» Transportation Secretary Ray LaHood talks the right talk. But the American government seems fated to be unable to deliver on his promises.

The pie chart above puts in context the limited degree to which the Obama Administration and the U.S. governing structure in general have committed to advancing alternatives to our nation’s current over-reliance on the automobile. The image comes from France’s national transportation infrastructure plan, which was introduced to public consultation earlier this month. With €170 billion in funds for transport planned to be spent over the next twenty to thirty years, the report articulates a vision in which 95% of public spending goes towards modes other than road and air — with more than fifty percent of funds earmarked for intercity passenger and freight rail projects. Though the program, promoted by a conservative government, has yet to be approved and lacks a funding source, it represents a sea change in what kinds of transport are prioritized in France.

Under the supervision of Transportation Secretary Ray LaHood, the Obama Administration has been making a big deal of its efforts to promote livable communities where people don’t have to drive to get everywhere. At the Netroots Nation conference last week in Las Vegas, Mr. LaHood was especially vocal about his goals. “Americans like their automobiles,” he said. “One of the reasons they like ‘em is because it is in some places in the country the only form of transportation, particularly in rural America.”

He promotes an alternative. Americans would act more like Europeans and Asians when it comes to transportation choice, the Transportation Secretary implied, had President Eisenhower made a commitment to high-speed rail when he advanced his Interstate Highway System in the 1950s. “That’s the kind of vision that President Obama and Vice President Biden [now] have for America,” he said. Mr. LaHood suggested that after 25 years of spending, “80% of America will be connected” to intercity rail.

Yet all evidence suggests that despite Mr. LaHood’s statements — the most honest (and exciting) about the future of American commuting by any U.S. transport secretary ever, as far as I know — there is no way that his goals will be implemented unless there is a massive transformation in the way American politicians think about transportation.

There are two principal explanations for this problem: one, a lack of long-term planning in favor of alternative transportation options; and two, a lack of funding.

From that perspective, the recent announcement of the French long-term transportation plan by Ecology, Energy, Sustainable Development, and Sea Minister Jean-Louis Borloo is particularly striking. Mr. Borloo, a member of President Sarkozy’s conservative administration, has advanced what the plan itself argues is “a drastic change in strategy, a major rupture in resolutely privileging the development of alternatives to road-based transport modes.” The result: Two million tons of carbon dioxide economized each year, part of a nationwide commitment to reducing greenhouse gases by 20% by 2020. In France, transportation consumes 68% of the nation’s gas and produces 28% of all emissions.

The plan, which is worthy of a read for French speakers, has four principal goals: Optimizing the existing transportation system to limit the creation of new infrastructure; improving the performance of the system in serving areas far from major metropolitan areas; improving the energy efficiency of the system; and reducing the environmental impact of the network. These priorities have resulted in what is a clear emphasis on improvements in the country’s already well-developed rail system. Not only will 2,300 kilometers (1,429 miles) of new (true) high-speed rail be under construction or complete by 2020, but two major north-south freight railroad corridors will be developed simultaneously to ramp up the country’s use of trains to transport goods.

In addition, €53 billion will be pointed towards the creation of new works of public transportation operating in fixed guideways, about half of which will go to the massive Grand Paris scheme. The doubling of congested highways such as the Paris-Lille autoroute have been eliminated from consideration, since road infrastructure projects will be kept to the absolute minimum. The program is likely to be approved by the government at the end of this year.

Though the state lacks a long-term funding source for the commitment, the plan suggests that whatever money that is available will go almost entirely to non-automotive modes of transport. Even if the government loses power in 2012, the plan’s goals won’t die off, since the opposition Socialists, in pseudo coalition with the Greens, are just as interested in advancing a similar transportation paradigm.

The U.S. lacks a similar long-term plan to develop transportation alternatives. National transportation efforts are not guided by an effort to respond to any particular problem, like climate change or metropolitan congestion, and, in reverse of France’s new priorities, they currently overwhelmingly favor investment in roads over transit and intercity rail. Even if the U.S. Congress ever gets around to approving a new transportation bill — a piece of legislation meant to pinpoint six years of federal funding — it will still spend up to three times on highways that it does on other modes. There is no national plan to articulate why it is important to spend more on rail than on the roads, and the Obama Administration does not seem particularly interested in developing one that has the strong backing of the powers that be.

Moreover, the momentum that seemed to be coming last year for a huge down payment for high-speed rail (on the order of $50 billion or more) has disappeared: A few weeks ago, the U.S. House indicated that it would be supporting a transportation allocation this year with only $1 billion for intercity rail (less than the $2.5 billion from the year before), and more spending on highways than ever.

Mr. LaHood is fond of comparing his administration’s support for high-speed rail to the Eisenhower Interstate project, but he always neglects to mention that that program came with a dedicated revenue base to sponsor it — the fuel tax. There is no similar proposal to reliably fund intercity rail or increase spending on public transportation.

The U.S. Senate’s structural bias towards suburban and rural populations is a constant source of problems for altering investment schemes. The decision by the Republican Party to make transportation investment a partisan issue means that the Obama Administration is faced with mounting opposition to a long-term high-speed rail program. Just as important, the complete unfamiliarity of many Americans towards the importance (or even function) of public transportation or intercity railways makes it difficult to convince their representatives at the local, state, and federal levels that it is worthwhile to stop spending so much on roads. The same is not true of the French population, which is used to using transit.

I don’t want to be the eternal pessimist here — proponents of alternative transportation must remain optimistic about the prospects for future change no matter the obstacles in the way — so I’ll conclude positively. Before becoming the Secretary of Transportation, Mr. LaHood was a Republican with little transportation background. Yet no matter the intransigence of Congress, as a member of the administration he has been steadfast in his advocacy for a transportation system that prioritizes getting around by means other than the car. Perhaps we can content ourselves for now by hoping that he’ll be the example to follow in the future.

Image above: Distribution of French spending priorities in transportation infrastructure long-term plan, from French government

» Industry, citing experience with Amtrak, is concerned that more passenger rail services could increase costs and reduce freight train movements.

The American intercity rail system, it is frequently argued, is notable for the world-class efficiency of its freight trains and the miserable record of its passenger system. While we transport a huge percentage of our goods on track, we move just a tiny percentage of people as such.

The Obama Administration, of course, is spending billions to change that situation, investing in true high-speed lines in California and Florida and upgrades to existing track in Illinois, North Carolina, Wisconsin, and elsewhere. Though the current commitment isn’t yet enough to produce service that will connect “80% of America,” it will significantly improve the performance of passenger trains in certain areas.

Will those improvements, however, come to the detriment of freight service? The Economist addressed that issue this week in a shock article that suggests that passenger rail is not directly compatible with cargo. The industry, already worried that the government is planning re-regulation (the railroads were deregulated in 1980), is convinced that its willingness to allow Amtrak on its tracks costs $240 million in lost fees each year, and it has already been subjected to a required $15 billion upgrade to install positive train control.

According to the article, by allowing more passenger trains on freight track, the efficiency of the freight system could be reduced, and that would lead to increasing costs for consumers. American freight transport costs on average about one-half of similar services in Japan and France and one-third of those in Italy. Each of those countries has far more effective passenger rail services than the U.S.

Indeed, there are some merits to the argument that an increasing intermixing of passenger and freight trains will lead to reduced effectiveness of the shipping industry, not to mention less-than-perfect reliability for passengers. The primary reason is that passenger and freight trains travel at different speeds on the same corridor.

As shown by the following image from the British government’s Command Paper for its High-Speed 2 program, allowing trains to run at different speeds on the same track could reduce capacity enormously. If you were to follow a 300 km/h train by a conventional train running at 200 km/h, you would eliminate the potential to run up to six trains at 300 km/h speeds — because they would run into the slower train otherwise. This situation worsens the longer the corridor.

In other words, in terms of capacity there are major advantages to running all of the trains on the same line at the same speed. (This chart provided one of the arguments for the UK’s decision to only allow true high-speed trains on its planned expansion.)

Freight trains are limited to slower speeds — around 50 mph — than even the relatively slow people-carrying trains the Obama Administration is promoting on some corridors, running at 79 and 110 mph. The private cargo companies that own the tracks to be used by these passenger trains are rightfully concerned that intermixing slower and faster vehicles will induce serious reductions in capacity. Is this result, likely meaning increasing freight transportation costs, worth the benefits of more passenger trains? Should the U.S. sacrifice its excellent freight transportation system for a mediocre passenger network?

Fortunately, the situation is not nearly as dire as the Economist suggests. For one, the vast majority of freight movements are through rural areas in the Western U.S., few of which are likely to see many passenger trains any time in the next century. Second, the true high-speed rail lines first planned for California and Florida will feature brand-new track, doing little to freight services. Third, with appropriate coordination between freight companies and the passenger services — such as promoting shipping during the night (done on New Jersey’s RiverLine corridor) — many problems could be avoided.

Nevertheless, there are some places where improved passenger rail service will make the running of freight trains increasingly difficult. This fact indicates that improved passenger services probably ought to run on their own tracks as much as possible, even if they’re only going 79 or 110 mph. Yet the federal government’s investments have been too minor thus far to make that possible in most cases. Strategic interventions, like passing sidings, could provide a half-way solution. If Washington continues to prioritize spending on passenger corridors, these are the cheap options.

If the public is committed to the funding of improved tracks along privately owned freight corridors, it has the right to demand that those companies allow passenger trains to run along them. From that perspective, the freight companies have little room to complain.

But the federal government does have a long-term interest in promoting investments that offer improvements in both freight and passenger offerings. Freight lines that run through the center of cities should be moved to new routes that detour, allowing passenger services to take over these access corridors much more essential for people than for cargo. Lines running both passenger and freight trains should be expanded to three or more tracks to allow multiple running speeds in both directions. Projects could theoretically be sponsored by public-private partnership, using both government and freight company funds directed to investments that benefit both.

The kind of coordination necessary to make such investments, however, is still generally lacking at the U.S. DOT. To appease the growing complaints of the freight rail companies, it may be necessary to find it.

Images above: (1) Freight train in Sydney, from Flickr user dicktay2000 (cc); (2) Comparison of train paths, from UK’s HS2 Command Paper

» Charlotte, Cincinnati, Dallas, Fort Worth, and St. Louis each plan streetcar projects. Chicago, New York City, and Stamford will build new downtown bus transitways. Many other cities win bus improvement grants, and Boston wins backing for its bike share.

After months of anticipation, the U.S. Department of Transportation finally announced the winners of $293 million in grants designated for urban bus and streetcar projects. The program has breathed life into the transit programs of a number of cities, though few of the projects are ready for implementation immediately.

The DOT has in several places fulfilled a promise it made months ago: Cities that commit to spending some of their own funds on projects, rather than relying entirely on the federal government, will benefit from federal grants. Other communities that have been less inclined to establish local funding sources for projects did not receive grants today.

The Urban Circulator Grant program was announced by Secretary of Transportation Ray LaHood last December in a visit to New Orleans. Like the TIGER program, whose first awards were introduced earlier this year, this program represents an effort by the DOT to emphasize transportation that serves to improve the “livability” of communities. That means convenience over speed and service to inner-city neighborhoods over suburban communities. The government has not announced whether more grants will be awarded later; this could be a one-time only allocation.

About $163 million in funds were derived from the Bus and Bus Livability grant programs, a source of funds that has been budgeted in years past.

With $130 million specifically allocated for streetcar projects, the DOT reaffirmed its effort to spread this mode of transportation to cities across the country. Four cities received $24.99 million grants specifically designated for new systems. Politicians in Cincinnati and Charlotte, each of which has dedicated a major source of municipal funds to its respective project, must be celebrating today after years of work. Both cities are likely to have their systems under construction in the next year or so. Fort Worth and St. Louis, whose projects will require a longer timeframe to be completed, also received these awards.

Dallas, which already won a TIGER grant to implement a new downtown streetcar, got $5 million more to extend the McKinney Avenue Trolley, a traditional streetcar system.

Several urban bus circulator projects were also lucky recipients. Chicago received $24.6 million for its Central Area Transitway project, which will connect the Navy Pier and Union Station with dedicated bus lanes. New York’s transformation of 34th Street into a mix between bus transitway and pedestrian mall, received more than $15 million, as did Stamford for the creation of its Urban Transitway, also a bus improvement project.

A panoply of cities received money for intermodal transfer facilities, road upgrades, or pedestrian trails. Projects worth more than a million dollars are listed in the table below.

Perhaps the most unique of the awardees was Boston, which proposes to use federal funds for the creation of a bike share program. It will be the first city to receive direct U.S. government funding for such a system.

A number of cities across the country will be disappointed today; Washington, D.C.’s hope for federal funding to ensure the completion of its first streetcar line, for instance, has come home without money, probably thanks to political squabbling last month. It, along with many others, will have to wait for future aid.

Image above: Map of St. Louis Loop Trolley Proposal, from Loop Trolley

About a year ago, House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) introduced a $450 billion proposal for a six-year transportation bill, hoping to get it out of the Congress and into the President’s hands by the end of the year. Unfortunately, Mr. Oberstar’s bill hasn’t even made it out of committee — primarily because no one in Washington has taken the steps necessary to fund it.

The biggest problem for the U.S. government is that its traditional source of revenues used to build highways and transit — fuel taxes — are drying up; not only has the fixed rate not been increased since 1993, but Americans are on average driving less and are using more fuel efficient cars. As gas prices increase and the switch to hybrids and electrics continues apace, this difficulty will only intensify. Meanwhile, because of political resistance to raising the gas tax during a recession, there’s little hope of that happening anytime soon. Other conceivable funding options, such as infrastructure banks, public-private partnerships, and extensive tolling, will only cover a small portion of the growing gap.

But the future of American transportation depends on finding the money to keep the infrastructure in good shape: this is a debate that will, for instance, determine how many of the hundreds of planned transit projects across the country listed on this site actually get built. And that’s why everyone in both the executive and legislative branches spent the last year scratching their heads, as if suddenly a politically acceptable answer to their monetary woes would pop out of thin air. There’s been a collective case of naivete floating around Washington for the last year when it comes to transportation, when the fact of the matter is that the money to fund improvements is not going to magically appear.

In fact, Congress has developed a solution to this fiscal hole — it’s just one that it claims to be unacceptable: the use of the general fund. As Ken Orski — an Associate Administrator of the Urban Mass Transportation Administration (now FTA) between 1974 and 1978 — pointed out to readers of his Innovation Briefs last week, Congress has allocated a total of $79.2 billion of income tax-sourced funds to pay for ground transportation projects over the past two years. That’s almost twice what the Highway Trust Fund is supposed to devote to highway and transit projects every year.

Orski notes that $43.2 billion went directly to make up for shortfalls in Trust Fund revenues. The rest of the money went to the Stimulus’ roughly $45 billion in one-time only project funds, including the Administration’s $8 billion commitment to high-speed rail.

Indeed, despite the fact that most influential members of Congress have claimed to be completely committed to the user fee-based Highway Trust Fund model — in which roads users pay for the completion of more roads, in addition to public transportation — the fact is that the body has spent massive sums using a different funding model, in which everyone pays for transportation investments though the general fund.

This brings the transportation world into unfamiliar territory. Whereas the distribution of funds has been relatively stable since the beginning of the Interstate era, with Congress setting in stone spending levels over five to six-year periods, an increasing reliance on congressional allocations, voted on every year, could mean uncertainty and a loss of security on the part of local transit agencies, state departments of transportation, and private contractors.

The underlying concern with this situation: If fuel tax revenues aren’t determining how much is spent on new infrastructure, Congress will be deciding how much to spend, each and every year. And members will have to weigh infrastructure spending against other priorities also funded by the general account, leaving highway and transit projects in the potential lurch. There would be no assurance of continuity across presidential administrations or political control over the legislature. For lobbying groups, this is a petrifying possibility.

But it may be the future, as Orski suggested about a month ago. He quotes former Secretary of Transportation James Burnley, who told Orski “What worries me is that the whole concept of the trust fund is breaking down… By 2013, we could find the whole notion of the trust fund obsolete.”

This situation, however, is not nearly as scary as it sounds. Even if Congress decides not to increase the gas tax and determines as unacceptable another form of user fee (such as a vehicle-miles-traveled (VMT) tax), it has the technical ability to make general fund-sourced expenditures more stable than have been the current emergency shortfall allocations. The legislature could commit a certain percentage of income tax revenues directly to transportation, essentially filling the Trust Fund with standard, predictable infusions, just from a different revenue source.

From the standpoint of increasing social equity, there are strong arguments to be made in favor of this approach. And a decision fund transportation with non-highway revenues would discourage what is now the politically necessary massive funding advantage for road infrastructure creation over public transportation, a consequence of the fact that drivers are the people who pay. Everyone contributes to the general fund.

Moreover, transportation infrastructure is popular: That’s why communities across the country have endorsed transit sales tax increases by a two-to-one margin over the past ten years. This means that even if Washington isn’t able to get its act together to dedicate adequate dollars for transportation, other levels of government can step in; the public sector, after all, doesn’t begin and end on the National Mall. And America, despite suffering the effects of a recession, remains a wealthy country that can find the money to pay for things — if its leadership demonstrates an interest in doing so.

There are plenty of ways states, metropolitan areas, and cities could develop new and more effective funding sources without relying on the federal government. Regional compacts could dedicate a certain percentage of a fuel tax surcharge to a high-speed rail line, for instance. Big cities with already adequate public transit systems could implement congestion pricing. States could implement VMT systems of their own (as Oregon already has). By increasing reliance on local sources of funding, states and cities may find themselves better able to get what they want done.

Indeed, though there may be negative consequences for poorer jurisdictions to reducing their reliance on Washington for the funding of local roads and transit, many regions may find themselves suddenly able to do things they hadn’t done before. If New York had more control over its local transportation spending, couldn’t it build the Second Avenue Subway more quickly? Couldn’t many of the smaller cities planning bus rapid transit lines simply construct them, without waiting on Washington to allocate them the funds?

Of course, that may be unreasonably optimistic thinking. States already have the ability to shift most of the “highway” revenues they get from Washington to other projects, like transit or pedestrian facilities — but they very rarely do they do so. Yet if states and municipalities are to take an increasing role in the transportation funding process, they may become the ground floor of discussions about where to direct limited funds for transportation investments. They must be pressured into responding appropriately to their new role.

» In arguing that cities need to focus on keeping their existing bus systems running rather than expanding rail services, the Federal Transit Administrator is pointing in the wrong direction.

Peter Rogoff, head of the Federal Transit Administration, made a series of sweeping assertions about the priorities of public transportation operators yesterday in a speech in front of the nation’s transit officials in Boston.

Calling for “honesty,” saying “no,” and “telling truth to power,” Rogoff suggested that the financial difficulties facing mass transit networks today are at least partially the result of an unnecessary focus on rail expansion rather than bus improvements. He asked his colleagues to commit to improving the political viability of state-of-good-repair maintenance and to refocus their goals towards continuing today’s basic operations, rather than moving into new markets and potentially leaving existing services by the wayside.

It’s disappointing and arguably damaging to the cause of improved public transit in the United States to hear such rhetoric from the chief of the FTA.

There’s nothing wrong with advocating improved maintenance; Mr. Rogoff is right in saying that unless we improve the capital conditions of transit systems, “We won’t get the riders we need… the sustainability of our transit systems will be in jeopardy… and the economic vitality of our cities will be undermined.” And it may be reasonable to suggest that U.S. cities are too attached to rail system expansion over all else. But Mr. Rogoff’s seeming willingness to ignore the existing delegation of funding roles in today’s federal system indicates a naïveté about the degree of change even possible for local transit agencies.

In his speech, the transit head played off an odd opposition he notices in his day-to-day meetings with general managers of public transportation agencies: While they all complain about the fact that the recession is pulling down their revenues, they then turn around an ask him to approve more funding for expensive new rail lines. “At times like these, it’s more important than ever to have the courage to ask a hard question: if you can’t afford to operate the system you have, why does it make sense for us to partner in your expansion?” Mr. Rogoff suggested.

Case in point is Sacramento, Mr. Rogoff argued, which asked the FTA for New Starts funds to build a new light rail line but which had its application denied earlier this year because of insufficient operations support for existing lines. Mr. Rogoff seemed to be suggesting that future New Starts grants will be dependent on higher local operations revenues. He seemed to be offended by the mere idea that any transit agency would want to expand given current fiscal circumstances.

Yet the unfortunate reality for Mr. Rogoff is that the federal government’s steadfast unwillingness to help cover operations spending is the primary reason agencies haven’t been able to maintain service levels during the economic downturn. Meanwhile, while he may be right that transit organizations aren’t doing enough to keep their systems in good shape, he neglects to mention that that problem is a reflection of the federal government’s inability to increase spending levels on maintenance in line with needs. Washington long ago agreed to pay for the majority of capital needs for most transit systems. Those funds are legally separate from any money used for expansions — transit systems are supposed to keep their operations and capital budgets separate. And funds mandated by federal or local governments for maintenance go towards that.

The fact that there aren’t enough efforts to advance a state of good repair is a consequence of inadequate dollars but not the inappropriate utilization of those dollars by agencies.

Then came Mr. Rogoff’s bizarre assertion that the majority of state of good repair expenses that are in rail and that therefore the “honest” thing to do would be to invest more in bus networks instead. “The deferred maintenance backlog for the entire transit universe is roughly $78 billion,” said the FTA Administrator. “But you should know that fully 75 percent of that figure is to replace rail assets.”

I have repeatedly argued for bus rapid transit instead of rail in some of the nation’s less dense cities, so I manifestly have no problem with Rogoff’s commentary from that perspective — there often simply isn’t the demand for the capacity rail offers. His argument that “you can move a lot of people at very little cost compared to rail” certainly applies to some cities.

But the overwhelming need to repair train systems as compared to bus networks is an entirely different issue that has nothing to do with the advantages of buses the FTA administrator is implying. Rather, there are two very obvious reasons it costs the FTA more money to maintain urban rail: one, many of this country’s subway systems are decades old; and two, the FTA doesn’t have a responsibility to maintain the roads buses travel on — other state and federal agencies do.

Thus globally, rail just means more expenses for the FTA, not government in general, which still must pay for road maintenance. And there far more state of good repair needs, worth up to one hundred billions dollars a year, for roadways. To blame transit agencies for focusing on rail because those systems put more of the funding onus on the FTA is absurd.

Moreover, until recently the FTA has made it quite difficult to make investments in limited-scale bus improvements of the sort Mr. Rogoff evidently now wants to emphasize. The Small Starts grant program (which also pays for streetcars) is only three years old; the similar TIGER and inner-city circulator programs are even newer. Just as relevant, transit systems in most of the country are so inadequate that even in the face of grave service reductions, line extensions must be built. Putting aside the fact that it would be impossible under federal rules, does anyone seriously think that New York should stop building the Second Avenue Subway or the LIRR East Side Access project and use the funds to pay for the daily functioning of the buses or subways? Aren’t the long-term benefits of continuing investment in these capital expenditures worth the seeming hypocrisy of simultaneously cutting operations?

Whether action from Washington is realistic or not, the real responsibility here comes from Congress to allocate more funds for bus upgrades and state-of-good repair maintenance; transit agencies should not be needlessly criticized for their limited resources. Admittedly, Mr. Rogoff does point that out, saying “We are at 40-50 percent in funding levels right now. We need a combined effort at the state, local, and Federal level to increase funding. And we need a nationwide partnership to solve these issues.”

Yet the saddest part about Mr. Rogoff’s statements is that he ignores a basic political reality: Without those big new rail programs he criticizes as too expensive, there would be little support for more funding for operations and maintenance funding at the local level; those projects are what unify advocacy for broader transportation expenditures. The FTA chair’s call for interest in routine maintenance — “We need to think about how we generate the same attention and excitement when we repair the retaining wall, replace rail ties, or refurbish a bridge” — comes across as unrealistic and naive. Only with big new projects, when people get unambiguous evidence of new and better service, can you generate the necessary willpower to fund operations and maintenance appropriately.

What’s most surprising about this speech is that it comes from a member of an Administration that has made a point to emphasize different kinds of thinking when it comes to transit investments. Secretary of Transportation Ray LaHood has been a major proponent of angling transit programs towards livability, in strong opposition to the Bush Administration’s obsession with diminishing spending on public transportation. This DOT has made positive statements about major new rail capital projects like Los Angeles’ 30/10 program.

In which direction is Mr. Rogoff’s FTA heading? Is he preparing us for a complete drop-off in federal funds resulting from Congress’ inability to pass a new transportation authorization bill? Is this a desperate call for more local financing? Only time will tell.

Image above: San Jose VTA Light Rail stop, from Flickr user richardmasoner (cc)

» The federal government must ensure that its investments in housing and transportation align. The newly cooperative Departments of Transportation and Housing and Urban Development may improve that prospect.

Roosevelt Island lies in the middle of the East River, a 2-mile-long stick of an island between Manhattan and Queens. Even before its first apartments opened in 1973, New York City officials for years understood the place’s potential — its amazing views and fantastic location would have made it a business bonanza had its land been sold off to private developers. Unlike many of the neighborhoods that had been bulldozed by urban renewal programs in the preceding years, it was virtually empty in the early 1970s, meaning there would be little citizen opposition to new construction.

Under the leadership of Governor Nelson Rockefeller and planner Ed Logue, the state’s Urban Development Corporation coordinated a campaign beginning in 1968 to build up the island as a mixed-use, mixed-income “new-town-in-town” using federal and state funds. The 1968 Federal Housing Act, which capped President Lyndon Johnson’s Great Society programs, provided specific funds and planning tools for this type of development under the assumption that money from Washington could play an important role in creating new types of diverse, livable communities.

In many ways, the project succeeded: Roosevelt Island remains incredibly diverse both economically and ethnically, despite its inclusion of thousands of units of public housing. Federal funds and state planning had produced a neighborhood that achieved the ideal of mixity promoted by the government. Federal urban policy of the late 1960s, despite what you may have heard, was not all crash and burn.

But transportation was always the island’s sticky point. Despite the fact that in 1965 New York’s Board of Estimate, led by Mayor Robert Wagner, approved final plans for a new subway line under the island to be built by 1975 in time for most of the island’s early redevelopment, the IND 63rd Street Line (F train) project was only partially completed in 1989 — and finally connected to the Queens Boulevard line only in 2001, almost thirty years late. Because of the problems getting from Roosevelt Island to Manhattan (the Queensboro Bridge, which soars above, had an elevator connection that was demolished), the Urban Development Corporation had to cobble together a makeshift aerial tramway by 1976 to ensure that the island’s inhabitants could get to their jobs.

In other words, though the federal Department of Housing and Urban Development was providing aid for the completion of the project, the Department of Transportation was sitting on its hands. The lack of coordination had its negative consequences.

Development on Roosevelt Island stood at a virtual stand-still after 1975, partially because of the Nixon Administration’s decision to cut aid to public housing programs but also because of the lack of an efficient subway. It is not a coincidence that Manhattan Park, the second stage of island development paid for mostly by private money, unlike the early buildings, didn’t open for business until 1989. For years, this kept the island from becoming the exciting, dense community planners first imagined decades ago.

I bring up Roosevelt Island not because it’s a specifically important case but rather because I’ve studied it extensively and its successes and failures exemplify the problems caused by a lack of unified transportation and land use planning within American federal policy.

Though New York’s Urban Development Corporation received millions of dollars in aid from Washington to construct affordable housing on the island, the similarly state-controlled Metropolitan Transportation Authority was for years not provided federal grants for new line construction — ultimately slowing down the completion of the subway to the island as the city and state underwent significant financial difficulties. The lack of subway service meant limited accessibility to the island and little interest from developers to complete development there. Only when the line opened for service did building resume.

Decision-makers in Washington clearly have case studies like Roosevelt Island in mind considering yesterday’s announcement by the Departments of Transportation and Housing and Urban Development. Though it’s a minor first step, the DOT will coordinate its distribution of $600 million in TIGER II grants based on HUD’s involvement in supplying $40 million in its own money for land use aid. The TIGER program is a series of grants handed out by discretion of the Transportation Secretary after a competitive process.

This is the second major step towards integrating the government’s transportation and urban policy. Last year, the departments announced a joint sustainable communities initiative which provided HUD $150 million for neighborhood development designed with alternative transportation in mind. Meanwhile, the Federal Transit Administration is promoting its vision of spending transportation dollars on programs that stimulate the creation of affordable housing in mixed-income communities.

It’s a refreshing reflection on the fact that land use and transportation are directly linked — each affects the other, and federal policy should treat the two as a single issue, not two separate policy matters.

Nonetheless, it’s just a start — the FTA supplies more than two billion dollars in new transit line construction programs (New Start) every year, and HUD spends hundreds of millions of dollars annually on the Hope VI program, which is designed to refashion public housing complexes into mixed-income communities. These programs should be linked directly; federally-sponsored inner-city housing should by definition include efficient public transportation links, while major new investments in rail or bus lines should spur the construction of associated development, some of which should be affordable housing and financed through HUD.

The FTA has not been uniformly competent in distributing transit funds to projects that emphasize the creation of better neighborhoods around transit stations; though the New Starts guidelines require localities to develop conducive land use rules, this has never been the priority and cities have repeatedly gotten away with very limited development plans. Moreover, the FTA does not have the funds to ensure that there will be money for affordable housing around stations: that’s HUD’s role. Plenty of that agency’s grants go to projects located far from good transit.

As the Roosevelt Island example demonstrates, there are major advantages to spending harmoniously on housing and transit. These are complementary, not competing, efforts.

Part of the problem, of course, is the fact that the DOT and HUD are distinct federal entities: Each submits its own budget every year, each has its own leader, each has its own goals. It’s hard to imagine how federal urban policy could be truly unified without bringing the two departments together. Nonetheless, coordinated grant distribution is the best way to work towards a unified aim within a disjointed system.

Image above: New York’s Roosevelt Island, from Flickr user WordIslandInfo.com (cc)

» The government has yet to identify a source of long-term funds for its highway and transit programs, let alone a new high-speed rail scheme. If it did, though, would it know where to direct the funds?

The development of high-speed rail networks ought to be a relatively simple matter: Once a route alignment serving a state’s biggest cities is selected in coordination with local governments, the governor and the state department of transportation makes a deal with the federal government in which each party commits to covering a certain percentage of total costs. If Washington were to establish a consistent funding regime as it did with the Interstate highway system, it could guarantee, for instance, an 80% match as long as the affected states chip in their respective 20%.

Unfortunately, it’s probably never going to be that simple.

Unlike in the 1950s and 1960s, when the federal government was rapidly expanding its size as the economy grew by leaps and bounds, today’s national government is paralyzed by mounting deficits, falling revenues, and a lack of popular trust. While President Dwight Eisenhower could promise in 1956 a steady stream of funds for the highway system over a decades-long period, members of Congress are now incapable of moving forward on a renewal of transportation funding legislation because of harsh disagreements about how to cobble together enough money to pay for existing programs, let alone new ones like high-speed rail.

Nonetheless, these hard truths haven’t stopped members of the House Transportation and Infrastructure Committee from demanding a dedicated funding source for high-speed rail in the next transportation bill. In a draft version of the bill released last June, Chairman James Oberstar (D-MN) suggested a $50 billion to the intercity transportation mode over six years, with $450 billion more going to highways and transit. Without clarifying where money would come from, more than one hundred members of the lower chamber have signed a letter to President Obama asking for him to pronounce himself in favor of providing funding for fast trains over the long term.

This kind of stable commitment to the high-speed rail program is absolutely vital to the system’s development, as it will be impossible for major projects such as California’s Los Angeles-San Francisco line to be built without an agreement by the federal government to shoulder a significant portion of total expenditures.

Chairwoman of the House Transportation and Infrastructure Subcommittee on Railroads Corrine Brown (D-FL) traveled through New York last week promoting the idea. That state’s high-speed rail program is currently in disarray because of the resignation of the state’s rail director Ann Purdue and claims of “lies” emanating from the Governor’s office, the Department of Transportation, and freight railroad operator CSX.

The Obama Administration is planning to unveil a framework for moving ahead with the next transportation bill before the summer, likely without a clear statement on how more funds will be raised in the absence of adequate financing from the existing source, the fuel tax. The hesitation to move past a user fee-approach to funding transportation is making a serious increase in infrastructure spending difficult to undertake. Even the proposed infrastructure bank, which has virtually unanimous support, isn’t going anywhere because of wildly diverging visions about its goals.

But all this in-fighting about how to finance the program adequately doesn’t answer the question of whether the government is capable of distributing project funds appropriately.

The biggest unknown is whether the American federal system possesses the appropriate mechanisms to make a national high-speed network possible.

If, as has been evident recently, Washington is reluctant to identify corridors for investment, decisions must be made by each individual state or by groups of states. At least under this Administration, a proposed national route network, identifying priorities for investment and specific goals for each line, seems unlikely. Places that don’t want high-speed rail won’t get it, and places that do — and are politically connected in the enormously influential Senate — will.

For train spending in big states, like California, Florida, and Texas, the process should be relatively simple to undertake: Once state-level administrators have selected a preferred investment and the federal government has agreed to its importance, a deal similar to the Federal Transit Administration’s New Start full-funding grant agreement can be signed. Done.

But the situation becomes far more complicated once multiple states get involved. Take the Northeast Corridor: despite clear evidence that the Washington-Boston mainline holds the most potential for increased ridership, plenty of affected states have been pushing for other investments. New York is focused on the Albany-Buffalo line, Pennsylvania on the Scranton-New York corridor, and Connecticut on the New Haven-Springfield connection. None of this is to suggest that those projects aren’t important, it’s just that they aren’t as essential as the mainline.

Yet the fact that states have to respond the the needs of their own constituents means that the region’s broader interests are ignored. Because states want spending within their borders, they’ll fight to prevent the federal government from using “their” tax returns for infrastructure construction elsewhere, even if those projects are indirectly beneficial. The federal government’s unwillingness to step in and promote routes as more important than others means that spending will be scattered around, often distributed to projects that shouldn’t be at the top of the priority list.

But if Washington is distributing billions of dollars in grants, it must identify which projects it thinks are most important, and its hodge-podge “designated high-speed rail corridors” map, filled with inaccuracies and gaps as a result of the uninformed interference of congressmen and senators, is not that. And even if it were to be equated with the 1955 Interstate highway map, itself the product of political maneuvering, states have not been given clear evidence from the national government that their investments will be rewarded with federal funds.

The U.S. Department of Transportation has no serious plan for how to implement nationwide high-speed rail. This comes to the detriment of the seamless and efficient distribution of funds.

Indeed, if Congress ever gets around to reauthorizing the transportation bill, it must take a step back and ensure that it will be capable of awarding funds fairly under a dedicated high-speed rail revenue stream before simply handing the money over to the DOT. Not producing such a preparatory plan will mean an eventual waste of money and time for everyone involved.

Image above: Shinkansen Platform in Tokyo, from Flickr user hikikomorix (cc)

» The rejection of Pennsylvania’s bid to toll I-80 was premised on the idea that road fees should only benefit users of that highway.

After a year spent lobbying states to develop “alternative” revenue sources for replacing the federal government’s rapidly shrinking budget for roads and transit, Secretary of Transportation Ray LaHood rejected Pennsylvania’s request to implement tolls on I-80, citing a law that prevents such funds from being used for anything but the roads where they’re raised. The ruling puts the state in a $500 million fiscal hole and will significantly affect transit agencies from Philadelphia to Pittsburgh, all of which had been hoping to take advantage of the new financing source.

The government’s interpretation of the law suggests that it will be difficult for any state to implement tolls on existing Interstate highways without a promise that it will use all revenues for the sake of the maintenance and upgrade of the road where money is charged. In no way does this prevent future roads from being built and funded through tolls, but it certainly suggests that the chances of being allowed to charge users new fees to drive on existing roads are slim. The law will have to be changed if Mr. LaHood wants to continue pushing for “different” ways to fund transportation — or the Secretary will have to recant and begin advocating a gas tax increase to fulfill Washington’s obligation to pay for infrastructure maintenance and construction, a step the administration has repeatedly said it is unwilling to do.

I’ll refrain from commenting here on the merits of tolls; I have suggested in the past that taking advantage of this revenue stream in metropolitan areas with poor public transportation links could result in a significant decline in mobility for the poor and lower middle class.

Nonetheless, today’s explicit vision of transportation funding, premised on the idea that “user fees” should pay for improvements and expansions, must be challenged. The assumption, promoted for years, that a gas tax-financed highway network “pays for itself,” is no longer accurate. Nor does it allow for society to transition easily from existing travel modes to more sustainable ones. Apart from the benefits and pitfalls of tolling, the idea that a new revenue source couldn’t be instituted in Pennsylvania because the funds raised won’t go directly back to those paying them is an antiquated manner of going about building future infrastructure.

The highway system that “pays for itself” — the foundation of the user fee concept — is the progeny of the federal government’s decision to use fuel taxes as the primary funding source for new roads. The system enforces the idea that people who drive should pay for the roads on which they travel by contributing every time they fill up. The problem with this idea is that it only applies to federally funded highways: All the other roads on which people travel to get to those highways are funded by state and local sources, often not user fees. So even in its heyday, the system didn’t “pay for itself.”

The gas tax system also cannot keep up with changing automobile propulsion technologies; people driving more fuel efficient or even zero emissions vehicles simply are not contributing to the costs of road construction. Thus not only the recent decline in federal government revenues but also the demand from Secretary LaHood for a new and different way to pay for projects, even while maintaining his insistence on the user fee approach.

More importantly for advocates of alternative transportation, the user fee system doesn’t work for transit and other non-automobile solutions because they are invariably subsidized by revenues originating from other sources. In other words, while some mass transit spending is user fee-based (the fares on buses and trains), most of it comes from elsewhere.

How can we continue to argue that the transportation system should be funded through user fees when a significant part of the network contributes nothing to the larger account? The fact that road users contribute all of the funds to Washington’s transportation account continues to be a political problem, since only 70% of overall spending goes back into roads. If the user fee theory is the guiding principle, how can that be justified?

I have argued previously that an expansion of income tax sourced general fund spending, already the money being used to shore up the federal transportation gap in the absence of a new transportation bill, would be the most appropriate, most socially equitable way to improve overall financing for all types of infrastructure spending.

But in order to move forward with a long-term reliance on such money, the political obsession with using user fees to pay for more roads and transit must come to an end. While the idea that roads “pay for themselves” may sound romantic, it results in a system that spends far too much on roads; it also provides the rationality for decisions such as the recent Pennsylvania one since based on user fees alone, it makes little since to transfer funds raised on I-80 to transit elsewhere.

We need a political shift: a new conception of how transportation is funded to meet new needs.

Image above: Roads and Railways, from Flickr user woodleywonderworks (cc)

» The European Investment Bank and Build America Bonds could serve as a model, but that strategy moves the burden of infrastructure spending to the next generation.

If you haven’t been following lately, it’s becoming increasingly difficult for members of Congress to get anything done. In terms of transportation, this fact is no laughing matter, because the nation’s ground transport systems is running on hot air — deficit spending — for lack of agreement about how to pull together financing for the next planned six-year transportation bill, now a year late.

What was once considered unthinkable — a reliance on the income tax-sourced General Fund to ensure continued cash flow to states for the purposes of highway and transit construction — has become something of the status quo. But the lack of a committed, long-term source of funds for the program has produced a situation in which an expansion of overall spending on transportation, something that many consider an urgent priority, is very difficult to undertake.

Rather than acting as a consensus-builder, the Obama Administration has systematically undermined potentially the most politically reasonable approach: raising the gas tax, an action that hasn’t been pursued since 1993. Just this week, Secretary of Transportation Ray LaHood ruled out a gas tax hike even though alternatives, like a vehicle-miles-traveled tax, would take years to implement. So a continued reliance on the General Fund seems likely — and it has some significant merits, mostly relating to the fact that it derives funds from the progressive income tax rather than regressive user fees.

Nonetheless, everyone involved in the process seems to want more funds for transportation — just not from the deficit-laden treasury. That’s why the Administration has been harping again and again on an idea it’s been fantasizing about since before Mr. Obama even won the Presidency: a national infrastructure bank.

According to its proponents, such a bank would provide a new funding source to the nation’s essential infrastructure projects, allowing cities, states, and even regions as a whole to build new rail lines or electricity grids. Theoretically, this independently-run institution would finance only meritorious projects and it would do so by leveraging the government’s guaranteed and virtually infinite bonding capabilities. In turn, voilà: the U.S. gets a renewed physical plant, and taxpayers are asked to foot less of the bill.

The usefulness of this concept is relatively easy to understand when put in context. Take the example of Los Angeles: under the leadership of Mayor Antonio Villaraigosa, the local Metro transportation agency wants to speed up spending on 12 major transit projects — from a planned thirty years to just ten. But sales tax revenue to pay for those projects will take decades to come in, meaning that the proposal is dead in the water. That is, unless the federal government steps in, lending Los Angeles the equivalent of two-thirds of total tax revenue, using as collateral twenty years of taxes that the region will eventually pay back to Washington. The end result: L.A. gets a big new transit network much more quickly than planned, all at the same price as initially assumed.

A national infrastructure bank could provide these loans, unlike the current executive departments that have no mandate to do so. So there’s a gap to fill.

But as nice as the infrastructure bank may sound, its own financing mechanisms have yet to be clearly defined, even though the way it would lend out is relatively easy to understand.

In his fiscal year 2011 budget, President Obama suggested appropriating $4 billion to establish the new infrastructure bank, with the assumption that the new agency would distribute grants to qualified projects and have its coffers refilled every year or so depending on need. Of course, what’s envisioned there is no bank at all, since it wouldn’t be generating revenue in return for its investments: it would be draining Washington’s coffers even more, with no clear explanation for why it is necessary. What’s the point of establishing another federal agency to dole out grants for infrastructure, when the Departments of Transportation, Housing and Urban Development, and Energy already do that all the time?

This non-bank idea, in other words, is a non-starter.

But what about an infrastructure bank that distributed loans at low interest rates and then expected to get its money back over time? What Connecticut Congresswoman Rosa DeLauro has been proposing for years is something modeled on the European Investment Bank (EIB). The EIB was founded in 1958 and provides low-interest loans at up to 50% of cost to qualified projects in a variety of sectors in Europe and North Africa. Recent projects funded by the EIB’s transport division include an extension of the Bilbao Metro in Spain, a tramway network in Lodz, Poland, and the high-speed rail line between Istanbul and Ankara in Turkey.

Despite its vast size and lending obligations — it is larger than the World Bank — the EIB is independent, does not rely on infusions of funds from any European governments, and has a stellar credit rating.

The principal of encouraging states and local governments to take out low-interest loans was championed by the stimulus act of early 2009, which included a provision for Build America Bonds. Governments have now issued $78 billion in these bonds, now representing 20% of the municipal debt market, mostly because the BAB program is such a good deal for public authorities that want to take out debt for new construction projects. Unlike the proposed infrastructure bank, however, the BAB program does not distribute funds based on merit, nor does it rely on a government bank — the federal government artificially produces low interest rates by subsidizing private loans.

But the EIB and BAB models, as interesting as they are, do not actually increase the amount of money being spent on transportation in the long-term — they simply transfer more of the current spending load into debt. Is that a good idea when governments are already so squeezed by limited budgets? How can we be sure that we’ll be in an adequate financial situation to pay back these debts in the future? Spending now through loans inherently means less spending in the future: If Los Angeles compresses thirty years of transit spending into ten, what happens during the other twenty? Nothing at all, unless another separate revenue source is established.

So none of the the infrastructure bank proposals put forth thus far will actually aid in reversing the current lack of adequate financing for transportation.

But there’s an alternative that would meld the idea of a bank and a grant-lending institution, leveraging the power of the federal government to invest and then using the profits to spend on necessary projects.

Imagine the federal government began offering a bank savings account package to young people and seniors with a very favorable rate of return, run through private banks in exchange for, say, their participation in the FDIC bank insurance system. Then say the government “collected” all of those funds together in a public bank and used the money to invest as it wished in the private sector. If well managed, this system could make enough money through its investments not only to give its depositors high interest rates, but also a large profit that would go not to shareholders but instead towards the construction of new social housing and infrastructure.

It turns out that this is not that far-off of an idea: it’s exactly how France’s Caisse des Dépôts works. The independent agency, originally formed in 1816, finances much of the country’s affordable housing and urban redevelopment schemes; more recently, it has contributed to the construction of new high-speed rail lines. For the most part, these expenditures are in grant form, meaning that the Caisse is increasing France’s overall spending on infrastructure without increasing the nation’s debt load. That makes it significantly more effective in moving forward with new spending than would be the infrastructure banks proposed for the U.S.

The Caisse can raise funds easily partially because it runs a huge percentage of the nation’s bank deposits, but also because it invests directly in (and helps run) a number of major French enterprises, a type of state involvement in the economy that is a hallmark of French policy but is unlikely to play a major role in traditionally hands-off American political decision-making. On the other hand, since the Caisse is autonomous — it makes its investment decisions without, say, the involvement of the National Assembly — it acts somewhat more like a non-profit than an arm of the national government. It does not rely on any kind of subsidy to maintain its operations.

Even without a savings account scheme, a similar bank in the U.S. could leverage existing government funds, such as those reserved for Social Security, to invest in the market and earn interest for the public sector. If properly managed, those dividends could be sent back to local and state governments in the form of grants for infrastructure. It’s hard to see the downsides of that idea.

Update, 9 March: I should point out that the investment-bank system I’m advocating would work much as public pension funds already do, investing and then using the returns to fund payments to subscribers. The use of this system for pensions produces some major problems, of course: if the market goes down, people stop getting their pensions, and that’s a huge problem. On the other hand, if this system were used for infrastructure creation, it wouldn’t need to be as stable and continuous year-to-year, meaning the use of market investment wouldn’t be as problematic.

Image above: European Investment Bank Headquarters in Luxembourg, from Flickr user Cédric Puisney (cc)

» Detroit’s light rail project, Downtown Dallas, and Tucson’s modern streetcar are big winners.

One year after the stimulus bill was signed into law, the Department of Transportation unveiled the winners of its big TIGER grants, which are transportation projects awarded on merit to cities and transit agencies from around the country.

For proponents of new streetcar projects in cities like Cincinnati, Charlotte, and Atlanta, today’s announcement is a major let-down. Each had hoped to win but a small portion of the U.S. Department if Transportation’s $1.5 billion in discretionary funds for meritorious transportation projects.

Alas, applicants from all fifty states demanded a total of more than $56 billion in federal grants, and there simply is not enough money to spread around.

But the Department of Transportation is moving in a positive direction: only 23% of investment went to highway projects, compared to 26% for transit and much more for intermodal and freight rail. It also has invested big bucks in pedestrian improvement programs. Indeed, TIGER says a lot about how this DOT works when it’s not under the direct control of Congress: it is prioritizing spending that is not car-centric.

And some cities were lucky today, their proposals intriguing enough to attract the attention of Secretary of Transportation Ray LaHood. Detroit now has a serious commitment from Washington for its Woodward Avenue light rail line; Dallas and Tucson will be able to move forward with their downtown transit links; New Orleans will be able to construct a minor extension of its streetcar network; New York City will see an expansion of service for its Midtown commuter rail lines; and the Washington, D.C. region will get the go-ahead for a number of rapid bus lines.

Philadelphia and Indianapolis will get significant sums to reinforce and renovate their pedestrian and bicycle networks.

But the Administration’s focus is clearly still on intercity rail, a priority for President Obama’s team since entering office more than a year ago. Three projects, each with a cost of $98 million or more, will address existing bottlenecks in the freight system, clearing the way for better transport of goods and more reliable passenger service. Corridors near Chicago, between Northwest Ohio and Pennsylvania, and in the deep South will see such improvements.

Though the TIGER grant process was supposed to result in the funding of creative, unique solutions to transportation problems in the United States, it would be hard to argue that many of the programs chosen for funding today are particularly different: no money was spent on bike share networks, for instance.

The DOT is also demonstrating a rather close consideration for the financial needs of the nation’s freight rail companies, which will be benefiting directly from Washington’s spending on improved rail corridors. It could be suggested that there are few other outlets at the national level to award such funds — and there are certainly significant merits to investing in the transportation of cargo via rail — but whether the government should be choosing to benefit certain freight rail companies over others is open to debate.

If the government is investing in improving traffic conditions along freight lines, shouldn’t it also receive some of the profits from the operations of those lines? Shouldn’t it demand from the companies that benefit better treatment for Amtrak, which is frequently delayed because of freight trains that share the same track?

There are also some transit investments here that appear to be mild forms of patronage for cities on the economic down-and-out. Why should Revere, Massachusetts or Normal, Illinois get tens of millions of dollars for their downtown transit facilities? Can the DOT provide compelling evidence for why their applications were more worthy than those of the tens of other cities that asked for similar funds for similar projects?

Meanwhile, the relatively small nature of most of the grants means that the impact of TIGER may be too spread out. New Orleans, for instance, will get money for just a tiny segment of its overall streetcar expansion project.

That said, Las Vegas and Tucson will get enough funds to ensure the completion of their full respective bus rapid transit and streetcar lines.

For those cities that did not receive awards today, their hopes shouldn’t yet be exhausted. The Department of Transportation has $280 million to distribute over the next year for inner-city circulator grants, money that will go to many of the bus rapid transit and streetcar systems that do not yet have enough fiscal support.

Image above: Tucson Modern Streetcar, from Tucson Regional Transit Authority