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OpenMarket: Transportation and Infrastructure

  • Reimagining Surface Transportation Reauthorization: Pro-Market Recommendations for Policy Makers

    June 30, 2015 10:15 AM

    Today, CEI published my white paper, “Reimagining Surface Transportation Reauthorization: Pro-Market Recommendations for Policy Makers.” In it, I lay out the case for making some small but important changes to federal surface transportation policy.

    Traditionally, free market fiscal conservatives have advocated for devolving all federal highway and transit programs to the states. To be sure, we at CEI support this eventual goal. Unfortunately, it is wholly unrealistic at this time. But there are still things that can be done to move closer to this direction. We suggest a strategy of “de facto devolution,” which basically involves keeping federal spending steady while increasing the flexibility of states to fund and finance their own highways. To accomplish this, we recommend the following changes to federal highway policy:

    • Repeal the current federal prohibition on states tolling their own Interstate segments for reconstruction purposes, codified at 23 U.S.C. § 129.
    • Uncap or greatly increase the national cap on private activity bonds, currently set at $15 billion, codified at 26 U.S.C. § 142(m)(2)(A).
    • Provide technical and financial assistance to states looking to launch their own mileage-based user fee pilot programs.

    With respect to mass transit, most free market fiscal conservatives have long and correctly held that transit is an inherently local issue. As such, it has no business receiving federal funding, let alone the current 1/5 share of total federal surface transportation spending—especially given the fact that mass transit accounts for less than 2 percent of person trips nationwide. You read that correctly: the federal government currently spends 1/5 of its surface transportation dollars on a mode that accounts for 1/50 of person trips.

     The federal politics of mass transit could be described as an unfortunate mix of parochial and ideological interests battling over non-federal issues. Given that serious federal mass transit spending cuts are at the moment politically difficult, fiscal conservatives and proponents of sound national transportation policy should embrace some more modest goals to rationalize federal mass transit policy. We recommend the following changes to federal mass transit policy:

    • Work to end Highway Trust Fund bailouts and raise public awareness of the huge discrepancy between transit funding and transit use—that 19 percent of federal surface transportation funding is currently directed to a mode that accounts for less than 2 percent of trips nationwide.
    • Roll existing discretionary transit grants programs such as New Starts into the Urbanized Area Formula Program.
    • Realign spending priorities to a fix-it-first-strategy by allowing federal transit funds to be used for maintenance projects.

    Read the whole white paper here.

  • Long Mass Transit Commutes Are Horrible for Your Health

    May 20, 2015 5:12 PM

    Joseph Stromberg at Vox.com has an article up arguing that “commuting alone by car” is “associated with obesity, high blood pressure, sleeplessness, and general unhappiness” relative to other transportation modes. His solution to unhealthy lengthy commutes is to increase carpooling.

    Back in 2012, I argued against another now-Voxxer, Matthew Yglesias, on the supposed health harms of auto commuting. The problem, as Census data make clear, is that other than those who walk to work, people commuting by driving alone generally have the shortest commutes. Those using public transit take on average twice as long to make their commuting journeys as those who drive by themselves.

  • Yes, It Is Stupid to Blame Lack of Subsidies for Amtrak's Derailment

    May 18, 2015 2:32 PM

    This morning, Amtrak Northeast Regional service was finally reopened following last week’s tragic derailment in Philadelphia that has killed at least eight and injured approximately 200. The tragedy was predictably exploited by cynical politicians, activists, and journalists, who seem to falsely believe that flushing more subsidies down the Amtrak drain would have somehow prevented the accident. It is true the technology at issue would possibly or even likely prevented this specific crash, speeding the deployment of it would dramatically increase costs and very likely reduce overall rail safety.

    The National Transportation Safety Board (NTSB) continues to investigate and a final report will likely take a year or more to complete, but we know that the train was reportedly traveling at 106 mph right before it went into the 50-mph curve. By the time the engineer pulled the emergency brake, it was too late and the train entered the curve at 102 mph. The engineer is claiming he doesn’t remember right before the derailment and may have been struck by a foreign object. Yet, the NTSB has reviewed the dispatch tapes and found that the engineer did not report being struck by an object—although the NTSB and FBI are currently investigating a mark on the windshield.

    It is likely the Philadelphia derailment is largely due to human error. In a similar 2013 crash in Spain, the operator was found to have recklessly ignored speed warnings before entering a 50-mph curve at 121 mph, killing 79 and injuring 140 when the train derailed and crashed into a concrete wall. In 2005, a Japanese commuter train derailed after it entered a 43-mph curve at 72 mph, killing 106 and injuring 562. The operator was killed, but he had likely intentionally increased the speed to unsafe levels.

    Washington being what it is, partisans almost immediately began exploiting this tragedy for political gain, blaming Amtrak opponents for supposedly starving Amtrak of operating subsidies. Carl Cannon highlights some of the more shameless examples from Democratic groups and politicians, such as the Agenda Project Action Fund’s claim that “Republican Cuts Kill… Again.” They argue that Amtrak’s alleged lack of sufficient operating subsidies has delayed the rollout of a set of rail safety technologies called positive train control (PTC). House Speaker John Boehner has righty called linking Amtrak funding to the derailment “stupid.”

    But rather than learn from Speaker Boehner’s accurate rebuke, New York Sen. Charles Schumer doubled down, saying, “Speaker Boehner’s comments are patently false. Experts have made clear that Positive Train Control could have prevented the tragedy in Philadelphia. It is simply a fact that insufficient funding for Amtrak has delayed the installation of PTC, and to deny a connection between the accident and underfunding Amtrak is to deny reality.”

    Yes, Sen. Schumer, it is stupid to make this absurd suggestion. To understand why it is baseless, you need understand a little bit about the history of PTC and Amtrak.

    Amtrak was created in 1970 to provide emergency passenger rail service throughout much of the United States. The private railroads were dying under a stultifying regulatory regime, leading to many bankruptcies, with members of Congress fearing the U.S. would lose passenger and freight rail service. The railroads had been cross-subsidizing passenger rail for decades, but while they were circling the drain in the 1970s, the passenger service mandates became too much to bear. It was widely believed that Amtrak would be temporary, and that deregulated railroads would either retake control of the passenger routes or intercity passenger rail would simply end up in the dustbin of history.

    Unfortunately, Amtrak has a small but powerful constituency and taxpayers have now doled out more than $45 billion in subsidies to keep Amtrak afloat. Amtrak accounts for just 0.15 percent of passenger-miles and 0.8 percent of trips more than 50 miles in the U.S.

  • This Week Is Infrastructure Week

    May 12, 2015 4:19 PM

    In the lead-up to the May 31 sunset date for federal highway funding, this week is “Infrastructure Week”—a week for scholars, advocates, and policy makers to debate needed long-term technologies, policies, and reforms on a wide range of infrastructure topics. Competitive Enterprise Institute transportation policy expert Marc Scribner has put forward specific reforms focused on infrastructure such as user-based revenue collection and expanded debt financing.

    “Government monopolies in infrastructure are misallocating resources and increasingly failing to serve their ‘customers’”, said Scribner. “Instead, lawmakers need to adopt policies that allow for improved transportation infrastructure provision. For the nation’s highways and airports, the most important reform right now is allowing modern user-based revenue collection and increasing debt financing, while reducing tax-funded federal grants. The improvements include all-electronic tolling, expanding the use of private activity bonds, and a modernized airport passenger facility charge, and would let consumers directly support services they actually use.”

    For more on CEI’s work on transportation policy, see CEI’s agenda for Congress, Free to Prosper.

    Also note that CEI president Lawson Bader is speaking on a Thursday panel on the economic impact of airports in America and what reforms are needed. > Thinking Beyond the Runway: A Look at How Airports Help Our Economy Take Off

  • Not So Fast: Fatally Flawed Research Asserts Alcohol Taxes Save Lives

    May 12, 2015 10:52 AM

    Last month, researchers at the University of Florida published a study in the American Journal of Public Health that concluded, “Increases in alcohol excise taxes, such as the 2009 Illinois act, could save thousands of lives yearly across the United States as part of a comprehensive strategy to reduce alcohol-impaired driving.” Their study presented the case that the 2009 tax increase resulted in a statistically significant reduction in alcohol-related deaths in Illinois. However, as I pointed out in a blog post, there only appears to be a reduction in fatalities because of the authors’ selective inclusion and exclusion of data. Rebecca Goldin, Director of STATS.org and Professor of Mathematical Sciences at George Mason University, found even more flaws in the research.

    In her post, Rebecca takes a bird’s eye view of the crash data in Illinois between 1999 and 2013. She finds a steady decline during this 10-year period with “hardly anything special at all going on at the end of 2009.” Looking closer at the data, she noted (as did I) the curious exclusion of data after 2011. “Results should be resilient to changes in choices, such as whether to use data published 2011-2013,” Goldin notes. When added to the evaluation, this 2011-2013 data shows a small decrease immediately after 2009, but then shows a steady increase in alcohol-related traffic deaths in Illinois. She also found that as a proportion of total traffic fatalities, alcohol-related fatalities on the road have been increasing since 2009 (though only by 2 percent—a statistically insignificant amount).

    Of course, the real story here is that breaking the data at year 2009 may not be an appropriate way of measuring the trends, and certainly it’s not appropriate to “blame” the excise tax for the proportionally increased alcohol deaths in the context of decreasing deaths associated to alcohol. But by the same logic neither is it appropriate to conclude that the excise tax has been saving lives.

    Finally, in addition to the “creative math” and error of conflating correlation with causation (bad scientists, bad!), there’s another potential problem with the study. The grant provided by the National Institutes of Health lists the purpose as “to develop a research program of HIV prevention focused on the intersection of event-level alcohol use… and sexual partner selection among adolescents.” There is no mention in the grant description about taxes or motor vehicle crashes. I say this is a “potential” problem because I have been unable to get answers from anyone at the NIH or the University of Florida researchers who worked on the project. My questions were simple: What was the rationale behind using an AIDS grant for alcohol tax research? And is this sort of change in scope common practice?

    It’s one thing to have public health advocates peddling flawed research in order to advance personal agendas, but it’s another entirely to use taxpayer money to do so.

  • New Tax Foundation Report Endorses PFC Modernization

    May 11, 2015 2:16 PM

    The Tax Foundation today released a new report, “Improving Airport Funding to Meet the Needs of Passengers.” Authored by Tax Foundation economist Alan Cole, the report notes that airport funding and financing in the U.S. is skewed against the users-pay principle and that the passenger facility charge (PFC) represents a welcome alternative to federal airport cross-subsidization schemes.

    The PFC is a local user charge that airports can use to fund or finance a narrow class of improvements, as permitted by the Federal Aviation Administration. The PFC has been capped at a maximum of $4.50 per enplanement since 2000. Inflation has eroded that buying power by about half. CEI, along with airports and other aviation industry stakeholders, supports increasing the cap to $8.50 and then indexing it to inflation. In the report, Cole endorses this position, writing, “The current $4.50 cap should be modernized and indexed to meet the needs of today and future growth.”

    Some have incorrectly labeled the PFC a tax. As I explain in detail here, it is not a tax and raising the federal cap on PFCs certainly cannot constitute a tax increase.

    The report goes on to say that harnessing local user fees such as PFCs can allow airports to eventually wean themselves off federal funding. The major reason CEI supports PFCs, and all transportation system user charges, over taxes is that, as Cole notes in his report, they resemble charges you would see if these were private, market institutions.

  • Why Is the Federal Government Threatening Times Square's Billboards?

    May 6, 2015 1:24 PM

    Colleagues tipped me off to an absurd news story about how the federal government is threatening to punish New York City for its famously gaudy Times Square electronic billboards:

    It is known as the “Crossroads of the World,” the “Center of the Universe” and “the Great White Way,” but Times Square could become like the “Black Hole of Calcutta” if the federal government has its way, CBS2’s Marcia Kramer reported Tuesday.

    The feds say many of Times Square’s huge and neon-lit billboards must come down or the city will lose about $90 million in federal highway money.

    The edict comes from a 2012 law that makes Times Square an arterial route to the national highway system. And that puts it under the 1965 Highway Beautification Act, which limits signs to 1,200 square feet. It took the feds until now to realize that Times Square was included, Kramer reported.

    City Transportation Commissioner Polly Trottenberg agrees.

    “The signs in Times Square are wonderful. They’re iconic. They’re not only a global tourist attraction, they’re important to the economy,” Trottenberg said.

    She said she’s not going to let it happen.

    “We’re not going to be taking down the billboards in Times Square. We’re going to work with the federal government and the state and find a solution,” Trottenberg said.

    Some have suggested that this is an example of regulators run amok. It isn’t. This is a classic example of Congress passing stupid laws, ordering regulators to implement them stupidly, and then forgetting about them until unintended consequences spring up down the line. Allow me to explain what’s going on here, as virtually all the news articles and commentary out there provide next to zero context.

    As the article noted, in the last surface transportation reauthorization (MAP-21 Act of 2012), Section 1104 created what is now known as the “enhanced National Highway System.” The enhanced National Highway System refers to MAP-21’s amendment to 23 U.S.C. § 103(b)(2)(B) to include, “Other urban and rural principal arterial routes ... that were not included on the National Highway System before the date of enactment of the MAP-21.”

    In a nutshell, this provision added roads that meet the definition of “principal arterial” to the National Highway System that were not previously designated as components of the National Highway System. Why might someone want to do this? Because arterials not designated as part of the National Highway System are not eligible for Federal-aid Highway Program funding. Based on the current statutes and regulations governing National Highway System designations, roads evaluated to be principal arterials by the Federal Highway Administration’s Highway Performance Monitoring System were automatically added to the National Highway System under Congress’s 2012 law. This included some roadways in New York City.

  • ERAM Deployed Five Years Late, NRC Blasts FAA on NextGen Delays

    May 4, 2015 10:32 AM

    We saw two announcements on air traffic control modernization last week. The first was that the Federal Aviation Administration (FAA) had finally completed its En Route Automation Modernization (ERAM) deployment, a critical component of the Next Generation Air Transportation System (NextGen) update of National Airspace System (NAS) management.

    ERAM greatly improves flight tracking, communications, and controller displays by harnessing new technologies that have been developed in the last several decades. This is all well and good, but ERAM rollout was supposed to have been completed by 2010. Five years late and several hundred million dollars over budget, it is a bit rich for the FAA to be declaring victory. But perhaps this is to be expected from a broken agency culture. Recall that the automated flight tracking computer system ERAM is replacing, the Host, suffered from serious delays when it was implemented… in the 1980s.

    The second big air traffic control announcement was the comprehensive review of NextGen published by the National Research Council. Appropriately described by The Washington Post’s Ashley Halsey as “scathing,” the NRC report, which was ordered by Congress in the FAA Modernization and Reform Act of 2012, calls out FAA’s failings in implementing NextGen. Halsey highlights some quotes:

    • “The original vision for NextGen is not what is being implemented today.”
    • “This shift in focus has not been clear to all stakeholders.”
    • “Airlines are not motivated to spend money on equipment and training for NextGen.”
    • “Not all parts of the original vision will be achieved in the foreseeable future.”
    • “NextGen, as currently executed, is not broadly transformational.”
    • “‘NextGen’ has become a misnomer.”
  • CEI Submits Comments to FAA on Small Drone Certification and Operations Proposed Rules

    April 24, 2015 11:18 AM

    Today, I submitted comments to the Federal Aviation Administration (FAA) on behalf of CEI on its notice of proposed rulemaking for small unmanned aircraft systems (sUAS) certification and operations. We make three main points.

    First, we question why the FAA is using its case-by-case exemption authority as the basis for this rulemaking, as opposed to the actual rulemaking section of the same law that Congress passed in 2012. This was the last FAA reauthorization and Congress included a subtitle on unmanned aircraft systems. Section 332, among other things, ordered the FAA to promulgate final rules integrating sUAS into the National Airspace System. But instead of relying on Section 332, as Congress required, the FAA in this proceeding is relying on Section 333, which granted the FAA authority to approve sUAS operations on a case-by-case basis until it had promulgated the sUAS integration rules mandated by Section 332. There are several potential explanations for why the FAA is relying on Section 333, none of them good, but we ask the FAA to explain its reasoning.

  • Let Amtrak Pay Its Own Way

    April 24, 2015 10:10 AM

    Randal O’Toole of the Cato Institute has a great blog post outlining the various ills besetting America’s government-subsidized passenger rail carrier Amtrak. The gist of O’Toole’s argument is that although both federal and state governments contribute large sums of money to keep Amtrak afloat, potential riders have not been nearly as enthusiastic. A recent National Journal article does cite Amtrak’s ridership as increasing 50 percent in the last fifteen years, but O’Toole points out that the increase was largely driven by a simultaneous increase in gas prices. Amtrak’s new riders aren’t somehow more attuned to taking passenger trains than they were before, they’re simply responding to market pricing and the laws of supply and demand.

    If the federal government revoked its latest $1.4 billion annual subsidy, Amtrak probably would not have even seen that 50 percent increase. O’Toole reports that in 2012, Amtrak fares averaged about 33.9 cents per mile, while travel by air and automobile averaged 13.8 and 25 cents, respectively. Taking into account these factors, as well as user costs and subsidies, O’Toole estimates that Amtrak costs about four times as much as flying and nearly twice as much as taking a car. These figures, along with the fact that Amtrak’s share of total passenger travel in 2012 was around 0.14 percent, demonstrate that demand for passenger rail in America can hardly be called robust.

    Even if greater demand for passenger rail did exist, the federal government would face the odd paradox of running a profitable industry that could probably be better handled by competition among private firms. Passenger trains already have at their disposal all the revenue they should ever need: fares and onboard sales. Why take money from hundreds of millions of people to finance the travel of only a few? Congress would do the nation a favor by phasing out funding for Amtrak, saving us all money in the process.

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