Guest Post: National Infrastruc​​​ture Bank – Issues & Recommenda​​​​tions Paper

October 4, 2011 at 4:25 pm

This guest post by Brendan Halleman, a fellow transportation professional, offers a paper that examines the merits of establishing a National Infrastructure Bank. As you are probably aware, the public discussion around this has been highly politicized and my note merely tries to put quantified elements on the table.

Image Courtesy: Wikipedia

A quick summary of the attached paper:
  • A National Infrastructure Bank is just one of several possible instruments in the toolbox of policy makers. On its own, it is unlikely to reverse the steep decline in municipal bond emissions which remain the primary capital market for infrastructure funding in the US. Significantly, the Bank’s mandate and project size requirements all but exclude maintenance of existing assets.
  • Comparisons with other Government Sponsored Enterprises (such as Fannie Mae and Freddie Mac) appear largely unwarranted on account of multi-layered risk provisions and the Authority’s one-way relation with the capital markets (it can sell to them, but not borrow from them).
  • The Authority complements rather than competes with State Infrastructure Banks for large-scale project funding. SIBs are currently too diverse in size and scope to offer a funding framework commensurate with the country’s infrastructure challenges. Bringing them up to speed across 32 States – and establishing them in 18 others – would take at least as long as creating a new Federal entity. As with the existing SIBs, the Authority’s ability to leverage infrastructure investment would greatly increase were it authorized to recycle project loan repayments (including interest and fees) into new credit.
  • An independent Infrastructure Financing Authority is superior in almost every respect to the TIFIA loan program or its Department of Energy counterpart. Through independent project evaluations and innovative financing instruments, AIFA has a far greater ability to tap into a pool of private infrastructure funds worth over USD 200 billion. However, TIFIA’s budget authority can and should be increased for a transitory period while AIFA is ramped up and made fully operational.
  • At present, too few surface transportation projects are candidates for AIFA funding as they do not rely on user-based charging mechanisms. This restriction could be lifted altogether, amended to incorporate other PPP arrangements (e.g. shadow tolls) or garnished with a companion Bill to extend tolling options to the interstate highway system.
  • EIB offers a convincing compromise between macroeconomic policy objectives and CBA-based project funding decisions. There is nothing intrinsically wrong in tasking AIFA with a mandate to enhance economic competitiveness, mitigate environmental damage and enhance public health. However, individual project decisions must be insulated from political arbitrations and unnecessary Federal requirements, such as “buy America” or wage determination clauses.
  • To ensure a shorter phase-in time and a greater degree of private investor interest, AIFA’s official mandate should be extended to include the provision of knowledge dissemination and advisory services to borrowers through a dedicated project preparation facility.
  • Although less easily quantified, establishing an Infrastructure Financing Authority will add a new, independent voice on national infrastructure needs and send a strong signal to private sector investors.

Note: Brendan Halleman is a Project Consultant – Communications & Knowledge Management and has extensive experience in the transportation industry.  Check out his profile http://www.linkedin.com/in/bhalleman. All opinions expressed in this guest post are those of the author’s and do not necessarily reflect the positions of www.Transportgooru.com.

Public and Private Sector Leaders Call for Deployment of Intelligent Transportation Systems and Smart Technologies

May 20, 2009 at 11:09 am

(Source: National Transportation Operations Coalition)

A coalition of transportation and technology leaders – including state and local officials, industry and academic leaders and prominent stakeholder organizations – is calling on Congress to focus federal funding in the surface transportation authorization bill on the deployment of smart technologies and innovative solutions in order to create a performance-driven, intermodal transportation system that is safer, cleaner, more efficient and more financially sustainable for communities, businesses and the traveling public.

America’s transportation system is facing significant challenges that must be addressed in the next surface transportation authorization bill, from financing our transportation system and reducing traffic fatalities to combating congestion and CO2 emissions. Solving these challenges will require transportation agencies and private sector partners to use all of the tools at their disposal, including intelligent transportation systems (ITS), related technologies, and multimodal operational strategies that can help prevent accidents before they happen, reduce traffic congestion and freight bottlenecks, provide more effective incident and emergency response, reduce energy use and emissions, and enable innovative 21st century financing options.

“As a result of successful research initiatives and private sector innovation, technologies are here today which can help increase safety, reduce congestion and emissions, boost competitiveness, improve system performance, and create more livable and sustainable communities,” the coalition wrote today to House transportation leaders. “While a continued and strengthened research role is still needed, it is critical that state and local agencies and private sector partners make better use of technology to modernize today’s infrastructure and optimize existing capacity, while building smart and efficient roads, bridges, transit systems, and multimodal transportation options for tomorrow’s transportation users.” 

Congress Takes a First Step Towards Reshaping Transportation Policy; Senate Bill Steers Away From the Car

May 16, 2009 at 10:04 pm

As stimulus spending on highways and bridges ramps up, Senate Democrats submitted legislation Thursday that suggests the nation’s transportation policy is headed for a major overhaul, with a strong emphasis on reducing automobile use and carbon emissions and boosting public transit, inter-city rail and rail freight service.

 Sen. John D. Rockefeller IV (D-W.Va.), chairman of the Commerce, Science and Transportation Committee, and Sen. Frank Lautenberg (D-N.J.) introduced legislation that they say lays out the guidelines of what they expect the next five-year federal transportation spending plan to accomplish. Their goal is to influence the House Transportation and Infrastructure Committee, which is responsible for drafting the spending plan. The House plan is expected in early June, and the bill is due for reauthorization this fall.  The Rockefeller-Lautenberg marker, which got some early love from the Washington Post, states that the next federal transportation bill should accomplish the following:

  • Reduce national per-capita motor vehicle miles traveled on an annual basis;
  • Cut national motor vehicle-related fatalities in half by 2030;
  • Cut national surface transportation-generated carbon emissions by 40 percent by 2030;
  • Reduce surface transportation delays per capita on an annual basis; 
  • Get 20 percent more critical surface-transportation assets into a state of good repair by 2030;
  • Increase the total usage of public transit, intercity passenger rail and non-motorized transport on an annual basis.

The focus for those trying to ascertain the administration’s transportation agenda has since turned to the five-year bill, which is expected to cost at least $400 billion. One big question is how the government plans to fund transportation spending, with revenue from the gas tax increasingly falling short. The new Senate bill does not address that problem.

Another big question is how much the bill will provide for public transportation. As it now stands, 80 percent of federal transportation money goes to highways. But David Goldberg, an official with the advocacy group Transportation for America, said Congress and the White House are sending signs that the new plan could represent a major break. The White House has already said it hopes to spend $1 billion per year on high-speed rail.

Click here to read the entire article. 

Transportation for America unveils its Blueprint for Reform on Capitol Hill

May 12, 2009 at 4:40 pm

(Source: Transportation for America)

With Congress preparing to write the bill that will determine the next six years of transportation spending, Transportation for America yesterday released a detailed plan to restructure the nation’s transportation program in order to build a smart, safe and clean transportation system that provides real choices to all Americans.

Image Courtesy: Transportation for America @Flickr

If our platform, released in February, lays out the vision and goals for America’s transportation system, then the Transportation for AmericaBlueprint contains the detailed directions for getting there.

The Route to Reform: Blueprint for a 21st Century Federal Transportation Program will serve as T4 America’s proposal for the policies and financing structures necessary to achieve real transformational change in America’s transportation system. (We’ll be highlighting and explaining pieces of the Blueprint here over the coming weeks — it’s a lot to digest at once.)

In the blueprint, Transportation for America recommends Congress include four critical reforms in the upcoming transportation authorization bill:

  1. Articulate a National Vision, Objectives, and Performance Targets for the national transportation program and hold state and local transportation agencies accountable for demonstrable progress toward goals including safety, efficiency, environment, health and equity.
  2. Restructure and consolidate federal programs for greater modal integration, with a focus on completing the second half of the national transportation system, providing more transportation options for all Americans and creating seamless transportation systems that meet the unique needs and connect metropolitan regions, small towns, and rural areas.
  3. Empower states, regions, and cities with direct transportation funding and greater flexibility to select projects, using carrots and sticks to incentivize wise transportation investments and in return require demonstrated performance on meeting national objectives.
  4. Reform how we pay for the transportation system and create a Unified Transportation Trust Fund that would achieve balanced allocations of federal funds in a portfolio of rail, freight, highway, public transportation, and non-motorized transportation investment

Pennsylvania Governor Ed Rendell — a co-chair of the Build America’s Future campaign and one of the leading voices calling for a renewed transportation system – gave the event’s keynote speech in the same committee where the transportation bill will be written and considered first by Chairman Oberstar’s House Transportation and Infrastructure Committee.

Gov. Rendell was followed by a panel that included James Corless, director of the Transportation for America Campaign; Elaine Clegg, Co-Executive Director of Idaho Smart Growth and and city council member in Boise; Astrid Glynn, former Commissioner of the New York State Department of Transportation; Andrew Cotugno, the director of planning for Metro in Portland, Oregon; andRonald Kilcoyne, the General Manager/CEO of Greater Bridgeport Transit Authority.

“This report couldn’t be more correct when it says this is a once in a lifetime opportunity,” Gov. Rendell said.

“If we don’t take advantage of this opportunity…nothing will change, and we’ll just bump along, funding some good projects almost by accident, some mediocre projects and some terrible projects. We won’t have national policy, we won’t move the ball forward, and we won’t do something that will improve our economic competitiveness – we’ll just keep moving along the way we’ve been moving along, and not solving any problems.”

Will The Transportation Bill Be Pushed Back To 2010? At Least One Senator Thinks So

May 12, 2009 at 1:15 pm

(Source: The Infrastructurist)

Many of you heard through the grapevine (from Congress), particularly, House Transportation and Infrastructure Committee Chairman Jim Oberstar — that the new transportation bill would be passed this year. Oberstar even offered September 30 as a target date. Sen Mark Warner (D, Va.) is now saying he’s “not sure” that the estimated $500 billion authorization will happen until next year. According to a story by Terry Kivlan in CongressDaily, Warner thinks that “Congress might have too many big-ticket items on its agenda this year to take on a transportation package.” Speaking at an infrastructure-focused conference hosted by the Departments of Transportation and the Department of Commerce, the senator remarked: “I’m not sure you are going to see a full transportation bill put out this year.”

He’s specifically worried about funding availability in light the fact that revenue from the gas tax, which pays for highway and transit programs, is no longer sufficient to cover outlays.  He called this the “elephant in the room” with respect to infrastructure funding.

Scoring the New Starts Report, from the Transit perspective

May 10, 2009 at 10:58 pm

(Source: The Transport Politic)

The Federal Transit Administration releases its budget for FY ‘10, and recommends new transit capital projects

On Friday, the Obama Administration released details on its proposed budget for fiscal year 2010. The recommended appropriations affect each agency, and will have to be approved by Congress in a succession of relevant bills before they become law, but since Democrats control both the executive and legislative branches, there are likely to be few divergences from the President’s proposals.

The Federal Transit Administration’s budget will increase to $10.34 billion this year, up from $10.23 billion in FY 2009. These amounts were set in stone by the 2005 surface transportation bill, SAFETEA-LU, so there was little expectation that the President would propose massive increases in funding for public transportation. However, the budget significantly expands funding for New and Small Start transit capital projects, from $1.57 billion in ‘09 to $1.83 billion in ‘10. ARRA stimulus funds were included in FY ‘09.

Because the dedicated highway trust fund, which funds highways and transit and which relies on fuel tax revenues, is running out of cash as people drive less and automobiles become more frugal, the government needs a new source of funds for transportation. This year, as in 2008, the Hosue and Senate will likely have to divert general fund revenues to compensate, and the budget assumes that fact, proposing that a large percentage of both transit and highway money be appropriated directly by the Congress.

Along with the general budget, the Department of Transportation released itsannual New Starts Report. This document, which is well worth reading through if you have the time, documents the federal government’s commitment to funding new transit corridors in the United States. The FTA rated and recommended a number of new corridors for funding — five major New Starts projects and five Small Start projects in addition to several already announced over the past year.

This is the last New Starts report before the writing of the next transportation bill, which may include important changes in the way projects are funded, and which is likely to significantly increase expenditures for transit capacity expansion project such as those charted below.
—–
This Year’s FTA Project Ratings
New Starts Recommended for FFGA
Project Total Cost 2030 Riders (new)
Starts Share Rating Federal $/Rider ($/New R)
Orlando, FL – Central Florida CR $356 m 7,400 (3,700)
50% MEDIUM 24 k (48 k)
New York, NY – ARC CR $8.7 b 254,200 (24,800)
34% MED-HI 12 k (119 k)
Sacramento, CA – South LRT II $270 m 10,000 (2,500) 50% MEDIUM 14 k (54 k)
Houston, TX – North LRT $677 m 29,000 (7,500)
49% MEDIUM 11 k (44 k)
Houston, TX – Southeast LRT $681 m 28,700 (4,500)
49% MEDIUM 12 k (74 k)
New Starts In Limbo
Project Total Cost 2030 Riders (new)
Starts Share Rating Federal $/Rider ($/New R)
Boston, MA – Silver BRT III $1.7 b 85,900 (13,700)
60% MED-LOW 12 k (74 k)
Miami, FL – Orange North HR II $1.3 b 22,600 (13,000)
47% MED-LOW 27 k (47 k)

Click here to read the rest of this interesting analysis (Note: It is a lengthy analysis too).

Sen. Barbara Boxer discusses reauthorization: Senate Aims to Index Gas Tax to Inflation, Is Considering Mileage Charge

May 8, 2009 at 5:10 pm

 (Source: The Infrastructurist & Reuters)

Reuters has done a lot of interesting interviews this week from its Infrastructure Summit. In thenews service’s latest dispatch, the Senate’s transportation pointperson, Barbara Boxer, the California Democrat, who will marshal the bill through the Senate, discusses her plans for the highway bill.  

Snippets of the interview that would appeal to us are here: 

  • “What I think is very important is to index the gas tax to inflation, because, obviously the gas tax is falling behind,”.
  • “I also don’t want to increase the gas tax, but I want it to keep up.”
  • Confident the bill would pass out of the Environment and Public Works Committee that she chairs and reach the full Senate by the end of the year.
  • The Senate is also considering raising the tax on diesel, changing exemptions to the gas tax given to certain groups, taking a percentage of customs duties, relying on private finance, and charging drivers fees based on Vehicle Miles Traveled (The bill’s authors, though, have rejected attaching a small device to cars to measure VMT). 
  • We’re looking at options. Are there ways for people to — an honor system, when they register their vehicles — just say, ‘This is the miles I had last year, this is the miles I have this year,’?

Related article:

Fear Growing Senator Boxer Won’t Deliver Progressive Transportation Act

Oberstar’s Handwritten Outline Of New Transportation Bill Leaks; Points to transformation of USDOT management structure “from prescriptive to performance”

May 8, 2009 at 4:45 pm

(Source: The Infrastructurist BNA)

A few days ago, Jim Oberstar, head of the House transportation committee, tipped his hand that he has big changes in mind for transportation policy in this country.

Now his outline for the new transportation bill has leaked. Oberstar has recently been circulating a “two-page handwritten outline” around the Hill, according to the BNA’s Daily Report for Executives, which obtained a copy of the document . They report the following tidbits:

Under the heading “the future of transportation,” the framework seeks to create a new undersecretary or assistant secretary for intermodalism that would meet monthly with all modal administrators. The outline includes the phrases “national strategic plan” and “mega-projects” in the list of agencies that would take part in the monthly meetings.  

It also includes a consolidation of DOT’s 108 programs into four “major formula programs”: critical asset preservation, highway safety improvement, surface transportation program, and congestion mitigation and air quality improvement. The “surface transportation program” section suggests that metropolitan planning organizations receive suballocations based on population.

According to the document, Oberstar would like the DOT’s management structure to shift “from prescriptive to performance.” He would call for DOT and states to design six-year targets for each of four performance categories and the framework would ask for annual reports to DOT and Congress as well as posting data online.   

Oberstar’s outline also addresses transit equity, including a hope to “level decision-making factors between highway and transit choices/projects.” The federal government pays for half of transit projects while it funds 80 percent of highway and bridge work, and transit advocates have been rallying for equal federal treatment.

SEE ALSO:

Fear Growing Senator Boxer Won’t Deliver Progressive Transportation Act

May 7, 2009 at 2:48 pm

(Source: Streetsblog)

California Senator Barbara Boxer will be at the center of a battle over whether or not the reauthorization of the transportation bill will address the global warming impacts of transportation, given her Senate Environment and Public Works (EPW) Committee is responsible for writing much of the bill’s language. Any chance of reforming the transportation bill, which advocates are clamoring for, will require deft political maneuvering to mollify ranking committee member Senator James Inhofe. 

Several sources said that Boxer’s cooperation with Inhofe is simple math. The $312 billion baseline for transportation over six years is insufficient to meet state of good repair needs and set the country on a course for innovation. Minnesota Representative James Oberstar, chair of the House Transportation Committee, has suggested $400-500 billion would be needed, while the American Association of State Highway and Transportation Organizations (AASHTO) and the American Public Transit Association (APTA) argue in their Bottom Line Report that at least $160 billion will be needed annually. In order get from $312 billion to $500 billion or better, Boxer will need to get approval for new revenue streams, which would require a filibuster-proof majority, something she might not get without Inhofe and other reluctant members on the committee. 

Several interviewees also pointed to Senator Boxer’s alliance with Inhofe on an amendment in the federal stimulus bill for an additional $50 billion in highway money as a bad sign.

“You have polar bears and glaciers on your website… then throw people back in their cars?” said one official who insisted on anonymity.

Because Boxer has traditionally been a champion for environmental causes, several advocates said that monitoring her on this issue would be new and potentially uncomfortable. TransForm Executive Director Stuart Cohen said he first saw a red flag late in 2008 when Senator Boxer spoke in San Francisco about highway and road infrastructure needs in the stimulus bill while failing to mention transit.  But, Cohen added, “we would have to adjust to the idea of watchdogging Senator Boxer; she has been such a reliable ally.”

Transportation for America (T4A) Communications Director David Goldberg said an appropriately large sum of money is needed in any discussion of the transportation bill, but he was more concerned about how legislators would spend that money. “We think there is a need of at least $500 billion, but support is contingent on reforms that would make it a wise investment.”

Colin Peppard, Climate and Infrastructure Campaign Director for the Environmental Defense Fund echoed the T4A sentiment. “What we’ve gotten for our money so far is not a good deal,” he said. “The public wants a better product. Hopefully the authorization lays out priorities that enhance safety and focuses on investment in new capacity that increases energy independence and reduces greenhouse gases.”  

Getting Inhofe, one of the premier global warming deniers, to support a bill that calls for reducing greenhouse gas impacts from driving would be a political coup. He has said that environmental review is an onerous burden for infrastructure investment and that the inclusion of global warming rhetoric in a transportation act is unacceptable.

Click here to continue reading.

Reauthorization and Reorganization in the works for USDOT – House Transportation and Infrastructure Committee Chairman James Oberstar wants to reorganize the U.S. DOT to streamline infrastructure spending programs

May 6, 2009 at 1:55 pm

 (Source: Reuters

WASHINGTON- The U.S. government would overhaul how it plans and manages big-ticket highway and transit projects in an ambitious proposal being drafted by a senior Democratic lawmaker who oversees transportation.

 House Transportation and Infrastructure Committee Chairman James Oberstar told the Reuters Infrastructure Summit on Tuesday that his plan would reorganize the U.S. Transportation Department in order to streamline infrastructure spending programs.

“It’s a complete restructuring of the thought process, the delivery system, the delivery mechanism, and the funding for it,” Oberstar, from Minnesota, said in his Capitol Hill office.

Oberstar’s proposal would be the centerpiece of a six-year highway and transit construction bill Congress will consider this year.

He estimates funding at $450 billion, but the figure has not been finalized. Oberstar, who will manage the highway bill in the House, hopes to propose his plan in the coming weeks.

The Senate is working on its own version.

The Oberstar measure would retain current federal funding sources as well as give more spending discretion to states. In addition, it would make room for private investment in infrastructure programs.

Lawmakers face a September 30 deadline to pass a long-term spending blueprint for new U.S. highway construction, road and bridge repair, and public transit.

That legislation, known as the highway bill, would be separate from the economic stimulus bill passed in February that provides $48.1 billion for transportation.

The current highway/transit construction law was approved in July 2005 with a price tag of $286.4 billion. That amount was considered by many in Congress and industry as inadequate to upgrade the country’s aging transportation infrastructure.

Industry leaders are pressing for the next bill to exceed $500 billion.

Highway spending is funded through a federal trust which draws from taxes on motor fuels. But recent shortages in gas tax receipts due to higher pump prices that have reduced driving and more fuel-efficient vehicles have prompted calls to find alternatives.

Oberstar’s plan would keep the Highway Trust fund, but would allow states to determine their spending priorities.

“They’ve had these responsibilities. They’ve just been straight-jacketed,” Oberstar said about the states. “We’re going to give the states broad discretion.”

Click here to read the entire article.