Perhaps you socialize with more people in the public transportation industry than I do.  For you, discussing matters relating to public transportation may not be the #1 way to end a conversation at a cocktail party. For me, such attempts usually end with, “Oh, look!  Tom and Liz have arrived.  Excuse me!”

You do a great job of educating me on the issues that affect your market space. But let’s face it, these issues are not accessible to the general public.   I am always interested in how to communicate to the world the obscure issues you know about that affect all of us every day.  Like anything that has to do with infrastructure, it’s only provocative when it doesn’t work.  Since you do your jobs so well, it’s usually working, right?

In the case of highways, there are certain regions in which the system is generally considered “broken,” as defined by really bad traffic congestion.   Funny thing is, you in the industry can determine when any given system is likely to “break” and plan for it.  However, when the plan requires money, and funding options include toll roads or – gasp! – privatization, the public’s lack of understanding leads to an emotional uproar.

What is causing this unrest?  Is it a market that has not reached its threshold of pain or is it a lack of information?  Both?  Would communicating these matters in a more accessible, non-politically-motivated way be helpful?  These are questions which always interest me; can you tell me what you think?

What is your opinion of this video, produced by reason.tv and hosted by Drew Carey?  Do you think it is too one-sided to be effective?  Do you think it is successful in presenting its pro-privatization point of view?

In tying these two issues, new policy initiatives to be introduced include replacing the funding source for the Highway Trust Fund (whether that be a VMT or other plan) and a change in how the HTF is allocated, moving toward performance based transportation-methodology.

In order to get traction for a Climate Change Bill, a major concession was made in lifting the ban on domestic drilling in the Atlantic and the Gulf of Mexico. Ironically, as we witness an environmental disaster unfolding in the Gulf of Mexico, it is exactly this concession which will torpedo the Climate Change Bill.

So now what happens to efforts to “green-up” transportation funding policies in the next Transportation Re-authorization? Are the two pieces of legislation inextricably linked? Will necessary reform in funding and allocating the HTF be more difficult to achieve? How? Why? How long can we keep a band-aid on our transportation funding problems?

I am not asking these questions for my health – I am asking these questions because I think you have a good handle on this subject matter, so please prognosticate!

6/16/2010 UPDATE:

Who would have ever thought that this tragic accident would result in a months-long continuous flow of oil into the Gulf of Mexico? When I wrote down my thoughts above, the breech at the bottom of the Gulf was an absolute catastrophe in my mind. I’ve lived near and played in the Gulf of Mexico; It’s one of my favorite places on earth. The damage this spill has and will cause is devastating to me personally on so many levels.

Perhaps our lawmakers “get” that, which is why it seems they are taking this disaster as an opportunity to underscore a clean energy policy push (remember, energy production is the #1 producer of greenhouse gas emissions, transportation is #2). The administration is no longer pressured to capitulate to drilling offshore to achieve a climate change bill, since there is no one who would be bold enough to push an offshore drilling platform in this context. Also, please note, I doubt you will hear the vernacular “climate change” associated with this effort any longer. It’s going to be “clean energy” all the way.

This still doesn’t tell me exactly what is going to happen with transportation, but it bodes well for more sustainable policies. As long as we get there fast enough. Will we?

If you missed the part about WHY we need a new means for funding the maintenance and growth of our transportation infrastructure, then let’s recap:  

First, the Highway Trust Fund (HTF), which pays for much of our roadway development, is depleted.  At the same time, the revenue to the HTF from gasoline taxes – already not enough – only promises to decline as fuel efficiency increases.   Concurrently, much our infrastructure is at a critical juncture in it’s life cycle — in need of major repair or a complete rebuild.

It’s the perfect storm:  Less money when more is sorely needed.

So, how do we raise more money for the work which needs to be done?  Here are some scenarios swirling around policy war rooms today:

• Reconfigure the gas tax to an ad valorem tax: Setting the gasoline tax as a percentage of fuel purchase instead of a flat, cents per gallon tax would be a better way to index revenue to road use and inflation. However, this idea presents a future conflict of interest to a nation which seeks to incentivize sustainable energy solutions and reduce its dependence on oil.  How can we justify funding mobility from the sale of fossil fuels?
• Toll roads: This classic model will have a new spin in that your toll road might be leased to a private company that has been selected to operate and maintain the road for a specific number of years.  They will recoup their operating costs through tolls to the user, and will be responsible for upkeep and performance as well as all services provided on the facility.  In some cases, the investor will also design, build, operate and maintain the roadway, for which they will be awarded a much longer lease (we’re talking greater than 50 years).  In the business we call this Public-Private Partnership, PPP, or P3, and it’s already a successful model in many U.S. states.
• Vehicle Miles Traveled (VMT): Given the advent of more fuel efficient vehicles, this idea is meant to recapture monies lost in gasoline sales.   It seems to be a more effective use tax, since it is fairly applied by actual miles driven than by gasoline consumed, and may be a better behavioral incentive for eliminating trips, combining trips, or exercising mode choice.  Since mileage tax is collected by the states, this proposal gets sticky when drivers cross state lines, but I am certain since I’ve last read up on the topic that they have come up with a solution to this problem.  (Anyone?)

In the United States, one can expect that in the future there will be a more direct correlation between transportation mode of choice and individual burden/cost.  This means there will be a different and very direct price to fly, drive, bus, rail or bike it.  The user will certainly weigh this price against available time and budget, then make choices accordingly.  The biggest change will be in the cost to drive…and it may change the way you move forever.

How do you believe these hypothetical changes will affect your own travel behavior?  What cultural/societal shifts do you predict will occur as a result of such changes?

Special Thanks to Contributing Researcher & Writer Crystal Pendergrass, civil engineer/jobseeker, and to Contributing Editor, Donald Galligan, AICP, all around nice guy.

Yes, there is a formula to allocate funds by state based upon a) gas tax revenues contributed, b) miles of highway and c) population, but — like the tax code — there are loopholes and exceptions. 

First, it is important to know that HTF monies are not given away with zero commitment at the state level.  For each project, there is a required state match (how the match is raised varies from state to state).  Typically, the match for capital projects or purchases is 80/20, with 20% being the state obligation.  Therefore, generally speaking, the 18.4¢ per gallon that each driver pays into the fund is matched at the state level by approximately 3.7¢.

Since 1983, 2.86 cents of each gallon’s tax is reserved for the Mass Transit account.  With a 20% match by the state, this amount becomes to 3.43 cents per gallon.  However, by law this is only to be used on capital expenditures…i.e., buying buses and other equipment.  The match is actually 50/50 when it comes to transit operations. 

So, buying buses and rolling stock is possible, but finding the money to put them to use is very difficult, and must be hobbled together from many sources.  Unless a locality makes transit a priority, the lack of funding to operate the system keeps it small and, as a result, less convenient than jumping in the car.

(By now, you know where this is going, and it might get me flamed on these pages for being mode-biased.  I will state here and now that I like and need my car; I just wish I had more choices available to suit my destinations and my schedule.  I would surely excercise those choices!)

Meanwhile, when it comes to highway funding match, all states are not treated equally.  States with a large amount of Federal land (which accounts for a lot of states west of the Mississippi), are awarded HTF money on a sliding scale.  The sliding scale decreases the local match requirement for highway projects, but does not do the same for transit. 

In Idaho, for example, the local match requirement for highway projects is only 7.34 %, but it is still 20% for transit capital, and 50% for transit operations, resulting in a built in bias toward roads.  Why would a region chose to augment alternative modes of transportation when they can build roads at a fraction of the cost (to their own budget)?

Obviously, the HTF is in crisis;  I am not suggesting that transit needs a bigger part of that pie…the 15.54 cents per gallon that funds roadway projects has to cover a lot of ground (see page 11 in the link).  The solutions to our problems lie not only in the ways that we spend money on transportation projects, but also in the ways we raise that money.  We will explore the latter issue in a forthcoming post.

Special Thanks to Contributing Writer and Editor, Donald Galligan, AICP, Transportation Planner and all around nice guy.

Where does the money to build and fix roads come from?  Since 1956, U.S. roadway infrastructure projects have been largely funded by the Highway Trust Fund (HTF).  Money is pooled into the HTF via an 18.4 cents per gallon gasoline tax (24.4 cents on diesel).  Other sources of income include taxes on tires, and the sale of heavy trucks and trailers.   Once collected, these revenues are placed in a dedicated account, The Highway Trust Fund.  Monies from the HTF are then re-distributed to individual states according to a formula based upon linear highway miles, population, and the amount of gas tax revenues originally contributed by the state to the HTF. ¥

This is all fine and dandy, but is it sustainable?  The answer has proven to be “No.”

In recent years, a confluence of factors has led to an emergency-level shortfall in the Highway Trust Fund.  These factors, while not in and of themselves bad, are individually daunting and collectively catastrophic to our antiquated funding mechanisms.  They include:

• high gas prices which have forced motorists to drive less,
• popularity of cars that get better gas mileage,
• the emergence of alternative fuels,
• the federal portion of the gasoline tax has not changed since 1993
• the rising expense of road maintenance, materials and construction

It is difficult to argue that this 50-year-old funding mechanism anchored in a time of cheap land, labor and materials is adequate to satisfy the needs of a modern nation.   In my next post, I’ll address a number of alternative proposals which are swirling about for replacing/upgrading our transportation infrastructure funding mechanisms.

(¥ Wow…does anyone else see how this promotes an SUV culture and ever more asphalt?)

Special Thanks to Contributing Researcher & Writer Crystal Pendergrass, civil engineer/jobseeker, and to Contributing Editor, Donald Galligan, AICP, Transportation Planner all around nice guy.

• One-third of the nation’s highways – interstates, freeways and major roads – are in poor or mediocre condition.
• More than one-quarter of major urban roads, which carry the brunt of national traffic, are in poor condition.

To surmise: Our roads and bridges are falling apart, just like my nearly 90 year-old house.  And like my house, maintenance costs are going up.  But wait – it’s worse than that.  As the roads deteriorate, our dependency upon them is increasing due to population growth and trends to dispersion (i.e. suburban living).  This heavy use means serious maintenance is in order; and, coupled with a demand for more roads, our auto-centric lifestyles are quickly outstripping the funds available to keep us moving in our personal, four-wheeled castles.

Take a look at the American Society of Civil Engineering’s 2009 Infrastructure Report Card, where the nations’ infrastructure receives an overall grade of “D.”  Do these films describe an economic powerhouse or the dilapidated third world?  Is this not perceived as a crisis to the general population because we can’t see or feel the problem unless we experience a failure?  (P.S. intolerable traffic = failure.)

ASCE Film Credits

Special Thanks to Contributing Researcher & Writer Crystal Pendergrass, civil engineer/job seeker, and to Contributing Editor, Donald Galligan, AICP, Transportation Planner and all around nice guy.