportation assets.

Too many more years of disinvestment and we will have to make gun-to-the-head decisions like Greece's, shock ourselves with big tax increases later, or both.

Without new revenue sources, the long-term problems for U.S. infrastructure finance are going to continue even if Congress manages a debt-ceiling deal. By contrast, if the U.S. defaults on its debt, our bond ratings will tumble. The higher costs of bond financing would then raise infrastructure costs through the roof. And those financing costs would put government negotiators at even more of a disadvantage in privatization deals.

Averting default would give U.S. leaders wiggle room to find public-private partnerships that really do serve the public interest. To do so, they must choose to maintain both America's credibility and its existing assets.

Lisa Schweitzer is an associate professor in the School of Policy, Planning and Development at the University of Southern California. She wrote this for the Los Angeles Times.


Read more: http://www.timesunion.com/opinion/article/No-panacea-in-privatization-1467160.php#ixzz1TVh0vyWk