Streetsblog San Francisco

The freight rail industry yesterday claimed
the top three awards in the Obama administration’s competition for $1.5
billion in TIGER stimulus grants, with Transportation Secretary Ray
LaHood singling out train shippers for an online shout-out:

(Chart: AAR)

You know, although passengers and
commuters have human faces, we need to remember that trade depends upon
the safe, smooth, and efficient delivery of goods. Our groceries depend
upon it as well. And jobs depend on it.

This DOT understands that.

But freight companies are hardly resting on their laurels today. The Association of American Railroads (AAR),
a Washington trade group that represents freight movers as well as
Amtrak, is just out with a report that carves out the industry’s turf
in a big way — including a legislative wish list.

Titled
Great Expectations, the report positions the freight industry as an
economic powerhouse well-positioned to power the nation through a
recovery from its lingering recession. Freight railroads generate $265
billion of economic activity per year while emitting 75 percent less
than similar shipments carried by truck, according to the AAR.

To
illustrate the financial might of the top U.S. freight companies, the
AAR produced a chart (above) that compares train shippers’ annual
spending on capital infrastructure and maintenance with the highway
budgets of major states.

So with the industry riding high from its stimulus victory, much to the dismay
of its trucking competitors, what’s standing in the way of a freight
renaissance? Government regulations, according to AAR chief Edward
Hamberger.

Read more…

Homeowners in car-dependent areas without access to alternative transportation are at greater risk of foreclosure, according to a report
released yesterday by the Natural Resources Defense Council (NRDC) that
calls for mortgage underwriting standards to begin taking so-called "location-efficiency" into account.

Weeds spring up near a foreclosed home in Illinois. (Photo: Getty)

The NRDC examined data for 40,000 mortgages in Chicago, Jacksonville, and San Francisco, seeking to test the contention — emphasized most
often by the nonprofit Center for Neighborhood Technology — that
affordable housing should include transportation costs as well as
mortgage bills.

And what did the report’s authors find?

In
all three cities … statistically sound results [indicated] that the
probability of mortgage foreclosure increases as neighborhood vehicle
ownership levels rise, after controlling for income. These results
suggest that mortgage lenders should include measures of location
efficiency in their underwriting to more accurately predict the risk of
default.

In addition to including transit access and
walkability in mortgage underwriters’ measurement of borrowing terms,
the NRDC recommended that location-efficiency be formally adopted as a
goal for community planners. Particularly in Sun Belt and West Coast
areas where waves of foreclosures
have prompted new fears of suburban blight, the report suggests that
rebuilding neighborhoods with location-efficiency in mind could stave
off negative effects from any future downturn in home prices.

NRDC’s conclusions are already being heeded by federal officials. Several House Democrats banded together
this summer to add language to their chamber’s climate bill asking the
Federal Housing Administration (FHA) to insure 50,000
location-efficient mortgages.

That climate legislation is
stalled for the time being, but the Obama adminstration’s deputy
housing and urban development secretary said last week that the White House would spend $10 million on research aimed at boosting the issuance of location-efficient home loans.

The U.S. Conference of Mayors released a
report this week with some dire conclusions for the nation’s cities:
Even the payroll growth that many prognosticators anticipate this year
won’t make a dent in double-digit urban unemployment. Half of the 363
biggest metro areas won’t return to their pre-recession jobs levels
until 2013 or beyond.

(Chart: US
Conf. of Mayors)

All this despite the fact that those 363 cities accounted for 90
percent of the U.S. gross domestic product (GDP) last year and 86
percent of all jobs.

Looking at the chart at right, the weight of urban contributions is
even clearer: the most economically vibrant U.S. city, New York, had a
higher productivity rate in 2008 than all but 10 foreign nations.

Going further down this list (to rankings not pictured at right),
the transportation contrasts become clearer.

The United Arab Emirates, where Dubai just opened
a $7 billion subway line, has a lower GDP than Miami, where transit
cuts are a fact
of life. Singapore, which boasts a vast rail network, has a
lower GDP than Detroit, the only major U.S. city without rapid transit.

Still, as diverting as it may be to compare American cities to
their international counterparts, the domestic struggle for better urban
transportation planning has less to do with overseas competition and
more to do with entrenched bureaucracy.

Transportation Secretary Ray LaHood told the mayors’ group today
that he understands the complaints
from metro areas that federal stimulus money was siphoned off by
state-level politicking and failed
to reach cities in sufficient proportions.

"Congress wanted the money out the door within 120 days," LaHood
said. "The only way you can do that is through these relationships we
have with the [state DOTs]."

To better meet urban needs in a jobs bill that "will be structured
pretty much the same way the current one is," LaHood added, he is pressing
for a larger infusion for TIGER, the stimulus’ merit-based grant program
where metro areas can apply directly for federal transport aid.

"It’s the one way that cities can have direct access to the money
without going through anyone else," he explained to the mayors.

Still, the heartening prospects of extra TIGER money may not salve
the transportation funding gaps developing in many large cities. The
mayors’ group reported that of the 85 biggest metro areas, 35 are
dealing with double-digit unemployment and getting proportionately less
transportation aid from the state DOT than they contribute to the state
economically.

Among those cities getting super-shortchanged: Los Angeles,
Atlanta, Detroit, Miami, Chicago — and Portland.

The claim to a link between economic growth and vehicle mileage –
that, in other words, auto travel is essential to keeping U.S.
productivity high — remains controversial and much-debated in
transportation policy circles.

One notable recent flare-up in that debate took place on National Journal’s blog after road lobbyist Greg Cohen, referring to an October paper [PDF]
released by the Cascade Policy Institute, contended that "it’s not
simply a correlation but VMT actually causes economic growth."

Now economist Todd Litman, founder of the Victoria Transport Policy Institute, has taken direct aim at the mileage-growth arguments made by Cascade’s Randall Pozdena. In a paper [PDF]
prepared for next week’s Transportation Research Board conference in
D.C., Litman charges that Pozdena’s research "misrepesents" the
relationship between prosperity and VMT "in important ways."

Litman
questions Pozdena’s conclusion, based on the below chart, that
"increasing a country’s income by 10 percent appears to increase its
use of energy by the same percentage."

(Chart: VTPI/Litman)

Note
that Pozdena equates a per-capita mileage in poorer nations with a
per-capita mileage increase in richer ones, despite data showing that
growth in car travel slows markedly once individuals reach a certain
income level. Moreover, Litman notes, America and Norway end up close
together on Pozdena’s graph even though "Norwegians actually consume
about half as much fuel per capita as U.S. residents."

Looking
exclusively at developed nations — specifically, the United States –
Litman found that per-capita productivity and VMT were negatively
correlated. Check out his graph of the state-by-state trend below:

Read more…

Washington transportation policymaking can often resemble an
unwieldy soup of anywhere between 50 and 535 local perspectives, as
lawmakers from different states and districts vie for a fixed (or even shrinking) amount of federal funding.

Congress isn’t eager to raise fuel taxes to pay for transportation — but what about the states? (Photo: Pop and Politics)

The
needs of northeastern states can bear little resemblance to those of
their southern or midwestern counterparts, and the mandate for
localities to "match" federal transportation funds at an 80-20 ratio
(or 50-50, for some transit programs) can prove daunting for cash-strapped areas — particularly as the dwindling value of the gas tax saps transportation budgets.

So as Congress and the Obama administration declining to debate a gas tax increase to pay for the next federal transport bill, how are the states coping?

Some
are taking the plunge that Washington won’t, debating new user fees on
fuel and driving. Others are simply spending less on maintaining
existing infrastructure that is bordering on disrepair. To get a taste
of the local developments, let’s take a quick tour of the
transportation-financing crisis as it’s unfolding outside of D.C.:

In Kansas, state lawmakers are debating alternative proposals to raise gas taxes and car registration fees to help close a transportation budget that has seen [PDF] $229 million in funding cuts over the past year.

In Virginia, planned transportation cuts over the next six years total $4.6 billion. The planned extension of Washington D.C.’s Metro to Dulles airport will push local tolls 25 cents higher this week, with a planned doubling by 2012. The state gas tax: 40th-highest in the nation, according to the Tax Foundation.

In Georgia, a new report
from the state transportation director endorses new revenue-raising
methods equivalent to a 1 percent sales tax and warns that the current
gas tax — which only meets half of existing infrastructure maintenance
needs — may fall short of federal matching requirements as soon as
2012.

Read more…

That’s the implication buried in a roundup
of dismal news from urban transit agencies that ran in Saturday’s Wall
Street Journal. After noting the overall ridership decreases tallied by APTA and the specter of punitive service cuts in many cities, the newspaper noted:

Riders
of Chicago’s El train, shown above, were spared fare hikes in 2010
thanks to a last-minute deal. (Photo: ~JudyCrawford via Flickr)

The cost of riding public transit rose at a 17.8% annual rate in the
six months ended in November, the Bureau of Labor Statistics reported.
Overall consumer prices were up at a 4.2% rate in the same period.

That statistic is a bit tricky, since it projects twelve-month inflation rates by looking at six months of data.

But
it’s still striking — and scary — to see transit fare inflation
hitting levels that look as bad as price increases for health
insurance, which in recent years has grown 8.7% faster than the annual inflation rate, according to the Kaiser Foundation.

Heading
into 2010, it’s easy to see urban transit agencies falling into a
vicious cycle driven by state budget woes verging on the apocalyptic
(see California), local resistance to fare increases that disproportionately affect non-car-owning commuters, and federal inaction on much-needed transportation reform.

Read more…

Transportation reformers and status quo-lovers alike smacked their
foreheads in frustration when the White House’s first stimulus plan
lowballed infrastructure to make
room for tax breaks that had little demonstrable effect on job creation
– particularly the $70 billion adjustment of the alternative minimum
tax (AMT).

HOT lanes on Virginia’s I-495 are one of seven projects approved by U.S. DOT for private activity bonds. (Photo: WaPo)

But
the stimulus law included one AMT tweak that ultimately could prove a
big boon for transportation. As the American Association of Port
Authorities observed yesterday in a letter
to Congress on economic recovery strategies, the stimulus helped
transportation planners by eliminating the AMT for two years on private
activity bonds issued by state and local governments.

So what
in the world are private activity bonds? Simply put, they are a
still-developing tool to encourage public-private partnerships (PPPs)
for infrastructure by allowing private companies to benefit from tax
exemptions similar to those enjoyed by municipal bonds (generally
issued by public entities for public projects).

As the AAPA wrote in its letter to Capitol Hill:

The
AMT reduces the attractiveness to investors of bond issues necessary
for infrastructure development projects. As a consequence, public port
authorities must discount the bonds; thereby reducing the overall
funding available for investment in infrastructure and the attendant
jobs and income creation which would have been created. AAPA strongly
supports the permanent elimination of the AMT for private activity
bonds.

Of course, the virtuousness of private
activity bonds — much like that of PPPs overall — depend on the type
of project that benefits from the debt issuance. And unfortunately, the
bonds have yet to be approved for use on transit.

Read more…

Pennsylvania Gov. Ed Rendell (D), who is in Washington today continuing his push for a "front-loaded"
federal transportation bill, told Streetsblog Capitol Hill that he sees
momentum building for a National Infrastructure Bank (NIB) to be
created as part of the jobs bill now moving forward in Congress.

Gov. Ed Rendell (D-PA) (Photo: Post-Gazette)

Rendell, who co-chairs the infrastructure advocacy group Building America’s Future
with New York City Mayor Michael Bloomberg (I) and California Gov.
Arnold Schwarzenegger (R), has proposed seeding a new NIB using part of
a short-term loan from the federal Treasury to the nation’s highway
trust fund — the meat of the "front-loading" concept.

"The
original stimulus bill had decent infrastructure spending," Rendell
said in an interview. "It probably should have had more."

The Pennsylvanian, who is bidding
for his state to become only the third in America to add tolls to an
existing interstate highway, described a "front-loaded" transport
spending bill as a means to create jobs quickly while giving Congress
time to reach an agreement on long-term infrastructure reform after the
2010 midterms.

Approving a loan from the federal
government’s general fund to the highway trust fund would ensure that
"the tough political decisions involved in" debating a new six-year
transportation bill don’t slow the pace of job creation, Rendell said.

His pitch would involve postponing the "guts of reform" — for example, progress on national performance targets for transport and more flexibility
for states to spend highway money on transit — for 12 months, at which
point lawmakers would be called upon to resolve the nation’s
transportation funding gap in order to pass a new bill that repays the
Treasury’s loan.

The design of a new NIB, which the Obama
administration strongly supports, is a key issue for Rendell. The bill
introduced in June by House transportation committee chairman Jim
Oberstar (D-MN) would make an NIB part of the U.S. DOT and set up an
Office of Public Benefit within the Federal Highway Administration to
monitor the terms of any public-private partnerships.

Rendell
expressed concerns that such a setup would limit the NIB’s independence
and subject it to excessive political scrutiny. His preferred method
would be setting up an independent board to manage the NIB, as envisioned in legislation offered by Connecticut Rep. Rosa DeLauro (D) and Sen. Chris Dodd (D).

Read more…