Tag: infrastructure

Infrastructure We Don’t Need

Here’s the great thing about driverless cars: They will need no new infrastructure because the people designing them are making them work with existing infrastructure. All they ask is for cities and states to fill the potholes and do other basic maintenance.

Here’s another great thing about driverless cars: Most congestion results from slow human reflexes, and simulations show that congestion will significantly decline if as few as 5 percent of vehicles on the road are driverless. So, even if you don’t have a driverless car, you will benefit from others being driverless.

So why is Bexar County (San Antonio) Commissioner Kevin Wolff proposing to use federal infrastructure dollars to build new interstate highway lanes open only to driverless cars? On one hand, they don’t need special lanes. On the other hand, separating them from other traffic eliminates the congestion relief benefits they can provide.

Kevin Wolff is the son of Nelson Wolff, San Antonio’s leading streetcar supporter and a long-time proponent of pork barrel in general (among other things, he has a stadium named after him). Kevin opposed the streetcar, but he supported another even more foolish rail-transit proposal.

The state of Texas is planning to add four lanes to relieve congestion on Interstate 35 in San Antonio. All four would be “managed,” meaning tolled to make sure they never get congested. Wolff’s idea is to dedicate two of those lanes to driverless cars, which means two fewer lanes for other people to use.

Kevin says he floated his driverless-lane idea to the Trump Administration, which has proposed to spend $20 billion on “innovative” infrastructure projects. “They told me, ‘This is just the kind of proposal we want to fund,’” he said.

Actually, it is just the kind of proposal they should not fund. It isn’t necessary. It doesn’t relieve congestion and will probably make it worse than having four managed lanes. It doesn’t help restore crumbling infrastructure. It merely adds more infrastructure that won’t have a source of funds to maintain it.

Trump Plan Probably Won’t Repair Crumbling Infrastructure

The White House released President Trump’s infrastructure plan today, which calls for spending $200 billion federal dollars as seed money to stimulate a total of $1.5 trillion on “gleaming new infrastructure.” Almost lost in the dozens of pages of documents issued by the administration is that the reason why the federal government supposedly needs a new infrastructure program is that our existing infrastructure is crumbling, and the reason it is crumbling is that politicians would rather spend money on gleaming new projects than on maintaining the old ones.

The White House proposes several new funding programs. The administration could have dedicated one or more of these programs to maintenance and repair of worn-out infrastructure. Instead, all $200 billion can be spent on new projects, and knowing politicians, most of it will be. To make matters worse, funds for most of the programs would be distributed in the form of competitive grants, but experience has proven that competitive grants are highly politicized. 

“In the past, the Federal Government politically allocated funds for projects, leading to waste, mismanagement, and misplaced priorities,” agrees White House economic advisor Gary Cohn. The administration’s solution, Cohn continues, is to “stimulate State, local, and private investment.” In other words, instead of most decisions being made by Washington politicians, they will be made by local politicians. But if local politicians were any better at maintaining infrastructure, then we wouldn’t have tens of thousands of local bridges classed as “structurally deficient” and the New York, Washington, Boston, and other subway systems wouldn’t be falling apart.

The White House says that the federal funds it proposes to allocate to infrastructure may be spent on either new construction or maintenance, which is an advantage over some existing federal programs that can only be spent on new construction. But just because they can be spent on maintenance, doesn’t mean they will be.

The New York subway system is falling apart because the city doesn’t have enough money to maintain it. Yet it has enough money to spend $10 billion on a tunnel between Penn Station and Grand Central Terminal for Long Island Railroad trains, which the New York Times has called “the most expensive subway in the world.” It also has enough money to build the eight-mile Second Avenue subway, which at $2.1 billion a mile must be the second-most expensive subway in the world.

State of the Union’s Infrastructure

Remember America’s crumbling infrastructure that supposedly needs trillions of dollars for maintenance and rehabilitation? President Trump doesn’t. Instead, the seven sentences in his State of the Union speech that focused on infrastructure talked about building “gleaming new” projects rather than fixing existing systems. 

The only news is that he is upping the ante from $1.0 trillion to “at least $1.5 trillion.” More disturbingly, other than mentioning an “infrastructure deficit” – which could just as easily be interpreted to mean a shortage of new infrastructure as a deficit in maintenance – Trump said nothing about fixing existing infrastructure. Instead, he wants to “build gleaming new roads, bridges, highways, railways, and waterways.”

Why? We have plenty of railways. Though the railroads have trimmed the nation’s rail mileage by 45 percent since 1916, they move more freight than ever and seem to be quite capable of adding capacity where they need it without government help. High-speed trains, meanwhile, are pointless when we have planes that can go twice as fast and don’t require hundreds of billions of dollars of supporting infrastructure.

Nor do we need more interior waterways. The ones we have are government subsidized and paralleled by railroads that could easily replace them if subsidies ended tomorrow (as they should). Fixing the Jones Act to allow low-cost shipping to Alaska, Hawaii, and Puerto Rico is more important than adding new waterways in the contiguous 48 states.

Our state and interstate highways and bridges are actually in better shape than ever. City and county roads aren’t doing as well and many urban roads are heavily congested, but these are local problems, not federal ones. They are best handled by fixing the system of user fees that should pay for them, such as by Oregon’s experiment with mileage-based user fees (in which I am a participant). More federal funding would only allow the states to delay making those changes.

Finally, our transit systems – especially the most important ones in New York, Chicago, Washington, Boston, and the San Francisco Bay Area – are suffering from overspending on gleaming new transit lines and neglect of the existing ones. More new lines will only make that problem worse.

In short, President Trump has fallen for the politician’s fallacy of preferring ribbons over brooms – that is, building new infrastructure rather than maintaining the old. This is underscored by a leaked infrastructure plan that outlines seven different initiatives and programs, none of which is focused on repairing or rehabilitating America’s existing infrastructure.

This country may need some new infrastructure, but mainly it needs to better utilize and take care of the infrastructure it already has. Since politicians seem to be incapable of doing that, and since user-fee-funded infrastructure tends to be far better managed and maintained than politically funded infrastructure, Congress should focus on returning as much infrastructure as possible to funding systems that rely on user fees, not taxes.

Federal Gas Tax Increase Misguided

The Trump administration will release its long-waited infrastructure plan in coming weeks. The plan is expected to include $200 billion over 10 years of federal funding. Where will the money come from? The president has pondered raising the federal gas tax.

Revenues from the 18.4 cent-per-gallon federal gas tax go into the Highway Trust Fund, and then are dished out to the states. But 98 percent of U.S. streets and highways are owned by state and local governments, and the owners should do the funding. States that need to improve their highways can increase their own gas taxes, sales taxes, issue debt, add user charges, or pursue public-private partnerships.

There is no advantage in raising federal highway revenues rather than the states raising their own. The states can tackle their own infrastructure challenges, and about half of them have raised their transportation taxes in the past five years.

Supporters of a federal gas tax hike say that the tax has not been raised since 1993, and its real value has been eroded by inflation. That is true. But the federal gas tax rate more than quadrupled between 1983 and 1993 from 4 cents to 18.4 cents, as shown in the chart below. The 4-cent rate would be 9.8 cents in today’s dollars, so the real gas tax rate has risen substantially since the early 1980s.

The chart shows that the states have steadily raised their own gas taxes in recent years. API discusses state gas taxes here, and they emailed me data back to 1994. (I’ve interpolated a few missing years). The state average—currently 33 cents—includes both gasoline excise taxes and other taxes on gasoline.

I hope Trump does not go down the road of gas tax increases. Pumping more money through the federal bureaucracies would fuel more top-down planning and inefficiency. Funding for highways and other infrastructure should be handled by state and local governments and the private sector.  

More on infrastructure here and here

The Good and the Bad of Public-Private Partnerships

President Trump has reportedly expressed reservations about public-private partnerships, but White House economic advisor Gary Cohn is still enthusiastic about building the administration’s fabled infrastructure plan around them. Not everyone realizes, however, that there are two very distinct kinds of public-private partnerships, which I call the good kind and the bad kind. I’d like to believe that it is the bad kind that worries Trump while it is the good kind that encourages Cohn.

The good kind of public-private partnership is more formally known as a demand risk partnership. In this case, the public partner essentially gives the private partner a franchise to build a road or some other infrastructure. The private partner is allowed to collect tolls or other revenues from the infrastructure for a fixed period of time, usually three or four decades, after which ownership and management of the infrastructure is turned over to the public partner (who may contract it out again). The key is that private partner accepts all of the risk that the revenues may not cover the costs. The I-495 Capital Beltway express lanes are a demand risk partnership.

Questions to Ask About Amtrak 501

The wreck of the 501–the Amtrak train that crashed near Seattle on Monday–is raising lots of questions about Amtrak operations, but they aren’t always the right ones. Here are some questions that should be asked and some of my preliminary answers. Answers from Amtrak (the operator), FRA (the funder), Sound Transit (the track owner), or WSDOT (the train owner) may differ.

1. Congress required passenger railroads to install positive train control (PTC) by the end of 2015. Why did the Federal Railroad Administration (FRA) give money to the Washington Department of Transportation (WSDOT) for a new passenger rail line that would not open until after 2015 when the project didn’t guarantee funding for positive train control?

Answer: The Obama administration wanted to distribute high-speed rail funds to as many states as possible in order to build political backing for the program, so it couldn’t be bothered with positive train control. The tracks the train was on are owned by Sound Transit, which says it is installing PTC, but it won’t be finished until spring. Public releases of WSDOT’s application for funds for this train didn’t mention PTC.

2. Around 800 people die in railroad accidents a year. PTC would prevent only about 1 percent of these fatalities; far more would be saved by spending the same amount of money on better grade crossings and fencing of rail rights of way. Why do we put so much emphasis on an expensive technology that will do so little?

Answer: Accidents that PTC could have prevented tend to be more spectacular than people getting killed when a train hits their car at a grade crossing. This suggests that, when politicians decide where private businesses spend their money, it’ll get spent on grandiose programs rather than things that could really make a difference.

A Horrible Way to Be Right

Today is not a proud day for the Washington State Department of Transportation (WSDOT). The agency spent close to $800 million of federal funds on a so-called high-speed rail project between Seattle and Portland–only “so-called” because top speeds would be just 79 mph, which is conventional rail. Much of the money was spent upgrading existing tracks to give passenger trains a shorter (but less scenic) route through and around Tacoma.

As you probably know, the very first train to use this route derailed on an overpass over Interstate 5, blocking half the freeway and killing at least six people. To make matters worse, Mayor Don Anderson of Lakewood, Washington, about 10 miles north of the crash, warned WSDOT a few weeks ago that it was not taking safety seriously enough. “This project was never needed and endangers our citizens,” he cautioned.

To be fair, Mayor Anderson was worried that grade crossings in Lakewood were inadequately protected for 79-mph trains. But his comments more generally suggest that WSDOT was putting the goal of saving Seattle-Portland passengers ten minutes of time–increasing average speeds by just 2.7 mph–ahead of safety.

In response to the accident, President Trump tweeted, “The train accident that just occurred in DuPont, WA shows more than ever why our soon to be submitted infrastructure plan must be approved quickly.” The implication was that this is an example of crumbling infrastructure, when in fact it is an example of misplaced infrastructure priorities.

In fact, what the accident shows is why the federal government should get out of the infrastructure business. As Mayor Anderson said, this project was unnecessary, and it was only done because President Obama wanted to spend billions of federal dollars on ideologically driven high-speed rail projects and WSDOT had a shovel-ready project (despite not being high-speed rail) on which to spend some of those dollars.

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