State and local transportation issues, part 2
Continuing from last week
on the transportation conference:
- The second-to-last segment on financing priorities and options was moderated by Bill King. It also turned into the feistiest session, with some back-and-forth on the practicality of density and rail (including the Texas T-bone high-speed plan), and how important predictability is on adjacent land use around transit stops.
- As far as the gas tax, Texas is a net donor to the federal govt, only getting back 78 cents on the dollar, and Houston is a net donor to Texas, providing 25% of the funds but only getting 15% back. Sounds like there will be a push to get more back on both of those.
- Some of the financing options discussed: tolls, sales tax, gas tax (including inflation indexing it, the most popular option), local options (county/city voting for local increases in sales and/or gas taxes), capturing property value-add (i.e. tax the value added to property that directly benefits from the road or transit improvement), and attracting private capital (with public-private toll road agreements). A good argument was made that we don't have to limit our options: the state could allow all these "options in the toolbox" for local cities/counties/agencies to use. The need is big enough to tap all of them.
- Public tax-free infrastructure financing is much cheaper than private money RoI requirements (12% IRR target), but Metro is evidently pioneering a hybrid approach that shifts risk the private contractor but still uses cheap public tax-free financing. No details were given.
- Bill King pitched his no-fares idea for Metro, noting it only costs 15-20% of the budget for a 50+% estimated ridership increase. Opposition included violating the principle of "user pays" and the problem of homeless/indigent riders camping out on the buses. The key metric seems to me to be which option generates the most passenger-miles per dollar spent? It certainly wouldn't be hard to try it for a couple months and see how it performs.
- One concern with private-public toll road partnership was that the private money might make too much profit, upsetting citizens and politicians. My solution: require the private money to be Texas government institutional funds, like city and state pension funds and university endowments. Still negotiate the best contract possible for the public, but if it turns out to be more profitable than expected, at least the benefit still flows to the citizens and taxpayers of Texas. No harm, no foul.
- The last session was on delivering projects. State vs. local? Public vs. private? Again, talk about maximizing the tools available and learning from best practices around the world. Someone also noted that, with the recession, we'll have a cheap build window for the next couple of years if we can take advantage of it.
- An interesting stat that came up: over a 40-year life, a road needs four times its cost in maintenance (does that seem really high to anyone else?). This is why toll roads are such a good option, because the provide the revenue stream not just for construction, but also for maintenance - as opposed to other financing methods that may only contribute enough to build the road, creating a maintenance shortfall down the, um, road.
- Humorous quote of the day: "If you take all the stupid people out of the legislature, then you don't have a representative democracy." Both funny and sad at the same time.
That about covers my notes. If you were there and have your own observations, please pass them along in the comments.
Labels: infrastructure, mobility strategies, toll roads, transportation plan