Tag: highways

Federal Gas Tax: LaHood Makes No Sense

Former U.S. transportation secretary Ray LaHood lobbied for a federal gas tax increase in a Washington Post letter the other day. The letter captures the illogic and misrepresentation that influences the highway funding debate.

Hugh Hewitt was right on target in his May 31 op-ed, “Trump should raise this tax,” about boosting the federal gas tax to address our nation’s crumbling roads and bridges. The federal gas tax of 18.4 cents a gallon has not been increased in 24 years. Imagine living today on the same salary you made in 1993. That’s the dire situation facing our infrastructure: We’re supporting our roads and bridges using outdated budgets that fail to meet the demands of 2017.

On this important issue, Congress must look to the 22 states that have raised their gas taxes since 2013. States leading the way are “red” states such as Wyoming, Georgia and Idaho and “blue” states such as California, Maryland and Vermont. The list also includes New Jersey, with a Republican governor and Democratic-controlled legislature. Infrastructure is a bipartisan issue. It’s time our federal government takes the action for which Republicans and Democrats have been tirelessly advocating.

Over the years, gridlock and finger-pointing have prevented real action on addressing our infrastructure challenges. All the while, traffic congestion has worsened, potholes have multiplied, and our roads and bridges have further deteriorated.

Here are some problems with LaHood’s position:

First Problem. As former transportation chief, LaHood must know that his own department publishes data showing that the condition of the nation’s bridges has steadily improved for two decades, while the condition of highways has been stable in recent years and improved in some cases since the 1990s. (Highway data summarized here and here. Bridge data here). Why does he say “… bridges have further deteriorated” when he surely knows that is not correct?

Second Problem. The 18.4 cent-per-gallon federal gas tax has not been raised since 1993, and its real value has eroded since then. However, the gas tax rate was more than quadrupled between 1983 and 1993 from 4 cents to 18.4 cents. The 1983 rate would be 9.8 cents in today’s dollars, so the real gas tax rate has risen substantially since then. Even if “potholes have multiplied,” the blame would go to the increasing diversion of plentiful gas tax funds to non-highway uses such as urban rail.

Third Problem. The final issue is the internal inconsistency of LaHood’s position. His first paragraph complains that federal gas taxes are not high enough. But his second paragraph says that 22 states have raised their own gas taxes in just the past four years, which logically negates the need for a federal gas tax increase. The states that have the highest demands for new highway funds are apparently already taking action. Great, problem solved.

In my new Cato study on infrastructure, I note that 98 percent of U.S. streets and highways are owned by state and local governments. The states are entirely capable of funding such infrastructure they own without federal aid. States can tax, borrow, collect user charges, and attract private investment to fund their highways, bridges, airports, and seaports.

Are there any advantages to raising federal gas taxes over raising state gas taxes? How is federal funding of state-owned infrastructure superior to state funding? LaHood and other advocates don’t tell us. Instead, they wave their arms, prattle about crumbling roads and multiplying potholes, and always demand more centralized spending and control.

Protect Your Privacy and Save Money by Telling NHTSA No to the Vehicle-to-Vehicle Communications Mandate

Comments on the National Highway Traffic Safety Administration’s proposed vehicle-to-vehicle communications mandate are due next on Wednesday, April 12. This is one of the rules that was published just before President Trump was inaugurated. If approved, it will be one of the most expensive vehicle safety rules ever, adding around $300 dollars to the price of every car, or (at recent car sales rates) well over $5 billion per year. 

Despite the high cost, the NHTSA predicts the rule will save no more than 31 lives in 2025, mainly because it will do little good until most cars have it. Yet even by 2060, after consumers have spent well over $200 billion so that virtually all cars would have it, NHTSA predicts it will save no more than 1,365 lives per year. 

The danger is not that it will cost too much per life saved but that mandating one technology will inhibit the development and use of better technologies that could save even more lives at a lower cost. The technology the NHTSA wants to mandate is known as dedicated short-range communications (DSRC), a form of radio. Yet advancements in cell phones, wifi, and other technologies could do the same thing better for less money and probably without a mandate.

For example, your smartphone already has all the hardware needed for vehicle-to-vehicle communications. Since more than three-fourths of Americans already have smartphones, mandating similar technology in new cars is redundant. Since that mandate will take more than a decade to have a significant impact on highway safety, NHTSA could see faster implementation using smartphones instead. It could do so by developing an app that could communicate with cars and provide extra features on the app that would encourage people to download and use it.  

All of the benefits claimed for the DSRC mandate assume that no other technology improvements take place. In fact, self-driving cars (which will work just as well with or without vehicle-to-vehicle systems) will greatly reduce auto fatalities, rendering the projected savings from vehicle-to-vehicle communications moot.

A mandate that one technology be used in all cars also opens the transportation system to potential hackers. The communications would necessarily be tied to automobile controls, which means that anyone who understands it could take control of every car in a city at once. If individual manufacturers were allowed to develop their own technologies, the use of multiple systems would make an attack both more difficult and less attractive.

There is also a privacy issue: vehicle-to-vehicle also means infrastructure-to-vehicle communications, raising the possibility that the government could monitor and even turn off your car if you were doing something it didn’t like, such as drive “too many” miles per year. That’s a very real concern because the Washington legislature has mandated a 50 percent reduction in per capita driving by 2050. Oregon and possibly other states have passed similar rules.

Comments on the proposed rule can be submitted on line or mailed to:

Docket Management Facility, M–30
U.S. Department of Transportation
West Building, Ground Floor, Rm. W12–140
1200 New Jersey Avenue SE.
Washington, DC 20590.

Trump and Democrats Issue Competing Infrastructure Plans

Senate Democrats have proposed an infrastructure plan that calls for $1 trillion in federal deficit spending. In detail, the plan calls for:

  • $100 billion for reconstructing roads and bridges;
  • $100 billion to “revitalize Main Street,” that is, subsidies to New Urbanism and affordable housing;
  • $10 billion for TIGER stimulus projects;
  • $110 billion for reconstructing water and sewer;
  • $50 billion for modernizing rail (Amtrak and freight railroad) infrastructure;
  • $130 billion to repair and expand transit;
  • $75 billion for rebuilding public schools;
  • $30 billion to improve airports;
  • $10 billion for ports and waterways;
  • $25 billion to improve communities’ resistance to natural disasters;
  • $100 billion for a next-generation electrical grid;
  • $20 billion for broadband;
  • $20 billion for public lands and tribal infrastructure;
  • $10 billion for VA hospitals;
  • $10 billion for an infrastructure bank;
  • $200 billion for “vital projects” that “think big,” such as building “the world’s fastest trains.”

In response, someone has leaked what is supposedly the Trump administration’s own list of 50 infrastructure priority projects. It includes such boondoggles as a Dallas-Houston passenger rail line, the congestion-inducing Maryland Purple Line, the $14 billion Hudson River tunnels, and completion of the $2.2-billion-per-mile Second Avenue Subway. Except for the Dallas-Houston line, most of the passenger rail projects were already pretty well decided, but they are still foolish investments that will cost a lot and return little to the economy. There are supposedly more than 250 other projects on a priority list, but it isn’t absolutely certain that this list was endorsed by Trump or merely proposed to him.

Update: While I am now certain that the supposed Trump priority list was really “fake”—that is, not really from the administration—it appears that the reason why the Dallas-Houston line was on the list is that it is supposed to be entirely privately financed. While I am skeptical that private funders could profitably build and operate such a line, if they could, it would be appropriate (though unnecessary) to have it on such a priority list.

What most people have been calling Trump’s infrastructure plan calls for giving tax credits to private investors who spend money on these kind of infrastructure projects. This has some virtues over the Democratic proposal of direct federal spending:

  1. While the Democrats take a top-down approach dictating where the money will go, Trump leaves the setting of priorities to state and local governments, which have already approved most of the projects on his top-50 list;
  2. Where Democrats would commit the federal government to spend an arbitrary amount of money whether it needs to be spent or not, Trump lets state and local governments decide how much to spend and how they will pay for it;
  3. Where Democrats would add $1 trillion to the deficit, Trump relies on a tax credit program that will cost the feds no more than $167 billion per trillion in spending (less, obviously, if less than $1 trillion is spent);
  4. Where a lot of the Democrats’ money would go down a rat hole, at least some of federal tax credits that Trump’s plan would issue will be offset by the reduced use of tax-free municipal bonds and taxes paid by companies and workers earning the money.

Typical of central planners, the dollar figures in the Democrats’ plan are completely arbitrary.

  • Why should trains and transit, which carry 1 percent as many passenger miles as roads, get roughly as much money as roads and bridges (and probably more considering much of the $200 billion “vital infrastructure” fund would go for high-speed rail)?
  • Why spend $40 billion expanding transit and no money expanding highways when highway use is growing faster than transit in most places and most years?
  • Why no money for upgrading the air traffic control system (which is on Trump’s top-50 list)? I don’t support the use of tax dollars for such things, but it is a huge oversight from a plan predicated on the idea that federal central planners know the best places to spend your money.
  • Why $110 billion on water and sewer, and not $100 billion or $120 billion? It seems the point of these numbers is to add up to a nice round $1 trillion while divvying up the money to special-interest groups.
  • For that matter, why any at all on water, sewer, and the electrical grid when these should already be adequately funded through user fees?
  • Why is education even on the list when the federal government has never spent more than token amounts of money for school infrastructure?

My complaints about the Trump plan have been:

  1. It’s not really a plan—it’s just one funding tool;
  2. It doesn’t prevent state and local governments from spending the money on completely looney projects such as the aforementioned Dallas–Houston high-speed rail; and
  3. The private-partnership aspect has confused many people into believing that it will only fund projects that can be paid for out of user fees when in fact most projects would require state and local taxpayers to ultimately repay the private contractors out of tax dollars.

While these are valid complaints, the Trump plan is more bottom-up than top-down, as most if not all of the projects on the possibly fake priority list are supported by state and local officials. And while Trump brought a new idea to the table, the Democrats’ plan is the same old borrow-and-spend formula that they have used in the past. This is actually worse than tax-and-spend because taxing and spending doesn’t leave huge debt problems and interest payments for the future.

While we can hope that Trump’s projects will rely more on user fees more than taxes, at the moment the score has to be Trump 1/2, Democrats minus 1.

The Feds Want to Track Your Car

Last week, the National Highway Traffic Safety Commission (NHTSC) formally proposed to mandate that all new cars be equipped with “vehicle-to-vehicle” (V2V) communications, also known as connected-vehicle technology. This would allow vehicles stuck in traffic to let other vehicles know to take alternate routes. It would also allow the governments—or hackers—to take control of your car anytime they want.

The good news is that the Trump Administration will take office before NHTSC has a chance to put this rule into effect, and may be willing to kill it. The bad news is that this rule will feed the paranoia some people have over self-driving cars.

This article, for example, considers self-driving cars to be a part of the “war on the automobile” because they offer an “easy way to track the movements of individuals in society.” In fact, the writer of the article is confusing self-driving cars with connected vehicles. As I’ve previously noted, none of the at least 20 companies working on self-driving cars or software appear to be making V2V an integral part of their systems. This is mainly because they don’t trust the government to install or maintain the infrastructure needed to make it work but also because self-driving cars don’t need that technology.

There are good reasons to be paranoid about connected-vehicle mandates. First, they will give government the ability to control your car, and some governments in the United States have shown that they are willing to use that control to reduce your mobility. The state of Washington, for example, has mandated a 50 percent reduction in per capita driving by 2050. This is a state that has forbidden people to build homes on their own land if they live outside of an urban-growth boundary. If they can’t reduce per capita driving through moral suasion, it is not too much of a stretch to imagine that they will just turn peoples’ cars off after they have driven so many miles each month.

Second, if every car uses exactly the same vehicle-to-vehicle software, they will be incredibly vulnerable to hackers. Remember that hackers figured out how to remotely control a Jeep that Chrysler had wired to the cell phone network. Chrysler responded by recalling 1.4 million cars to install a firewall between the network and the car’s operating system. But now the government wants to mandate that all cars connect their operating systems to the cell phone or other wireless network, with no firewalls allowed.

While the risks of mandatory V2V systems are significant, the benefits are tiny. Marc Scribner of the Competitive Enterprise Institute notes that, “As NHTSA readily admits, hypothetical safety benefits of the mandate will be trivial for the next 15 years, at which point far superior automated vehicle technology may be deployed to consumers,” especially if manufacturers aren’t locked into technologies prescribed by the government.

People should not be paranoid about self-driving cars because none of the technologies required for self-driving cars would allow someone to remotely control your car. But people should be paranoid about V2V communications, especially those mandated by the government. Some auto makers are already offering various connected technologies with their cars, such as OnStar, which leaves it up to consumers whether they want to buy those kinds of systems and gives manufacturers incentives to keep their systems hack-proof. But government mandates for connected vehicles are both dangerous and pointless.

Happy Birthday, Gabriel Roth

Gabriel Roth, who turns 90 years young today, is a rock star among transportation economists, and a special inspiration for those of us who support reducing the federal government’s role in transportation. According to his C.V., Roth earned degrees in engineering from London’s Imperial College in 1948 and economics from Cambridge in 1954.

In 1959, he began research into improved road pricing systems. This led to his appointment to a Ministry of Transport commission that published a 1964 report advocating pricing congested roads in order to end that congestion.

In 1966, the Institute for Economic Affairs published his paper, A Self-Financing Road System, which argued that user fees should pay for all roads, and not just be used to relieve congestion. Roads should be expanded, Roth noted, wherever user fees exceeded the cost of providing a particular road, but not elsewhere.

In 1967, Roth moved to the United States to work for the World Bank, where he did road pricing studies for many developing countries and cities, including Bangkok, Manila, and Singapore. After leaving the World Bank in 1987, he continued to work as a consultant until 2000, among other things helping design the Dulles Toll Road and writing Roads in a Market Economy, a book published in 1996.

Since then, he has been a regular participant in transportation conferences, meetings, and hearings. He edited a 2006 book, Street Smart, co-authored a 2008 paper showing how electronic tolling could be done without invading people’s privacy, and made a presentation about tolling at the 2010 American Dream conference.

My home state of Oregon is now experimenting with mileage-based user fees, and I’m one of the volunteers in this experiment. If it goes well, we may see the realization of Roth’s ideas before he turns 100.

I hope to see Gabe on my next trip to DC. I know I’ll be able to find him by looking for the nearest transportation conference.

Big Brother Wants to Run Your Self-Driving Car

As part of his 2017 budget proposal, Secretary of Transportation Anthony Foxx proposes to spend $4 billion on self-driving vehicle technology. This proposal comes late to the game, as private companies and university researchers have already developed that technology without government help. Moreover, the technology Foxx proposes is both unnecessary and intrusive of people’s privacy.

In 2009, President Obama said he wanted to be remembered for promoting a new transportation network the way President Eisenhower was remembered for the Interstate Highway System. Unfortunately, Obama chose high-speed rail, a 50-year-old technology that has only been successful in places where most travel was by low-speed trains. In contrast with interstate highways, which cost taxpayers nothing (because they were paid for out of gas taxes and other user fees) and carry 20 percent of all passenger and freight travel in the country, high-speed rail would have cost taxpayers close to a trillion dollars and carry no more than 1 percent of passengers and virtually no freight.

The Obama adminstration has also promoted a 120-year-old technology, streetcars, as some sort of panacea for urban transportation. When first developed in the 1880s, streetcars averaged 8 miles per hour. Between 1910 and 1966, all but six American cities replaced streetcars with buses that were faster, cost half as much to operate, and cost almost nothing to start up on new routes. Streetcars funded by the Obama administration average 7.3 miles an hour (see p. 40), cost twice as much to operate as buses, and typically cost $50 million per mile to start up.

The point is that this administration, if not government in general, has been very poor at choosing transportation technologies for the twenty-first century. While I’ve been a proponent of self-driving cars since 2010, I believe the administration is making as big a mistake with its latest $4 billion proposal as it made with high-speed rail and streetcars.

The problem is that the technology the government wants is very different from the technology being developed by Google, Volkswagen, Ford, and other companies. The cars designed by these private companies rely on GPS, on-board sensors, and extremely precise maps of existing roadways and other infrastructure. A company called HERE, which was started by Nokia but recently purchased by BMW, Daimler, and Volkswagen, has already mapped about two-thirds of the paved roads in the United States and makes millions of updates to its maps every day.

The Solution to Congestion

It is distressing, at least to economists, how many problems could be solved by adopting basic free-market principles, yet those solutions are ignored or stridently opposed by the very people who would benefit from them. California’s drought is one of those: California actually has plenty of water, it is just poorly priced.

An even more pervasive problem is traffic congestion, which (according to the Texas Transportation Institute) wasted more than 3 billion gallons of fuel and nearly 7 billion hours of people’s time for a total cost of $160 billion in 2014. Brookings economist Anthony Downs wrote a whole book about congestion that concluded there was no solution to the problem–except, he noted almost parenthetically, congestion pricing which Downs decided was politically impossible. Of course, that’s a self-fulfilling prophecy because if no one argues for something because it’s impossible, it will truly be impossible.