Obama Plans Largest Building Program Since 1950s

[vicupstate]

The long-term benefit of making government buildings more energy efficienct isn't just to reduce environmental impact, it is to REDUCE ongoing, government expenditures. In theory, long term annual savings could be achieved, thus allowing the savings to go back to taxpayers or at least into something else such as parks, schools, etc.

What exactly makes that a bad idea?  The fact that Sarah Palin didn't think of it?

[Charleston native]

Typical liberal quip at the end there, vic. Oh wait, you're an independent.

Nevermind...one in the same.

How often do we have to explain this? The long term savings with these ideas are a drop in the bucket compared to what should be done. But the perception has been created, and you and others have bought into it.

[vicupstate]

Typical liberal quip at the end there, vic. Oh wait, you're an independent.

Nevermind...one in the same.

How often do we have to explain this? The long term savings with these ideas are a drop in the bucket compared to what should be done. But the perception has been created, and you and others have bought into it.

I just want to know what so called conservatives hate about creating savings in government.     

What would you have him do instead?  What would provide short-term stimulus, which everyone acknowledges is needed in some form, but would also provide a long-term benefit independent of any short-term stimulus?  Let's hear your alternatives.

[vicupstate]

It will be interesting to see what type of projects our peer cities end up pushing for.

Bumpier ride ahead for Charlotte mass transit
Will money from half-cent sales tax be enough?

By Steve Harrison
sharrison@charlotteobserver.com

Posted: Friday, Dec. 05, 2008


Charlotte transit officials have long said the half-cent sales tax could build a network across all corners of Mecklenburg: A commuter rail line to Lake Norman. A busway down Independence Boulevard. A Lynx Blue Line extension to University City. A streetcar from the airport to Eastland Mall.

But a year after voters decided to keep the transit tax, and after light rail debuted, the Charlotte Area Transit System is unsure that it can build the rapid transit system it promised.

CATS is grappling with short-term problems such as this summer's spike in gas prices, which hurt the transit system's fuel budget, and the weak economy, which is depressing sales tax revenue. The N.C. Department of Transportation has said it will slash its transit funding to CATS by as much as 12 percent.

Former CATS chief executive Ron Tober, who created the long-range transportation plan in 2006, said his plan is now too ambitious, given the economy and this decade's sharp rise in the cost of materials.

“The big question is now: Will the half-cent sales tax make it? How much money can you count on from the feds and the state?” Tober said. “Given the current economic situation, the previous assumptions need to be revisited. 2006 is an eternity ago.”

In the meantime, CATS is still moving forward with the light-rail extension, commuter train and streetcar. This spring, when more engineering work is finished, CATS officials will have a better idea of what can be built.

Before the bottom fell out of the economy in September, there were discussions inside CATS and among elected officials about whether to ask voters for more money. The idea was to build the entire system as quickly as possible, because rapid inflation in construction prices was threatening to make some projects too costly and unbuildable.

CATS chief executive Keith Parker has discussed seeking more money as a possibility, but he hasn't actively promoted it yet. It's unlikely any new tax would be approved in the next year while the economy is in turmoil.

But Charlotte City Council member Anthony Foxx said more money will eventually be needed.

“Presumably we will pull out of this ditch we are in,” said Foxx, a Democrat who has said he will for mayor in 2009. “And we will still be a growing state, and a growing city. We can't afford to stay still.”

Foxx said the success of the Lynx â€" averaging more than 16,000 weekday trips â€" has shown that Charlotteans will use rail transit.

“There is a high demand for fixed-rail transit in this community,” Foxx said. “When you look at the economic development possibilities, the mobility it brings. It's very important for us to do everything we can to accelerate it.”

Funding for transit

Transit skeptics have acknowledged the Lynx's success, exceeding its first-year ridership projection of 9,100.

But they believe CATS will eventually have to ask for more money â€" something they said would happen, when the transit tax was being debated.

“The train, you can argue, has worked out well,” said former county commissioner Jim Puckett, who led an effort to repeal the tax. “But the financing was never a good idea. As a county commissioner, I used to ask Ron Tober: ‘Is the sales tax sufficient?' And he always said it would be.”

The transit sales tax was projected to grow at a rate of 5.75 percent annually. Atlanta's transit tax grew at a similar rate over the past 30 years, which included the deep recession in the early 1980s.

CATS projected the local transit tax would generate $75million this year. It's possible it could produce only $70million â€" giving CATS less money to spend on capital projects. CATS is worried the sales tax may fall short of projections for several years.

The entire transit plan was projected in 2006 to cost $9 billion to build and operate over 30 years.

Parker, who succeeded Tober last December, hasn't created a new transit plan because he's waiting until engineers give him a better idea of how much the commuter train and Lynx extension will cost. But Parker has repeatedly warned members of the Metropolitan Transit Commission that some bad news might be coming.

While there are a number of variables that could hinder CATS' expansion plans, the transit agency does face another prospect.

The Obama administration is planning a massive infrastructure stimulus package, which will likely include money for transit. Others believe that, as president, Barack Obama will make a long-term commitment to transit, increasing the amount of money available for new rail projects through the Federal Transit Administration's New Starts program.

CATS believes the success of the Lynx Blue Line will help its case for more federal money.

And the massive increases in the cost of materials, such as steel and concrete, have stopped with the slowing economy. The cost of buying land isn't expected to increase in the near future either.

“In the long term, there is good and bad,” Parker said. “If the sales tax stays in its current state for a prolonged period, it will cost us tens of millions of dollars for the next 10 years. On the optimistic side, we have been hearing very favorable things from Washington.”

Rail projects in the works

Unsure of what it will build next â€" and what the federal government will fund â€" CATS is working on building three new rail projects.

The northeast extension of the Lynx to the University City area is the most expensive â€" and the one completely dependent on help from the federal government.

CATS believes the 11-mile line will cost about $900 million, and it's hoping the Federal Transit Administration will pay 50 percent of the costs, with Raleigh paying 25 percent. CATS started engineering work on the extension in March and plans to reassess in the spring whether the project is still feasible.

The federal government currently has about $1.6 billion annually for the New Starts program, which funds rapid transit projects. Even if the Obama administration increases that by 50 percent or 100 percent, Charlotte will still have competition for the money.

If federal funding falls through for the Lynx extension, the chances of building the entire 11-mile segment are nil. CATS could build a small part of the line, to NoDa or Sugar Creek.

The commuter train to the Lake Norman area isn't eligible for federal funding, though it's possible the Obama administration could make it easier for commuter trains to qualify for federal money.

CATS has completed six months of engineering work on the train and hasn't found any significant design changes. The train is expected to cost between $250 million and $300 million, and could open in 2013.

If the Lynx extension hits a snag, the north corridor could be built within CATS' current budget. It's unlikely CATS can build the extension and the commuter train at the same time.

Parker said Monday that he thinks the commuter train could qualify for federal stimulus money. Some of the work on the line â€" such as improved grade crossings â€" could start immediately.

The commuter train would still need some financial help from the Lake Norman towns. Cornelius and Davidson have supported the train, but some members of the Huntersville Town Board are skeptical.

The city of Charlotte has taken the lead on building a streetcar through central Charlotte. It has been discussing a number of ways to pay for the train, including an assessment on property owners who would benefit from the streetcar.

The federal government doesn't fund streetcars, but some CATS officials are hopeful the Obama administration will make them eligible for federal grants. But that might not help CATS, either: There are dozens of streetcar projects throughout the country. Each would want a slice of pie.

If CATS were to seek additional funds, it would have a number of options.

The General Assembly last year gave counties the right to levy a quarter-cent sales tax for any purpose. With voter approval, that money could be funneled to CATS, or split between CATS and roads, or a number of other possibilities, such as parks.

The city or county could ask voters to approve bonds, which would help build train lines â€" but wouldn't provide long-term funding to operate them.

[RiversideGator]

Typical liberal quip at the end there, vic. Oh wait, you're an independent.

Nevermind...one in the same.

How often do we have to explain this? The long term savings with these ideas are a drop in the bucket compared to what should be done. But the perception has been created, and you and others have bought into it.

I just want to know what so called conservatives hate about creating savings in government.     

What would you have him do instead?  What would provide short-term stimulus, which everyone acknowledges is needed in some form, but would also provide a long-term benefit independent of any short-term stimulus?  Let's hear your alternatives.

No one is opposed to saving money for the taxpayers.  However, this was billed as a set of initiatives to help the economy.  That wont happen with this.

Alternatives to stimulate the economy?  Here are a few which would actually work:
1)  Reduce corporate tax rate to 10%
2)  Eliminate capital gains tax for 2 years
3)  Give $5,000 tax credit for purchase of American car
4)  Eliminate mark to market accounting rule
5)  Continue efforts to increase liquidity in the financial markets by having Fed keep purchasing mortgage backed securities on secondary markets.

Of course, across the board income tax cuts would greatly help also but that might be too much to hope for. 

[tufsu1]

River...some of those tactics (or things like it) were tried over the last 8 years....and how did that work out?

The fact is nobody is going to buy an American car with a $5,000 tax credit if they don't have enough $ to pay for the rest of the car....the economic stimulus needs to get people working so they can buy things....and infrastructure investement (including modernizing federal buildings) does just that.

But don't worry....we're not talking about all new jobs being givernment jobs....most will be private consultants and contractors....I can tell you for a fact that the companies in my industry are paying very close attention!

[thelakelander]

Vic, I figured a few of our peers would take advantage of the new administration's view towards mass transit.  I fear Jax won't despite decades long cries of not enough funding to pay for mass transit enhancements.  Here is our chance to make a change instead of focusing only on more road construction.

[tufsu1]

remembert that the issue in the short-term is projects that are "ready to go"....like most cities, Jacksonville doesn't have many transit projects that fit this requirement.

In the long-term, we'll have to see what the regional long-range plan reveals....that is where any philosophical change will show up.

[RiversideGator]

River...some of those tactics (or things like it) were tried over the last 8 years....and how did that work out?

None of those solutions have been tried. 

My postscript, income tax cuts, was tried though and it help set off a multi-year economic expansion.

[RiversideGator]

Meanwhile, existing infrastructure spending doesnt seem to be stimulating anything:

Infrastructure Spending Is No Cure-All   [Larry Kudlow]

A lot of people on Wall Street are praising Obama’s infrastructure plan for roads, highways, tunnels, schools, green tech, and other build-outs. But they don’t know that in 2008 alone the U.S. spent $114 billion on infrastructure, following $102 billion in 2007. Didn’t do much for growth did it?

Over the past five years infrastructure spending domestically for non-defense comes to nearly $500 billion, with another $500 billion spent on defense-related infrastructure. But an academic study from the University of Chicago argues that government spending does not stimulate jobs and growth, and in fact crowds out private investment. Infrastructure spending also doesn’t create permanent new businesses, jobs, or incomes.

What Wall Street may be missing is that only a permanent change in tax-rate incentives â€" such as slashing the corporate tax â€" will reignite investment and job creation. Governments don’t create new technologies or new risk-taking. For that matter they also don’t create the new profits that are so essential to private enterprise. In the short-run, infrastructure building appears to create jobs. But these are not permanent.

The Obama package is unbalanced by relying on this infrastructure business without any real permanent reductions in tax rates or business cash-expensing for investment. That’s why the Obama plan needs to be changed.

http://corner.nationalreview.com/post/?q=NDg4N2IwMWI5NGVmNDBkZTBhZjFlOWRkZjkxNDU3MDk=

[thelakelander]

remembert that the issue in the short-term is projects that are "ready to go"....like most cities, Jacksonville doesn't have many transit projects that fit this requirement.

In the long-term, we'll have to see what the regional long-range plan reveals....that is where any philosophical change will show up.

I'd encourage the city to think outside the box to get bigger bang for the buck.  Projects worth pursuing include the Jax Transportation Center, an Amtrak Corridor Service, Courthouse funding, Convention Center improvements/relocation, BRT phase one improvements, one way/two way street conversions, "town center" streetscape projects across various neighborhoods, Hogans Creek environmental cleanup/park restoration, etc.  Investment made in these areas will stimulate the local economy more than many of the unfunded BJP projects.  Its depressing to see that outside of the courthouse, ever other thing on the city's list appears to revolve around roads.

[Charles Hunter]

On TV last night, they showed what looked like a paper copy of an Infrastructure Stimulus list, has anyone seen the list?  A quick look at the Mayor's page at COJ.NET and I didn't see it - just his December 1st announcement.

[tufsu1]

River...

Tax cuts blew a hole in the deficit and led to a rising national debt....and that problem is a large part of the current crisis....people saw the U.S. government spending more than they brought in, and thought "why not me".

If you need proof of how this relates, check out the growth in the economy and stock market that occured in the late 1990's as we erased the deficit created during the Reagan/Bush years.

As for your assertion that infrastructure spending will not stimulate the economy, how about this statement...

"Although our national economic woes continue, there seems to be some very positive news for our industry. We’ve all heard the media reports about an economic stimulus package. Now our industry sources are confirming that President-elect Obama’s stimulus package will include a large component for infrastructure. Although it will be early 2009 before we know the details, we are confident it will positively impact virtually every part of our business."

It comes from our company's President!

You have implied that the tax cuts of 2001 may have prevented the collapse from happening sooner (not that I agree with that)...but perhaps the same could be said for infrastructure spending over the last 5 years.

[civil42806]

remembert that the issue in the short-term is projects that are "ready to go"....like most cities, Jacksonville doesn't have many transit projects that fit this requirement.

In the long-term, we'll have to see what the regional long-range plan reveals....that is where any philosophical change will show up.

Thats going to be a major problem with this stimulas package.  By the time the design gets done, all the environmental objections and requirements are met, and contracts actually let it will be at best a year before this gets started.  Who knows what the economy may be like then, the whole package may not be required.  And don't even get me started on his stupid computer on every classroom proposal.

[RiversideGator]

River...

Tax cuts blew a hole in the deficit and led to a rising national debt....and that problem is a large part of the current crisis....people saw the U.S. government spending more than they brought in, and thought "why not me".

It was spending increases, not tax cuts, which caused the deficit.  Federal tax receipts increased in the years following the Bush tax cuts.  This is a fact.

If you need proof of how this relates, check out the growth in the economy and stock market that occured in the late 1990's as we erased the deficit created during the Reagan/Bush years.

I agree that setting the stage for economic growth is the best way to increase federal tax receipts and this should then lower the deficit if spending is held in check (as with the Republican Congresses of the late 1990s).  The point is that Obama's proposals will not do this.  His proposals are for more spending which will not increase economic activity in a meaningful way but which will increase the deficit.