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Clinton Pledges to Make a Big Infrastructure Push in Her First 100 Days

The industry groups behind last week’s “Infrastructure Week” campaign got exciting news today when presumptive Democratic presidential nominee Hillary Clinton announced she’s going to make a big $275 billion “infrastructure” push in her first 100 days.

An anonymous Clinton aide told the Washington Post:

This proposal would represent the most significant increase in infrastructure investment since President Eisenhower built the Interstate Highway System.

Streetsblog took a look at Clinton’s infrastructure proposal when she introduced it in December, and there wasn’t much more to it than a large dollar figure. Her proposal calls for spending $275 billion on top of the $300 billion for surface transportation already on the books for the next five years. It doesn’t, however, call for raising the gas tax, a mileage fee, or even the barrel of oil tax recently proposed by President Obama.

Instead, Clinton ‘s proposal envisions additional funding from a vague “business tax reform.” Whatever that turns out to mean in practice, it sounds a lot like the funding gimmicks that Washington has increasingly come to rely on to subsidize roads.

On the bright side, Clinton did call for more investment in transit, biking, and walking; for more accountability for state DOTs; and for greater use of “merit-based” project selection, rather than just shoveling money at states to pour into expensive highway projects, no questions asked.

Overall, Clinton’s infrastructure plan falls short compared to what Obama called for in his final budget proposal. That Obama blueprint would substantially raise transit funding without increasing the allocation for highways. It would have been a real policy shift, rather than the “more of everything” approach Clinton seems to favor. Congress, however, would not even dignify the Obama proposal with a formal hearing.


Obama’s Politically Impossible Transpo Plan Is Just What America Needs

Even with a tax on oil, the U.S.'s effective gas tax rate would be the lowest in the industrialized world. Graph: Tony Dutzik via FHWA

Even with a tax on oil, the U.S.’s effective gas tax rate would be the lowest in the industrialized world. Graph: Tony Dutzik via FHWA

It may be “seven years too late,” as tactical urbanist Mike Lydon put it, but President Obama has released a transportation proposal that calls for big shifts in the country’s spending priorities.

Obama’s proposal would generate $30 billion annually from a $10-per-barrel surcharge assessed on oil companies. More importantly, the revenue is linked to a substantial shift in what transportation projects get funded. It’s the kind of thorough proposal, on both the revenue and spending sides of the equation, that Obama shied away from for most of his presidency. (It would only have stood a chance during his first two years in office.) While this Congress would never pass it, the proposal does lay down a marker for what smart federal transportation policy could be.

In a rough sketch laid out by the White House yesterday of the upcoming proposal, Obama calls for major increases in transit funding and investing in a network of efficient high-speed rail. Perhaps even more innovative is a $10 billion program to reduce carbon emissions from the transportation sector. This program, among other things, would fund states to better coordinate housing and job development with transportation. Obama’s proposal also calls for $2 billion to support research and development and the implementation of autonomous vehicles.

Not surprisingly, what has gotten the most press is the oil tax, which even Obama admits would likely be passed on to consumers through higher gas prices. Already, Republican Congressional leaders have called the proposal “DOA.”

Obama’s people have acknowledged the bill faces long odds in Congress, describing it as a conversation starter. An unnamed administration official told Politico the plan would help shift the nation’s transportation policy out of the Eisenhower era.

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5-Year, $300 Billion “FAST Act” Will Extend Transpo Policy Status Quo to 2020

They’ve done it. Representatives from the House and Senate have emerged from conference committee with a five-year transportation bill, which is expected to be quickly approved and become first “long-term” bill in more than a decade.

Streetsblog was unable to confirm that Congress will be using this as the cover for its new transportation bill.

The discouragingly-named “FAST Act” is 1,300 pages long, and everyone with a stake in the legislation is still having their policy wonks sort through it. But here’s a very broad outline: The $305 billion bill reserves $48 billion exclusively for transit and $205 billion for highways. While state DOTs do spend most of their “highway” money on highways, much of that money can be spent on surface streets or “flexed” to other modes if the agencies want. (Also, the bill lays out funding guidelines for passenger rail, but that will have to be meted out through a separate appropriations package.)

Stephen Lee Davis of Transportation for America says the bill mostly continues the transportation policy of the last 10 years. It contains small initial increases for both highways and transit and then raises them at the pace of inflation. The Transportation Alternatives Program — the small pool of funding for walking and biking — was the only program that was capped with no built-in adjustment for inflation. It will rise from the current $817 million annual allocation to $850 million and then be held constant.

“This bill essentially doubles down on [current policy] with some small changes, and it locks it in for 2020” Davis said.

Because no one in Washington is willing to raise the gax tax, the bill includes $70 billion in subsidies for the Highway Trust Fund from other sources. The subsidy could have been bigger, but late in the game, lawmakers backed off the idea of a six-year bill that would have reportedly cost $100 billion over and above what the gas tax brings in.

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It’s Time to Stop Pretending That Roads Pay for Themselves

If nothing else, the current round of federal transportation legislating should end the myth that highways are a uniquely self-sufficient form of infrastructure paid for by “user fees,” a.k.a. gas taxes and tolls.

Highways have been massively subsidized for many years, but now it’s going to be harder to ignore. Graph: U.S. PIRG

With all the general tax revenue that goes toward roads in America, car infrastructure has benefited from hefty subsidies for many years. But at the federal level, the road gang could always argue that the gas tax paid for the Highway Trust Fund. Not anymore.

The gas tax has stagnated at the same rate since 1993, and the Highway Trust Fund has been bailed out so many times over the last decade, it’s hard to keep count. A long-term transportation bill was supposed to fix that. Instead, the six-year bill on its way to passage right now in Washington may finally bury the idea that American highways are wholly paid for by the gas tax.

Despite gas prices plummeting to barely more than $2 a gallon, and despite pressure from interest groups on both the right and left, Congress has never seriously considered raising the gas tax to cover the cost of the federal transportation program. That means roads are in line for way more subsidies.

It’s unclear exactly how much subsidy the final bill will contain, since the House and Senate bills have yet to be reconciled. But it looks like about $85 billion will be needed to fill the gap over six years. Part of that figures to come from raiding the Federal Reserve and part from a gimmicky one-shot tax on “repatriated” overseas corporate profits. Either way, we’re not talking about “user fees.”

In the House bill, the combined subsidy would account for a quarter of the $322 billion in transportation spending over six years. The subsidy will only get larger in future bills as the purchasing power of the gas tax continues to erode, unless Congress can overcome its aversion to asking drivers to pay for roads.

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Is Raising the Gas Tax Really the Answer?

Cross-posted from the Frontier Group

In the 1920s, Great Britain debated the future of its Road Fund – a pot of money raised from vehicle excise taxes and devoted exclusively to road repair. Then-Chancellor of the Exchequer Winston Churchill opposed the fund, arguing that, if drivers paid taxes dedicated solely to roads, “It will be only a step from this for them to claim in a few years the moral ownership of the roads their contributions have created.”¹

Who pays and who "owns" the roads? Photo: Richard Masoner

Who pays and who “owns” the roads? Photo: Richard Masoner

Here in the United States, we have long been under the misimpression that the taxes paid by drivers – most notably the gas tax – cover the cost of building and keeping up our roads. And is there any doubt that those contributions have come with a claim of moral ownership? For decades, transportation policy has been shaped by the idea that drivers do their “fair share” to maintain the infrastructure they use, while other transportation users – those who ride transit, ride bicycles or walk – are little better than freeloaders.

If you’ve ever wondered why some people get enraged at the so-called “diversion” of small amounts of gas tax revenue to transit, or are apoplectic over the dedication of a small amount of roadway space to bike lanes, or perceive efforts to make communities more walkable as a “war on cars,” it all comes down to the deeply ingrained belief that roads have been built solely by and for the exclusive benefit of motorists.

A new report we at Frontier Group have co-authored with U.S. PIRG Education Fund, Who Pays for Roads?, explodes the “users pay” myth. Nearly half of the money now used to build, maintain and operate highways now comes from ordinary taxpayers – you and me – regardless of how much we drive.

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American Roads Depend on Handouts From Bus Riders, Cyclists, Pedestrians

Paying for roads costs everyone, whether they drive or not. Chart: US PIRG

Paying for roads costs everyone, not just people who drive. Graphic: U.S. PIRG

Once upon a time in America, the road system was largely funded by the gas tax. But that was many Highway Trust Fund bailouts ago.

User fees have made up a declining share or road funding as general taxes have increased. Graph: US PIRG

Gas taxes, tolls, and other fees on driving account for a rapidly declining share of road spending. Graph: US PIRG

Today, only about half the money spent on the U.S. road system comes from fuel taxes, tolls, or other fees paid by drivers, according to a new report [PDF] by the U.S. Public Interest Research Group. Taxes with no relation to the amount people drive — property taxes and sales taxes, for instance — account for about 42 percent of road and highway spending, PIRG reports. Another 10 percent comes from bonding, and given elected officials’ deep reluctance to raise gas taxes, a lot of those bonds won’t be paid off by drivers.

Between 1947 and 2012, the total subsidy for American roads amounted to about $1 trillion, according to PIRG’s analysis of data from the Federal Highway Administration. On an annual basis, the road subsidy has only been getting larger recently, as inflation eats away at gas tax revenues and cars become increasingly fuel efficient. Today, drivers cover roughly 50 percent of spending on roads, compared to 70 percent in the 1970s.

The average American household now supports the U.S. road system to the tune of between $1,100 and $1,848 per year in sales taxes, property taxes, and other indirect subsidies, such as the cost of traffic collisions to government agencies, according to PIRG.

“Our transportation finance system resembles a ‘users pay’ model less than at any time in modern history,” write authors Tony Dutzik, Gideon Weissman, and Phineas Baxandall. “The conclusion is inescapable: all of us, regardless of how much we drive, now bear the cost of our roads.”

In fact, federal, state, and local governments spend more money subsidizing roads than they spend on transit, biking, and walking combined, PIRG finds.

So, keep this research handy the next time someone tells you that America’s transportation system is paid for by drivers whose money gets diverted to other priorities like transit and biking. The truth is that we all pay for roads, whether we drive or not.


Study: Most Roads Don’t Pay for Themselves

Most American roads — even the most highly trafficked — are financial losers. That’s a major finding from a new study by the Center for American Progress [PDF].

Four out of 10 American highways don't generate enough revenue to pay for maintenance. Photo: Wikipedia

Four out of 10 American highways don’t generate enough revenue to pay for maintenance. Photo: Wikipedia

A financial analysis by the think tank found that about four out of 10 U.S. highways don’t carry enough traffic to generate sufficient revenue to pay for their maintenance — let alone construction.

CAP analyzed individual road segments from around the National Highway System. Using publicly available traffic data, researchers were able to estimate how much revenue each segment generated in terms of user fees paid by drivers, namely state and federal gas taxes. Those totals were then compared to average maintenance costs, assumed to be two resurfacings and one major reconstruction over the course of 30 years.

That just six in 10 highways passed such a low test should be a wake-up call, CAP authors say. For one, the cost analysis did not include initial construction costs or inflation. Including a modest annual 1 percent inflation adjustment on the cost of construction would have increased the share of roads that failed to cover costs by 9 percent.

CAP’s study only examined national highways, which host far more traffic than the average road. Roads on the National Highway System represent only about 5 percent of America’s total road network, but carry 55 percent of all vehicle traffic. Meaning the financial returns on local roads, which generate fewer trips and less fuel use than highways, are much worse.

The study should help dispel the false notion that roads pay for themselves, write authors Kevin Degood and Andrew Schwartz. It should also inspire us to rethink the way we disperse funding for roads versus transit, they say. (At the federal level, the split is about 80-20.) In most cases, the argument that roads are self-sustaining is a myth.


Chris Christie Keeps Trying to Balance NJ’s Books on Backs of Transit Riders

Graph: Tri-State Transportation Campaign

That blue line is about to take another steep jump, but not the green one. Graph: Tri-State Transportation Campaign

Governor Chris Christie has really made a mess of New Jersey’s transportation finances. Since 2011, the governor’s “flipping the couch cushions” strategy has resulted in the state amassing an additional $5.2 billion in debt.

New Jersey’s gas tax has not increased since the 1980s and is the second lowest in the nation. Without new revenue, predictably enough the state can’t balance the books. This budget session, New Jersey Transit is facing a $60 million shortfall, and transit riders will soon be paying more for less. The state has proposed a 9 percent fare increase on top of service reductions.

The refusal to raise the gas tax is a hallmark of Christie’s political strategy. A 2012 report from the federal Government Accountability Office concluded that Christie killed the ARC transit tunnel across the Hudson because he wanted to siphon the money off for highways without hiking the state’s gas tax.

While the gas tax hasn’t budged since 1988, New Jersey transit riders got stuck with a 25 percent bus fare hike and a 10 percent rail fare hike in 2010.

A recent poll of New Jersey voters found 50 percent favor raising the gas tax. But that hasn’t convinced Christie to face reality.

Without new revenue, the state may be forced to cancel previously authorized projects, the Tri-State Transportation Campaign warns. And soon, New Jersey won’t even be able to pay the bill on existing debts. Something’s got to give — raising fares and cutting service can’t paper over Christie’s transportation budget mistakes much longer.


Ranking the Sad Parade of Federal Transpo Funding Ideas From Worst to Best

The Highway Trust Fund is on a losing trajectory. But no one can agree on how to fix it. Image: Congressional Budget Office via America 2050

America’s transportation funding system is broken, and no one in charge has good ideas about how to fix it.

The problem seems simple enough: The federal transportation program is going broke because Washington has allowed the gas tax to be eroded by inflation for more than 20 years.

As obvious as raising the gas tax may be, America’s political leaders won’t touch it. Yesterday, The Hill reported that Congressman Bill Shuster, chair of the Transportation and Infrastructure Committee, is ruling out a gas tax increase or any additional fees on driving to fund transportation.

Apparently, anything that might make driving a little more expensive is no longer politically palatable. Instead, President Obama and members of Congress have trotted out a series of proposals that range from one-off gimmicks to total fantasies that wouldn’t solve anything.

It can be hard to keep them all straight, so here’s our ranking of ideas to fix federal transportation funding, from worst to best.

Read more…


Michigan Gas Tax Hike Could Provide Some Relief for Detroit Transit Riders

Michigan state senators voted last week to approve a gas tax hike expected to net more than $1 billion annually to fix the state’s notoriously potholed roads, reports the Free Press. The measure, if it passes the House intact, could also be good news for Detroit’s woefully inadequate transit system.

A provision of the bill would allow Detroit to spend 20 percent of its portion of the proceeds on transit. Detroit has been funding transit only through its general fund — with no dedicated revenue stream — and it has arguably the worst transit system of any major city in the nation. With the city in bankruptcy, general fund revenues for transit have been in short supply. Riders report two-and-a-half-hour one-way commutes, or buses that never show, making it nearly impossible to hold down a job without a car.

Although the region is in the process of merging Detroit’s transit system with SMART, the suburban transit provider, establishing a seamless system has been fraught with political challenges. Regional planners, for instance, recently shifted millions of dollars in transit funding from Detroit to the suburbs. A new funding source would be huge.

Under the plan approved by the State Senate, Michigan’s gas tax would incrementally rise 17 cents per gallon over the next few years. Raising the tax to fix the state’s roads has been a top priority of Governor Rick Snyder, and Republican lawmakers apparently felt comfortable advancing it following the election.