• Discrepancy in air traffic controller numbers and resignations
• Post-mortem on advanced air mobility
• Update on ATC “privatization”
• Europe’s conundrum on air travel
• Scott Kirby is wrong on slots for Newark
• Is the moon race heating up?
• $20 billion more for ATC?
• News Notes
• Quotable Quotes

Controllers Discrepancy

During the government shutdown, we read article after article about the loss of air traffic controllers. Not only were some controllers calling out sick, but some reportedly were taking part-time jobs to make ends meet, and others took the shutdown as an opportunity to retire.

Yet once the shutdown ended, the media were full of news stories, based on updates from the Federal Aviation Administration, that controllers were returning, as USA Today reported on Nov. 16, “FAA Ends Shutdown-Era Flight Limits as Controller Staffing Rebounds.” Aviation Daily on Nov. 14 headlined that, “FAA Freezes Flight Cuts as Controller Callouts Decline Rapidly.” Within a week or so after the government shutdown ended, airline flights were reported as being essentially back to normal, just in time for Thanksgiving weekend.

There is something wrong with this rosy picture. To begin with, recall that controller staffing pre-shutdown was far below FAA norms, with six-day workweeks and 10- to 12-hour shifts for controllers at some key facilities. If all controllers who were on the roster the week before the shutdown returned to their jobs within the week after it ended, many air traffic control (ATC) facilities would still be seriously understaffed and controllers would still be overworked. Instead of allowing a return to all flight activities as they were pre-shutdown, the FAA could have considered what it would take in terms of targeted flight reductions to reduce the number of six-day controller work weeks and 10-hour shifts.

Adding to my concern are statements by Transportation Secretary Sean Duffy during the shutdown. In Politico on Nov. 9, Duffy said the following: “I used to have four controllers a day retire before the shutdown. I’m now up to 15 to 20 a day are retiring, so it’s going to be harder for me to come back after the shutdown and have more controllers controlling the airspace. So this is going to live on in air travel well beyond the time frame that this government opens up.” (italics added)

Let’s do a bit of arithmetic here. The federal government shutdown lasted 43 days. The net increase in retirements, per Duffy, was 11 to 16 controllers per day. At the low end, 11 retirements per day times 43 days equals 473 retirements. On the high end, 16 retirements per day times 43 days equals 688 controllers retired during the shutdown. The average of those two numbers for Duffy’s retirement claims is 580 fewer air traffic controllers today than before the shutdown.

So how could air traffic controller staffing possibly be back to pre-shutdown levels? Secretary Duffy owes us an explanation. Perhaps Congress should ask him. If the system is actually staffed with 580 fewer controllers than it had before the shutdown, it’s hard to see how they could be safely handling pre-shutdown levels of air traffic.

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Post-Mortem on Advanced Air Mobility  

This year has turned out to be the time when reality imposed its judgment on the plethora of advanced air mobility (AAM) start-up companies. In a lengthy article in Aviation Week (Oct. 27-Nov. 9), Ben Goldstein summarized the many losers and the handful of survivors.

This trend was already underway in 2024, which saw the demise of Lilium, Rolls-Royce’s Electrical unit, Universal Hydrogen, and Volocopter. Then came 2025’s deluge of bankruptcies. They include the City Airbus project, Germany’s APUS Zero Emission, Spain’s Crisalion Mobility, Cuberg/Northvolt, Eviation, Guardian Agriculture, Overair, Supernal, and Textron eAviation.

Left standing are the U.S. big three: Archer Aviation, Beta Technology, and Joby Aviation. All three have decent funding, a path toward FAA certification, and some potential as ongoing businesses, whether only as producers of aircraft or also as operators. The same issue of Aviation Week had another article on the growing number of AAM companies in China, none of which appear to be planning to seek FAA certification. Both Joby and Archer aim to launch actual electric vertical take-off and landing (eVTOL) air service in the United Arab Emirates as early as next year, with or without FAA certification.

Why have we seen so many failed start-ups? It’s not because eVTOL (the primary aim of these start-ups) is impossible, because we see the survivors’ aircraft flying. One serious problem is the business model. Because battery-powered vertical flight requires a very large amount of power, and batteries are very heavy, an eVTOL’s payload and range are both very limited. Instead of the mass-market fantasy of “flying cars” and go-anywhere air taxis, this is looking more and more like a high-end luxury service for niche markets. In addition, most of the failed start-up companies probably had no idea of both the long time and high cost of obtaining FAA certification.

This is why we are seeing non-eVTOL AAM concepts being developed and tested. One alternative is hybrid propulsion, which can significantly increase payload and/or range. Another is including actual wings on some of these aircraft for cruise flight. And once wings are taken seriously, we have seen Electra.aero demonstrate its blown-wing innovation that enables its EL2 to take off and land in less than 150 feet—and it’s a hybrid-electric. Its larger EL-9 can handle a 1,000-lb. payload and still land and take off in less than 300 ft. The U.S. Air Force is seriously interested in the EL-9. This kind of aircraft is a hybrid STOL.

Giving up vertical flight and battery-only power are two keys to more viable advanced air mobility. These lessons are being learned the hard way, but that is what competitive technology development requires. Imagine if a central planner like NASA had defined eVTOL as the “one best way” for advanced aerial mobility?

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Update on ATC “Privatization” 

My ongoing effort to shift the terminology for de-politicizing U.S. air traffic control by ceasing to call it “privatization” (as opposed to a self-funded public utility) has thus far not caught on here in the United States. As I noted in this newsletter, I switched my terminology several years ago to “public utility” because that is what these air traffic control entities are in all serious proposals today.

Since last month’s newsletter, I’ve continued to do interviews, most notably with Scott Simon on Nov. 15 for NPR’s Weekend Edition, which mentioned privatization in the online version’s headline. The Washington Post editorial board endorsed the idea of corporatization and cited my work in an editorial on Nov. 23, but the headline used the word privatize. Similarly, my Reason colleague Marc Scribner and Cornell Prof. Rick Geddes were interviewed by Dan Levin for Straight Arrow News in a piece that noted the plan would be “more akin to a public utility” but was headlined “The Quietly Powerful Group Keeping US Air Traffic Control Privatization Grounded.”

I was pleased to see an earlier op-ed in The New York Times by Binyamin Appelbaum, which explained the FAA’s limitations and cited “stand-alone corporations in Australia, Canada, and Germany” without resorting to using privatization. Former U.S. Department of Transportation official Diana Furchtgott-Roth had a good piece in The National Interest headlined “How to Modernize America’s Air Traffic Control,” but the unfortunate subhead was “Privatizing air traffic control could help prevent flight delays over the holiday season.” Oh, well…

As I explained last month, opponents of last decade’s House bill to create a U.S. version of nonprofit air traffic control corporation Nav Canada repeatedly attacked this idea as being “for profit” and “dominated by major airlines,” neither of which was true. And the strongest opponents then (and now)—private aviation groups AOPA and NBAA—continue to attack air traffic control “privatization” as if that were the case. In fact, nearly all 95 countries that receive ATC services today from user-funded, de-politicized air navigation service providers (ANSPs) are neither private nor for-profit. That is why, two years ago, I began using the term air traffic control public utility, since that is what the vast majority of depoliticized ATC systems are.

So, to this newsletter’s readership group, I repeat my request from last month’s issue: If you support depoliticizing the low-tech, underfunded Air Traffic Organization, please don’t refer to this as “privatization.” That helps only the opponents of this much-needed reform miscast what is actually being proposed.

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Europe’s Conundrum on Air Travel

Much of the discussion of air travel in Europe seems to be driven by environmental groups such as Transport & Environment (T&E), which calls for cancelling airport expansion plans, increasing taxes on airline passengers, and other measures. Most airport expansion projects are still going forward, but in parallel with that, the European Commission announced on Nov. 5 a plan to spend $400 billion of taxpayers’ money to greatly expand the current 12,128 km high-speed rail network between now and 2040. The stated goal is to shift travelers from short-haul flights to rail travel.

There is no sign in aircraft sale projections from Airbus and Boeing that air travel will not grow or shrink. T&E warns that if all French airport expansion plans were carried out, 38 million more people would travel through French airports by 2050, compared to a hypothetical no-build scenario. In its Nov. 14 article on this subject, Aviation Daily notes that the current Groupe ADP airport expansion plan would mean an increase by 2050 from 82 million to 105 million annual passengers.

A few European airports are attempting to limit increases in air travel. Schiphol Airport in the Netherlands is still battling airlines over its attempt to reduce the number of annual flights, ostensibly due to noise exposure. In Germany, Vienna Airport recently decided not to proceed with adding a third runway. But those anti-growth efforts are swamped by planned expansions. In non-EU member, the United Kingdom, long-sought runway additions have this year been approved for both Heathrow (LHR) and Gatwick (LGW). The ongoing expansion of Germany’s Frankfurt Airport (Terminal 3) will add capacity for between 19 and 24 million annual passengers. And there’s also the ADP expansion plan noted above.

Groups like T&E and the European Commission (EC) seem to be ignoring what is going on in the rest of planet Earth’s airspace. Air travel in India is growing by leaps and bounds, and many airport expansion projects are underway in that country. In the Middle East—especially Dubai and the United Arab Emirates—air travel is booming. Andrew Charlton, in his December newsletter, reported on the Dubai Airshow in mid-November. He noted that a “small order” for new aircraft in this region is 100, with an option for 50 more.

The International Air Transport Association (IATA) reports that Europe accounts for 26.7% of global air travel. So if the EC were to succeed in restricting air travel in its domain, three-fourths of the world would continue expanding air travel: the United States because of its affluence and the developing world (China, India, the Middle East), as their economies continue to grow.

I have written previously that the de facto premise of most climate activists and their followers in government is that every sector of every economy must reduce its share of greenhouse gases (GHGs), regardless of either how costly that is to carry out or the benefits of the activity that generates those gases. If I were an environmental policy central planner, my policy would be to figure out the cost per ton of GHG reduction in every sector of the economy—and focus first on all the low-hanging fruit. My guess is that the cost/ton in aviation would be on the high end, and the economic benefits of air travel would also be high. That would suggest looking for relatively lower-cost air travel measures rather than very costly measures, such as spending $400 billion to expand European high-speed rail.

For background reading on approaching climate change policy rationally, I once again recommend Steven Koonin’s important book, Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters, BenBella Books, 2021. Koonin was Undersecretary for Science at the U.S. Department of Energy during the Obama administration. Earlier in his career, he was a professor of theoretical physics at Cal Tech. He has held numerous governance positions at national laboratories.

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Scott Kirby Is Wrong About Newark Slot Controls
By Gary Leff

United Airlines CEO Scott Kirby recently laid out the major benefits that fixing air traffic control would mean for improving air service in the United States, reducing delays and cancellations. I don’t think the FAA as a service provider can ever actually do it – you need the regulator to be different from the actual air traffic organization. The FAA regulating itself has meant zero accountability for decades.

However, Kirby goes on to argue that there still need to be limits at Newark airport, where United has a hub. His point about “simple math” doesn’t imply the solution that he thinks it does.

“Newark, for what it’s worth, always should have been capped. I mean it was the only airport left in the world that was a large airport that was over-scheduled that doesn’t have slots. It’s the only one and it used to have slots and the reality is at Newark the FAA says in the best of times with full staffing on perfect weather day they can handle 77 operations per hour and they were letting it be scheduled at 86 operations per hour for hours in a row. And that is simple math.”

We should improve throughput at Newark, because there’s a lot of demand for air travel out of Newark. We can’t do that because of air traffic control and because we don’t build things in the United States well anymore.

However, if Newark is overscheduled, the answer isn’t to hand the exclusive right to operate most of the flights to United, blocking competitors and future new entrants, as a free gift (subsidy) from taxpayers. That’s what slots are – the right to take off and land at an airport, generally given for free, despite huge economic value. Slot controls allow incumbents exclusivity and block anyone else from competing with them. That airlines have succeeded in regulatory capture to make this standard practice doesn’t make it any less bad policy.

Here’s the better approach: congestion pricing.

Slots are a blunt rationing instrument (and a subsidy to the incumbent airlines). Since they’re “use it or lose it,” we get unnecessary flying on small planes hardly anyone wants to fly, just to squat on flight times. Prices encourage airlines to allocate flights to the right aircraft and the right routes that match passenger demand.

Think of a runway like a heavily used road approaching its capacity. As use approaches 100% of capacity, planes have to queue. Each additional flight imposes delay costs on everyone else, but the airline only internalizes its own delay cost. So airlines are incentivized to overschedule.

Slots try to deal with this by capping the number of flights in a period. Congestion pricing says: “You can operate whenever you like, but you must pay the actual total cost of the delay you impose on others.”

Slots are a crude cap: “X movements per hour.” They’re allocated via grandfather rights and use it or lose it. They’re adjusted infrequently and administratively. Once you have the slot, the flight becomes “free” regardless of the delay it causes.

Charging per flight that approximates the marginal delay cost to others works better. When the system is uncongested, the price is low or zero. As demand approaches or exceeds capacity, prices rise sharply. Airlines operate a flight in that time slice if they are willing to pay – if the value of the flight to passengers and the airline is greater than the congestion charge.

That way, you get the flights that generate the highest value relative to the delay they cause. You also get natural spreading of flights to shoulders or off-peak times, reducing congestion and lowering their costs. Pricing can encourage the use of larger aircraft (“up-gauging”) to spread the cost out across more passengers.

A slot freezes peak delay – a “50 slots per hour” rule means you get 50 flights per hour, regardless of delay and irrespective of whether those are 50 regional jets or widebodies. There’s no incentive to move any of those flights 20 minutes to spread out peak loads.

Slots are also bad at handling weather events and air traffic control problems. Those might reduce an airport’s capacity from (say) 60 to 35 flights per hour. That’s when we get ground delay programs and ad-hoc rationing. Congestion pricing can do the work for you and prioritize the most valuable flights. Instead of stressing the system, airlines contribute towards paying for a better one.

Ultimately, the same price applies to everyone – incumbent airline or new entrant in the market. “Airlines would hate this!” Yes, of course incumbents would. They’re getting a valuable property right for free, and instead they’d be charged (though it could be done as revenue-neutral).

You’ll likely hear that “congestion charges” will just cement incumbent dominance, which is silly, because that’s what the current slot system does. The claim, though, is that incumbents have deep pockets to pay peak charges, while others get pushed out, worsening competition.

• Under slots, incumbents own peak access for free (or were often cheaply acquired in the past). They can sit on grandfathered rights indefinitely. New entrants are often shut out completely.
• If a new entrant sees high value in a particular peak flight, they can buy in. Under a fixed slot regime, there may literally be no access at any price.
• If policymakers still want to support entry (they will, usually for their own constituents rather than the public good), they can offer rebates for new carriers on specific routes and use competition policy to scrutinize predatory practices rather than locking in those practices with slots.

There will also be a class argument that peak times will become “rich people’s time slots,” with lower-income travelers getting pushed into inconvenient off-peak times or other airports. That’s often what happens now, getting pushed to Spirit and Frontier for lower fares at other airports. And lower-income travelers would face fewer delays! In any case, especially if congestion pricing encourages up-gauging, we’ll likely see more major carriers with excess capacity to discount – at peak times. But if you want redistribution, then do it explicitly, not via hidden cross-subsidies embedded in slot allocation.

A fair concern is that low-value flights that few passengers value – often on smaller regional jets to low-volume airports – will lose peak-time service. That’s because these flights are less valuable! But if we’re really going to design policy around these flights, don’t do it in a way that also inefficiently allocates flights, causing delays for the entire air system. Make the subsidy cost of these flights explicit rather than burying it.

A system that sets prices by day and time seasonally, by 15 or 30 minute increments, and is published in advance is easy for airlines to plan for. Then, major weather or air traffic control outages can have surge pricing with a capped multiplier (e.g., 2x). This is easy for airlines to deal with – they manage variable fuel pricing and demand risk constantly. And this will lower costs from ground delays.

Newark shouldn’t get slot controls. We should abolish them at New York’s JFK and LaGuardia and Washington National as well. They’re a rationing mechanism that locks in incumbents and treats all flights in the same time window as equivalent, regardless of the systematic delays they create. And they provide no real incentive to move a flight time or up-gauge.

And slots turn scarcity value into privately-owned assets of the airline, rather than revenue streams to improve system capacity. Congestion pricing does the opposite! Anyone can access takeoffs and landings if the value of their flight is high enough to warrant paying peak prices.

Editor’s Note: This article is a slightly condensed version of Gary Leff’s “View from the Wing” column published Nov. 21, 2025, and is used with the author’s permission.

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Is the Moon Race Heating Up?

While NASA continues to plan to launch its first SLS/Orion human lunar launch as early as February, some observers (including the editor of this newsletter) are very concerned about risking the lives of four astronauts on a spaceship that has flown only once (in 2022), and whose Orion capsule’s heat shield was partly destroyed during re-entry. Instead of fixing the heat shield, NASA is counting on an untested, gentler re-entry path to bring the astronauts back to Earth.

The only reason I can think of for this risky decision is the multi-billion-dollar cost of each SLS/Orion launch. By contrast, because SpaceX and Blue Origin space launchers cost a small fraction of that, they sensibly carry out repeated uncrewed test launches to be sure that when it’s time to launch people, every system and subsystem has had ongoing improvements to increase its operability and level of safety.

I’m encouraged to see both Blue Origin and SpaceX talking with NASA about alternative ways to get people and cargo to the Moon and back. Eric Berger reported in Ars Technica (Nov. 13) that NASA’s acting administrator, Sean Duffy, asked both companies for more nimble plans for their respective lunar landings.

SpaceX disclosed that it has “shared and are formally assessing a simplified mission architecture and concept of operations that we believe will result in a faster return to the Moon while simultaneously improving crew safety.” Could that mean not using the flawed Orion capsules? Berger did not suggest this, but he thinks it might mean working with others beyond those directly involved with Artemis III. He went on to suggest two ideas that might be put forth by SpaceX: expendable Starships and using the company’s proven Dragon (presumably instead of Orion). For the former, instead of depending on propellant transfer in orbit (from one Starship to another), the idea would be to use expendable tankers, which would reduce their launch weight and might reduce the number of tanker missions by up to 50%.

Using SpaceX Dragons instead of Orion would increase safety and reduce cost, though Dragons would need a new heat shield for re-entry to Earth from lunar missions. Berger lays out a mission relying on a combination of Starships and Dragons, which is too complicated to summarize here, but none of its steps involves an SLS or an Orion. This would be a major change from using NASA’s minimally tested vehicles. It would also appear to eliminate having to use the costly (and behind-schedule) Lunar Gateway.

On Dec. 3, the Wall Street Journal reported on new proposals from Blue Origin. It has already been planned, for next year, to send a Blue Moon Mark 1 cargo mission to the lunar surface. This could be followed by a larger version of the cargo rocket to transport astronauts to the Moon in 2028 for a shorter stay than planned for Artemis III. The modified rocket would use storable propellants, which are intended to eliminate in-space fuel transfers. No details are available on that propulsion system.

NASA, per the WSJ report, “will evaluate proposals for a simpler astronaut landing on the Moon from Blue Origin and SpaceX, as well as any other proposals it might receive.” And assuming that Jared Isaacman gets confirmed promptly as NASA administrator, that assessment will be in good hands.

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What About that “$20 Billion More” for ATC Modernization?

Aviation media reports late last month focused on DOT Secretary Duffy’s call for Congress to provide the “additional” $20 billion for air traffic control modernization that a broad aviation coalition has called for, all of them deeming the $12.5 billion in borrowed money that Congress provided earlier this year as merely a down payment.

Until now, when capital investments in the ATC system were called for, Congress allocated funds from the Airport and Airway Trust Fund, whose dollars come from aviation user fees, primarily the airline passenger ticket tax. Aviation (or at least airlines) has long relied on user-funded infrastructure, for both airports and ATC. Highways are likewise supported largely by user fees, both fuel taxes and tolls.

The balance in the Aviation Trust Fund is expected to be around $20 billion by late 2025, but a large fraction of that will be drawn upon for the FAA’s 2026 operating and facilities and equipment budget needs. So what is the responsible answer to the “additional $20 billion” for ATC modernization?

Increase the aviation user fees. At a time when the federal budget is running a $2 trillion annual deficit, there is no justification for aviation to add to that total, which directly increases the national debt to unsustainable levels.

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News Notes

Port Authority Plans P3 for Newark Terminal B
Infralogic’s Eugene Gilligan reported (Nov. 13) that the Port Authority of New York and New Jersey’s $45 billion capital plan includes using a long-term public-private partnership for its new Terminal B. Gilligan’s article noted that infrastructure investment firms have held discussions with Port Authority officials regarding the use of a P3 procurement model for replacing the aging existing terminal. The agency in recent years has used such P3s for new terminals at both Kennedy (JFK) and LaGuardia (LGA) airports. The capital plan also includes a new AirTrain Newark and an “EWR Vision Plan” for revitalizing the airport.

SpaceX Starship Cleared for Cape Canaveral Launches
Politico Space reported (Dec. 5) that the Space Force has cleared SpaceX to launch its huge Starship launch system from its launchpad SLC-37. SpaceX hopes to launch up to 76 Starship flights per year from that site within the next few years. Other launch companies expressed concerns about interference with their own launch plans, but the Space Force accepted SpaceX’s plans to identify any new “blast danger areas” that need to be cleared near SLC-37.

First Digital Tower in the Middle East
Hamad International Airport (HIA) in Qatar has received certification for the first virtual/digital control tower in the Middle East. The Virtual Tower was developed by Searidge Technologies, with partners ADB Safegate and NATS, the UK air navigation service provider (ANSP). The vTWR provides 360-degree views of the entire airport, which was not possible from its conventional tower. The new system has two controller workstations in the existing conventional tower and two in HIA’s Backup and Approach Training Center.

Blue Origin Lands New Glenn Booster
On its second launch, Blue Origin’s New Glenn booster lofted two NASA payloads toward Mars and recovered the reusable booster for the first time. This was the first successful New Glenn booster recovery. Blue Origin plans to use it for many future launches, similar to SpaceX’s growing track record with Falcon 9 and Falcon Heavy launch vehicles.

Nav Canada Breaks Ground for Its First Digital Tower Center
Kingston, Ontario, is the site where Nav Canada has begun construction of an interim digital tower facility. The Kingston Digital Facility (KDF) is intended to lay the groundwork for a future digital tower center that is intended to serve up to 20 airports. Upon completion in 2026, the KDF will initially provide tower services for Kingston and one other airport, as the first digital tower facility in Canada. It is also the first stage in Nav Canada’s Digital Aerodrome Air Traffic Services (DAATS) initiative. Nav Canada’s technology partner on this endeavor is Kongsberg.

DOT Seeks Information on Dulles Airport Revamp
Responding to a White House request, the US DOT on Dec. 3 issued a Request for Information on plans to “revitalize” Washington Dulles Airport (IAD). The RFI includes the idea of public-private partnerships (P3s), like those that have been used to replace aging terminals at LaGuardia (LGA) and Kennedy (JFK) airports. IAD is an airport I avoid whenever possible, in part because of its slow, dangerous people movers called “mobile lounges,” which have no seats and are generally wall-to-wall with standing passengers and luggage. The airport really could use a serious rethink, and it could be a good fit for design-build-finance-operate-maintain (DBFOM) P3s.

JSX Plans Passenger Service from Santa Monica
Public charter carrier JSX has announced daily flights between Santa Monica (SMO) and Las Vegas (LAS) to begin before the end of December. This will be JSX’s first route to use turboprop aircraft (ATR 42-600s). JSX holds options to acquire as many as 25 additional ATR turboprops, if its early routes are successful. Even if it is successful, the SMO-LAS route will not be long-term, since SMO is due to shut down entirely at the end of 2028.

Fengate Plans to Sell its ConRAC
One of the pioneer developer/operators of consolidated rental car centers (Con RACs) is planning to sell its pioneer project at Los Angeles International Airport (LAX). Infralogic reported (Nov. 26) that Fengate is in negotiations with BBGI Global Infrastructure to sell the LAX ConRAC and a public school P3 in Prince George’s County, MD. BBGI, which owns 56 P3s in the United States, Canada, and Europe, was recently taken private by British Columbia Investment Management Corporation.

NASA Bans People from Next Boeing Starliner Flight
Ars Technica reported that NASA has approved renewed missions to the International Space Station for Boeing’s ill-fated Starliner capsule, but this first set of new missions will be for cargo only. Assuming this cargo-only mission is a success, Starliner will be approved to fly three passenger missions to the Space Station before the ISS is de-orbited, as planned. The original 2014 NASA contract called for Starliner to operate six crewed flights to ISS.

U.K. Takes Steps to Bolster GPS Position, Navigation, and Timing (PNT)
In response to increasing levels of GPS/GNSS spoofing and jamming, the U.K. government has committed £155 million for three projects. First, £71 million will be invested in a new enhanced LORAN program, a system with higher power and a far different spectrum than used by GNSS. Second will be £68 million to continue the development of a National Timing Center aimed at providing nationwide timing that does not rely on GNSS. Another £13 million will fund a new UK GNSS interference monitoring program.

Eurocontrol Calls for Increased Use of Text Messaging
The 42-government agency Eurocontrol has called for air navigation service providers (ANSPs) and airlines to make significantly more use of controller-pilot-data-link-communications (CPDLC), Aviation Daily reported (Nov. 14). Greater use of text messaging would relieve congestion on voice radio communications channels. Eurocontrol’s Paul Bosman reported at a recent conference that in European airspace, flights average only two data link messages per flight, adding, “This technology has been available for 20 years; can’t we do better?”

FAA Seeks Input on Replacing ERAM and STARS
On Nov. 20, the FAA released a Request for Information (RFI) about creating a common automation platform that would replace separate systems that manage en-route flights (ERAM) and terminal-area flights (STARS). The Common Automation Platform (CAP) sounds good in principle, and FAA is wise to seek a single, state-of-the-art platform to replace the two older systems, developed during different time frames. FAA noted that it is open to several potential approaches to “re-architecting” existing platforms. Responses are due Dec. 19, which does not provide much time for serious brainstorming.

Lockheed Martin Plans Commercial Orion
Aviation Week (Oct. 13-26) reported that the prime contractor for NASA’s Orion moon capsule is planning a commercial version. Lockheed acknowledged NASA’s contract for the Artemis moon missions, but with that program likely to be cut short after only a few launches, it is looking for possible commercial customers. I am happy to refer them to last month’s article on Orion’s potential shortcomings, beginning with its hardly-proven re-entry heat shield. If even half the problems cited by ex-NASA scientist Casey Handmer (in last month’s issue) are valid, my advice is caveat emptor.

Blue Origin Partners with Luxembourg Space Agency on Lunar Prospecting
Project Oasis was recently announced by the space launch company in conjunction with Luxembourg’s space agency. The plan is to remotely surveil lunar water ice to identify Helium 3, rare earth elements, and other resources that might support lunar production of materials and fuel that would not have to be transported from Earth. To the extent that promising lunar resources are identified, the project’s second phase, called Blue Alchemist, will experiment (here on Earth) with turning such raw material into useful materials that could later be produced on the Moon.

Airport P3 Activity in Brazil
In October, airport operator Motiva announced that its Brazilian airport concessions were for sale, with a value estimated at $1.8-2.2 billion. Twelve airport groups initially expressed interest, including the world’s second-largest (AENA Airports) and fifth-largest (Vinci Airports). In early November, AENA announced that it was working on a $986 million bond issue for its Brazilian airport P3 concessions. It also announced that its partially-owned Mexican airport company GAP would merge with its strategic partner AMP. It looks as if more airport deals will be forthcoming soon in Brazil.

Stockholm Arlanda Airport OKs Curved Landing Approaches
Aircraft equipped and certified for required navigation performance (RNP-Authorization Required) may be allowed to make continuous descent approaches on curved arrival paths at Arlanda. Swedavia expects that this will lead to more landings per hour and lower aircraft emissions. RNP-AR has been approved by Nav Canada for two airports in that country, Calgary and Toronto. I am not aware of any US airports approved by the FAA for this kind of landing

Newark Controllers Have Two More Years in Philadelphia, Per FAA
When the FAA shifted control of arrivals and departures at Newark from the troubled New York TRACON (N90) to the Philadelphia TRACON, 14 controllers moved to the Philly TRACON. The time period was indefinite, but on Nov. 17, the FAA announced that those controllers would remain at Philly TRACON for two more years.

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Quotable Quotes

“The economics of urban air taxis are difficult. An aircraft costing millions must fly many hours per day at high load factors to cover capital and operating costs.  Battery energy density limits range and payload. Downwash, noise, and turbulence make rooftop or street-level operations problematic. Wind and weather limits reduce availability. Certification requires thousands of flight hours and proven safety redundancies. Air traffic management for autonomous or semi-autonomous craft is not ready. Public acceptance of low-flying craft over dense cities remains uncertain. . . .  Supernal’s folding is symbolic. The era of hype is ending. The sector is moving into an attrition phase where many firms will fail, a few will survive, and the market will settle into niches. The original promise of eVTOLs as a mass urban transport solution is receding. The story now is about how a vision of the future met the hard reality of physics, economics, and regulation, and how an industry will be reshaped in the aftermath.”
—Michael Barnard, “From Kitty Hawk to Supernal: The Shrinking Future of eVTOLs,” Clean Technica, Sept. 11, 2025

“I enjoyed your piece in the Wall Street Journal [on ATC reform]. As someone on the front lines, I can tell you that things are certainly not getting better. The most frustrating part of my day is battling all the chatter on the radio. Many times we can’t get a word in edgewise. Meanwhile CPDLC (controller-pilot-data link- communications) just sits unused. It’s very rare for controllers to use it for anything other than frequency changes. Many of its numerous functions are not even activated, including free text messages. One concern I have is that the feds are going to spend billions on a new elaborate ground-based system, when a better and less-expensive aircraft AI system may be just around the corner. While I seriously doubt that the ground-based network will be eliminated any time soon, I could see significant reductions in the need for hardware, particularly on the en-route part of the system.”
—Greg Ross, email to Robert Poole, May 10, 2025, used by permission. Mr. Ross is a 737 captain for a major U.S. airline.

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The post Aviation Policy News: Air traffic controller staffing and resignation claims appeared first on Reason Foundation.

• More trouble for the Key Bridge replacement
• Spain de-tolls motorways; problems arise
• Brightline West: Xpress West Reborn
• Fixing the Highway Trust Fund
• BBC report on electrifying passenger rail
• News Notes

More Troubles for the Key Bridge Replacement

Things are not looking good for a speedy replacement of the destroyed Francis Scott Key Bridge in Baltimore. To begin with, last month, the National Transportation Safety Board (NTSB) cited Maryland officials’ failure to conduct a critically important risk assessment (based on guidelines from the American Association of State Highway and Transportation Officials) on the adequacy of bridge protections from collisions with major ships.

NTSB correctly identifies the Maryland Transportation Authority (MDTA) as having been at least partly responsible for the bridge’s collapse. NTSB noted that countermeasures such as “dolphins” could have been implemented if MDTA had performed the AASHTO risk assessment. As I have reported previously in this newsletter, MDTA also ignored “repeated warnings” from the Baltimore Harbor Safety and Coordination Committee about the lack of meaningful protection of the bridge piers. I believe it can be argued this is what attorneys call “contributory negligence.”

The second bad news was that the estimated cost of the replacement bridge will be between $4.3 billion and $5.2 billion, much higher than the previous estimate of $1.7 to $1.9 billion. The reasons for this include the fact that the new bridge will have a longer span, will be much higher, and (of course) have pier protections. I think Maryland officials should be taken to task for this. First, they claimed that the bridge would be a simple “replacement” of the old bridge, and therefore no environmental impact study would be needed. But then they went ahead and developed specifications for a very different and obviously much more costly bridge.

Politico recently reported that Senate Environment & Public Works Committee Chair Shelley Moore Capito (R-WV) is outraged by this double-cross, given Congress’s over-hasty commitment to paying 100% of the replacement bridge’s cost. In relating her conversation about this with Gov. Wes Moore, she told Politico that, “I felt it was unfair for Maryland to ask for 100 percent on $1.7 billion, when now it’s $5.2.”

Moore said that, at this point, she would not be leading a charge to alter the federal commitment, which she said would need to clear the 60-vote filibuster threshold in the Senate.

My own view is that, due to its contributory negligence in not protecting the Key Bridge piers, in no way should all U.S. taxpayers be on the hook for the new bridge’s construction cost. Maryland should provide funds based on the following sources:

• The amount of revenue bonds it could issue based on reinstating tolls on the new bridge;
• Proceeds from its own bridge insurance policies; and,
• Proceeds from the shipping industry’s insurance pools, which are capable of providing up to $3.1 billion per ship collision.

As Rep. John Garamendi (D-CA) told Bloomberg TV last year, “I don’t think this has to be federal taxpayer money. Let’s go first to the insurance side of it, and then we’ll see what’s left over.”

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Spain De-Tolls Motorways; Problems Ensue

In 2018, the national government of Spain began de-tolling the country’s long-distance motorways, in an apparently populist move to make all of its extensive highway system (the world’s third-largest) available for free. The consequences were not exactly what the government expected.

Until 2018, nearly all the major motorways were operated and managed via long-term public-private partnerships (P3s). The motorway companies charged tolls, which paid for improvements as well as operating and maintenance costs. They also paid corporate taxes to the national government.

How the government is de-tolling is by failing to renew these long-term P3s as they reach their final year. Once a P3 is terminated, the tolls are removed, and the obvious consequence is that far more cars and trucks move onto the “free” motorways. The initial de-tolling has led to nearly 40% more personal vehicles and 89% more trucks. Most of these increases were from nearby roadways, but in the freight sector, some of the increased truck traffic has been a shift from rail to truck.

Thus far, according to Julian Nunez, head of the Spanish Association of Construction and Infrastructure Concession Companies, the government is losing €409.8 million per year in tax revenue from the former tollway operators and spending an additional €89.7 million per year in motorway maintenance costs. And this is just the beginning. In 2029, three more long-term P3 agreements are set to expire, potentially de-tolling another 527 km of motorways.

Nunez points out that because there is no dedicated fuel tax to pay for highways in Spain, all the cost of building, upgrading, and maintaining de-tolled motorways comes from the national government’s general budget. By contrast, users of Spain’s railways pay €690 million in taxes per year, maritime transport pays €515 million per year, and airport users pay €2.24 billion per year. But users of the de-tolled motorways pay nothing.

The motorway association has proposed to the government a replacement tolling plan for the entire 13,000 km motorway system. Under the plan, light vehicles would pay €0.03 per km and heavy vehicles €0.14 per km. This plan has also been submitted to the European Commission. That plan includes over €18 billion in motorway investments. It also proposes new long-term P3 concessions with 25-year terms.

Nunez says the Spanish government appears to be awaiting support for the plan from the European Commission before making any decisions. But it’s pretty clear that the government did not think through the consequences of de-tolling the country’s motorways.

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Brightline West: Xpress West Reborn

Engineering News-Record reported in its Oct. 22 issue that the estimated cost of the planned Brightline West high-speed rail line between Las Vegas and Rancho Cucamonga, CA, has ballooned from $12 billion (the Dec. 2023 estimate) to $21.5 billion. To cover most of the shortfall, the company has applied for a $6 billion loan from the federal Railroad Rehabilitation and Improvement Financing (RRIF). That would be a very high-risk loan.

On Nov. 17, Infralogic, an infrastructure finance newsletter, reported that Brightline West is in deep financial trouble, with mandatory redemption of $2.5 billion in revenue bonds that were due by Nov. 30 and many other dire problems. (See “Brightline West Faces USD 2.5 Billion Bond Redemption Amid Financial Uncertainty—2Q Credit Report”)

We’ve seen this high-speed rail story before, and it did not have a happy ending. The previous attempt to provide a privately financed high-speed rail line between Las Vegas and (in this case) Victorville was called Xpress West. In Aug. 2012, Reason Foundation published “The Xpress West High-Speed Rail Line from Victorville to Las Vegas: A Taxpayer Risk Assessment,” authored by consultant Wendell Cox. Like Brightline West, it planned to use right-of-way in the median of I-15, the primary highway route between Southern California and Las Vegas (which would make future expansion of that highway far more expensive).

The report assessed a number of risks, but the most serious was a speculative consumer market. “There is no parallel for large numbers of drivers and airline passengers to travel well outside the urban areas in which they live to connect to a train to any destination, much less one so close to Southern California as Las Vegas.”

Hence, ridership and revenue would likely be a fraction of what Xpress West projected, making repayment of its federal loan difficult, if not impossible. The study also pointed out that there are six commercial airports throughout the LA metro area that are far more convenient for most Las Vegas-bound travelers than driving out to Victorville. And those air fares are very economical. Hence, the Express West traffic and revenue numbers were highly exaggerated.

The story did not have a happy ending for Xpress West. Like Brightline West, it had applied for a federal RRIF loan. In March 2013, Rep Paul Ryan, then chair of the House Budget Committee, and Sen. Jeff Sessions, ranking member of the Senate Budget Committee, sent a letter to Transportation Secretary Ray LaHood opposing the RRIF loan. They also asked the Government Accountability Office to evaluate the project. Those actions led to a U.S. Department of Transportation (DOT) letter on June 28, 2013, rejecting their RRIF loan request. And that was basically the end of Xpress West, though it lingered on for a number of years trying to find other funding.

Brightline West, with its much higher estimated cost and similarly dismal ridership potential, is likely not much longer for this world.

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Fixing the Highway Trust Fund
By Marc Scribner

In November, the Tax Foundation released a new report by Alex Muresianu and Jacob Macumber-Rosin, “How to Refuel the Highway Trust Fund.” Their brief focuses on the federal Highway Trust Fund’s (HTF’s) persistent structural deficit and examines four alternatives that could eliminate the revenue-outlay imbalance. While these are not the only options for addressing the HTF’s fiscal problems, they are under somewhat serious political consideration. Most importantly, the authors’ comparative analysis accurately highlights the advantages and disadvantages of each approach. However, some of their policy conclusions and recommendations will generate criticism even from those who directionally agree with them.

Muresianu and Macumber-Rosin examine four potential revenue fixes to the Highway Trust Fund, assuming continued baseline growth of HTF expenditures:

• Option 1: Replacing all existing HTF taxes with mileage-based user fees (MBUFs);
• Option 2: A combination of replacing existing truck taxes (including the diesel tax) with a truck MBUF, establishing a new flat registration fee on electric vehicles (EVs), and increasing the gas tax;
• Option 3: Raising gas and diesel taxes and indexing the rates to inflation; and
• Option 4: Replacing all existing HTF taxes with flat registration fees.

The Option 1 full MBUF approach uses a rate schedule dictated by a gross vehicle weight rating formula (see Appendix Table 1), which is in part based on Oregon’s existing weight-distance tax for heavy trucks. Adopting this rate schedule would roughly double the per-mile tax liability on commercial trucks, while gas-powered passenger cars would face a tax burden similar to what they pay today. This approach would be propulsion-neutral, so hybrid-electric vehicles and EVs would pay to support the system they currently use and future-proof it for any subsequent advances in vehicle propulsion technologies.

The Option 2 hybrid approach recognizes that scaling an MBUF regime for all vehicles may be administratively or politically challenging. So, the authors propose instead to impose MBUFs on heavy trucks only, add a $100 annual fee for EVs, and increase the gas tax by 2 cents, each of which would be indexed to inflation. Muresianu and Macumber-Rosin estimate that total HTF revenue would grow slightly slower under Option 2 than under Option 1, but it would still be sufficient to cover baseline HTF expenditures over the next decade.

Option 3 is the most “conventional” of the alternatives: simply raising fuel tax rates and indexing them to inflation. This has long been proposed in Congress, but raising a tax on nearly all Americans has rendered it a political dead-end. The Tax Foundation proposal would increase gas tax rates from 18.4 cents to 28 cents per gallon and diesel tax rates from 24.4 cents to 40 cents per gallon. Out of the four options, this approach scored the worst. While a large fuel tax increase would be sufficient to cover baseline expenditures for a few years, it would fail to eliminate the HTF’s structural deficit because rising fuel economy and electrification are expected to dramatically decrease per-mile fuel tax collections going forward.

Option 4 is the most dramatic departure from the status quo: abolishing any tax relationship from the intensity of system use (i.e., gallons of fuel consumed while driving, miles driven) and imposing flat annual registration fees. Tax Foundation’s registration fee rate schedule (Appendix Table 2) is based on the gross vehicle weight rating formula from Option 1. Under this approach, a 4,000-pound passenger car would pay $68.14 per year, a 6,000-pound full-size SUV or light-duty pickup would pay $118.84, and an 80,000-pound Class 8 semi-truck would pay $7,354.31.

Replacing existing HTF taxes with registration fees has been proposed by the American Highway Users Alliance (NAPA testimony, page 5), under which most passenger cars would pay $135 per year, large SUVs and pickups would pay $165, and the heaviest trucks would pay $4,600. There are clearly vast differences in who would bear the burden in these registration fee proposals, with the Tax Foundation concentrating tax liability on heavy trucks that cause most of the wear and tear on roads and the American Highway Users Alliance shifting the burden to smaller passenger vehicles.

This question of who wins and who loses in a registration fee scheme would likely become a major source of political controversy. The concept itself faced strong backlash earlier this year when House Transportation and Infrastructure Committee Chairman Sam Graves attempted to attach his own registration fee proposal to the Republican reconciliation bill, which was quickly rejected as a new “car tax.” Under the Tax Foundation’s Option 4, registration fees also appear to be a weak revenue-raiser, with HTF baseline outlays exceeding projected revenue by year eight of the 10-year budget window.

Muresianu and Macumber-Rosin conclude that the Option 1 full MBUF approach “is the most efficient and sustainable option for US highway funding amid rapidly changing markets and technologies. It best achieves the user-pays principle, aligning taxes paid with actual road use, vehicle weight, and infrastructure costs.”

However, they acknowledge that a national MBUF system for all vehicles would be difficult to establish and administer, with significant implementation and operating cost uncertainties. They suggest that the Option 2 hybrid approach—which would establish truck-only MBUFs and EV registration fees, as well as modestly increase the gas tax—would deliver most of the benefits of Option 1 with fewer policy challenges.

While it is certainly true that a national truck MBUF and EV registration fee is less complex to administer, the politics on the ground are less favorable to Option 2. The trucking industry has been clear that it will fiercely oppose any MBUF proposal that singles out trucks. As such, MBUF advocates for years have been stressing the importance of developing collection methods capable of scaling across the entire vehicle fleet. A truck-only MBUF could generate a political backlash that kills MBUFs for all. Tying this counterproductive strategy to another proven political lead balloon—federal gas tax increases, however modest—likely dooms not only Option 2 to failure, but potentially Option 1.

As unsatisfying as it may be, there are likely no politically viable Highway Trust Fund fixes that can sustain current baseline expenditures. Perhaps addressing excessive spending rather than insufficient revenue would be more fruitful. One option Muresianu and Macumber-Rosin did not consider is aligning HTF expenditures to expected tax receipts and then relaxing federal constraints on tolling and public-private partnerships. This would make states less dependent on federal-aid grants and expand the users-pay principle at the individual facility level. To be sure, fiscal restraint also faces strong immediate political headwinds, but it might prove to be the most realistic option as entitlement programs become insolvent and the national debt explodes as anticipated over the next decade, as we at Reason Foundation have suggested.

See Alex Muresianu and Jacob Macumber-Rosin’s full Tax Foundation analysis, “How to Refuel the Highway Trust Fund,” which is well worth reading.

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BBC Report Touts “Electrifying Rail”

In an odd news article, BBC technology reporter Chris Baraniuk wrote that passengers on a British train leaving Aldershot station may not notice a cluster of solar panels beside the tracks. But, he writes, they would be surprised to learn that “the train they are on is drawing power from it.”

Hurrah, the BBC seems to be reporting. And the headline writer penned the story’s headline as, “This is the big one—tech firms bet on electrifying rail.” Well, one of the great many things I learned by earning two engineering degrees from MIT is that solar power is very, very diluted. It might light up a few bulbs, but in no conceivable way could it power any train (apart from a model railroad).

But the story goes on to quote the co-founder of start-up company Riding Sunbeams, Leo Murray, who says, “On a sunny afternoon, if you are catching a train through Aldershot, a little bit of the energy for the train will come from those solar panels.” His company installed the solar panels beside the tracks in 2019. They produce 40 kilowatts on a sunny day. Murray adds, “If you are a railway, this is the cheapest energy you can buy.” Also, the most diluted.

So what is solar power actually used for?

It’s never made clear, but Murray is quoted as saying that his panels are the only solar array in the country that delivers power directly to the rail to move trains. Nowhere does the article explain how a tiny bit of electricity fed into the track can help power the train, which does not appear to be powered by electricity. Moreover, by paragraph 12, the story notes that solar panels produce direct current (DC) while overhead lines used to power trains use alternating current (AC). The piece goes on from there to discuss various electric-powered rail ideas in a number of European countries. But it never explains how the tiny bit of solar electricity connected to the track at Aldershot makes any difference at all.

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News Notes

Work Begins on $4.6 Billion Georgia 400 Express Toll Lanes
The Georgia Department of Transportation’s largest public-private partnership (P3) thus far got underway in October. The entirely privately funded project will add priced express lanes in both directions to sixteen miles of this north-south expressway in the Atlanta metro area. The toll-financed P3 project has a 50-year term. In addition to passenger vehicles, the express lanes will be used by a new MARTA Bus Rapid Transit line, and the P3 project will construct several BRT stations along the right of way. The P3 consortium, SR400 Peach Partners, is led by ACS Infrastructure, Acciona, and Meridiam.

Replacing the Cape Fear Bridge May Be a Toll-Financed P3
North Carolina DOT has concluded that the aging steel lift bridge across the Cape Fear River is functionally obsolete and needs to be replaced. With an estimated cost of $1.1 billion, and only one third of that available from a $242 million federal grant and an $85 million state grant, NCDOT and its Turnpike Authority are considering both tolling and a public-private partnership (P3) to finance and manage the replacement. David Roy of the Turnpike Authority pointed out at a recent public hearing that a state agency is not allowed to provide toll discounts to any kind of user, but that a P3 concession company would be able to do that –e.g., for local residents.

South Carolina May Consider I-77 Toll Lanes
In its $3.2 billion express toll lanes project, North Carolina DOT will be adding express toll lanes to I-77 between Charlotte and the South Carolina border. Unless South Carolina adds lanes on its side of the border, there will be a huge bottleneck as 10 NC lanes meet far fewer lanes on the South Carolina side. SCDOT director Justin Powell is aware of the problem. He told the Rock Hill Herald on Nov. 24 that he plans to discuss this with his North Carolina counterpart in the near future.

New Zealand Moving to Road User Charges
Last month, the New Zealand Parliament passed a bill to authorize nationwide road user charges. Local agencies are encouraged to partner with the NZ Transport Agency. The proposed charging is called “time-of-use charging,” with higher rates applying during the busiest hours for roadway use. The Auckland Council is expected to be the first local government to engage with the Transport Agency. Also, in late November, the Agency announced that tolls and road user charges will be indexed to inflation, as measured by the NZ Consumer Price Index.

EPA Changes Definition of Waters of the United States
For decades, the Environmental Protection Agency defined waters of the United States (WOTUS) very comprehensively, to include even ditches that were often dry. Litigation over many years challenged this policy as inconsistent with the legal definition of those waters as “navigable.” On Nov. 17, the EPA announced a revised definition, consistent with a 2023 Supreme Court decision, which has led to cheers from highway organizations.

I-10 Bridge Replacement to Begin in March
Louisiana DOTD has announced that construction of the $2.4 billion I-10 Calcasieu Bridge replacement will begin in March. The bridge is to be designed, built, financed, operated, and maintained by Calcasieu Bridge Partners, formed by Plenary Americas, Acciona Concesiones, and Sacyr Infrastructure USA under a 50-year toll-financed public-private partnership. That river has something of a pirate history, so a Louisiana pirate symbol of crossed pistols will be incorporated into the bridge’s four towers.

Express Toll Lanes Expanding in California’s Bay Area
18 miles of new express toll lanes are nearing completion on I-80 in Solano County, from Red Top Road in Fairfield to I-505 in Vacaville. Variable tolls will be charged between 5 AM and 8 PM, and a FasTrak tag will be required, as on other express toll lanes in the region. Vehicles with two occupants and a switchable FasTrak will pay half price, and those with three will go at no charge with the FasTrak set at 3.

Brightline Florida in Trouble
The privately financed “higher-speed” passenger rail line between Miami and Orlando is in financial trouble. Its tax-exempt revenue bonds are trading at below their nominal value, and non-insured bonds have recently traded in the low 80s. While ridership has increased over the last year, it is well below projections. Moreover, due to a number of collisions with motor vehicles and pedestrians, in recent years, the rail line is under attack in Miami media. Separately, Brightline and Florida East Coast Railroad are in litigation over Brightline’s planned commuter service, which FEC claims violates Brightline’s agreement on its use of FEC trackage.

Four Dallas Suburbs May Withdraw From Rail Transit System
The cities of Plano, Irving, Farmers Branch, and Highland Park have scheduled referenda for next March on whether they should withdraw from the regional rail transit system DART. The agency says its 93-mile system is the largest light rail system in the United States. Thirteen cities dedicate a share of their sales tax revenue to DART, but these four cities say their sales taxes to DART cover far more than what the agency spends on their DART service. In the Dallas/Fort Worth metro area, only 0.6% of commuters used transit in 2024, down from 1.2% in 2019 and 3.4% in 1980.

Metro Pacific to Sell Shares in Its Toll Roads
Metro Pacific Investments Corporation announced plans to sell 20-30% stakes in its Indonesian and Philippine toll roads via private placement, according to the Manila Standard. MPIC chief finance officer June Cheryl Cabal-Revilla said the sale will involve 20-30% of the Indonesian toll road and a similar stake in Metro Pacific Tollways Corp. MPTC CEO Gilbert Sta. Maria said the company is in talks with overseas and local investors for the private placement.

Japanese Maglev Project Costs Have Doubled
The cost of the main segment of the Chuo maglev line planned for Tokyo to Nagoya is now double the original estimate. That section—between Shinagawa and Nagoya—is now expected to cost $72 billion, compared to less than half that in 2014. The reasons for the large increase were cited as price surges, responses to challenging construction work, and enhanced specifications. This news is based on an article in Infralogic dated Oct. 30, 2025.

Nashville Loop Project in Trouble?
ENR reported late last month that the $240 million Music City Loop tunnel project has experienced a walkout by local contractor Shane Trucking & Excavating partway through boring the nine-mile tunnel. Boring Company CEO Steve Davis, on a Nov. 24 livestream, discussed worker safety innovations and said the project remained on schedule.

Vietnam Considering $1.4 Billion Expressway
Infralogic (Nov. 28) reported that the Vietnamese government is considering a public-private partnership for a 141 km expressway linking two other expressways in Lam Dong province. The national Ministry of Construction has asked the Lam Dong government to assess the pros and cons of a P3 for this project.

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The post Surface Transportation News: Key Bridge replacement costs soar appeared first on Reason Foundation.

On behalf of Reason Foundation, I respectfully submit these comments in response to the Office of the Secretary’s (OST) notice of proposed rulemaking (NPRM) on Procedures in Regulating and Enforcing Unfair or Deceptive Practices.

By way of background, I am a senior transportation policy analyst at Reason Foundation and focus on federal transportation policy, including aviation consumer protection regulation. Reason Foundation is a national 501(c)(3) public policy research and education organization with expertise across a range of policy areas, including transportation.

Reason Foundation previously submitted comments to OST recommending the initiation of this rulemaking proceeding. We write in support of the proposed changes to Subparts F and G contained in the NPRM.

Protecting consumers from defective regulations

The statutory authority (49 U.S.C. § 41712) wielded by the U.S. Department of Transportation to police unfair or deceptive practices in the aviation industry long predates the Department itself. The authority was created as Section 411 of the Civil Aeronautics Act of 1938 and modeled on the “unfair or deceptive acts or practices” language included months before in the Federal Trade Commission Act of 1938, which covered most other commercial contexts. In 1958, Congress expanded Section 411 to cover not only air transportation itself but the sale of air transportation by ticket agents.

When Congress passed the Airline Deregulation Act in 1978, it eliminated most economic regulation in the aviation sector and wound down the Civil Aeronautics Board (“CAB”). When the CAB was terminated in 1985, Section 411 consumer protection authority was transferred to the Department of Transportation’s Office of the Secretary (“OST”). In 1994, Congress reorganized the Title 49 Transportation Code, and Section 411 was recodified as Section 41712.

While reorganizing the Transportation Code, Congress was also working to modernize authorities held by the Federal Trade Commission (“FTC”). The FTC Act Amendments of 1994, among other things, codified longstanding internal FTC policy in dealing with claims of unfair or deceptive acts or practices that had in part been synthesized for Congress in the FTC’s December 1980 “Policy Statement on Unfairness.” The FTC’s approach, as affirmed by Congress, requires that specific elements be met to prove unfairness allegations, one of which necessitates careful benefit/cost analysis.

Specifically, the FTC Act amendments added three standards of proof to the FTC’s broad statutory prohibition on unfair business practices (15 U.S.C. § 45(n)). For conduct to qualify as legally unfair, it must be (1) “likely to cause substantial injury to consumers,” (2) not “reasonably avoidable by consumers themselves,” and (3) “not outweighed by countervailing benefits to consumers or to competition.” It is worth noting that these reforms earned bipartisan support. Similar language was also included in the Dodd-Frank Act of 2010, covering the enforcement responsibilities of the Consumer Financial Protection Bureau (12 U.S.C. § 5531(c)).

While bipartisan recognition of the problem of ill-defined “unfairness” exists in virtually every other federal consumer protection context, Congress has so far not moved to reform the Department of Transportation’s similar Section 41712 aviation consumer protection authority. This failure to act has enabled regulators in recent years to engage in a variety of re-regulatory activities, including new restrictions on airfare advertising that prohibit government taxes and fees from being “displayed prominently” (14 C.F.R. § 399.84(a)), outlawing true nonrefundable ticketing (14 C.F.R. § 259.5(b)(4)), which puts upward price pressure on airfares due to the forced risk transfer from consumers to air carriers, and an inflexible tarmac delay rule (14 C.F.R. § 259.4) suspected of increasing flight cancellations—particularly at smaller and more-rural airports.

Each of the aforementioned aviation consumer protection regulations has been criticized as harming consumers, some with stronger evidence than others. But without the FTC-style standards of proof and evidentiary hearing procedures, the scales were tipped in favor of regulators. These are fact-intensive matters that require careful review of the evidence to ensure potential regulatory actions will not perversely harm consumers.

Despite congressional inaction on modernizing Section 41712, the December 2020 final rule did much to bring the Department’s aviation consumer protection authority into alignment with similar federal authorities. This rule added FTC-style standards of proof to Section 41712 enforcement and rulemaking procedures while also codifying internal agency practices for allowing alleged violators to present evidence defending themselves against possible enforcement or rulemaking activity derived from the aviation consumer protection authority.

While this would have improved airline and ticket agents’ defensive positions, it also would have required the Department of Transportation to clearly explain itself along the way and give consumers better insight into how decisions that affect them are made. In this way, the FTC-style standards of proof in unfairness claims are best understood as promoting regulatory quality and consistency in enforcement.

Following the transition between administrations, the Biden administration quickly moved to reverse these reforms. In February 2022, the Department published a rule modifying the hearing procedures for discretionary aviation consumer protection rulemakings in several ways that would reduce regulatory quality. In August 2022, OST published a guidance document further suggesting it will again take an expansive view of how its Section 41712 powers are defined and limited.

These policy changes reopened the door for future discretionary rulemaking guided more by political whims than careful empirical analysis. The recent history of Section 41712 discretionary rulemaking suggests that regulatory analysis has not been sufficiently robust to avoid harm to consumers. As such, we support the proposed restoration of the 2020 hearing procedures, as modified. While outside the scope of this proceeding, we also support the rescission of the August 2022 Guidance Regarding Interpretation of Unfair or Deceptive Practices, as the Department indicated it will pursue in the future.

Conclusion

Thank you for the opportunity to provide comments in response to this NPRM. We urge the Department to act swiftly to implement these needed reforms to protect consumers from defective regulations derived from the aviation consumer protection authority.

The post Restoring robust hearing practices will protect consumers from defective aviation consumer protection regulations appeared first on Reason Foundation.

• Protecting aviation from the next shutdown
• Time to retire the P word
• NASA’s huge risk in Artemis II mission
• Airport privatization back on Canada’s agenda
• Protecting passengers from defective regulation
• Carry-on bags and emergency evacuation
• News Notes
• Quotable Quotes

Protecting Aviation from the Next Shutdown  

The longest federal government shutdown has finally been ended by Congress. Air travel will likely take weeks to recover, in part due to an even larger shortage of air traffic controllers due to the higher-than-usual number of controller retirements during the past month and a half.

The Federal Aviation Administration’s Air Traffic Organization was already far short of standard air traffic controller staffing, and the next few years will be even worse. Transportation Secretary Sean Duffy says that an average of 15 to 20 controllers retired per day during the shutdown. If that’s the case, multiply 15 retirements by 43 days and you get 645 fewer controllers post-shutdown. Therefore, the Federal Aviation Administration (FAA) is likely to retain some flight restrictions indefinitely based on the post-shutdown level of controller staffing at towers, TRACONs, and high-altitude centers.

The shutdown may be over, but now is the time for policymakers to think seriously about protecting air travel from the next government shutdown, because there are sure to be more. The most effective means to that end is to do what nearly 100 other countries have done since 1987: de-politicize air traffic control (ATC). What the vast majority of those countries have done is to remove ATC from the government’s budget by (1) separating the air traffic control provider from direct government funding, and (2) enabling it to charge airlines and business jets International Civil Aviation Organization-compliant weight-distance charges for all flights.

Policymakers and opinion leaders should understand that U.S. airlines and business jets pay those user fees whenever they fly in non-U.S. airspace. The business jet lobby group, the National Business Aviation Association (NBAA), pulls out all the stops to prevent its members from facing those fees in the United States because they currently pay only a very small fuel tax that covers about 10% of the cost of the air traffic control services they receive. As an Aug. 10 video editorial from The New York Times explained, whenever an airline passenger pays the ticket tax (which is the FAA’s primary revenue source), part of that tax is used to cross-subsidize business jets.

The other obstacle to modernizing U.S. air traffic control is, alas, Congress. It has twice rejected serious proposals to depoliticize our ATC system: once by rejecting the Clinton administration’s proposal to create a federal ATC utility and again under the first Trump administration, where a Republican proposal for a nonprofit ATC corporation modeled on the very successful Nav Canada didn’t move forward.

Perhaps the air travel chaos of this historically long federal government shutdown will prompt Congress to think more seriously about making air traffic control shutdown-proof, as many other countries have done.

As The Wall Street Journal editorialized on Nov. 5:

“This is a ludicrous way to run the air transportation system of any country, much less the richest and most powerful one in the history of the planet. The answer is to hand off the job of air traffic control to a nonprofit funded by user fees instead of taxes. This model is already present in Canada and elsewhere, so it isn’t some pie-in-the-sky idea. President Trump backed such a plan during his first term, but parochial opposition kept it grounded.”

Former U.S. Department of Transportation Undersecretary for Policy Jeff Shane reminded me several months ago of a 2007 bill introduced in both houses of Congress to accomplish some of what other countries have done. It would have enabled ATC user fees instead of current aviation excise taxes (notably the ticket tax and aviation fuel taxes) and, via a kind of “permanent appropriations” process, enable the user-fee revenues to go directly to the ATC system. It would also have provided borrowing authority for the FAA to use to finance ATC capital investments. The Senate bill was S.1076, 110th Congress.

That approach is not my preference, but it would be a major improvement over today’s “ludicrous” status quo for America’s air traffic control system. We need to take air traffic control out of the federal budget, insulating it from the next government shutdown.

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Time to Retire the P word

Both friends and foes of air traffic control reform frequently refer to proposed changes as “privatization.” In an abstract, academic sense, shifting a function from the public sector to some form of non-government management can be dubbed “privatization.” But that word has acquired a serious negative meaning when it comes to air traffic control. This dates back to the initial efforts by then-Rep. Bill Shuster, who chaired the House Transportation & Infrastructure (T&I) Committee last decade, to craft 2017 legislation to replace the FAA’s Air Traffic Organization (ATO) with a nonprofit, stakeholder-governed corporation modeled after Nav Canada. This plan originated from a working group (of which I was a part) of the Business Roundtable. I also served as a (non-paid) subject-matter expert on this effort for the House T&I Committee. In parallel, a working group on air traffic control reform at the Eno Center for Transportation came up with a similar recommendation.

By the time the House T&I Committee released the first draft of its nonprofit air traffic corporation bill, the proposed stakeholder board was a disaster. The 13 stakeholders were to include four seats representing the major airlines, three representing general and business aviation, and six others representing air travelers and others. This led to a business-jet/private-pilot media campaign denouncing the bill as a takeover of ATC by the big airlines. NBAA bankrolled a new organization called Alliance for Aviation Across America (AAAA) that denounced the bill as having “a private board dominated by the big airlines” that would short-change rural states and small airports.

Despite a later version of the bill having a far more balanced set of stakeholders (including regional airlines and airports, and provisions ensuring the continuation of the Contract Tower program), the same AAAA talking points continued about a big-airline takeover and making profits at the expense of the rest of aviation. And this likely made it impossible for there to be a companion bill in the Senate.

When I review recent reports from organizations opposed to separating air traffic control from the FAA, they consistently label this change “privatization” and imply that it would be a profit-making private company.

A 2015 report from the Center for American Progress defines what they are against as “a private entity with a profit motive.” Yet the same report assumed that a privatized ATC entity would require “a steady stream of tax revenue to cover operational costs” and procurement of improved infrastructure. It went on to state that this would be “a bold attempt to carve out operations and procurement activities along with all or most of [Aviation Trust Fund] funding while dumping responsibility for remaining FAA functions onto taxpayers.” It also assumed airline control of the privatized entity, assuming that they would seek to ensure funding did not go to a major hub of a competing airline.

A more recent 2025 piece from “In the Public Interest” repeats claims such as, “Privatizing ATC would hand significant control of the airspace to the major airlines, allowing them to consolidate their power and dictate rules that prioritize their bottom lines over the public interest.”

In short, the meme is out there that “privatization” means “profits” and “control by airlines.” This does not reflect the situation in any of the nearly 100 countries that now receive air traffic control services from air navigation service providers (ANSPs) organized as public utilities, the vast majority of which are government corporations funded by ATC user fees.

That is why I switched my terminology several years ago to “public utility,” because that is what these entities are. In a U.S. context, they are analogous to electric utilities (including the Tennessee Valley Authority, which gets its funding from its electricity customers, not from Congress). TVA also issues long-term bonds to finance major capital improvements.

I urge fellow supporters of air traffic control public utilities to dump the ‘P’ word and start referring to public utilities as I wrote in my study, “Air traffic control as a public utility.” That is what the Clinton administration proposed in 1994, as its largest “reinventing government” project, the U.S. Air Traffic Services (USATS) corporation. It was to be funded by air traffic control user fees and regulated at arm’s length by the safety regulator, the FAA. I remember testifying in favor of USATS, but it never got beyond a single House committee presentation.

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The Huge Risk in NASA’s Artemis II Mission

As reported by Eric Berger in Ars Technica, NASA plans to launch its Artemis II mission early next month. Its giant, once-flown Space Launch System (SLS) rocket will launch its only-once-flown Orion capsule with four astronauts on board for a trip around the Moon and return to Earth. On the only previous launch (without crew) Orion’s heat shield partly disintegrated during re-entry. Once NASA engineers analyzed the damage, they decided that the fix would be to perform the next Orion re-entry on a different trajectory on which heat would not build up as much. But this has not been tested.

That bothers Casey Handmer, who has posted a very long critique of Orion, which I read in preparation for writing this article. Who is Casey Handmer, and why do I take him seriously? He received his PhD in theoretical physics from Caltech, worked at NASA’s Jet Propulsion Laboratory, and later founded Terraform Industries to make synthetic natural gas. Several space policy experts that I know and respect think he’s very credible.

His lengthy piece presents a technical case arguing that the Orion capsule is poorly designed, particularly in its heat shield. After many detailed pages, he summarizes Orion as follows:

• Orion does not have a “reference mission,” and Orion is not needed to go to the Moon.
• Orion is hugely expensive; the Orion program spends more in a year than SpaceX spent in total on its first space capsule.
• Orion has been delayed endlessly; in 2013 it was so far behind schedule that it could not be included in any serious space exploration architecture. And 12 years later, it has still not flown humans.
• Orion is irredeemably unsafe; the systems engineering was compromised from the beginning. Most obvious is the flawed heat shield. But nearly every other subsystem is either unstable, untested, or unfit.

Obviously, Handmer thinks it is wrong to risk four human lives on this very flawed vehicle. Remember, both the SLS launch rocket and Orion have flown only once. Contrast this with SpaceX’s approach. It has flown 11 Starship spacecraft thus far, none with humans on board. Each mission (and I’ve watched them all) is intended to test different design changes, flight tracks, and other details. Each one is a learning experience that leads to continuous improvements. A good overview of this approach is Irene Katz’s two-page article on Mission 11 of Starship Version 2. (“Next Up: Starship Take 3,” Irene Katz, Aviation Week, Oct. 27-Nov. 9, 2025) It’s a great illustration of SpaceX’s learning by doing.

NASA’s approach typifies the central planning “one best way”. It comes up with a concept and works extensively to fine-tune it on paper. It ends up being so costly that multiple test flights are unaffordable, so after just one SLS/Orion launch, it’s ready to fly with humans. That is an extremely risky way to proceed, but at $4 billion per launch, NASA has painted itself into a corner.

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Airport Privatization Back on the Agenda in Canada

Canada’s federal government has once again raised the subject of airport privatization, which was discussed briefly last year, but did not go anywhere. The government’s aim is to attract private capital to invest in the country’s airports, both the four major hubs (Calgary, Montreal, Toronto, and Vancouver) and also the larger regional airports. The government is looking for a way for equity investors, such as pension funds and infrastructure investment funds, to upgrade these airports.

What’s different this time, per a recent brief by Jody Aldcorn and Ken Silverthorn of McCarthy Tetrault that crossed my screen recently, is that today’s federal government has deficit constraints, the Canadian Airports Council is open to reforms, and Canadian pension funds are interested in airport investment at home, as they have been doing globally for many years.

Back in 1992, when the national government owned all the principal airports, it began devolving control to local non-profit airport authorities—but required that they pay annual rent to the federal government. The rent is a percentage of each airport’s annual gross revenue, and can be as high as 12%. The airport authorities hate this because they have to charge large fees to airport passengers, which makes air travel more expensive, on average, than in the United States.

When this subject arose last year, I had several suggestions, which I will repeat here, since I think they still make sense. The airport authorities want to get rid of the annual rent payments, but that would reduce a long-standing revenue source of the federal government. My suggestion was—and is—for the federal government to enact legislation enabling local authorities to opt out of annual rent payments if they enter into a long-term public-private partnership lease with an investor group (potentially including pension funds) and the investor group then agrees to compensate the federal government for the loss of rents from that airport. Thereafter, the airport authority and the P3 group would develop plans for modernization/expansion, etc., financed by equity and debt, as Canadian pension funds are involved worldwide.

This is potentially a win-win for the federal government, the airport authorities, and would-be airport investors, including Canada’s outstanding public pension funds, with their long track record of investing equity in airports worldwide.

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Protecting Consumers from Defective Consumer Protection Regulation
By Marc Scribner

Federal authority to police unfair and deceptive airline practices was first established in 1938 and has been largely unchanged since 1958, when consumer protections were extended to sellers of airline tickets. The commercial aviation industry has changed a great deal, as have consumer protection best practices that apply to most other businesses. In recent years, the outdated aviation consumer protection authority has been wielded to regulate air transportation in a variety of questionable ways, which are threatening the gains consumers realized following the Airline Deregulation Act of 1978. Fortunately, the U.S. Department of Transportation recently proposed a rule aimed at modernizing aviation consumer protections for the 21st century and protecting consumers from defective regulation.

The Department of Transportation’s aviation consumer protection authority long predates the DOT itself. Its basic structure was enacted by Congress as part of the Civil Aeronautics Act of 1938, which included protections against unfair or deceptive airline practices modeled on those contained in the Federal Trade Commission (FTC) Act passed months earlier in 1938. The Federal Aviation Act of 1958, which established the FAA, also extended aviation consumer protections to ticket agents. Since then, the statute has largely been unchanged (49 U.S.C. § 41712).

In contrast, the FTC’s authority to police against unfair or deceptive practices outside the air transportation industry has evolved significantly since 1938. These changes were driven by court decisions and internal practice in the decades that followed the enactment of the FTC’s consumer protection statute, an approach that was summarized[?] in the FTC’s 1980 Policy Statement on Unfairness.

Congress codified FTC’s modern practices in the 1994 FTC Act amendments, which importantly added three standards of proof to the statutory definition of “unfairness” (15 U.S.C. § 45). For conduct to qualify as unfair under the law, it must be (1) “likely to cause substantial injury to consumers,” (2) not “reasonably avoidable by consumers themselves,” and (3) “not outweighed by countervailing benefits to consumers or to competition.” This updated definition of “unfairness” was also included in the Dodd-Frank Act of 2010, which covers the enforcement duties of the Consumer Financial Protection Bureau (12 U.S.C. § 5531). Thus, a consensus on what “unfairness” means exists in every  federal consumer protection context other than commercial aviation.

While bipartisan recognition of the problem of ill-defined “unfairness” exists in virtually every other federal consumer protection context, Congress has so far not moved to reform the Department of Transportation’s similar aviation consumer protection authority. This failure to act has enabled regulators in recent years to engage in a variety of re-regulatory activities, including new restrictions on airfare advertising that prohibit government taxes and fees from being “displayed prominently” (14 C.F.R. § 399.84(a)), outlawing true nonrefundable ticketing (14 C.F.R. § 259.5(b)(4)), which puts upward price pressure on airfares due to the forced risk transfer from consumers to air carriers, and an inflexible tarmac-delay rule (14 C.F.R. § 259.4) suspected of increasing flight cancellations—particularly at smaller and more-rural airports.

Each of these aviation consumer protection regulations has been criticized as harming consumers, some with stronger evidence than others. But without the FTC-style standards of proof and evidentiary hearing procedures, the scales were tipped in favor of regulators.

Despite congressional inaction, DOT moved to bring the aviation consumer protection in line with FTC-style definitions and procedures in Dec. 2020. While this rule certainly improved airline and ticket agents’ defensive positions against allegations of unfair or deceptive practices, it would have required regulators to explain themselves along the way and give consumers better insight into how decisions that affect them are made. In this way, it should be understood as promoting regulatory quality and consistency in enforcement.

But the Biden administration moved quickly to reverse these reforms. Pursuant to an executive order, it published a rule in Feb. 2022 modifying procedures for discretionary aviation consumer protection regulatory proceedings in several ways that watered down process rigors. This change in policy opened the door for future discretionary rulemaking guided more by political whims than careful empirical analysis. DOT’s recent history of aviation consumer protection rulemakings suggests that past regulatory analysis was not sufficiently robust to avoid perverse harm to consumers.

The good news is that the new Trump administration is seeking to reinstate its previous reforms. Earlier this year, Reason Foundation urged DOT to restore the aviation consumer protection hearing procedures established in the Dec. 2020 rule. On Oct. 30, DOT published a proposed rule to do just that. While this latest shift in policy is welcome, it underscores the need for congressional action. A future administration can reverse these reforms just like the Biden administration did. Amending the aviation consumer protection statute, as Reason Foundation has recommended, would promote aviation consumer protection regulation and enforcement that actually protects consumers, regardless of who sits in the White House.

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Overhead Bags and Cabin Evacuation

Air travelers’ dependence on bringing travel luggage on board and stashing it in overhead bins is a serious problem. Not only does it increase boarding time; it also hinders emergency evacuations. As Sean Broderick reported in Aviation Week (Oct. 27-Nov. 9), a detailed study of evacuations revealed that retrieving bags from overhead makes it impossible to evacuate the cabin in the standard 90 seconds.

The study was carried out at the University of Greenwich. The researchers built a model so they could run thousands of scenarios, modeling a 180-seat narrowbody airliner with FAA-standard exits. In the base-case scenarios in which no passengers retrieved luggage, the median evacuation time was 121 seconds—well above the 90-second requirement. In the worst-case scenarios with many passengers retrieving luggage, total evacuation time averaged 199 seconds, with an average of 63 passengers left behind after 90 seconds. I note that in most scenarios, not all exits were modeled as usable, which is also realistic.

These are dismaying findings. The 90-second standard should not be increased, given the danger of fire and toxic fumes entering the cabin in many cases. So what kind of measures would improve evacuation times? Banning carry-on luggage (or locking the overheads until safe arrival at the gate) is not likely to be considered feasible. But what about providing economic incentives?

One reason so much luggage is brought on board is that airlines charge a lot for checked bags but charge nothing for carry-ons. What if checked luggage fees were cut in half? (I’d say eliminated, but airlines depend on that revenue.) But suppose they also started charging for most or all luggage carried on? We’ve seen the reverse of that when Southwest recently began charging for checked bags, leading to a large increase in carry-ons. So if airlines started charging for any carry-on larger than an under-seat briefcase, requiring a paid carry-on tag affixed to each such carry-on, some fraction of roll-aboard suitcases would end up in the hold, rather than in overhead bins.

This change should reduce boarding delays due to fewer suitcases being stored overhead and also improve evacuation times. Sounds like a winner to me.

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News Notes

Trump Renominates Isaacman for NASA Administrator
President Trump has formally re-nominated former astronaut Jared Isaacman to be the new NASA administrator. The nomination took place a few days after Politico unveiled Isaacman’s 62-page non-public concept paper for re-inventing the agency, which appears to reflect the ideas he discussed with Aviation Week reporter Irene Klotz’s two-page interview with Isaacman, summarized in the July 2025 issue of this newsletter. Politico quotes him as saying the document’s vision is “fully consistent with what I discussed in my Senate Hearing and in my responses to the Commerce Committee’s questions for the record. And I stand by it.”

Iridium Plans GPS Alternative on a Chip
Iridium Communications has announced an 8mm x 8mm chip that can provide position/navigation/timing information based on PNT data from its 66 low-earth-orbit communications satellites, reported Graham Warwick in Aviation Daily (Nov. 4). Iridium is seeking partners to conduct beta trials of the chip. CEO Matt Desch pointed out that the Iridium signal is 1,000 times stronger than GPS signals. The company plans to license the chip and PNT service to value-added resellers such as Collins Aerospace, Honeywell, and Skytrac Systems.

Archer Leases Hawthorne Airport for LA Air Taxi Market
Electric vertical take-off and landing (eVTOL) startup Archer Aviation has paid $126 million to lease, for 45 years, Hawthorne Airport for its planned Los Angeles air taxi service and to test various new aviation technologies. The airport is owned by the City of Hawthorne. It was built in the 1920s and was once known as Jack Northrop Field. It is three miles from LAX and close to major attractions, including SoFi Stadium, The Forum, and Intuit Dome.

SpaceX Details Progress on Starship as Lunar Lander
In response to criticism from acting NASA Administrator Sean Duffy, SpaceX released (Oct. 30th) a detailed progress report on its Starship-based Human Landing System for the agency’s Artemis III mission. It reported upcoming in-space trials of in-flight refueling and the development of a Starship HLS crew cabin. In addition, SpaceX issued the following statement: “In response to the latest calls [from NASA], we’ve shared and are formally assessing a simplified mission architecture and concept of operations that we believe will result in a faster return to the Moon while simultaneously improving crew safety.” This information comes from a Garrett Reim article in Aerospace Daily & Defense Report.

Beta Raises $1 Billion on the New York Stock Exchange
In an initial public offering, Beta Technologies sold 29.9 million shares at $34 per share. That puts Beta in the same funding category as Archer Aviation and Joby Aviation, all three now having each raised close to $3 billion. Beta is developing two versions of its Alia aircraft—conventional takeoff and vertical takeoff. It expects FAA Part 23 Type certification for Alia CTOL by late 2026 or early 2027, followed by Alia VTOL certification in late 2027 or early 2028. Beta says it has firm orders for 131 CTOL and 158 VTOL aircraft.

Macquarie Seeks Control of London City Airport
Infralogic reported (Oct. 15) that Macquarie Asset Management has reached an agreement to acquire a 50% stake in London City Airport from two Canadian pension funds: Alberta Investment Management Corporation and OMERS. That is in addition to its previous purchase of a 25% stake from Ontario Teachers’ Pension Plan, giving Macquarie 75% control of London’s third-largest airport. Earlier this year Macquarie acquired a 55% stake in Bristol Airport and a 26.5% stake in Birmingham Airport.

Quiet Supersonic Jet Makes First Flight
NASA’s X-59 Quest supersonic test aircraft made its first flight on Oct. 28 from Palmdale to Edwards Air Force Base in the California desert. The one-hour and 7-minute flight was at subsonic speeds between 170 and 250 knots. The X-59 is designed to reach Mach 1.4 and an altitude of 55,000 ft. During the next year, the flight envelope will be expanded in altitude and speed, after which acoustic measurements will be made to find out how quiet the aircraft is at various altitudes and (especially) supersonic speeds. A third phase will focus on community response to X-59 flights.

Blue Origin Opens New Glenn Factory at the Cape
The Orlando Sentinel’s Richard Tribou reported on the opening of a $3 billion manufacturing plant for the company’s New Glenn launch rocket. It provided a media tour of the factory, which will produce workhorse reusable New Glenn launch vehicles and also the version selected by NASA for its Human Landing System, to be called Blue Moon Mark 2. It is scheduled for the Artemis V mission, following SpaceX’s moon-lander version of Starship for Artemis III and IV. Blue Origin already had another plant nearby producing the uncrewed Mark 1 version.

New York Times Highlights Collegiate Controller Schools
Reporter Karoun Demirjian interviewed administrators at some 20 colleges that offer an FAA-vetted air traffic controller training curriculum. This program has not been widely known, despite its longevity and the addition of nine more colleges in the past year or two. I was pleased to learn that DOT Secretary Sean Duffy freed up enough FAA funds to keep these college courses in operation during the federal shutdown. That is a wise investment, given the increase in controller retirements during the shutdown. On the other hand, Demirjian reports that hardly any students in these programs have been trained to work in FAA’s high-altitude centers, which are considered the toughest assignments for new controllers.

Microwave Imaging Will Speed Travelers Through TSA Screening
MIT Lincoln Laboratory spent years developing a new kind of walk-through screening device for TSA checkpoints, to replace current walk-through metal detectors. The Department of Homeland Security (DHS) funded the project. The prototype uses antennas on flat panels that send out low-energy radio waves to reflect any hidden objects. This creates an instant image that the TSA agent scrutinizes. The technology has been licensed to Liberty Defense, and under the name “Hexwave” it was approved by DHS in 2024 to replace conventional walk-through metal detectors in TSA PreCheck lanes.

SpaceX Getting Close to Launching Starship Version 3
Starship Version 3 will be the successor to the Starships that have continued to provide huge amounts of data on operational performance this year. The first V3 launch is planned to, among other things, be the first to test orbital propellant transfer—a key factor in planned longer-term Starship flights, including its Human Landing System for NASA Moon landings.

Venice Airport Operator SAVE Is Being Bought by Infrastructure Funds
A consortium led by infrastructure investor Ardian has reached an agreement to acquire Italian airport operator SAVE, whose portfolio includes the Brescia, Venice, Verona, and Treviso airports, plus a stake in Belgian airport Charleroi. Being bought out under this transaction are infrastructure funds DWS Infrastructure and InfraVia Capital Partners. Infralogic estimates the deal is worth €1.1 billion.

JSX Introducing Turboprops
Public charter operator JSX is planning to introduce turboprop aircraft to its fleet; all other U.S. carriers have phased them out. JSX plans to add ATR 42-600s and possibly ATR 72-600s. JSX aims to provide the same kind of service offered by its small-jet flights. Its current all-jet business is up 30% over last year, with yields continuing to rise, reports Chris Sloan in Aviation Week (Sept. 29-Oct. 12). A number of legacy airlines are sponsoring legislation to treat public charters the same as scheduled (Part 121) carriers. Two airlines—United and JetBlue—are investors in JSX and are not supporting that bill.

Philippines Plans to Privatize Nine Regional Airports
Infralogic reports (Oct. 8) that its government plans to privatize nine regional airports, via two separate bundles. Both the Asian Development Bank and the International Finance Corporation are advisers for the planned auctions.

Iraq Selects Winner for Baghdad Airport
With bids from both Dublin Airport Authority and Corporacion America as finalists, the government in October selected the latter. The International Finance Corporation will negotiate with the Corporacion America consortium. The plan calls for the winner to construct a new passenger terminal (estimated at $400-$600 million) as part of the 25-year concession.

Error in Last Month’s Issue
Not one but two aviation professionals (whom I know) pointed out an error in last month’s lead article. The 17-country ATC utility in Africa is ASECNA, which I know. I plead guilty to sloppy proofreading.

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Quotable Quotes

“The reliance on overworked controllers is particularly dangerous because the FAA relies on outdated technologies that it has struggled to upgrade or replace. As in so many other areas, the United States has fallen behind other nations that use more-modern technologies to guide more airplane safely through crowded parts of the sky. . . . One possible corrective is to remove the government from its role. Other nations—including Australia, Canade, and Germany—have created stand-alone corporations, funded by industry, to operate their air traffic control systems. The FAA already collects a large portion of its funding directly from the industry. It could be fully funded in the same way. . . . Shutdowns cause unpredictable and lasting damage. If our elected representatives once again fail to perform their basic responsibilities, and the government again shuts down, other things will break—and the consequences will be with us for a long time.”
—Binyamin Appelbaum, “Why Is Your Flight Always Delayed? Blame Government Shutdowns“, The New York Times, Sept. 29, 2025

“Lack of competition in the airline industry stems from antitrust law enforcement. That’s what former Delta and Northwest CEO Richard Anderson suggested on the Airlines Confidential podcast this week, when he joined ex Wall Street Journal airline reporter Scott McCartney and ex-American CEO Doug Parker. Spirit Airlines is in bankruptcy. They’ve already said they’re giving up half their fleet. The whole thing was going to be flying if they’d been acquired by JetBlue, but the government stopped that. The Biden administration said they wanted those planes all flying under an ultra-low-cost model, and that’s why they blocked the JetBlue merger that would have saved Spirit.”
—Gary Leff, View from the Wing, Oct. 12, 2025

“The Artemis III mission, a key priority for NASA acting Administrator Sean Duffy, is set to launch in 2027. But given the high-stakes engineering feats planned for the mission, both people inside and outside NASA say that’s impossible—making it more likely by the day that China beats the U.S. back to the Moon. The program’s tight schedules—compounded by a massive wave of resignations at the agency—will make it ‘awfully difficult, if  not impossible’ to make 2027, another congressional staffer said.”
—The Spotlight, Politico Pro Space, Oct. 3, 2025

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The post Aviation Policy News: Protecting air traffic control and travelers from the next government shutdown appeared first on Reason Foundation.

Federal and state fuel taxes were designed for a 20th-century transportation system. When every car burned roughly the same amount of fuel per mile, taxing fuel was an efficient and equitable way to fund roads. However, as fuel economy improves and the number of electric vehicles (EVs) increases, revenues decline, and the burden shifts to drivers of older, less efficient vehicles.

In Oregon, total fuel consumption has fallen for more than a decade. In California, the Legislative Analyst’s Office projects a $4.4 billion—or 31%—drop in transportation revenue over the next 10 years if nothing changes. The existing model is not only unfair—it’s unsustainable.

Mileage-based user fees (MBUFs) offer a more sustainable alternative than the fuel tax: drivers pay for the miles they drive, not the fuel they buy. However, if states present MBUFs merely as a tax replacement, they risk public backlash. Many residents equate any new funding model with higher taxes or expanded government. That skepticism is understandable. If the gas tax isn’t repealed, a per-mile fee would feel like an added tax rather than a replacement for the fuel tax. The goal should be revenue neutrality, replacing how states collect road funding without increasing the overall tax burden. Some drivers, especially those operating electric vehicles or highly fuel-efficient vehicles, will pay more in mileage-based user fees than they do today under the fuel tax, but that’s a fair adjustment since those vehicles still use the roads without contributing proportionally to their upkeep. 

Early government marketing of electric vehicles emphasized cost savings, so states will need to clearly explain why contributing to road maintenance is now part of long-term fairness. The communication challenge is not whether MBUFs are equitable; it’s how governments convey that equity to the public.

To build confidence, states must use clear, consistent messaging that explains not only how road funding works but also why change is needed and how drivers will see the benefits. For states, that means leading with transparency, local relevance, and choice. The next step is clear: educate the public through focused outreach and communication.

Educate first, build trust

It’s not enough for policymakers to say the fuel tax is outdated; states must explain why it exists and how it functions. In the Minnesota Department of Transportation’s 2022 public attitudes study, fewer than one in four drivers could accurately describe how the fuel tax works, and more than half expressed concerns about privacy, fairness, and whether revenue actually returns to their communities. Those findings align with national research from the Federal Highway Administration (FHWA) and the Eastern Transportation Coalition.

To bridge that knowledge gap, states can draw from FHWA’s report “Bridging the Communications Gap in Understanding Road Usage Charges,” which outlines early the outreach, education, and public
awareness techniques used by the state MBUF pilot projects such as:

1. Simple, non-technical materials. Oregon’s Oregon Road Usage Charge Program (OReGO) uses a three-step infographic and mileage calculator to explain how per-mile fees work. States should use everyday analogies, such as a phone plan or utility bill, and provide materials in multiple languages. Short, animated explainers comparing “John’s commute under the gas tax vs. per-mile fee” can make the concept more relatable.

2. Local forums. The Utah Department of Transportation (UDOT) held info booths at county fairs. The Hawaii Department of Transportation (HDOT) hosted community meetings across the islands. States could have “MBUF open houses” at DMVs, libraries, or community centers where residents can test a demo mileage calculator.

3. Trusted messengers. Virginia used DMV clerks to explain its “Mileage Choice” option during the registration process. States can partner with farm bureaus, school bus fleets, and local radio hosts to hold town halls with trusted local leaders such as county boards, sheriffs, and faith leaders, connecting MBUFs with visible local road and safety improvements.

4. Testing messages. California’s statewide pilot tested different phrases in English and Spanish to identify which resonated most. States can replicate this through small-scale message testing, such as comparing “No GPS tracking required” versus “Flat fee or per mile—you choose” and measuring responses.

States should also explain how electric vehicles and fuel-efficient vehicles fit into a user-pay system. Many drivers bought these cars expecting savings, often encouraged by government incentives. Outreach should emphasize that per-mile fees don’t erase those savings; they ensure every driver contributes fairly to maintaining safe, reliable roads. 

Minnesota’s experience demonstrates that education is an effective tool for mileage fees. In a 2022 Minnesota Department of Transportation study, support for a mileage-based fee increased from 32% to 64% after participants understood how the fuel tax works and why revenues are declining. When people see the link between what they pay and the roads they use, skepticism gives way to support. Clear, early communication helps build trust and demonstrates that MBUFs can deliver visible local benefits while replacing the fuel tax. From there, policymakers should shift their focus to giving drivers confidence in how these systems protect their privacy and provide real choice.

Lead with choice and privacy

People don’t mind paying their fair share for vital infrastructure, but many are wary of MBUFs. Focus groups from Minnesota to the Eastern Transportation Coalition reveal that privacy concerns and lack of choice are the top concerns. Utah addresses those fears by letting drivers choose between a flat alternative-fuel fee or per-mile billing, up to a posted cap, while clearly stating that “neither option involves sharing location data.” A prepaid “wallet” lets participants view real-time deductions, caps, and clear privacy promises, making the fee feel more like a phone plan than a tax.

Other states can offer multiple reporting options, such as odometer photos, non-GPS plug-ins, or optional GPS, and enact strict privacy laws with independent audits or privacy boards. The privacy pledge shouldn’t be hidden in an FAQ somewhere online; it should lead the message. MBUF programs that emphasize voluntary participation and privacy protections consistently gain more support.

Make the mileage-based user fee money visible locally

Fuel-tax dollars often seem to vanish, especially when drivers don’t see improvements on the roads they use. MBUF can change that. The Hawai‘i Road Usage Charge (HiRUC) program, which began for EVs in July 2025, allows drivers to choose between an $8 per 1,000 miles charge (capped at $50) or a flat $50 annual fee, verified through odometer readings. Public estimators help drivers compare costs. 

States can go further with “Your Dollars at Work” dashboards, showing how much was collected in each county and what projects it funded, such as repaving Main Street, fixing intersections, or adding guardrails. Oregon and Minnesota already share project maps online. Adapting these tools for per-mile fees, with quarterly emails linking mileage to local projects, helps turn a fee into a visible service. 

Market like a product, not a program

Branding matters. Virginia’s “Mileage Choice” program embeds enrollment in DMV registration with a flyer headlined “Drive Less. Pay Less.” That timing and slogan make an abstract policy feel like a consumer choice.

California uses bilingual outreach, multiple device options, and pilot incentives to recruit participants. States are learning they should not call it “MBUF” to the public. They can use names that signal fairness—DriveFair, RoadReturns, MyMiles—and apply consistent logos and colors across DMV notices, social media, and flyers.

States should share short success stories, such as ‘I drive 8,000 miles a year and saved $180 under Utah’s per-mile option.’

States can also launch pilots with small incentives or referral credits to boost participation. When mileage fees are branded as a product, they can become a service people choose, rather than a tax they resent. As trust grows, states can phase out some options. The goal is to create a system where MBUF becomes the standard. Simple, trusted, and fair so that every mile truly pays for the road ahead.

Anticipate criticism up front

Some critics will label mileage-based user fees a tax increase. Policymakers should be proactive to counter this. In the near term, they should make the transition to MBUFs revenue-neutral and ensure there are caps so that no one pays more than under the old fuel tax system for driving. States can address privacy concerns with non-GPS options and legal guarantees.

Rural drivers fear being penalized by mileage fees. However, pilot data from Oregon and Utah show that many rural residents with older, less efficient vehicles actually pay less per mile. States can still include mileage caps or rural credits to show that fairness is a priority. Concerns about complexity and cost are valid. States should start small, utilize competitive contracting for administration, and demonstrate how costs decrease with scale and technological advancements.

The gas tax is eroding fast, and so is the public’s patience. Mileage-based user fees can either become another tax or a smarter, privacy-safe way to fund the roads people rely on. States that educate first, offer real choices, and show visible results will earn public trust and lay the groundwork for lasting infrastructure.

A roadmap for the future

The ultimate vision for mileage-based user fees is a simple, fair, and sustainable funding system where every driver pays proportionally for what they use—no more, no less. Over time, MBUFs can evolve into a national framework that replaces the fuel tax entirely, ensuring long-term stability for highway funding for maintenance and construction. In the long term, this system would give drivers control, choice, and visibility, while enabling states to modernize their transportation networks without relying on outdated or inequitable revenue sources. Implemented correctly, mileage-based user fees align with the users-pay principle and restore the link between the miles we drive and the roads we depend on.

When every mile counts, every dollar should too—and that’s how we rebuild trust in America’s roads.

The post Building public trust in mileage-based road funding appeared first on Reason Foundation.

The FAA’s new order that airlines limit flights at 40 major airports is meant to stabilize traffic flow and ensure safe operations, at the cost of tens of thousands of Americans experiencing flight cancellations each day. This unfortunate situation was entirely avoidable and is impossible in most of the rest of the world. That’s because most countries have converted their air navigation service providers into public utilities that operate independently of national government budgets.

What the FAA’s emergency order requires airlines to do

The FAA’s Emergency Order Establishing Operating Limitations on the Use of Navigable Airspace came into force on Nov. 7. Airlines at 40 “High Impact Airports,” which account for the vast majority of air traffic in the United States, are required to reduce their daily scheduled flights between 6 a.m. and 10 p.m. Required flight cuts begin at 4% today, increase to 6% on Nov. 11, then 8% on Nov. 13, and finally peak at 10% on Nov. 14 and beyond. 

Airlines’ initial planned flight cancellations through Nov. 14 were to be filed with the FAA on today, and are to be submitted seven days in advance on a rolling schedule going forward. Even at the initial 4% reduction, this translates to tens of thousands of Americans receiving cancellation notices for their previously booked flights. 

The impact will be even more severe than if airlines could freely select the lowest-volume flights to cancel because the FAA’s order imposes a requirement that carriers must reduce by marketing code, rather than operating certificate. Large mainline carriers have outsourced their short-haul routes to regional airlines, such as American Airlines, which operates its American Eagle-branded subsidiaries, including Envoy Air, PSA Airlines, and Piedmont Airlines, as well as contract carriers Republic Airways and SkyWest Airlines. Each of these airlines flies under a separate operating certificate, but all are marketed as American.

In its order, the FAA recognizes that major airlines would have an incentive to reduce smaller-capacity regional flights operated under separate certificates from the mainline carrier. As such, the FAA requires that flight reductions be calculated by marketing code and that reductions for any single operating certificate shall not exceed 15%. This will undoubtedly ensure more geographic equity in flight cuts, but will also result in more travelers being impacted.

In addition, the order puts airlines on notice that failure to comply can result in fines of up to $75,000 per flight operated over a carrier’s limit.

To further ease airspace congestion, all commercial space launches and reentries are prohibited between 6:00 a.m. and 10:00 p.m.

How to make air traffic control shutdown-proof

This unfortunate situation was completely avoidable. It’s also impossible in most of the rest of the world. This is because most countries have converted their air navigation service providers into public utilities since 1987.

According to Reason Foundation’s 2025 Annual Aviation Infrastructure Report, 98 countries are served by air traffic control utilities, which collect user fees from their aviation customers to fund day-to-day operations and finance improvements. Just 24 countries provide air traffic control through legacy FAA-style civil aeronautics authorities, mostly in developing countries in Africa, Asia, and the Caribbean.

The two main reasons why most of the world has moved on from the World War II-era FAA model are:

1. Regulatory independence: There is an inherent conflict of interest when a regulator provides the service that is tasked with regulating. Since 2001, the International Civil Aviation Organization (ICAO) has urged member states, including the United States, to separate the provision of air navigation services from its regulation. The non-compliant FAA model is increasingly uncommon as countries around the world have moved to adopt consensus regulatory best practices.
2. Financial independence: Air traffic utilities charge cost-based user fees based on ICAO consensus charging principles. This makes them independent from government budgets and allows them to issue revenue bonds to finance major improvements quickly. Free from the strings attached to government funding, air traffic utilities tend to focus on efficiency-enhancing modernization projects. Because utilities are able to finance improvements based on expected future revenue, these projects and their benefits to customers are delivered much more rapidly and cost-effectively.

Reason Foundation’s Robert Poole has been researching and advocating for air traffic control governance reform for more than 40 years. He has long argued in favor of converting the FAA’s Air Traffic Organization into an independent public utility. This approach has enjoyed bipartisan support in the past, although certain special interests have been successful in derailing reform. As he wrote days ago, “Depoliticizing the U.S. ATC system would be the most effective way to insulate it from inevitable future government shutdowns. Building the coalition to get this done should begin now.”

The post FAA emergency order grounds flights for tens of thousands of travelers appeared first on Reason Foundation.

Over the past nine years, Congress has funded a growing number of state mileage-based user fee (MBUF) pilot projects, which have had generally positive receptions from the very small fraction of a state population that participated. But state and federal elected officials are all over the map on how to replace fuel taxes, with some calling for a new federal vehicle registration fee and others wanting electric vehicles to pay twice as much per mile as petroleum-fueled vehicles pay today.

In the Infrastructure Investment and Jobs Act, Congress authorized a national road user charge (RUC) pilot project that would charge real fees. It asked the Biden administration to appoint a steering committee to design and oversee that program. The Biden White House dithered but eventually appointed that committee last year, but failed to announce the members. It has not convened, and so it has not defined the national pilot project. The Trump White House has said or done nothing about it. So there will be no results from a non-existing national pilot project to provide lessons learned for next year’s surface transportation reauthorization bill, as originally intended.

Given this lack of progress, we need a better way to actually begin this needed transition from fuel taxes to mileage-based user fees. That requires figuring out a workable approach for large-scale per-mile charges, including the rates to be charged to various types of vehicles, as well as affordable technologies.

However, to win political and popular support, transportation policymakers must also address the very real concerns of motorists, truckers, and elected officials. The most important concerns and issues about mileage fees are:

• Privacy: People fear the government—“Big Brother in your car”—tracking everywhere they go. 
• Drivers also view mileage fees as double taxation or a new tax that they’d pay in addition to the current fuel tax.
• Transportation officials are concerned about the high cost of collection compared to the gas tax.

Several years ago, I suggested that instead of beginning with some type of vehicle (e.g., EVs), we should begin with one type of roadway. My suggestion is to begin this transition with Interstates and other limited-access highways, using all-electronic tolling. This first step would address all three of the above concerns.

• Privacy: The only miles recorded would be from on-ramp to off-ramp, so there would be no data suggesting the trip purpose. Millions of people drive on tolled Interstates and turnpikes today, and the electronic tolling does not seem to raise privacy concerns.

• New tax: The answer to concerns about double taxation is to provide refunds of the fuel tax paid for the miles traveled on the newly priced highways. That’s a simple calculation that both the Massachusetts Turnpike and the New York Thruway have been doing for many years for truck fleets using those toll roads.  

• Cost of collection:  The cost of collecting fuel taxes for personal vehicles is about 2% of the revenue collected. With all-electronic tolling, the cost is as low as 5% of the revenue. By contrast, consulting firm WSP last year estimated the cost of collection for scaling up technology used in recent state mileage fee pilot projects as between $4 and $9 a month per vehicle. That is clearly not ready for prime time. So we should start where it is feasible to use relatively inexpensive all-electronic tolling.

Starting the transition to per-mile charges with limited-access highways should not be mandated by Congress. But it should be allowed by Congress in the 2026 reauthorization. Reason Foundation has recommended this as the best way to jump-start the transition from per-gallon fuel taxes to per-mile charges. If all U.S. limited-access highways were converted, that would be more than one-third of all vehicle miles of travel.

The bill should make use of an existing but never-used federal program: the Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP). Instead of being open to only three states, the program should be open to all 50 states. And instead of allowing a participating state to convert only one Interstate, it should be able to convert any or all of them.

Potentially more controversial, but crucially important, is refunding fuel taxes for the miles driven on newly priced highways, to avoid double taxation. This is actually a good deal for state transportation departments because the rate charged on tolled Interstates is typically at least twice as much per mile as what is paid in fuel tax for driving the same highway. That’s because the toll rate must cover the capital and operating costs of the more costly limited-access highway. The state DOT would be freed from devoting any of its fuel tax money to those expensive Interstates, so those dollars would be available to do a better job of sustaining and improving state highways. (I crunched the numbers on this in a peer-reviewed paper in the Transportation Research Board’s journal, Transportation Research Record, in 2023.) A similar proposition is potentially true for federal fuel taxes, whose proceeds would no longer be needed for Interstates that transitioned to per-mile charges.

While this program would begin as a pilot test of the concept, there is good reason to expect several states to volunteer as early adopters. Over the last decade or so, the following states have commissioned detailed studies of the feasibility of converting some or all of their Interstates to toll financing: Connecticut, Indiana, Michigan, Minnesota, and Wisconsin. In addition, four states took part in a federally funded Corridors of the Future study that would have allowed rebuilding I-70 with toll financing and dedicated truck lanes (Missouri, Illinois, Indiana, and Ohio). After participating in two of these studies, Indiana this year became the first state to pass legislation for converting its Interstates to toll financing.

The first few states to take part in this mileage fee program will serve as role models for others, just as California, Florida, and Virginia have done for express toll lanes. Over the next decade or two, as states transition their limited-access highways to per-mile charging, the tech industry may develop low-cost, privacy-respecting technology for per-mile charges on all other types of roadways. And that would be the beginning of converting the other two-thirds of vehicle miles traveled to paying by the mile, rather than by the gallon.

A version of this column first appeared in Public Works Financing.

The post Starting the transition from gas taxes to per-mile charging appeared first on Reason Foundation.

• Express toll lanes’ strong performance
• Bicycles, cars, and economic productivity
• U.S. traffic congestion at record high levels
• Reforming environmental litigation
• Feds ease off driverless truck regulation
• Transit shifts to light rail and bus rapid transit
• News Notes
• Quotable Quote

Express Toll Lanes’ Strong Performance

In news that I missed when it came out earlier this year, Fitch Ratings has increased its investment-grade ratings on toll-financed express toll lanes (ETLs). In its June 24, 2025 “Peer Review of Managed Lanes” report, Fitch explains why it increased the ratings on seven of the 13 express toll lane projects that it has been tracking since they were first implemented (or in the case of two that are not yet in operation, since they had progressed far enough for data on their corridor and planned capacity being available).

The ETLs whose ratings Fitch increased are as follows:

• I-77 Mobility Partners (NC): from BBB to BBB+
• LBJ Infrastructure Group: LLC (TX): from BBB to BBB+
• 95 Express Lanes LLC (VA): from BBB to BBB+
• Riverside County Transportation Commission (SR-91): from BBB+ to A
• Plenary Roads Denver LLC (CO): from BBB- to BBB
• NTE Mobility Partners (TX): from BBB to BBB+
• Colorado HPTE (C-470): from BBB to BBB+

Two high-rated express toll lanes projects that were not upgraded this year were already at the top of the list:

• Orange County Transportation Authority (SR-91): AA-
• Texas DOT (I-35E): A-

The world’s first express toll lanes, SR-91 Express Lanes in Orange County, opened to traffic in December 1995, so their 30th anniversary is coming up. (I was present at both the ground-breaking and the ribbon-cutting, and I still have my hard hat.) At that time, popular opinion and media coverage were both skeptical: either so few people would pay to avoid congestion that the project would fail, or so many would crowd in, resulting in congestion. The same objections were raised when the Florida Department of Transportation opened its first ETLs (on I-95 in Miami in 2008). Express toll lanes have come a long way since then.

The Fitch report provides a lot of interesting details on these projects. Of the 13 that are in operation, six are managed by various government entities, and the other seven were developed and are operated under long-term public-private partnerships (P3s). Appendix D provides details under 10 headings for all 13. One of those details is the pricing policy. Those financed and operated as P3s are listed as using “revenue maximization” as their pricing policy, which the not-yet operational Hampton Roads project (a public-sector project) also plans to use. All the other government-run projects are listed as using “Blend of throughput and revenue maximization.”

With more than 60 ETL projects in operation, the largest fraction of them are conversions of HOV lanes, sometimes (as in Miami) with the addition of a second lane each way. These conversion projects are not financed by toll revenues, and since most have low capital costs compared to toll-financed ETLs that involve building new lanes, they can often cover their operating and maintenance costs from their toll revenue.

The investment-grade ratings of the revenue-financed express toll lanes reflect the public-private partnership companies’ careful selection of very congested corridors in large metro areas. The few (so far) government-sponsored toll-financed express toll lanes appear to have followed the P3 companies’ lead in selecting similar corridors for their projects.

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Bicycles, Cars, and Economic Productivity

The Economist remains my favorite source for worldwide news and analysis. But sometimes, its reporters let their opinions get in the way of facts. A case in point is a two-page article, “Four Wheels Good, Two Wheels Better” in the Oct. 11 edition. The author glibly asserts that electric bikes are transforming travel in European cities (and Montreal) and portrays this as very positive for cities and their residents.

This portrayal misses two very significant points. One key is access to jobs, and the other is how mobility relates to the economic productivity of metro areas. Since the audience for this newsletter is overwhelmingly the United States, my focus here is on access to jobs in U.S. metro areas.

For nearly a decade, the University of Minnesota’s Center for Transportation Studies (CTS) has published annual “Access to Destinations” reports, using data from the 50 largest U.S. metro areas. Their individual tables focus on the extent to which a given mode (auto, bike, transit) enables users to reach a fraction of available jobs within a given time period. I have not been able to find a CTS table that directly compares access to jobs by auto, bicycle, and transit. My Reason Foundation colleague Marc Scribner crunched the numbers from CTS’s 2023 data to enable direct comparisons between modes.

For all 50 metro areas, the average results for jobs reachable within 30 minutes are: cars 42.2%, bikes 2.1%, and transit 0.9%. In 50 minutes, cars reach 84% of jobs, while bikes reach 5.4% and transit 4.5%. The same general pattern prevails in the large majority of the 50 metro areas. For example, Kansas City residents can reach 60% of jobs by car in 30 minutes, 1.7% of jobs via bike, and 0.5% via transit. In Minneapolis, the comparable numbers for 30 minutes are 49% via car in 30 minutes, 2% by bike, and 0.8% by transit. And within 50 minutes in Minneapolis, it’s 87% of jobs by car, 5.2% by bike, and 3.9% by transit. The good news for cyclists is that in the large majority of metro areas, biking beats transit for access to jobs. However, bikes are in a distant second place after cars.

One of the most important functions of a large metro area is to provide a huge array of job opportunities for people with a very wide array of skills and experience. For this to work well, a transportation system needs to enable this for a large majority of its population. That is not possible with concepts like the “15-minute city” beloved by some urban planners.

Among those who have educated me on the relationship between transportation and urban area productivity is former World Bank urban planner, Alain Bertaud (now at NYU’s Marron Institute). In his book Order Without Design: How Markets Shape Cities (MIT Press, 2018), Bertaud explains the relationship between an urban area’s economic productivity and its transportation system.

The underlying idea is that a large urban area makes possible a far greater number of high-value connections between potential employers and potential employees. Bertaud and a number of other economists have pointed out and quantified the relationship between access to jobs (as in the CTS studies) and the urban area’s economic productivity. As Bertaud puts it, “The effective size of the labor market depends on travel time and the spatial distribution of jobs.” The ability to reach a large number of jobs in as short a time as possible is the key factor in the increased economic productivity of an urban area.

One of the first studies to quantify this effect was by Remy Prud’homme and Chang-Woon Lee (Urban Studies, Oct. 1999). They found that, for a sample of 22 French metro areas, a 10% increase in how far one can travel in 25 minutes increased the productivity of a metro area by 1.3%. Others who have done similar studies include Robert Cervero, David Hartgen, Alan Pisarski, and Steven Polzin. In a large 2012 policy study of potential transportation improvements in the metro areas of southeast Florida, I proposed and analyzed a three-county express toll lanes network. I drew on the above research to estimate the economic productivity gains from my estimated reductions in vehicle hours of travel. Based on computer modeling done for me by the regional planning agency, I estimated the projected increase in gross regional product was 0.5%, amounting to $3.5 billion per year.

These economic benefits will not be generated by increasing the commute share of bicycles and transit, at least in the large majority of U.S. urban areas. European governments can dream on about carless cities, but at the expense of continued economic stagnation.

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U.S. Traffic Congestion at Record High Levels

The Texas A&M Transportation Institute (TTI) has released its 2025 Urban Mobility Report, which analyzes traffic congestion nationwide. The study includes data from 494 urban areas. The headline message is that urban roadway travel has more than recovered from the COVID-19 pandemic years and, as of 2024, traffic congestion reached the highest levels ever recorded.

But travel has changed significantly since the pandemic. Hybrid (home/workplace) working and the ongoing increase in online purchases with commercial delivery have changed when and where travel occurs—but have not led to a reduction in congestion. And due to the latter, truck congestion is 19% worse than in 2019, compared with total vehicle congestion being up only 10%.

Here are a few summary statistics to give you an overview of the five-year change between 2019 and 2024.

The TTI report also provides graphs illustrating the reduced morning peak and a significantly increased evening peak in vehicle travel, along with an increasing weekend peak in the mid-afternoon.

The report’s second section, beginning on page 45, consists of numerous tables showing congestion specifics for very large, large, medium, and small urban areas. These tables generally compare data from 2024 with 2023. Here are a few examples from the top five urban areas in each group.

Note that for the metro areas’ congestion cost data, the metro areas are listed in order of their per-motorist congestion cost, which accounts for lower aggregated numbers in smaller metro areas, such as San Francisco and Baton Rouge.

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Reforming Environmental Litigation, Continued

In my 2024 Reason Foundation policy paper, “Reforming Environmental Litigation,” my research found that the kind of lengthy, time-consuming, and project-cost-increasing litigation was not a part of the original National Environmental Policy Act (NEPA) but was invented by appeals courts and then became part of environmental regulation. My research found that this kind of after-the-environmental-review-studies litigation is unusual among peer countries in Europe and Australia/New Zealand.

The study also documented Stanford University research on the extent and outcome of such litigation. While litigation actually stopped relatively few infrastructure projects directly, it more often led to significantly increasing their cost, which led to some being terminated—not by the litigation but by the increased cost making the project no longer viable to construct. Finally, the study summarized an array of litigation reforms suggested by think tanks and academic researchers.

I’m pleased to see that interest in reforming such litigation is picking up support. Some of this is coming from supporters of green energy projects, such as wind, solar, and high-voltage transmission lines. But my assessment of potential political support suggested that the most likely path to success would be a bipartisan coalition of groups supporting both transportation and energy/environmental infrastructure.

That’s an overly long introduction to a recent proposal from the Breakthrough Institute called “Reboot NEPA,” written by Marc Levitt, Breakthrough’s Director of Environmental Regulatory Reform.

Levitt begins by explaining what he means by a “reboot” of the NEPA legislation, signed by President Nixon 55 years ago. “Rebooting NEPA means returning the law to its originally intended purpose as a tool for environmentally informed infrastructure planning and for public engagement.” NEPA’s drafters “did not set out to create a litigation machine,” he writes, and points to NEPA’s intellectual architect, Lynton Caldwell, as emphasizing planning and public exposure as NEPA’s core purpose.

Levitt goes on to explain that the Supreme Court’s Seven County decision narrowed the scope of environmental reviews, and another decision eliminated the Council on Environmental Quality’s authority to issue regulations. So it makes sense to figure out a rethinking of how environmental reviews should  be carried out going forward, and fixing the litigation problem should be a major part of this reboot.

The paper then sets forth several specific reform proposals, as follows.

• Codify (early) meaningful public input to improve projects and mitigate impacts. Specifically, he proposes that agencies open a 60-day public comment period when they announce a planned environmental study.
• Limit project-stopping relief to cases of substantial undisclosed adverse environmental effects.
• Use AI and modern software to evaluate project eligibility for categorial exclusions, check completeness of applications, and integrate public comments into the environmental study.
• Mandate and fund an interagency NEPA platform and cross-agency data-sharing.
• Establish a centralized NEPA court or procedural review body.
• Codify Seven Counties limits on environmental review scope.
• Require agency follow-up on mitigation measures (because EPA has no such mechanism).
• Modernize EPA’s Clean Air Act Section 309 review role.
• Eliminate ineffectual page and time limits.

Some of these go into details that I am not competent to assess. But the overall thrust of this approach strikes me as reasonable and realistic. It would preserve useful public input at the start of the review process, rather than attacking environmental reviews after they have been completed. And a designated review court or body could prevent venue-shopping by project opponents.

Those are my initial reactions, as an engineer/policy analyst with no legal training. I hope these proposals lead to significant discussion and generate needed NEPA reform by Congress.

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Federal Regulators Clear Driverless Truck Barrier, For Now
By Marc Scribner

Fully automated semi-trucks without a driver onboard were put into commercial service for the first time earlier this year. Aurora Innovation began driverless operations on a route between Dallas and Houston, with plans to quickly expand in the Sun Belt and beyond. However, the company’s expansion plans were threatened by an obscure federal regulation mandating the use of roadway warning devices. Aurora requested and then was denied a waiver from the rule, which spawned a legal challenge from the company. In a turn of events, regulators decided to grant Aurora its waiver last month, clearing the path for more driverless truck deployments. But this remedy is temporary and highlights the need for durable regulatory reform to support automated vehicle deployments.

The challenge begins with a decades-old federal regulation on safety procedures when commercial motor vehicles are stopped on or along roadways (49 C.F.R. § 392.22). The rule requires that within 10 minutes of stopping, warning triangles or flares must be placed in three locations around the stopped vehicle to alert approaching motorists of the potential hazard. This is no easy undertaking when there is no driver in the truck cab to place these devices.

In Jan. 2023, Aurora and Waymo petitioned the Federal Motor Carrier Safety Administration (FMCSA) for a waiver from the warning device rule. Granting a waiver is conditioned on a finding of safety equivalence, so the companies proposed adding light beacons that would be mounted on the outside of the truck cabs and presented research showing the warning beacons would be more effective at alerting drivers than conventional warning triangles or flares.

This did not prove persuasive with FMCSA, which in Dec. 2024 denied Aurora and Waymo’s waiver request. The agency argued the evidence provided by the companies was insufficient to demonstrate safety equivalence. But just weeks later in Jan. 2025, FMCSA announced a study on warning devices, conceding that it had no empirical evidence to support the existing rule. So, companies seeking relief from the warning device requirement faced the impossible task of demonstrating safety equivalence to a nonexistent standard.

This regulatory catch-22 was not lost on Aurora, which quickly filed suit challenging the denial of its waiver. The good news is that FMCSA ultimately relented in Oct. 2025, granting Aurora its waiver. The terms and conditions of the waiver give Aurora a three-month reprieve from the warning device rule until Jan. 9, 2026. It also allows other motor carriers operating autonomous trucks to gain relief from the rule if those carriers first notify FMCSA and certify that they will comply with the terms of the waiver.

During that period, motor carriers operating under the waiver must inform the agency of any crashes involving trucks equipped with warning beacons within five days. Carriers must also file a performance report with FMCSA within 30 days of the end of the waiver’s term (or within 30 days of prematurely ceasing operations under the waiver). If FMCSA is satisfied that the terms have been met after the three-month waiver period, it will reissue the waiver.

While FMCSA’s about-face on the warning device rule is welcome, it is still a temporary solution. Given that it has already admitted that there is no safety evidence to support the underlying rule, the agency should move quickly to establish a permanent compliance pathway for driverless trucks. Reason Foundation has developed draft legislation that would order FMCSA to codify a permanent exemption for driverless trucks equipped with warning beacons.

But the legacy requirement on warning device placement is only one regulatory barrier facing autonomous trucks. Numerous other rules are written in a manner that presumes a human driver is seated in the cab operating the vehicle and should be updated. To that end, Rep. Vince Fong (R-CA) introduced the AMERICA DRIVES Act (H.R. 4661) in July.

In addition to ordering FMCSA to interpret warning beacons as compliant with the warning device rule, Rep. Fong’s bill would order the agency to clarify human-centric requirements such as those that apply to hours of service, drug testing, and commercial driver’s license do not apply to autonomous trucks. It also importantly forbids the secretary of transportation from promulgating any regulation in the future that would discriminate against or unduly burden motor carriers operating autonomous commercial motor vehicles relative to their conventional counterparts and thereby establishing a technology-neutral mandate.

Rep. Fong’s AMERICA DRIVES Act has yet to be considered by the House Transportation and Infrastructure Committee. Including it in the forthcoming surface transportation reauthorization bill due next year would go a long way in modernizing outdated federal regulations for autonomous vehicles.

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Transit Evolves from HRT to LRT to BRT
by Baruch Feigenbaum

When light rail (LRT) burst onto the transportation scene 45 years ago, it was envisioned as a way of bringing the benefits of heavy rail (HRT) at a much lower price. And that first light rail line in San Diego succeeded. However, as transit agencies soon found out, constructing light rail, was on average, about 75% of the costs of constructing heavy rail. And, in general, LRT was slower and could carry significantly fewer people. Over the last 10 years, a growing number of transit agencies began choosing bus rapid transit (BRT) instead. A recent Eno Transportation Weekly article detailed the strength of this trend.

How prolific is the change? Examining the number of projects receiving federal funding provides a clue. Several federal programs can fund LRT but the Capital Investment Grants (CIG) program is the most extensive. In 2007, 28 projects were funded by the CIG program. Fifteen were light rail projects and only one was BRT. In 2017, when 31 projects were funded, 10 were light rail, six were BRT, and five were streetcar projects. In 2024, among the 50 projects seeking CIG funding, 30, or the majority, are BRT projects. It should be noted that in 2007 and 2017 Republicans controlled the White House. In the past, Democrats have been more likely to support rail projects than Republicans. The fact that the Biden administration was such a big supporter of bus rapid transit shows how times have changed.

Nationwide BRT ridership has also rebounded from COVID-19 more robustly than LRT ridership. According to the most recent numbers from 2023, BRT ridership is at 60 million, less than 5% from its 2015 high-water mark of 63 million. LRT’s 300 million riders may sound more impressive, but its 2017 ridership peak was 500 million. Streetcar’s ridership was almost 60 million in 2017 and is now below 40 million. More new BRT systems have been added than new rail systems in the last five years, but not in proportion to the ridership numbers.

What has led to the change in project selection? The biggest factor is cost. BRT is doing to LRT what LRT did to HRT. The difference is BRT is significantly less expensive than LRT. A BRT-heavy line with its exclusive guideway costs $103 million per mile in Canada, while the Maryland Purple Rail LRT, which shares part of its running way with automobiles, costs $562 million per mile. The Metropolitan Atlanta Rapid Transportation Authority (MARTA) reduced its costs by more than 50% by swapping out an LRT line for a BRT line. 

Another factor is the flexibility. All BRT systems have running ways that give buses priority, enhanced stations, larger vehicles, enhanced use of technology, including off-board fare collection, intelligent transportation systems such as transit signal priority, and more frequent service. Many also have level boarding platforms and electronic signage. However, there are three types of BRT service, heavy, lite, and freeway. BRT Heavy operates in a dedicated lane and is best for corridors with 20 or more buses per hour. Constructing a dedicated lane has costs, which transit agencies must fund. But if there is a sufficient number of buses, the cost is justified. BRT Lite operates in mixed traffic, which means automobile drivers pay the cost for the lane. One of the things that separates BRT Lite from regular bus service is the use of transit signal priority (TSP) and queue jumps. These technologies provide buses with an early green cycle or an extended green cycle and use of a lane (often a right-turn lane) at intersections to bypass traffic. BRT Freeway operates on limited-access highways. Some lines include stops in the median, making it quicker and easier for buses to pick up passengers than if they had to exit and reenter the highway.

Contrast this with LRT. Traditional LRT, which operates in a dedicated guideway (track and overhead wires), is more expensive than a lane of pavement. Streetcars, which operate in mixed traffic, are cheaper but slower, and they cannot change lanes. As a result, streetcars often get stuck behind slow-moving vehicles. The average Streetcar speed is 4-5 mph, about the same as a fast walk. BRT Lite averages 20 mph. LRT and BRT are both heavy, averaging about 25-30 mph, while BRT Freeway averages 55 mph.

Congress also played a role. In 2005’s Safe, Accountable, Flexible, Efficient, Transportation Act: A Legacy for Users (SAFETEA-LU), Congress added Small Starts to the Capital Improvement Grants, which encouraged transit agencies to pursue smaller, less-expensive projects. In 2015, the Fixing America’s Surface Transportation (FAST) Act eliminated the requirement that CIG-grant recipients provide frequent service on the weekends. Because project planning, environmental review, and construction in transportation projects often takes 5-10 years, legislation may not lead to policy changes for 10-20 years. Hence, the recent uptick in BRT activity. 

However, some places are sticking with rail. Los Angeles Metro is adding nine miles and four stations to the A Line, part of an ambitious slate of 28 infrastructure projects the region is building for the 2028 Olympics. Kansas City is doubling the length of its streetcar system. Yet, most places have made the decision that the lower costs and flexibility of bus rapid transit make it a better choice than rail.

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News Notes

Louisiana Governor Suspends P3 Bridge’s Tolls
On Oct. 3, Gov. Jeff Landry and Louisiana DOTD ordered a stop to toll collection on the P3-developed Belle Chasse Bridge in Plaquemines Parish. The replacement bridge was developed under a long-term design-build-finance-operate-maintain P3 concession with a consortium led by Plenary. Toll revenue is the primary source of funds to pay the project’s bondholders and (they hope) a return on the equity investors’ capital. The cash toll is $2.26, and with a GeauxPass transponder it’s only 25 cents. But late fees for toll payments have aroused residents to protest to public officials. DOTD has begun negotiations with Plenary over technical issues and what residents regard as overly aggressive collection efforts on overdue bills.

FDOT Announces Project to Add 17 Miles of Express Lanes to I-4
While the Orlando portion of I-4 has 20.8 miles of express toll lanes, which are relieving considerable congestion there, FDOT announced on Oct. 21 that it will now add 17 miles of ETLs to I-4 in Hillsborough County, in the Tampa region of the state. Most of the ETLs in Orlando are two lanes each way, but funding constraints have led to this initial project adding one lane each way for the 17 miles to be added in Hillsborough County. FDOT told Construction Dive that this project has been in FDOT plans for 15 years. This initial project can fit within I-4’s existing right-of-way.

Missing Link on Capital Beltway Managed Lanes Postponed
The National Capital Region Transportation Planning Board, on Oct. 16, voted not to add the I-495 Southside Express Lanes project to the region’s long-term strategic plan. The final vote on this decision will take place on Dec. 7 by the Metropolitan Council of Governments. The reason for holding off is that Maryland officials have not approved this express toll lane’s terminating point to be across the Woodrow Wilson Bridge in Maryland. If the lanes stop short on the Virginia side of the bridge, they will accommodate far less traffic, and hence generate a lot less toll revenue, which reduces the ability to finance this missing link based on projected toll revenue, as all the rest of that network has been financed.

Toll Road to Orlando Sanford Airport Approved
The Central Florida Expressway Authority last month decided to proceed with a proposed project to add a $200 million, two-mile toll road between SR 417 and the Orlando Sanford Airport. The rationale for the project is to reduce congestion on East Lake Mary Blvd. by nearly 50%. The agency is also planning a $1.59 billion toll road designated as SR 534 to alleviate severe congestion on Narcoossee Road. Construction is planned to begin in 2027.

Waymo Reports Far Fewer Serious Accidents Than Other Vehicles
In September, autonomous vehicle developer Waymo released a report on the 45 most serious crashes in which its vehicles were involved in recent months. Its fleet of AVs has logged 96 million miles of travel as of June 2025. Waymo estimates that typical human drivers would have gotten into airbag-triggering crashes 159 times in that amount of travel. But the Waymo vehicles had only 34 airbag crashes—79% less. Similarly, for injury-causing crashes, Waymo data showed that its vehicles has such crashes 80% less often. More details are in a column by Kai Williams.

Potential North Carolina Toll Lanes on I-40 Near Asheville
The MPO of French Broad River, NC is considering a feasibility study of adding 16 miles of toll lanes on I-40 from Exit 44 to Exit 27. Interest in the concept has been sparked by the benefits of such lanes in Charlotte and Raleigh.

Pennsylvania DOT Reports Unsolicited P3 Proposals
On Oct. 1, PennDOT announced that it would welcome unsolicited proposals for P3 transportation projects, Infralogic reported. Proposals were due by Oct. 31, not enough time to prepare something large and costly, so the responses may focus more on services than on infrastructure. Proposals will be reviewed by the seven-member Public Private Transportation Partnership Board.

Louisiana DOTD Moving Forward on St. Bernard Corridor
According to an Oct. 1 news release, the Port of New Orleans and DOTD have signed an agreement to work together on planning the St. Bernard Transportation Corridor, a new roadway to connect the planned Louisiana International Terminal to the Interstate highway system. The corridor is intended for freight traffic, reducing the burden on local roads. It is also intended as a hurricane evacuation route for St. Bernard Parish and its surroundings. No cost estimates are available, but tolls have been mentioned in some discussions of the project.

Arkansas DOT Launches I-49 Extension Project
In September, ARDOT held a groundbreaking for a new bridge across the Arkansas River near Barling, AR. It is the first step in a project that will add 14 miles of four-laned I-49, at an estimated cost of $1.3 billion. The project will build I-49 between Barling and Alma. The long-term vision of Arkansas and several other states is an I-49 that extends from the Gulf Coast to the Canadian border, but many stretches remain unbuilt.

Alabama Approves Plan for $3.5 Billion Mobile River Bridge
The Alabama Toll Road, Bridge, and Tunnel Authority has approved a plan for this new toll-assisted bridge. Personal vehicle tolls will be capped at $2.50, but heavy trucks will pay $15-18. The existing causeway, two tunnels, and another small bridge will remain non-tolled. With the project no longer viable as a long-term P3, as originally planned, the bridge will be built by a design-build contractor, Kiewit. Moreover, the plan calls for removing the tolls once the bonds have been paid off—a very 20th-century model.

Pennsylvania Plans Statewide Truck Parking Expansion
On Oct. 6, PennDOT announced that it plans to add 1,200 truck parking spaces at 133 locations statewide by the end of 2026. PennDOT says the new facilities will be added near Interstate on-ramps, at weigh stations, and various other locations along highway rights of way. PennDOT Secretary Mike Carroll noted that he holds a commercial driver’s license himself and fully appreciates the need for more truck parking along major highways.

Highway Trust Fund’s Record Users-Pay Deficit
Jeff Davis reported in Eno Transportation Weekly that the federal Highway Trust Fund ran an all-time high deficit of $30.6 billion in FY 2025. That’s an increase from the previous year’s deficit of $26.7 billion. The user tax revenues increased by only $1.2 billion, but total highway and transit spending increased by $5.2 billion, “pushed upward by the massive funding increase provided by the IIJA infrastructure law,” all of which is borrowed money.  

Missouri DOT Under Way on Statewide I-70 Reconstruction and Widening
Because Missouri legislators have never approved tolling, rebuilding aged I-70 (one of the earliest-built Interstates) cannot use toll financing, as Indiana now plans to do. Instead, it is using $2.8 billion in state general funds in a decade-long effort to rebuild and widen (to three lanes each way) all 200 miles of I-70. More than a decade ago, Missouri was part of a four-state Corridors of the Future project whose consensus result was to rebuild the four-state corridor with heavy-duty truck toll lanes. The current project will spend $350 million to rebuild the portion between Blue Springs and Odessa. It is the third of eight such projects, all being paid for by general taxpayers rather than Interstate users.

Oklahoma Turnpike Widening
The state’s busiest highway, the 31-mile John Kilpatrick Turnpike, will be widened to three lanes each way and will add interchanges. The Oklahoma Turnpike Authority will spend $375 million of its toll revenue for the project, the agency announced in early October.

New Zealand Considering P3 Toll Roads
Back in June, the New Zealand Transport Ministry hired Citi to examine the potential of P3 toll roads, as the ministry considers P3 concessions for several potential new toll roads. Infralogic (Sept. 23) reported that Australian toll road company Transurban has partnered with Canadian pension fund La Caisse and NZ pension fund New Zealand Super in anticipation of potential toll road P3 concessions. Transport Minister Chris Bishop told Infralogic that the agency wants to learn of potential interest in such concessions for any or all of the three proposed toll roads.

Czech Republic Plans Two New Highway P3 Projects
Two planned motorway projects are likely to be procured as long-term P3s, according to Infralogic (Sept. 24). One is the Prague to Voracice portion of the D3 motorway; the other is the Bzenec-Breclav section of the D55 motorway. The projects will be procured as 25-30-year design-build-finance-operate-maintain (DBFOM) concessions financed based on availability payments. Both are planned to be operational by 2033.

Italian Court Vetoes Sicily Bridge Project
Politico reported that Italy’s Court of Auditors rejected the government’s plan to build a €13.5 billion suspension bridge across the Strait of Messina between Italy and Sicily. The 3.7 km suspension bridge would be the world’s longest, if built. Prime Minister Giorgia Meloni deemed the ruling “an act of overreach.”

Bridge Across Long Island Sound Proposed
Newsweek reported that a proposed 14-mile bridge between Long Island (NY) and southern Connecticut is currently being debated. Connecticut developer Steve Shapiro has revived an idea dating back to New York’s powerful Robert Moses in the 1950s. The bridge cost has been estimated at $50 billion, but Shapiro estimates that the toll revenue (at $39 per crossing) would pay for the construction in 48 years.

Tunnel Boring Machine Completes Virginia Tunneling
ENR reported (Oct. 13) that the tunnel boring machine for the Hampton Roads Bridge-Tunnel expansion project in Virginia has completed its second (final) bore for the $3.9 billion project. When completed, the project will accommodate two GP lanes and two express toll lanes in each direction.

MassDOT to Re-Procure Service Plaza P3 contract
Infralogic reported (Oct. 16) that Massachusetts DOT will carry out a new procurement competition for a company to operate and manage the 18 service plazas on the Massachusetts Turnpike. Negotiations with Applegreen, which won the initial selection, led the company to withdraw.

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Quotable Quote

“We believe an important step . . . is to reboot NEPA [National Environmental Policy Act]. The regulation has mutated far beyond what its drafters intended, becoming a vehicle for costly and overwhelmingly ineffective litigation. Comprehensive reform would place clearer bounds on the original function of NEPA—informed planning and public engagement—preventing the administrative bloat that has characterized the law since its passage. Rebooting NEPA would prevent the administrative ping-ponging that has become standard over the last two decades, as Democrats and Republican administrations each weaponize the statute for their own aims. And it will avoid the unintended consequences of some well-meaning proposals, such as environmental review page limits that merely shuffle content to report appendices, or the neutering of a regulation under a Republican president that could easily be revived on Day One of a Democratic successor.”
—Alex Trebath, Marc Levitt, and Elizabeth McCarthy, “Keeping the Window Open,” The Ecomodernist, Oct. 27, 2025 

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The post Surface Transportation News: The strong performance of express toll lanes appeared first on Reason Foundation.

Public-private partnerships (P3s) can deliver megaprojects but can also add value by addressing smaller-scale infrastructure facilities that people rely on every day. Local bridges, transit hubs, and rest areas may not grab headlines, but they shape commutes, commerce, and safety. In a country where mobility helps drive opportunity, infrastructure project delays don’t just cause inconvenience—they drive decline. Every postponed or long-delayed transportation project slows growth, deepens disparities, and erodes public trust.

Pennsylvania faced this challenge directly. With more than 4,000 structurally deficient bridges statewide, the Pennsylvania Department of Transportation (PennDOT) launched the Rapid Bridge Replacement Project to tackle 558 of them in a single package. The winning consortium, Plenary Walsh Keystone Partners, agreed to finance, design, build, and maintain the bridges until 2042.

Instead of paying the company all at once, PennDOT used an availability-payment contract. Under this arrangement, the private partner is paid gradually over 25 years, provided that the bridges are open to traffic and meet safety and maintenance standards. This approach was the best fit for Pennsylvania because hundreds of small rural bridges could never generate sufficient toll revenue. By tying payments to availability and condition, PennDOT accelerated delivery without creating a new revenue stream.

The contract also clarified who was responsible for which risks. Plenary Walsh Keystone Partners assumed responsibility for design, construction, financing, and long-term maintenance. If bridges were delayed, failed inspection, or fell below contractual standards, PennDOT could reduce or withhold payments. This created a direct incentive to build durable structures and keep them in good condition over time.

At the same time, PennDOT retained certain risks that only the state could manage—such as acquiring rights-of-way, coordinating utility relocations, and monitoring performance. These responsibilities meant the public agency still had to step in at times, but the private partner was directly accountable for the timely, durable delivery of hundreds of bridges. The result was a win-win: Pennsylvania taxpayers saw a large backlog cleared years sooner, while the private consortium secured steady returns by meeting strict performance requirements.

Other states have shown the same principles at work. In Colorado, the US-36 Express Lanes public-private partnership delivered two new express lanes, rebuilt two general-purpose lanes, added five bus rapid transit stations, and built 12 miles of bikeway—completed under a concession that tied private payments to performance.

In Louisiana, the I-10 Calcasieu River Bridge reached financial close in August 2024, with a private consortium now responsible for designing, financing, constructing, and maintaining the 5.5-mile corridor between Lake Charles and Westlake. These results show that P3s not only save time but also raise expectations for how quickly and effectively infrastructure can be delivered.

Public-private partnerships are not without risks, and strong oversight is essential. PennDOT’s Rapid Bridge Replacement Project demonstrated the importance of anticipating and managing challenges early. The department learned that some utility companies lacked the capacity to relocate their lines on schedule, resulting in delays. To keep the project moving, PennDOT stepped in directly when outside partners failed to respond to the private contractor. The agency also determined it was more effective for the state itself to handle right-of-way acquisitions, leaving the private partner to focus on design and construction responsibilities. Beyond these examples, PennDOT still faced other risks, including:

• Coordinating with local governments and permitting agencies on necessary approvals;
• Ensuring contract compliance through ongoing inspections and monitoring;
• Defending the project against possible lawsuits, legislative changes, or political opposition; and
• Guaranteeing availability payments, because the state’s credit ultimately backs them.

To reduce those risks and strengthen future infrastructure projects, governments should adopt clear safeguards in P3 contracts, including:

• Net worth maintenance requirements: A rule should require the private partner to maintain sufficient assets to always meet its obligations. This prevents the company from running out of funds or abandoning the contract before it is complete;
• Performance monitoring: Regular inspections and reports to confirm the project meets safety and service standards, with penalties if it doesn’t;
• Independent audits: Outside reviewers ensure that the private partner is meeting its obligations; 
• Contingency planning: The state retains the authority to step in and complete the project if the private partner fails to meet its obligations; and
• Defined public responsibilities: Clear roles for the government, such as acquiring land, relocating utilities, and securing permits, so there’s no confusion about which tasks remain public and which belong to the private partner.

Policymakers who confine public-private partnerships to megaprojects are missing their most significant value: delivering the everyday infrastructure that communities notice most. States should look to enter into P3s for moderate-cost infrastructure projects, such as the Pennsylvania bridges project, which can be completed efficiently, at lower cost, and with greater accountability. The question isn’t whether mid-sized public-private partnerships work, but why more states aren’t using them now.

The post Using the practical power of public-private partnerships to improve infrastructure appeared first on Reason Foundation.

The pilot program’s structure, however, limited participation and missed wider benefits. Congress should utilize the expected 2026 Water Resources Development Act (WRDA) reauthorization to renew the Army Corps of Engineers’ public-private partnership program with expanded authority to enable private-sector participation.

The program, created in 2018 by the Assistant Secretary of the Army for Civil Works, selected four projects: the Brazos Island Harbor Channel Improvement in Texas; the Fargo-Moorhead Metro Area Flood Risk Management Project in North Dakota and Minnesota; the South Platte River and Tributaries Ecosystem Restoration in Colorado; and the Louisville Metro Flood Risk Management Project in Kentucky.

These projects underwent a six-to-24-month process to test how public-private partnership delivery compared with the standard model. Each project underwent an evaluation to determine whether alternative delivery could reduce costs, accelerate schedules, or improve outcomes when compared to the Corps’ traditional design-bid-build approach.

The program’s framework had a few structural flaws. The program did not permit direct private-sector involvement in project ideas. This restriction prevented P3s from drawing on the expertise and flexibility that make them useful. By limiting private participation to projects the Corps had already selected with non-federal partners, the program foreclosed opportunities for industry to identify infrastructure needs, propose solutions, or bring forward financing mechanisms that might not have occurred to agency planners working within budget constraints and bureaucratic timelines.

The effective prohibition on unsolicited proposals was another major design flaw. Research shows that accepting unsolicited proposals can help public partners identify new project concepts they might not have identified on their own. Companies bring technical skills, knowledge of new financing tools, and operational methods that can improve outcomes when combined with public planning. The restriction meant that the Corps could not benefit from innovations or efficiencies developed by private firms through work on similar projects in other jurisdictions or industries.

The Army Corps of Engineers also restricted projects further to those already in its system and with construction costs above $50 million. This prevented lower-cost or non-traditional projects from entering the process, even when they aligned with mission goals. The threshold excluded many projects that could benefit from alternative delivery while limiting the program to a handful of megaprojects that take years to develop and execute.

Despite these barriers, the pilot program outcomes make a strong case for making greater use of public-private partnerships (P3s). 

Of the four projects:

• The Fargo-Moorhead Area Diversion Project, built through a shared P3 model, is set to cost $330 million less and finish 10 years sooner than a standard Corps project. 
• The Brazos Island Harbor Channel Improvement Project, built through a P3 model, saved a total of $72 million and proved the viability of P3s for future dredging projects.
• The South Platte River & Tributaries Ecosystem Restoration and Flood Risk Management Project saved anywhere from $121 million to $ 194 million and reduced the project time by two to five years.
• The Louisville Metro Flood Risk Management Project saved up to 30% of project costs and had an expected delivery date eight years ahead of schedule compared to a traditional project.

Gains like this show what can happen when incentives align. The project combined federal participation through the Army Corps of Engineers with state and local contributions and private financing to accelerate construction and transfer long-term operations to entities with experience managing similar facilities.

Congress is expected to reauthorize the Water Resources Development Act in 2026. The bipartisan WRDA of 2024, signed in early 2025, funded $10.7 billion in Corps work but did not extend the P3 program. Lawmakers could use the next bill to fix the first program’s limitations. The next reauthorization presents an opportunity to expand P3 authority before the momentum from the successful pilot dissipates.

A renewed program should drop the ban on unsolicited proposals while maintaining evaluation and transparency standards. The Army Corps of Engineers should also remove cost thresholds that restrict participation to large projects. Many projects with costs below $50 million could still produce value when using alternative delivery models. A renewed program could establish criteria for evaluating unsolicited proposals, including alignment with Corps mission areas, demonstration of public benefit, and financial viability, while preserving the agency’s discretion to accept or reject proposals.

Studies suggest that public-private partnerships can deliver projects faster and at a lower cost than direct government delivery. The 2019 USACE “Revolutionize Civil Works“ report found that P3s can deliver projects 20% faster and more efficiently, with added value from better long-term management. These gains result from aligning contractor incentives with project outcomes, transferring certain risks to parties better positioned to manage them, and utilizing private capital to expedite work that might otherwise wait years for sufficient appropriations from Congress.

The Army Corps of Engineers could establish a process for private firms to propose projects that meet navigation, flood control, or ecosystem needs. That process would help the agency manage its current project backlog of nearly $100 billion. Wider use of public-private partnership models could accelerate projects without relying on annual appropriations. Opening the door to private proposals would give communities and industries with pressing infrastructure needs a pathway to work with the Corps on solutions, even when those projects have not yet entered the agency’s planning pipeline.

Renewing and improving this program would not reduce oversight. It would create more ways to align private capital and skills with public goals. Congress should use the next WRDA to grant the Army Corps of Engineers broader public-private partnership authority, enabling it to utilize every tool to meet national infrastructure needs. The pilot program proved the concept works at a surface level. Now, policymakers should remove the restrictions that prevent it from reaching its full potential.

The post A chance to unlock the full potential of public-private partnerships in water infrastructure appeared first on Reason Foundation.

On behalf of Reason Foundation, we respectfully submit these comments in response to the Office of Science and Technology Policy’s (OSTP’s) request for information on “Regulatory Reform on Artificial Intelligence.”

Reason Foundation is a national 501(c)(3) public policy research and education organization with expertise across a range of policy areas, including technology and communications policy.

There are numerous activities, innovations, and deployments currently inhibited, delayed, or constrained by federal statute, regulation, or policy. For this reason, we recommend a formal audit or review to identify areas of regulatory conflict with innovation—including the effect of state laws where federal regulation is silent. However, we offer the following specific examples in response to Question (i) for OSTP’s review:

1. Legacy NEPA Rules and Expansion Create Major Delays in Energy Production
2. Regulatory Barriers Limit the Expansion of Automated Track Inspection

Legacy NEPA rules and expansion create major delays in energy production

In order to maintain global technological superiority, the United States must focus squarely on reforms that increase energy capacity through streamlined permitting reforms in order to facilitate the development of artificial intelligence (AI) across industries. As of now, multi-year permitting delays are the status quo in any energy project. These delays set back the construction of new power plants, but also lead to the downstream effects of a restricted energy grid. As the United States competes with foreign adversaries for dominance in AI, energy capacity will either be a force multiplier in the country’s success or lead to failure on the global stage.

Congress passed the National Environmental Policy Act (NEPA) in 1969, directing federal agencies to evaluate the environmental impact of their decision-making prior to a major federal action. As part of this directive, agencies were required to produce an Environmental Impact Statement (EIS) when a federal action would significantly alter the environment, which is to include a comprehensive analysis of environmental effects, alternatives to the proposed action, and proposed mitigation measures (42 U.S.C. § 4332).

For federal actions that would impose smaller effects on the environment or where the size of the effect is uncertain, agencies must complete an Environmental Assessment (EA). An EA is a shorter-form document that aims to determine whether a proposed federal action warrants a full EIS or if the effects are small enough to render a Finding of No Significant Impact (FONSI). These mandated reviews were meant to inform both decision-makers and the public of potential significant environmental impacts and potential mitigations, but have evolved into increasingly lengthy and complex processes. Further, despite their extensive documentation, these reviews generate a substantial amount of litigation. As a result, the environmental review process that was designed to increase public transparency increasingly serves to delay and add costs to worthy projects.

For instance, the Nuclear Regulatory Commission (NRC) promulgated licensing rules that incorporate NEPA’s environmental review framework into nuclear power project approvals (10 C.F.R. Part 51). These NRC licensing processes have traditionally entailed lengthy reviews and administrative hurdles, delaying and often derailing reliable energy projects that could support AI infrastructure. Similarly, power grid interconnection regulations governed by the Federal Energy Regulatory Commission (FERC) under 16 U.S.C. § 824a et. seq. impose restrictive control over how new loads such as AI data centers connect to the grid. Lengthy wait times and cost allocation disputes in FERC’s interconnection queues compound delays to reliable, scalable power delivery essential to AI model performance.

The Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County curtailed this expansion of agency review. Moreover, recent reforms, such as the expansion of categorical exclusions, recent executive orders on permit streamlining, and the U.S. Court of Appeals for the D.C. Circuit’s Marin Audubon Society ruling, may remove some of the chokepoints.

However, legacy NEPA implementation and statutes built upon decades of overexpansion continue to impose substantial procedural burdens on AI-related infrastructure—particularly energy.

As the need for abundant energy production grows more vital, this regulatory barrier to energy production is particularly relevant in light of small modular nuclear reactors (SMRs), which have emerged as a promising source of clean, abundant energy to power the energy-intensive AI data centers at the heart of U.S. technological superiority.

Regulatory barriers limit the expansion of automated track inspection

Automated track inspection (ATI) technologies have been tested in recent years to improve railway track defect detection and have the potential to improve rail safety while also increasing operational efficiency of the network. Instead of shutting down tracks for human inspectors to walk, or using specialized rail vehicles to inspect track visually, ATI sensors are mounted to trains as they are in service to collect track component data as part of normal rail operations. These robust sensor data are then fed to AI-powered models to better plan maintenance activities.

Through pilot programs established by railroads, which obtained waivers from the Federal Railroad Administration (FRA), ATI was demonstrated to more reliably detect defects than traditional inspections—and improve maintenance forecasting and planning over time. Pilot program data submitted to FRA show that defects per 100 miles of inspected track declined from 3.08 before the use of ATI to 0.24 during the ATI pilots, or a 92.2% reduction. Reportable track-caused train derailments on main track per year during that same period declined from eleven to three, or a 72.7% reduction. None of those three derailments was attributable to ATI-targeted defects, with two occurring while manual visual inspections were still taking place twice weekly and one while pilot testing was inactive.

These results are in line with successful ATI performance expectations, with a shift in maintenance practices from being guided by a “find and fix” approach to a “predict and prevent” approach. Better and earlier detection of geometry defects allows track maintenance to be performed in a more preventative manner. Further, the higher-quality data collected by ATI over time allows for AI-powered improvements to maintenance forecasting and strategy. As such, as ATI use is expanded and repeated over time, defect detection rates—and defect-related hazards—should decline.

Realizing the benefits of ATI requires changes to manual inspection practices. ATI cannot inspect turnouts (i.e., the point where trains switch from one track to another), turnout components (e.g., “frogs”), and other special trackwork. By focusing ATI on track geometry defects, human inspectors can be redeployed to infrastructure where they are best positioned to inspect. If legacy visual inspection requirements are not modernized, railroads will have less incentive to invest in ATI and improve their inspection practices.

Analysis of the ATI pilot program data found that visual inspectors identified far more non-geometry defects than track geometry defects. Prior to ATI testing on the pilot corridors, visual inspectors identified 10,645 non-geometry defects and 422 geometry defects. In 2021, during the ATI pilots, visual inspectors identified 14,831 non-geometry defects (a 39.3% increase) and 238 geometry defects (a 43.6% decrease). Of the non-geometry defects identified by visual inspectors, 60-80% were in turnouts and special trackwork that ATI cannot inspect.

Another important benefit of ATI is reducing visual inspectors’ exposure to on-track hazards. Substituting ATI for routine geometry defect inspection, coupled with a corresponding reduction in visual inspections, will remove inspectors from harm’s way. Data from the ATI pilot program indicate that inspector track occupancy duration declined by approximately one-quarter after visual inspections were reduced to once per week as part of the ATI pilots, suggesting substantial inspector workforce safety risk reductions are likely to occur if ATI is widely deployed.

The Association of American Railroads recently petitioned for an industry-wide waiver to enable significantly expanded ATI deployments. The necessity of a waiver is indicative of the inflexibility of legacy rail safety regulations, which mandate rigid manual visual inspection frequencies (49 C.F.R. § 213.233). Importantly, these long-standing inspection frequency rules are based on questionable assumptions about accumulated tonnage loads and lack the scientific rigor that ought to guide safety policy. FRA has yet to act on the pending ATI waiver petition, thereby preventing rail carriers, rail workers, shippers, and consumers from realizing the safety and efficiency benefits of ATI.

Conclusion

We greatly appreciate OSTP’s attention to regulatory barriers to the development and deployment of AI technologies. Realizing the full benefits of these various technologies and applications will require a sustained, concerted effort on the part of policymakers.

Thank you for the opportunity to provide these comments to OSTP. We look forward to further participation and stand by to assist as requested.

Download the full public comment:

The post Comments to the Office of Science and Technology Policy on AI regulatory reform appeared first on Reason Foundation.

• Air traffic chaos: Only in America
• DOT Inspector General post-mortem on NextGen
• Airports and “use it or lose it”
• Airlines vs. spaceships: Florida’s looming problem
• Time to reform TSA airport screening
• Don’t move the ATO to DOT
• News Notes
• Quotable Quotes

Air Traffic Chaos: Only in America  

As this article is being written, the federal government shutdown is dragging on, and reports of overstressed controllers taking sick leave are reflected in late arrivals and departures at more and more airports (following the ‘air traffic control zero” event at Hollywood Burbank Airport on Oct. 6, when there were zero controllers in the tower on the evening shift).

The tragic aspect of this fiasco is that it could not have happened in 98 countries that, since 1987, have depoliticized their air traffic control systems by taking them out of the government budget and converting them into user-funded public utilities (analogous to toll roads and electric and water utilities). New Zealand was the first, spinning off its air traffic control (ATC) system as Airways New Zealand, and transferring the International Civil Aviation Organization (ICAO)-compliant weight-distance ATC fees so that instead of being paid to the New Zealand government, they were paid directly to Airways. And since aviation is a growing industry, that revenue stream became bondable, making it possible to long-term finance ATC modernization, of both technology and facilities.

Of the 98 countries that have made this transition thus far, three can be considered to have “privatized” their air traffic control systems: Canada, Italy, and the United Kingdom. In 61 cases, the self-supporting air navigation service provider (ANSP) is a government corporation (analogous to our federal Tennessee Valley Authority and various state and local government electric, gas, and water utilities). All of these have bondable revenue streams, enabling long-term financing of new facilities and modernizing their technologies. Six countries in Central America are served by a multi-state ATC utility called COCESNA, and 17 in Africa are served by a multi-state ACESNA. You can find a complete listing of how countries provide for ATC services in Table 5 in the 2025 edition of Reason Foundation’s Annual Aviation Infrastructure Report.

Since these ANSPs are self-funded via ICAO-compliant ATC user fees, they are outside their governments’ budget and hence not affected by their governments’ fiscal problems. Our airlines, passengers, and air traffic controllers would be spared the present miseries if Congress were to depoliticize our Air Traffic Organization (ATO) by separating it from the Federal Aviation Administration (FAA) and enabling it to charge ICAO-compliant user fees and issue revenue bonds based on that revenue stream.

Notice what word I have avoided: ‘the dreaded P word.’ As noted above, only three can be described as to some degree “privatized.” Separating the air traffic control provider from the government budget is not privatization. Nor is allowing it to emulate 98 other countries in charging airlines and business jets the same ICAO weight-distance fees that those aircraft pay nearly everywhere else on the globe.

Support for converting U.S. air traffic control into a public utility has historically had bipartisan support. Vice President Al Gore was impressed by the formation of Airways New Zealand, and doing likewise in this country was a key objective of the Clinton administration’s U.S. Air Services Corporation proposal. When the plan got to a House Transportation and Infrastructure Committee hearing, I testified in favor. But neither the airlines nor the air traffic controllers supported it at that time.

But in the aftermath of a 2013 government shutdown, in which controllers (like today) went without pay until the shutdown ended, controllers’ union, the National Air Traffic Controllers Association, supported the 2016-2018 air traffic control corporation bills, along with nearly all the major airlines and the editorial support of nearly all major newspapers’ editorial boards (except The New York Times). That effort began with a blue-ribbon task force convened by the Business Roundtable, and was championed in Congress by Rep. Bill Shuster, then-chairman of the House Transportation and Infrastructure Committee.

The next FAA reauthorization is due to be debated in the 2028 fiscal year, Between the FAA’s serious safety gaps concerning the risks of helicopter routes at Reagan Washington National Airport (highlighted by the National Transportation Safety Board) and the current air traffic debacle, perhaps public opinion would support one of more of the following: (1) separate the ATO from safety regulator FAA, per ICAO policy since 2001, (2) allow the independent ATO to implement ICAO-compliant weight-distance fees, and (3) give it bonding authority, to allow long-term financing of facility consolidation and large-scale technology replacements. Calling that “privatization” would be a lie. It would follow the global trend of air traffic control modernization. This change is long overdue in the United States.

P.S.: Not everyone remembers that President Donald Trump’s 2018 infrastructure plan included a call for air traffic reform, and Trump supported Shuster’s House bill via a White House event at the time. Politically, if Trump were to renew that part of the plan, he might encourage MAGA Republicans to take this idea seriously, and it could also be appealing to some Democrats.

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DOT Inspector General Post-Mortem on FAA’s NextGen

On Sept. 29, the Department of Transportation (DOT) Office of Inspector General (OIG) released what it calls a “capstone memorandum” on the FAA’s more than 20-year NextGen lifespan. It draws on 50 audit reports OIG produced, beginning in 2005. While there is nothing “new” here, pulling this all together amounts to a devastating critique of the much-touted NextGen program that was supposed to reinvent U.S. air traffic control.

The planned $36 billion effort (by the FAA and U.S. airlines) was intended to transform the system via advanced technology by 2025. Overall, this summary report estimates that by the end of last year, NextGen had achieved only 16% of its intended benefits. It also notes that despite the 2024 FAA reauthorization legislation calling for the FAA to “operationalize all key NextGen programs and terminate the Office of NextGen by the end of 2025,” the FAA will continue to deploy several NextGen systems over the next three years.

Here are a few conclusions set forth in OIG’s post-mortem. The first of these is that “FAA is delivering a less-transformational NextGen than originally envisioned, resulting in reduced benefits.” Early on, the Joint Planning & Development Office estimated $213 billion in benefits by 2025. FAA has on multiple occasions presented (ever-downward) benefits estimates, with the most recent (2024) being somewhere between $36 and $63 billion. That compares with an actual number, by the end of 2024, of just $9.9 billion. OIG also notes that the benefit estimates depend in part on airlines equipping their fleets with new technology, such as DataComm, which is far from complete.

Another key finding is that “FAA is currently implementing a version of NextGen that will be less-transformative than the original vision.” Instead of fundamentally transforming how air traffic is managed, as the National Research Council pointed out in 2015, the FAA had switched to a NextGen outcome based on “replacing and modernizing aging systems.” In most cases, “programs would remain nearly identical to existing capabilities.” The FAA also removed the NextGen Future Facilities program, which was intended to consolidate and modernize ATC facilities.

Another key finding is that “Many key programs and capabilities are over budget and delayed until 2030 or beyond. The report cites many examples, such as the delays and downsizing of the Terminal Flight Data Management program, which is not only late but has been scaled back from the planned 89 airports to only 49 (meaning only those 49 will get electronic flight strips for tower controllers; the others will still be stuck with paper flight strips).

Summing up, the report says, “Overall, FAA has delivered a delayed, over-budget, and less-transformational NextGen than originally planned. Many challenges continue to persist, even as FAA transitions to its new modernization plans in 2025.”

The OIG report also provides a set of lessons learned from the NextGen fiasco. The first is that FAA has a problem developing and implementing realistic long-term plans and assessing risk—and that this is due to a lack of meaningful requirements for projects (a subject that has been discussed in this newsletter—and this issue’s Quotable Quotes). Vulnerabilities in FAA acquisitions include not establishing fair and reasonable pricing, not promoting competitive procurements whenever possible, not mitigating against conflicts of interest among award-selecting officials, and not establishing effective contract management.

Another ongoing problem is sustaining “legacy systems” that were supposed to be replaced by NextGen systems. As the FAA’s independent 2023 National Airspace Safety Review Team report explained, the cost of maintaining obsolete systems (often with no spare parts available) eats up a significant proportion of facility and equipment budgets that were intended to pay for new technology. The report does not point out that if the Air Traffic Organization (ATO) had the kind of revenue bonding authority that airports have, it could finance new technology and implement it across the system within a year or two, rather than having to dole out the new tech in dribs and drabs over 15 or more years.

There is more, but I will stop here, simply to note that the much-hyped “Brand New ATC System” does not address any of these shortcomings, so don’t expect it to be more successful than NextGen.

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Airports and “Use-It or Lose-It”

A Chicago Tribune story crossed my screen on Oct. 2, “United Airlines Gets Additional Gares at O’Hare, while American Loses a Few: Competition Keeps Fares Lower.” As you may know, Chicago O’Hare (ORD) is a rare case where two major airlines each maintain a hub. Each would prefer to offer more flights than the other, to offer passengers more choices of destinations and/or frequencies. In the old days of long-term lease-and-use agreements, airlines sought to lock in control of as many gates as possible for many decades. Critics rightly referred to it as gate-hogging.

In the last several decades, we’ve seen an evolution in how U.S. airports handle gates. I’m not aware of any U.S. airports that assign gates dynamically, as I’ve experienced at some European airports (where you don’t know your departure gate until about 30 minutes before boarding time). But a growing number of U.S. airports have shifted to more-flexible gate assignments. According to the Tribune article, ORD changed to a “use-it-or-lose-it” provision in its airline use agreement in 2018. Each year, gates are allocated to airlines based on their use the previous year. Under that “use-it-or-lose-it” policy, starting this month, United will gain five more gates while American will lose four.

For a relatively recent example of gate-hogging, I recall an Atlanta trip where I ended my business early and got to Hartsfield (ATL) about three hours before departure time. When I checked the board after getting through TSA, I saw my gate already listed with my Delta flight number. I did not see any earlier flight to my destination, but I decided to spend my time waiting in the DL concourse where my gate was. To my surprise, when I got to the gate, it was empty—and it remained that way for about two hours more while other flights arrived and departed. That seems like gate-hogging to me.

In a landmark study from the National Bureau of Economic Analysis (NBEA) that I wrote about in the April 2024 issue of this newsletter, I learned that in a study of 2,444 airports worldwide, the ones that were being managed under long-term private concessions that included an infrastructure investment fund had more airlines, more airline competition, lower average fares, and higher productivity by several measures than other airports. Clearly, U.S. airports on average could achieve some of these gains by operating them more like businesses (which is what the infrastructure funds bring to the table, in addition to more robust long-term financing).

Another aspect of productivity (or lack of same) is how nearly all airports deal with more flights than their runways can handle. The landing slot system widely used in Europe (and some other countries) generally begins by grandfathering in the airlines and their slots, which represent the status quo at the time the system is implemented. What a way to intervene on the side of “in’s” at the expense of “out’s.” And many slot-controlled airports have a loosely enforced “use-it-or-lose-it” provision; a slot-holder is considered to be fully using its slot if it flies 80% of what full use would be.      

I have long argued that a far more economically productive variable runway pricing system would increase an airport’s productivity and foster competition (see my co-authored 2007 paper, “Congestion Pricing for the New York Airports“). The only airports that have even tiptoed into variable pricing are London’s Heathrow and Gatwick, which have peak and off-peak rates, plus noise charges.

The reformist government in Argentina has recently altered its conventional slot system at Buenos Aires’ Jorge Newbery Airport. The new rules allow airlines to trade slots under the supervision of a regulator and a “silence-positive” provision, which ensures that if the facilitator fails to take action on a slot request within a required period, the change is approved. These are small changes. But if the current libertarian-oriented government wins re-election, I would not be surprised to see more serious reform—perhaps even variable runway pricing.

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Airlines vs. Space Ships: Florida’s Looming Problem

As a life-long “space cadet,” growing up with science fiction and closely following the Apollo Moon landings, I watch SpaceX Starship launches and am a big fan of how SpaceX’s innovation continues to slash the cost of getting payloads into space. But as a Florida resident and still a frequent flyer, I stand to be personally affected by the coming growth of space launches and recoveries from Florida’s spaceports at the Cape.

Next year alone, SpaceX plans 120 Starship launches from Florida—76 from Air Force Space Launch Complex 37 and another 44 from the Kennedy Space Center Launch Complex 39-A. Assuming most or all 120 succeed, in addition to 120 launches, there will be up to 240 returns—of both the Starship itself and its Super Heavy booster. In addition, in the near term, the company expects to launch (and mostly recover) 50 or more Falcon 9s (though the company plans to phase down Falcon 9s as Starship matures).

The Air Force and FAA have conducted environmental impact studies of these launch and recovery operations, as well as the gradually increasing volumes of Blue Origin’s New Glenn launches and recoveries. One major impact is on (mostly) north-south air travel between the Northeast/Midwest and Florida. This greatly increased space flight activity will ramp up the operations of the Space Data Integrator at the FAA Command Center in Warrenton, VA.

How many flights will be affected on, say, a Starship launch day? Orlando Sentinel reporter Richard Tribou cited a federal report estimating that as many as 12,000 commercial flights per year could be delayed due to increased launch activity at Cape Canaveral.

Based on launch/recovery plans, plus expected telemetry data, FAA staffers must define and refine the “aircraft hazard areas” for each launch and each recovery. The volume of these will increase dramatically next year. In a series of articles in the Orlando Sentinel, reporter Tribou reported that SpaceX says these aircraft hazard areas “are extremely conservative by nature and are intended to capture a composite of the full range of worst-case outcomes, but not any single real-world operation.” The company anticipates that the “actual, implemented areas will be far smaller in geographical scope and far shorter in duration, validated by the robust flight data we are building.”

Needless to say, safety is the FAA’s number one priority as the federal aviation safety regulator. So it is likely to err on being conservative, rather than taking chances on some kind of air/space disaster that could have been prevented.

I don’t have an answer to this dilemma, but I want to bring up a subject that’s not being mentioned thus far in this debate: paying for the airspace used. Worldwide, airlines and business jets pay ATC user fees for the services they receive. They paid nothing in the early days of aviation, but once a complex, costly ATC system was brought into existence, it made sense for those who benefitted from it (rather than all taxpayers) to pay for its capital and operating costs.

When it comes to in-atmosphere launch/recovery traffic, there are currently no user fees—but there should be. If 400 airline and business jet flights are delayed due to space launch/recovery operations, what is the cost to those airlines and their passengers? This is what economists call an externality, and one way to deal with externalities is to price them. I have no idea what the cost to aircraft operators will be from launch/recovery delays, but it’s time for economists to start figuring this out. Space launch companies would certainly be motivated to invest more in precision launch and recovery operations if the use of this valuable airspace were no longer “free.” And in response to such prices, launch companies might figure out ways to provide the FAA with real-time data on flights, so that the FAA might be able to reduce the size and duration of hazard warning areas.

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It’s Time to Reform TSA Airport Screening
By Marc Scribner

The impact of the October government shutdown on the air traffic controller workforce has received wide attention owing to the travel delays caused by shuttered FAA facilities. If the shutdown continues and federal employees go unpaid, we can expect additional travel chaos from the TSA’s frontline security screeners calling out sick or quitting. As with the FAA’s Air Traffic Organization, airport security screening is too important to be left to the political strife of Congress. Instead, security screening operations should be devolved to individual airports, with the TSA reorganized as a dedicated regulatory agency to oversee this reformed system. To that end, Reason Foundation has produced draft legislation to implement these reforms.

Forbes reported on Oct. 7 that one-fifth of the mid-Atlantic screening workforce had called out sick, according to the regional union representative. As of the second week of the shutdown, TSA checkpoint problems had yet to materialize. However, this may change soon if the government shutdown continues and TSA employees do not receive their full paychecks, as the agency has warned. During the 35-day shutdown in Dec. 2018 and Jan. 2019, airports in Miami and Houston were forced to close terminals because TSA could not staff security checkpoints.

Despite a major pay increase in 2023 that was credited with reducing annual attrition rates from 20% to 11%, TSA screener turnover is still roughly double the average federal employee attrition rate. Their comparatively low wages and monotonous workplaces make TSA screeners more likely to depart for better jobs even when the government is meeting payroll. A single missed paycheck is likely to lead many screeners to call out sick and seek employment elsewhere to address their sudden financial hardships.

This is no way to run airport security screening. Peer countries do not rely on a single national agency to self-regulate and provide screening services that are then funded by the federal legislature. The current TSA dual provider-regulator model presents an inherent conflict of interest, while its monopoly and dependence on general government funding creates a high-cost single point of failure. To mitigate these inherent risks of the status quo TSA airport security model, three reforms are necessary.

First, the provision of airport security screening services should be separated from the TSA, which would be converted into a dedicated security regulator. Screening operations would be devolved to individual airports. This reform is in keeping with global best practices established by the International Civil Aviation Organization. Annex 17 of the Convention on International Civil Aviation, commonly known as the Chicago Convention, states that parties to the agreement—which includes the United States as a founding signatory and the treaty’s depositary—should ensure the “independence of those conducting oversight from those applying measures implemented under the national civil aviation security programme.”

Second, airports newly responsible for security screening should be allowed to contract directly with private security providers. Two months after the Sept. 11 terrorist attacks, the Aviation and Transportation Security Act of 2001 nationalized airport security screening operations previously provided by airlines. The law includes a provision that allows for contract screening—the Screening Partnership Program (SPP)—but this program is fundamentally flawed.

Today, airports seeking SPP screening are given merely an advisory role in a TSA-dominated process that selects, approves, and then funds eligible private screeners. Airports are not party to SPP screening contracts and have no control in the process beyond their initial decision to apply to the TSA. As a result, SPP has been an unattractive option for most airports, with just 20 airports currently enrolled in the program. Instead, airports should be allowed to contract directly with private security providers, who would be selected from an approved vendor list maintained by TSA. Airports should also be allowed to self-provide screening, subject to TSA certification, just as is required of private screening companies.

Third, airports should be authorized to directly collect passenger security fees to pay for screening services. Airports would understandably oppose an unfunded mandate to provide security screening. This dynamic is what led to the creation of the TSA in the first place, with airlines lobbying for a federal takeover of the screening services they had previously been required to provide at their own expense.

To address this legitimate concern, Congress should reform the existing security service fee assessed on airline tickets, commonly called the 9/11 Security Fee. Currently, airlines are required to collect security fees and remit the revenue to the TSA. However, since 2013, Congress has raided one-third of fee revenues for deficit-reduction purposes. Instead, these fees should be directly remitted to individual airports to cover the costs of the screening services provided, much like the passenger facility charge is collected today for airport capital project financing.

Reforming the TSA to a model widely used in affluent European and Asian countries would permanently insulate airport security screening from the risks posed by government shutdowns. It could also help advance improvements to practices and technologies, leading to a better passenger experience. And it could do all of this while saving federal taxpayers money.

Reason Foundation’s draft TSA Reform Act is available here.

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Don’t Move the Air Traffic Organization to the DOT Headquarters

As noted in last month’s issue, the FAA has announced plans to move a portion of its Washington, D.C. staff from the two aging FAA office buildings to DOT headquarters, often referred to as “Navy Yard.” Because there is not enough office space at the Navy Yard, the FAA administrator needs to decide who moves there and who relocates to an unspecified “elsewhere.”

Politico Pro reported on Oct. 3 that a Sept. 30 document they reviewed calls for moving the Air Traffic Organization staff to Navy Yard’s East building, by around Dec. 10.

This is the worst choice. For several decades, dating back to the Clinton administration’s reinventing government efforts, it has become clear that the ATO is a high-tech service business that does not belong embedded in the national aviation safety regulator. There is ample evidence that FAA safety regulation of the ATO is not as rigorous as its safety regulation of airlines, airports, flight schools, repair stations, etc.

Consequently, the ATO should be functionally and physically separated from the aviation safety regulator, eliminating the current built-in conflict of interest. Given the FAA’s failure to take seriously a host of pilot reports of the safety hazard presented by Helicopter Route 4 crossing under the final approach to DCA runway 33, I’m hoping the NTSB will recommend organizational separation between the ATO and FAA.

The responsible decision would be to move the ATO outside DOT, to a location adjacent to the Command Center in Warrenton, VA. That is already a key ATO facility, and if it does not have the space to house the D.C.-based ATO staff, nearby office space could be leased. The rest of the FAA’s D.C.-based staff would be appropriate to move to the Navy Yard.

One other benefit of moving the ATO out of FAA would be to comply with ICAO policy that, since 2001, has called for organizational separation between a country’s aviation safety regulator and entities such as airports and air traffic control providers. The United States is one of the last major countries that has failed to adhere to this principle.

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News Notes

Isaacman Again in Line for NASA Administrator
Bloomberg and Politico have reported that President Trump has met with Jared Isaacman to discuss re-nominating him as NASA Administrator. This would be a very positive step, as I explained in the July 2025 issue of this newsletter, based on a two-page interview with Isaacman in the June 30-July 12 issue of Aviation Week. Read one or both to see why this would be such a meaningful change for NASA.

Saudi Arabia’s First Digital Control Tower
On Oct. 1, Saudi Arabia’s General Authority of Civil Aviation approved the country’s first remote digital tower, to be located in Jeddah at King Abdulaziz International Airport, to control traffic at A1Ula International Airport. Saudi Air Navigation Services (SANS) is working with Spanish company Indra to implement the project. If SANS can do this, why can’t the FAA?

Arora Group Submits $33 Billion London Heathrow Plan
Arora’s specially created company, Heathrow West, formally submitted its proposal to the U.K. government on Sept/ 2. The plan would include U.S. company Bechtel, whose global airport track record includes the new second airport for Sydney, Australia, and many others. The Arora proposal competes with Heathrow Airport’s own $66 billion plan (which would build the new runway over the M25 motorway) by proposing a shorter new runway instead. Both plans aim to complete the expansion by 2035.

New NOTAM System Getting Trial Run
Politico Pro reported (Sept. 30) that the FAA has begun a trial period of its new Notice to Airmen (NOTAM) system with “early adopter stakeholders” for testing and validation. The new system has been developed, under FAA contract, by Virginia-based CGI Federal. FAA Administrator Bryan Bedford said the replacement system is “resilient, user-friendly, and scalable. The current schedule calls for the new system to replace the antiquated NOTAM system in Feb. 2026.

Islip Shortlists Three Teams for Airport Terminal Project
Long Island’s MacArthur Airport (ISP) is in the market for a new terminal. The three pre-qualified firms submitted their proposals during the first week of October, reports Eugene Gilligan in Infralogic (Oct. 3). The airport owner (Town of Islip) hopes to select the winner by February and execute a pre-development agreement with the winner. ISP is located adjacent to the Ronkonkoma railroad station, which provides service to both Penn Station and Grand Central Station in Manhattan.

Gatwick Second Runway Approved
U.K. Transport Secretary Heidi Alexander has formally approved London Gatwick Airport (LGW) converting the taxiway that parallels its runway into a second runway. That would allow for 80 million annual passengers compared with 43.2 million in 2024. U.K. Chancellor Rachel Reeves said, “A second runway at Gatwick means thousands more jobs and billions more in investment for the economy.” Green Party leader Zack Polanski opposes this decision, saying that “Aviation expansion is a disaster for the climate crisis.” LGW is 50.01% owned by Vinci Airports, the world’s fifth-largest airport firm, according to the Reason Foundation’s “Annual Aviation Infrastructure Report: 2025.”

American to Remove Gate Bag Sizers
Starting this month, American Airlines plans to start removing the bag sizers at its boarding gates, billing the change as “simplifying the boarding process.” My impression (as a two-million-mile AAdvantage member) is that this change will more likely lead to longer delays in getting the boarding door closed, because more passengers will bring aboard too-large bags that will have to be removed at the last minute.

NASA Plans February Launch of Artemis II Mission
On Sept. 23, NASA announced that it plans to launch its huge SLS rocket for only the second time, carrying four astronauts on a 10-day trip around the Moon. SLS’s Orion capsule had a troubled re-entry on its first (uncrewed) launch (in 2022) and has not been modified. The Artemis 2 orbit will take it 5,000 miles past the Moon before swinging back toward Earth for its return. As noted here last month, each Artemis flight costs $4 billion.

First SpaceX Starship Version 3 Will Launch near Year-End
The new version of Starship will make its debut launch in either December or January, reported Aviation Week Network on Sept. 16. The new version has an improved upper-stage heat shield as well as other improvements. It will also be the first Starship equipped for propellant transfer in space, a key capability for its role in the Artemis program.

Blue Origin Planning Second New Glenn Launch
Jeff Foust reported in SpaceNews that Blue Origin is preparing its second New Glenn rocket for launch this month. Its payload will be a NASA Mars mission. The company will try again to recover the reusable first stage by landing it on a barge. New Glenn is a potential provider of a Moon lander for NASA, as is the SpaceX Starship. The Orlando Sentinel separately reported the opening of Blue Origin’s $3 billion New Glenn assembly plant and launch site on Merritt Island, Florida.

Adani Plans Additional $3.4 Billion to Expand Mumbai Airport
Infralogic reported (Oct. 7) that Adani Group is planning to invest $3.38 billion to expand the capacity of Navi Mumbai International Airport in India, primarily for the new airport’s second terminal, which is planned to open in 2029. The new investment is a combination of equity and debt. The project is a long-term public-private partnership (P3), in which the Maharashtra government holds 26%.

FAA to Require 25-Hour Cockpit Voice Recorders
A new air safety regulation, now in final review by OMB/OIRA, will require all newly manufactured commercial aircraft to be built with 25-hour cockpit voice recorders. The National Transportation Safety Board has long recommended this change, since in a number of accidents and other mishaps, the current two-hour recorders get written over by new material and are then useless in NTSB investigations. Unfortunately, there is no requirement for airlines to retrofit 25-hour recorders in their existing fleets.

Beta Planning a Larger Electric Hybrid
Electric vertical takeoff and landing (eVTOL) developer Beta Technologies has unveiled plans for a 19-seat hybrid eVTOL, as a follow-up to its six-seat Alia eVTOL. Like the existing Alia, the new aircraft will have wings. Thanks to its hybrid propulsion system, the new 19-seat aircraft is expected to have a much longer range than electric-only VTOLs. Its existing six-seat Alia is designed to make conventional takeoffs as well as vertical ones. To raise funds to develop the new 19-seat hybrid, Beta has filed with the SEC for an initial public offering of shares. Aviation Daily notes that Alia’s MV250, aimed at military missions, has a range of 250 nm. Aviation Week (August 11-21) notes that Archer, Joby, and Vertical are also developing hybrid-electric aircraft with longer range and higher payloads.

China Leads the Pack in Advanced Air Mobility
SMG Consulting, relied on by Aviation Week for assessing the viability of eVTOL and related aircraft, now ranks Chinese developers EHang and Volocopter in first and second place in its 2025 rankings. In the next four places are U.S. companies Beta, Joby, and Archer, followed by two more Chinese and two more U.S. developers (Robinson and Wisk).

Archer and Joby Bid for Bankrupt Lilium’s Assets
According to Aviation Daily’s Jens Flottau, the two U.S. eVTOL developers have joined Advanced Air Mobility Group to bid for the intellectual property of now-defunct German eVTOL startup Lilium. A decision by Lilium’s creditor committee is expected by the end of October. 

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Quotable Quotes

“The bottom line is that there will be no cancellation of SLS, Orion, or Lunar Gateway in the near future. Congress wants all three and is willing to throw money at them for years to come to keep them alive. Though [SpaceX’s] Starship might delay things a bit, as Bridenstein claimed. The reason China will get its lunar base built first will be because of SLS, Orion, and Gateway, not Starship. SLS and Orion are inefficient, cumbersome, and too expensive, and Gateway puts our assets not on the Moon but in space. You can’t build a manned lunar base with a rocket and capsule that launches at best once a year, carrying four people. Nor can you do it building a lunar space station in an orbit that makes landing on the moon more expensive and difficult.”
—Robert Zimmerman, “Yesterday’s Senate Hearing on Artemis: It’s All a Game,” Behind the Black, Sept. 4, 2025

“The FAA has 14 business units, heavily siloed, intensely fortified. I do think the [DCA] incident was a wake-up call for the agency that we have to think differently, act differently, and move quicker with modernization . . . . We’re innovating at about the same pace as aircraft manufacturers are redesigning. But the world is changing. Demand for the [National Air Space] is growing exponentially, and our innovators are innovating at about the pace of an iPad, not the pace of the new mid-market aircraft. The FAA also has to increase its agility, which is going to create some challenges for us.”
—FAA Administrator Bryan Bedford, in Sean Broderick, “FAA’s Bedford: NAS Modernization Not Just About Technology,” Aviation Daily, Sept. 10, 2025

“Over the years, FAA’s acquisition and airways facilities organizations have experienced a significant cultural shift, moving away from a mission-driven, engineering-centric approach. Once supported by a robust systems engineering capability via the Martin Marietta Systems Engineering and Integration (SEI) contract, the organization now faces significant challenges due to diminished engineering leadership and oversight structures that lack technical depth and NAS experience. Issac Asimov once said, “Science can fascinate, but if you want something built, call an engineer.” This shift has led to delays, cost overruns, and a loss of mission focus, putting efficiency ahead of safety and security. To restore effectiveness, FAA must appoint a deeply and broadly NAS-experienced Chief Systems Engineer, who will lead the re-establishment of a world-class systems engineering organization informed by current and continuous operations research. . . . Reinvesting in experienced systems engineering and engineering program acquisition management will be essential to modernizing the NAS’s aging systems and will create a cultural shift that will once again attract the very best leaders back to FAA.”
—Mitch Narins, Strategic Synergies LLC, retired from FAA after more than 26 years as program manager and eventually Chief Systems Engineer for Navigation

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The post Aviation Policy News: Government shutdown causes air traffic control problems appeared first on Reason Foundation.

This is simply no way to run airport security screening and underscores the need for reforming the TSA. Reason Foundation has long supported reforms to TSA’s governance model to improve the provision of airport security screening in the United States. To insulate airport security screening from congressional bickering and government shutdown risk, as well as improve its efficiency and effectiveness, we propose the following three reforms: separate the provision of airport security screening from its regulation; allow airports to contract directly with private security providers; and convert the 9/11 Security Fee into a dedicated local user fee.

To that end, we have developed draft legislation, which we are calling the TSA Reform Act, to detail and help implement these reforms. This proposed legislation is contained in Appendix A of this memorandum.

Separate the provision of airport security screening from its regulation

Following the enactment of the Aviation and Transportation Security Act (ATSA) of 2001, U.S. airport security screening was centralized under TSA. Importantly, the law tasked TSA with both providing screening services and regulating those services. This dual mandate combines the regulator with the regulated entity and represents an inherent conflict of interest. 

As with airlines, railroads, and automobiles, arm’s-length regulation by a government regulator and regulated entities is necessary to reduce the risks of regulatory capture. In the case of European Union member states, airport screening is the legal responsibility of airport operators. These airports either provide screening services themselves or contract with private providers.

Annex 17 to the Convention on International Civil Aviation (commonly known as the Chicago Convention) contains the International Civil Aviation Organization’s standards and recommended practices for aviation security. Paragraph 3.5.1(a) states that parties—including the United States, which is a founding signatory and the treaty’s depositary—should ensure the “independence of those conducting oversight from those applying measures implemented under the national civil aviation security programme.”

As a combined regulator and provider, TSA’s current institutional design fails to align with international consensus standards.

To address TSA’s core self-regulator design flaw and to align U.S. screening with global best practices, TSA should be reformed to focus strictly on the regulation of security services. Section 110(b) of ATSA replaced an earlier requirement that airport security screening be conducted “by an employee or agent of an air carrier, intrastate air carrier, or foreign air carrier” with a mandate that screening “shall be carried out by a Federal Government employee” (presently codified at 49 U.S.C. § 44901(a)).

We propose that this be amended to require instead that airport security screening be conducted by “an employee or agent of an airport” who would be certified and regulated by TSA.

Allow airports to contract directly with security providers

The major exception to TSA’s general security screening monopoly under ATSA Section 110(b) is the Screening Partnership Program, which allows airports to apply to seek the services of private screening companies (49 U.S.C. § 44920). TSA’s website lists 20 airports that are currently enrolled in the Screening Partnership Program, mostly small airports, but also includes Kansas City International, Orlando Sanford International, and San Francisco International.

Growth in the number of airports opting for private screening has stalled. Observers have identified a complicated, time-consuming, opaque, and biased process as the principal cause for the lack of interest in airport security contracting. A normal government contracting process typically involves a government agency issuing a request for proposals from qualified firms and then initiating a competitive bidding process. In the case of airport security, this would perhaps involve a sponsor airport beginning procurement from a list of security companies certified by the security regulator and then selecting the firm that best fits the airport’s particular needs.

This is not how the Screening Partnership Program is designed. Instead, under current law, an airport seeking to opt in to private screening must submit a detailed request to TSA. If TSA decides to grant the airport entry into the Screening Partnership Program, it will then determine which security company it believes best fits the needs of the airport applicant. As part of this selection process, the airport has only a minor advisory role. The security company is then assigned to the airport, and the private screening company is contracted to TSA; rather than a contract between the company and the airport it would serve.

We propose that the basic statutory framework of the Screening Partnership Program be amended to allow airports to contract directly with security screening providers or to self-provide screening services. The screening companies should be certified by TSA to be eligible for selection by individual airports, and airports should be able to choose the screening companies that best fit their needs and terminate contracts with those that fail to provide adequate service. Airports that choose to self-provide screening services should be subject to the same TSA certification and oversight as private screening companies.

Convert the 9/11 security fee into a dedicated local user fee

The principal barrier to direct airport contracting with security screening providers is payment responsibility. Under the Screening Partnership Program, rates are determined by TSA, which then pays the contracted providers and assigns them to willing airports. An unfunded mandate on airports to provide certain security services without compensation would surely be opposed by the airport industry.

To address these legitimate concerns, we recommend that Congress reform the existing security service fee, commonly referred to as the 9/11 Security Fee, which is assessed on airline tickets. Currently, airlines are required to impose security fees of $5.60 per one-way trip and a maximum of $11.20 for round-trip tickets (49 U.S.C. § 44940(c)(1)). Airlines then remit the fee revenue to TSA. However, since the enactment of the Bipartisan Budget Act of 2013, Congress has diverted one-third of 9/11 Security Fee revenue for deficit-reduction purposes (49 U.S.C. § 44940(i)).

To fund airports’ security screening operations, Congress should convert the 9/11 Security Fee into a dedicated local airport user fee akin to the passenger facility charge (PFC). Congress authorizes enplaning airports to impose PFCs of up to $4.50 per flight segment, with a maximum of two PFCs per one-way trip ($9) and four PFCs per round trip ($18) (49 U.S.C. § 40117(b)(1)). Airlines collect the fees on passenger tickets and remit the revenue directly to the airports at which the passengers enplaned. The Federal Aviation Administration regulates the use of airport PFC revenue by project eligibility criteria (14 C.F.R. Part 158). Despite these restrictions, PFC revenue now accounts for a large share of commercial service airport capital investment, particularly on terminal projects.

A PFC-style 9/11 Security Fee would restore the 9/11 Security Fee to its original purpose of advancing aviation security. Like the Federal Aviation Administration’s oversight of the passenger facility charge, TSA should regulate the use of these funds to ensure they are spent on security-related projects and operations. Revenue from a reformed 9/11 Security Fee would be sufficient to cover security screening services at most airports, although Congress should require, as part of these reforms, that TSA conduct a detailed financial analysis. Low-volume airports that might be unable to raise sufficient revenue to provide effective security screening should be supported by a separate account established by Congress and funded through annual appropriations, along with TSA administrative costs and other activities lawmakers deem appropriate.

Conclusion

These reforms to the Transportation Security Administration would significantly improve airport security governance and effectiveness in the United States. They are long overdue and are justified on their own terms. But the latest government shutdown, with the looming threat of commercial air travel chaos, underscores the need for these reforms. Airport security screening is simply too important to be left to the whims of Congress. 

Reason Foundation’s proposed TSA Reform Act is available here.

The post Reforming the TSA so airport security isn’t impacted by government shutdowns appeared first on Reason Foundation.

The controllers had called in sick due to the federal government shutdown. During the shutdown, air traffic controllers are not being paid for their often six-day, 10-hour-per-day work weeks. While President Donald Trump has floated the idea of not paying all federal workers back pay this time, controllers have typically received back pay for time worked during shutdowns.

All evening long, flight arrivals and departures at Burbank Airport were delayed, as the FAA’s regional TRACON (Terminal Radar Approach Control) facility took over for the local tower and handled the reduced traffic into Burbank. Outgoing flights from Burbank were delayed an average of two and a half hours.

Air traffic controller staffing shortages were also slowing flights at airports in Las Vegas, Denver, and Newark, among many others.

That’s the bad news. The good news is that this did not have to happen and can be prevented from happening again.

In fact, this kind of situation cannot occur in nearly 100 other countries around the world, because those countries fund air traffic control, much like airports, from customer user fees and long-term revenue bond financing.

By contrast, the FAA, which includes the country’s Air Traffic Organization, is mostly funded by federal aviation user taxes. Because they are taxes, the money goes to the federal government, and Congress must appropriate the funds for FAA and the Air Traffic Organization. When Congress fails to pass budgets and shuts down the federal government, even though airline passengers continue to pay their ticket taxes, the money does not reach controllers or the air traffic system.

This system is also a significant reason why American air traffic control technology is outdated and lags behind that of large air traffic control systems in countries such as Australia, the United Kingdom, Canada, Germany, and others.

In 1987, New Zealand separated its air traffic control provider from the government, which enabled its new Airways Corporation to retain the revenue from the user fees paid by the airlines, just like electric and water utilities charge their customers. The success of Airways New Zealand led to dozens of countries doing likewise within a decade. Today, nearly 100 countries receive their air traffic control services from air navigation service providers, which are funded directly by user fees paid by airlines and business jets.

With their own revenue source, these air navigation service providers are unaffected by government shutdowns. They are also better able to fund long-term projects and technological improvements because they aren’t beholden to the dysfunctional political battles in Congress that determine aviation funding every few years.

The New Zealand success inspired Bill Clinton’s presidential administration to study and then recommend creating a U.S. counterpart, which was detailed in a large-scale study by the office of the U.S. Secretary of Transportation. Unfortunately, opposition by private pilot groups killed it.

Those ideas were revisited after the 16-day shutdown in 2013 caused air traffic control problems and closed the academy that trains new controllers. That shutdown prompted the National Air Traffic Controllers Association to support efforts to transfer the nation’s air traffic control system from the FAA to a self-supporting nonprofit corporation.

This effort was championed by then-Rep. Bill Shuster, who chaired a House transportation committee that twice passed the reforms. President Donald Trump endorsed that plan during his first term, but the administration didn’t push it, and the bill never even made it to the House floor.

Today, the primary opponents are members of Congress who don’t want to lose control over the system and the business jet community, which doesn’t want to pay user fees. But it is still possible to take air traffic control out of the federal budget, insulating it from recurrent government shutdowns.

It’s time for the U.S. to join the rest of the world in recognizing that governments should regulate safety but not run air traffic control, which is a high-tech business that should be directly funded by fee-paying airlines and operated like a public utility or nonprofit corporation.

A version of this column first appeared at The Orange County Register

The post Only in America: Government shutdown causes air traffic control problems appeared first on Reason Foundation.

Airports Council International maintains a database indicating that in Europe, 75% of passengers use privatized airports. In Latin America, the figure is 66%, and in the Asia-Pacific region, it’s 47%.

Here in the United States, only 1% of passengers use privatized airports. The public-private partnership lease of the San Juan, Puerto Rico, airport is responsible for that 1%.

This significant disparity has puzzled many people in both industry and government. So, I was pleased to receive an invitation last fall from Ed Glaeser of Harvard University to submit a proposal for a research paper on a current problem and a potential policy-change solution for it. The problem I suggested was the dearth of U.S. airport privatizations. My proposal was one of a half-dozen that were accepted. The project was managed by the American Enterprise Institute and the Brookings Institution, and the paper went through rigorous peer review. It was released in August, and I hope it has a significant impact on improving airports. 

In the years following the privatization of the British Airports Authority by former Prime Minister Margaret Thatcher in 1987, there was significant interest in enabling similar transactions to take place in the United States. In 1996, Congress enacted an Airport Privatization Pilot Program under which five airports could be P3-leased. (Outright sale of U.S. airports was and remains against federal law.) 

A handful of small airports were P3-leased, but none were successful. In 2012, Congress made modest changes to the Airport Privatization Pilot Program (APPP). Under this program, Chicago attempted to lease Midway International Airport twice, and Puerto Rico successfully leased Luis Muñoz Marín International Airport in San Juan. 

Eventually, in 2018, Congress substantially revised the program, renaming it the Airport Investment Partnership Program (AIPP). The most important change was that the (generally up-front) lease payment can now be used by the airport owner’s jurisdiction (city, county, or state) for any governmental purpose, rather than being limited to being spent on airport improvements. 

Many of us thought this would finally lead to airport public-private partnership leases, but the only serious effort to lease one was St. Louis Lambert International Airport. In 2018, the Lambert effort was terminated by the city due to opposition from other governments in that metro area. This was despite very significant private-sector interest in a lease and support from the airport’s airlines.

My research topic was to review the literature on U.S. airport privatization and come up with policy changes that could open the door for long-term public-private partnership (P3) leases. I reviewed a major Transportation Research Board study from 2012 and several reports on the topic by the Governmental Accountability Office (GAO), Congressional Research Service, and others. One theme stood out to me: the non-level tax playing field between the United States and the rest of the world. U.S. airports are financed via tax-exempt bonds, which do not exist in Europe, Latin America, or the Asia-Pacific countries. This problem had not been addressed in the succession of changes made by Congress relating to airport public-private partnerships.

Fortunately, I had also saved the text of the major 2018 White House infrastructure report researched and written by D.J. Gribbin during the first Trump administration. I’d had occasional discussions with Gribbin while he was serving as the leading strategist of President Donald Trump’s $1.5 trillion infrastructure plan, and I remembered that it addressed the tax-exempt bond situation. The transportation portion of Gribbin’s report was also released as a report by then-Secretary of Transportation Elaine Chao, and it included the same discussion of tax-exempt airport bonds as a barrier to U.S. airport public-private partnerships.

In the new report, I propose two federal tax policy changes that were discussed in the White House report: (1) allow an airport’s existing tax-exempt bonds to remain in force, but with subsequent debt service becoming the responsibility of the private-sector partner, and (2) expand the availability of surface transportation tax-exempt private activity bonds (PABs) to airports and seaports, as proposed in 2014 by a bipartisan House Committee on Transportation and Infrastructure working group on P3s.

Congress’s Joint Committee on Taxation (JCT) and the U.S. Treasury Department generally oppose any expansion of tax-exempt debt. Their stated reason is their assumption that anything financed via expanded tax-exempt debt would have otherwise been financed via taxable debt—hence, the government would miss out on tax revenue if tax-exempts were expanded.

For U.S. airports, this is simply incorrect, as I explain in the report. Treasury receives no taxable revenue from airport finance today, since nearly all airport bonds are tax-exempt. No new U.S. airport public-private partnership leases are taking place, so Treasury is not getting any tax revenue from non-existent leases. 

Under the changes I propose, if airport P3 leases start to occur, there would be no immediate increase in federal tax revenue. However, as for-profit public-private partnership firms enter the U.S. airport market, assuming they are successful businesses, they will be subject to federal corporate income taxes. This could develop into a new U.S. industry, similar to what has occurred in surface transportation, thanks to long-term public-private partnerships for highways and transit. Today, the United States has a whole new tax-paying corporate sector of highway/transit public-private partnership companies, like what could develop as a new airport P3 industry in the years ahead.

The most important question is whether these tax changes would actually lead to more than the current single long-term airport public-private partnership lease. 

In my new report, I draw on my 2021 Reason Foundation study on airport P3 leases to estimate the impact those tax changes would make. Under current law, in an airport P3 lease, the airport owner (city, county, or state) must pay off its outstanding bonds before the deal can be finalized. 

In Europe, the airport owner receives the estimated gross value of the airport, generally based on a multiple of its EBITDA (earnings before interest, taxes, depreciation and amortization). But for a U.S. airport, under current law, the owner would receive the net value (gross value minus the bond payoff). That can make a significant difference in what can be considered as a major one-time financial windfall that the city, county, or state can use for any governmental purpose, under the current AIPP law.

For example, based on my 2021 analysis, which estimates the market value of 31 large and medium U.S. airports, for Hartsfield–Jackson Atlanta International Airport, the gross up-front payment would be $9.2 billion, compared with a net payment of $6.1 billion.

For the Los Angeles International Airport, the gross value of $17.9 billion contrasts with a net value of $10.6 billion. Similarly, for San Jose Mineta International Airport, the gross value is $2.5 billion versus $1.3 billion in net value. 

To make this even more tangible, the report compares the one-time windfall for each of 31 airports with the unfunded liability of that jurisdiction’s public employee pension funds. Atlanta, Los Angeles, and San Francisco are some of the cases with the gross value being more than sufficient to fully eliminate their pension system’s unfunded liabilities. In many of the 31 large and medium airports examined, the payment would make a significant dent in the jurisdiction’s public pension debt. 

Still, the question remains: would any U.S. airport owner consider such an airport lease to be worthwhile? 

I quote a former director of Miami International Airport explaining to Sadek Wahba of I Squared Capital how much elected officials enjoy micromanaging airports. That’s a real phenomenon, but this leads me to a question: What do elected officials think an airport P3 is? 

My hypothesis is that most think a P3 is a de facto sale. Even if their city or state already has one or more long-term DBFOM (Design-Build-Finance-Operate-Maintain) public-private partnership highway projects, they might not see that a long-term airport P3 lease is an ongoing partnership between the airport’s government owner and the selected private sector company or project entity. They may not be clear about the respective roles of the public and private partners in the long-term agreement. To be sure, elected officials will not retain their micro-managing ability of an airport if it is P3 leased, but they will have a significant role in major future decisions, such as expanded terminals or runway extensions, made by the airport. 

So, the airport P3 industry has an important educational role to play with policymakers and stakeholders. And despite my AEI/Brookings paper having the word “privatization” in the title, my first recommendation is to avoid using this term with regard to U.S. airport long-term public-private partnership leases. In the examples and cases described here, they are not sales; they are long-term partnerships that research has shown lead to significantly improved airport performance.

One encouraging word comes from Kevin Burke, chief executive officer of Airports Council International- North America. In an interview with Aviation Week reporter Aaron Karp last fall, Burke lamented Congress’s repeated failures to increase the amount of the federally authorized passenger facility charge (PFC), which has not been increased for 20 years and has lost half of its purchasing power. Without a near-term PFC increase, Burke said, U.S. airports would likely turn to “public-private partnerships to fund the multiple billions of dollars it takes” to improve airports. He noted that airport lease transactions would likely follow the financing model used in Europe and other regions where companies oversee airport management and development in decades-spanning leases with governments.

In looking for another reason for potential optimism, I’d also remind readers that the key tax changes proposed in my paper were first spelled out in the 2018 Trump White House Legislative Outline for Rebuilding Infrastructure in America. It would be wise for the current Trump administration to return to some of the proposed changes that Gribbin and the 2018 document outlined to help spur the modernization of airports through public-private partnerships. 

As I conclude in the study, Congress should make these changes to enable U.S. airports to improve their performance and compete on a level playing field with airport P3s in Europe, Latin America, and the Asia-Pacific.

A version of this column first appeared in Public Works Financing.

The post How Congress can spur the modernization of U.S. airports appeared first on Reason Foundation.

• Preparing states for when the federal money runs out
• How personal travel has changed post-pandemic
• Why U.S. taxpayers should not pay for Maryland’s new bridge
• Road safety in the post-pandemic era
• California high-speed rail’s last-ditch effort
• Let’s reconsider commercializing Interstate rest areas
• News Notes
• Quotable Quotes

Preparing States for When the Federal Money Runs Out

For the past year and a half, I’ve written columns and chaired a conference panel on the looming insolvency of the federal government, which is now projected as early as 2033. When the Social Security and Medicare trust funds reach “empty,” Congress’s most likely choice will be to reduce all kinds of other federal spending in order to replace the 20%-25% shortfalls of those two entitlement programs’ annual funding. If Congress were instead to commit to filling the gap in entitlement funding via massive additional borrowing, forever, the U.S. government’s credit rating would move from investment-grade to junk, making debt service on the greatly increasing national debt even more expensive.

Yet, in the transportation world, Congress is gearing up to reauthorize the highway and transit program using the borrowed $674 billion added by the Infrastructure Investment and Jobs Act (IIJA) legislation as its baseline. Doubling fuel taxes to fund that spending increase is not even thought about in Congress, let alone being suggested by anyone as a wiser remedy than borrowing.

Yet, fiscally responsible members of Congress ought to be proposing reforms that would at least start to get state departments of transportation (DOTs) and state legislators to prepare for the day when federal transportation money is no longer available. This would be a massive, unexpected change, unless at least some transportation leaders start paving the way for this financial earthquake.

With that as an introduction, here are some provocative ideas from my friend and colleague, D. J. Gribbin, who drafted the White House infrastructure plan during the first term of the Trump administration. Gribbin recently published his thoughts on federal transportation funding in a short paper for the Eno Center for Transportation on Aug. 27. Gribbin sets forth several important points that could lay the groundwork for the major changes needed in federal transportation policy.

First, federal transportation trust fund money is not “additive,” Gribbin notes, meaning it all originates from state and local taxpayers (except for recent years’ egregious borrowing from future generations). Every state is entitled by law to receive back at least 95% of what it generates in federal user tax revenue.

Second, the prospect of getting “free federal money” at some future date can lead a state agency to hold off on launching a project that has some prospect of having a large fraction paid for by “the feds.” We have all seen state policymakers hold off on committing their own funds to needed projects, in hopes of future federal largesse.

Third, as we know but often ignore, federal funding increases a project’s cost. Davis-Bacon, Buy America, and all kinds of other rules and regulations make a project that gets federal dollars cost a good deal more than if it were entirely state (and privately) funded. D.J. cites a Government Accountability Office (GAO) study that in the 2014-18 period, found that a federal building cost 14%-25% more than if it had been state/local funded. He also cites a Georgia study finding that road widenings with federal money took four times longer to carry out than state-funded widening projects.

Finally, Gribbin cites a growing body of work that documents the large increase in highway construction costs due to the IIJA. Jeff Davis of Eno reported that construction cost inflation has consumed $57 billion of IIJA’s spending increase.

Based on these points, D.J. suggests several modest changes in federal law.

First, give each state a legal right to 95% of the Highway Trust Fund money that originated in that state. And then amend Title 23 so that those funds, since they are each state’s property, are exempted from all federal regulations.

Would Congress balk at such a change? Perhaps not, he suggests, because all the IIJA-type borrowed money would still be subject to the usual federal regulations and would be available for Members of Congress to earmark, as they love to do (at least while the borrowed money lasts).

This agenda would be a way to revive the highway funding devolution proposal that became popular in the 1990s, when it was endorsed by mainstream thinkers such as Alice Rivlin (Brookings Institution) and David Luberoff (Harvard Kennedy School). I wrote a 1996 Reason Foundation policy paper, “Defederalizing Transportation Funding,” and spoke about the subject at several conferences. Sen. Connie Mack (R-FL) and Rep John Kasich (R-OH) sponsored a bill that would have phased out, over two years, all but two cents of the federal motor fuel taxes. California Gov. Pete Wilson and the state’s 1996 Commission on Transportation Investment supported this devolution.

Discussing these kinds of ideas should get started now, so that state and local governments are not left unprepared when the Social Security and Medicare crunch occurs, as early as 2033. State and local governments own nearly all the U.S. roadway and transit systems. It is their responsibility, as owners, to ensure that these vital systems remain funded when the federal government is no longer able to be their backstop.

Transportation thought leaders need to engage on this vital subject because it’s clear that Congress apparently does not see this coming. Somebody needs to start thinking through the needed transfer of responsibility to the owners and operators of this infrastructure. If not us, who? And if not now, when?

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How Personal Travel Has Changed Post-Pandemic

How has commuting changed since the COVID-19 pandemic? How far has transit ridership recovered? How many of us are working at home full-time?

These are among the questions answered by two decades of data from five reputable transportation surveys. My colleague Steven Polzin of Arizona State University (and his ASU colleagues Ram Pendyala and Irfan Batur) have compiled these findings in both tabular and graphical form. Their graphical summary is now available. Here are some of the highlights.

From the 2024 American Community Survey (ACS) conducted by the U.S. Census Bureau, we find that commuting alone in a motor vehicle has declined from around 76% pre-pandemic to around 69% today. But those commuters did not shift to transit, whose average has declined from around 5% to around 3.7% in 2024. Walk, bike, and other modes are basically unchanged at around 4.5% (higher than transit’s share). Where former commuters and transit users went is to “working at home.” The ACS data show 13.3% working at home “usually,” compared with 3% to 5% pre-COVID. The American Time Use Study (ATUS) figure for “work at home always” is 19.6% (which has declined from 25% in 2020).

The graphical data adds additional information about what has changed since 2005. For example, average commute time increased pretty steadily from 25.1 minutes in 2005 to 27.6 minutes in 2018. But post-pandemic, it has climbed back from 25.6 minutes in 2021 to 27.2 minutes in 2024 (despite the smaller fraction of solo commuters). Far more dramatic is the average daily trips per person. That shows a steady downtrend from 4.2 trips in 2003 to 3.5 trips in 2018. That plunged to 2.5 trips during COVID but has slowly increased to 2.88 by 2024, basically continuing the long downtrend. The amount spent per day on travel also experienced a gradual downtrend from 2003 (75.3 minutes) to 2018 (69.4 minutes). After a large decrease during COVID, by 2024, it was up to 61 minutes.

One of the most surprising changes is what people are using their trip time for. Even back in 1990, commuting was only one-third as much as shopping and errands, per the ATUS data. But the shopping fraction by 2022 was half of what it was in 1990. And in 2022, total daily household travel, as measured by ATUS, had declined from 3.76 hours to 2.28 hours. It’s pretty obvious, as Polzin has written elsewhere, that travel time for shopping has been slashed due to online ordering and delivery, as well as home services partly substituting for things like trips to Home Depot. One graph in the presentation shows e-commerce retail sales having climbed from less than 1% of total retail in 1999 to over 16% in 2025.

Consistent with all of the above is the change in vehicle miles of travel (VMT). Between 1945 and 2005, VMT grew at 4.22% per year. Since then, after a dip 2008-2011, it resumed growing but at a significantly lower rate (apart from a COVID-19 dip). But the most dramatic change is in VMT per capita. During that same 1945-2005 period, it grew at 2.95% per year. But after peaking in 2005, it has been in a slight downtrend since then. This is consistent with the above data on things like reduced household travel.

The anti-highway/anti-car organizations still like to portray Americans as car-crazy people who get in their cars for anything and everything. They assume that adding lanes to congested freeways is futile, since there is a reserve army of drivers waiting to fill up every new lane-mile. But travel behavior has changed, thanks to trends like working from home, service delivery companies, and online retail sales and delivery. Transportation planning needs to take these major trends into account.

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Why U.S. Taxpayers Should Not Pay for Maryland’s New Bridge

Following the collapse of the Francis Scott Key Bridge last year after one of its piers was struck by a cargo ship, Maryland officials pulled out all the stops to get a pledge from Congress that taxpayers would pay for the bridge’s estimated $2 billion replacement cost. And to ensure a speedy replacement process, they announced that the new bridge (although a different design) would be built in the same location; hence, no years-long environmental impact study (EIS) would be needed.

That was then; this is now. First, we learn that, based on a preliminary design by the planned contractor, the replacement will cost $5 billion, rather than the initially estimated $2 billion. And second, the bridge will follow a different route than the original bridge (but never mind about no need for an EIS). Congress should not fall for this bait-and-switch. Taxpayers in 49 other states should not be stuck with a $5 billion tab for this project.

In fact, the case for federal taxpayers to pay for the bridge at all is very weak. As I pointed out in the aftermath of the Key Bridge collapse, that bridge was a toll bridge, and there is no reason to ignore the users-pay principle for its replacement.

Second, while realistic toll revenues would very likely fall short of paying for a $5 billion bridge, Maryland has a number of other funding sources. The bridge was insured against the loss of toll revenue via a $350 million policy, so that is one source. The company that operated the ship that collided with the bridge was also insured. As The Wall Street Journal reported at the time, it was insured by Britannia P&I Club, one of a dozen such maritime insurance clubs. Those clubs pool their resources in the event of a major disaster, and up to $3.1 billion is available per ship.

In addition, it’s very clear that Maryland officials dropped the ball on the need for heavy-duty protection of the bridge piers. The Maryland Transportation Authority ignored repeated warnings over the years from the Baltimore Harbor Safety and Coordination Committee about the lack of meaningful protection of the bridge piers. So it was not an innocent victim of the bridge collapse. This negligence suggests that Maryland taxpayers should bear part of the cost of the replacement bridge.

Let’s hope members of Congress from the other 49 states resist Maryland’s new drive for a $5 billion federal windfall. The federal government is operating at a huge budget deficit, and $5 billion is hardly spare change.

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Addressing Road Safety in the Post-Pandemic Era
By Marc Scribner

In the last half-decade, the United States experienced the most dangerous roads in years. The National Highway Traffic Safety Administration (NHTSA) reports that nationwide traffic fatalities exceeded 40,000 in 2021 for the first time since 2007. Accounting for the growth of the population and travel yields similar results in terms of fatality rates. This traffic safety problem spurred many dramatic policy proposals, most of which failed to deliver any safety benefits. The good news is that the recent surge in dangerous driving seems to have subsided. But questions about the role of public policy in improving roadway safety will continue and should be informed by evidence and realistic assumptions.

The onset of the COVID-19 pandemic coincided with a rise in what could be generally termed “bad behavior.” In the United States, increasing violent crime in major cities received the most public attention, but other examples abound. Public health agencies observed substantial increases in substance abuse and overdose deaths. In transportation, a troubling outbreak in “air rage” incidents on commercial airliners coincided with the air travel recovery. Pilot-reported “laser incidents” also dramatically increased during this period. America’s roadways were not spared.

The fatality rate per 100 million vehicle-miles traveled increased by 22% between the third quarters of 2019 and 2020, marking the highest fatality rate since 2005. This period coincided with relaxed pandemic restrictions while commuter travel remained minimal due to working from home, which opened up many previously congested roads for high-speed misbehavior. Traffic enforcement by police also fell, in part due to public health concerns about maintaining social distancing.

Both the number of traffic fatalities and the fatality rate have declined steadily from their peaks over the last few years. Last month, NHTSA released its initial estimate of U.S. traffic fatalities for the first half of 2025. In very welcome news, the fatality rate of 1.06 deaths per 100 million vehicle-miles traveled is lower than the 1.07 deaths observed in the first half of 2019, suggesting that the pandemic era of roadway carnage may be behind us.

So what might explain this recent positive change in road safety? Urban traffic congestion came roaring back in metropolitan areas across the country, limiting opportunities for high-speed misbehavior. Renewed emphasis on high-visibility enforcement by law enforcement might play some role, although there isn’t strong evidence to support this claim.

What about engineering infrastructure to be safer? Supporters of this approach generally advocated traffic-calming measures whereby the design of roads was to be modified to encourage drivers to alter their behavior. Changes such as narrower roadways and lanes have been widely demonstrated to reduce driver speeds. Unfortunately for traffic-calming advocates, re-engineering roadways is the most costly and time-consuming type of safety intervention, so it is unlikely to have been responsible for the recent decline in dangerous driving to pre-COVID levels.

Further, in addition to the high costs and time-consuming nature of traffic-calming interventions, these programs in practice have often been poorly targeted. For instance, the 2021 Infrastructure Investment and Jobs Act established a grant program called Safe Streets and Roads for All (SS4A). SS4A aimed to fund Complete Streets traffic-calming projects favored by urbanists. But as I noted in the June 2022 issue of this newsletter, because SS4A eligibility criteria were overly focused on relatively safe urban streets owned by municipalities, the program in practice prohibited funding to the U.S. roadways where more than half of fatalities occur. If the goal was to make a material difference in the safety outcomes on America’s most dangerous roadways, SS4A failed spectacularly by its own poor design.

I’m no psychologist, but my strong suspicion is that Americans’ bad behavior has demonstrated something like a reversion to the mean in the years since the initial shock of the COVID-19 pandemic. This has been observed in violent crime, unruly airline passengers, substance abuse and overdose deaths, and even aircraft laser strikes. So why not misbehavior by motorists, too?

It has long been known that the critical factor in the vast majority of motor vehicle crashes is driver behavior, whether error or misdeed. The implementation of behavioral-focused traffic safety countermeasures, such as those catalogued and evaluated by NHTSA, has historically proven successful in reducing crashes and the injuries and fatalities caused by them.

However, in the years immediately before the pandemic, traffic fatality rates had plateaued. This led to growing concern among policymakers that the “low hanging safety fruit” had been picked, a dubious assertion given that U.S. traffic safety policy often neglects the centrality of driver behavior. Nevertheless, this led some to suggest that improving road safety in the future means advancing the most-costly, less-immediately-effective, and often-unpopular interventions. These interventions, such as traffic calming, often present stark trade-offs between road network efficiency and safety.

Fortunately, automated vehicle technology increasingly being deployed in various forms might be as close to a safety silver bullet as we can get. Fully automated driving directly addresses driver behavior—the critical factor for more than 90% of crashes—by assuming responsibility of the dynamic driving task. And it does so in a way that minimizes public expense with the potential to also improve traffic flow, rather than sacrificing roadway efficiency for safety through costly and gradual infrastructure treatments.

Automated driving developer and robotaxi operator Waymo has analyzed 96 million miles of driverless operations and persuasively estimates its technology has produced 91% fewer serious-injury or worse crashes and 80% fewer any-injury crashes compared to a human driver baseline. To be sure, many of these driving automation technologies are not in widespread use—especially the most advanced automated driving systems that completely remove human beings from the driving loop—and they will take time to mature and deploy at scale. But we may be on the cusp of realizing unprecedented traffic safety improvements. This is something Congress should consider as it works to develop the various programs contained in its surface transportation reauthorization due next year.

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California High Speed Rail’s Last-Ditch Effort
By Baruch Feigenbaum

High-speed rail (HSR) has proven to be very expensive to build in the United States. A taxpayer-funded line in Florida was vetoed years ago, and today, there is the less-expensive but still costly public-private Brightline project. A proposed, privately funded high-speed rail project in Texas connecting Dallas and Houston sits in a zombie state, waiting for funding. But the original and most expensive project of them all—California’s planned high-speed rail line between Los Angeles and San Francisco—is still alive. The project’s existence has more to do with political convenience than transportation needs.

Last month, Gov. Gavin Newsom and California legislative leaders reached a general agreement to provide long-term funding for the high-speed rail (HSR) line from the Cap and Invest (previously known as Cap and Trade) program. While that might sound encouraging, this new funding plan relies on some creative accounting that doesn’t exactly meet the standards of the Government Accounting Standards Board.

As Jeff Davis at Eno Transportation Weekly first reported, the combination of scope increases, cost escalation, closeout costs, and completed designs would virtually double the starter segment’s cost from $26 billion to $51 billion. At the same time, the Trump administration has clawed back $4.1 billion in federal funding that was previously awarded by the Biden administration. As a result, the California High-Speed Rail Authority (CHSRA) needs to close a significant budget hole.

The state identified design and sequencing changes that it says would reduce the cost of the Merced to Bakersfield starter section of the rail system by $14 billion. It also plans to close the gap by extending the timeline of the Cap and Invest funding from 2030 to 2045, but that would cause delays in construction.

As a result, the state is trying to identify expansions beyond the starter segment that might yield an operating profit to help finance the expanded project. The authority is examining expanding the starter segment northward, southward, and eastward. The most viable option it could find is a San Francisco to Palmdale route, which might yield $11 million in operating profit over 40 years. But those extensions would cost another $60 billion to construct.

In reality, this new budget is an accounting shell game. It tries to use revenue generated from operating services without counting shortfalls incurred from construction costs.

But given California’s existing transportation network and decisions other states have made regarding HSR, it is worth asking why California is still pursuing this project. And the answers are less compelling than they were 15 years ago.

High-speed rail isn’t a big win for the environment. High-speed trains operating at capacity between L.A. and S.F. would produce fewer greenhouse gas emissions than half-full airplanes flying between the same regions. But the trains would not reach the line endpoints until at least 2050. And there is no indication that they will be full.

Meanwhile, most airlines fly inter-California routes at 90% capacity. Aircraft engines are becoming more efficient; several electric and hybrid aircraft propulsion systems are under development. And building an HSR line is extremely energy-intensive, much more than the construction of a new airport or highway. The irony of using Cap and Invest dollars meant to remediate energy-intensive uses for the energy-intensive construction of HSR is apparently lost on California decision-makers.

It’s also not clear why California needs high-speed rail. Airplanes are faster and don’t require taxpayer subsidies. An intercity bus provides a budget option. And driving is the customizable option for folks traveling outside the city centers or who need to stop between the central cities.

Other countries built their HSR network for two reasons. The first was to relieve crowding on conventional passenger rail systems. There is no conventional passenger rail between LA and San Francisco, and hence no overcrowding. The second was to stimulate development before they had a limited-access highway network. California already has a robust freeway network, including I-5 and US 101, connecting Southern and Northern California. Widening I-5, where needed, wouldn’t be cheap, but it would be a fraction of the cost of HSR.

Using general fund revenue (which Cap and Invest is) to build HSR is a wealth transfer from the working class to the business class. Trains often have roomier seating and better food options, but taxpayers subsidize those perks. All but three high-speed rail lines worldwide have required subsidies to build, and many require subsidies to operate.

Contrast high-speed rail with local transit, particularly local buses, which are used most by lower-income residents. While government subsidies should always be minimized, there is more justification for subsidizing local lower-income transit riders who might not be able to access employment without the service.

From a political perspective, it may seem an odd policy for Democrats to support a project for the wealthy. What makes it potentially politically savvy in California is the number of jobs the project can provide to unions, which have typically been a core constituency of the Democratic Party, and the illusion that the project reduces greenhouse gas emissions in the short term, which the environmental wing of the party supports. But that doesn’t make the rail system a good policy for taxpayers or the state’s future. Perhaps this latest creative accounting is so egregious that some Democrats in the state legislature will pull the plug on the project.

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Let’s Reconsider Commercializing Interstate Rest Areas

Last month, I received an email from a corporate official who had just discovered Reason’s 2021 policy study, “Rethinking Interstate Rest Areas.” It made the case, based partly on the minimal facilities at Interstate rest areas (forbidden by law to offer any commercial service), partly on the need for safer overnight truck parking spaces, and partly on the then-emerging need for electric vehicle charging stations. His email suggested that, given limited state and federal highway funding, perhaps it is time to revive this idea.

The context in 2021 was the Biden administration holding the presidency and Democratic majorities in both the House and Senate. We made common cause with groups working hard to legalize EV charging at rest areas, and at one point, it looked likely to be included in pending legislation. But opposition from the trucking and truck-stop industries (plus the organization of fast-food franchisees whose locations at on-ramps and off-ramps felt threatened by rest area competition) killed the effort.

Today, the safe overnight truck parking shortage remains in play, and while EV charging has increased, it would be much more convenient for range-anxious drivers to know they could charge up at Interstate rest areas. Plus, we are in a very different political environment, with the opposite party in control of the White House. I was recently reminded that the 2018 Trump White House infrastructure proposal included both expanded Interstate tolling and commercializing Interstate rest areas.

So what might increase the prospects this time around? First, many state DOTs would like to expand truck parking but can’t afford to expand the small acreage of their existing rest areas—which any of the companies that develop and operate toll road service plazas would be glad to do. A number of state DOTs favored repealing the ban on commercialization four years ago, and very likely still do.

Second, the trucking industry is not uniformly opposed. In the roll-out of our 2021 study, I learned that the Owner-Operator Independent Drivers Association (OOIDA), the organization of owner/operator truckers, has long favored commercialization. (I made a guest appearance on their radio program to talk about this.) Potentially very important is that two of the major truck stop operators—Pilot and Flying J—as of 2024 are wholly owned by Warren Buffett’s Berkshire Hathaway, a champion of free markets and competition.

Third, one possible sweetener for both the breadth of services at rest areas and the expansion of truck stops would be for state DOTs to include not only expanded safe overnight parking but also truck-stop-like facilities such as showers and trucker-friendly retail. Indeed, some commercialized rest areas might offer to host truck stops as part of their commercial expansion.

The economic case made against commercialized rest areas reflects a zero-sum view of the world. Any new service offered at a rest area is assumed to deprive that amount of service from a gas station or fast-food outlet at an off-ramp. Since trucking is projected to be one of this country’s fastest-growing businesses in the coming decades, that zero-sum view is wrong. But it’s also (how can I put this) anti-American. In a free-market economy, any business must expect competition and has no right to expect the government to prevent it. Yet that is what the federal ban does. Moreover, the opponents of commercialization are not companies such as Burger King or Coca-Cola—they are associations of franchisees of such companies. Advocates of rest area commercialization should recruit the big-name companies that eagerly offer their services at toll road service plazas and would be glad to do likewise at commercialized rest areas..

Reason’s 2021 study has lots of still-useful information for policymakers and the transportation industry.

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News Notes

Company to Auto Producers: Get a Horse!
Making its debut at last month’s annual Munich Motor Show was a 1.5-liter engine designed to enable auto manufacturers to convert their electric vehicles (EVs) to hybrids. Called the Horse C15, it is the size of a large briefcase. Its four cylinders deliver up to 94 horsepower for B and C-segment vehicles. A larger 161-horsepower version is available for larger cars. Horse says the C15 can run on gasoline, ethanol, or methanol flex fuels. With EV sales tapering off and hybrids in many markets out-selling pure EVs, Horse might have a viable product, depending on its price and installation cost.

Waymo Gets Permit for San Francisco Airport
Last month, city officials announced that Waymo was receiving a permit to take passengers to and from SFO, the Bay Area’s largest airport. The move enables SFO to compete better with San Jose Mineta International Airport, which announced that its Waymo service will launch by the end of the year. With no driver costs, the Waymo service is expected to be less expensive than taxis and ride-hailing companies such as Lyft and Uber. No start date was announced for Waymo at SFO, but that is also unlikely to begin until the end of this year.

IBTTA Supports User-Based Funding in Federal Reauthorization
In a recent news release, the International Bridge, Tunnel, and Turnpike Association (IBTTA) has recommended that Congress strengthen user-based highway funding when it reauthorizes the federal highway program next year. Given the huge and growing shortfall in the federal Highway Trust Fund, IBTTA called for expanding the scope for tolling and road pricing on Interstates and other federal highways. It also called for streamlining project delivery via full implementation of the One Federal Decision policy and advancing alternatives to fuel taxes, such as mileage-based user fees (MBUFs).

Congress Takes Another Look at Federal EV Fee
While a growing number of states have some kind of a tax or fee on electric vehicles, at the federal level, EVs pay no federal highway user taxes, unlike conventional motor vehicles. Lacking an easy way for the federal government to charge some 289 million vehicles for their annual miles driven, the simplest option appears to be a flat annual fee/tax. This would presumably be collected by state motor vehicle departments and remitted to the federal Highway Trust Fund. There is still talk about charging $250/year for EVs and somewhat less for hybrids. The average personal motor vehicle pays $100-150/year in federal fuel taxes, so $250 seems excessive, despite the somewhat higher weight of EVs compared with comparable internal combustion vehicles. $150 would seem more like it, perhaps with an adjustment for gross weight and inflation.

More Ports for Panama Canal Proposed
The Panama Canal Authority plans to auction two greenfield ports, as it continues to counter fears of undue Chinese interest in the Canal. The agency hopes to have two new operators selected by year-end. Those known to be preparing to do so include European companies CMA-CGM and AP-Moller-Maersk, according to Infralogic (Aug. 27).

Florida Continues Expanding Its Toll Roads
With more tolled lane-miles than any other state, according to Federal Highway Administration (FHWA) data, fast-growing Florida continues to expand its toll roads. For example, in the Tampa Bay area, the Selmon Expressway (which includes a reversible upper deck for faster suburbs-to-downtown commuting) has public support to extend the expressway eastward to the suburb of Riverview. Recent surveys show 95% support in that suburb. And in the Jacksonville metro area, the First Coast Expressway continues to expand westward, with current plans calling for it to grow to 46 miles. The Expressway will provide a shortcut between I-10 and I-95 once a new bridge over the St. Johns River is completed.

Virginia Express Toll Lanes Missing Link
Oct. 15 is decision day for Virginia DOT and the Metropolitan Washington Council of Governments. The latter’s Transportation Planning Board will vote on whether to move forward with the extension eastward of the existing express toll lanes network, by including it in the regional Visualize 2050 transportation plan. If that decision is yes, whether or not the project (I-495 Southside Express Lanes) will be procured as a long-term public-private partnership (P3) will remain to be decided. That will depend on whether projected revenues would be enough to support a revenue-financed P3 procurement. That depends, in part, on whether Maryland planners approve extending the lanes across the Woodrow Wilson Bridge to MD 210 in Prince George’s County.

India Planning 68-Mile Elevated Toll Road
The New Indian Express reported that the Greater Bengaluru Authority’s technical committee has approved a detailed report on a new cross-city elevated toll road. It would be procured as a long-term public-private partnership, as many Indian toll roads have been. The toll road would have entry and exit ramps at strategic locations.

Brightline West Revamping Its Financing
Infralogic’s Stephen Pastis reported (Sept. 5) that Brightline West is updating the financing plan for its proposed 218-mile high-speed rail line from Las Vegas to Rancho Cucamonga in San Bernardino County, California. CEO Mike Reininger said the company will finalize contracts with construction firms within the next 90 days, enabling the company to finalize its financing. Pastis reported that the company will increase its equity investment to “well above” the previous $1 billion in earlier plans. The revised financing will also require more debt. The company had an Aug. 31 deadline to secure $6 billion in senior debt financing and is now within a 90-day grace period to revise its financing plan.

Queensland Government Cancels Light Rail Project
A long-planned project to extend an existing light rail line by 13 km to Brisbane’s southern suburbs, whose cost had escalated to an estimated A$9.85 billion, was terminated early last month. Community support ended up largely negative, due in part to only light rail being considered, objections to its impact on a national park and popular creek, and likely further cost increases. The government promised to embark on a multimodal study taking greater account of public concerns.

Tolls Removed: Congestion Blossoms
Highway 407 ETR is a P3 toll road in the Toronto suburbs, and it was one of the first large-scale transportation P3 projects in Canada. It was an extension of the existing state-operated 407, which was also financed based on tolls. On Aug. 14, the premier abruptly abolished tolling on the state-operated portion, and significant congestion appeared. Interestingly, Green Party leader Mike Schreiner criticized the government for removing pricing, which encouraged far more people to drive.

Reduced Bridge Tolls Agreed for Strait Crossing
Infralogic’s Eugene Gilligan reported (Aug. 25) that Transport Canada and Strait Crossing Bridge Limited (SCBL) had agreed to reduce tolls on the Confederation Bridge. Infrastructure P3 company Vinci owns 85% of SCBL, which has the P3 concession that developed the bridge, and which runs until 2032. Transport Canada negotiated the toll reduction agreement, from $C50.25 to $C20 for all vehicles until 2032, but also agreed to subsidize SCBL to make up for lost toll revenue. The bridge is eight miles long and connects Prince Edward Island with New Brunswick. It was developed by a previous P3 consortium, starting in 1993 and completed in 1997.

Luxury EV Charging Stations in the Los Angeles Area
The Economist reported that Los Angeles now has two luxury EV charging stations. One is the Tesla Diner, with sleek, retro-science fiction architecture and food served in boxes shaped like a Tesla Cybertruck. A competitor has opened in nearby Orange County, competing with diner Rove; it includes an on-site lounge and an upscale grocery store. This concept will work as long as it takes 20 to 30 minutes to charge an EV, so people need something else to do. If or when super-fast charging comes about, then any gas station could be converted to an EV charging station.

New York State Thruway Goes Electronic
Despite being a latecomer to the all-electronic tolling trans, the Thruway seems to be doing an excellent job. The International Bridge, Tunnel, and Turnpike Association (IBTTA) reports that, in 2024, 95% of all Thruway tolls were collected via E-ZPass, with toll revenue topping the $1 billion level. The numbers are derived from the agency’s audit of 2024 operations..

Correction to Last Month’s Lead Article
The article on China’s high-speed rail excesses came to me from a D.C. think tank, CSIS. But last week I heard from Zichen Wang, who writes the Pekingnology newsletter on Substack. It was his post that I discussed, but CSIS did not originate it (although it did host a recent podcast from him). He works for the Center for China and Globalization in Beijing, a non-governmental think tank. He also explains that he is a journalist, not a transportation expert, and that he recently posted a rebuttal to the Lu Dadao criticism.

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Quotable Quotes

“Based on projected fuel-efficiency gains, the federal gas tax revenue will lose $3.9 billion (16% decline) in 2030 alone. Over 80 percent of that loss is because vehicles are going farther on a tank of gas. Although EVs are not the primary cause of the revenue problem today or in 2030, as EV adoption accelerates, our ability to rely on fuel taxes will further erode. The billions lost is a jaw-dropping number, but it is invisible to users of the road, as we never receive a bill for transportation cost. Rather, taxes on our fuel are baked into the price at the pump. As wrapped up as Americans are in driving, we are largely oblivious to how roads are paid for.”
—Patricia Hendren, Eastern Transportation Coalition, in “Transportation at a Crossroad: User Fees, Emerging Technology, and the Value of Transportation,” Eno Center for Transportation, Aug. 27, 2025

“Current federal fuel taxes average about $100-124 per year per personal vehicle—often less than one’s monthly bill for internet and cell phone service. While mileage-based user fee concepts will mature over time, administrative costs and outstanding issues regarding deployment prevent them from being near-term solutions. If we want to build big, beautiful stuff, we should not dump more debt on future generations.”
—Steven Polzin, Arizona State University, “As Travel Changes, So Must Transportation Governance,” Eno Center for Transportation, Aug. 27, 2025

“Let’s be candid about [environmental] litigation. Challenges to project approvals cost time and money. More importantly, litigation risk creates uncertainty for project development, especially for those supported by private-sector investment. Reauthorization is not the best vehicle to debate how much or how little litigation should be permitted. But Congress could create a streamlined litigation process for challenges to surface transportation projects. The statute of limitations for lawsuits addressing projects funded by federal aid should be 150 days, without exemption. Legal challenges should skip federal trial court and go directly to the federal appellate court, like most major rulemaking challenges. Even these modest reforms could reduce the uncertainties created by litigation.”
—Fred Wagner, Jacobs, “Improvements to Project Review and Permitting Built on a Solid Foundation,” Eno Center for Transportation, Aug. 27, 2025

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The post Surface Transportation News: Funding state transportation projects when federal money runs out appeared first on Reason Foundation.

For years, the nation’s busiest ports have been caught in a funding paradox. The ports of Los Angeles and Long Beach, for instance, contribute roughly half of all Harbor Maintenance Trust Fund (HTMF) revenue but historically received only about three percent back in federal investment. These naturally deep-water ports needed less maintenance dredging than their shallow-draft counterparts, so under the old formula, they were effectively subsidizing smaller harbors across the country.

Section 102 of the Water Resources Development Act (WRDA) of 2020 reduced the cross-subsidization of smaller, shallower ports by naturally deep ports. Section 102 guarantees donor ports at least 12% of annual Harbor Maintenance Trust Fund expenditures for expanded uses like berth improvements, wharf repairs, and slope stability projects. 

The 2020 reform represented a moment of bipartisan consensus on infrastructure policy. Congress recognized that forcing major trade gateways to subsidize less economically significant harbors was both unfair and strategically unwise. The legislation established a more equitable distribution formula that would continue to support smaller ports while ensuring that the nation’s most critical maritime infrastructure received adequate federal investment. In fiscal year 2024, approximately $332 million was allocated to donor and energy transfer ports under Section 102, demonstrating the program’s potential impact.

But through reinterpreting budget allocation rules, the Army Corps of Engineers is failing to disburse funds to ports that have been anticipating them. 

The Corps has exploited the vague statutory phrase “to the extent practicable” in Section 102 as the primary basis for reducing or eliminating allocations in subsequent years. According to the American Association of Port Authorities (AAPA), this will cost ports around $1 billion for the remainder of the Trump administration, and $417.6 million of what Section 102 would have had the Corps pay out currently. By interpreting this phrase to confer broad administrative discretion over the timing and amount of payments, the Corps frames Section 102 funding as subject to fiscal constraints and internal budget priorities rather than a mandatory appropriation. 

Furthermore, the Corps relies on its interpretation that Section 102 functions as a limitation on reimbursement and credit authority—not as an independent authorization to obligate funds. This means it will only pay out Section 102 funding when directed by clear appropriations language or when specific reimbursement authority exists elsewhere. Combined with restrictive budgeting practices and the absence of explicit mandatory payment directives in annual appropriations laws, this interpretation enables the Corps to treat Section 102 allocations as subject to change or elimination in the Corps’ internal work plans and fiscal execution. 

In letters to congressional leadership, the American Association of Port Authorities and 23 major port authorities have demanded restoration of Section 102 funding, warning that continued cuts will cost the port system over $1 billion in federal investment during the current presidential term. These port executives recognize that consistent, predictable funding is crucial for planning and implementing the infrastructure improvements necessary to maintain America’s position in global trade.

Congress should require the Corps to act in accordance with the legislative intent of Section 102 by appropriating the funds promised in Section 102 for the upcoming 2026 fiscal year Energy and Water Appropriations Bill. The current situation illustrates why vague statutory language, such as “to the extent practicable,” invites bureaucratic misinterpretation.

Future WRDA reauthorizations should include more explicit funding guarantees and stricter reporting requirements to ensure the Army Corps of Engineers cannot simply ignore congressional directives. Appropriators should also include specific language in spending bills that compels Section 102 compliance rather than leaving it to agency discretion.

The broader principle at stake extends beyond port funding to the relationship between Congress and the executive branch. When federal agencies can effectively nullify legislation through administrative interpretation, they undermine the constitutional separation of powers and can evade accountability. Section 102 represented sound policy based on economic logic and the “user pays/user benefits” principle. Its circumvention by the Corps demonstrates how statutory vagueness can be exploited or used to avoid disbursing necessary funds.

American ports are critical infrastructure that facilitate over $2 trillion in annual trade. Ensuring their efficient operation and continued modernization should be a national priority. Congress created Section 102 to address fundamental inequities in federal port funding, and those inequities will only worsen if the Corps continues to ignore its statutory obligations. 

Congress needs to rectify this and has an opportunity to do so in the 2026 fiscal year’s Energy and Water Appropriations Bill. Congress should allocate the funds that ports have planned for and were promised, as outlined in Section 102 of the Water Resources Development Act of 2020, rather than allowing the Army Corps of Engineers to circumvent congressional intent. 

The post The Army Corps of Engineers is failing to disburse port funding appeared first on Reason Foundation.

The Spring 2025 edition marks the first Unified Agenda publication of the second Trump administration. Like past presidents, President Donald Trump immediately issued a customary “regulatory freeze” of all federal rulemaking activities to allow new agency leadership to evaluate the regulations being developed by their predecessors.

The Trump administration has also been aggressive in its issuance of executive orders, and two in particular are relevant to the federal regulatory enterprise: EO 14192 (2025), “Unleashing Prosperity Through Deregulation,” and EO 14219 (2025), “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative.”

EO 14192 orders regulatory agencies to identify 10 existing regulations for repeal whenever they consider promulgating a new regulation. This 10-out, one-in regulatory budget also contains a directive that, to the extent permitted by law, any new incremental costs of a new regulation be offset by the elimination of existing costs associated with at least 10 prior regulations.

Having been tasked with implementing ambitious regulatory budgeting, EO 14219 provides agencies with specific deregulatory targets. It directs agencies to identify regulations that are unconstitutional or pose “serious constitutional difficulties,” based on unlawful delegations of statutory power, go beyond the “best reading” of the statute, implicate significant matters not clearly authorized by Congress, impose significant costs on private parties not outweighed by public benefits, harm the national interest, or impose undue burdens on small businesses and entrepreneurs. Following agency review, identification, and categorization of the offending rules, agencies are to consult with OIRA to develop a “Unified Regulatory Agenda” to rescind or modify these regulations.

In its Spring 2025 Unified Agenda preamble, the U.S. Department of Transportation states that it has “taken actions to ensure that all Departmental policies align with the Administration’s policies.”

With respect to regulatory policy, it highlights, “Ensuring Reliance upon Sound Economic Analysis in Department of Transportation Policies, Programs, and Activities,” Department Order 2100.6B, “Policies and Procedures for Rulemakings,” and a memo from the Department’s Office of General Counsel on “Review and Clearance of Guidance Documents.”

Each of these policies is deregulatory in character, and together they suggest that the Department of Transportation is taking seriously its orders from the president.

I previously examined the transportation rulemakings contained in Fall 2024, Spring 2024, Fall 2023, Spring 2023, Fall 2022, Spring 2022, Fall 2021, Spring 2021, and Spring 2020 editions of the Unified Agenda for Reason Foundation. From a historical perspective, Figure 1 below shows that the current volume of regulatory activity at the U.S. Department of Transportation is unprecedented, exceeding the previous record number of newly published rulemaking projects set in Spring 1996 by nearly 50%.

The Spring 2025 Unified Agenda lists 291 active rulemaking projects at the U.S. Department of Transportation. Of those 291, 133 are new rulemaking projects first published in the Spring 2025 edition. These new rulemaking projects are listed in Table 1 at the bottom of this article.

The Unified Agenda contains rules determined to be “significant regulatory actions,” or “economically significant” rules, which had been defined by EO 12866 (1993) as regulations that would have an annual impact on the economy of $100 million or more, or otherwise “adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.” Rules deemed economically significant are subject to greater scrutiny, most notably a requirement that agencies conduct a benefit-cost analysis of the proposed regulation.

With the changes brought by EO 14094 (2023), the annual cost threshold for a rule to be considered a “significant regulatory action” doubled to $200 million, and that threshold will be adjusted every three years for “changes in gross domestic product.” This adjustment was made in Section 3(f)(1) of the 2023 EO. A discussion of the rationale and implications of this change can be found in my review of the Fall 2023 edition of the Unified Agenda.

One important implication is that EO 14094 made historical comparisons of the stock and flow of “economically significant rules” more challenging. Fortunately, as part of the Congressional Review Act, Congress itself requires a separate “major” rule designation that retains the traditional $100 million threshold (5 U.S.C. § 804(2)(A)), allowing for continued like-for-like historical accounting.

Figure 1 preserves the traditional cost threshold by counting “major” rules instead of “economically significant” rules. While Trump revoked EO 14094 (2023) as part of EO 14148 (2025) and thereby restored the traditional $100 million cost threshold for “economically significant” rules, we have continued to count “major” rules to ensure continuity. There are currently 12 “major” rules under development at the Department of Transportation. Of the 133 new rulemaking projects that first appeared in the Spring 2025 edition of the Unified Agenda, only one has been designated a “major” rule. However, 34 have a “major” status listed as “undetermined,” meaning they could be later designated as “major” rules as they move through the rulemaking process and economic costs are estimated.

Transportation deregulation in the second Trump term

Given that Trump signed an executive order titled “Unleashing Prosperity Through Deregulation,” it should perhaps not be surprising that the U.S. Department of Transportation has categorized many of its newly announced rulemaking actions as “deregulatory.” That order, EO 14192, established a regulatory budget, which necessitates the categorization of rules as “regulatory” or “deregulatory.”  OIRA issued a memo in March 2025 providing guidance on this process. According to the Spring 2025 Unified Agenda, of the Department of Transportation’s 133 newly announced rulemaking projects, 119 are categorized as “deregulatory,” with the remainder being categorized as “fully or partially exempt,” “not subject to, not significant,” or “other.”

Some of DOT’s deregulatory actions involve rescinding existing rules, such as the forthcoming proposed rule from the Federal Aviation Administration that would eliminate the regulatory prohibition on overland supersonic flight (2120-AM15). Others would amend existing regulations to enable new technologies, such as the National Highway Traffic Safety Administration’s planned modernization of Federal Motor Vehicle Safety Standards 102 (2127-AM72), 103 and 104 (2127-AM71), and 108 (2127-AM70) to accommodate automated driving systems. And still others focus more on what could be called regulatory hygiene by removing obsolete requirements and unnecessary language that naturally accumulates over time, such as a recently issued proposed rule to eliminate a reference to a program that was terminated in 1998.

What this shows is that DOT is likely to pursue an aggressive deregulatory agenda, broadly construed. This makes sense given the presidential requirement of 10 deregulatory actions for every regulatory action. Agencies will have a strong incentive to find deregulatory actions, however inconsequential in terms of economic impact, to demonstrate compliance with the executive order.

Yet, the other component of this new regulatory budgeting—that the costs of a new regulation be offset by the costs associated with at least 10 other regulations that would be eliminated—is likely to focus DOT on bigger-ticket items. Thus, the size of the cost savings identified in benefit-cost analyses included in the regulatory impact assessments that accompany “significant” rules will determine the internal political success of this deregulatory effort. But the quality of those benefit-cost analyses will determine this deregulatory effort’s economic success, which is ultimately what matters, and that will need to be a key focus of those seeking to realize actual reforms.

Table 1: U.S. Department of Transportation Rulemaking Projects First Published in the Spring 2025 Unified Agenda

Source: Office of Information and Regulatory Affairs, Unified Agenda of Regulatory and Deregulatory Actions, Spring 2025

Note: RIN = Regulation Identifier Number, a unique alphanumeric code assigned by the Regulatory Information Service Center to each rulemaking project listed in the Unified Agenda. An explanation of Stage of Rulemaking terms can be found on pages 10 and 11 of the Introduction to the Unified Agenda from the Regulatory Information Service Center.

The post First look at the Trump administration’s transportation regulatory agenda appeared first on Reason Foundation.