Transportation Agreement Seems Remote
House Republicans and Senate Democrats remain at loggerheads over the future of federal highway and transit funding. Although House Transportation & Infrastructure Committee Chair John Mica introduced a compromise transportation bill this week, few are pleased with his proposal. Secretary of Transportation Ray LaHood, for example, calls it “the worst transportation bill” he has ever seen.
Congress passes legislation defining how federal gasoline taxes and other highway user fees will be spent every six years, and the most recent bill lapsed in 2009. Although the revenues all come from highway users, public transit agencies and other interests have captured increasing shares of the funds in successive bills passed since 1982. To please the wide range of interest groups who benefitted from this spending, the 2005 bill (which itself was two years late) made spending mandatory, meaning annual appropriations bills could not refuse to spend the money even if gas taxes failed to cover the costs—which they did after 2008, forcing Congress to transfer general funds to the Highway Trust Fund. In addition, Congress added more and more earmarks to the bills, increasing from 10 earmarks in 1982 to more than 6,000 in the 2005 bill.
The struggle today is between the Democrats (and others) who want to keep spending like there is no tomorrow and the Tea Party Republicans who want to reduce spending to be no more than actual revenues and eliminate earmarks and other pork.
One major source of pork is so-called competitive grants, which are mainly for transit. Although most highway funds have been distributed to the states using formulas based on such things as population, land area, and road miles, competitive transit grants are handed out on a project-by-project basis. Though the money was supposed to be used for the best projects, in fact most of it was distributed based on political power.
Mica’s compromise would keep spending at current levels—which are as much as $10 billion a year more than revenues—but include no earmarks and replace all competitive grants with formula funds. Instead of pleasing everyone, the compromise has simply ticked everyone off.
Driverless Nevada
In Gridlock, I argued that the next great improvement in human mobility will come not from rail transit or high-speed rail but driverless cars. Companies such as GM and Volkswagen have invested heavily in research and development of cars that can drive themselves, and I expected that they would soon begin lobbying state legislatures to change laws to allow such driverless cars on the road.
As it turned out, the lobbying was done not by an auto company but by Google, which has tested driverless cars (developed by the same Stanford University engineers who designed Volkswagen’s driverless cars) throughout the state of California. Google decided Nevada would be a good state to start legalizing driverless cars, and last week the Nevada legislature agreed.
By coincidence, Volkswagen has announced that it will soon offer semi-driverless cars for sale. The cars will include a “temporary auto pilot” that can stay within speed limits, steer within lane indicators, pass slow-moving vehicles, and avoid collisions on the highway. The cars will not be able to navigate city streets, but that will come soon.
The introduction of true driverless cars will significantly expand personal mobility because anyone—not just people over 16 who can pass a driver’s test—will be able to use them. Driverless cars will reduce congestion and improve safety. The new mobility will significantly change the way we live. And the cars will render obsolete any and all rail transit and moderate-speed rail lines now being planned or under construction long before taxpayers finish paying the heavy debts incurred to build such lines.
Thursday Links
- Former Minnesota governor Tim Pawlenty received an “A” grade from Cato in 2010 (PDF) for his fiscal record in Minnesota, but in terms of national fiscal policy, he hasn’t gone far enough on ethanol subsidies.
- Regarding North Korea, “the United States should indicate its willingness to rethink its commitment to nonproliferation if the North continues its nuclear program. Maybe it would be better if South Korea and Japan were able to defend themselves than keeping them forever reliant on the United States and keeping America forever entangled.”
- Why is the federal government involved in state and local transportation issues?
- “Regulating, restricting, or eliminating [oil futures markets] would not bring prices down or make them more predictable.”
- Tim Pawlenty also sides with law enforcement on the medical marijuana issue. It’s too bad he doesn’t seem to side with taxpayers.
Transportation: Top Down or Bottom Up?
America’s transportation system needs more centralized, top-down planning. At least, that’s what the Brookings Institution’s Robert Puentes advocates in a 2,350-word article in the May 23 Wall Street Journal.
If that seems like an unlikely message from America’s leading business daily, perhaps it is because Puentes couched it in terms such as “spending money wisely,” solving congestion, and “adhering to market forces.” But not-so-hidden behind these soothing phrases is Puentes real argument: “America needs to start directing traffic” by developing “a clear-cut vision for transportation.” Such a vision “must coordinate the efforts of the public and private sectors.”
“The big question,” Puentes says, “is how much it will all cost.” This is a diversion from the real big question, which is: who will do this coordination? In Puentes view, the answer is smart people in Washington DC who can best determine where to make “critical new investments on a merit basis” using such tools as an infrastructure bank.
The Administration Concedes Defeat
To sell his high-speed rail program, President Obama desperately needed a success story—a high-speed train operating during his administration that would awe the public and lead to a national demand for more such lines. That success story was going to be Florida’s Orlando-to-Tampa line, the only true high-speed route (as opposed to speeding up existing trains by 3 to 5 mph) that could have been completed during Obama’s term in office (assuming he is re-elected).
Anticipating that success, the administration drafted a proposal to use federal gasoline taxes and a “new energy tax” to fund $53 billion for more high-speed rail lines over the next six years. (The proposal also included $250 billion for highways, $120 billion for urban transit, $27 billion for “livability,” and $25 billion for an infrastructure bank.)
The chances of that happening died when Florida Governor Rick Scott decided to turn back the $2.4 billion in federal dollars dedicated to the Orlando-Tampa line. To maintain momentum behind high-speed rail, the administration could have given all of that money to California, the only other state proposing to build true high-speed rail.
Instead, the Department of Transportation gave nearly $1 billion of the $2.4 billion to Amtrak and states in the Northeast Corridor to replace worn out infrastructure and slightly speed up trains in that corridor, as well as connecting routes such as New Haven to Hartford and New York to Albany. Most of the rest of the money went to Midwestern states—Illinois, Iowa, Minnesota, Michigan, and Missouri—to buy new trains, improve stations, and do engineering studies of a few corridors such as the vital Minneapolis-to-Duluth corridor. Trains going an average of 57 mph instead of 52 mph are not going to inspire the public to spend $53 billion more on high-speed rail.
A Ban On “Walking While Wired”?
New York state senator Carl Kruger (D-Brooklyn) is crusading to ban pedestrians’ use of cellphones and other mobile devices while crossing the street. It’s for your own good, you must understand:
“When people are doing things that are detrimental to their own well being, then government should step in.”
The Daily Caller asked me to write an opinion piece about this proposal so I just did. Excerpt:
Phone use on the street has become near-ubiquitous in recent years, yet over nearly all that time — nationally as in Gotham — pedestrian death rates were falling steadily, just as highway fatalities fell steadily over the years in which “distracted driving” became a big concern.
In the first half of 2010, the national statistics showed a tiny upward blip (0.4 percent), occasioned by a relative handful of fatalities in a few states. Even a spokesman for the Governor’s Highway Safety Association, Jonathan Adkins, seems to agree it’s premature to jump to conclusions: “You don’t want to overreact to six months of data,” he told columnist Steve Chapman.
Like others who seek quasi-parental control over adults, Sen. Kruger tends to infantilize his charges. He told the Times: “We’re taught from knee-high to look in both directions, wait, listen and then cross. You can perform none of those functions if you are engaged in some kind of wired activity.”
This drew proper scorn from columnist Chapman: “Actually, you can perform all those functions and dance an Irish jig, even with text messages or rock music bombarding you.” That some ear bud devotees don’t take due caution is no reason to pretend they can’t.
C.S. Lewis, Lily Tomlin and Transportation Secretary Ray LaHood all get walk-on parts as well.
Gingrich & Woolsey on Energy
The other day, The Wall Street Journal provided a public service by lambasting Newt Gingrich for his absurd speech to the ethanol lobby in Des Moines last month (money line: ”Obviously big urban newspapers want to kill it because it’s working, and you wonder, ‘What are their values?’”). Today, Gingrich and fellow ethanol-maven James Woolsey struck back in those very same pages. In doing so, Gingrich provided yet more evidence that he’s intellectually unfit for office.
“It is in this country’s long-term best interest,” he said, ”to stop the flow of $1 billion a day overseas.” Really? So money sent overseas is gone forever. News to me. The only thing you can buy with dollars earned from oil sales to the U.S. is to buy things denominated in dollars or to exchange them so that someone else can. And we sell a lot of stuff to foreigners that are denominated in dollars (treasury bills for one) and that money comes right back to the good old U.S. of A.
But put that aside. If Gingrich really believes this, then why not just ban all imports all together? Is that what the GOP is about these days – rank gooberism on trade?
Privatize the FAA
Bloomberg is reporting more bad news for the nation’s air traffic control system, which is run by the Federal Aviation Administration. The FAA is $500 million overbudget and six years behind schedule on a $2.1 billion technology upgrade project.
The FAA has a long history of mismanaged technology projects, and so the latest screw-ups are nothing new. Yet the nation needs high-tech advances in air traffic control more than ever to ease our increasingly congested airspaces.
There is a better way to run air traffic control—a private sector way, as Canada has been demonstrating. In 1996, Canada converted its government air traffic control system to a private nonprofit corporation. Nav Canada has been a smashing success, providing an excellent model for possible U.S. reforms.
A December 24 story in the Financial Post describes how Nav Canada is a world leader in efficiency, safety, and technology under private management. “A once troubled government asset, the country’s civil air traffic controller was privatized 14 years ago and is now a shining example of how to create a global technology leader out of a hulking government bureaucracy.” It really is an impressive story of pro-market reform.
Canada’s system recently won an award from the International Air Transport Association. The IATA said that “Nav Canada is a global leader in the efficient implementation and reliable delivery of air traffic control procedures and technologies.”
We should have that type of efficient air traffic control system in this country. Privatizing the FAA should be a high priority for the next Congress.
See here for a discussion on privatizing air traffic control.
Unfair Subsidies for Buses
Cato essays on the Department of Transportation contain a common theme: federal subsidies for various modes of transportation have stifled privately funded and operated alternatives. One emerging bright spot is private intercity bus companies.
From a Cato essay on Amtrak subsidies:
If Amtrak is privatized, passenger rail will be in a much better position to compete with resurgent intercity bus services. The rapid growth in bus services in recent years illustrates how private markets can solve our mobility needs if left reasonably unregulated and unsubsidized. A Washington Post reporter detailed her experiences with today’s low-cost intercity buses: “This new species offers curbside pickup and drop-offs, cheap fares, clean restrooms, express service, online reservations, free WiFi and loyalty programs . . . The bus fares undercut Amtrak and, depending on the number of passengers, personal vehicles.”
That’s why a story out of Minnesota is disturbing. According to the Duluth News Tribune, Jefferson Lines, which operates a bus line between Duluth and the Twin Cities, received $2.65 million in federal stimulus money to purchase five of the eight buses it has in service. One of Jefferson Lines’ competitors isn’t happy:
That angers Dave Clark, owner of Skyline Shuttle, which provides transportation from Duluth to the Twin Cities. Clark claims it’s unfair for Jefferson Lines to use government money to compete with his business and cut into his revenue.
“When there’s a market and they are competitors, it should be left to the market without government interference,” Clark said. “They could have taken the risk themselves, but they relied on the taxpayer to take the risk.”
The first problem is that federal taxpayers across the country are being forced to subsidize a private bus line in Minnesota. The second problem is that the government is effectively picking winners and losers in the market for intercity bus services. Instead of spreading transportation subsidies across every form of transportation, the federal government should cease with the seemingly endless interventions and allow free individuals to figure out what makes the most sense.
High-Speed Rail Battle
Wisconsin has become a battleground over the Obama administration’s plan to create a national system of high-speed rail. Of the $8 billion in HSR grants awarded to the states in the stimulus bill, $810 million of it went toward a high-speed route between Milwaukee and Madison.
Ironically, this Wisconsin “high-speed” route would only achieve speeds of 79 mph initially and 110 mph by 2016. As a Cato essay on high-speed rail points out, HSR aficionados don’t even consider 110 mph to be true high-speed. In fact, passenger trains were being run at speeds of 110 mph or more back in the 1930s. And those “high-speed” trains didn’t prevent the decline of passenger trains after World War II.
The Cato essay also notes that the 85-mile line between Milwaukee and Madison “is only a tiny portion of the eventual planned route from Chicago to Minneapolis, and no one knows who will pay the billions necessary to complete that route.” In fact, to build a national system of true high-speed rail on the 12,800 mile network envisioned by the administration, the cost could be close to $1 trillion.
Where would the money come from? State governments are hoping that it would be all from federal taxpayers. As I recently discussed, the states’ interest in grabbing new federal HSR money has dropped now that Congress is requiring a 20 percent state match:
The states already have dedicated revenue sources for federal highway aid matching requirements (also 20 percent). With state tax revenues flat due to the recession, where would the money come from to pay for high-speed rail projects? Proposing new taxes to fund high-speed rail would probably be political suicide. And most state policymakers recognize that shifting money away from more popular programs to pay for high-speed rail won’t be any more politically rewarding.
The issue is even affecting elections in states that are in line to receive federal funding for high-speed rail. Scott Walker, a Republican candidate for governor in Wisconsin, recently said he’d send back the $810 million in stimulus funds the state has received for a rail line between Madison and Milwaukee. Walker appears to understand that his state has more pressing infrastructure needs and that high-speed rail could become a fiscal black hole.
“We’re Talking Bridges…”
On Labor Day, President Obama announced his plan for an additional $50 billion in spending, mostly on transportation. An area Obama specifically mentioned was more spending for bridges, playing on the widely held perception that America’s bridging are falling apart. While clearly there are bridges that are greatly in need of repair and represent a threat to passenger safety, what has been the overall trend in bridge quality? In one word: improving.
According to the U.S. Bureau of Transportation Statistics only about 1 in ten bridges today can be characterized as “structurally deficient”, this is, in need of serious repair. This may sound high, but it is down from 1 in four back in 1990. As one can tell from the accompanying chart, the percent of deficient bridges has been on a steady decline over the last two decades.
It is also worth noting that over 80 percent of the deficient bridges in the U.S. are in rural areas, and subject to much less passenger traffic. Many of these bridges likely see little, if any, traffic.
Perhaps more important from the perspective of “economic stimulus” is that additional bridge construction and repair would take years to have any real impact on employment. Rather than coming up with policies designed with solely political appeal in mind, the President and Congress should focus on broad policies that allow the private sector to determine what investment needs should be addressed.
Donald Shoup on Free Parking
Donald Shoup, the author of The High Cost of Free Parking, has posted a response to my first post about Tyler Cowen’s op ed against free parking. Shoup points out that I erroneously attributed proposals to him that are in fact only urged by his followers, such as maximum-parking requirements and requirements that all businesses charge for parking. I apologize for that.
In fact, Shoup’s book argues that cities should eliminate minimum-parking requirements and charge market rates for on-street parking. I favor these things as well. Where we may disagree is about the effects of these policies.
My post pointed out that many municipalities do not have minimum-parking requirements, but businesses still offer plenty of free parking to their employees and customers. Shoup asks for “a list of some of these.” Virtually all counties in Texas, most counties in Nevada, and many counties in Indiana have no minimum-parking requirements, and I am sure I could find counties in many other states as well. Unlike California, where Shoup lives, and Oregon, where I live, these states do not restrict urban development to within city limits or urban-growth boundaries, and developments in unincorporated parts of these counties offer plenty of free parking.
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