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Reason Foundation

Surface Transportation Newsletter #121

Tolls are not taxes, says Virginia Supreme Court, Debut of new version of Commuting in America, Searching for a national freight policy

Robert Poole
November 21, 2013

In this issue:

Virginia Supreme Court Rejects Challenge to Tolls

In a case with nationwide implications for tolling and public-private partnerships, the Virginia Supreme Court ruled unanimously that the tolls scheduled to begin early next year for the Elizabeth River Crossing project between Portsmouth and Norfolk, Virginia, are legitimate charges for the use of highway infrastructure, rather than taxes as alleged by the plaintiff. The court rejected a laundry list of allegations, including that the Virginia Public-Private Transportation Act (PPTA) was an unconstitutional delegation of legislative and taxing power to the Virginia DOT.

The case in question was complicated by the fact that the project to add a third tunnel to the two existing ones, while also making improvements to the latter, would charge tolls on all three, rather than only on the new tunnel. The court found ample evidence that the state legislation under which the original tunnel was funded envisioned a system of crossings, thereby permitting tolling of all three to pay for the combined set of improvements (as well as 58 years of operation and maintenance costs on all three).

On the question of whether the toll charges are taxes in disguise, the court put forward three solid reasons why they are not. First, the tolls are paid so that motorists receive "a particularized benefit not shared by the general public"—compared with the project being paid for via sales taxes. Second, drivers are "not compelled by government to pay the tolls or accept the benefits of the project facilities"—there are other, less-convenient ways across the river between the two cities. And third, the tolls are "collected solely to fund the Project, not to raise general revenues."

Those three points would apply to just about any toll project in the country, so they may come in handy if populist opponents of tolling (and PPPs) in, say, Texas, should ever bring a court case in pursuit of their frequent arguments against "toll-taxes."

Perhaps equally important was the Virginia Supreme Court's upholding of the Virginia PPTA, one of the nation's earliest and best transportation PPP enabling laws. Besides the $2.1 billion Elizabeth River Crossing project, the PPTA has enabled the $1.9 billion express lanes project on the Capital Beltway (I-495), which has been in operation for the past year, and the $1 billion I-95 express lanes project, now well along in construction. The plaintiff had claimed that the PPTA illegally delegated toll-setting powers to VDOT. But that claim actually rested on the plaintiff's prior claim that the tolls were taxes, and it is established law in Virginia that the legislature cannot delegate its taxing power. But since the tolls are clearly not taxes, the delegation claim was also rejected.

To my non-lawyer eyes, this decision appears well-argued and well-written. You can find the text of the decision at: http://www.courts.va.us/opinions/opnscvwp/1130954.pdf.

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New Version of Commuting in America Debuts

For the past three decades, several years after each decennial Census, the transportation community received a large volume of information about commuting. These volumes were produced by Alan Pisarski and were titled Commuting in America I, Commuting in America II, and Commuting in America III. Last year a set of changes was announced. First, the new Commuting in America will be a series of 16 briefs, issued online and downloadable at no charge. Second, since they are now based on annual American Community Survey data, they will be released on an annual basis. And third, leadership of the project now rests on the able shoulders of Prof. Steve Polzin of the Center for Urban Transportation Research at the University of South Florida, with Alan Pisarski serving as consultant and co-author.

Several weeks ago, at a conference in Washington, I got a preview of the new series, presented by Pisarski himself. As of then, five of the 16 briefs were available, with seven more scheduled for November and the remainder for December. The overview put commuting into perspective. As important as it is in terms of access to employment and peak-loading of the urban transportation system, commuting accounts for only 15.6% of all person trips (and 18.8% of person travel time). The long-term patterns of commuting by mode—from 1960 through 2010—are a long, steady growth in private- vehicle commuters (from about 43 million to nearly 120 million) and nearly no change in public transit commuters, walk to work, or work at home (each fluctuating around 3 to 5 million over that entire 50-year period). And in the very latest full year, of the 2.6 million new commuters in 2012, here were their mode choices:

Drove alone: 70%
Carpooled: 11%
Rode transit: 3.8%
Walked: 3.1%
Worked at home: 5.8%
Other means: 6%

Another interesting finding is what Pisarski calls "brand loyalty" to one's "usual" commute mode. Those who reported their usual mode as drive alone actually did so 93.5% of the time, but used other modes for 6.5% of commuting (primarily carpooling). Those who said their usual mode was carpool did so only 55% of the time, driving alone nearly all the rest of the time. Those who usually use transit actually used it 68% of the time, and on other occasions drove alone, carpooled, or walked. Walkers and bikers used their preferred mode 80% and 73% of the time, respectively.

A strong and continually rising trend over the decades has been the fraction of workers leaving their home county to work. That has quadrupled from 14.5% in 1960 to 27.4% in 2010. Another finding that may surprise you is that despite congestion levels that have increased over most of the past decade, average commute travel time in 2011 was 25.5 minutes—the same as in 2000 (and with very little fluctuation from year to year). This bears out Peter Gordon's finding from two decades ago that both people and businesses shift locations over time to facilitate better access of desirable workers to job locations.

Finally, Pisarski provided 50-year data on vehicle ownership. The fraction of households with no vehicles has declined from about 22% in 1960 to 9% in 2010—but to only 3% in households with one or more workers. On an ethnic group basis, 32.6% of black households had no vehicle in 1980, compared with 20% in 2010. For Hispanic households, the comparable figures are 21.8% in 1980 versus 12.6% in 2010.

The new Commuting in America briefs are being disseminated by AASHTO. You can download the briefs from their dedicated website: www.traveltrends.transportation.org.

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The Search for a National Freight Policy

In enacting the MAP-21 surface transportation reauthorization bill last year, Congress put new emphasis on goods movement. It called for the US DOT to develop a national freight policy, designate a national freight network, develop a national freight strategic plan, and provide for a competitive grant program for large multimodal freight projects. In August 2012, DOT created a Freight Policy Council, chaired by Deputy Secretary John Porcari and consisting of DOT experts from all modes, to carry out the tasks called for by MAP-21. In order to tap into industry expertise, this year DOT created a National Freight Advisory Committee to advise the FPC. The NFAC consists of 47 members with expertise in all modes used for goods movement.

In parallel with these efforts, the House Transportation & Infrastructure Committee created a Panel on 21st Century Freight. Its report, "Improving the Nation's Freight Transportation System," was released last month. It provides a pretty good primer on each of the major modes, as well as brief descriptions of the current federal mode-specific user taxes and trust funds, as well as several lists of recommendations. Some of those simply restate provisions already in MAP-21, but others are more specific, such as calling on DOT to complete (soon!) an ongoing truck size and weight study, to extend the deadline for positive train control (PTC) for railroads, and directing the Secretaries of the Army and Treasury to assess financing options for the inland waterways system.

I'm glad to see more emphasis being placed on goods-movement, especially given that DOT expects 61% growth in freight between 2007 and 2040, which will require some major increases in infrastructure capacity (and therefore funding). The big questions are how best to decide what investments make sense and who should pay for them. And on these two questions, I have some serious concerns about the approach set forth in MAP-21 and embraced by a number of freight stakeholder groups. Let me explain.

The model underlying all these efforts is that the DOT, advised by industry experts, will define an overall national network of goods-movement infrastructure. Presumably it will include major Interstate highway routes, major freight railroad routes, key seaports, major sections of the inland waterways system, key cargo-hub airports and air routes, and even major pipelines—all of which are discussed in the House T&I Committee report. Then the DOT will weigh alternative investments to strengthen this network, and use some to-be-defined source(s) of funding to make grants to beef up the network.

The first problem with this model is the huge disparity among the modes. Railroads are investor-owned, not government-owned, and self-supporting. Likewise for pipelines. The other modes are all government-owned. Major ports are largely self-supporting, despite the cockamamie redistribution of monies among ports via the Harbor Maintenance Tax and associated Trust Fund. Major airports are also self-supporting. Highway freight does not fully pay its way, according to federal cost allocation studies and research by transportation economists. But it covers a vastly larger share of its infrastructure costs than barge transportation on the inland waterways, which according to a report last year from House T&I, covers only about 5% of its infrastructure cost via the barge fuel tax that feeds the Inland Waterways Trust Fund. Therefore, the self-supporting modes have no real interest in being taxed to pay for better infrastructure for the subsidized modes, but the latter have a strong interest in retaining their subsidies.

The second problem is the idea that central planning will lead to the most efficient and cost-effective investments in goods movement. Let me suggest a thought experiment. Suppose freight stakeholders had been asked to develop a 40-year strategic plan for freight infrastructure in 1955. At that point in time, not only was there no Interstate highway system (though that was reasonably predictable), but the intermodal container had not been invented. And therefore the global revolution in shipping wrought by this development could not have been taken into account in creating the plan. There was no such thing as just-in-time inventory systems, and there was no third-party logistics industry. Railroads, trucking, and airlines were all heavily regulated. My point is that freight transportation is inherently dynamic, and one of the forces that drives its dynamism is competition, both within each mode and between modes. A central-planning model cannot really account for this, and therefore risks making bad investment decisions on long-lived infrastructure that will be the wrong kind and in the wrong place.

The third problem is perhaps the most serious, and that is the likelihood of interest group politics prevailing over economic value maximization in deciding which major infrastructure projects to fund. Self-supporting railroads and pipelines make their own investment decisions, based on their own risk-benefit calculations—and if they make unwise investments, they bear the costs. Cargo airlines work cooperatively with airports to get the facilities they need, often committing themselves to long-term lease agreements. The trucking industry says it's willing to pay a higher diesel tax, but has yet to come up with a mechanism to target the new funds strictly to high-priority trucking corridors. Barge lines lobby incessantly for a greater share of lock and dam investments to be paid for by general taxpayers (e.g., the proposed WAVE Act), and the port industry for some reason sticks with a bizarre redistribution scheme that gives the deep-harbor ports like Los Angeles and Seattle only a few cents back in maintenance funds for every dollar of harbor maintenance tax they send to DC, while pumping money into other ports that may or may not require deep-water dredging. Moreover, as soon as the DOT defines some corridors and facilities as the national network, we can be sure huge political pressures will be brought to bear to add corridors and facilities that got left out as non-strategic.

If a central plan for goods-movement infrastructure does get created, along with a funding source, even modes that are now self-supporting or nearly so could well see the potential of getting someone else to pay for part of the additional infrastructure they need. And those that are not self-supporting will have even stronger incentives to get somebody else to pay a large share of their infrastructure costs. A very wise 19th century French economist, Frederick Bastiat, once wrote that "The state is that great fiction by which everyone tries to live at the expense of everyone else."

For all of the above reasons, I'd hate to see the goods-movement industry go down that path. The alternative is to develop more-direct and robust users-pay/users-benefit approaches under which each mode pays for the additional infrastructure it needs—and two or more modes work together on projects that facilitate intermodal connections (as in the CREATE program in Chicago and the Alameda Corridor in Los Angeles). That way, the costs of the new infrastructure get built into the rates each mode charges its customers, so that the price of moving goods reflects what it actually costs to build and maintain the infrastructure used.

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MBUF or RUC—Some Thoughtful Commentary

The August/September issue of Thinking Highways (North American edition) includes a pair of articles by Jack Opiola and colleagues from D'Artagnan Consulting on the subject of road usage charging (RUC), otherwise known as mileage-based user fees (MBUFs). One article explains points of similarity and difference between traditional tolling and RUC, primarily with the former typically being facility-based while the latter is envisioned as system-based (as in a whole state's roadway system).

But what I especially want to call to your attention is their other article, "Let There Be RUC." That one was written as a response to a previous article that argued for fuel tax increases rather than starting the transition away from paying per gallon to paying per mile. In this article, Opiola and colleagues take on a number of arguments being raised against what I will continue to refer to as MBUFs. Of the seven points in the article, I will focus on three that I think most need wider understanding.

First, why should we start the transition now rather than waiting until alternatively propelled vehicles start achieving large market shares? The main reason, write the authors, "is to keep infrastructure revenues on pace with the rapid increase in fuel efficiency of the internal combustion engine." For model year 2013, the average mpg reached 24.7 mpg, on the way toward the 34.5 mpg required by federal CAFE standards by model year 2016. And assuming they are not rolled back, the 2025 standards require 54.5 mpg for cars and 40 mpg for trucks. Thus, by 2025, the average new car will go twice as far on a gallon of gas as today's average new car. Unless you think it is politically realistic to double fuel taxes between now and then, highway funding is in big trouble.

A second key point is that a variety of affordable, adaptable off-the-shelf technologies for implementing MBUFs is available today—and I don't mean mandated GPS boxes in every vehicle. A good illustration is the current Oregon pilot program (on which Opiola and company have served as advisors). It offers a number of options, beginning with a no-technology version in which one can opt for the maximum annual miles (set at 98th percentile) for a flat annual fee. Another is a simple device that plugs into the diagnostic port and records total miles traveled—but not where or when. A third option is a smart-phone app that report odometer data, using cell phone towers to distinguish between in-state miles and out-of-state miles. A fourth option is to use built-in telematics (if the vehicle is so equipped) such as GM's OnStar or Ford's SYNC to record and report mileage. These options are selected by the vehicle owner, not imposed by the DOT.

A third critically important point is that the cost of collection will not be anywhere near the alleged 10 to 20 times the cost of collecting fuel taxes. A simple mileage-based system would not require any new infrastructure on the roadway, and it would not require "a whole new government bureaucracy" for billing and collections. Large-scale, very low-cost billing and collections services are widespread in our economy, for credit cards and telecommunications in particular. And the authors cite the important 2012 Reason Foundation study by Daryl Fleming, et al., finding that the true cost of fuel-tax collection is closer to 5% of the revenue collected than the widely believed 1% and that the cost of all-electronic tolling (using a streamlined business model) is approaching 5% of the revenue collected. And Opiola points out that New Zealand already has a functioning MBUF system for 500,000 diesel cars, whose cost of collection is less than 5% of the revenue collected.

There's a lot more in this article than I have summarized here, so I commend it (and the companion piece) to your attention.

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The Cost of Lousy Urban Highways

Last month's report by TRIP (The Road Information Program) about the extent of poor pavement quality in America's urban areas received fairly decent media coverage. But I'm sure many readers wondered what its numbers were based on. I, too, was surprised by some of the headline findings—e.g. that 27% of major urban highways (Interstates, freeways, and major arterials)—are in "poor condition" and that the average U.S. motorist incurs $377 a year in additional vehicle costs due to driving on badly maintained roadways. So I downloaded the report and looked at how the numbers were derived.

"Bumpy Roads Ahead: America's Roughest Rides and Strategies to Make Our Roads Smoother" is based on condition data collected from state DOTs by the Federal Highway Administration. The assessment of pavement conditions is based on two internationally recognized standards: the International Roughness Index (IRI) and the Pavement Serviceability Rating (PSR). This table shows how TRIP used the FHWA data to define four categories of pavement condition.

 

IRI

PSR

Substandard (poor)

Above 170

2.5 or less

Mediocre

120 - 170

2.6 - 3.0

Fair

95 - 119

3.1 – 3.4

Good

0 - 94

3.5 or higher

Based on the FHWA data, TRIP found that 27% of major urban roads are in poor condition, another 27% are mediocre, 15% fair, and 31% in good condition. That's bad enough, but what really caught my eye were two tables showing the 20 worst metro areas of 500,000 or more population and the 20 worst areas with 250,000 to 500,000. Perhaps I should not have been surprised, but metro areas in California dominated both tables, with 7 of the worst 20 in the larger group and 6 of the top 20 in the medium-size group. That includes the top four in the first table: Los Angeles (64% poor), San Francisco (60%), San Jose (56%), and San Diego (55%). Connecticut had three in the top 20 and Massachusetts had two; other states had only one (including New York at 51% poor, New Orleans at 47%, and Honolulu at 43%).

The next point I looked into was how TRIP calculated the increase in vehicle costs due to badly maintained roads. They used the Highway Development and Management Model (HDM), which is recognized by FHWA and numerous counterparts worldwide. Impacts include faster depreciation and need for repairs (in proportion to roughness), plus increased tire wear and fuel consumption. For each metro area, TRIP used data on the average annual miles driven and 2012 AAA vehicle operating cost data as inputs to HDM, to compute each metro area's average annual driver cost due to badly maintained roadways.

Two more top-20 tables summarize the grim results for major and mid-sized urban areas. Top of the list for the former is Los Angeles, at $832 per motorist per year in additional cost, down to $589 per year in 20th-ranked Colorado Springs. The numbers in the mid-sized urban areas table are also quite high, ranging from $793 in Antioch, CA to $530 in Fort Wayne, IN.

The report makes a good case for proper ongoing maintenance over the life cycle of a highway, as the most cost-effective approach to minimizing life-cycle cost to the highway owner/operator while also reducing costs to motorists due to sub-standard pavement conditions. State DOTs need to do a much better job of educating the traveling public about these issues, and TRIP's report provides a good starting point. (www.tripnet.org/docs/Urban_Roads_Report_Oct_2013.pdf)

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A U.S. Bicycle Route System?

In the face of massive shortfalls in federal and state highway funding, what are FHWA and many state DOTs busy doing? Creating what is envisioned as a 50,000-mile US Bicycle Route System (USBRS), analogous to the Interstate Highway System. As of this month, 10 "parent routes" have been officially designated, along with three subsidiary "child routes." Like the Interstates, the parent routes have one- and two-digit numbers, with odd numbers for north-south routes and even numbers for east-west ones.

Back in 2010, when then-DOT Secretary Ray LaHood got up on a table at a bicycle convention and vowed to put bicycles on a level playing field with cars, I thought he was just bloviating, as politicians will do. One commentator remarked that LaHood apparently thought he was Secretary of Recreation, not Transportation. But it turns out he was serious.

I only learned about USBRS last week, when my local newspaper carried an article about Florida DOT's plans to develop US BR1 in this state, 541 miles from Jacksonville to Key West, more or less paralleling US 1. It is just one of four USBRS routes FDOT plans to establish, another being US BR90, parallel to US 90 from Pensacola to St. Augustine. FDOT bike route coordinator David Lee is quoted in the article saying, "We were all busy building roads and highways. Usually when you ride a bike, you don't think about traveling across a state,"-- especially one as hot, humid, and rainy as Florida is much of the year.

Wikipedia has a rather comprehensive description of the overall USBRS program, including a table listing currently planned routes. When you Google the subject, you will frequently encounter the program's number one booster, the Adventure Cycling Association. ACA's Virginia Sullivan loves to make the Interstate highways analogy, telling a reporter recently that US Bicycle Routes will promote tourism, and because bicycle trips take so much longer than car trips, bike tourists will stick around longer and "pour money into the local economy."

Let me step back and put this into perspective. As a nation, we are seriously under-investing in basic highway maintenance, but our federal and state DOTs are busily creating a nationwide system of bike routes? There is no mention in any of the material I could find online about what any of these bike routes will cost, or who is supposed to pay for them. There are only two answers to the "who-pays" question. Either highway users will get stuck with the bill, further depleting federal and state highway trust funds. Or general taxpayer funds will be used—to benefit the relative handful of people who enjoy long-distance bike touring.

I have nothing against bike riders or bike paths. Several of my family members are avid bike riders. What I'm talking about here is a sense of priorities—the ability to distinguish between necessities and "nice-to-have" amenities. There is also a question of basic fairness. Why should I—either as a highway user-tax payer or a general taxpayer—have to pay for someone else's hobby?

When federal and state transportation agencies plead for increased funding, they should be able to show us that they have done rigorous benefit-cost analysis to ensure that whatever limited funds they have are invested in the highest and best uses. Creating a national set of bike routes fails that test.

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Upcoming Conferences

Note: I don't have space to list all transportation conferences that might be of interest. Below are those that I or a Reason Foundation colleague are taking part in.

Living Up to Return Expectations, LP Summit 2013, Dec. 5-6, Westin Times Square, New York, NY (Robert Poole speaking). Details at: www.peimedia.com/Product.aspx?cID=7441&pID=305778&contType=2

Strife in the Fast Lane: How to Solve America's $1.7 Trillion Transportation Problem, Dec. 11, Washington, DC, American Enterprise Institute (Robert Poole speaking). Details at: http://www.aei.org/events/2013/12/11/strife-in-the-fast-lane-how-to-solve-americas-17-trillion-transportation-problem

Transportation Research Board 93rd Annual Meeting, Jan. 12-16, Washington, DC (Robert Poole speaking). Details at: www.trb.org/AnnualMeeting2014/annualmeeting2014.aspx

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News Notes

New Report on Autonomous Vehicles. The Eno Center for Transportation last month released "Preparing a Nation for Autonomous Vehicles," by 2012 Fellow Daniel J. Fagnant. It's a thoughtful discussion of the potential benefits, costs, and limitations of this important new technology—and hence a welcome antidote to some of the hype published in Sunday supplements that I critiqued last issue. Go to: https://www.enotrans.org/wp-content/uploads/wpsc/downloadables/AV-paper.pdf.

Trucking Association Sues New York State Thruway. The American Trucking Association has filed suit against the New York State Thruway Authority over the diversion of toll revenue to the state canal system. Commenting on the suit, ATA President Bill Graves said, "When truckers pay for access to the Thruway, tens of millions of dollars of their toll payments go to the steep costs of the Canal System, which they derive no benefit from." The Thruway Authority acquired the Canal System in 1992, and has spent over $1.1 billion on it since then. The complaint, filed in U.S. District Court, is based on the Commerce Clause, arguing that the toll rates "are not based on a fair approximation of commercial truckers' use of the Thruway."

Perspective on "Green Energy" Policy. Bjorn Lomborg, director of the Copenhagen Consensus Center, published an excellent op-ed in the Wall Street Journal, Nov. 12, 2013. "Green Energy Is the Real Subsidy Hog" compares actual subsidies for various forms of energy, pointing out some bizarre claims of highway subsidy from a recent International Monetary Fund report, along with overall comparisons of annual subsidies by type of energy.

Another Tunnel Buy-Out in Australia. Demonstrating once again that toll concession agreements can and do shift traffic and revenue risk from government to the private sector, the Cross-Sydney Tunnel has been acquired out of bankruptcy by Transurban, the country's largest toll road operator. Designed to relieve congestion on downtown surface streets, the $750 million tunnel achieved well under half the forecast traffic and was unable to service its construction debt. Transurban reached agreement with Royal Bank of Scotland to acquire the remaining years of the 30-year toll concession for $474 million, and expects the deal to close early in 2014.

Could the Jones Act Be Relaxed?. The surging U.S. oil production market is challenging the ability of domestic oil tanker producers to keep up with demand. And that has led to calls to amend the Jones Act to permit ships built overseas to be used in oil transport between US ports. But as Peter Tirschwell notes in a recent Journal of Commerce column (Oct. 28, 2013), that can lead to calls for granting similar exemptions for vessels carrying other goods and people—and possibly the demise of the Jones Act.

Atlantic City Expressway Saving Money on Toll Collection. Two years ago the South Jersey Transportation Authority outsourced toll collection to Faneuil Inc. of Hampton, VA. In August, it extended the contract for another year, which is expected to yield three-year savings of $7.5 million; the one-year extension costs $3.7 million. But Faneuil is still collecting most tolls on a cash basis. Despite being in the heart of E-ZPass territory, SJTA has not yet made plans to convert to all-electronic tolling.

Government Study Finds HS2 Not Cost-Effective. The $80 billion plan to build a high-speed rail line from London to Birmingham, Manchester, and Leeds would yield far less economic benefits than upgrading tracks, signaling, and stations along the existing rail lines. That was the finding of a Department for Transport assessment released early this month. The alternative plan would upgrade the three major north-south rail lines, creating significantly greater value for money. That was also the conclusion of an editorial in the Nov. 2, 2013 edition of The Economist.

Why OPEC No Longer Calls the Shots. Highly respected energy analyst Daniel Yergin penned a Wall Street Journal op-ed of the above title for the paper's Oct. 15th issue. It is well worth reading for an overview of the impact of the current U.S. oil and gas boom on the previously unachievable goal of U.S. "energy independence."

Bolt Bus Adds Los Angeles to San Francisco Route. To better compete with arch-rival MegaBus, Bolt Bus announced last month that it will begin offering three daily roundtrips between Los Angeles and San Francisco. Both compete in what some are calling the "premium discount" market, offering free Wi-Fi, power outlets, and greater leg-room, as well as selling most tickets online and generally dispensing with the expense of bus terminals.

Gov. Brown Preserves Identity of LA HOV Lanes. California Gov. Jerry Brown vetoed a bill by a Los Angeles legislator that would have opened the HOV lanes to all vehicles on sections of the 134 and 210 freeways in Los Angeles during non-peak hours. Since all existing HOV lanes in the SCAG region are likely to be converted to HOT or express toll lanes in the coming decade, reducing their limited access nature would have been a step in the wrong directions.

OECD Issues Report on PPPs for Transport Infrastructure. The OECD's International Transport Forum last month released a report on how governments can make effective use of public-private partnerships for transportation infrastructure. It addresses the fiscal impacts of such PPPs, examines the kinds of risks involved and how they can be shifted to private partners, and compares the relative merits of tolls, availability payments, and utility-type regulation. Go to: www.oecd- library.org/transport/better-regulation-of-public-private-partnerships-for-transport-infrastructure_9789282103951_en.

Majority in California Say Drop High-Speed Rail. A September public opinion survey by USC and the Los Angeles Times found that 52% of voters said the $68 billion project is a waste of money and should be halted, compared with 43% who want it to continue. The findings are similar to those of a poll taken last year, according to an article in the Times (Sept. 28, 2013).  

Oxford Senior Fellow Position Available. Bent Flyvbjerg, director of the BT Center for Major Program Management at Oxford University, has asked me to announce that it is seeking a Senior Research Fellow in Operations Management. Details are available at: http://www/ox.ac.uk/about_the_university/jobs/academic/index/ac13662j

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Quotable Quotes

"The hardware required to measure miles traveled is already present in every car—an odometer. States can quickly set up a system by which periodic odometer readings, whether self-reported or verified, form the basis of the road user charge. Consumers who prefer advanced hardware in their vehicles to count miles and conduct transactions should have that technology option, but the evolution of that technology is up to the market. Today it could be based on the same technology used by many consumers for pay-as-you-drive insurance, smart-phones, or tablets. Tomorrow it could be built into the vehicle. The bottom line is that road usage charging can exist today with no new in-vehicle hardware required in every car."
—Jack Opiola, Steve Morello, Travis Dunn, ad Matthew Dorfman, "Let There Be RUC," Thinking Highways (North America), Vol. 8, No. 3, August/September 2013

"A frequent objection to road-use metering, such as GPS-based ones, is that they allow vehicles to be 'tracked.' This objection is based on a misunderstanding. The satellites comprising the GPS enable road users to pinpoint their own locations, in the way that sextants were used at sea to enable mariners to ascertain theirs. But the sextants did not enable ships to be 'tracked' and neither does GPS enable road users to be followed. If a vehicle equipped with a GPS navigation system is lost, the navigation system on it does not enable the owner to locate  it. For this, an additional unit (popularly referred to as a 'bug') has to be fixed to the vehicle, to broadcast its position."
—Gabriel Roth, "Moving the Road Sector Into the Market Economy," IEA Current Controversies Paper No. 43, Institute of Economic Affairs (London), June 2013

"To many in the transit business . . . Southern California is often seen as a paradise lost, a former bastion of streetcar lines that crossed the region and sparked much of its early development. Today, billions are being spent to revive the region's transit legacy. Like many old ideas that attract fashionable support, this idea, on its surface, is appealing. Yet, in reality, the focus on mass transit, however fashionable, represents part of an expensive, largely misguided, and likely doomed attempt to re-engineer the region away from its long-established dispersed, multipolar, and auto-dependent form."
—Joel Kotkin, "Thinking Outside the Rails on Transit," New Geography, Sept. 23, 2013 (www.newgeography.com/content/003948-thinking-outside-rails-transit)

"This is why we have federalism. Two reasons: You're more apt to have three or four smart governors than you are to have a smart president at any time, so you disperse decision-making and experimenting. Beyond that, we can now practice under federalism what the late Daniel Boorstin, great historian and Librarian of Congress, called 'entrepreneurial federalism.' That is, let the states compete for mobile businesses."
—George Will, Reason Interview, "George Will's Libertarian Evolution," Reason, December 2013.

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Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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