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August 2006
The
Vision Thing
When the high and the mighty of the road
industry gathered in June at the gala celebration of the
Interstate Highway System’s 50th Anniversary, conversation
inevitably turned to what it would take to keep the system vital
in the future.
In their public remarks they were kind
about it, but public or private, those who care about America’s
roads know that the SAFETEA-LU federal transportation act of
2005 is an enormous setback for modern transportation in the
United States. It is, most of all, pathetically inadequate to
meet the needs of an overloaded highway system that is suffering
from gridlock and physical deterioration. It is that way because
there is no political will to raise the revenues that are needed
to rejuvenate it. And to pass even this limp-wristed legislation
took more than 6,000 pork-barrel attachments, which the general
public could only interpret as evidence that the entire
enterprise has been corrupted.
Industry leaders who can still think
positively about this challenge spoke of creating a new vision
for the system. Raising revenues simply to preserve what we have
now is a nearly impossible sell in Congress, they said, but a
whole new vision — a 21st century version of the original
Interstate Highway vision of the mid-20th Century — would have a
chance of success.
Are future transportation demands so
different? Well yes. The current system was conceived to answer
the transportation problems of 1950s America. It took weeks to
drive from coast to coast, fatal crashes took place at an
alarming rate, and the movement of commerce was slow and
expensive. The Eisenhower system answered all of these needs
with marvelous success.
If we were to design a surface
transportation system today, it would be conceived to answer the
problems of 2006 America: an overused road system, a global
economy that demands efficient multi-modal movement of people
and goods, and rapidly rising energy costs, to name just a few.
While no one is currently touting a
total solution to surface transportation in the 21st century,
some basic ideas are coming into focus. One of the most tangible
of these is an Interstate Highway concept being promoted by
Charlie Potts, CEO of Indiana-based Heritage Group; it shows a
modern, divided roadway with rail service occupying the space
between the automobile lanes.
It is an image that poses a range of
possibilities: If you could move trailer-loads of freight over
long distances faster and cheaper by train than by truck cab,
you could reduce rural interstate congestion by a substantial
amount and improve transportation efficiency. And while
traditional freight rail companies might not have any interest
in such an enterprise, other enterprises with a more forward
looking vision might be very interested — starting with the
trucking companies themselves, especially with diesel fuel
becoming so expensive. Now, imagine a freight rail service
designed and managed by truck companies or by institutions with
the mentality of, say, Federal Express. That’s how this vision
thing can work...
Another fundamental concept that will
help create a workable vision for future transportation is the
thought that the challenges of urban/metropolitan commuter
congestion have to be separated from the challenges of the rest
of the interstate system. They are linked systems, but they have
different roles and challenges — and they will require different
solutions.
There are many other concepts getting
discussed by industry leaders. It will be interesting to see how
many of them end up the “vision” put forth by the Surface
Transportation Policy and Revenue Study Commission in its report
to Congress next July. But even if the committee fails to come
up with a powerful concept for the future of surface
transportation in the U.S., industry leaders will take up the
slack. This “vision thing” has legs.
July 2006
Selling Public Assets
You may not be aware of it, but the good
people of Indiana and Illinois are debating the merits of
selling or leasing their tollways to private enterprises.
Those politicians who avidly favor
privatization love to hear themselves say that private business
runs anything much more efficiently than government. They also
like to talk about how the windfall should be spent.
Call me old fashioned, but this sounds
like a clarion call to tax payers to grab their wallets because
they are about to get fleeced.
What’s wrong with this picture? Isn’t
the proposed sell off just a small variation on the so-called
public-private initiatives that anti-tax advocates have been
touting for the past decade or so?
No. It is a huge variation. The tollways
in question are established businesses and are already an
integral part of the social and commercial fabric of the regions
they serve. The private enterprises that might purchase or lease
these properties face very little risk; their biggest challenge
is to project ownership and operating costs accurately over a
long period of time — the lease periods being discussed range
from 50 years to 99 years.
The greater risk belongs to the
citizenry and the users. The citizens paid to build these roads
initially, and the users have continuously paid to maintain and
rebuild them. It’s hard to see how their interests would be
served by turning things over to a private corporation which
would bring nothing new except a profit motive to the
enterprise.
Yes, we’ve heard the one about private
corporations being more efficient than government bureaucracies,
but that’s seldom true of corporations that have monopolies,
which these roads would be, and it’s probably generally
overrated in any event. An independent British Columbia
newspaper, The Tyee, reported in early June that since the
province of Ontario signed a 99-year lease in 1999 to a private
consortium to run Toronto’s 407 Express Toll Route, tolls have
risen 250%. Locals are said to be mad, not only at the higher
prices but also at incorrect billings and hassles from
collection agencies.
Could something similar happen in
Illinois or Indiana? Of course. The primary focus of the
tollways would change from expediting the movement of people and
commerce to producing healthy profits for shareholders.
The other thing that should worry
taxpayers in both states is whether or not the politicians who
want to sell public things should be trusted to get a fair price
for them. Illinois is said to think it could get $14 to $20
billion for its 274-mile tollway system over a lease period of
75 to 99 years. Does that seem like a good deal? If the system
is worth that much today, what might it be worth in 99 years?
Time has a funny affect on money. In 1955, per capital income in
the United States was just under $1,900 a year; 50 years later,
in 2005, it had increased 18-fold, to just over $34,500,
radically changing what we pay for things and what we consider
essential in our lives. With this in mind, your children’s
children might be giving their children a monthly allowance of a
million dollars or so 99 years from now, and the purchase of a
274-mile highway system might be mentioned in the same breath as
the beads and baubles that bought Manhattan.
To me, selling off existing public
assets without further in-depth research by reliable third
parties is just a boondoggle offered by politicians too weak to
deal with emerging public needs either by raising taxes or
cutting spending in other areas.
June 2006
The Tax Question
When the new 12-member Surface
Transportation Policy and Revenue Study Commission convenes
again next year, they will do well to tread carefully as they
debate various options for increasing Highway Trust Fund
revenues.
Required by the language of the recently
passed federal transportation act, the commission is, by design,
made up of a wide spectrum of interests, from transportation
users, to transportation managers, to financial and political
advisors. They could easily end up proving the axiom that
committees designing horses end up with camels, but the size and
diversity of the group is important: ultimately, they will talk
about money and taxes, and if their recommendations are going to
affect lawmaking, they will have to be acceptable to a wide
spectrum of political interests.
Quentin C. Kendall is the executive
director of the commission. He has been White House liaison for
Transportation Secretary Norman Mineta in the past, and was most
recently deputy assistant secretary for Management and Budget.
Other notables on the commission include former Federal Highway
Administration head Mary Peters, former House Transportation and
Infrastructure Committee chief counsel Jack Schenendorf, and
Secretary Mineta. State government is represented by Frank
Busalacchi, secretary of the Wisconsin DOT, and a city voice
comes from Steve Heminger, executive director of San Francisco’s
Metropolitan Transportation Commission.
When these leaders convene with their
colleagues from business and industry to plot the future of U.S.
transportation, they will talk about congestion, aging
infrastructure, and what it will take to address a looming
crisis in surface transportation. They will look for ways to
relieve some highway congestion by increasing the viability of
shipping freight by rail, but when they get to highways, chances
are they will be looking at the same kind of revenue needs
defined in last year’s Chamber of Commerce report on the highway
system.
The Chamber, you may recall, called for
hundreds of billions more Highway Trust Fund revenue than TEA-LU
provides. To raise those revenues, the Chamber proposed a
laundry list of fees, fee increases, and especially, an
inflation-proof fuel tax.
Since the Chamber’s report, a number of
voices have called for making the fuel tax a percentage of the
cost of gasoline and diesel, rather than a flat tax per gallon
of fuel. The politics of the current run-up in fuel prices argue
against this. In the U.S. House and Senate, and in many
statehouses around the country, posturing political
representatives have moved to strike or suspend very modest
flat-rate fuel taxes as a way to give consumers relief from $3 a
gallon gasoline.
Some states have actually passed such
legislation, even though few consumers would even notice a
nickel decrease in fuel that has gone up a dollar a gallon in a
short period of time. The damage done to road programs, on the
other hand, can be devastating. Backlogs of failing pavement,
deficient bridges, and congestion relief projects balloon,
creating an unnoticed but real debt for the very taxpayers who
were supposed to benefit from the tax cut.
The lesson to be learned here is that,
under pressure, many politicians will happily do something
stupid rather than risk being perceived as doing nothing at all.
The further lesson for the new Policy
and Revenue Commission is to be careful about changing the fuel
tax structure. If today’s modest state and federal flat fuel
taxes can draw that kind of fire, imagine how vulnerable they
would be if they had increased in direct proportion to the cost
of gasoline and diesel.
We wish this commission all the best.
They are taking on an incredibly complex and largely thankless
challenge that is probably more vital to the future of the U.S.
economy than any issue the Congress will debate for many months
to come.
May 2006
Where Do We Go Now?
Even as we celebrate the 50th
anniversary of the Interstate Highway system and marvel at the
sweeping cultural and economic changes it has wrought, highway
advocates representing interests as varied as transportation
agencies, construction contractors and even conservative and
liberal think tanks are increasingly disturbed about the lack of
political interest in addressing the real needs of the highway
system.
At a recent meeting of the steering
committee for the National Partnership for Highway Quality, a
star-studded panel of highway experts discussed the need for a
new paradigm in the federal-aid highway program, and were
largely skeptical about our capacity to achieve it.
To these leaders, the current
transportation bill represents a damaging step backward. Not
only are its funding levels hopelessly inadequate for dealing
with critical problems, but SAFETEA-LU manages to divert highway
funds over an increasing number of special programs, further
diluting funds available for replacing crumbling pavements and
relieving chronic congestion.
Worse still, SAFETEA-LU was drafted and
enacted as a spending bill. It lacked any coherent focus on a
national goal, such as reducing congestion or improving the
efficiency of moving people and freight. The safety element in
its title is straight from the theater of the absurd — the
safety of federal aid roads is not a significant public concern
and safety statistics have been stable for many years. To give
tortured credence to this empty bromide, millions of dollars had
to be funneled into various and sundry safety activities that
will succeed mainly in taking money away from people and
applications that could improve pavements and traffic flow.
Now, add to this picture the earmarks
that were attached to the bill. According to one panelist, there
were 6,701 listed clearly in the legislation, and more than
2,000 others imbedded in other parts of the nearly 900-page
bill. A little perspective here: the legislation that created
the Interstate Highway System in 1954 was 29 pages long. A
little more perspective: President Ronald Reagan vetoed the
first TEA legislation (ISTEA) in the 1980s because the bill had
nearly 200 pork barrel attachments to it.
Let there be no doubt about it, Congress
and the Administration, Republicans and Democrats alike, regard
the federal highway program as nothing more than a spending bill
today, and that dooms future legislation to a cruel combination
of declining investment and more waste of the limited dollars
that are left.
Unless.
Unless a dynamic new leader or cadre of
leaders with a dynamic new vision for the federal highway
program emerges in the Congress. Unless stakeholders in the
highway systems — like the freight haulers, the Chamber of
Commerce, the highway agencies, and the construction industry —
can unite behind common goals and funding options. Unless these
stakeholders can organize and unleash serious grass roots
support for the next transportation act.
This is a daunting challenge and few
Washington insiders think it can be done because it takes a
massive effort from thousands of people to affect the kind of
change we’re talking about. Our industry’s advocacy groups are
already beginning to organize strategies and tactics for the
next transportation debate. They can be counted on to deliver
the message on Capitol Hill and even to lobby for the right
committee chairs. But the hard part is getting the kind of
sustained grass roots support that makes elected officials take
notice of the issues. That means letters and emails and phone
calls from you and us and our co-workers and our neighbors, and
not just on one occasion but again and again for however many
months the debate may last.
April 2006
Washington Roulette
Hopefully, by the time you read this,
the U.S. Senate will have either approved the nomination of Rick
Capka to be the director of the Federal Highway Administration,
or at least the appropriate Senate committee will be reviewing
his credentials for the job.
That’s what everyone expected when the
Bush Administration announced last month that Capka was their
choice for the directorship of the road industry’s most
important institution.
Capka has served as the interim director
of the FHWA since Mary Peters resigned last August, and he had
served as deputy director since 2002. Prior to joining Federal
Highways, Capka was the CEO and Executive Director of the
Massachusetts Turnpike Authority and had oversight of Boston’s
“Big Dig” project, the largest transportation infrastructure
project in America since the Interstate Highway System was
built. Before that, he spent nearly 30 years in the Corps of
Engineers managing a wide variety of construction projects here
and abroad.
With just two years left in the Bush
Administration’s gig, the Capka appointment seemed to make
eminent sense. Few people in public life have such a rich
background in management, construction, and surface
transportation, and his nomination was endorsed by leading
organizations like the American Association of State Highway
Transportation Officials and the American Road & Transportation
Builders Association, among others.
But partisan politics entered the
picture just as the endorsements were rolling in. Senator John
Kerry made headlines in his home state of Massachusetts by
announcing that he was going to put a hold on the Capka
nomination — preventing a Senate review of his credentials —
based on Capka’s management of the Central Artery/Third Harbor
Tunnel project in Boston. Kerry likened the Capka nomination to
that of former FEMA chief Michael Brown.
I like Senator Kerry and I voted for him
two years ago, but he’s way off base on this issue. Likening
Capka to the inexperienced Brown is particularly unfair, given
Capka’s long career spent on the front lines of big
infrastructure projects. People familiar with the Big Dig credit
Capka for getting the project’s infamous spiraling costs under
control; he was ultimately fired for a political gaffe when he
gave three attorneys connected with the project a large
severance package. At Federal Highways he has won acclaim from
industry experts for his contributions to the 64-day replacement
of the Oklahoma I-40 bridge in 2002, and the rebuilding of
highways in Louisiana and Mississippi after Hurricane Katrina
ravaged the area.
I don’t know enough about Capka to say
Kerry should vote for him, or that his nomination should be
approved. But the man’s record of service for the United States
here and abroad, as a civilian and as a soldier, gives him the
right to a fair hearing where any doubts about his capabilities
can be answered directly, rather than in the press. Of all
people, Senator Kerry should see this, having had his own
stellar record of national service so viciously and unfairly
maligned in the presidential campaign.
Senator Kerry should withdraw his
blackball and give this man a chance to be heard. Ask tough
questions and vote your conscience, but don’t slam the door on a
man who has served so well and so long just to roil the
political waters. We have to be better than that. All of us.
March 2006
Those Evil Lobbyists
One of my favorite political action
organizations recently sent me an electronic missive,
encouraging me to urge my Congressman to support legislation
that would ban all gifts, free meals, and free travel for our
elected representatives.
In the wake of the Jack Abramoff
debacle, it seemed like a really good idea. At first.
Then doubts began creeping in. Would my
Congressman or Senator trade a vote on an issue because somebody
bought him a nice steak dinner? Think of all the people you’ve
entertained for dinner who didn’t do business with you or
stopped doing business with you not long after. Chances are,
most of them had more of a conscience than any professional
politician and they had no trouble eating and running.
No, I don’t think a free meal or even
several days of free meals would corrupt my Congressman or yours
either. It just gets somebody access to the congressman for an
extended period of time. Is that bad? I think not, even though I
might not agree with many of the lobbyists who get the dinner
dates.
In point of fact, I don’t see how a
Congressman or Senator can learn about the needs of the hundreds
of special interest groups that represent a full spectrum of
American citizens without listening to their various
representatives. In business, we all do it because it’s
important. Communication is how we learn, and for national
politicians, seeing beyond the much-maligned Beltway is critical
to the needs of the country and their constituents.
So, no, I don’t mind if my
representatives and yours break bread with a, gasp, lobbyist.
Would my congressman sell his soul for
an expenses-paid trip somewhere? Well, the expensive golf trips
to exotic locations that got so much publicity during the
Abramoff revelations don’t look good, but I have two
reservations about banning such junkets altogether. First, as a
practical matter, it’s hard to imagine that anyone who went on
such a trip wasn’t already a “friend” of the sponsor.
Second, I can’t stand the thought that
new ethics legislation might keep politicians from visiting
construction job sites, or even, on a grander scale, from
visiting places in Europe or Asia where they might be exposed to
a different way of doing things. Would they get there anyway if
we banned junkets and gave them nice travel budgets? Maybe, but
it would still be a lobbyist that would sell them on where to go
and what to see.
And would we taxpayers foot a bigger
travel budget? In a country that doesn’t want to pay a nickel
more for social programs, education, war, or anything else, it’s
hard to picture an electorate willing to underwrite Senator
Smith’s trip to Paris, even if it is a cheaper way to introduce
him to pervious pavement than building three lane miles of it.
Did the politicians and aides
entertained by corrupt lobbyists change their votes because they
had a good time in paradise, or did they get the trips to
paradise because they were already on board? Were the corrupted
politicians and aides corrupted by lobbyists or were they
already on the make?
At a recent press luncheon hosted by the
Associated Equipment Distributors, Christian Klein, the
association’s chief lobbyist, was asked what lobbying reforms he
thought we needed. His answer came in two parts. First, he said,
you have to ask if the egregious acts of this scandal were
against existing laws. The answer is, apparently, yes.
Second, said Klein, if he could change
one part of the system it would be to lengthen the period of
time a politician or senior staffer has to wait after leaving
government before they can become a lobbyist calling on their
former associates.
Sounds like good advice to me. Of
course, AED comped me a nice lunch, and if you’re thinking a
Congressman would sell his soul for the surf and turf, what
would a mere editor do?
February 2006
After the Fuel Tax
Few things about transportation’s future
are more unsettling than the thought that the fuel tax, the
foundation for modern road and light rail mass transportation in
America, may no longer be a viable funding source in the future.
As motor fuel has become expensive, the
attractiveness of highly efficient cars has increased, raising
the specter of a future in which a vast fleet of 50-mpg hybrids
produce a fraction of the tax revenue per mile that today’s
fleet of cars and SUVs produce.
While some in the environmental lobby
who haven’t gotten any deeper into this subject than the slogan
of the day might think this is an attractive prospect, the truth
is that the first casualty of this scenario would be the
transportation form environmentalists hold most dear: mass
transit. Generations of smelly, dirty, polluting, gas guzzling
cars and light trucks have funded a lot of the mass transit
construction in this country, and the rest has come from general
revenues. Few mass transit systems even cover their own
operating expenses, much less produce revenues for capital
investment.
Similarly, the inability to expand the
capacity of the highway system due to lack of funding would not
be likely to reduce congestion or enhance air quality. Indeed,
congestion would almost certainly get much, much worse, reducing
any air quality benefits that might be derived from the
transition to more fuel efficient cars.
It’s also hard to see much benefit
accruing to anti-tax groups, the other force opposing
significant investment in transportation infrastructure in years
past. True, a red-blooded anti-taxer could reduce his annual
fuel tax bill from, say, $150 to $75 by switching to a super
fuel-efficient vehicle, but at what cost? Longer commuting
times. Less predictable trip times. Increased aggravation.
Higher costs for retail goods as delivery costs increase.
The rest of us just want a
transportation system that works, and even we will be uncertain
about some of the fuel tax substitutes that are being bandied
about. The most futuristic is a tolling system that would use
sensors in your vehicle and in the roads to tax each of us
according to the miles we drive. It gets high marks for fairness
and slickness, assuming the technology evolves. But that
technology might be easy to cheat on, and if it isn’t, what
about the privacy issues? Such a system would seem to lend
itself to creating a history for each of us, delineating where
we have been every day and hour we have ever driven somewhere. A
lot of people will have trouble with that.
Enforcement wouldn’t be easy, either.
How much could government invest in employees to chase down
deadbeats, especially if their debts are in the $100 a year
range or less? It would be very hard to get any return on the
collection investment, it seems.
Other measures are variations on
traditional taxes, focusing on vehicle-related services and
products. They are do-able at some level of taxation, but not at
radically high ones. If you tried to put the equivalent of a
cigarette tax on batteries and tires, for example, you might
just create a new black market.
Solutions will be found to the
diminishing returns on the fuel tax, but they will almost
certainly be piecemeal and not nearly as elegantly fair and
equitable as the fuel tax era has been.
January
2006
Expanding Your Solution Base
Generally, I think taxpayers are well
served by the risk-averse tendencies of most road and bridge
agencies. While their conservatism means it takes forever to
change mix designs and pavement strategies, it also means they
don’t fall for gimmicks and rarely invest public money in
experimental pavements that fail.
On the other hand, it strains
credibility that nearly a decade after the creation and federal
certification of Superpave, there are still some states and many
local governments that have not used the stuff, even though its
merits have been proven time and again. There’s a difference
between conservative management of public funds and pure
resistance to change.
As a taxpayer, I would like my state,
county, and local road agencies to set aside a portion of each
year’s budget to explore new pavement and traffic management
technologies on a scale large enough to reap meaningful results
and small enough not to kick us in the head if the project
fails.
I want this because I think it’s more
cost effective to have a lot of proven solutions to road
management challenges than to have just a few. I also think that
when you test something new, it’s not just the materials or the
machinery that’s being tested, it’s also the ability of area
contractors or suppliers to implement the new stuff in an
efficient manner.
That said, here are some of the
technologies I’d like my road agencies to be working with, at
least on a demonstration project basis, over the next few years.
New asphalt solutions. Superpave
is widely used here, and I’d like my local agencies to be laying
stone matrix asphalt on higher volume surface streets serving
business districts and commercial parks. Traffic volume is very
high in this Chicago suburban area, and anything that lengthens
the time between mill-and-fill interventions will help our
traffic congestion problem.
I would also like to see local agencies
install some strips of full-depth asphalt pavement when they
replace concrete roads, especially in commercial areas. Concrete
is a great pavement and it lasts almost forever, but when it has
to be replaced, the process can be long and involved and
crippling for retail businesses fronting on the street under
construction. Local pavement managers should know if full-depth
asphalt is a viable option or not.
New concrete solutions. Illinois
is already a big user of concrete for high-load, high-volume
roads, and the state has made a big commitment to continuously
reinforced concrete for Chicago-area expressways. The cost is
high, but the smoothness of the newer roads is pleasing and
practical.
Now, I’d like to see our agencies
explore the potential for roller-compacted concrete on secondary
roads and perhaps commercial drags. One of the pioneer
contractors in RCC paving once told me he thought he could match
asphalt smoothness and installation time if he could get an
agency to write a spec that allowed him to pave in lifts, like
asphalt. I say, let’s test this. If it works, it would make an
interesting and valuable alternative in many pavement
replacement situations.
Pavement recycling. The suburbs I
travel make extensive use of mill-and-fill and overlays, and
they do a good job of recycling old asphalt by blending it into
new mixes. But in-place asphalt recycling is almost unknown
hereabouts — no doubt because of the near proximity of hot-mix
plants, and the plentitude of milling and paving contractors. On
the other hand, hauling the tailings 10 miles from a milling
project to a plant, then 10 miles back in this area’s traffic is
not an ideal solution. For many miles of local roads, it should
be more cost effective to employ hot-in-place recycling.
Similarly, I’d like to see local
agencies employ full-depth reclamation when they replace asphalt
roads just to get a higher quality base for a lot less money
than a total reconstruction.
No, I’m not second-guessing the
professionals who manage the pavements I use every day. I’m just
asking them to know all the options available to them for any
particular challenge, and to invest a reasonable amount of money
each year in looking for ways to expand and improve their list
of options. I think your taxpayers would ask the same of you,
too.
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