We have a webinar through APA up. Go watch it here.
Gen Giuliano, Kevin Holliday, Teddy Minch, Zach Elgart, Victoria Farr, Matthew Kridler, Mary Kuhn, and I spent about a year or so working on questions about public-private partnerships in California. The resulting report is huge, but you can access its various parts here.
So just when Santorum leaves and I’m faced with the possibility that reading about politics won’t be interesting enough to keep me away from doing real work (gasp! work!), LA’s mayor decides he’s going back to the ballot box to ask voters to make Measure R, a half-cent sales tax measure passed for 30 years back in 2008, permanent.
In Tony’s favor, it never hurts to ask, particularly when one is not running for re-election. For most US mayors who want to build more transit, the writing is on Belshazzar’s wall: we’re not likely to get a new transportation deal in DC at all before the November election. Unless something changes there–as in, we have a big, Goldwater-style doomsday for the GOP—if we get a deal after November it’s likely to be the Republicans’ deal. And they don’t want a federal infrastructure bank, and they don’t like sending money to California.
A couple journos called my Suburban Lair yesterday to talk about whether the Measure R extension has a chance of passing. I don’t think I gave them anything useful. Los Angeles County has had six or seven–I can’t remember–ballot box measures for sales taxes between 1975 and today, and three of them have passed: Prop A in 1980, Prop C in 1993, and Measure R in 2008. So based on the county’s history, it could go either way.
When Measure R was on the ballot, I spent time talking to both Democrats and Republicans about the measure, and among the Republicans, the fact that the measure would sunset seemed like a big deal to them. I can’t imagine they would be happy with the extension.
But if there is one thing that Mayor Tony’s crew knows how to do, it’s campaign. They are very good at it, and they got some key experience with Measure R, and they also have a pretty powerful network of businesses and nonprofits that threw their support behind the “Yes on Measure R” campaign–like most of the LA County museums. It seems likely that that coalition is still in place and readily activated for another initiative.
However, the continuation of the tax is a big deal, and the rationale–that they want to make sure they can borrow against the tax–has an assumption that will probably worry conservatives in the County: the fact that they aren’t comfortable borrowing against the tax that will sunset suggests that they know full well the tax as it is can’t support the existing project list without very, very low cost federal financing of the 30/10 plan. There are always cost over-runs, and it’s really really important that people not underestimate how expensive the subway to the sea is going to be. By releasing that sunset, the pressure to avoid cost over-runs goes away a bit. And that’s a problem for many conservative voters who see removing that constraint as a license to do what governments do: take on too much financial risk and manage projects poorly.
The annual conference of the American Planning Association is coming to Los Angeles, and in tandem, they have decided to do books on planning in the cities they are visiting. Planning Los Angeles is the first effort, and it’s quite nice. I’m impressed by a bunch of things, but one thing in particular: for a book that cost members $25, it has full color photos. The chapters came from writers around the region. I have a selection looking at the development of Measure R and what ballot box financing and politics means for transit.
Here is a nice interview with David Sloane via Planetizen, discussing the book.
APA has just put up a podcast here (also available through iTunes), along with a slideshow of some of the images.
The book is available right now, and it will be shipping through Amazon and other vendors later this month. It will also be on sale at the APA conference, April 13-17, and on display at the Organization of American Historians conference in Milwaukee, April 19-22. There will be an event at the Huntington Library in San Marino on April 28.
Here is a list of contributors–impressive!:
Ken Bernstein, AICP
Marlon G. Boarnet
Meredith Drake Reitan
William Fulton, AICP
Robert A. Leiter, FAICP
Steven A. Preston, FAICP
Christian L. Redfearn
Kenneth C. Topping, FAICP
Andrew H. Whittemore
David Levinson, the Transportationist, as usual, is thinking critically about the discussion about budget cuts in transport, and he’s got a provocative argument: transport projects cost too much to build. I’m fond of pointing out how failures to raise the gas tax erodes the purchasing power of the funds, but it’s also the case that costs have risen.
I don’t really disagree with his list of potential reasons. I only have a few additions, which may be riffs and variants on what he already has.
Some (additional) reasons why I hypothesize transport (and infrastructure) costs just keep going up and up:
1) The highest demand areas for maintenance and new stock occur in places that are expensive. I wonder how much of the costs of, say, intersections have to do with land costs. When Levinson asked why is it is so expensive–$175K–I began trying to think of private sector comparables, and I don’t have any except the house renovations: right now, looking at $15K to $20K for a new climate system, which makes no sense without new windows (another $10K). But that doesn’t include the land costs which are already sunk. So yes, the Northeast Corridor and California links of the proposed high speed make the most sense in terms of service and users, but they are also the most expensive to build. Ditto with LA’s subway down Wilshire. It’s a great corridor. It’s also west LA, where land just doesn’t get more expensive.
As urban land gets more intensively used, these costs get higher and higher.
2) Project creep. Standards have risen, as Levinson notes, but it’s not as though there aren’t a lot of what we might call side-payments in project development: noise walls hither and thither, etc. It’s hard for me to say that these costs aren’t necessary because the politics of getting something built pretty much requires the outlay.
And these are directly related to the first question, where the more densely settled the surrounding area, the higher the side payments.
3) Envy is a much bigger problem in public works than in personal life, I think. Jurisdiction X got a light rail link. I pay taxes for those things, why does Jurisdiction X get it when my neighborhood/district doesn’t? It’s a recipe for political hostages at budget time, as few political leaders have any reason to say “You know, the benefit cost on a project in my district just shows the project makes no sense.” It’s leads to two problems: projects that make no sense to serve some notion of geo-political equity, and project creep because if Jurisdiction X’s light rail stations had public art and golden knobs and a fountain, then my district’s light rail should have those and more. Combined with the Other People’s Money problem, this type of envy is a recipe for project creep.
There’s part of me that thinks that this problem might be addressed by forcing localities to pony up the cost of amenities out of property tax coffers.
4) One quibble with Levinson’s list: people do do benefit cost analysis all the time, but benefit cost is only as good as the integrity of the data and the analysts, and the whole process is too easy to roll. For development in California, I think CEQA forces agencies to get pretty financially committed to projects before they hit the “go” button in analysis. So by the time you’re there, you’re doing analysis to rationalize what you’ve committed to. With nonuser benefits and nonmarket benefits thrown in, the b/c ratio is politically constructed number. Perhaps it’s not CEQA–perhaps the commitment problem occurs everywhere, in that any line on the map causes a political firestorm, so that you have your rationales lined up before you draw anything.
Again, I’m not sure how to avoid this other than to have multiple groups paid to analyze potential projects–the proposing district and districts competing for the same funds. I’m sure we would find a way to make unsavory deals there, too.
I have no actual numbers or proof on these ideas. Maybe they are all small potatoes. Anybody got research they can have me read?
We are here: TRB Special Report 303: Equity of Evolving Transportation Finance Mechanisms – has now been made available in prepublication format on the TRB website. Our individual commissioned papers have also been posted and can be accessed via the links provided in the blurb and in Appendix C of the report.
Very cool. Many thanks to the wonderful Jill Wilson of TRB for helping us put this report together.
Our Federal budget donnybrook embodies so many conflicts in American values that it’s hard to recount them all: disagreement over the Federal government’s reach versus states’ rights, a disillusionment, for whatever reasons, with social programs, the staggering costs of being at war for a decade—the list goes on and on. Buried within the politics of the budgetary battle, however, are longstanding snafus in US policy. One such mistake, and a potentially crippling one if it continues, has been a chronic inability among US leaders to help voters connect the dots between transportation investment and user fees.
In 2009, the Federal Highway Trust Fund, which pays for a sizable chunk of US transport investment, fell short of its financial commitments. Why? Because the federal gas tax which supports the HTF is out-of-date. We haven’t increased the gas tax—which is 18 cents per gallon—since 1993. That’s like you or me not getting a pay raise in 17 years! Throughout the intervening decades, the Highway Trust Fund remained in the black because Americans kept consuming more and more gasoline. We didn’t take advantage of those growth times to bump up the tax by a nickel or a dime, when gas prices were low and we could have afforded it, easily.
Now the US is now in a tricky position. Having underinvested for decades with an eroding revenue stream vis-à-vis booming demand for transit and highways, much of our transportation infrastructure is aged, obsolete, or congested. Americans understand the problem, and they want transportation investment. A recent poll done by the Rockefeller Foundation found that two thirds of their respondents from both political parties believe that transportation investment is important. But less than a third thought raising the Federal gas tax is acceptable.
Those views make for potent political one-two punch in bankrupting transport funds. Leaders want to deliver on things that Americans value, like transit. But politicians don’t want to pay the political penalty that comes with charging tolls or transport taxes to cover project costs. Thus politicians work in a constant state of temptation, a bit like college students with their Dads’ credit cards—spend now, pay later.
No recent president has fallen harder onto this political whipsaw than Obama. After the 2009 shortfall in the Highway Trust Fund, a report from National Academy of Sciences recommended a modest increase in the gas tax and a gradual movement to mileage fees. The Obama administration’s response was no way, no how.
Instead, Obama not only decided to ignore the shortfall, but to build on it. His State of the Union and budget emphasized an infrastructure extravaganza: a new $8 billion yearly investment to create a high-speed rail system via a 54,000 percent increase in the budget for the Federal Railroad Administration. Even though high speed rail companies will charge passengers once the system in place (quite a bit, if fares around the world are any indicator), Obama’s proposal had no clawback for the Federal taxpayer and no plan to create a sustainable, long-term fund for seeding the projects.
Instead, the administration simply looted from general fund programs.
We can expect the major windfalls from high speed rail to go to land owners who develop around stations—just like the real estate developers who are now cashing in on all the new land in downtown Boston provided by the Big Dig. Financing things like high speed rail out of the general fund, rather than using a pay-as-you-go system of user fees, can burden low-income Americans both by taking their tax money for transport projects unlikely to benefit them much and gobble up money from programs that serve them, like Aid to Families or veterans’ benefits (both of which felt the ax).
Obama may have avoided the ire associated with raising the dreaded gas tax, but his high speed rail proposal completely backfired on him, at least for now. Around the country, from Wisconsin to Ohio to Florida, Republican governors have made a media festival out of turning down Federal high-speed rail funds. In doing so, the Republicans have successfully portrayed the whole high speed rail plan as yet another instance of Obama’s fiscal irresponsibility and, worse, a wildly expensive vanity project.
So Obama ran a fruitless and embarrassing budgetary gambit that, had it worked, would have undermined the user-based funding principles that have served transportation investment remarkably well for about 60 years. He got chewed up like a man in a bacon suit at a dog show, and the whole debacle distracted everybody from the really innovative ideas in the budget, like a national infrastructure bank to help governments leverage private funds for transportation investment.
All that, just so that Obama could dance around the dreaded gas tax and get a few trains going? Really?