So What’s Up With the Transportation Bill?
Time for an update on the long-delayed federal Transportation Bill. It was due to be reauthorized in 2009, was kicked down the road to 2010, and now languishes in 2011, with the White House having previously discussed even waiting until 2013.
100 House Democrats had pushed for $50 billion for high speed rail in the Transportation Bill in April 2010. That didn’t happen, and with Republican control of the House – including the defeat of Democrat Jim Oberstar, a champion of HSR funding – things are looking a lot dicier:
Despite Obama’s call for increased investment in infrastructure during Tuesday’s State of the Union address, House Transportation and Infrastructure Committee Chairman John Mica, R-Florida, said this week that transportation stakeholders should expect a bill that calls for spending only what the Highway Trust Fund can sustain.
The Highway Account of the trust fund is projected to run short of money next fiscal year, the Congressional Budget Office reported Wednesday.
The last surface transportation law, enacted in 2005 and known as “SAFETEA-LU” authorized $287 billion in highway and transit projects. CQ Today reported a Mica-drafted surface transportation bill this year might contain only $250 billion in new budgetary authority over the next six years — less than the last law despite growing infrastructure needs. That figure would be half of the $500 billion bill that Mica’s Democratic predecessor, James Oberstar of Minnesota, unsuccessfully sought to pass in the last Congress.
Mica doesn’t actually think that would be all we should spend on transportation – he wants to “leverage” that money to attract private funds to build projects:
“I could take up to a $250 billion bill and leverage it by five, four times,” Mica said. “I could have a huge amount of capacity in helping to finance projects.”
Mica cited tolling, public/private partnerships, and tinkering with existing successful bond and loan programs as policies he will pursue to better leverage existing transportation revenue.
That’s the best we’re likely to get out of the Republican House, where Mica is one of the folks most friendly to HSR – other Republicans are proposing massive cuts to transportation spending and we’re going to have a big fight on our hands to spare even present funding levels from FY 2010.
Transportation Secretary Ray LaHood is “optimistic” on getting a Transportation Bill this summer:
“I’d like to have a transportation bill on the president’s desk by the August recess,” he said Friday during a conference call with reporters. He said the bill would be “significant and substantial” and that lawmakers in the House and Senate appear committed to complete the legislation.
I read this as LaHood saying the White House is open to what Mica is proposing. It would not create nearly as many jobs as the Oberstar proposal would have, but Congressional Democrats balked at funding it, not wanting to approve a hike in the gas tax before the midterm elections. Since they lost those elections anyway, it seems safe to say this was a bad move.
HSR advocates have work to do, including here in California, where many key legislators from both parties have districts along the project route and constituents who need the jobs that more HSR funding will produce.
Wether you are a Democrat or Republican I think it is so important to get this California High Speed Rail System built. The sooner we get revenues from this system, everything else will fall into place. Many people are going to get employment statewide from this, not just construction workers.
More Republicans need to jump on the band wagon and realize how important the CA High Speed Rail will be. If they need to increase how many meetings they have in a month to increase the productivity of this project…let’s do it.
Those cities that are going to be involved in the California High Speed Rail stopping in their town or passing through need to get on the ball and start finding funding for it. Let’s get it done.
YesonHSR Reply:
February 6th, 2011 at 11:21 pm
The faster we get Chinese or Japanese or Korean involvement the better it is… from ground up money ..this nation is pathetic there is going to be no money from Congress or anywhere else from Washington outside of peanuts.. the problem will be no phase 2… all funding and money revenue will go to pay the debt on Los Angeles to San Francisco. That’s a truth if you desire high speed rail in California.
So what is better, continuing to kick the can down the road or Mica’s plan? Isn’t an extension of the current plan almost better?
Mike Reply:
February 7th, 2011 at 9:41 am
Not really. It’s likely that Mica’s approach could produce a new bill that’s about the same size, maybe even a hair bigger, as SAFTEA-LU. Nothing like the huge increase that Oberstar wanted, but that’s just not in the cards any longer. So, financially, sort of a wash. But Mica would provide the opportunity to offload some lower priority federal programs (e.g., Transportation Enhancement Activities) and focus the money on a shorter list of programs that have real national significance. Though he’s hot and cold on HSR, it’s a legitimate candidate to be considered a real nationally significant priority. Also, enacting a new multi-year bill will provide badly needed predictability that will allow states and localities to make better decisions about how to spend their own money.
The problem with Mica’s plan is that nobody wants privatized infrastructure. Sure, they say they want it….but go poll the folks that live near the bush-era toll highways. Or do some opinion polls on the HOT lane projects.
On one hand, House Republicans are insisting austerity and cutting back. On the other hand, the nations infrastructure is literally falling apart. There is no middle ground evident in improving our roads, airports, and rail systems.
Something needs to give.
synonymouse Reply:
February 7th, 2011 at 10:39 am
The reason for the long term disinterest in infrastructure is that the wealthy and the corps do not wish to pay for it – the entire burden belongs to the little people. Quite possibly a reason the privileged refuse to get involved in infrastructure is that, being on the inside, they recognize the enormous waste and incompetence associated. Tony Soprano has more interest in the commonweal than the affluent. Hard to boondoggle professional crooks and scammers
In order to pry the huge sums that the welfare state will require for all of its enormous expenditures in infrastructure, operating subsidies plus welfare, entitlements, fat union compensation plans, unlimited free education benefits, yada yada, a dictatorship will be requiired and an international one at that because the rich will simply relocate themselves and their money. That’s why they call them multinationals.
I like how Mica is thinking, especially since our HSR project will fall under the realm of “public/private partnerships” and leveraging “existing successful bond(s).”
While funding from either China or Japan (Korea?) is also promising, this HSR supporter still has some questions on how that would work, i.e., if it’s a “loan,” how much would that cost yearly to pay off? If it’s “free” financing, does that make the foreign investor a partner in our HSR project?
“tolling, public/private partnerships, and tinkering with existing successful bond and loan programs as policies” are expected to multiply the funds by 4 or 5 times?
That doesn’t fit with the current policy of the feds paying 80% of freeway projects and 50% of transit projects.
Is Mica expecting the States to make up the difference by planning to put high tolls on all new roads and bridges? If the feds will only be paying 20 to 25% of each project (suggested by the 4 to 5 times multiple), tolls will be very high on any new roads, and high speed train tickets would be very expensive (like Acela).
Now, perhaps we could temporarily get that sort of investment by allowing tolls to be added to all existing federal highways. If Los Angeles Metro could add congestion tolls to all of the interstate freeways in the area (which have tens of millions of vehicle miles every commute), we could easily collect 10 billion a year for local transit projects. Pennsylvania recently suggested tolling I-80 thru the state, so other areas might be willing to consider this as well.
Would the Republican leadership be willing to change all of the freeways into tollways? This would be a way of instituting a VMT (vehicle miles tax), hidden as a user fee, to pay for transportation infrastructure. And it would have the benefit of making transit and rail projects more profitable. Imagine if driving on I-5 from SF to LA cost $0.10 a mile, or $40 in tolls. Add on another $40 or $60 for gas, and even a $100 HSR ticket will look cheap. Similarly, rush hour tolls on freeways would probably have to be set at $1 per mile to make a dent in traffic congestion, making Metrolink or Caltrain or BART look like a great deal in comparison, even if the fares were raised by 50%.
But short of tolling all the interstates, I’m not sure that Mica will be able to attract 4 dollars for every 1 federal dollar in transportation funds, unless he expects the States to raise taxes when the feds won’t.
Steven Reply:
February 7th, 2011 at 6:15 pm
@ Joseph E
I’m pretty sure (not 100%, but close) that Mica is looking for $4-5 of *private* funds for every federal dollar. I think he’s referring to a infrastructure bank, not state funds or pure toll financing. Lord knows the states can’t actually afford to pay for infrastructure, and user fees can no more finance road construction than most transit projects pay for themselves out of the fare box.
Tolls and increased gas taxes are part of the equation, but probably more as cash flow for private investors in an NIB, leveraged with the general fund. I *think* that’s what Mica means when he predicts $4 per federal dollar of additional investment (in addition to funding equal to that of SAFETEA-LU). Anyway, who knows what these guys are thinking 0.o
Donk Reply:
February 7th, 2011 at 8:56 pm
All of this talk about Public Private Partnerships is getting tiring. I heard it over and over again from Arnold, Mica, and all of the other Republicans, but it is just not going to happen. Show me an example for where a 3P actually works well. It clearly didn’t work on the 91 express lanes in Riverside, it will sure as hell not work on any other highway or road project, and it didn’t even work right for Taiwan HSR.
The only place this can possibly work is on HSR or bridges, in most cases leading to exorbitant ticket prices or tolls. This is just a bunch of blabber to make uniformed Republicans get all fired up and to gain their votes.
jimsf Reply:
February 7th, 2011 at 9:27 pm
I wonder if public private partnership is really just another giveaway of taxpayers money to private business.
Nathanael Reply:
February 8th, 2011 at 6:32 am
Usually. Looters can’t *stand* the idea that something is being done without them getting a cut.
James Fujita Reply:
February 8th, 2011 at 5:54 pm
Please stop talking like Japan does not exist. The country no longer has what we would traditionally call a nationalized, public railway; each of the divisions of Japan Railways (formerly Japan National Railways) is privatized.
That’s on top of the many private commuter railways, and then there’s the Tokyo Metro, which I must admit I don’t fully understand, but there’s a public-private combination involved there as well.
That’s much too large of a system to be considered an outlier; and not to be ignored when Japan wants its fair share of Cal HSR.
I’m not saying that’s how private-public partnerships would work here in the United States, and of course we should be cautious lest we end up with Enron Railways.
But at the very least, we shouldn’t NIMBY our way through the debate.
Dan S. Reply:
February 8th, 2011 at 5:21 pm
No reason to sugar-coat it or give the benefit of the doubt on this one. The idea that Mica can multiply the transportation funds by 4x or 5x is pure fundamentalist free-market bullshit, and the Republicans have been spreading it out over our country for years. That smell of decline is the result of a country with no will to invest in itself.
That’s another thing only we Americans have to struggle with. In Europe, HSR and subsidies for public transportation usually have overwhelming multi-partisan support.
Drunk Engineer Reply:
February 7th, 2011 at 9:43 pm
If public transit gets widespread support in Europe, it is because it does not require as much subsidy that US systems seem to require. And in the case of intercity rail routes, EU directives require they operate without subsidy altogether.
swing hanger Reply:
February 7th, 2011 at 11:36 pm
Yeah, in Japan, passenger railways even are businesses, beholden to stockholders. What a concept.
Nathanael Reply:
February 8th, 2011 at 6:31 am
In the US, businesses aren’t accountable to stockholders. So maybe that’s a key difference.
Alon Levy Reply:
February 8th, 2011 at 11:42 am
No, they are – at least, the railroads are. One of the reasons the railroads deferred maintenance was to look good to the shareholders in the short term, allowing them to get more favorable merger and acquisition terms. This is what doomed the Milwaukee, 15 years before it deelectrified.
Andre Peretti Reply:
February 8th, 2011 at 6:25 am
This seems to be largely ignored by US rail experts who often state as a “known fact” that HSR is heavily subsidized everywhere.
To my knowledge there has been no serious research about why passenger rail demands so much public money in the US, and so little in Europe. Would it be politically incorrect?