Great Neighborhoods Initiative Going Strong in Massachusetts

The Massachusetts Smart Growth Alliance has posted thepresentations from their recent Great Neighborhoods Summit, and it’s good to see this initiative moving forward.  The Great Neighborhoods program provides expert assistance to communities working for smart development and redevelopment, often with a transit-oriented development angle.

Two of the best success stories (with a transportation perspective) from MSGA’s update report:

·      In the Fairmount corridor in Boston a suburban commuter rail line runs through otherwise transit-poor neighborhoods.  MBTA is building new in-town stations, which will function almost like rapid transit stops, and a variety of agencies and groups are promoting redevelopment along the line, including  “village centers” and greenways.

·      In the more upscale, suburban setting of Winchester, MSGA is working with the town to plan a major upgrade and infill development of the CBD, centered on the commuter rail station.

Historically, transportation agencies have not been very good at planning or project development at this scale.  This will be a challenge we need to address in coming years, as “great neighborhoods” will be a key building block for a successful, sustainable future.  Thanks to MSGA for providing some good lessons.

NASTO Notes – Reauthorization and Funding

The biggest topic at NASTO (Northeast Association of State Transportation Officials) is – as at all transportation conferences – Reauthorization and funding.  And as usual, no one is very optimistic.

John Porcari (USDOT Deputy Secretary) noted that if we are all asked to do more with less for much longer, pretty soon we will be asked to do everything with nothing.  He said we are living off the infrastructure our parents (and grandparents and great-grandparents) bought and paid for.  He naturally pointed out some of the good things the Obama Administration has been trying to do, but said it was hard to be optimistic about Reauthorization.

Jack Basso, AASHTO’s finance guru, had to provide another in his long series of rather depressing accounts of the current and future state of transportation funding.   The Highway Trust Fund is in critical condition.  No more transfers can be expected from general funds.  The new CBO report on the financial effects of the new CAFÉ standards makes it clear that current funding is not viable.  And there is now no escaping the revenue issue.  (Here I have to disagree.  Congress and state legislatures can be incredibly creative in escaping revenue issues!)

We will miss Jack Basso, retiring soon from AASHTO, who has been a major voice of reason in transportation finance for many years.

When will we turn the corner and start talking about all the wonderful things we can do in this country in the 21^stCentury?

Oklahoma Transportation Funding is (not so) OK

Oklahoma Governor Mary Fallin has signed a bill (HB 2247) that will dedicate another $18 million a year in general revenue toward fixing state highway bridges.

The good news is that Oklahoma has in place an aggressive program to rehab or replace structurally deficient bridges, which the added money will accelerate.

The bad news is that the funding doesn’t come from new revenue: it comes from general revenues diverted to the transportation budget from other purposes.  This continues a pattern Oklahoma started a few years ago.  And by the way, Oklahoma has a lower gas tax than every state other than South Carolina, New Jersey, Wyoming, and Alaska.

Now, ODOT does a lot of good work, and I’m sure they’re happy to get the extra funding.  But I have to say that effectively diverting money from education, health, and public safety (the big budget draws in Oklahoma) is a bad bargain in the long run for transportation.

Southern Towns – Fredericksburg, VA

I recently had occasion to spend some time wandering around some southern towns I was unfamiliar with, and saw some positive – and some not so positive – signs of smart growth.

Fredericksburg, VA, is a welcome oasis in the horrendous I-95 corridor between Washington and Richmond.  It’s a charming town with an historic district reflecting both Revolutionary and Civil War events, although still a little rundown and gritty in spots.

Some of the positives:

·      Excellent street grid and good architecture.

·      Lots of antique shops – bins and bins of Civil War prints!

·      Boutiques, craft beer, locally owned bookstore, Victorian B&Bs, etc.

·      College town (Mary Washington)

·      Good north and south train service (Amtrak, last VRE station on the line to Washington) from a restored train station.

Missing?

·      The city is right on the Rappahannock River but doesn’t seem to have made the connection.

·      Not much downtown housing.  A few streets of townhouses around the train station and riverfront could make a big difference.

The town has real charm and offers real promise for the future.

More on Infrastructure Banks Don’t Generate Revenue

A recent GAO report (Transportation: Key Issues andManagement Challenges, March 29, 2012) makes the same point I have been making about infrastructure banks (and similar mechanisms) and revenue.  After a brief summary of proposals for a national infrastructure bank, more TIFIA, etc., they note:

“While these tools have promise to help meet increasing transportation demands, they are forms of debt that must be repaid, not new revenues.  New revenues for transportation infrastructure investments can come only from two sources: new taxes or new fees. Ultimately, raising new revenues or reducing transportation spending or both will be needed.”

Thank you GAO!  

NJ Turnpike – “Savior of the Industry”

A recent meeting about the New Jersey Turnpike’s widening projects and related work was called  “Savior of the Industry.”  That’s a good indication of how bad things are in the construction industry – and how important infrastructure investment is for helping the ailing economy!

The Turnpike Authority is spending $350 million on this program over the next few years, and it has no doubt been a life-saver for many of the construction and engineering firms in the state.  Admittedly these projects have been controversial, and some people would have chosen other projects to spend $350 million on.  But the point is that this infrastructure investment has been a huge tonic to New Jersey’s economy, while buying its citizens a massive piece of infrastructure at bargain prices. 

The shame is that this kind of investment in major transportation infrastructure is not happening all over America.

The Turnpike meeting, by the way, was sponsored by the NewJersey Alliance for Action.  If you’re not familiar with the Alliance, they are a non-profit, nonpartisan coalition of business, labor, professional, academic, and government leaders that advocates investment in infrastructure in the state.  There are similar groups in other states, but I’m not aware of any that has the prestige and credibility that NJAFA brings to the public forum.  

Yes, You Should Read the U.S. Treasury Report on Infrastructure

State DOT policy folks and anyone interested in transportation finance should read the Treasury report “A New Economic Analysisof Infrastructure Investment,” published in late March. 

I haven’t posted anything on this report before now, as I’ve been trying to decide how to respond to some of the shortcomings in it.  Shortcomings aside, however, this is a valuable piece and should be taken seriously.  I mention state policy people in particular because although the report is intended to influence the congressional debate, I doubt that it will penetrate the dense fog on Capitol Hill.  Those toiling on transportation finance and revenue problems in the states, however, may find it a useful tool.

Why useful?  All too often the discussion of the economic impact of transportation investment is superficial at best, usually dominated by a figure for the number of jobs created by a project or program (based on a mutiplier that someone came up with at some time in the past).  The Treasury report, on the other hand, draws our attention to the real and substantive contribution that investing in transportation makes to economic growth. 

Some of the key points:

·      Transportation investments have long-term economic benefits in addition to short-term job creation.

·      Investment is very timely now, as there are major underutilized resources.

·      We are underinvesting in transportation compared to the need, the investment levels of other countries, and the expectations of our citizens.

·      These investments have a lot of side benefits, including promoting public health.

There has been surprisingly little work done on these issues, and state DOTs haven’t done much to pursue research at the state level either.  (When I was at NJDOT I commissioned Rutgers Professor Joe Seneca to do just this, which has yielded some excellent results: short version here, long version here.)

My main quibble with the Treasury report is that it manages to ignore the obvious point that a revenue plan is needed to support this highly desirable investment in transportation infrastructure.  I believe that a strong argument could be made that a significant gas tax increase, if phased in properly, could (1) finance an infrastructure-led economic recovery, (2) buy a huge amount of infrastructure for the price, (3) have minimal economic drag, and (4) promote long-term budgetary stability.  That argument – or any argument related to revenue – is not to be found in the Treasury paper.

Instead, we see another argument for a national infrastructure bank.  Now, I am generally OK with the idea of an NIB.  What I don’t like is the notion than an NIB will take the place of the revenue we really need.  And as Ihave pointed out before, there is usually an unspoken assumption in these discussions that private investments are adding new revenue to the mix, when in fact they are loans that are going to be repaid – with interest – by the tollpaying public.

I also continue to be somewhat perplexed at how the argument for an NIB gets mixed up with the argument that we need better project choices.  I have been a strong supporter of the TIGER program, which has used discretionary funding to stimulate innovative projects.  But NIB projects would seem likely to be scored by the predicted return on investment from tolls, not how well they contribute to innovative solutions.  And TIGER and NIB together would surely never account for more than a small fraction of the total transportation program.  More important for the total program is a focus on performance objectives.