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Vol. 16, No. 2; Mar/Apr 2005 – Vol. 16, No. 3; May/Jun 2005

May/June 2005

Reuthorization Bill Still Facing a Bumpy Road Ahead

Both the House and the Senate authorizing committees have given approval to their respective versions of the Surface Transportation authorization bill (HR 3 and S. 732 respectively). As the full Senate begins consideration of its version of the bill, the road to final approval of the reauthorization measure appears to be anything but smooth. ... Are we going to be faced with another impasse? Some pessimists think that is entirely possible. We, for our part, believe both sides are anxious to reach agreement and will not permit the legislative process to end in a stalemate. But with a week-long congressional recess coming up on April 29, the prospects of having a signed reauthorization bill by the May 31 expiration of the current extension appear remote.


Beyond the Interstate Highway System: It May Be Time To Rethink The State-Federal Relationship


In June of next year the Interstate Highway System will be 50 years old. As this anniversary approaches, the future of the Interstate system is becoming a subject of growing discussion. An important catalyst for this has been a provision in the House version of the Surface Transportation reauthorization bill (H.R. 3). Section 1122(b) of that bill directs the Secretary of Transportation to take appropriate action “to preserve and enhance the Interstate System to meet the needs of the 21 st century.” Section 1122( c) establishes a National Commission on the Future of the Interstate Highway System. The Commission is directed to “develop a conceptual plan with alternative approaches for the future of the Interstate System” for 15-, 30-, and 50-year horizons. The nine-member Commission is to submit its report to Congress by September 30, 2006.

Recently, a group of Washington-based transportation professionals sat down for one of their periodic confabs to speculate on what some of these alternative approaches might be. The scenario depicted below was by no means the only one considered. A wide range of views were expressed concerning such issues as projected future demands placed on the nation’s highway network, the necessity to accommodate rising freight movements, the relative need for metropolitan vs. interregional expansion of road capacity, and the changing federal role. On one thing, however, there was a clear consensus: doing nothing is not an option.


The Future of Transportation Finance

Each year for the past four years, the University of Minnesota’s Center for Transportation Studies has hosted a forum named in honor of Minnesota’s Congressman James L. Oberstar, ranking member of the House Transportation and Infrastructure Committee and a respected national transportation leader. The purpose of the forum is to explore how transportation in the United States is changing in the light of political, economic, social, and technological forces affecting society. National and Minnesota transportation leaders are invited to participate with faculty members from the University of Minnesota and other academic experts.

This year’s Oberstar Forum, held on April 18, had as its theme “The Future of Transportation Finance: ‘Gas Tax Plus’ and Beyond.” The aim of the forum was to explore short and long term options for financing the nation’s surface transportation system. A resource paper prepared by Forum consultant Steven Lockwood provided participants with valuable background information on the state of federal, state and local finance. Reproduced below are some reflections on the meeting, delivered by your editor at the concluding session of the Forum.


News From the Smart Growth Front

Back in November 2003, we speculated that future historians are likely to view the ‘smart growth’ movement as yet another example of a planning ideology that has foundered for lack of a realistic understanding of the power of demographic pressures, market forces and consumer preferences. ( The Backlash Against “Smart Growth,” Nov/Dec 2003). Two recent developments, described below, provide some fresh evidence that "smart growth" is in retreat.


March/April 2005

A National Debate About Amtrak Has Begun

The stage is set for a fundamental reassessment of Amtrak’s structure and role in the oversight and development of passenger rail service in America. Or is it? Will Congress face Amtrak’s problems squarely and legislate fundamental changes to the current system? Or will the lawmakers keep extemporizing, propping up poorly patronized long distance routes, and accomplishing little more than keeping Amtrak barely afloat? As we wrote in these pages 18 months ago, “The Administration’s call for reform raises a fundamental question that has seldom been asked during Amtrak’s 30-year existence: What constitutes a “national passenger rail system?” Should such a system be a continent-wide network of physically interconnected long-distance train routes, as envisioned by Amtrak’s supporters? Or should it rather be a system of regional rail services? In our view, the answer is clear. A coast-to-coast system of linked intercity rail lines is neither justified nor needed. In our vast country there simply is not enough demand for long distance rail travel to make a continent-wide rail network necessary or economically feasible. Instead, what is needed is rail services connecting major population centers in heavily traveled corridors where trains can compete successfully with air and car travel. When viewed in this light, the logic of a federal-state partnership to improve and maintain the physical infrastructure while calling upon the states to assume responsibility for passenger rail operations, is compelling.

Sometimes it takes drastic action to stimulate a national debate and jolt Congress into action. Let us hope that the Administration’s bold decision to end Amtrak subsidies will spark the critical decisions.


Bridging the Transportation Funding Gap: Will the Private Sector Come to the Rescue?

The cost of expanding and improving the nation’s transportation infrastructure far outstrips the user fees generated by state and federal fuel taxes. Can the private sector step into the breach and help bridge this gap? A March 2004 report by the General Accountability Office (GAO) thought this was unlikely. “Under current conditions and circumstances, private sector sponsorship and investment...seem unlikely to stimulate significant increases in the funding available for highways and transit,” the report concluded. (“Private Sector Sponsorship of and Investment in Major Projects Has Been Limited,” GAO-04-419, March 25, 2004). But there are growing signs suggesting that GAO’s skepticism may not be warranted. Signs of mounting private sector involvement include: (1) Proposals by private enterprises to build express toll lanes financed entirely or largely with toll revenue bonds; (2) a groundbreaking initiative by a private consortium to enter into a long-term lease to operate a city-owned toll facility, the Chicago Skyway—an initiative that has aroused interest in similar deals in other jurisdictions; (3) A new Texas law that has embraced public-private partnerships as a means of speeding up project delivery and shifting the risk of toll road development to the private sector; (4) Growing interest in public-private partnerships in other states: 23 states have enacted laws providing legal authority for cooperation with the private sector in implementing transportation projects. The Virginia Public Private Transportation Act, embraced by Republican and Democratic Administrations alike, is 10 years old this year; and (5) Supportive federal policies as evidenced by the Federal Highway Administration’s Special Experimental Project initiative (SEP-15); U.S. DOT’s Report to Congress on Public-Private Partnerships; and the Administration’s legislative proposals.


The Stage is Set for the Long-Delayed Reauthorization

With the release of the President’s FY 2006 Budget Request, followed by the House introduction of its reauthorization bill (H.R. 2) and the Senate leaders’ conciliatory pronouncements, the deadlock over the long-delayed surface transportation reauthorization bill appears to have been broken.


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