» Foxx reiterates the Obama Administration’s demand for more transportation funding, but fails to commit to a new funding source outside of business tax reform. He also is non-committal on reforms to the Federal Railroad Administration’s rules for commuter rail systems.
Yesterday, I had the opportunity to chat with Anthony Foxx, who became the U.S. Secretary of Transportation last year and was previously mayor of Charlotte. I wrote an article on the interview’s major focus points on the website of my employer, Chicago’s Metropolitan Planning Council. The transcript of the full interview is posted at the bottom of this post.
In addition to the conclusions I noted on MPC’s site (and please read those; they are relevant to the discussion here), I want to note a few points about the interview that reflect my personal sense of the administration’s progress on moving forward with a new transportation bill.
It was evident in Secretary Foxx’s responses that he remains committed to the Obama Administration’s push to increase funding for transportation. Of course, the Obama Administration has been promoting increased funding for transportation since 2009, beginning with the stimulus (which roughly doubled federal expenditures for transportation for a short period), and continuing with a number of proposals over the years, each of which promoted the idea of a huge infusion of funds for transportation but which ultimately produced little change. From that perspective, Secretary Foxx’s determination to pass a new four-year, $302 billion program for infrastructure (a plan that would increase expenditures by roughly 50%) seems rather unlikely to result in much of anything.
This is particularly true in light of Senator Barbara Boxer’s proposal to simply extend the funding levels provided for in MAP-21, which themselves were little changed from the previous level of spending. At the heart of the problem, as we all know, is that the transportation user fee model (premised on fuel tax revenues) has collapsed and no one is willing to do much of anything about it. It’s not Secretary Foxx’s fault, but the Obama Administration’s decision to propose funding transportation by using “business tax reform,” which is essentially premised on one-time repatriation of foreign assets, is a half-empty call for change, neither likely to pass Congress nor a long-term solution. I’m skeptical. It’s not that the Administration has done anything terribly wrong, but there certainly has not been much courage coming out of the White House on this issue.
No one with particularly significant power is willing to simply say, “I will increase the gas tax,” or “I will institute a vehicle-miles traveled fee.” It’s not an easy demand, certainly, but it is a necessary one if we want to move forward with more funding for our road and transit systems.
In this context, it is frustrating to watch Secretary Foxx, like Secretary Ray LaHood before him, extol the values of high-speed rail (I confess I hold them dear as well), without making any progress in actually paying for it. Foxx pointed to Florida and Texas as models of interest in high-speed rail even in relatively conservative states – a fair point — but he failed to note that those states are hoping that the private sector will chip in for most or all of the cost of those lines. Certainly conservatives will support transportation investments that are fully paid for by someone else, but what happens when the Florida or Texas projects require public subsidy? Will they face the same resistance as has California’s heavily contested project has?
On the other hand, what other options does the Administration have in the face of a recalcitrant House of Representatives?
Nevertheless, Secretary Foxx’s answers about the Department of Transportation’s willingness to expand the possibility of local funding options were positive. States and cities should be able to toll their local highways if they so desire, but right now they’re stymied by federal regulations that make tolling impossible on most Interstate highways. His willingness to consider Transportation for America’s new policy proposal that would encourage local and state competition in awarding transportation funding is potentially exciting.
In addition, where the executive branch of the federal government may have an easier time producing positive results is in the implementation of regulatory changes within agencies of the Department of Transportation. One issue that has been of particular concern to those interested in improving American rail service has been the Federal Railroad Administration’s (FRA) rules about train weight and strength, which effectively make lighter, more efficient European and Asian trains impossible in the U.S. Stephen Smith noted last year in Next City that the FRA was considering changes to these rules by 2015, when positive train control (PTC) is supposed to be implemented.
Secretary Foxx, however, was far less direct on the issue than this change would imply, noting that “Whether that issue or how that issue comes up in the context of that is still an open question, but we’ll take a look at any issues put out there.” It’s hard to know based on that whether the Department of Transportation or the Obama Administration in general will take these issues seriously in the coming months, but the issue is important, and we can only hope they’ll notice.
Full interview transcript follows below
Yonah Freemark (YF): What do you see as the role of the federal government in the national transportation system?
Anthony Foxx (AF): The role is very critical. If you think about the foundation of a house, the federal role is one of the cornerstones of how transportation is built. It involves our role as safety regulator across all modes of transportation. It gets into our role as part of the funding mix that supports everything from bridges, roads, highways, transit, rail, so many modes of transportation we all depend upon. The role of the federal government is very important to transportation.
YF: Given the President’s ambitious proposal for a new transportation bill but the declining revenues produced by the existing fuel taxes, what are appropriate new revenue sources for the federal government?
AF: We are proposing to use a funding source from business tax reform to support a $302-billion, 4-year package for transportation. This is an area where there is at least bipartisan interest and significant bipartisan support for moving the country forward using transitional revenues from business tax reform to plow into our infrastructure and move America forward. Clearly there are some long standing issues with the gas tax and some forward-going issues with our sustainability over a much longer period of time. We believe this package is the appropriate way to go with the Congress we now have, and we also believe that there is ample opportunity to hear other ideas now, and to consider other approaches, which is what we’ve been saying for months.
YF: Are you willing to endorse a potential other source, such as an increase in fuel taxes or the creation of a vehicle miles traveled fee?
AF: We feel like the pay-for that’s contained in our package is the right pay-for based not only on our analyses but also the efforts we’ve made to reach out to members of Congress on both sides of the political aisle to achieve agreement. If there are other ideas that emerge along the way towards an agreement on this very important issue, we certainly will listen to those ideas and consider them.
YF: One local issue that is relevant to the federal government is the issue of tolling on the Interstate Highways. This is particularly relevant to the Chicago region, where there are a number of Interstate Highways where tolling is currently not allowed on because of a historic decision about what is free and what is not on our roads. Senators (Mark) Kirk and (Mark) Warner have introduced a bill that would allow Interstate tolling in a number of states such as Illinois. Are you in favor of that bill?
AF: Given the situation at the federal level with the uncertainty of funding the Highway Trust Fund, once again veering to the brink of insolvency, we do believe that part of our responsibility is to help states and local project sponsors develop new options, new sources of revenue, including, for example, public-private partnerships. We would never tell a state or a local project sponsor to toll but that optionality is increasingly becoming something that states are interested in, and we’ll consider finding ways to help when that’s an option that states want to consider.
YF: I know that one big item of your agenda as Secretary of Transportation has been the idea of expanding access to jobs through our transportation system, and I wonder if you could talk a little bit about what transportation investments can really encourage access to jobs.
AF: Well, there are several ways to look at this question, and it’s a good question. One way is, what are we building, and what kind of economic growth is it creating. For instance, we have a freight advisory committee that is looking to do a first of its kind freight strategy for the nation. We have 47 people from all over the country who are helping us look this through. But at the end of it, they’re going to have looked at where freight actually moves in this country, where some of the gaps are, and choke points, as well as helping us figure out approaches to getting those issues addressed.
Our framework, to take the point a little further, would take $10 billion and target it specifically to freight over four years and encourage not only states but groups of states to work together to get scale out of the federal investments that would be provided to support the freight system. So the freight issues are ones that are directly tied to manufacturing and other types of job creation. Many times we find that when the appropriate road improvement is done — or the last mile connection to a port or any number of investments that support the movement of commerce — that instantly makes the area that has made the investment more attractive to manufacturing and distribution types of jobs, which are really good jobs for American workers. So that’s one frame.
The other frame to look at this question is through not just what we’re building, but how are we deciding what to build. Increasingly, as our country experiences exponential population growth — I’m told we’re going to have another 100 million people by 2050, and we’ll be moving $14 billion more tons of freight by that time — our economy is increasingly becoming tied into regions, and these regions make up not only urban centers, but also suburbs and rural areas that surround even those suburbs. An astounding percentage of our population is contained in those places, and an astounding amount of our gross domestic product is produced in those areas. So one of the questions that we’re also asking is how do we organize our transportation decision making around these areas of growth, and again, we’re working through some of that thought process in the design of our package.
YF: One issue that’s been increasingly relevant to a lot of our big cities is this issue of encouraging transit-oriented development (TOD). There was some mention of TOD in MAP-21 (the 2-year transportation law passed in 2012), but I wonder if you’ve considered expanding the role of the federal government in encouraging TOD through the transportation bill or through other means.
AF: First of all, transit-oriented development is clearly a trend in this country and we have many success stories all over the United States on transit-oriented development. One of the most important ways that we can support the growth of transit-oriented development is to ensure that we have not only stable funding in our transit system, but also that that investment is matching the kind of population surges that we’re seeing in many of our metro areas. When the federal government invests in transit and communities at the local levels that have good land use plans attached to that, you really start to see the multiplier effect of the federal investment on the ground. We will continue to push for multimodalism and ensuring that the federal government is paying due attention to our growth centers, our job centers and connecting those areas to not only our urban and suburban communities, but also our rural communities.
YF: Transportation for America has advocated for the creation of state-level TIGER grants, and I’m wondering if that’s something that you’ve discussed at the Department of Transportation as a possibility.
AF: That’s a case of first impression for me. I know that TIGER has been marvelously successful, and we’ve had both state project sponsors as well as local project sponsors and I know that local governments are hungry for opportunities to have direct investment in their priorities. I hadn’t heard of that idea, but it’s an interesting one, and maybe one that we’ll study.
YF: One important program that was created in MAP-21 that is being taken advantage of in Chicago and perhaps some other cities is the Core Capacity program and it seems to be providing some excellent new revenues to pay for these renovation projects. But will it provide enough for all of the transit systems that need to upgrade their older train lines?
AF: The truth of the matter is we don’t have enough funding to match the needs of this country in general. By definition, a very successful Core Capacity effort is going to fall short of the mark in terms of meeting every single need that’s out there. That’s unfortunately true across the board in transportation right now, which is why we’re making a push for a much stronger reauthorization effort.
YF: Your predecessor, Ray LaHood, was a very strong advocate of high-speed rail. I wonder if you feel the same about the importance of high-speed rail in our transportation system.
AF: I do. I think high-speed rail is the future for passenger movements in our country. What’s so interesting is that for all of the fire and brimstone that’s been cast out there on high-speed rail, we’re now starting to see states like Florida and Texas actually studying approaches to getting it done in those places. That says to me that it’s an idea whose time has come and that it’s only a matter of time before it takes an even stronger hold in this country. The great thing about rail travel is just how — particularly high-speed rail — is how the travel times can be compressed to such an extent that it creates a choice for the passenger, whether they want to drive someplace, or fly someplace, or ride a train someplace, it makes it more accessible to more people, and it makes transportation accessible to new markets, and it certainly is a clean way to travel in relative terms, so I think there are lots of reasons why this is an inflection point for high-speed rail. There’ll be bumps and bruises along the way, but it’s a really important step in the progression of transportation in the U.S.
YF: One thing that’s interesting about the Florida and Texas example is that they’ve had significant private sector involvement. Do you see more examples like that around the country?
AF: I think there’s so much private capital sitting on the sidelines looking for long-term safe investments that we’d love to see more of it flowing into infrastructure, so whether it’s high-speed rail or expanding highway capacity or something else, we certainly want the private markets thinking about ways to plow their assets into American infrastructure.
YF: My last question is about the reforms that FRA (Federal Railroad Administration) has planned for 2015, under congressional rulings about the implementation of positive train control (PTC). I wonder to what degree that that implementation will change the nature of our commuter rail systems and perhaps our inter-city rail systems.
AF: Well, it certainly is one of the vanguard technologies to improve safety and it requires a lot of coordination between federal agencies to get it done. We’re working as much as we can as an agency to support the rail companies getting PTC compliant as soon as possible. It’s a really big deal and we’re doing everything we can to be helpful.
YF: Have you considered the possibility of changing the FRA rules about train strength and train heaviness that currently make American trains far heavier than European or Asian trains?
AF: You know, in Washington, there are several issues that are on the plate right now. There’s a water bill pending, and there’s also the rail title that expired last September. Part of what we’re hoping to do, with our reauthorization effort, is to include rail in that conversation and to have a vigorous conversation about the future of rail in America. Whether that issue or how that issue comes up in the context of that is still an open question, but we’ll take a look at any issues put out there.