Category Archives: Federal Transportation Policy

Drivers might pay road taxes by mile

Although better fuel economy sounds great for the pocketbook and good for the planet, it spells trouble for our long-term reliance on gas-tax money to finance transit and highway needs.

After spending more than it takes in for several years, the federal Highway Trust Fund is expected to run out of money for road projects by 2009.

So, as part of a $16.5 million nationwide study over the next two years, 450 Triangle drivers will help road-test a new way to pay for transportation — by the mile, not by the gallon.

Replacing the fuel tax with a mileage fee would be a long-range idea — and possibly a long shot.

Long shot or not, the issue of how to pay for state and federal roads does not to seem to going away any way soon.

See also New Technology for an Old Dilemma by Paul Sorensen and Brian Taylor

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Auto CEO pushing fuel independence

From Al Lewis at the October 22, 2006 Denver Post . . .

AutoNation CEO Mike Jackson wants to sell you a car, and he wants to raise the price you pay for gasoline every year for 10 years.

AutoNation, based in Fort Lauderdale, Fla., is the largest U.S. car dealer with 333 dealerships in 16 states (including 17 in Colorado), and more than 100,000 vehicles for sale online at http://www.AutoNation.com. Before Jackson took this job in 1999, he was CEO of Mercedes-Benz USA.

Higher gasoline taxes, he says, will curb America’s lethal addiction to foreign oil – a habit that inevitably puts money in the hands of terrorists and sends U.S. troops into deadly battles.

“Americans do not want to go on like this,” Jackson said in a telephone interview. “Their dollars are going to support both sides of a war. It makes no sense.”

Jackson has been lobbying for a higher federal gasoline tax, which has not budged from 18.4 cents a gallon since 1993. He wants to hike it 10 cents per year for a decade. He hopes this will force consumers to conserve and provide economic incentives for alternative fuel technologies.

The Fortune 200 CEO describes himself as a Republican, a fiscal conservative, strong on national defense and a free-market capitalist.

“You can’t leave national security to the free market,” Jackson said. “Five presidents have said this is an issue of national security. … But they haven’t put forth a policy to address it. We’ve gone from importing one-third of our oil to importing two-thirds. And fuel economy has been stuck at 21 miles per gallon for 25 years.”

The problem isn’t automakers or even big oil companies. The problem is American consumers, who’ve consistently chosen size and speed over fuel efficiency.

“If you want people to drink less, you tax alcohol. If you want them to smoke less, you tax cigarettes,” Jackson said.

“Let’s say the issue is obesity. Right now, what the federal government is doing is putting out a plate of broccoli and a plate of donuts, and it’s saying you should really eat broccoli, but we’re having a half-price sale on donuts.”

Gasoline has plunged to less than $2.25 a gallon. Jackson said he believes consumer behavior only begins to change at $3, and really changes at $6.

“The last thing that OPEC wants is for America to get serious about energy, conservation and the development of alternatives,” Jackson said.

In Jackson’s view, gasoline should be taxed, and alternatives should get tax breaks. But who wants to talk about taxes just before an election?

“The state of affairs in Washington is pretty depressing,” Jackson said. “They will say that they completely agree with my position but are unwilling to stick their neck out. Or they argue that the free market will address this issue. And when I point out that the free market hasn’t fixed it in 25 years, they shrug their shoulders and walk away.”

Jackson says his CEO acquaintances haven’t been much help, either.

“Most are supportive,” he said. “But few are willing to say it. The perception is that you’ll be tarred and feathered.”

An increasing number of economists, however, favor hiking gasoline taxes. Many argue that current gasoline prices do not reflect costs that are foisted upon society – such as pollution or the military required to protect oil fields.

Last month, former Federal Reserve Chairman Alan Greenspan, who has long toed a conservative line on taxes, told a group of executives in Massachusetts that he favored hiking the gas tax. “That’s the way to get consumption down,” he said. “It’s a national security issue.”

Then came Robert Lutz, vice chairman for worldwide vehicle development at General Motors. “I’d say the best thing the (U.S.) government can do is to raise the gas tax by 10 or 15 cents a year until it reaches European levels,” Lutz said at the Paris Motor Show on Sept. 28.

Former U.S. Vice President Al Gore, author of the global warming tome, “An Inconvenient Truth,” called for a tax on all fossil fuels in 1993. What we got instead was a 4.3-cent hike in the gasoline tax, a move so unpopular it helped Republicans take back Congress in 1994.

“If you read Al Gore’s book, he doesn’t call for anything effective,” said Jackson. “The inconvenient truth is that we need a higher gasoline tax.”

Funding is big hurdle for I-70 mass transit

A second article on I-70 planning . . .

BY BOB BERWYN
summit daily news
October 20, 2006

COPPER MOUNTAIN – There is widespread consensus among I-70 coalition members that mass transit needs to be a big part of any long-term solution for the I-70 mountain corridor. But federal and state highway officials said transit proponents shouldn’t rely on massive government funding.

Planning and building a transit system will require not only innovative technology, but an equally creative financing mechanism, most likely through a combination of statewide taxes and bonds, experts said Thursday during the I-70 Coalition transit workshop and retreat at Copper Mountain.

Through 2010, the Colorado Department of Transportation (CDOT) has budgeted about $65 million for I-70 corridor improvements, with a bigger pot of about $1 billion available for strategic projects. Funding beyond 2010 is uncertain, said CDOT’s Joyce Bunkers.

“There is no silver bullet for funding,” added Brian Pinkerton, CDOT program engineer for Region 1, which covers most of the I-70 mountain corridor. “Without some kind of change, we will not have enough money to keep roads and bridges in current condition,” Pinkerton added.

The most frequently discussed transit alternatives, including various fixed guideway systems running from DIA to the Eagle County airport or beyond, could cost as much as $6 billion. For the sake of comparison, Pinkerton said CDOT’s annual budget runs about $800 million.

And the federal government is probably not in a position to pony up that kind of additional cash, said Charmaine Knighton, of the Federal Transit Authority (FTA). Knighton outlined several funding programs for transit systems, and explained that the FTA is looking for projects that give some real bang for the bucks. Under a rigorous evaluation and rating system, the agency looks at the ratio of cost to passengers carried per mile. Other criteria include whether the system serves low-income populations, whether there is employment near stations and whether the projects offer environmental benefits.

“It’s very expensive terrain to put any kind of a system in, whether it’s highway or transit … it’s an extremely expensive environment to work in,” Pinkerton said, briefly touching on the challenges of addressing environmental concerns, as well as potential impacts to communities along the corridor.

While he didn’t mention any specific towns, concerns are greatest in Clear Creek County, where any type of highway or transit construction is sure to have significant impacts to communities like Georgetown, Idaho Springs and Silver Plume.

The federal government is looking to move the most people for less money, Pinkerton said.

“For every dollar spent, how many people go how far?” Pinkerton said, simplifying the FTA’s funding equation. “I don’t think the money is going to come from one particular source. It’s going to have to come from a multitude of financing options,” he concluded.



Statewide solution

Those options could include a statewide sales tax or a levy on gasoline, said Alan Matlosz, senior vice president of George K. Baum and Company.

“There is no limit to the amount of money to fund the project … the difficulty is, you have to pay it back,” said Matlosz, whose company provides investment banking and financial advisory services to local governments throughout Colorado.

Matlosz outlined several ways that the I-70 coalition might be able to raise the money through existing mechanisms already authorized under state laws, including formation of a metro district that could levy property taxes, or a regional transportation authority that could be funded by sales taxes.

A regional transit authority would require a complex intergovernmental agreement and voter approval for a sales tax increase, vehicle registration fees of up to $10, as well as a 2 percent lodging tax could also be levied by a regional transit authority, Matlosz explained.

Focusing in on the eight counties represented in the coalition, Matlosz said that, based on some table-top calculations, a 1 percent sales tax could raise about $52 million annually, based on current taxable retail sales in the region. A $10 vehicle registration fee would generate another $2.24 million, he said.

Dallas, Phoenix, Santa Fe, Atlanta and San Jose all have sales-tax-funded transit projects, he said.

“They’re easier to get passed – people just don’t like property taxes,” Matlosz said.

A statewide one-cent gas tax hike could raise about $25 million annually, while a 10-cent hike could fund about $4 billion worth of improvements, Matlosz said.

“There are mechanisms to raise funds through a district or transit authority. The challenge is to figure out what to tax, where to tax and how to spend the money,” he concluded.

“This state has never had a designated funding transit source,” said I-70 coalition director Flo Raitano, adding that a one-half percent statewide sales tax could finance about $4 billion worth of bonds.

Raitano said the gas tax idea warrants caution and sensitivity to the concerns of people living in rural areas who, out of necessity, drive a lot.

The transit workshop wrapped up Friday with a facilitated session aimed at identifying areas of agreement and disagreement on transit performance criteria and on management and operating principles.

The coalition website is at http://www.i70mtncorridor.com.
For more info on transit options, go to http://www.i70mountaintransit.org.

Some Convenient Truths

In the September Atlantic Monthly, Greg Eaterbrook offers a different way of thinking about the greenhouse effect – it’s an air pollution problem and a problem we have tackled before.

Greenhouse gases are an air-pollution problem—and all previous air-pollution problems have been reduced faster and more cheaply than predicted, without economic harm. Some of these problems once seemed scary and intractable, just as greenhouse gases seem today. About forty years ago urban smog was increasing so fast that President Lyndon Johnson warned, “Either we stop poisoning our air or we become a nation [in] gas masks groping our way through dying cities.” During Ronald Reagan’s presidency, emissions of chlorofluoro­carbons, or CFCs, threatened to deplete the stratospheric ozone layer. As recently as George H. W. Bush’s administration, acid rain was said to threaten a “new silent spring” of dead Appalachian forests.

But in each case, strong regulations were enacted, and what happened? Since 1970, smog-forming air pollution has declined by a third to a half. Emissions of CFCs have been nearly eliminated, and studies suggest that ozone-layer replenishment is beginning. Acid rain, meanwhile, has declined by a third since 1990, while Appalachian forest health has improved sharply.

Most progress against air pollution has been cheaper than expected. Smog controls on automobiles, for example, were predicted to cost thousands of dollars for each vehicle. Today’s new cars emit less than 2 percent as much smog-forming pollution as the cars of 1970, and the cars are still as affordable today as they were then. Acid-rain control has cost about 10 percent of what was predicted in 1990, when Congress enacted new rules. At that time, opponents said the regulations would cause a “clean-air recession”; instead, the economy boomed.

Greenhouse gases, being global, are the biggest air-pollution problem ever faced. And because widespread fossil-fuel use is inevitable for some time to come, the best-case scenario for the next few decades may be a slowing of the rate of greenhouse-gas buildup, to prevent runaway climate change. Still, the basic pattern observed in all other forms of air-pollution control—rapid progress at low cost—should repeat for greenhouse-gas controls.

Yet a paralyzing negativism dominates global-warming politics. Environmentalists depict climate change as nearly unstoppable; skeptics speak of the problem as either imaginary (the “greatest hoax ever perpetrated,” in the words of Senator James Inhofe, chairman of the Senate’s environment committee) or ruinously expensive to address.

Even conscientious politicians may struggle for views that aren’t dismal. Mandy Grunwald, a Democratic political consultant, says, “When political candidates talk about new energy sources, they use a positive, can-do vocabulary. Voters have personal experience with energy use, so they can relate to discussion of solutions. If you say a car can use a new kind of fuel, this makes intuitive sense to people. But global warming is of such scale and magnitude, people don’t have any commonsense way to grasp what the solutions would be. So political candidates tend to talk about the greenhouse effect in a depressing way.”

One reason the global-warming problem seems so daunting is that the success of previous antipollution efforts remains something of a secret. Polls show that Americans think the air is getting dirtier, not cleaner, perhaps because media coverage of the environment rarely if ever mentions improvements. For instance, did you know that smog and acid rain have continued to diminish throughout George W. Bush’s presidency?

One might expect Democrats to trumpet the decline of air pollution, which stands as one of government’s leading postwar achievements. But just as Republicans have found they can bash Democrats by falsely accusing them of being soft on defense, Democrats have found they can bash Republicans by falsely accusing them of destroying the environment. If that’s your argument, you might skip over the evidence that many environmental trends are positive. One might also expect Republicans to trumpet the reduction of air pollution, since it signifies responsible behavior by industry. But to acknowledge that air pollution has declined would require Republicans to say the words, “The regulations worked.”

Does it matter that so many in politics seem so pessimistic about the prospect of addressing global warming? Absolutely. Making the problem appear unsolvable encourages a sort of listless fatalism, blunting the drive to take first steps toward a solution. Historically, first steps against air pollution have often led to pleasant surprises. When Congress, in 1970, mandated major reductions in smog caused by automobiles, even many supporters of the rule feared it would be hugely expensive. But the catalytic converter was not practical then; soon it was perfected, and suddenly, major reductions in smog became affordable. Even a small step by the United States against greenhouse gases could lead to a similar breakthrough.

And to those who worry that any greenhouse-gas reductions in the United States will be swamped by new emissions from China and India, here’s a final reason to be optimistic: technology can move across borders with considerable speed. Today it’s not clear that American inventors or entrepreneurs can make money by reducing greenhouse gases, so relatively few are trying. But suppose the United States regulated greenhouse gases, using its own domestic program, not the cumbersome Kyoto Protocol; then America’s formidable entrepreneurial and engineering communities would fully engage the problem. Innovations pioneered here could spread throughout the world, and suddenly rapid global warming would not seem inevitable.

The two big technical advances against smog—the catalytic converter and the chemical engineering that removes pollutants from gasoline at the refinery stage—were invented in the United States. The big economic advance against acid rain—a credit-trading system that gives power-plant managers a profit incentive to reduce pollution—was pioneered here as well. These advances are now spreading globally. Smog and acid rain are still increasing in some parts of the world, but the trend lines suggest that both will decline fairly soon, even in developing nations. For instance, two decades ago urban smog was rising at a dangerous rate in Mexico; today it is diminishing there, though the country’s population continues to grow. A short time ago declining smog and acid rain in developing nations seemed an impossibility; today declining greenhouse gases seem an impossibility. The history of air-pollution control says otherwise.

Americans love challenges, and preventing artificial climate change is just the sort of technological and economic challenge at which this nation excels. It only remains for the right politician to recast the challenge in practical, optimistic tones. Gore seldom has, and Bush seems to have no interest in trying. But cheap and fast improvement is not a pipe dream; it is the pattern of previous efforts against air pollution. The only reason runaway global warming seems unstoppable is that we have not yet tried to stop it. [emphasis added]

Read the full article . . .