Summer Transportation Roundup: Missouri Considers a Sales Tax; Congress Kicks the Can on the Highway Trust Fund

While August was a time of summer vacations for many, for me the month disappeared in a blur of CSG meetings in far-flung places like Baltimore, Seattle and Anchorage (which is why the blog has been on an extended hiatus since my last post on July 25). Now with Congress set to return next week and the days of summer dwindling to a precious few, it’s time to round up the transportation stories you may have missed while you were catching rays on the beach or joining CSG for an Alaskan adventure last month. I have a look at the Missouri vote on a sales tax increase to fund transportation and the temporary reprieve for the federal Highway Trust Fund, plus links to a huge variety of stories on state transportation revenue activities, public-private partnerships, transit projects, high-speed rail and other topics.

Missouri Voters Reject Sales Tax Increase

The biggest state transportation funding story of the summer was probably the rejection by Missouri voters on August 5 of a constitutional amendment that would have increased the state’s sales tax by three-quarters of a penny per dollar to fund key infrastructure projects. Fifty-nine percent of voters said no to the measure, which was expected to raise around $5.4 billion to fund 800 projects across the state over a decade. Missouri’s constitution requires that any large tax increase be submitted to the voters for consideration.

The amendment would have blocked a fuel tax increase for 10 years. But Gov. Jay Nixon (D), who opposed the plan, had argued that charging drivers more to use state roads was a better way to raise revenues for transportation. He said in June that the sales tax would “fall disproportionately on Missouri’s working families and seniors by increasing the cost of everyday necessities like diapers and over-the-counter medication while giving the heaviest users of our roads a free pass.”

Nixon and others contended that while the trucking industry is responsible for much of the wear and tear on the roads, they would have paid little for repairs under the plan. That’s because tractor-trailers were given a special sales tax exemption by the legislature in 2012.

In addition to the Governor’s opposition, the failure of the measure was blamed on his decision to schedule the vote for the state’s primary rather than general election. That ensured a smaller, more conservative, more tax-hostile group of voters and allowed less time for proponents to make the case for the plan.

A group called Missourians for Better Transportation Solutions led the charge in opposing the measure. Among their arguments were that while each of the state’s seven transportation districts managed their own list of projects that would have received funding, there was no guarantee local sales taxes would be spent on local projects. They also had concerns about the project list’s focus on roadways and whether that made sense as VMT in the state was declining.

Tanya Snyder at Streetsblog USA argued that “while the construction industry tried to sell the initiative as a cure for deteriorating infrastructure, a big chunk of the revenues would have gone to interchange enhancements and road extensions.”

But Kansas City voters also rejected a referendum to expand the city’s streetcar system, which ironically broke ground on the same day.

In a post-mortem on the Missouri sales tax vote, Adie Tomer of Brookings wrote that the results mirrored the failed local option sales tax vote in the Atlanta area in 2012 (see more on that below).

“Much like Missouri, Atlanta has clear transportation needs—but voters sense the current plan wouldn’t do enough to adequately improve their commutes and livability,” Tomer wrote. “Americans have proven time and again they’ll pay for transportation projects, but they want to know what they’re getting and how it will benefit their communities.”

Voters interviewed at the polls told the St. Louis Post-Dispatch that a tax on goods other than fuel just didn’t make sense. But lawmakers who supported the measure said it was more likely a more general anti-tax sentiment that ultimately derailed the plan.

“Missourians, they don’t like tax increases, they don’t want to pay more, no matter what the situation is,” said Sen. Mike Kehoe, the sponsor of the bill that set the vote in motion.

Kehoe said polling had showed that among the available potential revenue streams, a sales tax was most likely to pass muster with voters. A fuel tax increase would have had to have been on the order of 20 to 25 cents per gallon to generate the kinds of revenues that were needed, he said.

A citizens committee found the state needs to invest an additional $600 million to $1 billion a year in its infrastructure. In addition to the federal funds it receives, Missouri relies primarily on a 17.3 cent-per-gallon gasoline tax that is one of the lowest in the nation and that hasn’t been raised in 20 years and local property taxes to fund transportation projects, plus some location-specific revenue streams in places like St. Louis. State transportation officials have said the state will begin having difficulty matching federal transportation dollars by the year 2020. Before that happens, the state may have problems adequately maintaining roads and bridges, officials say.

With the failure of the ballot measure, supporters said it could be a number of years before transportation funding can again appear on a statewide ballot. But policymakers are already seeking out a Plan B.

“We’ve got to have the table wide open for any suggestion that’s out there,” Kehoe told the Kansas City Business Journal. “We’ve got to find something that’s palatable to the voters.”

Kehoe and others said a scaled back proposal with a smaller sales tax combined with a small gas tax increase might be able to win support but could also attract more opposition.

Opponents of the measure said user fees—in the form of increased fuel taxes or possibly tolling—should be part of the solution.

A story in the St. Louis Post-Dispatch last month said the state could technically enact a small gas tax increase without seeking a public vote. By law, the legislature can raise about $87 million without such a vote and a two-cent-a-gallon gas tax increase would raise about $80 million. But that’s a far cry from the amount transportation officials say is needed.

As for tolling, Joseph Miller of the Show-Me Institute, an organization that promotes market solutions in Missouri public policy, writes in a (Columbia) Missourian op-ed this week that the state should consider introducing tolls on I-70 which would allow passenger and commercial vehicles to be charged based on their size and distance traveled.

“In other states, commercial vehicles typically pay four to five times more than passenger vehicles,” Miller writes. “They pay more to compensate for the extra damage they cause to the roadway. In fact, toll roads in other states generate much, if not most, of their revenue from commercial vehicles.”

But any solution to Missouri’s transportation challenges is likely a long way off.

“If we came up with the best idea known to man tonight, it would take two to three years to implement it,” said Kehoe.

Kehoe’s counterpart on the House side, Rep. Dave Hinson, said he hopes to start discussion next year on other ways to raise revenues for transportation. Mechanisms could include higher vehicle registration fees, new fees for electric or hybrid vehicles, indexing the fuel tax to inflation or turning to private investors to build road and bridge projects, Hinson said, according to the Associated Press.

Temporary Highway Trust Fund Fix Satisfies No One

On August 8, President Obama signed into law a $10.8 billion bill that’s intended to keep the federal Highway Trust Fund up and running through May of next year. The legislation relies on yet another general fund transfer, this one offset largely by an accounting technique called pension smoothing, something The Washington Post editorial board called “an egregious budgetary gimmick.”

The legislation allowed the U.S. Department of Transportation to avoid scaling back reimbursements to states for active transportation projects. But Transportation Secretary Anthony Foxx said it falls woefully short of what’s actually needed.

“While we at DOT are glad to avoid those painful cuts, we—along with thousands of commuters, construction workers, freight shippers and manufacturers—know that it’s still not the long-term solution that America’s transportation system really needs,” Foxx wrote in an August 4 blog post.

Foxx noted that after 10 surface transportation extensions and 18 short-term budget measures over the last six years, there is still no long-term certainty for states and others. Moreover, the latest measure only serves to amp up the uncertainty for May 2015.

“The latest band-aid expires right as the next construction season begins, setting up another crisis next spring,” he said in a letter to state transportation officials, The Hill reported. “So in the coming months, the department will again be required to prepare cash management procedures in anticipation of repeating the same Highway Trust Fund insolvency crisis.”

Others had similar disdain for the last minute patch.

“Congress is rapidly running out of last-minute budget gimmicks to patch holes in America’s key infrastructure fund, and must immediately begin the task of replacing pretend dollars with the real money necessary to continue to call ourselves a first-world nation,” said Transportation for America Director James Corless in a statement. “In truth, they have bought themselves only a few short months to grapple with an issue they have delayed for years.”

Also, as Emily Badger of The Washington Post’s Wonkblog noted, pushing the snooze button until next May means that Congress will have to take up the issue at a time that usually marks the beginning of peak summer gas prices. That doesn’t bode well for anyone hoping for a gas tax increase to provide a longer term fix.

The U.S. Chamber of Commerce, which has supported the idea of a federal gas tax increase, called on members of Congress to tackle a long-term solution in the near term and not wait until May.

“The Chamber urges leaders of both parties to come together on a shared solution for the HTF’s structural deficiencies as soon as possible,” said Chamber Executive Vice President for Government Affairs Bruce Josten in a statement following Senate passage of the temporary patch. “Regardless of any deadline set into law, lawmakers need to develop a long-term revenue solution this fall, with the goal of creating—and seizing—the opportunity to act before the end of the year.”

MAP-21 Reauthorization & the Future of the Highway Trust Fund

  • The Congressional Budget Office now projects the highway account of the Highway Trust Fund balance will fall about $2 billion short for FY 2015 and drop even lower without action by Congress. Land Line magazine has more on the numbers.
  • Two Republican U.S. Senators recently predicted that Congress will come up with a new way to pay for transportation projects, The Southwest Times Record reported last month. Sens. John Boozman of Arkansas and James Inhofe of Oklahoma appeared at an event in Arkansas last month. “Coming up between now and May, you’ll see a new funding mechanism that is going to change how we are funding our roads and highways,” Inhofe said during his remarks. “This is not an announcement on my part, because I still maintain opposition to any new tax increases, however it’s more of a user fee than a tax increase.”
  • One of the amendments that received a vote during Senate debate on H.R. 5021, the temporary trust fund patch bill, was one offered by Sen. Mike Lee of Utah. Commonly referred to as the “devolution amendment,” it would have (according to the official statement of purpose) “empower(ed) states with authority for most taxing and spending for highway programs and mass transit programs.” The amendment did not pass, but won 28 votes including, notably, those of the aforementioned Boozman and Inhofe and that of Tennessee Sen. Bob Corker, who made news earlier this summer for introducing bipartisan legislation (with Sen. Chris Murphy of Connecticut) to raise the federal gas tax. Also in the yes column: Sen. David Vitter of Louisiana, who could be in line to chair the Senate Environment and Public Works Committee (one of several committees that oversee transportation authorization bills) next year if Republicans win control of the Senate in the November election. You can see how others voted here.
  • Also, Terri Lynn Land, the Republican U.S. Senate nominee in Michigan, recently announced she would support slashing federal gas taxes by 78 percent to four cents a gallon and allowing states to decide how to replace the revenue, The Detroit News reported.
  • Alabama: State DOT officials remain concerned about continuing federal uncertainty in the wake of the passage of the temporary trust fund fix, The Anniston Star reported. “It makes it very difficult for the (Alabama) Department of Transportation and for our contractors,” said Ronald Baldwin, the department’s chief engineer. “In terms of planning, it makes it hard for contractors to know if they can add additional people or equipment.”
  • Delaware: U.S. Sen. Tom Carper spent much of his August Congressional recess making the case for more transportation infrastructure spending, Delaware Public Media reported.
  • Georgia: State transportation officials expressed relief that Congress passed a short-term Highway Trust Fund fix this summer to keep it afloat until next May but they remain cautious about what’s ahead, The Atlanta Business Chronicle reported. “New projects will proceed, albeit at a limited capacity,” Georgia DOT spokeswoman Natalie Dale told the publication. “GDOT must proceed with great caution due to the threat of another shortfall which awaits us in May.”
  • Next City looks at “4 Reasons Federal Money is Bad for U.S. Transportation” in a recent piece. One reason writer Scott Beyer cites is that federal dollars have gone into “white elephant” light rail projects in sprawling cities like Dallas and Phoenix, where ridership may never reach critical mass and in declining cities like Cleveland with hollowed out downtowns.
  • Former American Society of Civil Engineers President Andrew Hermann discussed “How Our Crumbling Roads Impact the Economy” on Wisconsin Public Radio last month.
  • Ike Brannon of The Weekly Standard argues the best way to get out of the endless cycle of brinksmanship in Washington would be to enact a “radical reform that could lead to both a more equitable and economically efficient way to finance the roads.” The answer, Brannon writes, “is to scrap the gas tax and go to a market-based method of financing roads. It could take various forms, but the most efficient way to do this would be to put transponders in cars and charge people based on when and where and how much they drive.”
  • The Bond Buyer examined how close we are to mileage fees replacing gas taxes at the federal level.
  • Jason Plautz of Nextgov writes that a number of recent transportation innovations, conveniences and applications should be alleviating privacy concerns presented by vehicle miles traveled fees but it hasn’t worked out that way so far. Ridesharing programs like Zipcar and Uber, the use of E-Z Pass for toll roads, and data collection systems in some electric vehicles, all of which have been embraced by the public to one degree or another, all rely on the sharing of location-specific data, which could be required under a VMT system.

State Activity on Transportation Revenues

  • Alabama: The condition of Alabama roads is costing drivers $3.1 billion annually, according to a recent report by the nonprofit transportation research group TRIP. The lack of a long-term highway funding solution at the federal level is hampering the state’s ability to make improvements just as Alabama faces a declining tax base and a massive hole in the state’s general fund that make state tax increases to fund transportation unlikely, reported.
  • Connecticut: A coalition of environmental, economic, regional and construction groups is urging the state’s gubernatorial candidates to consider taxes and tolls to help meet the state’s transportation needs, The Hartford Courant reported. The coalition lists its key priorities as: making sure that state revenue that is supposed to be devoted to transportation isn’t diverted elsewhere, ensuring that existing state transportation funding allocated to specific projects is used rapidly to get projects done, creating state contingency plans for alternate ways to pay for transportation improvements in the event that federal funding is cut back, and making critical, long-range decisions about which areas of the transportation system need to be improved to have the greatest economic and environmental impacts. 
  • Georgia: A special committee with members of the House and Senate is holding a series of hearings around the state this summer to gather public input on transportation funding options before recommending one or more to the legislature, Morris News Service reported. Among the options lawmakers could consider, according to road construction advocates: raising the gas tax, converting to a mileage-based fee, paying off bonds using the state’s general budget in order to free up funds for the state DOT that now go to pay debt service, dedicating the fourth penny of the gas tax to transportation (it now goes into the state’s general budget fund), and shifting to greater use of tolls. Two years ago, most parts of the state voted down a local option sales tax to fund transportation and the bruising defeat has made seeking a “Plan B” difficult. Original supporters of the sales tax measures still hold out hope they could be voted on again in smaller, redrawn regions. Some believe voters might find a sales tax increase that’s less than 1 percent more palatable as well. Such modifications to the original plan would require legislative action. The committee has meetings scheduled through the end of October and will present a plan to Gov. Nathan Deal in November for possible consideration by the legislature next year. The (Macon) Telegraph had this report on the committee’s meeting in Macon this week, where Mayor (and former state legislator) Robert Reichert proposed a 1-percent transportation sales tax across the state, except in regions that already adopted the tax two years ago.
  • Louisiana: A transportation funding task force, authorized by the legislature earlier this year, is scheduled to hold its first public hearing September 10 in Baton Rouge, the Associated Press reported. The task force, which is made up of legislative leaders and others, is charged with reviewing “all potential funding mechanisms” and filing a report with the House and Senate transportation committees by January 15 of next year. According to The Shreveport Times, options the task force may consider include “adjusting the way gasoline is taxed, speeding up a planned method of shifting existing revenues to highway construction and eliminating some of the deductions to the gasoline tax.”
  • Massachusetts: As voters prepare to consider a ballot question this November to remove the automatic indexing mechanism placed on the state’s gas tax as part of last year’s transportation funding package, a recent Boston Globe poll showed that Bay Staters are much more likely to support new taxes if they’re convinced they would go toward road improvements in their own communities. … The Transportation for America blog reported recently on efforts to develop criteria for selecting projects, with the idea of devoting new state funding to the most deserving projects rather than the ones that have simply been in the pipeline the longest.
  • Minnesota: The Star Tribune editorial board makes the case that transportation should be a topic on the campaign trail this fall. “It’s understandable that no Minnesota candidate wants to make ‘raise the gas tax’ his or her campaign theme. But those who are serious about governing will leave that option on the table, and will talk about transportation needs in a way that helps Minnesotans understand why it belongs there.” As the editorial points out, Democratic Gov. Mark Dayton and the Democrat-controlled legislature failed to “coalesce around a plan” the last two years and essentially “punted the transportation issue to the 2015 Legislature.” The newspaper believes Dayton and Democratic House candidates should be pressed now to describe their approach to improved transportation funding. Dayton, up for re-election this fall, faces Republican nominee Jeff Johnson, who has suggested construction costs could be saved by easing environmental regulations and requirements that contractors pay prevailing wages. But the newspaper calls it “far-fetched to think that large sums can be freed for transportation investments by allowing contractors more license to pollute.”
  • New Jersey: Assembly Speaker Vincent Prieto penned an op-ed last month for The (Bergen) Record, in which he wrote that “New Jersey needs a modern and safe transportation network for its economic survival, but years of foolish borrowing leave our state teetering on the brink of a transportation disaster.” The Assembly Transportation and Independent Authorities Committee is planning several hearings to focus on some key questions, Prieto noted: “How much money do we need? Where do we get that money? How safe are our bridges? What must be done to improve our roadways? How does mass transit play into this? What are other states doing? How many jobs rely on a modern, safe and reliable transportation network? What is the impact of businesses if roads cannot be improved and maintained, including the impact on the movement of goods and on employees?” Prieto writes that many of the possible solutions are already well known. “A gas tax increase is often mentioned. We could apply the sales tax to gasoline. We could think about changing the state’s gross receipts tax on petroleum products. We could look at funding from independent authorities. We need to discuss whether any new revenue for transportation should be presented to voters for constitutional dedication. And any new solution should not include any additional bonding. We are tapped out.”
  • Oregon: State department of transportation officials announced last month they are now reviewing bids from companies hoping to participate in the state’s first large-scale test of a mileage-based road usage charge program, Tollroads News reported. While the names of the bidders weren’t released, it was reported there are four consortia that submitted a total of seven bids and that the companies include well-known names in the tolling industry, a telematics company and a firm with extensive communications business. Under the program starting next July, 5,000 volunteers will pay 1.5 cents per mile in lieu of paying the state gas tax.
  • South Dakota: Members of an interim legislative committee on highway needs and financing met last month at the state Capitol in Pierre. The committee, led by Senate Transportation Committee Chairman Mike Vehle, heard from officials with the state departments of transportation, agriculture, economic development, tourism and parks and recreation. I also testified before the panel about transportation funding efforts in other states over the last couple of years (another reason I was gone from the blog so long). The panel also heard about potential transportation revenue options from legislative staffer Fred Baatz and took public testimony. The Associated Press had this report on the meeting. The committee plans to meet again in early November to finalize legislative recommendations for consideration next year.
  • Texas: Community Impact newspaper reported recently on the constitutional amendment Texas voters will consider in November to allow oil and gas production tax revenues that currently flow into the state’s Rainy Day Fund to be used to help fund transportation projects (there’s another worthwhile article here from the same newspaper with a nifty infographic called “Where Do Texas Roads Come From?”). The Texas Transportation Commission has asked lawmakers to stop using money from the highway fund for agencies including the Department of Public Safety and Department of Motor Vehicles, The Dallas Morning News reported. Land Line magazine recently assessed the positions of the state’s gubernatorial candidates on transportation funding.
  • Washington: In a recently issued draft of its new 20-year transportation plan, the Washington State Transportation Commission says the state’s transportation system will fall into a long-term decline under current funding scenarios that rely on gas taxes, The Spokesman-Review reported.
  • West Virginia: The state’s Blue Ribbon Commission on Highways plans to issue its final report this month, The Charleston Gazette reported. The commission already approved recommendations last September and the final report makes no changes to those. Members said the state needs to nearly double its Road Fund budget and in lieu of raising taxes recommended increasing a variety of DMV fees and moving forward with a $1.5 billion bond issue to be repaid by keeping tolls on the West Virginia Turnpike through 2049.
  • Wisconsin: Gov. Scott Walker, who is running for re-election this year, said recently he’s still reviewing options for how to fund transportation for the long term, WSAU reported. One option that could be on the table: converting from a gas tax to a sales tax based on the price of gas. Walker has tasked transportation secretary Mark Gottlieb with coming up with transportation funding ideas for the next state budget, The Milwaukee Journal Sentinel noted recently. Walker’s opponent, former Trek Bicycle Corp. executive Mary Burke, said she hasn’t ruled out any options to supplement highway funding, including raising the gas tax or creating a mileage fee. … Meanwhile, Wisconsin is one of two states (the other being Maryland) where voters will decide on constitutional amendments this fall to protect transportation funds from being used for other purposes. About half the states in the country have similar amendments, The Beloit Daily News reported. Transport Topics also recently reported on the latest round of states exploring transportation fund "lockboxes."
  • Wyoming: The Transportation for America blog noted recently that 94.4 percent of state legislators who supported the state’s 10 cent gas increase approved last year and are running for re-election this year have won support from their constituents in their primary elections.
  • Stateline reported recently on how shrinking gas tax revenues are prompting states to consider alternatives including indexing mechanisms, sales taxes and mileage fees.
  • Governing had a piece recently tracking the decline in the number of structurally deficient bridges nationwide since the I-35 bridge collapse in Minneapolis seven years ago.
  • The Brookings Institution had a recent report “Ranking the Top States for Infrastructure Jobs.”

Public-Private Partnerships & Tolling

  • Arizona: The Arizona Department of Transportation announced plans to pursue the $1.9 billion South Mountain Freeway Project under a single design-build-maintain public-private partnership. The project will also incorporate available public funds and public financing, the Infra Insight Blog reported in July.
  • Florida: The $1 billion Port of Miami Tunnel public-private partnership project officially opened to traffic last month, the Infra Insight Blog noted. During the construction period, the Florida Department of Transportation made payments to the concessionaire upon the achievement of contractual milestones. Now that the tunnel has entered the operations phase, FDOT will make availability payments, contingent upon lane availability and service quality.
  • Illinois: State officials say they are moving forward with plans for the Illiana Expressway, The (Merrillville, IN) Post-Tribune reported. The roughly $900 million tollway is expected to be financed with $250 million in low-interest loans, using tolls to pay off that debt. The state would chip in an additional $400 million and $250 million would come from private partners.
  • Indiana: Indiana Finance Authority Director Kendra York recently addressed concerns about tolling on the Ohio River Bridges Project in the Louisville area, The Courier-Journal reported. She said that despite calls to delay tolls until the $2.3 billion project is completed in December 2016, debt payments can’t be changed and tolling decisions need to be made soon. The board overseeing the project recently approved hiring a Louisville marketing company to raise awareness and educate the public about tolls. Also, WDRB-TV reported that Indiana and Kentucky are looking at options for regional interoperability and reciprocity in shaping tolling policy.
  • Maryland: In late July, the Maryland Department of Transportation and Maryland Transit Administration released a request for proposals for the Purple Line light rail project, which will connect Montgomery and Prince George’s counties. The agencies are seeking a private sector team to design, build, construct, finance, operate and maintain the light-rail line over a 35-year term. Four teams that were shortlisted in January are eligible to submit proposals on January 9, 2015. The Federal Transit Administration announced last month that the Purple Line project has advanced to the engineering phase of its New Starts grant program, Progressive Railroading reported. Next City took a look at the history of the Purple Line in a recent piece. … Also, the state recently opened its second travel plaza along I-95 constructed under a public-private partnership with Areas USA, The Baltimore Sun reported. The company will have operating rights through 2047.
  • Massachusetts: Transportation Secretary Richard Davey touted the state’s implementation of all-electronic tolling in a recent guest column for The Metro West Daily News.
  • Nevada: The state department of transportation has scrapped plans to use private financing on the I-15 Project Neon project in Las Vegas, The Las Vegas Sun reported last month. Concerns about affordability including higher interest rates, an expanded project scope and increased maintenance costs prompted the department to go with a more traditional financing plan using government-issued bonds on the $700 million to $800 million project.
  • New Jersey: A recent (Newark) Star-Ledger editorial argued that Gov. Chris Christie’s decision to cancel the ARC tunnel project in 2010 still doesn’t make sense four years later.
  • North Carolina: State highway officials and representatives of the Spanish infrastructure firm Cintra announced plans to move forward with construction of toll lanes on Interstate 77, The Charlotte Observer and Roll Call noted last month.
  • Ohio: A state board has approved spending $8 million to study the potential impacts of tolling a new Brent Spence Bridge over the Ohio River on traffic, minorities and low-income workers, The Cincinnati Enquirer reported.
  • Oregon: Portland Mayor Charlie Hales recently proposed tolling city highways to help pay for maintenance, KOIN-TV reported.
  • Texas: The Dallas Morning News reported recently on growing opposition to tolled lanes on the Central Expressway and the state’s ongoing debate about transportation funding. … Meanwhile the North Tarrant Express is scheduled to open next month with new free lanes, frontage roads and the largest continuous managed toll lane in Dallas-Fort Worth, the Dallas Business Journal reported. The state contracted with Cintra on the $2.5 billion project, which combined $573 million in public funding with private dollars that will be repaid through toll revenue.
  • American Road and Transportation Builders Association President & CEO Pete Ruane says new federal banking rules announced last month could impede state transportation planning and investments. The rules, approved by the U.S. Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, will preclude banks from using municipal bonds to comply with new liquidity standards. Ruane argues in a letter to Congress this week that “This decision will increase the financing cost of infrastructure projects for state and local governments by imposing a constraint on the market for municipal bonds. That could also adversely impact development of public-private partnerships for transportation projects.”
  • The Pittsburgh Post-Gazette had a recent four part series on public-private partnerships. Part one took a look at the effectiveness of P3s. Part two examined P3s that have fallen short of taxpayers’ expectations. Part three looked at Pennsylvania’s Rapid Bridge Replacement Project P3 and its promises of savings and efficiency. And part four examined how some states have learned that P3s come with hazards.
  • Roll Call took a look recently at why it has taken public-private partnerships longer to take off in the United States than elsewhere in the world. I spoke with reporter David Harrison for the article.
  • The benefits and challenges of private sector infrastructure investment were the subject of a recent brief by Clifford Winston of the Brookings Institution.
  • TollRoadsNews had a piece last month on the current state of national toll road interoperability.

State Multi-Modal Strategies


  • Arizona: FTA Acting Administrator Therese McMillan touted Tucson’s new Sun Link streetcar service in a recent blog post. The streetcar was built with the aid of a federal TIGER grant.
  • California: Community activist Drew Reed argues in a recent piece that a plan to divide California up into six states, which could appear on the 2016 statewide ballot, would be bad for transportation in the state, especially mass transit.
  • Colorado: Transportation officials in Denver have proposed a $115 million bus rapid transit system along Colfax Avenue, a 10-mile corridor that suffers from congestion issues, according to The Denver Post. BRT was given the nod over a modern streetcar system.
  • Illinois: Tolls on the Illinois Tollway will be used to fund more express bus service to the Jane Addams Memorial Tollway, The Chicago Tribune reported.
  • Maryland: Japanese investors say they’ve lined up more than $5 billion in financial backing to put toward a high-speed maglev train capable of cutting travel times between Washington, DC and Baltimore down to 15 minutes, Mass Transit reported.
  • Minnesota: MINNPOST looks at the challenges still ahead now that Minneapolis has okayed moving forward with the Southwest Light Rail Transit project. … The Minneapolis Star Tribune looked at the challenges of projecting ridership for transit projects like the Southwest LRT.
  • Oregon: As I’ve noted here before, Portland is building a multi-modal bridge called the Tilikum Crossing that bans cars. The Atlantic City Lab profiled the bridge in a recent piece. Attendees at our CSG Transportation Policy Academy in Portland last year got to see construction on the bridge firsthand and you can read about that (and see pictures) here.
  • Texas: Some in San Antonio hope to modify plans for a streetcar project after the city and county announced they will withdraw support from the project, Texas Public Radio reported. ... Dallas Area Rapid Transit began rail service to Dallas-Fort Worth International Airport this summer, CBS DFW reported. The $152 million rail extension opened about four months ahead of schedule.
  • Utah: An audit of the Utah Transit Authority is the subject of a recent editorial in The Salt Lake Tribune. … A bus rapid transit line that will run through Orem and Provo won the green light from elected officials and transportation officials, reported The Daily Herald. Bonding will be used to pay for its construction.
  • Virginia: The new Silver Line Metrorail extension officially opened to riders in July. As Streetsblog USA and others noted, the project was in the works for more than five decades. Nearly $3 billion was spent on the line, which connects five new stations in Tysons Corner and Reston along 11.7 miles of new track. But it’s just the first phase of the Silver Line, which will eventually extend to Dulles Airport and beyond. Phase Two is receiving a $1.28 billion TIFIA loan, it was announced recently. Matthew Yglesias writes in Vox that the Silver Line is already creating a new kind of city in the Tysons area.
  • Robert Steuteville writes for Better Cities & Towns that it’s okay if modern streetcars aren’t the fastest form of transportation on the planet. He was responding to a recent piece by Matthew Yglesias on Vox that dubbed the under construction DC Streetcar “the worst transit project in America.”
  • The Wall Street Journal reported recently on how some transit agencies in the United States looking to expand rail lines are getting into the real estate development business to raise revenue.
  • Roll Call noted in July that light rail and streetcar projects continue to get the nod when it comes to federal urban transit funding and buses remain runners up. Of the 53 projects being funded or under consideration in the FTA’s New Starts program, 30 are light rail or streetcar projects and just 18 are bus rapid transit projects.
  • The Economist weighed in on the efficiency of streetcars and the federal subsidies that have supported them.
  • Eric Jaffe of The Atlantic City Lab writes that “Overall, U.S. Streetcars Just Aren’t Meeting the Standards of Good Transit.”
  • Yonah Freemark at The Transport Politic blog argues there need to be minimum service standards for transit projects in a recent post.
  • The Regional Transportation District of Denver and the Utah Transit Authority have both begun studies of their policies for calculating and charging transit fares, Progressive Railroading reported.

High-Speed Rail

  • California: A panel of appellate court judges handed a victory to Gov. Jerry Brown and supporters of the state’s $68 billion high-speed rail project, The San Jose Mercury News reported. The panel overturned two lower court rulings that had stalled funding for the project. Its approval was expected to pave the way for the state to sell $8.2 billion in bonds to construct the San Francisco-to-Los Angeles rail line. But just this week it was announced that opponents of the project have petitioned the California Supreme Court, arguing the appellate court decision ignored the financial protections of voters. There was also news recently that legal challenges may not be the only thing slowing down the project. Closing land deals along the route has proven to be time consuming as well, The Fresno Bee reported. Building the first 29-mile stretch of rail line between Madera and just south of Fresno will require the California High-Speed Rail Authority to buy more than 550 pieces of property. As many as 1,150 more parcels will need to be acquired along the next 100 miles between Fresno and Bakersfield. But so far, just 71 parcels in the first segment have been purchased. By September of 2017, the authority is supposed to have substantial completion of both San Joaquin Valley sections of the line in order to meet a Federal Railroad Administration deadline.
  • Texas: The Fort Worth Star-Telegram reported last month that high-speed rail may be gaining momentum in the Lone Star State. The Texas Tribune also had a recent piece.
  • In a New York Times article last month, Ron Nixon reported that despite $11 billion in federal investment since 2009 to develop faster passenger trains, most of the projects have gone mostly nowhere. But in an editorial almost a week later, the newspaper made the case that the promise of high-speed rail remains alive and well. Michael Gunwald of Time magazine also offered a response to the original article.
  • Yonah Freemark asks “Why Can’t the United States Build a High-Speed Rail System?” in a piece for The Atlantic City Lab.


  • A recent op-ed in the San Francisco Chronicle looks at the potential impact of the widening of the Panama Canal on jobs at West Coast ports and what needs to be done to protect them.


  • California: The state legislature has approved legislation that expands the authority of an existing investment mechanism called Infrastructure Financing Districts, according to the California Economic Summit website. Senator Jim Beall, who sponsored SB 628, said the legislation will help local jurisdictions finance transportation projects and transit-oriented development. The legislation now awaits the governor’s signature. The California Economic Summit also released a how-to guide for using the newly enhanced infrastructure financing districts.
  • Tennessee: The state DOT has reinvented how it interacts with local communities to create better outcomes on projects and save taxpayer dollars, Smart Growth America noted recently.