• 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.

• 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.

• 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.

• China’s high-speed rail boondoggle
• Ideas for 2026 surface transportation reauthorization
• Reason Foundation’s reauthorization proposals
• Cost-effective Northeast Corridor proposal
• A P3 option for deficient bridges
• Immigration raids on construction sites
• News Notes
• Quotable Quotes

China’s High-Speed Rail Boondoggle

Last month, I received an email from Zichen Wang of Pekingnology, which is affiliated with the Center for Strategic and International Studies, a think tank in Washington, DC. Attached was a long report by an academic named Lu Dadao of the Chinese Academy of Science. (He is also a former president of the Geographic Society of China, and he has drafted plans for the State Planning Commission.) His lengthy report, translated into English, is titled “The Glory of High Speed Rail: What About Its Problems?” Everyone interested in potential U.S. high-speed rail projects should read this authoritative report.

China’s high-speed rail system began as part of China’s 11th five-year plan, which called for a network of four basically north-south high-speed rail (HSR) lines and four east-west ones. By 2012, there were 18,000 kilometers of such lines, and the 13th five-year plan called for a system totaling 37,900 kilometers—but that was soon superseded by the China Railway Group’s 2021 plan for a 70,000 km system by 2035. However, the soaring costs and growing concerns about bad planning led to an “emergency brake” halt to new lines as of 2022.

What seems to have happened goes beyond extensive overbuilding by the state-owned railroad company. Lower-level governments added numerous (often far too short) links to the system as prestige projects. Over 100 of these too-short lines now exist. According to Lu’s analysis, the vast majority of the HSR “system” (which he terms a “hodge-podge”) loses money, due to low passenger demand. This is partly because a great many stations have been located well outside the centers of metro areas, and without direct local highway or light rail connections. He devotes an eight-page section just to “absurdly located and excessively costly grand HSR stations.”

By the author’s analysis, only six high-speed rail lines (all between major metro areas) break even on operations, and none of them cover more than a small fraction of their construction costs. As of 2023, China’s cumulative HSR debt had reached 6 trillion yuan ($839 billion).

China calls itself a communist country, with decisions about nearly everything decided by allegedly rational central planners. That clearly has not happened with China’s implementation of HSR. The system that has been implemented makes no sense, with numerous short lines that duplicate existing passenger and freight rail service. But the bizarre “planning” goes beyond that. As he notes, “Along several major passenger and freight corridors, the authorities overseeing different modes of transport have each proposed major trunk line projects, yet coordination across sectors remains lacking.” And he adds that “Even among departmental specialists, there is often a lack of objectivity when analyzing and forecasting supply and demand.” And “As a result, transport sectors operate in isolation, stations are constructed on an excessive scale and are increasingly far from residential zones.”

There is an underlying reason for these failures of central planning. It’s explained by a discipline called “public choice theory,” which some have referred to as studying the economics of politics. One of its pioneers, James Buchanan, won a Nobel Prize in economics in 1986 for his role in pioneering this field. In basic terms, public choice theory postulates that public officials are influenced by the same kinds of self-interest as participants in markets. Hence, the interests of planners and bureaucrats may be to win plaudits for grandiose monuments rather than projects that make economic sense.

It’s not clear whether the author is familiar with public choice theory, but he grasps the basic concepts. For example, he writes:

“Debts incurred today won’t come due while they [planners] are still in office. So why not borrow? Why not pursue grand construction schemes? The more HSR projects a region has under way, the more funding it attracts from multiple sources, and the greater the rewards for local leaders. Over time, this has given rise to an addiction to large-scale construction.”

There are lessons here regarding proposed U.S. high-speed rail projects, as well as for infrastructure plans that fail to analyze supply and demand or fail to insist on rigorous benefit/cost analysis. Thanks to Prof. Lu Dadao for this provocative new study.

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Ideas Proliferate for 2026 Surface Transportation Reauthorization

Transportation groups have been sending open letters to Congress on their ideas for the upcoming reauthorization bill, which needs to be passed by Sept. 30 of next year. I like some of their ideas and dislike others, so for what it’s worth, here is a brief overview. Marc Scribner reviews Reason Foundation’s proposals in the following article in this newsletter.

To me, the most disturbing proposal is that Congress, at a minimum, should provide a transportation funding level that matches what was provided in the Infrastructure Investment and Jobs Act (IIJA) legislation, a large fraction of which was borrowed from future generations (i.e., increasing the federal budget deficit each year and hence the national debt). This is highly irresponsible, given the downgrading of federal bonds by the big three rating agencies and the looming 2033 insolvency of both Social Security and Medicare. All or nearly all of a 29-member coalition of business and transportation infrastructure organizations have nevertheless supported this as the minimum funding level.

On the other hand, that same coalition does call for “fixing” the Highway Trust Fund, which would mean increasing federal fuel taxes by a whopping percentage and adding a corresponding federal highway user fee for electric and hybrid vehicles. (But unlike a recent suggestion from the House Transportation & Infrastructure Committee, the rate per mile for electric vehicles should be comparable to the rate per mile for petroleum-fueled vehicles.)

Several groups advocate further federal efforts toward working out a future propulsion-neutral road user charge/mileage-based user fee (RUC/MBUF) for all roadways, which also makes sense, but we aren’t close to getting there, because the cost of collection (using current technology) would be 10 times what it costs to collect fuel taxes.

There is also broad support for further infrastructure permitting reform, despite recent progress via a Supreme Court decision and reforms to the White House Council on Environmental Quality. The remaining major reform, as I wrote last month, is to reduce or eliminate environmental litigation that takes place after completion of detailed environmental studies.

If Congress were to take seriously the impending fiscal insolvency of the federal government, it would start to narrow the scope of the federal program. One idea, suggested to me by Argentine colleague Eduardo Plasencia last year, would be to rescind the 44% expansion of what is now called the Enhanced National Highway System, which, in the MAP-21 reauthorization, added 70,000 miles of mostly suburban and urban roads to what had been an NHS made up of highways linking cities. Undoing that would remove federal regulations and federal funding from those added roadways. Remember that the original national system consisted solely of the Interstates, which were the only new highways that were 90% funded by the federal government. The states own all important roadways, and they should resume stewardship of those non-highway components. Another potentially doable reform would be to eliminate all discretionary grants, in a bipartisan recognition that these amount to “executive branch earmarks.”

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Reason Foundation’s Reauthorization Proposals
By Marc Scribner

Last year, Reason Foundation’s transportation policy team began developing recommendations for the federal surface transportation reauthorization due by the end of Sept. 2026. Earlier this year, we submitted our recommendations to congressional committees of jurisdiction for their consideration. In July, the U.S. Department of Transportation (DOT) issued a request for information asking what it should include in its reauthorization proposal to Congress. Reason Foundation responded to DOT’s request, making our recommendations public. Below are summaries of Reason Foundation’s nine reauthorization recommendations, in which topic headers link to our full explanations. Each recommendation includes suggested legislative text or reform principles.

A Fiscally Responsible Surface Transportation Reauthorization Bill: Programs under recent surface transportation reauthorizations have become increasingly fiscally irresponsible. The expansion of discretionary grant programs, especially under the current Infrastructure Investment and Jobs Act of 2021, has created a vast catalogue of executive branch earmarks that are poorly targeted and managed. Further, Congress has been bailing out the Highway Trust Fund with general tax revenue, degrading the users-pay principle that underpins the trust fund. Rising public debt and a looming social entitlement program crisis underscore the urgency of surface transportation fiscal stabilization. Restoring fiscal responsibility to federal surface transportation programs will require eliminating—or at least minimizing—discretionary grant programs, aligning Highway Trust Fund outlays with expected user-tax receipts, and increasing the flexibility of states to finance their own infrastructure improvements.

Give States a New Option for Converting from Per-Gallon Taxes to Per-Mile Charges: States generally understand the need to shift from per-gallon fuel taxes to propulsion-neutral mileage charges, but progress toward that goal has been very slow for both technical and political reasons. One alternative to jump-start this needed transition is to allow mileage charges on the limited-access Interstate highways, from on-ramp to off-ramp. This would be relatively simple to implement and would address privacy concerns by forgoing the collection of trip-specific data. To enable this change, Congress could modify the existing Interstate System Reconstruction and Rehabilitation Pilot Program to allow any state to toll any of its Interstates. To address “double taxation” concerns, the program should require states to provide fuel-tax rebates to motorists and truckers for all miles traveled on the converted Interstates. Read Reason Foundation’s recommended legislative text here.

Expanding Private Activity Bonds for Major Transportation Projects: Tax-exempt private activity bonds (PABs) for surface transportation were first authorized by Congress in 2005 and have become an important financing component in infrastructure megaproject public-private partnerships (P3s). Prior to their authorization, P3s in transportation projects were rare in the United States, despite the large fiscal and delivery benefits. These PABs were meant to level the playing field between conventional procurement that has long had access to tax-exempt government bonds and P3s, and have proven highly successful. The original PABs legislation included a cap of $15 billion in lifetime bond issuance, which was doubled to $30 billion in the Infrastructure Investment and Jobs Act of 2021. But there are at least $31 billion in P3 construction costs expected to reach the financing stage over the next several years, and as of August 15, 2025, the Build America Bureau estimated that the remaining PABs capacity was only $1.1 billion. To remedy this problem, Congress should eliminate the PABs lifetime volume cap and expand eligibility to seaports and airports. This would bring better financing parity to P3s and traditionally procured projects and deliver better value to taxpayers. Read Reason Foundation’s recommended legislative text here.

Reforming the TIFIA Loan Program: The Transportation Infrastructure Finance and Innovation Act (TIFIA) program was created by Congress in 1998 for the purpose of addressing capital market gaps for promising surface transportation infrastructure projects. As of 2022, TIFIA loans had helped to finance 98 projects in 22 states. Originally, TIFIA loans were limited to 33% of the project budget and required two investment-grade ratings. These limitations led to the program’s very low loss rate. In recent years, TIFIA’s eligibility criteria have been weakened: projects can now receive loans up to 49% of budgeted costs and only one investment-grade rating is required. The scope of eligible projects has expanded to transit-oriented development, INFRA grant projects, state infrastructure banks, airports, seaports, and natural habitats affected by infrastructure. There is a very real risk of at least the perception of TIFIA being transformed into a traditional discretionary grant program, with the associated reduced accountability. To minimize both financial and political risk to TIFIA, Congress should restore the original requirements on loan size, loan terms, investment-grade ratings, and project eligibility. Read Reason Foundation’s recommended legislative text here.

Discretionary Grant Programs Need to Be Reformed: Under IIJA, discretionary grant funding ballooned to $200 billion that was spread over dozens of different programs, accounting for approximately one-fifth of total transportation funding. Several new programs were established to directly aid local governments, which had little or no experience with federal grant programs. This unprecedented environment led to severe delays, poor documentation, and questionable award decisions. A growing consensus recognizes that the Department of Transportation’s discretionary grant programs lack focus, have been overly political, and cannot be executed in a timely manner. To address these challenges, Congress should reduce the number of discretionary grant programs to one per mode, focus on core national transportation priorities, establish quantitative project scoring criteria, and mandate increased quantity and quality of documentation explaining the award process.

Prioritizing Maintenance in Federal Transit Programs: In recent decades, approximately 20% of funding in each surface transportation reauthorization has been allocated to public transit. For large transit systems, federal grants are generally limited to capital improvements, with the federal government typically paying 80% for eligible projects and the local sponsor providing a 20% match. Transit systems are in poor shape throughout the United States in part because federal grant programs do not sufficiently encourage maintenance before expansion. With nationwide transit ridership down one-fifth since the pandemic and growing fiscal challenges, Congress should prioritize maintenance over capital expansion projects. Specifically, the federal share for New Starts, Small Starts, and Core Capacity grants should be capped at 50%, while the maximum federal share for State of Good Repair grants should remain at 80%. Read Reason Foundation’s recommended legislative text here.

Improving Public Transit Efficiency: With nationwide public transit ridership remaining depressed at roughly 80% of pre-pandemic levels, transit agencies are facing growing financial problems. However, while transit productivity collapsed following the onset of the COVID-19 pandemic, it had been steadily declining for decades. Operating expenditures make up two-thirds of transit agency costs, with labor accounting for a majority of operating costs. A central problem is a 1964 labor law known as Section 13(c), which establishes strict labor protections for transit agency employees as a requirement to be eligible for federal funding. Because Section 13(c) supplements other government employee labor laws, transit agency employees are arguably the most protected class of U.S. workers. This law has inhibited modernization of transit operating practices for 60 years, preventing the adoption of competitive contracting and automation that are increasingly mainstream outside the United States. Adopting these practices and technologies could reduce transit operating costs by one-third to one-half, and thereby pull agencies back from their approaching fiscal cliffs. Congress should repeal Section 13(c) in its entirety, which is presently codified at Section 5333(b) of Title 49, United States Code.

Clearing a Bureaucratic Roadblock to Safer Driverless Trucking: Autonomous commercial motor vehicles have great potential to improve roadway safety and logistics efficiency. Developers have been successfully validating their technology on U.S. public roads for years and have recently launched limited commercial service. However, expansion throughout the United States faces regulatory challenges. In particular, a requirement that drivers of commercial motor vehicles must place warning triangles or flares around their vehicles that are stopped or disabled along highways presents a unique barrier to driverless trucking that Congress can quickly address. In lieu of placing warning devices, a number of companies have proposed alternative means of compliance through truck-mounted warning beacons that likely achieve a greater level of safety than the status quo. Congress should instruct the Federal Motor Carrier Safety Administration to allow truck-mounted warning beacons as an alternative means of complying with the general warning-device rule. Read Reason Foundation’s recommended legislative text here.

Advancing Performance-Based Rail Safety Regulation: New automation technologies are increasingly reshaping transportation systems in a variety of ways for the benefit of safety and efficiency. In the case of freight rail, the ability to adopt new technologies in the face of increasingly automated trucking is also a competitive imperative. Yet many of the rules governing the freight rail industry are decades-old and highly prescriptive, often referencing outdated technical standards. One example is automated track inspection, which has faced an uncertain path due to inflexible regulations and interest-group politics. Another is a century-old statute requiring automatic couplers on railcars, which pose a barrier to entry of a new automated rail technology tailor-made to compete with short- and medium-haul trucking. To reorient federal rail safety regulations toward the future, Congress should require the Federal Railroad Administration to consider performance-based regulatory alternatives whenever proposing or adopting a rule, streamline the waiver petition process, and conduct periodic comprehensive reviews of rules, orders, and guidance documents to assess their effectiveness, consistency, and whether they reflect the current best technologies and practices.

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A Cost-Effective Fix for Amtrak’s Northeast Corridor

Over the past decade or two, there have been many grandiose proposals for high-speed rail in the Northeast Corridor: Boston-New York-Washington. Most have had enormous estimated costs, and the expectation of mostly federal funding, so none of them have come anywhere close to being built. A new approach proposed by the Marron Institute at New York University might turn out to be the exception.

To begin with, let’s ignore the ridiculous super-high-speed rail fantasies and focus on more recent proposals. In July 2021, Jeff Davis of the Eno Center for Transportation wrote about a proposal from the Northeast Corridor Commission: a 15-year plan estimated to cost $117 billion. It was presented as saving 26 minutes for an Acela trip from DC to New York and saving 28 minutes between New York and Boston. The plan itemized a long list of station and track improvements. Davis pointed out that only two months before, Amtrak CEO William Flynn told the House Transportation & Infrastructure Committee that it had a $50 billion plan whose trips would be slightly faster than the Commission’s proposal, at less than half the cost. I’ve never seen that disparity resolved—and neither proposal is being implemented.

But a project team at NYU’s Marron Institute recently released a new Northeast Corridor plan that would cost only $17 billion and lead to even faster trips: just under two hours for either of the two main legs of the Corridor. The key to the Marron proposal is its radically different approach to what needs to be changed. As Alon Levy explained in a Wall Street Journal interview, their approach was to learn from what have become standard practices in Europe, especially Switzerland, but which have never been applied to very conservative, tradition-bound U.S. railroading.

One of these is to make modest improvements in tracks and switching to save time in small increments that really add up. Another is to standardize schedules and run them all day, with the trade-off being that some small station stops would be eliminated so that all trains served all the same stops. Yet another change would be modest speed increases at certain points on the route—on sharper curves, approaching stations, etc.—which are standard in Europe and legal in the United States, but are not used due to traditional super-cautious practices. To be sure, some commuter trains would still operate at slower speeds than Acela, so some of the improvements would be strategically located passing sidings.

Another factor in the faster trips would come about because the set of changes would enable much of the “padding” built into current schedules to be eliminated (again, as in Europe). Still another factor would be changing all the locomotives to electric power. Electric trains accelerate faster and brake faster, which enables local trains to be able to operate closer to express trains, reducing the need to add passing tracks.
 
Levy told the WSJ that they have done detailed simulations to test how these features would work together. I don’t know to what extent their proposal has undergone peer review, but if this has not yet been done, it would be important that some of the reviewers be very familiar with European (especially Swiss) passenger railroads.

As I was writing this article, another Wall Street Journal article reported that Amtrak’s new-model Acela trains are actually slightly slower, Boston-New York City and NYC-DC, than the regular Acelas—again, due to obsolete infrastructure and operating practices.

I was impressed last year with the Marron Institute’s large Transit Costs Project that sought to identify reasons why new rail transit projects generally cost far more in the United States than in many European countries. One of their transportation experts served as a peer reviewer on one of my 2024 policy studies. I hope their new Northeast Corridor study gets serious attention.

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The P3 Option for Deficient Bridges
By Baruch Feigenbaum

Building and maintaining safe bridges is one of a department of transportation’s core tasks. Structurally deficient bridges are both a roadway quality measure (similar to pavement condition) and a safety measure (similar to fatality rate). Each year, Reason Foundation’s Annual Highway Report evaluates states in 13 categories, including bridge quality. Given the report’s expected release later this year, it’s worth assessing not just where bridge condition is today but how much it has improved over the last handful of years.

Some states excel in bridge quality, others struggle, and most are in the middle. The good news for states that are struggling is that there is a proven alternative delivery method that can improve bridge quality on a widespread scale.

In 2023, five states, led by Arizona, had fewer than two percent of their bridges classified as structurally deficient. Yet nine states, with West Virginia being the worst, had more than 10% of their bridges as structurally deficient. The good news is that unlike the fatality rate, which has been uneven, and spending, which has increased even adjusting for inflation, bridge condition has continued to improve. Back in 2017, only two states had fewer than two percent of their bridges as structurally deficient, while 17 states had more than 10% of their bridges as deficient. In 2017, the worst state, Rhode Island, had more than 23% of its bridges in poor condition. By 2023, the worst state, West Virginia, had fewer than 20% of its bridges in poor condition.

The average is also improving. In 2017, the mean state had about 8.5% poor condition bridges. By 2023, the average had declined to 6.2%.

While DOTs are often criticized for being slow bureaucracies, the data show that they have clearly prioritized improving bridge conditions. Many anti-highway advocates claim DOTs aren’t focused on maintenance or safety. According to their narrative, DOTs just want to build more infrastructure regardless of safety. But those advocates are very wrong.

There is no clear geographic rationale as to why some states are excelling and others are struggling. While some metrics, such as fatality rate, tend to favor denser, more urbanized states, and others, such as spending, tend to favor more rural states, bridges are different. In 2023, the top 10 states with the best bridges were sunbelt states with newer infrastructure, led by Arizona and Nevada. But Delaware and Vermont, two Northeastern states with old infrastructure and little population growth, also ranked highly. The bottom 10 states were even more of a mix. Five were Rust Belt states: Illinois, Maine, Michigan, Pennsylvania, and Rhode Island. Three others were Great Plains states with somewhat newer infrastructure: Iowa, North Dakota, and South Dakota. And two stood alone: Louisiana and West Virginia. Clearly, management and priorities are the major factors in bridge condition.

There are several steps states can take to improve their bridges. One is to develop an asset management plan to better manage conditions over the lifecycle of the infrastructure. Another is to take part in peer exchanges. A struggling Northeastern state, such as Maine, could benefit from speaking with a fellow Northeastern Association of State Transportation Officials member, Vermont, that is excelling. States can also make better use of technology; many states use drones or robots, finding that technology has a better view of the bridge carriage or can more easily access parts of the bridge. Finally, states can dedicate funding to bridge improvements. There are many competing priorities for limited funding, but maintenance should be a higher priority than expansion, and roadways should be a higher priority than bicycle paths.

However, states with more than 10% of their bridges that are structurally deficient need to take more drastic action. Pennsylvania shows how an availability payment P3 can help provide financing and transfer risk for bridge improvements. The $1.12 billion Pennsylvania Rapid Bridge Replacement Project P3 replaced 558 structurally deficient bridges throughout the Commonwealth. The bridges were bundled in a single contract, accelerating construction. Under the design-build-finance-maintain model, Plenary-Walsh-Keystone partners is responsible for maintaining each of the bridges for 25 years after reconstruction concludes.

When Pennsylvania undertook the project it had the worst bridge conditions in the country. More than 25% of its bridges were structurally deficient, and the state did not have the resources to make the needed improvements. Without the P3, some bridges would have had weight limits, and others would have been closed entirely. Through the Rapid Bridge P3, the state was able to transfer risk, use a more business-like approach, and tap the private market to finance improvements. Today, Pennsylvania ranks 45th in bridge condition. This might not seem like a great ranking (although it’s better than the state’s 50th place ranking 10 years ago), but the state has reduced its percentage of deficient bridges by half in 10 years. Recently, the state closed on the Major Bridges P3 project, a similar approach for six Interstate highway projects throughout the state. Too few states have chosen this approach to rebuilding their bridges. All states with more than 10% of their bridges as structurally deficient should be examining the P3 option.

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Where’s the Outcry Over Immigration Raids on Construction?

An editorial in the Aug. 11 issue of Engineering News-Record was titled, “What to Do About Our Workers Under Siege.” The piece begins:

“U.S. Treasury Secretary Scott Bessent described President Trump’s trade policy approach as an exercise in ‘strategic uncertainty.’ Regarding the administration’s stepped-up undocumented worker raids, however, we remain unconvinced there is anything strategic about it. Instead, we see confusion, disruption and economic harm Rather than focusing on ‘the worst of the worst,’ as promised during his campaign, the administration has increasingly treated the construction sector as a primary enforcement target.”

The editorial went on to note that undocumented immigrants have long made up at least 12-15% of the U.S. construction workforce, accounting for $30 billion in annual payroll taxes, without those workers receiving benefits.

An article in the same issue of ENR noted that Hispanic workers have long been a key demographic in construction, making up 33.8% of this workforce in 2023 and likely to exceed 35% this year. The article described ICE raids on construction sites in Alabama, Florida, Louisiana, Texas, and elsewhere. The Associated Press and many other outlets have widely reported raids on places such as Home Depot parking lots, where would-be construction workers congregate early in the morning.

The White House says it has offered relief from the immigration raids to the agriculture industry, where fruit and vegetables are often harvested by seasonal workers, typically immigrants. However, Politico reports “the White House does not appear close to a policy decision — and farmers are getting frustrated with the delays.” The agriculture industry still holds out hope because, as Politico puts it, “In Trump’s first term, the White House paid out $28 billion in financial relief for farmers hurt by his trade policies” and because he has expressed some understanding of the large role played by often-undocumented immigrants in the hotel industry, which he knows extremely well. Like fruit-picking and the manual labor portion of construction, these tend to be jobs that most American citizens don’t seek.

ENR’s editorial urged construction trade organizations to “make a full-throated call for a temporary visa system, grounded in labor demand and compliance oversight.” These construction and transportation organizations also need to make the case for the need for these workers and infrastructure projects to the media and the public. Transportation construction costs, in particular, have increased dramatically over the past decade, and an ongoing labor shortage will likely lead to further delays and even higher costs.

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News Notes

Kansas Introducing Its First Express Toll Lane Project
Though it’s only six miles long, the new express lanes being added to U.S. 69 in Overland Park, KS are the first in the Midwest. To accommodate the new lanes, the four-lane highway has been expanded to six lanes, with the new express lanes separated from the general-purpose lanes by a double-white-line buffer area. During the last week of August, electronic tolling equipment was being installed in the northbound express lane, and a period of testing will follow. The lanes are expected to open to paying traffic in January.

Tennessee Identifies Shortlisted Teams for Nashville Express Lanes
On Aug. 20, Infralogic reported that four qualified teams have been short-listed for the I-24 express toll lanes design-build-finance-operate-maintain P3 project. The four teams are headed by ACS/Meridiam/Acciona, ASTM North America/FCC, Plenary/Shikun &Binui/Sacyr, and Transurban/Cintra. This project will be the first of four planned express toll lanes projects in the state.

Iceland Will Be First with RUC for All Vehicles
A transportation expert I’ve known for many years informed me (after reading the August issue of this newsletter) that the first country to implement a road user charge (RUC) for all vehicles will not be New Zealand (which plans to accomplish this within the next several years) but Iceland. As of Jan. 2026, all 315,862 registered motor vehicles (including trucks) will pay an annual fee based on the number of kilometers driven. It’s not clear if the 12,482 semi-trucks will pay a higher rate. Motorists will be able to make online payments during the year, rather than having to pay the annual total at year-end.

Record Pipeline of Transportation Projects vs. Dwindling Private Activity Bonds
The good news released by DOT’s Build America Bureau in late August is that the pipeline of approved P3 highway projects is at an all-time high, with most of them being express toll lane projects in Georgia, North Carolina, Tennessee, and Virginia. The bad news is that the remaining capacity of the current $30 billion Private Activity Bonds (PABs) program is now down to just $1.1 billion. Fortunately, Congress can fix this in the upcoming 2026 surface transportation reauthorization bill. Reason Foundation is arguing that the current $30 billion cap is obsolete, because the PABs program is no longer an experiment. Removing the cap would mainstream PABs; there is no federal cap on tax-exempt municipal bonds.

Georgia Removes Some I-85 Toll Exemptions in Atlanta
After Sept. 30, some vehicles that used to be exempt from the variable pricing on the I-85 express toll lanes will pay tolls. Henceforth, electric and alternative-fuel vehicles will have to pay the posted toll rate on all single-occupant trips. Carpools will still be exempt. In recent years, about 20% of all vehicles using the express lanes were toll-exempt.

Florida DOT Expands Tampa-Area Express Lanes
In a recently begun project, FDOT has launched a $340 million project to add two express toll lanes each way to 7.5 miles of I-275 in Pinellas County. To accommodate the new lanes, the project is also reconstructing four interchanges and modifying four bridges.

NEVI Reforms Should Speed Up EV Charging Station Implementation
U.S. DOT last month announced reforms to the troubled National Electric Vehicle Infrastructure (NEVI) program. The headline on most news stories focused on the removal of the requirement for state DOTs to add a charging station every 50 miles on their selected highways, but the reforms cover more than that. Gone are former requirements for labor union participation, small-business mandates, and required participation by businesses owned by minorities and women, many of which might be difficult to accomplish in rural states and/or may increase project costs.

Truck Producers Sue California Over ZEV Sales
A group of truck manufacturers has filed suit against the California Air Resources Board (CARB), arguing that since Congress overturned the regulation that led to the state’s “Clean Truck Partnership,” the state’s program is illegal. When the federal regulation was in place, the companies agreed to meet certain zero-emission requirements. After Congress overturned the regulation, the U.S. Justice Department sent CARB a “cease and desist” letter calling for it to drop its effort to continue the program despite Congress’s action.

Life Insurer Invests in U.K. M6 Toll Road
Life insurance company Just Group last month made a £20 million loan to the M6 toll road public-private partnership, owned by IFM Investors, which invests in infrastructure on behalf of public pension funds. The toll road company, Midland Motorways Group, received a 22-year refinancing loan to support upgrades, including a modernized electronic tolling system. The 27-mile, six-lane toll road in the West Midlands is the only such toll road in the U.K. Just Group deploys pension fund capital into revenue-generating infrastructure.

Delaware River Bridge Implements Protective “Dolphins”
ENR reported that the twin-span Delaware Memorial Bridge is installing “dolphins” to protect the bridge piers from collision damage from large ships. The two-year, $93 million project is adding eight stone-filled concrete 80-ft. diameter cylinders near the piers, with completion expected this fall. The project is under the auspices of the Delaware River and Bay Authority.

Cube Highways Buying India Toll Road
Indian firm Reliance Infrastructure is selling its Pune Satara Toll Road concession to Cube Highways and Infrastructure, owned by infrastructure investment fund I Squared Capital. In 2020, Reliance sold its Delhi-Agra Toll Road to Cube Highways. Both projects were developed under India’s Build-Operate-Transfer toll model.

Philip Howard’s Answer to Infrastructure Obstacles
In a policy paper for the Manhattan Institute, long-time government reform advocate Philip K. Howard sets forth a three-part agenda in “Escape from Quicksand: A New Framework or Modernizing America.” The first proposal would create a new framework for infrastructure projects, designating a lead agency with final authority to approve major infrastructure projects, constraining today’s extensive judicial review. Second, a National Infrastructure Board would approve projects, shielding elected officials from political backlash. Third, a nonpartisan Recodification Commission would work out the details of these reforms. I’m not sure this is the best approach. But I’m glad to see qualified people proposing solutions to the roadblocks that delay or kill much-needed infrastructure improvements.

Driverless Trucks on Highways at Night
In another step toward autonomous long-haul trucking, Aurora Innovation has been operating autonomous trucks at night between Dallas and Houston. Aurora says its new LIDAR system can spot obstacles 300 yards ahead and react 11 seconds sooner than a human driver. Competitor Kodiak is operating trucks between Atlanta and Dallas and between Houston and Oklahoma City. Long-haul trucking is the most difficult sector for retaining drivers. Moreover, a truck that does not have “hours of service” driver regulations should be able to operate far more hours per day, increasing productivity as well as saving on operating costs.

Ship Pilots Testing Remote Guidance
The Wall Street Journal reported that maritime pilots in Denmark are testing a new form of remote work. “Remote pilotage” is an emerging technology that enables an experienced pilot to guide a ship into and out of port from a console on shore (or in the case described, on a houseboat). The article reports that the technology from a firm called Danelec is the first to enable remote pilotage, using data transmitted from the ship being piloted. The International Longshoremen’s Association is coordinating the first Global Anti-Automation Conference in November, in Portugal. DanPilot, developer of the technology, says there are enough use cases to gain interest from pilots in Australia, Singapore, Finland, and Sweden thus far.

GDOT’s Russell McMurry Wins Award
The Commissioner of Georgia DOT, Russell McMurry, last month received the Lifetime Achievement Award from ITS America. This honor is awarded annually to a transportation professional who is recognized as a thought leader in intelligent transportation systems. McMurry has led GDOT since 2015 and is a long-time champion of transportation system management and operations (TSMO) and connected vehicles to everything (CV2X).

National Intercity Bus Atlas Published
A project managed by the Transportation Research Board (TRB) has released a booklet, “Implementation of the National Intercity Bus Atlas.” It summarizes the National Cooperative Highway Research Project that developed three guides: a user guide for intercity bus carriers and related companies, a user guide for transportation agencies, and a guide for maintaining and improving the intercity bus atlas.

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Quotable Quotes

“While this [IIJA] deficit spending allowed us to continue making important investment in infrastructure, it is fundamentally unsustainable. State and local governments, engineering and construction firms, and their workers understand that they cannot continue to rely on general fund revenue in order to make the robust investments in our infrastructure that are needed. We therefore need to find a new way to pay for these investments.”
—John Drake, VP, Transportation Infrastructure, U.S. Chamber of Commerce, letter to Hon. Sam Graves and Hon. Rick Larsen, April 30, 2025

“In favor of a merger, interchange between railroads at Chicago, Kansas City, and a few other sites is the bottleneck of all bottlenecks. A container might spend three days getting from Los Angeles to Chicago and another three days getting across a Chicago rail yard. The division of the country into east and west rail sectors can also be a problem for certain midwestern shippers, since their nearest carrier may have little interest in the short-haul portion of a longer trip that financially benefits a rival railroad.”
—Holman W. Jenkins, Jr., “Mergers Test ‘Madman’ Trump,” The Wall Street Journal, July 30, 2025

“Underpinning the concept of market-driven city planning is an acceptance that spontaneous order emerges without design. Labor markets create cities, ensuring that, even as millions of people make unpredictable decisions, equilibrium is maintained. Price signals lead to more housing where it’s needed, and at no point are millions of workers left without a home. . . . The location of jobs is decided by the market. In order to respond as efficiently as possible to maintain this spontaneous order, the location of housing should be, too. Urban planning has a place, but it’s in responding to what infrastructure people say they need—not breaking ground where planners think housing ‘should’ be built. In short, planners should respond to the labor market and not try to shape it themselves.”
—Alain Bertaud, “How to Build a City,” NYU Marron Institute of Urban Management, July 15, 2025. Bertaud is the author of Order Without Design, MIT Press, 2018

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The post Surface Transportation News: China’s high-speed rail boondoggle appeared first on Reason Foundation.

• New Zealand road user charge
• Boring Company’s Nashville loop project
• Union Pacific/Norfolk Southern railroad merger
• Streamlining NEPA: a good start
• Transit’s worsening financial crisis
• Impact of reduced electric vehicle sales
• News Notes
• Quotable Quotes

New Zealand’s Road User Charge Transition

Based on recent announcements from New Zealand’s Transport Minister, Chris Bishop, his country is likely to be the world’s first nation to transition completely from motor fuel taxes to road user charges (RUCs) for roadways. To bring this about, the transition will involve innovative technology and a radical reduction in collection cost, assuming everything works as planned.

One advantage is that New Zealand is an island nation, so it does not have to deal with unequipped vehicles driving across its borders. It also has years of experience with trucks paying a road user charge, so the big change will affect motorists, who currently pay for roads via fuel taxes. As in other countries, the growth of hybrids, EVs, and higher-mpg internal combustion engines means that the viability of the “petrol tax” is decreasing, and that appears to be the reason for shifting to RUC going forward.

The national government Cabinet has agreed to a series of legislative and regulatory changes that will end up replacing the petrol tax with an electronically paid RUC. Transport Minister Bishop summarized these as follows:

• Removing the need for physical licenses, allowing for digital driving licenses;
• Enabling a range of electronic RUC devices, including those already available as new-vehicle telematics;
• Enabling flexible payment models, such as post-pay and monthly billing;
• Separating the NZ Transport Agency roles as both RUC regulator and retailer to enhance competition; and,
• Allowing the bundling of tolls and time-of-use pricing into a single payment.

The RUC revenues, like the petrol tax revenues, will continue to be sent to the National Land Transportation Fund, retaining the existing users-pay/users-benefit principle. And Bishop has promised that the RUC system will be like paying for an electric bill online. There will be a Code of Practice for RUC providers.

So, how soon will all this happen? Bishop expects the needed legislation to be enacted in 2026, and once this happens, Bishop says his agency will engage with the market to assess potential technologies and delivery timelines. And both the Transport Agency and the police forces will upgrade their systems for “enforcement in a digital environment.” His goal is that by 2027, the RUC system will be open for business, with third-party providers offering innovative payment services approved by the Transport Agency.

As I set out to write this article, a transportation colleague in New Zealand sent me his own overview of this planned transition. He tells me that companies are already developing in-vehicle devices to provide the data needed to assess the RUC amounts due, based on miles traveled and whatever other specifics get incorporated into the RUC (vehicle weight, for example). Four electronic system providers have been approved by NZTA. One of those companies, he noted, is already active in the United States (EROAD).

If New Zealand implements this ambitious plan, it will provide a model for other countries. I will be especially interested to learn what the cost of collection of the new RUCs will be, since at this point in the U.S., estimates of the cost of collection are 10 to 20 times what it costs to collect fuel taxes. If New Zealand can get this down to a few percent of the amount charged, that will be a major breakthrough.

The other complication for the United States is that state and local governments own and operate nearly all the roadways. So each state government or transportation department will need to figure out how to deal with out-of-state vehicles.

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Boring Company Launches Nashville Loop Project

Elon Musk’s Boring Company has been in the news since a media blitz late last month announcing an agreement with Nashville, TN, to build and operate a 10-mile underground Music City Loop linking downtown to the Music City Center and the Nashville International Airport. Boring Company states that the system will be entirely privately financed as a public-private partnership with the city of Nashville.

The company evidently did its public affairs homework before making the announcement, because it has been endorsed by Gov. Bill Lee, Sen. Marsha Blackburn, the city and state chambers of commerce, and U.S. Transportation Secretary Sean Duffy. As a long-time supporter of transportation public-private partnerships (P3s), I’m inclined to be favorable to such projects. But at this point, I have many questions.

Most fundamentally, I don’t understand the business model. The project obviously needs a revenue source in order to provide a return on the major investment needed to build the tunnels that comprise the Loop and equip it with the vehicles that will transport passengers. The only operational model is the Boring Company’s Las Vegas Loop, of which only 2.1 miles of a planned 68 miles are completed and in operation as of last year. The fare to use one of the Teslas using the Loop is in the $4-$6 range. No published data exists on the number of daily trips and the revenue they are generating, and without that information, it’s difficult to see how financially viable the Vegas Loop may turn out to be when it is fully built out and in operation.

The Boring Company proposed similar Loops for Chicago, Los Angeles, and Washington, D.C. in 2017-18, but those projects never materialized. Other cities where post-pandemic presentations were made include Miami and Fort Lauderdale, where they attracted considerable interest from local officials, but never went further. Boring Company’s only other active project is in Dubai.

Another question is whether using Teslas as the vehicle is the best alternative. In Vegas, the Teslas are being driven by Boring Company drivers, though Tesla’s “self-driving” capability should be easy to use in this highly constrained one-way tunnel (as compared with mixed traffic on city streets). So, automated operation would reduce operating costs somewhat. But still, why not 10-passenger electric shuttles? To be sure, if the model is to offer customers an immediate departure when they show up, an immediately available vehicle is superior. But this policy would also limit passengers per hour that the system could handle. It’s far from clear how the revenue model would generate enough to service construction bonds and provide a return on the initial investment.

A public-private partnership (P3) of the design-build-finance-operate-maintain (DBFOM) model, in particular, needs to have a detailed long-term concession agreement. This document spells out the roles of the public partner and the private partner. Generally, the public partner has considerable oversight responsibilities, and the extent of its role in various policy questions (schedule, user charges, duration, future decision during the term of the agreement, etc.) is spelled out in the agreement. Also critically important are termination provisions. These typically are two possible ways in which the agreement may be terminated by the public partner: for cause (serious failure to comply with the terms of the agreement) or for convenience (the public partner changes its mind some years into the agreement, and commits, in advance, to compensation for this kind of early termination).

There has been no mention of any kind of P3 agreement. If such an agreement exists, or is negotiated and made public, some of the many citizen concerns and complaints about the project might be satisfied.

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Maximizing the Benefits of a Transcontinental Rail Merger
By Marc Scribner

On July 30, two of the largest U.S. freight railroads notified federal regulators that they plan to apply for approval to merge. Under the proposed deal, the largest Class I carrier, Union Pacific, would acquire the fourth-largest, Norfolk Southern. The combined carrier would be the first truly transcontinental railroad, serving 43 states over 50,000 miles of track and linking roughly 100 seaports on the East and West Coasts. There is little overlap between the two railroads’ current networks, so the competitive effects of a merger are likely to be positive. While an expanded Union Pacific could certainly realize network efficiencies, realizing the full benefits of this transaction will require regulatory modernization.

According to their July pre-filing notice submitted to the Surface Transportation Board (STB), the national railroad economic regulator tasked by Congress with reviewing and approving industry mergers and acquisitions, Union Pacific and Norfolk Southern plan to submit a formal application to consolidate on or before Jan. 29, 2026. The most recent major rail merger between Canadian Pacific and Kansas City Southern in 2023 took 15 months to gain approval from the STB. A similar timeline is likely in this case, so we can perhaps expect final approval in the first or second quarters of 2027, assuming everything goes smoothly.

Union Pacific operates primarily west of the Mississippi River, while most of Norfolk Southern’s operations are in the east. Intra-rail competition between the two carriers is very limited given their geographic separation, with the vast majority of overlap occurring in Missouri, where both railroads operate between Kansas City and St. Louis. The STB has long recognized that end-to-end mergers like the one proposed by Union Pacific and Norfolk Southern can potentially reduce intra-rail competition and service quality. As a result, their Missouri operations will be a major focus of the STB’s merger analysis and approval conditions. The railroads will need to propose remedies to mitigate and offset any competitive harms arising from their merger if they are to secure STB approval.

In addition, Union Pacific and Norfolk Southern are likely to emphasize how offering single-line, coast-to-coast intermodal rail service will increase competition with long-haul trucking. This is because the STB’s major merger regulations since 2001 have required that carriers demonstrate that the transaction would enhance competition, rather than the previous requirement that competition not be degraded under consolidation.

While the network efficiency benefits arising from a combined Union Pacific and Norfolk Southern are potentially very large, maximizing those benefits to carriers, shippers, and consumers will require regulatory modernization by the Federal Railroad Administration (FRA), the nation’s rail safety regulator.

One problem is that the FRA’s rail safety regulations are often highly prescriptive, which limits alternative means of compliance as technology and practices evolve. Related to this problem is that these regulatory requirements often reference outdated technical standards. Based on my analysis of the principal rail standards compendium—the Association of American Railroads’ Manual of Standards and Recommended Practices—and the FRA’s regulations that incorporate those standards by reference, there is a roughly 10-year lag between the latest standards and those referenced in rail safety regulations. Unless Congress establishes a consistent mechanism requiring the FRA to consider regulatory updates whenever new standards are published, this conformity gap between standards and regulations is likely to persist and grow.

Another problem is that the FRA has adopted an inconsistent approach to new technologies and practices, often driven by special interest politics. During the Biden administration, FRA political appointees overruled agency career staff to restrict the use of automated track inspection technologies, despite the FRA’s own data showing the technology was far more reliable in detecting track geometry defects than traditional visual inspections. This action was driven by the union representing track inspectors. The Association of American Railroads currently has a waiver petition pending with the FRA to recommit the agency to this proven technology, which Reason Foundation supported in comments to the FRA.

Similarly, the FRA during the Biden administration finalized a regulation establishing a general requirement that trains operate with at least two crew members, despite conceding it could not quantify any benefits of the rule. The practical result is that U.S. railroads will find it difficult to leverage automation technology increasingly available around the world and even single-crewmember train operations that have long been the default in Europe. And similar to the political interference on automated track inspection, the FRA’s crew-size regulation fulfilled an explicit campaign promise made to unions representing train engineers and conductors by then-candidate Biden.

The trucking industry is anticipated to become increasingly automated in the coming years. Earlier this year, driverless truck startup Aurora launched commercial operations in Texas and has ambitions to expand driverless service throughout the Sun Belt over the next two years. Driver wages and benefits account for nearly half of truck operating costs, so the potential savings from driverless operations are large.

To give freight rail a fair shot at competing with trucking, FRA leadership should seek to restore evidence-based policymaking at the agency, rather than deny railroads superior technology for arbitrary and capricious reasons. Congress can also play a positive role, such as by passing legislation that would require the FRA to consider performance-based regulatory alternatives, streamline the waiver petition process, and periodically conduct comprehensive reviews of its policies to assess their effectiveness and compatibility with the current best technologies and practices.

The potential acquisition of Norfolk Southern by Union Pacific could enhance freight transportation competition in exciting new ways. But the ability of intermodal rail to compete effectively with increasingly automated trucks into the 21st century hinges on the ability of the freight rail industry to innovate. Innovation will require business and engineering savvy, to be sure, but also an accommodating regulatory environment.

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Streamlining NEPA—Good Start But More to Be Done

The first seven months of 2025 have seen significant policy changes to the interpretation of the National Environmental Policy Act (NEPA). The Supreme Court and the White House have both reduced the adverse impacts on major infrastructure projects that resulted from decades of executive orders and legislation. But one of the most serious problems—excessive post-assessment litigation—remains largely untouched.

The first big change came from the Supreme Court. In a 9-0 decision, the Court ruled that an organization opposing a new short-line railroad line in Utah had gone way overboard by considering potential environmental impacts more than a thousand miles away from the railroad’s location (Seven County Infrastructure Coalition v. Eagle County). The decision found that NEPA itself “imposes no substantial restrictions” on development. Justice Brent Kavanaugh wrote that NEPA is supposed to be “a procedural cross-check, not a substantive roadblock.” The judgment was unanimous, but three liberal justices did not join in Kavanaugh’s written opinion.

The second change came from the Council on Environmental Quality (CEQ), which was empowered to issue regulations (not just policy advice) via Executive Order 11991, issued by President Jimmy Carter in 1978. President Trump voided that E.O. back in January. The revamped CEQ on July 3 released revised implementing procedures for a large array of federal agencies, explaining that these rules are purely procedural in nature, which do not “impose substantive environmental obligations or restrictions,” per Rebecca Higgins’ summary for the Eno Center for Transportation. U.S. Department of Transportation (DOT) subsequently released two revisions to what had been regulations. One revised rule clearly states that the question of whether an impact is “significant” is a matter for the agency’s expert judgement (apparently building on the Supreme Court’s Seven Counties decision).

In my transportation policy (non-legal) assessment, these are important and welcome changes that should streamline environmental reviews and enable much-needed energy and transportation infrastructure projects to move toward implementation with less delay and somewhat lower cost to users and taxpayers.

However, there is still a huge elephant in the room: post-review environmental litigation. None of the above reforms directly limit such litigation, though they may reduce the kinds of arguments litigants can make successfully. The good people at the Breakthrough Institute are continuing to focus on this problem, as discussed in their new study, “The Procedural Hangover: How NEPA Litigation Obstructs Critical Projects.” Their team examined 1,400 NEPA cases subjected to litigation between 2013 and 2022. The median project in the dataset spent 19 months in litigation, with 7% spending more than six years. They also found that only 26% of the litigations ended up with a legal flaw in the agency’s review. They also found that environmental nonprofits were involved in 75% of the judgments in these cases.

Readers of this newsletter may remember an article in our July 2024 issue discussing a then-new Reason Foundation study that focuses primarily on environmental litigation. Part 5 of that study offers a large array of potential litigation reforms, one of which—removing CEQ’s power to issue regulations—has already happened. Others include limiting the types of potential litigants eligible to sue, having Congress impose a higher standard for injunctive relief, or not entertaining public comment after a final Environmental Impact Statement has been released. Given the major changes that have taken place in the last six months, this menu of potential litigation reforms is newly relevant.

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Transit’s Worsening Financial Crisis
By Baruch Feigenbaum

Despite the economic recovery of cities, transit systems are still facing significant economic headwinds. Recent reports from three of the six legacy rail systems and a nationwide analysis by the Government Accountability Office (GAO) show the severity of the problem. For some systems, transit ridership has been slow to recover from COVID, still below 80% of 2019 levels. And rail, particularly commuter rail, has been slower to recover than bus and paratransit, sometimes at less than 50% of 2019 levels. Yet rather than trade the Titanic in for a seaworthy vessel, agencies seem to be hoping that the giant iceberg they hit five years ago will just melt away.

The GAO report examined the nation’s 31 commuter rail lines. It found that while overall service (the number of trains and buses operating) was above 2019 levels, ridership was 31% lower in fiscal year 2023. Operating more services with fewer riders leads to budget holes that need to be plugged. To plug these holes, agencies relied more on government funds, primarily from federal, local, or other sources. These agencies also relied heavily on COVID-19 relief funding, which has since been exhausted.

Most of these agencies’ long-term fiscal plans seem to be to replace farebox revenue with state subsidies. One example is Virginia Railway Express (VRE), which operates commuter rail service between the southern and western suburbs of Washington, D.C. and the city itself. Between 2019 and 2023, service levels remained similar, but ridership dropped by 65%. In 2019, fares and agency-generated revenue were the largest funding source, 40% of the total. State funding made up less than 30%. But by 2023, fares and agency-generated revenue totaled 8.5% while state funding provided more than 51% of the total revenue.

Several heavy-rail operators are also struggling with ridership. To begin with, in FY 2026, Chicago’s transit operators are facing a $770 million budget deficit. The Chicago Transit Authority is threatening to shut down half of the city’s “L” lines and eliminate almost 60% of bus routes. The legislature could provide state funding, but lawmakers want to reform the Regional Transit Authority, which oversees the Chicago Transit Authority, suburban PACE bus lines, and the METRA commuter rail line.

In San Francisco, the Municipal Transit Agency is facing a $322 million budget deficit. The agency is examining a series of budget cuts and ballot measures to enact new taxes. The agency has a little more time—until May 2026—to deliver its recommendations.

Finally, in Philadelphia, the Southeastern Pennsylvania Transportation Authority is threatening to increase fares from $2.50 to $2.90 in September. It will implement a hiring freeze and eliminate additional services, bringing the total cuts to half its services. Earlier this month, Pennsylvania lawmakers introduced dueling assistance plans, with a Democratic plan increasing funding for highways and transit, and a Republican plan using money from an existing statewide transit fund and indexing fares to inflation.

To be fair, agency leaders have taken some corrective actions. They have redesigned bus networks and added microtransit. They have embraced technology and partnered with ride-hailing companies for last-mile service. But they have not been able to solve the big problem: costs are too high and riders are too few. Agencies cannot control the past, but to solve the problem for the future, they need to make the following changes.

First, cut service to match actual ridership levels. After the initial COVID-19 surge, many transit agencies quickly restored former service levels. Reducing transit service can deter ridership. But increasing headways for rail lines operating at less than half of their capacity is a needed change.

Second, do not rely on any type of emergency funding. Many agencies used COVID-relief dollars as a crutch. Rather than make long-term structural changes, they ran up charges on Uncle Sam’s credit card. Now that the federal government has ceased pandemic-related stimulus and bailouts, most transit agencies are in a much worse position today than if they had started on the road to reform three years ago.

Third, try to control labor costs. The Congressional Research Service estimates labor is 62% of transit system costs. There are legal limits to what transit agencies can do, but adopting best practices in management and contracting for new service are two obtainable goals.

Fourth, don’t exacerbate problems by making transit service fare-free. Zohran Mamdani, the democratic socialist running for mayor of New York City, wants to make buses fare-free. While not paying fares sounds attractive, it doesn’t help poorer residents, who already have fare-free or heavily discounted transit cards. But it does help upper-middle-class residents, who don’t need a subsidy and are a large share of transit riders in the legacy rail regions. In the New York Metropolitan Transportation Authority (MTA’s) case, free transit, if including the subways, could blow a $668 million hole in the budget.

Finally, states and localities can cap general funding to transit. That might seem like tough love, but to ensure agencies adopt recommendations one through four, a change-forcing mechanism is necessary. Unlike highways, which can and should be funded entirely from user fees, transit cannot realistically operate without subsidies. Reason Foundation has justified providing subsidies to lower-income workers using transit on the grounds that providing cost-effective transportation to work is better than welfare programs. However, there has to be some cap. Farebox revenue supplemented with other revenue sources (tax increment financing from transit-oriented development, advertising, etc.) should provide 40% of the funding for large agencies, 30% for medium agencies, and 20% for small agencies. Pre-COVID, these were numbers that almost every transit agency in the country could attain. If agencies cannot meet them today, they have too much service, too low fares, or too much inefficiency.

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Reduced EV Sales and the Impact on Mileage-Based User Fees

These are not good times for electric vehicles (EVs) in the United States. The most recent AAA poll on this subject revealed the following:

• Only 16% of adult Americans say they are likely or very likely to buy an EV as their next vehicle, the lowest percentage since 2019. The fraction saying such a purchase is unlikely or very unlikely increased to 63%, the highest since 2022.
• The reasons most-cited in the AAA survey were concerns about charging, high battery repair costs, and purchase price, in that order.
• One third of those unlikely to buy cited safety concerns, while others worried about being unable to have a charger at their residence.
• The percentage who believe that most cars will be electric within 10 years declined from 40% in 2022 to 23% in this year’s survey.

Reinforcing motorist concerns are several political developments. One is the coming elimination of the $7,500 federal tax credit, which will make an EV comparable in size to a conventional vehicle even more expensive to purchase. And because EVs depreciate considerably faster than internal combustion engine (ICE) vehicles, more potential EV buyers are shifting to the used-vehicle market. Since those EVs are already in the vehicle fleet, a purchase from a used-car dealer adds nothing to the total EVs in use.

Recent Wall Street Journal headlines included “EV Makers Rev Up Incentives to Shift Sales Out of Reverse” followed by “Detroit Quickly Pivots as America Rediscovers Love for Gas Guzzlers.” But Ford is taking a gamble, announcing a plan to spend $2 billion to convert a plant in Louisville, KY, to produce a small EV it plans to sell for $30,000. This comes after Ford lost $5 billion on its existing EVs in 2024.

The one bright spot in the U.S. EV market is hybrids. Sales of hybrids now exceed those of fully electric vehicles. In the first quarter of this year, conventional hybrids accounted for 12% of new vehicle sales, with plug-in hybrids adding another 2%. A report from Bank of America projects that hybrids will account for 20% of new-car sales by 2028.

What do these changes mean for transportation policy? Projections from several years ago that were relied on to support the transition from per-gallon fuel taxes to per-mile charges need to be revised, given the likely slower growth of EVs over the next decade or two. That will provide time for more states to plan and carry out pilot projects to test mileage-based user fees (aka road user charges). The longer time frame will also enable more research and development on lower-cost ways to collect per-mile charges (which currently would cost 10 to 20 times as much as fuel taxes, as a fraction of the revenue collected). This will also give Congress more breathing room to agree on increased revenue sources for the Highway Trust Fund, other than just borrowing ever more money from future generations.

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News Notes

$11 Billion Express Toll Lanes Financed in Georgia
Georgia DOT reported (Aug. 5) that it had reached financial close with a private consortium on the $11 billion SR 400 Express Lanes project. The consortium is led by Meridiam, Acciona, and ACS Infrastructure. The project will add two express toll lanes each way on 16 miles of SR 400 in northern Atlanta. The financing includes $3.4 billion in tax-exempt Private Activity Bonds (PABs), the largest ever federal TIFIA loan ($3.9 billion), and $3.36 billion in private equity. The design-build-finance-operate-maintain P3 concession term is 56 years. The project will also add two stations along the route for express bus service that will make use of the faster and more reliable express lanes. This is the first of several express toll lanes P3 mega-projects in the Atlanta metro area.

Pennsylvania DOT Reviewing Express Lanes Proposal
Eugene Gilligan reported in Infralogic (July 23) that PennDOT is reviewing a $3.25 billion express toll lanes project for the Philadelphia metro area, submitted as an unsolicited proposal by Cintra. It would add ETLs (two such lanes each way) to a congested 17-mile stretch of I-76 known as the Schuykill Expressway. The DBFOM project would have a term of 50 years. If this project goes forward, it would be the first P3 express toll lanes north of Virginia and the first such lanes in a metro area that developed prior to the automobile age. Gilligan reports that the Cintra proposal was first submitted in Oct. 2021, and a PennDOT source told him that “Due to the complexity of the project, it is still under consideration.”

Shifts to Electronic Tolling in Europe
While several European countries have long relied on tolling (e.g., France, Italy, and Spain), many others use a permit system called Eurovignette. But as of next summer, the Netherlands will shift from that method to a new electronic toll system for truck traffic. It will apply to all trucks weighing more than 3.5 tonnes, whether Dutch or from other countries, and the revenues will be dedicated to Dutch highways. Switzerland has unveiled a similar plan. It has its own Swiss vignette for vehicles under 3.5 tonnes that use motorways and expressways. But for trucks, it is underway with a revised electronic tolling system to be implemented by Kapsch TrafficCom and the Swiss company LostnFound. Under an eight-year deal, the joint venture will provide onboard units that interface with a satellite tolling system; the contract calls for the delivery and installation of 55,000 onboard units to be installed in Swiss trucks.

Rivian Introduces Electric Commercial Van
Rivian Automotive, in recent years, has provided more than 20,000 of its electric custom delivery vans to Amazon. With that impressive track record, the company is now offering a new Rivian Commercial Van to delivery firms nationwide. There are two versions, the 500 for city streets and the larger 700 for larger amounts of cargo. Their respective ranges are 161 miles and 153 miles. The vans come equipped with automatic emergency braking, collision warning, and 360-degree visibility. Both models have been in test service with several large fleets, according to an article in FleetOwner (Feb. 10, 2025).

DelDOT Toll Increase Will Charge Non-Delaware Vehicles More
The three toll roads in Delaware plan to implement toll increases later this year, in the vicinity of a 25% increase, according to Delaware DOT (June 15). Two aspects of the plan strike me as bizarre. First, DelDOT charges the same amount for E-ZPass and cash customers, even though its costs are higher for cash. Second, the increases will be greater for out-of-state vehicles than for Delaware-registered vehicles. I’m not a constitutional scholar, but it seems to me that the Constitution’s interstate commerce clause prohibits such discrimination against non-state citizens. That was one of the founding principles of the Constitution. I’m sure litigation over this discrimination will take place if DelDOT actually goes through with this plan.

First Highway P3 Announced for Newfoundland and Labrador
Infralogic reported (June 10) that its first P3 highway procurement is underway. The project involves upgrading 150 miles of the Trans-Canada Highway in the northern part of Newfoundland. Under a 30-year concession, the selected team will design, build, finance, and maintain the rebuilt highway. The article reported that Plenary, Fengate, and Municipal Enterprises Ltd. submitted responses to a Request for Qualifications in January. The Request for Proposals had been expected in the spring, but “procurement decisions are taking longer than expected,” reporter Liam Ford explained in June.

Sec. Duffy Cancels Funding for DC-Baltimore Maglev Project
Long-time readers of this newsletter may recall several critical assessments of unanswered questions about proposed maglev projects. Yet the planners’ dreams continued, with one example being the proposed $20 billion line from Washington, D.C. to Baltimore. It was first proposed in the 1990s, but generated a wide array of objections. It finally received a modest $26 million grant from the Federal Railroad Administration in 2016, but with little observable progress since then. DOT Secretary Sean Duffy on Aug. 1 announced the cancellation of those grants.

Florida Brightline Sued by Railroad Partner
Higher-speed passenger rail company Brightline Florida runs mostly on the tracks of the Florida East Coast (FEC) Railway. It seemed like a natural partnership for the startup, for-profit passenger rail company, and the freight railroad whose right of way has some degree of excess capacity. But last month, FEC sued Brightline for, FEC says, concealing its plans to start a commuter rail line from West Palm Beach to Miami on the FEC right of way. FEC says this violates its agreement with Brightline because it would overload the freight railroad’s capacity. Meanwhile, Brightline saw its bonds downgraded by both Fitch Ratings and S&P, after posting a $550 million net loss last year.

Ups and Downs in India’s Toll Road Industry
Rouhan Sharma reported last month in Infralogic (July 8) that toll roads operator Abertis is seeking partnerships for toll roads in India. Less than a month later, the same reporter spotted two such opportunities. Macquarie Asset Management has begun a process to sell a portfolio of nine Indian toll road concessions. A separate article on the same day (Aug. 6) revealed that KKR is planning to sell a $300 million stake in Vertis Infrastructure Trust, which has a portfolio of Indian toll road concessions. That article also noted that I Squared Capital is planning, with KKR, to offer toll road concessions from Vertis and Cube Highways Trust.

Major Tunnel Projects Under Way in Australia
Twin tunnel boring machines are at work on a pair of tunnels for the North East Link project in the Melbourne metro area. The A$16 billion project is building the tunnels, each to handle three lanes of traffic. They will be 6.5 km long and at a depth of 45 meters. The overall project, aiming to reduce congestion in the metro area, includes upgrades to the M80 ring road and the Eastern Freeway. Meanwhile, in Brisbane, twin 6 km tunnels are being bored under the Brisbane River. These tubes will serve to extend Brisbane’s existing rail transit system to the rapidly growing South East Queensland metro area. Originally budgeted at A$5.4 billion, some estimates put the total as likely to be A$17 billion.

North Carolina Express Lanes Extension Construction to Begin in 2030
The Charlotte Regional Transportation Planning Organization and NCDOT have announced that the $3.2 billion project to extend the I-77 express toll lanes 11 miles from downtown Charlotte to the South Carolina line will begin in 2030. NCDOT plans to procure the project as a revenue-financed long-term DBFOM P3, similar to the way the existing express lanes were procured last decade.

Sacramento Express Toll Lanes Network Under Way
Caltrans is adding express toll lanes to I-80 in Yolo and Solano Counties, as reported by CBS Sacramento last month. Derek Minnema, Executive Director of Connector JPA in Sacramento, tells me these links are part of a plan for a network of such lanes in the Sacramento metro area. Most of the projects will convert existing HOV lanes to HOT-3 lanes, in which carpools of three or more will not be charged, but all other vehicles will pay the variable toll. Similar express toll lane networks exist and are being expanded in the metro areas of Los Angeles, San Diego, and the San Francisco Bay Area.

Massachusetts Moving Forward to Revamp Service Plazas
The 18 service plazas on the Massachusetts Turnpike will be rebuilt and modernized under a 35-year P3 lease agreement with Applegreen. In winning the concession, the company committed to spending $750 million in improvements to the plazas and will share a portion of the revenues from the plazas with MassDOT. This agreement is similar to the way other toll roads have modernized and upgraded their plazas. Since 2010, six other toll road providers have signed similar P3 leases in Connecticut, Delaware, Florida, Indiana, Maryland, and New York.

More Road Diet Funding Is Unlikely—U.S. DOT
DOT Secretary Sean Duffy last month announced that its agencies will look “less favorably” on proposed projects that would reduce lane capacity for vehicles. The warning came in a Notice of Funding Opportunity for the Safe Streets and Roads for All Program. Anti-auto groups (such as Streetsblog) are very upset about this change, with their usual talking points about “excess road capacity.”

Hawaii Road User Charge Begins
Since July 1, EV owners in Hawaii will have the option to pay either a road user charge of $8 per 1,000 miles or a flat annual fee of $50. Both options replaced the previous $50 EV annual registration surcharge. Implementing such a program is simpler in Hawaii because no out-of-state vehicles use its roadways.

Massive Bridge Project Under Way in Italy
A $15.6 billion bridge will span the Strait of Messina that separates Italy from Sicily. The long-dreamed-of span has won government approval, and a contract has been awarded to a consortium that includes Italian contractor Webuild. The bridge will include highway lanes and a railroad line. Its suspended span will be 10,827 feet, the longest in the world. The financing plan is not clear, but the Italian government says the bridge will qualify as supporting national defense under a new NATO policy.

Australia Selects Japanese Builder for New Navy Ships
In a prior article in this newsletter, I suggested that the U.S. Navy could upgrade its aging fleet faster and less expensively by contracting with the world-class shipbuilders of Japan and South Korea. Australia is now pursuing that course, with a contract to produce its new frigates awarded to Mitsubishi Heavy Industries. Under the agreement, the first three frigates will be produced in Japan and the remainder in Australia. The frigate is an upgraded version of the Mogami frigate being procured by the Japan Maritime Self-defense Force.
  
Stop the Bleeding on California High Speed Rail, Analyst
In a July 7 online commentary, Baruch Feigenbaum argued that “walking away from the decades-late, largely unfunded California HSR project is the least-bad way forward.” The article first appeared in the Orange County Register and was subsequently posted on the Reason.org website.

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Quotable Quotes

“I have a report from an international HSR [high speed rail] association [which finds that] HSR construction generates huge amounts of GHG [greenhouse gases] but projects that it takes 5-10 years after the beginning of HSR operations to reach break-even. The situation in California is even worse because (1) the GHG benefits of HSR have been significantly overstated because the state has projected passenger loads higher than any HSR in the world has ever achieved, and (2) if California HSR ever commences operations, it will be in the Central Valley, which has the lowest population, lowest density, and the least projected ridership. Since this generates the biggest ‘last mile’ problem along the alignment, it will be particularly difficult to attract passengers who will have to find ways to access the HSR origin and destination stations, rather than just drive themselves.”
—Thomas A. Rubin, transportation consultant, email to Robert Poole and others, July 17, 2025

“This project [Maryland maglev] lacked everything needed to be a success, from planning to execution. This project did not have the means to go the distance, and I can’t in good conscience keep taxpayers on the hook for it. We will continue to look for exciting opportunities to fund the future of transportation.”
—Sean Duffy, U.S. Secretary of Transportation, DOT news release, Aug. 1, 2025

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The post Surface Transportation News: New Zealand’s road user charge transition appeared first on Reason Foundation.

• Indiana leads on Interstate tolling
• Virginia plans missing link in Beltway managed lanes
• Dashboard screens vs. buttons: change is on the way
• Tesla enters the robotaxi market
• Trucking organization proposes repeal of tax on new trucks
• New Washington State P3 law has bipartisan support
• News Notes
• Quotable Quotes

Indiana Takes the Lead on Interstate Tolling

Last month, Indiana announced that it would be the first state to rebuild its aging Interstate highways using toll financing. It will not be the last to take this step.

Legislation authorizing the state department of transportation (DOT) to use toll financing to rebuild all six of the state’s non-tolled long-distance Interstates passed via a large, bipartisan majority and was signed into law in mid-June by Gov. Mike Braun.

How did this big change become so popular? The decline of fuel tax revenues was a significant factor. Because Indiana is only 149 miles wide, many out-of-state truckers and motorists can drive through the state without purchasing fuel. The Indiana Department of Transportation (INDOT) and state chambers of commerce are also concerned by the gradual decline in fuel tax revenues due to ever-higher new-car fuel economy, the growth of hybrids and electric vehicles, and reduced annual vehicle miles of travel (VMT).

Congress has ignored repeated studies by the Transportation Research Board and other researchers on the need to reconstruct Interstates that are well past their 50-year design life. Since Congress is clearly not prepared to act, it will be up to states to take charge of rebuilding these vital corridors which, despite their name, are owned and operated by state governments.

Indiana DOT started building a case for toll-financed Interstate reconstruction a decade ago. First was a tolling feasibility study by HDR in 2017, and then a major Statewide Interstate Tolling Strategic Plan developed by HNTB in 2018. The 2018 governor took a “not on my watch” position, but seven years later, the stars aligned for Indiana’s landmark legislation.

As the first mover on this endeavor, it’s important for INDOT to get this right. Here are some recommendations for addressing several key issues.

The first is getting federal permission to implement tolls on Interstates. The HNTB study reported that INDOT had been assured (in 2018) by the Federal Highway Administration (FHWA) that it could use the “bridge exception” to implement tolls. A current provision in federal law permits tolling of currently non-tolled bridges on Interstates. Whether that provision will pass muster for tolling every overcrossing on a long-distance Interstate remains to be seen. If that works, no problem.

But Indiana could begin its program by rebuilding two Interstates using two more straightforward federal tolling provisions. The first is the Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP), which allows three states to each rebuild one Interstate with toll financing. This could be used for one long-distance Interstate. The other project would use a slot in the Value Pricing program under which a state may toll all lanes of an Interstate to address congestion; this could be used for an urban Interstate (such as I-465 beltway around Indianapolis). And for the 2026 federal surface transportation reauthorization, Indiana’s congressional delegation could then support liberalizing ISRRPP so it would allow every state to toll all its Interstates (a measure Reason Foundation has suggested for that reauthorization bill).

A second concern is fairness to Interstate users, both motorists and truckers. Auto and trucking groups have long decried “double taxation” on tolled highways—i.e., having to pay both tolls and fuel taxes on the same highway. As part of the transition from state fuel taxes to state-authorized tolling, Indiana could offer refunds of state fuel taxes for state residents’ and truckers’ trips on rebuilt tolled Interstates.

INDOT’s likely first reaction would be “We need every dollar of that declining fuel tax revenue.” But this ignores the fact that it costs a lot more to build and maintain a lane-mile of Interstate than a lane-mile of an ordinary highway. That’s why Interstate toll rates (where they exist) are generally twice as much per mile as fuel taxes. So INDOT would do better by offloading Interstate reconstruction and maintenance, so that nearly all its fuel tax revenue (apart from some fuel tax rebates) could be devoted to its non-tolled roadways. 

A third recommendation for INDOT and other toll supporters is to focus on the reconstruction, not the tolls. Reconstruction is the goal; toll finance is the means. Indiana’s Interstates rank in the bottom third of states in terms of pavement condition. Their heavy truck traffic wears them out faster than if there were less truck traffic, but state and federal projections show truck traffic increasing twice as fast as personal vehicle traffic in the coming decades. In addition to reconstruction, some of Indiana’s long-distance Interstates are potential candidates for adding dedicated truck lanes.

Last but hardly least, Indiana should seriously consider procuring these major reconstruction projects as long-term design-build-finance-operate-maintain (DBFOM) public-private partnerships (P3s), financed via the projected toll revenues. As “brownfield” concessions, these projects might even attract up-front concession fees from equity investors. Using toll revenue bonds would provide an important reality check on traffic projections and the financing plan, limiting or eliminating any potential for taxpayer bailouts of a project gone wrong. Bondholders also insist on serious maintenance accounts and reserve funds, to enable such projects to survive economic downturns.

Fortunately, Indiana law already grants P3 authority to both INDOT and the Indiana Finance Authority. The state also has experience dealing with a large brownfield concession via the long-term P3 lease of the Indiana Toll Road.

These factors suggest that Indiana is in a good position to succeed in its role as the first state to rebuild and modernize its aging Interstates via toll financing. With eight states having done Interstate tolling feasibility studies in recent years, I would not be surprised to see a few of them—perhaps Michigan and Wisconsin—looking seriously into following Indiana’s footsteps.
[Note: An earlier version of this article appeared in the June 2025 issue of Public Works Financing.]

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Virginia Plans Missing Link in Beltway Express Lanes
By Baruch Feigenbaum

Northern Virginia has one of the most comprehensive priced managed lane networks in the country. By November, the region will have 86.7 centerline miles of managed lanes, including the longest continuous linear section in the country, I-95/I-395 from north of Fredericksburg to Washington, D.C. Only one major freeway, SR 28, doesn’t have managed lanes. And that’s because the traffic congestion doesn’t justify adding them yet. And the region has 28.2 centerline miles of toll road lanes connecting Falls Church and Leesburg.

After the 495 Next project opens in November, there will be one 7.8 centerline-mile hole in the network, the segment of I-95/I-495 between Springfield and the Woodrow Wilson Bridge. Currently, the Virginia Department of Transportation (VDOT) is conducting the Southside Express Lanes Study to determine the feasibility of managed lanes in this corridor.

Soon after the initial traffic studies, VDOT came to the conclusion that managed lanes are feasible and that they would be more effective if extended into Maryland. Much of the travel in the corridor is between Northern Virginia and the National Harbor Area (home to a large conference hotel and convention center) or I-295, which runs into the District of Columbia. VDOT reached out to the Maryland Department of Transportation (MDOT) to gauge their interest in expanding the lanes 2.8 miles across the Woodrow Wilson Bridge and into Prince George’s County, Maryland.

MDOT has been supportive of the study. However, for any project to move forward, Maryland Governor Wes Moore wants to see “local support” from Prince George’s County lawmakers serving in the General Assembly. Thus far, a number of regionwide transportation groups have reached out to local lawmakers to gauge support and found limited interest.

VDOT has hosted Southside Express Lanes open houses, in which the public can comment on the project. Concerns from Virginia residents have focused on how these lanes affect traffic flow at their terminus or how this project will increase noise where they live. Some Virginia residents dream of a world where heavy rail is built across the Wilson Bridge, a project the Washington Metropolitan Area Transit Authority (WMATA) has studied and declared infeasible for the foreseeable future. But most see value in the managed lane concept, even if they have concerns about the execution.

Maryland residents in the corridor have a very different take. Many suggested that the project was being forced upon them by Virginia. They don’t seem interested in tolling in any form. They suggested Maryland can create a different solution (although no one has mentioned a viable alternative yet).

Managed lanes are not just a Virginia thing. The first managed lanes on SR 91 were actually created in 1995 in California (based on a paper by Reason’s co-founder Bob Poole). The concept has spread to states across the political spectrum, including red states (like Florida, Texas, and Utah), purple states (like Georgia, North Carolina, and Virginia), and blue states (like Colorado, Minnesota, and Washington). In fact, Maryland has its own managed lanes on I-95 north of Baltimore. The state just finished extending the initial 7.0-centerline miles an additional 7.5-centerline miles. But given that all politics is local, a successful managed lanes project in Baltimore doesn’t move the needle in suburban Washington, D.C.

A Virginia-only project would be less than ideal from a design perspective. The lanes would have to be tapered before the bridge, with one ending at U.S. 1 and another merging into traffic. The current alignment features two to three general-purpose lanes for local traffic (with access to all exits) and two to three general-purpose lanes for express traffic (with access to limited exits). This alignment would need to be changed. I’ve never liked this type of split lane setup because it reduces the number of vehicles (and people) per lane a highway can accommodate, so I consider fixing this split a bonus for the project, but traffic would have to split again going onto the Woodrow Wilson bridge.

Currently, Transurban operates the I-495 Express Lanes, and having the company operate the extension would provide the most seamless travel experience. However, with the lanes ending before the bridge, it might not be financially feasible for Transurban or any private entity to operate the lanes. In initial simulations, travelers were less likely to use the lanes if they ended before the bridge than if they ended after. The alternative would be for the state to operate the lanes as it does with the I-66 congestion-priced lanes inside the Beltway, as well as some other toll facilities across the state.

This isn’t the first managed lanes proposal in the Maryland suburbs of D.C. that has run into political problems. Former Maryland Governor Larry Hogan proposed managed lanes on I-270 and I-495, which would have been the country’s largest P3 managed lane project. However, strong opposition from residents of central Montgomery County and the current governor’s desire to create his own project led to the demise of that project.

The two states have less than one month to move forward on the project. By late August, each state has to decide which projects to submit for inclusion in the Metropolitan Washington Council of Governments’ (the regional metropolitan planning organization) next transportation improvement plan. I’m hopeful that Maryland officials will agree that managed lanes are the best approach. But time is running out. Regardless of what Maryland officials decide, Virginia needs to be ready to move forward with the project to finish the missing link in the Northern Virginia network.

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Dashboard Screens vs. Buttons: Change Is Under Way

In previous issues of this newsletter, I have expressed concerns over the safety implications of automakers shifting many (or even all) control functions to multi-level data screens. Yes, they look cool, and the nerds who create them are proud of their comprehensiveness. But if you have to go through several steps to find the windshield wiper control while driving at 65 mph, taking your eyes off the road could easily lead to an accident (politically correct today as a “crash”). Fortunately, as a lengthy piece in Wired (May 5) makes clear, European automakers are starting to come to grips with these safety implications.

A prime mover in this change is the European New Car Assessment Program (EuroNCAP), which does crash-testing analogous to what our own National Highway Traffic Safety Administration (NHTSA) does. Starting in January of this year, the organization’s new vehicle safety ratings will give the highest score only to those with physical controls (knobs, buttons, etc.) for important features (such as wipers, turn signals, hazard lights, etc.)

European vehicle producers are slowly getting the message. Volkswagen’s design chief Andreas Mindt promised change in upcoming vehicles, admitting that its “digitized” 2019 Golf Mk8 was not “intuitive to operate” as claimed. He told Wired, “We will never, ever make this mistake anymore . . . It’s not a phone, it’s a car.” A few other auto companies are starting to reintroduce physical controls, but this is not yet widespread. A classic example is that several YouTube tutorials are available to explain, step by step, how to open a Tesla’s glove compartment.

The article quotes human factors expert Steven Kyffin: “It is really important that steering, acceleration, braking, gear shifting, lights, wipers—all that stuff which enables you to actually drive a car—should be tactile. . . . Now [with screens] you must look, think, and aim to adjust the temperature or volume. That’s a huge cognitive load, and completely at odds with how we evolved to interact with driving machines while keeping our attention on the road.”

According to a five-year study carried out by Swedish magazine Vi Bilagare in 2022, reaction time on a non-screen Volvo V70 for tasks such as changing interior temperature, tuning the radio, or turning down instrument lighting took about 10 seconds. The same tasks in an MG Marvel with touchscreens took 45 seconds to search through nested menus. A study by British road safety TRL found that reaction times using screens were worse than when a driver was at the drunk-driving limit or high on marijuana.

While I’m pleased to see that EuroNCAP is working on this problem, where are NHTSA, SAE (Society of Automotive Engineers), and even Consumer Reports on this subject?  

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Tesla Enters the Robotaxi Market
By Marc Scribner

In June, Tesla launched its “Robotaxi” ride-hail service in Austin, Texas, using a fleet of the company’s Model Y SUVs. For the last decade, Tesla CEO Elon Musk has made near-term promises of driving autonomy. While Tesla has produced impressive advanced driver assistance systems, the promise of sustained driving automation that can be operated without active human supervision remains an elusive goal for the company.

Tesla aims to catch up with robotaxi industry leader Waymo, which is expanding its autonomous ride-hail service in cities around the country. Tesla’s position is that it can do so in large part by leveraging Tesla’s lower vehicle unit costs. However, core automated driving system performance is likely to determine the outcome of this race, an area where Tesla appears to be at a distinct disadvantage.

Tesla Robotaxi service is presently invitation-only, offered between the hours of 6 am and midnight, and confined to a small geographic area in South Austin estimated to be approximately 30 square miles. Tesla Robotaxi currently has an onboard attendant in the passenger seat, who can trigger an emergency stop if the vehicle encounters a problem.

The inclusion of a human safety operator seated in the vehicle led longtime automated driving consultant Brad Templeton to argue in Forbes that the Tesla Robotaxi, at launch, was not a “real robotaxi system.” Despite the underwhelming unveiling of Tesla Robotaxi, the company does have two potential advantages over robotaxi competitors: lower vehicle unit costs and an enormous amount of data collected from its advanced driver assistance systems in consumer-owned Tesla vehicles.

Tesla’s Musk has claimed that Waymo vehicles cost four to five times more to produce than the Tesla Model Y Robotaxi. Assuming that this is accurate, much of this can be accounted for by economies of scale, a gap that is likely to close over time as Waymo ramps up production. But part of it is due to hardware differences between Tesla and Waymo—namely, the sensor configurations.

Musk, for years, has been publicly opposed to sensors other than cameras. The company’s camera-based autopilot system is known as Tesla Vision. Tesla vehicles have never been equipped with lidar, which Musk has called “lame” and “a crutch,” and the company has phased out radar and ultrasonic sensors in recent years. Tesla Model Ys are currently equipped with eight cameras, which are fed to onboard computer vision processing to create real-time representations of the operating environment.

In contrast, Waymo One robotaxi vehicles currently make use of more than three dozen radar, lidar, and camera sensors, data from which are “fused” to “see” its surroundings. While Waymo’s hardware costs certainly exceed Tesla’s, will spending less on fewer sensors ultimately benefit Tesla?

The reason why Waymo—and virtually every other autonomous vehicle developer—has opted for the “fused” sensor stack approach instead of reliance on a single sensor technology is that different types of sensors have relative strengths and weaknesses depending on the task and environmental conditions. The table below, adapted from a paper by Peide Wang presented at the 2021 International Conference on Mechanical Automation and Electronic Information Engineering, compares the sensory performance of radar, lidar, and cameras across different dimensions (as well as with human vision for a baseline comparison).

As one can see, different sensors are better depending on the task and conditions. For instance, while cameras are great at classifying objects, radar and lidar are better at detecting them. Cameras are great at detecting lane markings but perform poorly in bad weather. The biggest practical advantage of lidar over cameras is in depth perception, which is critical for automated driving systems to accurately perceive a vehicle’s surroundings and avoid obstacles in complex roadway environments. A more detailed comparison of radar, lidar, and camera sensory perception and operational performance can be found in Table III of this 2023 paper from Mitsubishi Electric Research Laboratories.

While adopting a camera-only sensor configuration might be cheaper, it may well reduce the performance of the automated driving system. Indeed, Carnegie Mellon University engineering professor Raj Rajkumar told Business Insider that he suspects forgoing lidar and radar sensors will limit Tesla’s ability to address “phantom braking” incidents in which the vehicle’s driving automation system suddenly slams on the brakes for no apparent reason. The National Highway Traffic Safety Administration has been investigating Tesla over phantom braking since 2022 after receiving hundreds of complaints from Tesla owners.

The large volume of data collected by Tesla cameras may not be sufficient to solve the phantom braking problem, at least in the near term. “To process camera data, one has to use AI and machine learning,” according to Rajkumar. “But hallucinations are an integral part of how AI operates, and once you hallucinate, phantom braking ends up happening, so a camera-only solution will not be sufficient for a very long time.”

Tesla Robotaxi is starting at a point well behind Waymo. In Austin, Waymo launched fully driverless commercial operations earlier this year in an area larger than Tesla’s invitation-only, supervised service, and Waymo One robotaxis can be hailed on the Uber app. In addition to Austin, Waymo operates commercial service in Atlanta, Los Angeles, Phoenix, and San Francisco. The company is planning robotaxi expansions in Miami later this year and Washington, D.C., in 2026, and has or is planning to test its vehicles in Boston, Buffalo, Las Vegas, Houston, Orlando, Philadelphia, Nashville, New York, San Antonio, and San Diego. In May, Waymo said it plans to more than double its current fleet of roughly 1,500 robotaxis by the end of next year, with plans to continue scaling production and operations.

Tesla may today have an advantage in manufacturing as America’s most successful electric automaker, but Tesla’s ability to compete with Waymo and other more advanced autonomous vehicle developers will depend on its ability to deliver on core automated driving system performance. Before any chance at commercial success, Tesla must first be able to operate robotaxis at a high level of safety without onboard attendants. As the implosions of Uber’s Advanced Technologies Group and General Motors’ Cruise units show, even the perception of cutting corners on automated driving safety and performance carries massive business risks.

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Trucking Organization Proposes Repeal of Tax on New Trucks

The American Transportation Research Institute (ATRI) is the trucking industry’s think tank. On April 30, it released a 36-page report making a case for Congress to repeal the 12% federal excise tax (FET) on new trucks. This tax dates back to World War I. ATRI’s main argument is that the tax, which can add $20,000 to $50,000 to the cost of acquiring a new commercial truck, acts as a deterrent to the sale of new trucks. As economists often note, if you want less of something, put a tax on it.

The report makes two arguments for the potential benefits of repealing this tax: environmental and safety. Without the tax, trucking companies are more likely to replace aging trucks with new ones. Since new trucks emit somewhat less CO2 and other exhaust products, ATRI’s researchers estimate that diesel emissions would be reduced annually by 1.2 million metric tons of CO2.

The other potential benefit is safety. Without the tax on new trucks, safety technologies such as advanced driver-assist systems (ADAS) would be more affordable. Assuming that all new trucks were so equipped, the report estimates that 750 crashes per year might be prevented, with a saving of $13.5 billion in crash costs over 10 years. This calculation strikes me as far more speculative than the CO2 reduction.

As a final argument, ATRI argues that the truck excise tax “does not function well as a funding mechanism for the federal Highway Trust Fund.” Unlike, say, the diesel fuel tax, the excise tax revenue fluctuates from year to year, due to fluctuations in new truck purchases.

ATRI’s news release devoted no attention to what should replace the FET, which currently averages 14 percent of each year’s user-tax revenue for the Highway Trust Fund (HTF). When I downloaded the 36-page report, I was relieved to find a 1.3-page section near the end (pp. 32-33), “Offsetting Revenue Impacts of a Truck FET Repeal.” First, it explains that in 2023, this tax provided $6.78 billion, slightly more than 14% of HTF revenue that year. After mentioning such ideas as replacing fuel taxes with a Road User Charge/Mileage-Based User Fee, the text then focuses on fuel tax increases to replace the FET revenue. If both gasoline and diesel tax rates were increased for this purpose, the gas tax would go from 18.4 cents/gal. to 20.7. But if the objective were to have the trucking industry bear the cost of the replacement (as it should), the diesel tax alone would be increased from 24.4 cents/gallon to 35.6 cents/gal.

Kudos to ATRI for at least contemplating the idea that if the trucking industry is relieved of one user tax, it should bear the cost of replacing the lost revenue for the Trust Fund. As a final note in this section of the report, ATRI notes that federal fuel taxes have not been increased since 1994. Had the gasoline and diesel taxes been increased to keep pace with inflation, the federal gas tax would today be 39.7 cents/gal. and the diesel tax rate would be 52.7 cents/gal. You can see why the HTF has lost so much of its purchasing power over the past 31 years.

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Washington State’s New P3 Law Has Bipartisan Support

Thanks to Eugene Gilligan’s informative Infralogic article (June 18), I learned that Washington Gov. Bob Ferguson signed SB 5081 on May 20, providing WSDOT with new public-private partnership (P3) capabilities. I’d seen nothing in any of my other transportation sources about this legislation, and I’m pleased to note that it passed with bipartisan support.

Indeed, a major source for Gilligan’s article was Sen. Marko Liias (D-Edmonds), who co-sponsored the bill. Liias explained that Washington legislators learned a lot from P3 successes in Colorado and Virginia. He also noted that “Some projects are more complicated than others, so this provides more ways of procuring them with more sources of funding. . . . With P3, the ability to bring in some private equity to help at a time when budgets are stretched is also attractive.”

When it came to suggesting potential P3 projects, Liias offered several ideas. He said he expects more tolled highway projects in the state over the next two decades, and he noted that Virginia could provide Washington with a template for P3 managed lanes projects. He also notes that Virginia’s Transform 66 P3 is transit-friendly, with new express bus service operating in the uncongested express lanes.

Getting the bill to the finish line was a P3 Work Group. It included not just legislators but also designees of the governor’s office, the state DOT Secretary, and members of the legislature’s Joint Transportation Committee. Section 204 of the state’s current transportation budget directed the legislature to develop “a new statutory framework for WSDOT’s P3 program.”

WSDOT told Gilligan that the agency’s next step will be “to assemble a qualified team of industry P3 experts to educate decision-makers both within and outside of WSDOT on this project delivery approach and develop a comprehensive screening process for evaluation and selection of projects,” prior to the effective program date of Jan. 1, 2027.

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News Notes

Florida Ends HOV Lanes
In what appears to be a first, Florida legislators have repealed highway legislation that enabled HOV lanes on the state’s highways. The rapid growth of express toll lanes in the state’s four major metro areas has undermined support for continuing HOV lanes, with their inherent enforcement difficulties and their failure to stimulate carpooling (which has declined by more than half over the last two decades nationwide). Express toll lanes inherently encourage carpooling, in which several people can split the cost of the variable toll. And they have the major benefit of enabling faster and more reliable travel when people really need such trips.

US DOT Is Making TIFIA Into a Subsidy Program
Politico reported (July 7) that DOT’s Build America Bureau is “revamping” TIFIA, the carefully managed loan program aimed at providing gap financing for P3s and other innovative transportation projects. Originally, TIFIA loans were limited to 33% of a project’s cost and required that other financing have investment-grade ratings. Projects were limited to transportation improvements, narrowly defined. The new TIFIA will finance up to 49% of project costs and be available to “all types” of transportation infrastructure, which appears to include (based on recent loan requests) transit-oriented development projects, state infrastructure banks, and natural habitats affected by infrastructure. These changes pose a threat to the credit quality of TIFIA’s loan portfolio, which has an excellent track record.

North Carolina I-77 Express Toll Lanes Moving Forward
NCDOT plans to release its request for qualifications (RFQ) in August for potential bidders on its $3.2 billion project to add 11 miles of express toll lanes from Charlotte (where the current I-77 ETLs terminate) to the South Carolina border. NCDOT Division Engineer Brett Canipe told the Charlotte Observer that the agency expects “stiff competition” among potential P3 teams, with a long-term agreement expected to be signed by late 2027.

Utah Railway Group Seeks $2.4 Billion Private Activity Bonds for P3 Project
After winning a challenge to the environmental review of its planned railroad via a landmark Supreme Court ruling, the Seven County Infrastructure Coalition is seeking $2.4 billion in tax-exempt PABs for the 85-mile Uinta Basin Railway. The coalition’s private-sector partner, Drexel Hamilton Infrastructure Partners would use the PABs to finance major components of the project, as Infralogic reported on June 11. The planned railroad would link the oil and gas resources of the Uinta Basin to markets in other states via existing railroads.

Converting U.S. 1 Near Raleigh, NC to a Toll Road
In response to a request from the Capital Area Metropolitan Planning Organization (CAMPO), the North Carolina Turnpike Authority (NCTA) analyzed the feasibility of converting 10 miles of Capital Blvd. (U.S. 1) from a four-lane arterial to a six-lane toll road to relieve congestion on this urban corridor. And based on the NCTA study’s results, in May CAMPO approved the tolling option, which will require approval from the NC legislature. The new tolled corridor will run from I-540 in Raleigh to Purnell Road in the suburbs. The estimated cost of the project is $1.3 billion, which will be financed based on toll revenue.

Ohio and Kentucky Unveil Brent Spence Companion Bridge Design
The $3.6 billion project will implement a two-level cable-stayed bridge to relieve congestion on the existing Brent Spence Bridge. Early plans to replace the old bridge with a larger one, financed by tolls, were rejected by legislators of both states for many years. Thanks to borrowed federal money from the federal IIJA program, the new bridge project has been approved for a $1.636 billion grant, with the two states now needing to come up with the remaining 55% of the project’s cost. This is a prime example of how “free federal money” can reward tolling opponents if they hold out long enough.

Austin Express Toll Lanes Project Moving Forward
The MoPac South project, as proposed by the Central Texas Regional Mobility Authority, would extend the existing express toll lanes on the MoPac Expressway eight miles further south, aiming to reduce projected levels of peak-period congestion. The project was among a list of transportation improvements approved by CTRMA’s board on June 25. An environmental group called Save Our Springs has ongoing litigation aiming to remove the project from CTRMA’s agenda.

New York State DOT Contracts for Removal of Syracuse I-81 Viaduct
NYSDOT has awarded a $251 million contract to tear down the first portion of the 1.4-mile I-81 viaduct in Syracuse. The project will demolish the southern end of the viaduct and replace it with a “community grid” of pedestrian-friendly streets. Subsequent contracts will demolish further portions of the viaduct, and the community grid will be redesignated as Business Loop 81. Another contract will redesign/redevelop interchanges on either end of the viaduct. Through traffic heading north and south on I-81 will have to bypass downtown on the 15-mile I-481 ring road.

Mexico Planning DBOM Highway Projects
Infralogic reported (June 23) that Mexico’s Infrastructure, Communications, and Transportation Secretariat (SICT) plans four new P3 highways via planned design/build/operate/maintain P3 concessions. The first of these is the 53-mile Cardel-La Tinaja highway, estimated to cost $484.5 million, including a branch road to the Port of Veracruz. Financing would be primarily by the government, including the development bank Banobras.

Brightline Florida Growing—But Still Losing Money
Despite continued growth in ridership, especially between Orlando and South Florida, the privately financed higher-speed passenger rail line is still operating in the red. In May, Fitch reduced its bond rating to junk status, as did two other rating agencies. The problem appears to be reduced commuter ridership in South Florida. That reduction seems to be linked to a major price increase imposed last year: the former 40 tickets for $400 ($10 each) were replaced by 40 tickets for $1,400 ($35 each). A price increase may have been called for by reduced commuter revenue, but that change seems to have driven away much-needed commuter business.

Florida’s I-4 Express Lanes Loan Rating Upgraded
Moody’s Ratings last month upgraded from Baa1 to A3 its rating on I-4 Mobility Partners’ $845 million TIFIA loans. The rationale for the upgrade included a sound operational track record since the project’s completion in 2022, a manageable scope of operating and lifecycle requirements, cash reserve funds, and a longer-than-usual two-year concession tail for an availability payment P3 project. I-4 Mobility Partners is a special-purpose entity of Skanska ID and John Laing Investments Ltd. Their I-4 Ultimate project rebuilt 21 miles of I-4 in the Orlando area and included the addition of express toll lanes in both directions.

Australian State Plans Eventual Takeover of Tollways
The New South Wales government has created NSW Motorways that will take over the state’s long-term P3 toll roads when their concessions expire. The new entity plans to establish uniform rules and standards for all the toll roads, bridges, and tunnels, including new toll rates. It will also create positions for a Consumer Advocate and an Independent Tolling Ombudsman. The government’s statement said that, “The NSW government is driving towards a fairer toll road network, with the establishment of NSW Motorways to progress toll reform and advocate for motorists.”

Union Truck Drivers Reject In-Cab Safety System
Several vendors now offer AI-enabled cameras for truck cabs that track driver eyelid behavior and other signs of alertness. As noted in a Wall Street Journal commentary by Jordan McGillis, San Diego-based Lytx’s in-cab system now includes a real-time fatigue scoring system that uses both in-cab and highway data. Unfortunately, the Teamsters and other unions oppose this innovation, and in 2023, negotiated bans on in-cab systems in union contracts with major freight companies, including UPS. Last October, the National Labor Relations Board (NLRB) claimed such tools could violate driver union rights, but the US Circuit Court for the District of Columbia denied enforcement of the NLRB ruling. 

Vietnam Province OKs P3 Toll Road Project
As reported by Infralogic (June 11), a four-lane, 125 km toll road will link the country’s Central Highlands with the Southeast, with construction expected to finish by 2027. The project will be developed as a P3 by a consortium led by Vingroup, whose special-purpose entity will be Vingroup-Techtra Infrastructure Investment and Development Joint Stock Company. The toll road will be the first component of the planned Gia Nghia-Thanh expressway.

California Rescinds Diesel Locomotive Phase-Out
After failing to receive federal approval, the California Air Resources Board voted unanimously to revoke its in-use locomotive rule. The measure would have required rail operators (public and private) to phase out diesel locomotives, leaving it vague what would replace them, since hardly any railroad lines in California are electrified.

Tennessee DOT Choice Lanes Advocate Steps Down
On June 6, Tennessee Gov. Bill Lee announced that Butch Ely, the Deputy Governor and Commissioner of TDOT, would step down after seven years of statewide leadership. Ely championed express toll lanes for the state’s most-congested urban Interstates and came up with the brilliant name “Choice Lanes.” He made the case to the public and legislators not only for Choice Lanes but also for long-term P3s financed based on toll revenues, both of which passed with majority votes. Prior to his career in Tennessee, Ely had a long history in transportation, playing a key role in the new industry of privately contracted highway maintenance. Ely says he is not retiring, but he has not announced his future plans.

California Permitting Reform Is Less than You Might Think
Gov. Gavin Newsom signed a bill that reduces the scope of the state’s counterpart of NEPA—CEQA. It reduces the threat of litigation only for residential real estate projects, not for infrastructure. And as Allysia Finley pointed out in the Wall Street Journal, that relief applies only to urban housing; any housing projects in the suburbs still face the threat of CEQA litigation.

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Quotable Quotes

“[S]ummary data from a survey that is opt-in and such a small sample size isn’t a very good basis on which to make project decisions. . . . Of the 400-plus comments [Tennessee] DOT received through its public involvement survey, . . . approximately 60% of the commenters opposed the [Choice Lanes] project while only 25% supported it, with the remainder uncommitted or conditional. However, this tells us less than nothing about the level of support for the project among the broader public. Comment-and-response consultations capture a tiny sliver of the population, and there are many reasons to assume that sampling is biased in opposition to any project in question.”
—Michael Bennon, “500 Comments on Tennessee’s I-24 Choice Lanes,” Public Works Financing, April 2025

“I like to say that the fuel tax is like a rock star on his farewell tour. You know, we keep saying, ‘Well, this is going to be it. We’re going to find a solution, We’re going to find a solution.’ And we’re to the point now where the rock star has done three or four farewell tours, and we actually need to come up with something. . . . Tolling by itself is not going to work, because local streets can’t be tolled. On roads with traffic signals, tolling is a challenge, and so we need something that can work on all roads in all places. . . . There is a high-tech solution where a device plugs into the vehicle’s OBD2 port and collects the when and where of highway use. . . . There’s a medium option, where you have a device, but it’s only collecting the miles, it’s not looking at the location or time. And then a low-tech option, such as an odometer reading, which can be done with a photo or other types of verification through inspections that require very little in the way of new technology or new costs.”
—Baruch Feigenbaum, testimony before the Michigan House Transportation & Infrastructure Committee, June 24, 2025

“The tasks performed by transit workers have remained basically the same for decades even as wages have risen to keep up with economy-wide trends. The agencies themselves deserve some blame for not finding ways to modernize operations and improve efficiency. But Congress itself is a major culprit, specifically . . .Section 13c of the Urban Mass Transportation Act of 1964. This provision, as Marc Scribner of the Reason Foundation points out, makes cost-saving reforms difficult if not impossible. . . . The law requires that agencies which receive federal funding, which is essentially all of them, to protect collective bargaining rights, guarantee re-employment of workers who lose jobs, and safeguard employees ‘against a worsening of their positions.’ The upshot is that not only do transit agencies face all the usual obstacles to making their workforce more efficient, they are in many respects prohibited from doing so.”
—Matthew Yglesias, “If Your Commute Is a Nightmare, Blame Congress,” Bloomberg Opinion, May 4, 2025

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The post Surface Transportation News: Indiana takes the lead on Interstate tolling appeared first on Reason Foundation.

• P3 surface transportation had a robust 2024
• New report examines the year in transportation finance
• Muddled thinking on fixing the Highway Trust Fund
• New insights on the truck parking shortage
• The role of transit in a changing America
• News Notes
• Quotable Quotes

P3 Surface Transportation Had a Robust 2024
By Baruch Feigenbaum

Reason Foundation recently released the Annual Surface Transportation Infrastructure Report, one of three related transportation publications. Formerly known as the Annual Privatization Report, the new name reflects how the report encompasses a variety of state and federal legislative changes and proposals, global public-private partnerships, and pure privatizations.

Privately-owned roadways in the United States are rare; there are only 22 of them. Most are bridges or highways that lead to bridges. Alabama has four, more than any other state. There are three private bridges connecting Texas and Mexico, built to increase freight movement with one of the country’s top trading partners. Two additional bridges connect the U.S. with Canada, another major trading partner. Other private roads serve small communities or beachside towns. Each of these bridges meets a need that the state could not otherwise afford to build.

In the U.S., public-private partnerships (P3s) are much more common. Reason Foundation defines a public-private partnership as having at least four of the five parts of a full concession: design, build, finance, operate, and maintain (DBFOM). Almost all infrastructure could be defined as some type of public-private partnership.

For example, the Virginia Department of Transportation awards some Interstate repaving design-build contracts to contractor Superior Paving Corp. However, these contracts are for short-term maintenance and do not involve operations or life-cycle maintenance. Design-build-finance or design-build-operate agreements can be considered mini P3s. They help to reduce costs, speed up project delivery, and improve project quality. Since they do not have at least four of the five P3 steps, they are not included in this report.

In 2024, the world’s largest transportation P3 contract was in the United States. The $2.3 billion Calcasieu River Bridge project will rebuild the I-10 bridge in Lake Charles, Louisiana. The revenue risk/toll DBFOM contract is 50 years in length, including the construction time.

The next nine largest projects were located outside the U.S. Highway projects in Turkey and Belgium, as well as a heavy-rail station and track refinancing project in Australia, each valued at more than $1 billion.

While the U.S. had the largest P3 deal for the second year in a row, activity remains most robust in Asia and Europe. In Asia, 23 public-private partnership projects worth $1.9 billion reached financial close. In Europe, 14 P3 projects worth $4.5 billion reached financial close. Latin America had three projects valued at $1.3 billion; Canada had one project worth $2.3 billion, and Oceania had two worth $1.5 billion.

After several U.S. P3 projects were bought out by state or local governments over the past two years, in 2024, the U.S. has 41 surface transportation P3 projects worth at least $0.1 million that have reached financial close. And there are several megaprojects in the pipeline including the SR 400 managed lanes in the northern Atlanta suburbs, the I-24 choice lanes southeast of Nashville, and the I-95/I-495 southside managed lanes south of Washington D.C. While the U.S. lags the per capita P3 investment of countries such as Australia and Colombia, the gap is closing.

One reason P3s remain robust is the doubling of the private activity bond (PAB) cap in the last federal surface transportation reauthorization, the Infrastructure Investment and Jobs Act (IIJA). Private activity bonds are tax-exempt bonds that help level the playing field with municipal bonds. Without PABs, private investors would have to pay a tax on P3 bond income, which they do not have to pay on municipal bonds.

Given that P3s serve a public purpose, it is important that their bonds are treated the same way as municipal bonds. Twenty-three active public-private partnerships have used private activity bonds. Unfortunately, in 2026, the $30 billion federal PABs cap is expected to be hit again. The next federal surface transportation bill needs to raise the cap to at least $45 billion, or better yet, eliminate it.

The Transportation Infrastructure Finance and Innovation Act (TIFIA) is another key tool for P3s. Twenty-five of the P3 projects used TIFIA loans. Unfortunately, by expanding TIFIA beyond its core highway and transit mission to transit-oriented development and allowing projects with only one investment-grade rating to receive a TIFIA loan, the Department of Transportation (DOT) risks the economic viability of the program’s loan portfolio. Fortunately, many members of Congress have expressed interest in returning TIFIA to its core focus.

Similarly to 2023, 2024 was not a banner year for state-level P3 legislation. This is not necessarily a bad thing. It reflects the fact that 24 states already have broad P3-enabling laws. Broad enabling legislation allows state DOTs to enter into public-private partnerships with minimal meddling from elected officials. Another 18 states, the District of Columbia, and Puerto Rico have restrictive P3 laws. In such jurisdictions, the legislative and executive branches must approve each P3 project. While this is better than the small number of states with no P3 authority, it introduces politics and horse trading into the process, minimizing the technical guidance of the DOT engineering, financial, and legal advisors.

State legislation was in play in 2024 in some states’ second session of the two-year calendar. Four bills to make P3s viable in Illinois failed. One in Rhode Island to authorize P3s failed. On the other side, one bill that clarified how revenue from the Louisiana Belle Chase Bridge can be spent passed, and one bill passed in Georgia that streamlined the public meeting requirements for P3s. Meanwhile, the state of Texas completed its buyout of the SH 288 P3 concession, so the state could add parallel general-purpose lane capacity without needing to reimburse the concessionaire.

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New Report Documents 2024 Innovative Transportation Finance

For more than 20 years, I have been researching and writing a report on the previous year’s developments in innovative transportation financing. It’s now known as the Annual Transportation Finance Report, and it was released in late May.

The report’s three main sections cover global infrastructure investment funds, companies, and projects making use of innovative finance, including public-private partnerships (P3s), and public pension fund investments in revenue-generating infrastructure.

It turns out that 2024 was not a record year for infrastructure investment funds. The total they raised in 2024 was $103 billion, well short of a record. However, the Infrastructure Investor 100 largest funds finished with their five-year total exceeding $1 trillion for the second year in a row.

Figures in the report estimate that these funds’ assets under management (AUM) totaled $2.26 trillion and their “dry powder” (funds raised but not yet invested) totaled $376 billion. Readers of this newsletter may be pleased to learn that for the second year in a row, the most popular category of infrastructure for these funds to invest in was transportation, at 64% of all such investment, per IonGroup, publisher of Infralogic.

The section on companies and projects reports that of the world’s 15 largest investor-financed transportation infrastructure projects last year, two were in the United States: the $2.3 billion I-10 Calcasieu River Bridge in Louisiana and the $1.25 billion I-285W and I-20W design-build-finance project in Atlanta. Two of the world’s top-five transportation project developers were French companies (Vinci and Meridiam), with the next two based in Spain (Sacyr and ACS Group). In fifth place was Macquarie, based in Australia. Within the United States, the five leading transportation developers were Meridiam, Ferrovial/Cintra, ACS, Fluor, and John Laing.

Another table in the report tracks U.S. P3 greenfield transportation projects, dating back to 1993 (the 91 Express Lanes in Orange County, CA). The top half of that table has financing details for 22 revenue-risk projects, and there are 17 availability-payment (AP) projects in the table’s lower half. On average, the revenue-risk projects received only 9% of their funding from the relevant (state) government, and got 28% of their construction budget from equity investors. The AP projects, by contrast, got 35% of their budgets from the relevant state/local government and had only 6% equity investment.

One of the most notable findings in this 2024 report is the substantial pipeline of P3 transportation projects, most or all following the design-build-finance-operate-maintain (DBFOM) revenue-risk model. Already in procurement is Georgia DOT’s $4.6 billion SR 400 express toll lanes project in Atlanta, which has selected its preferred bidder (Meridiam/ACS/Acciona). Also underway, with an initial request for proposals expected this summer, is the I-24 Choice Lanes project in Nashville, TN. It is the first of four such projects to be procured over the coming decade. Besides those projects, the U.S. P3 transportation pipeline includes:

• Georgia DOT’s I-285 upper-half express toll lanes—estimated at $10-15 billion
• North Carolina DOT’s I-77 South express toll lanes, estimated at $3.2 billion
• Two potential projects on Virginia DOT’s northern Virginia express lanes network—extending I-495’s ETLs to or across the Woodrow Wilson Bridge, and possibly converting the I-95/395 express lanes to bi-directional from reversible.
• Illinois DOT has legislative OK to add toll-financed express lanes to I-55 in the Chicago suburbs, but this is not yet in their current work plan.
• Louisiana plans a new toll bridge across the Mississippi River at Baton Rouge, which will probably be a DMFOM P3.
• And two still-speculative Florida projects are extensions of the I-4 express toll lanes near Orlando and a possible railroad bridge under the New River in Fort Lauderdale, similar to the Port of Miami Tunnel P3.

This unprecedented project pipeline has led transportation organizations, including AASHTO and ARTBA, to call for a large increase in the current $30 billion federal cap on surface transportation tax-exempt private activity bonds (PABs). U.S. DOT’s Build America Bureau has announced that only $2.4 billion of that $30 billion cap remains available, and transportation groups are calling on Congress to either raise the cap again or to abolish it.

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Muddled Thinking on Shoring Up the Highway Trust Fund

I will give members of the House Transportation & Infrastructure Committee some credit for finally starting to think about the looming bankruptcy of the federal Highway Trust Fund. The problem began with the 2005 reauthorization bill called SAFETEA-LU, which for the first time projected highway and transit funding well in excess of the user tax revenue it was likely to bring in during the same time period. The shortfall ever since has been covered by general-fund bailouts, now totaling $272 billion according to analysis by Jeff Davis of the Eno Center for Transportation. All of that bailout money is borrowed, contributing to annual federal budget deficits that increase the national debt.

So, in one sense, it’s good news that Transportation & Infrastructure Committee Chair Sam Graves (R-MO) proposed a first-ever federal electric vehicle user fee of $250 per year and a corresponding fee of $100 a year for hybrids. In doing this, Rep. Graves also acknowledged that federal gasoline and diesel taxes are unlikely to remain viable long-term and expressed support for eventually shifting from per-gallon taxes to per-mile fees. Graves’ initial proposal also called for an annual $20 user fee on internal combustion vehicles, but that was quickly dropped.

In defending these proposed annual fees, Graves said, “I’d like to completely eliminate fuel and diesel tax and go to a system that I think is fair—and that’s just a system with registration of our vehicles.”

But a flat annual fee would be grossly unfair to both road-warriors who rack up 30,000 miles a year and retired people who drive 2,500 miles per year. The original concept of fuel taxes is that they charge based on how much roadways people use each year, just like electric bills, water bills, and other utility bills. Since highway user fees/taxes pay for the capital and operating costs of our roadways, they must be proportional to both the amount of driving and the weight of the vehicles. Fortunately, I believe Graves simply misspoke on this, and I think he genuinely favors per-mile road user charges, as he has said on a number of occasions.

But now let’s look at the electric vehicle/hybrid fees included in the House plan. How much would they address the looming Trust Fund shortfall, and would they be fair to electric vehicle (EV) and hybrid drivers? 

Consumer Reports estimated that an average new internal combustion vehicle getting 28 mpg and driving 11,000 miles per year would pay $73 per year in federal fuel taxes. The $250 a year EV fee is 3.4 times that amount. To be sure, the average EV is heavier than a conventional vehicle of the same dimensions, but if it’s 20% heavier, a more realistic EV fee would be about $88, not $250. The hybrid fee at $100/year is also too high.

Even at their far-too-high levels, these new fees would not do very much to address the Highway Trust Fund shortfall. The Congressional Budget Office estimated that those new fees would yield $85.7 billion over 10 years, but their net effect, CBO says, would be $64.3 billion. Eno’s Jeff Davis estimates that the Trust Fund would still be short $199 billion by the end of 10 years. So basically, even at their far-too-high levels, those EV/hybrid fees would do little to restore the Trust Fund to solvency.

The only honest way to do this—to stop increasing each year’s budget deficit and with it the national debt—would be to either (a) massively increase the current (mostly fuel) highway user taxes or (b) slash the amount of federal highway and transit spending to match the user-tax revenue. At the very least, this would mean forgetting about reauthorizing surface transportation at the historically very high funding level from the bipartisan infrastructure law (IIJA). While state DOTs and highway builders are counting on IIJA-level funding being the baseline in 2026, not doing that could be a down payment toward restoring solvency to the Highway Trust Fund.

The late Herb Stein, once chairman of the Council of Economic Advisers, is famous for introducing Stein’s Law: “If something cannot go on forever, it will stop.” Free (borrowed) federal money cannot go on forever, so it will stop. The time to start preparing for this is now.

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Some New Insights On the Truck Parking Shortage

Most of those interested in or involved with interstate trucking are aware that, in addition to driver retention, another ongoing problem is insufficient safe truck parking. This shortage primarily affects long-haul trucking—big rigs with sleeper cabs. My long-standing impression has been that trucking industry ally NATSO (National Association of Truck Stop Operators) tends to think of itself as the legitimate provider of overnight services for long-haul truckers. It has fiercely defended the long-standing ban on commercial services being offered at rest areas on Interstate highways, which makes them dreary alternatives to its members’ full-service truck stops.

A new report from trucking industry research organization ATRI takes a refreshingly broader view of the truck parking shortage. Its new report is “Expanding Truck Parking at Public Rest Areas,” by Andrew Fain and Dan Murray, April 2025. Conducted in partnership with state DOT organization AASHTO, it acknowledges the role played by state-owned rest areas and looks cautiously into the potential of expanding their role.

To begin with, we learn that public rest areas provide only 13% of truck parking spaces—only 40,000 out of  313,000, the large majority of them at commercial truck stops. The report looks into state DOT progress in implementing truck parking information systems, state plans to provide truck parking during emergencies (e.g., at weigh stations and other locations), and at the potential for “repurposing state-owned facilities for truck parking.”

The data collected in the study shows wide variations among states and regions in the number of public truck parking spaces and in the amount of truck parking spaces per 100 miles on the National Highway System. (The West and Southwest score worst on that measure.) Another measure provided for all states is the ratio of public to private (truck stop) parking spaces, which the report benchmarks against a 1 to 4 ratio. Using that metric, it targets states that fall well short of that in public spaces as “expansion opportunity states”: among these are Colorado, Texas, Arkansas, Oklahoma, and Louisiana. The study also finds that over the past 10 years, 26% of states have sought to acquire land for additional truck parking. A more optimistic finding is that 64% of states have looked into expanding truck parking at existing facilities. Funding for truck parking real estate has been difficult for state DOTs, but the report identifies 13 federal grants awarded for such purposes, under several discretionary grant programs.

As you may know, the only thing anyone can buy at an Interstate highway rest area is what’s available in vending machines. Refueling or recharging is forbidden as a commercial service under a federal law that is routinely defended by NATSO. Truck drivers would obviously appreciate showers (not just toilets) and actual food and drink (and somewhere to sit down and consume it). The report tiptoes into this formerly off-limits territory with a three-page Appendix A, “You Can’t Buy That Here.” It explains the origin of the federal ban (to protect service stations and fast-food operators at Interstate off-ramps) from—think of it—competition. It summarizes a 2024 attempt in Congress to permit electric vehicle charging at rest areas, which was defeated by NATSO and its ally, the National Association of Convenience Stores. I take this Appendix as a welcome departure from the trucking industry’s historic alliance with NATSO on this subject.

When I compare Interstate rest areas with the service plazas on American toll roads, the differences are stunning. Truckers and motorists alike have both gas stations and EV charging, clean, modern restrooms, multiple fast-food choices, and safe, lighted overnight parking. These services are all provided by commercial firms, typically under long-term public-private partnerships, which finance the construction, and (in conjunction with the state DOT or toll agency), contract with brand-name commercial service providers. This model could be adapted to develop commercial truck stops on Interstates, with the P3 developer financing the land acquisition and construction, and negotiating an operating agreement with a reputable truck stop company.

ATRI has not suggested anything like this, but perhaps they have opened a door for thinking about such things. If anyone is interested in trying this out on the Florida Turnpike, on my latest trip, I noticed two large parcels between Orlando and West Palm Beach that have similar dimensions to the Turnpike’s existing service plazas. I have no idea what the Turnpike plans to do with them, but one might serve as a test case for a truck-stop-on-turnpike pilot project.

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The Role of Transit in a Changing America

Reason Foundation last month released the third in a series of three research papers by Prof. Steven Polzin of Arizona State University. All three focused on transportation and climate change. This third report deals with urban mobility in a climate-sensitive post-COVID world.

Last month’s article covered Polzin’s assessment of the greenhouse gas (GHG) impact of all transportation modes, which included some surprising results for urban bus systems (not GHG-friendly) and commuter rail systems (generally GHG-friendly). Those findings were based on historical, pre-COVID data. The new report looks at urban transit’s potential future in a changed post-COVID environment. It’s hard to summarize 56 pages backed up by many tables and figures, but here are a few highlights.

For example, a whole array of new technologies is already changing the ways people do and don’t travel. Working from home has permanently changed commuting. New modes such as e-bikes and e-scooters have provided alternatives to driving and transit for some trips. Vehicle automation, not yet perfected but making serious progress, could lead to smaller transit vehicles offering something closer to door-to-door service, thanks to not having to pay for a driver. Ordering things online continues to reduce trips to the mall. And service businesses for residents (lawn service, pool service, bug services in Florida), etc., also substitute for some categories of shopping trips. One result of these and other changes shows up in data from the American Time Use Survey. It found that daily person trips declined from 4.44 in 2003 to 3.04 in 2022—a very significant change.

The pandemic, along with very high housing costs in central cities, has led to relocations to suburbs and exurbs, which also spells trouble for traditional transit service, which has focused on bringing commuters from suburbs to central business districts. Polzin discusses the changing value of downtown density, historically responsible for urban agglomeration benefits (increased productivity due to better matching of job skills with employer needs).

Polzin draws on these and other changes to assess the role of U.S. public transportation moving forward. While he’s confident that transit will continue to provide vital transportation for those unable to afford a car or other means of personal mobility, he suggests that “Traditional public transit is at a unique point in its history with perhaps the greatest gap between empirical reality and the aspirations and expectations of industry stakeholders.” He notes increased auto-availability thanks to ride-hailing companies (which, contrary to transit-industry hopes, did less in bringing riders to transit stations and more to shift riders away from transit). He notes changes in age distribution, with a large increase in people over 65 (low transit use) and a slight decline in people aged 15 to 29, who are more often transit riders. His Table 3 shows declines in transit ridership in all nine of the country’s largest metro areas between 2019 and 2022, ranging from 17% (Miami) to 54% (Dallas/Ft. Worth)—and even a 25% decline in New York, the country’s largest transit market. Among his conclusions is, “Aspirations that more funding for public transportation or that more-aggressive transportation and land-use coordination will meaningfully impact future transit utilization lacks empirical evidence that such initiatives can produce in a time frame or at a scale that is meaningful in the aggregate.”

Polzin’s assessment will, I hope, spur others to grapple with these questions about the future role of transportation in U.S. urban areas. My Reason Foundation colleague, Baruch Feigenbaum, has written such a book, tentatively titled “Reinventing Transit for the 21st Century.” It examines how urban transit (rail and bus) systems can be reimagined to provide better service at lower costs. After detailing the challenges facing transit systems, such as crime/perception of crime, increasing costs, and declining ridership, it reviews examples of recent changes, such as redesigning their networks, offering more consistent service, and shifting from transit-choice to transit-dependent riders. Looking further ahead, it suggests a future in which fixed-route and on-demand transit would be integrated, and private providers would provide seamless mobility in urban regions. The book is expected to be published in 2026.

And a final word for those who may think Polzin is “anti-transit.” His distinguished career began at transit agencies in Chicago, Cleveland, and Dallas. He went from that experience to academia, first at the University of South Florida, where he was Director of Mobility Policy Research at its Center for Urban Transportation Research. While there, he served on the boards of the Hillsborough County Transit Authority and the county’s metropolitan planning organization (MPO). He later served as Senior Advisor for Research & Technology in the Office of the Assistant Secretary for Research & Technology at U.S DOT. He holds bachelor’s, master’s, and PhD degrees in civil engineering from the University of Wisconsin (BSCE) and Northwestern University (MSCE and PhD).

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News Notes

Alabama’s Mobile River Bridge Gets Federal Funding
The long-stalled project to build a new bridge and causeway across the Mobile River has won a $550 million grant toward its now-estimated cost of $3.7 billion. Originally planned as a toll-financed public-private partnership project at an estimated cost of $2.1 billion, ALDOT’s original tolled P3 plan was cancelled by ALDOT in 2019, after it was voted down by the MPOs on both sides of the river, due to the proposed toll rates being too high. But soaring construction cost inflation in recent years has greatly increased the construction cost. ALDOT has applied for a federal TIFIA loan, but even if it were for half the project cost ($1.85 billion), the project would still need toll financing and some amount of state highway investment to cover the missing $1.3 billion.

Tolls the Only Option for NC Cape Fear Bridge Replacement?
The aging Cape Fear Memorial Bridge in Wilmington, NC, needs replacement, at an estimated cost of $1.1 billion. While NCDOT is seeking federal grant funding, its own analysis found the project does not rank high enough to be included in the State Transportation Improvement Program. NCDOT’s Trevor Carroll told local officials last month that, “Right now, NCDOT cannot produce this project without a toll or an alternate funding source.” While officials on the Wilmington side of the bridge seem open to a toll, those on the Leland side seem strongly opposed. Meanwhile, the Army Corps of Engineers has announced that the lowest-cost option will not be permitted, because it would not meet the agency’s requirement for 135 ft. of vertical clearance for ships passing under the bridge.

Inglewood Light Rail Project Replaced with a Busway
As noted here last month, political support has disappeared for a $2.2 billion, 1.6-mile light rail line to serve a new sports and entertainment center in Inglewood, CA (near Los Angeles International Airport). But the planned P3 project will now proceed to develop an “event-activated” exclusive bus lane. The P3 will still be developed by Elevate Inglewood Partners, led by Plenary Americas. One goal is to have the project up and running in time for the 2028 Olympics to be held in Los Angeles.

Congestion-Priced Toll Road Will Serve Seattle Airport
Washington State DOT in October will open a new SR 509 expressway, giving Sea-Tac users coming from the Puget Sound region south of the airport a short-cut from congested I-5, their current route. But in what may be a U.S. first, the toll rates will vary by time of day and direction. The peak rate of $2.40 will apply only to peak-time/peak-direction trips on the new tollway.

Flix Train Ordering 65 High-Speed Trains for European Routes
Passenger rail has been deregulated within the European Union, ending the long-standing monopoly of state-owned systems such as Deutsche Bahn and SNCF. German passenger rail company Flix Train (a subsidiary of global travel company Flix SE) on May 27 announced orders for 65 high-speed trains from manufacturers Talgo and Siemens, in a deal valued at  €2.4 billion. Flix Train is based in Germany, but it serves some 50 European cities thus far. FlixBus, a sister company, has 300 stops in Germany alone.

Amtrak Board Considers Profit by 2028
Politico reported (May 21) that Amtrak’s board was planning to adopt a plan that would project a profit by 2028. They did not, of course, mean a real profit, which covers capital costs and depreciation as well as operating costs. The article referred to “operating profits” on the Northeast Corridor, compared with operating losses on most or all of its other routes, none of which are apparently being considered for termination. Instead, the board will double down on the NE Corridor, increasing its Acela trains from 20 to 28, and passenger capacity by even more, since the newest Acela cars have 25% more passenger capacity. Amtrak still has an enormous backlog of “deferred maintenance” which does not appear to be a factor in this plan.

Oregon-Washington I-5 Bridge Will Be Later and Cost Even More
The two states plan to seek $1.9 billion in state and federal funds to support the ever-expanding cost of replacing the aging and obsolete I-5 bridges across the Columbia River linking Portland with Vancouver, WA. Back in 2023, the cost estimate was $5 to $7.5 billion, with the larger number due to Oregon’s insistence on including a light rail line rather than a set of express-toll/bus lanes. The previous plan called for starting tolling on the existing bridges in 2026, rather than waiting until the new bridges are in place. Due to projected delays in design and construction, the early toll collection will now be postponed to 2027, further straining the project’s financing plan. Washington State will be responsible for issuing $2.5 billion in general obligation bonds backed by the taxpayers of both states. Revenue to service the bonds will come from tolls, fuel taxes, and vehicle fees, but backed up by the “full faith and credit of the state,” i.e. general taxpayers.

Supreme Court Unanimously Cuts Back Environmental Reviews
The U.S. Supreme Court, ruling in favor of a Utah short-line railroad project, narrowed the scope of environmental impacts that could be considered in Environmental Impact Statements. It rejected the need to include distant upstream or downstream impacts, rather than the direct impacts of the project itself. In the case of this railroad, that meant potential increases in oil use in other states far from Utah were judged not within the scope of what the National Environmental Policy Act requires. The ruling reverses a policy introduced by the Biden administration. The decision was by a vote of 8-0, since Justice Gorsuch recused himself from the case.

Maryland May Face Lawsuits Over Bridge Collision
The Washington Post reported last month that the state of Maryland could face lawsuits for negligence and wrongful death related to the collapse of the Francis Scott Key Bridge last year. This prospect relates to the NTSB’s finding that Maryland failed to conduct the risk analysis required for such bridges. National Transportation Safety Board Chair Jennifer Homendy said that state officials “could have known and should have known” that the bridge was at risk of collapse in the event of a ship collision. State officials also ignored repeated warnings from the Baltimore Harbor Safety and Coordination Committee about the lack of meaningful protection of the bridge piers.

Louisiana Senators Back Port Toll Road
With a new $2 billion port terminal planned in St. Bernard Parish (south of New Orleans and open to very large container ships), a state senate committee late last month approved plans for a $600 million toll road to connect the new port to the Interstate highway system. The objective is to keep heavy trucks off local roads and to provide an additional evacuation route during hurricanes. The new toll road is planned as a P3, but whether it would be toll-financed remains to be seen. The project would also have to be approved by the state legislature’s transportation committees.

Virginia DOT Releases I-495 Missing Link Plan
On June 2, VDOT unveiled its proposed approach for the last segment of its express toll lanes on the I-495 beltway: two express toll lanes each way along the 11-mile corridor, including across the Woodrow Wilson Bridge, using existing capacity set aside for future use. The plan also envisions a new express bus service on the new express lanes. Four public hearings are scheduled to take place this month, as part of the Environmental Assessment of the project.

Louisiana Mississippi River Bridge Update
On June 3, the Louisiana Department of Transportation & Development announced that by fourth-quarter 2025 its preferred design for the planned crossing of the Mississippi River just south of Baton Rouge will be released. The purpose of the bridge is to relieve traffic congestion in the Baton Rouge metro area, including on the existing I-10 bridge. As of now, the projected cost is between $1.5 and $2.5 billion. It has long been planned as a toll bridge and has been referred to as a likely candidate for P3 procurement, as has been used for two prior Louisiana bridge projects.

Making Vehicle Controls More User-Friendly
A recent Wall Street Journal article was headlined, “The Latest Car Technology Is Starting to Drive People Nuts.” High-tech door handles and over-use of touch screens were among the features many drivers resent. Surveys of new car buyers by Strategic Vision found a decrease in drivers’ positive response to vehicle technology, slipping from 79% in 2015 to 56% in 2024. (Personally, I would not buy a car in which touch screens replaced dials and buttons, due to the visual distraction involved.) Volkswagen has gotten the message. In March 2025, it announced that all future VW models will feature physical controls for the most important functions. The Society of Automotive Engineers (SAE) should take note.

Maryland Considering a Freight Rail P3
The state government acquired a failing 92-mile short-line freight railroad in 1978. Because it has at least 15 customers, the Maryland DOT would like to keep it in operation but turn over its operations and maintenance to a private contractor. Unfortunately, more than half the trackage is only Class 1, which limits speed to 10 mph. Upgrading the track could permit higher speeds. According to Public Works Financing’s April article, the state was hoping to issue an RFP in June to four short-listed companies and select a winner before year-end (when the current operations contract expires).

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Quotable Quotes

“NEPA has transformed from a modest procedural requirement into a blunt and haphazard tool employed by project opponents (who may not always be entirely motivated by concern for the environment) to try to stop or at least slow down new infrastructure projects,” wrote [Justice] Kavanaugh. “All of that has led to more agency analysis of separate projects, more consideration of attenuated effects, more exploration of alternatives to proposed agency action, more speculation and consultation and estimation and litigation.” Projects that  receive the necessary permits to start “often end up costing much more than is anticipated or necessary, both for the agency preparing the EIS and for the builder of the project,” he added, “And that in turn means fewer and more expensive railroads, airports, wind turbines, transmission lines, dams, housing developments, highways, bridges, subways, stadiums arenas, data centers, and the like.”
—Jeff Luse, “Supreme Court Unanimously Agrees to Curb Environmental Red Tape That Slows Down Construction Projects,” Reason.com, May 29, 2025

“It dawned on very few at the time, but the economic situation in late 2021, when the IIJA passed into law, was the exact opposite of those ideal conditions for a big Keynesian infrastructure push. . . . In February, Foreign Affairs published an article from Harvard economist Jason Furman . . . one of whose specific points was particularly biting: real infrastructure investment in the highway sector was down since the IIJA passed into law. . . . DOT’s National Highway Construction Cost Index does not yield promising results for the first few years of IIJA. Highway inflation appears to move nearly in lock step with nominal spending, while real investment has declined. . . . The IIJA was clearly investing at the top of the market, and construction cost inflation either greatly diminished or completely overwhelmed the federal investment so far.”
—Michael Bennon, “Lessons from the IIJA: Inflation and Federal Infrastructure Legislation,” Public Works Financing, Feb. 2025 

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The post Surface Transportation News: Examining public-private partnerships, private sector infrastructure investment appeared first on Reason Foundation.

• Can U.S. DOT terminate New York’s cordon pricing?
• New report reviews U.S. transit and climate change
• Rethinking the energy transition
• How state highway systems measure up
• Central planning a new shipbuilding industry?
• Federal AV policy reinvented
• News Notes
• Quotable Quotes

Can U.S. DOT Terminate New York’s Cordon Pricing Program?

When I first read Transportation Secretary Sean Duffy’s Feb. 19 letter terminating federal permission for New York’s cordon pricing program, I thought it was on solid ground. It argued that under the federal Value Pricing Pilot Program (VPPP), any such projects must provide a non-priced alternative, which is not consistent with cordon pricing. But an April 11 letter to the Department of Transportation (DOT) from three assistant U.S. attorneys at the Southern District of New York provides a strong case against that argument.

The VPPP was created by the Intermodal Surface Transportation Efficiency Act (ISTEA) in 1991, and the discussions and testimony on value pricing make clear that the term was broadly understood. Discussions by members of Congress and witnesses supported “congestion pricing” as covering a range of alternatives, including actual (Singapore) and proposed (Stockholm) cordon pricing, as well as a proposal from Los Angeles to price all lanes of its congested freeways (which I recall from having been a member of a task force on freeway congestion there). The attorneys also cite DOT’s March 1990 National Transportation Strategic Planning Study that included Singapore’s cordon pricing as an idea “that may be of interest to the United States.”

The letter goes on to include excerpts from the VPPP solicitations for proposed projects in 2005, which included “area-wide pricing” and a 2007 VPPP notice that explicitly identifies “cordon pricing” as an eligible project category. And the Federal Highway Administration’s (FHWA) 2009 report to Congress on VPPP stated that “the VPPP portfolio of implemented projects must include pilot implementation of broad congestion pricing involving tolls on all lanes of a highway facility, all roads in a congested area, or all roads of an entire roadway network.” It also cites VPPP approval in 2002 of a cordon pricing project for Fort Myers Beach, Florida, and a project to study cordon/area-wide pricing in Southern California.

As I wrote in the Dec. 2024 issue of this newsletter, I still think the New York cordon pricing system was poorly designed and implemented: its flat-rate (rather than variable) charge is not aimed directly at reducing congestion but at raising enough money to finance $15 billion worth of improvements to the subway and bus system. So I was glad to see the additional section of the Southern District of New York attorneys’ letter, arguing that DOT has a legitimate way to terminate federal permission for the project.

That approach cites changed DOT priorities, via an established Office of Management and Budget (OMB) procedure for terminating cooperative agreements with a state or local government. Such agreements may be terminated if the project “no longer effectuates the program goals or agency priorities.” The attorneys also explain that even though there is no grant funding included in this agreement, it may still be terminated. But just to be sure, it also notes that “FHWA’s grant of authority to the [NYC] MTA… is clearly the transfer of a thing of value.”

As always, when reporting such legal assessments, I remind readers that I have no legal training and only ever took one survey course in business law. But from my decades of transportation policy work (including as a subject-matter expert for FHWA on value pricing), I think the above case for federal termination is sound.

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New Report Reviews U.S. Transit and Climate Change

Reason Foundation has released part two of a three-part study by Steven Polzin of the School of Sustainable Engineering and the Built Environment at Arizona State University. The report provides a wide array of data on energy use and transportation modes, looks into transit’s past and potential future impact on land-use and travel behavior, and offers some sobering thoughts on changes in travel behavior in the coming decades.

A short review cannot do justice to a data-intensive 52-page report, so I will limit these comments to some of the more unexpected findings in the report. First, I was surprised by the data in Table 1 on 2019 energy use by all major modes of U.S. transportation. Using the metric of BTUs per passenger mile, the winner nationwide was rail transit, at a low of 851. That compares with 2,787 for passenger cars, 1,583 for commuter rail, and 4,634 for bus transit. Hence, transit bus was already a relative energy hog even pre-pandemic, and it’s very likely worse with today’s even lower post-pandemic ridership.

But Polzin also provides a caution about rail transit. If the 10 large “legacy” rail transit systems (which account for 77% of rail transit passenger vehicle miles) are excluded, in all the other metro areas with non-legacy rail transit, personal vehicles are more energy-efficient than transit rail. Unfortunately, most of the data in this report ceases at 2021, and transit ridership has increased somewhat since then. But this section’s 13 tables on various measures of energy use and transit trips still provide a wealth of information.

Later sections get into the energy intensiveness of transit in more detail, introducing the reader to a 2021 report from the Transit Cooperative Research Program (TCRP Report 226), which explains how indirect emissions (from “well-to-pump”) are calculated. Polzin notes that these indirect emissions typically add about 20% to each mode’s total, but this may vary considerably depending on the energy source. Another section goes further, explaining life-cycle energy intensiveness, which includes energy used to operate stations, maintenance yards, etc. This aspect is becoming more complex as electric buses and electric robo-taxis enter the picture.

One of the most interesting sections is the seventh, which addresses the relationship between land-use patterns and travel behavior. The historical concept (pre-auto and later pre-internet) was based on agglomeration benefits from concentrations of economic activity in central business districts (and later in “edge cities”). But today’s communication modes, which have facilitated part-time or full-time work from home, have significantly changed the benefits of this land-use model. Polzin also emphasizes the changes coming about in personal/household travel due to vendors and service providers coming to people’s homes, leading to fewer non-work trips.

Polzin contrasts his own 1999 journal article, “Transportation/Land-Use Relationship: Public Transit’s Impact on Land Use” (ASCE Journal of Urban Planning and Development), with the changes we are likely to see in the decades ahead. These include different types of new development with different relationships with potential public transit, and a slower pace of land use changes in the coming years. He also cites the landmark 2009 Transportation Research Board study, “Driving and the Built Environment: The Effects of Compact Development on Motorized Travel, Energy Use, and CO2 Emissions.” Its analysis of 2050 development scenarios found that, “Under a wide range of conditions, reductions in VMT, energy use, and CO2 emissions resulting from compact, mixed-use development are estimated to be in the range of less than 1 percent to 11 percent.” That was a sobering finding in 2009 and remains so today.

The third and final volume of this three-part study will be reviewed in the June issue of this newsletter.

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Rethinking the Energy Transition

This is a newsletter about transportation policy. But since climate change and energy policy will have significant impacts on transportation, it’s important for those of us in transportation to understand what is going on regarding energy use and goals for “net-zero emissions” by 2050.

The most profound article I’ve read on this subject appears in the March/April 2025 issue of Foreign Affairs. The authors are Daniel Yergin, Peter Orszag, and Atul Arya. Yergin is one of the world’s most respected energy analysts, whose books include The Prize and The Commanding Heights (made into a PBS series). I met Orszag when he was OMB director in the Obama administration. Arya is the chief energy strategist at S&P Global.

The article’s theme is that the energy transition “will be much more difficult, costly, and complicated than was initially expected.” The authors explain that previous energy transitions were “energy additions,” with each new source adding to rather than replacing prior sources. To illustrate the size of the challenge, they note that the International Energy Agency (IEA) in 2021 projected that to meet 2050 targets, greenhouse gas (GHG) emissions would have to decrease from 33.9 gigatons in 2020 to 21.2 gigatons in 2030. But as of 2023, global GHGs had increased to 37.4 gigatons. Why are things going in the opposite direction?

When coal first became an energy source, it did not displace wood for two centuries, they report. And once that finally happened, oil took another century to overtake coal in the 1960s. But again, coal did not go away. As of 2024, global coal consumption was three times what it was in the 1960s, due to the transition from wood in much of the developing world. Not only giant China, India, and Indonesia but nearly all of Africa and many other “global South” governments have every intention of bringing electricity and improved transportation to their rising populations—and they will make use of the lowest-cost energy sources. (The authors note that three billion people in the developing world use less electricity per capita than the average American refrigerator.) Moreover, those relatively poor countries have little realistic prospect of paying the first-world costs of a large-scale transition to renewables. That leaves the developed world with a choice between paying only the trillions it would need to reach its own net-zero transition while the rest of the world does not participate… or paying for the rest of the world’s transition, as well. 

The authors also point out, as others have, the extreme dependence of large-scale electrification (e.g., of transportation) on costly and scarce rare earth elements such as cobalt, graphite, lithium, and others that most people have never heard of. According to the IEA, demand for such minerals will quadruple by 2040, and even copper supply will need to double by the mid-2030s to meet current net-zero targets for 2050. And they add that “the push for energy transition minerals is in tension with local environmental, political, cultural, and land-use concerns and permitting obstacles.”

Another major challenge for the United States (and other developed countries) is a lack of electricity capacity. Power demand in the USA is expected to double by 2050, based on plans for the electrification of transportation, a huge increase in data centers, and other planned changes. As a result of all the above factors, “the goal of achieving zero-carbon electricity in the United States by 2035 will be more challenging than it appeared during the slack years of the Covid slowdown.”

The authors’ bottom line is the need for trade-offs. For example, instead of insisting on phasing out natural gas, they note that utility-scale electricity from natural gas emits 60% less CO2 than coal, per kilowatt hour of electricity. It has already displaced a lot of coal, which provided 49% of U.S. electricity in 2008 but only 16% today. Needless to say, they are also encouraged by the increasing support for nuclear power, as at least an important transition source (but I would say as an ongoing zero-emission source). They acknowledge that the energy transition “will unfold over a long period and that continuing investment in conventional energy will be a necessary part of the energy transition.” This is wise counsel from exceptionally well-qualified people.

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How State Highway Systems Measure Up
By Baruch Feigenbaum

Reason Foundation recently released our 28th Annual Highway Report. The report measures how states manage their roadway system by evaluating them in 13 different categories. Four of the categories measure spending, four measure pavement quality, one measures urban traffic congestion, and four measure safety (one for structurally deficient bridges and three for fatality rates).

This year, the top five states, providing the best performance for the funds spent, are North Carolina, South Carolina, North Dakota, Virginia, and Tennessee. The bottom five states are Alaska, California, Hawaii, Washington, and Louisiana.

While states can have big increases or decreases in the highway report’s rankings, most states move fewer than five slots from year to year. This year’s exceptions include Idaho, which improved 19 positions; Maine, which improved 11; and New Jersey, which improved 10. On the downside, Massachusetts declined 20 positions, and Arkansas declined by 15.

While the national rankings are important, regional comparisons may be more valuable. While we weigh the measures for costs, departments of transportation (DOTs) cannot control factors such as urbanization, and some regions fare better than others. For example, the Southeast is home to five of the top 10-ranked states. As a result, Louisiana’s 46th place ranking, West Virginia’s 33rd place ranking, and Arkansas’s 28th place ranking really stand out. Each of these states could learn best practices from peer states, including Georgia, North Carolina, South Carolina, and Virginia, through trade organizations such as the Southern Association of State Highway and Transit Officials. 

Meanwhile, on the West Coast, Oregon is the only state not to rank in the bottom 40. While Oregon has a lot of room for improvement, states such as California and Washington could learn from it.

Some state transportation departments believe that they are penalized for high costs. But costs are just one factor, and Utah shows it is possible to have high costs and a top 10 ranking. The state, which ranks 8th overall, ranks 47th in capital disbursements, 34th in maintenance disbursements, 27th in administrative disbursements, and 32nd in overall disbursements. Yet Utah ranks in the top 20 in every other category, including 6th in urban arterial pavement condition and structurally deficient bridges. Utah shows that a top 10 ranking is possible with high spending if the rest of the system is in outstanding condition.

Another misconception is that if states rank high in several categories, they will rank highly overall. But in reality, the states that rank the highest have the fewest poor categorical rankings. For example, Ohio ranks 10th overall but does not rank in the top five in any category. The key to its high overall ranking is that it doesn’t rank in the bottom 10 states in any category either.

State DOTs often ask what common factors lead to high rankings. While each state is different, there are four common factors that high-ranking states share.

First, top-ranked states have an effective quantitative cost-benefit project selection process. With these processes, states create a list of potential projects and compare their costs and benefits. For example, a project that widens a roadway from two lanes to four lanes, costs $50 million and reduces congestion by 500 hours per year, will score higher than the same length project that costs $100 million and reduces congestion by 100 hours per year. While all states have some type of review process, both North Carolina and Virginia, which are perennially in the top five of the rankings, have nationally recognized prioritization tools. California and Washington, which are ranked in the bottom five, were cited by the Federal Highway Administration as using the wrong methods to prioritize projects.

Second, states that make use of innovative delivery, such as design-build and public-private partnerships, also ranked highly. Virginia (4th) and Florida (14th) are two of the heaviest users of public-private partnerships (P3s). Georgia, 6th, is one of the heaviest users of design-builds. Of the bottom five states, none make significant use of innovative delivery. In fact, in the past five years, of those states, only Louisiana has entered into a P3.

Third, states that modernized their DOTs into 21st-century operations fare better. Around the turn of the century, after the Interstate system was completed and DOTs began contracting out more of their maintenance needs, many researchers encouraged DOTs to reorganize and focus more on project management and less on new construction. Over the next 10 years, Florida, Georgia, North Carolina, and Virginia DOTs made these changes. California, Louisiana, Oklahoma, and West Virginia did not make these changes, which is one factor in their low rankings.

Finally, states without strong unions rank better as well. One factor is costs. Many non-unionized states, particularly in the South, have lower costs. But other non-unionized states, such as Utah, have higher costs and are still ranked higher. Productivity may be a bigger factor. Whether it is extra staff required by union contracts or the inability to discipline certain workers, higher union costs don’t generally translate to better roads, while higher non-union costs often do.

The full report is available here.

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Central Planning a New U.S. Shipbuilding Industry?

The United States used to have a commercial shipping industry, but in 1920, Congress tried to help it grow by passing the Jones Act. It requires that all ships carrying any cargo between U.S. ports be constructed in American shipyards, crewed by U.S. sailors, and owned and operated by U.S. companies. As I reported in the March 2025 issue of this newsletter, due to high costs and costly mandates, the “merchant marine” fleet has dwindled, and the United States is left with a handful of inefficient, very expensive shipyards. And that means military ships, such as destroyers, aircraft carriers, and submarines, are also very expensive and often delivered late.

Meanwhile, the world’s commercial and military ships are mostly built in efficient 21st-century shipyards in Asia—China, Japan, and South Korea. Yes, those industries received government subsidies to begin with, and China reportedly still subsidizes ship-building. But the world’s commercial shipping companies buy Asian ships because of their high quality and reasonable prices.

On April 9, President Trump signed an executive order called “Restoring America’s Maritime Dominance.” It basically amounts to super-sizing the Jones Act with a program of massive new subsidies for shipbuilding. Federal agencies must produce a Maritime Action Plan (MAP) by Nov. 8. It calls for extending the Harbor Maintenance Tax (HMT) to U.S.-destined cargo unloaded in Canadian and Mexican ports for shipment to the United States. (Jeff Davis in Eno Transportation Weekly, April 11, points out that this violates the user-fee principle of the HMT because the proceeds are used for dredging of U.S. ports.) It would create a new Maritime Security Trust Fund to direct various revenues (from tariffs, fines, fees, etc.) to be spent on modernizing U.S. shipyards. And it requires the relevant federal agencies to draft legislative proposals (by November) to provide subsidies for shipbuilding. It further requires DOT and DOD to come up with another legislative proposal to ensure an “adequately-sized” U.S.-flagged merchant fleet for use in times of crisis. And there’s even more in the offing. Starting in October, Chinese ships docking at U.S. ports will be charged $50/ton at each stop. And starting in 2028, ships that export LNG must be U.S.-built (which none of them are today—and none could be ready by 2028).

There’s a name for all this: it’s called central planning or “industrial policy.” This kind of policy has a very poor track record in the United States. It would likely expand federal spending by billions of dollars a year, provide new jobs in shipyards, and produce ships that are not competitive with those produced in China, Japan, and South Korea

There are alternatives to this potential boondoggle. One of the merits of international trade is taking advantage of lower-cost producers in other countries. As The Economist reported (Feb. 27):

“America’s allies in East Asia could help counter the Chinese build-up. South Korea and Japan are home to the world’s second- and third-largest shipbuilding industries, accounting respectively for 28% and 15% of global production. Shipyards there have cutting-edge technology.  The firms that run them built industrial clusters with robust supply chains. . . . ‘Shipyards in South Korea and Japan are 21st-century enterprises,’ Mike Walz, America’s national security adviser, said in September . . . . ‘You go to some of ours—it looks like it hasn’t changed since the 1930s.’ Officials around the region are keen to work with America. Doing so is good business for their industries, and [their] potential investment in American shipyards could also be good politics.”

The Economist also suggested several forms of collaboration. One would be having Japanese and South Korean shipbuilders help revive their ailing U.S. counterparts. The article pointed out that one major South Korean company last year bought Philly Shipyard in Pennsylvania and reported that other Asian shipbuilders are considering doing likewise. Another would be tapping Asian shipyards for maintenance, repair, and overhaul (MRO). That could free up U.S. shipyards to build more naval vessels.

It also suggested that collaboration on MRO might even lead to further collaboration, asking “Why not have South Korea build ships for the American navy? In private, some senior American military officials salivate over the prospects.” Lest that seem far-fetched, Utah’s Republican Sens. Mike Lee and John Curtis in February introduced a bill that would enable the U.S. Navy to contract with shipyards of close U.S. allies to build military ships. 

Finally, Rodolphe Saade, the CEO of CMA CGM, the world’s third-largest ocean shipping company, has pledged to invest $20 billion in U.S. shipyards and cargo ships. He plans to add 20 US-flagged ships to the CMA-CGM fleet. The company holds leases on terminals in Los Angeles/Long Beach and New York/New Jersey. While in D.C., he met with President Trump, but said the new fees on Chinese ships would be ill-advised.

In short, there are many alternatives to spending taxpayers’ money on a central plan to jump-start U.S. shipbuilding. Far more effective would be to work with world-class Asian shipbuilders and encourage them to invest in modernizing whatever U.S. shipyards appear to be salvageable. And maybe even build us a few Navy ships.

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Federal AV Policy Reoriented Around Growth and Innovation
By Marc Scribner

There is growing optimism around automated vehicle (AV) technology in the United States. AV developers made several important announcements in recent weeks. This industry momentum coincided with the release of a new AV Framework by the U.S. Department of Transportation, which is designed to “unleash American ingenuity, maintain key safety standards, and prevent a harmful patchwork of state laws and regulations,” according to U.S. DOT. This led to two immediate policy changes, and more ambitious proposals are expected in the future.

As last month’s issue of this newsletter previewed, AV trucking startup Aurora Innovation announced it began regular driverless commercial operations on I-45 between Dallas and Houston during the final week of April in partnership with Uber Freight. That same week, robotaxi pioneer Waymo revealed it had partnered with Toyota to explore, among other things, incorporating its automated driving system (ADS) into vehicles manufactured by Toyota that are designed to be personally owned by consumers.

The changes in policy announced on April 24 by Secretary of Transportation Sean Duffy are meant to support these types of advances in deployment. The new federal AV Framework is guided by three principles: prioritize the safety of ongoing AV operations on public roads, unleash innovation by removing unnecessary regulatory barriers, and enable commercial deployment of AVs to enhance safety and mobility for the American public.

The debut of U.S. DOT’s new AV Framework included two specific changes in federal policy at the National Highway Traffic Safety Administration (NHTSA). First, NHTSA amended the 2021 Standing General Order (SGO) that requires incident reporting for vehicles equipped with ADS as well as certain advanced driver assistance systems (ADAS). The SGO was initially issued in June 2021. It was amended twice during the Biden administration, first in Aug. 2021 and again in April 2023. The latter version remains in effect.

The previous iterations of the SGO led to duplicative and overbroad reporting, which caused junk data, with no plausible bearing on safety performance, to proliferate. For instance, incidents in which electric scooters lightly impacted AVs and then continued on their way as if nothing had happened were included. So was an incident in which a fight broke out between two (presumably intoxicated) individuals in the driveway of a Las Vegas hotel, who proceeded to stumble into a Zoox robotaxi moving at 2 mph before fleeing the scene.

NHTSA’s April 2025 amended SGO, which takes effect on June 16, makes several changes aimed at improving data quality and consistency in reporting, including:

• The new SGO eliminates the requirement that all reporting entities submit incident reports even if another reporting entity has already submitted a report on the incident, “unless [the additional reporting entities] have notice of materially different information.”
• The current SGO requires an incident involving a vulnerable road user to be reported even when that person is not struck in a crash involving a covered vehicle (i.e., they are “alleged to have caused or contributed to the crash by influencing any part of the driving task for any vehicle involved in the crash”). The new SGO will require reporting of incidents involving vulnerable road users only if that person “is struck by any vehicle involved in the crash.”
• The new SGO will only require reporting of an incident within five days if the crash involves a fatality, injured person transported to a hospital, strike of a vulnerable road user, airbag deployment, or vehicle tow-away. In contrast, the current SGO requires incident reporting even when those criteria are not met, in addition to separate reporting when those factors are involved.
• The current SGO requires monthly reporting of all crashes that do not meet incident-reporting thresholds. The reports must be filed even if the covered entity has no crashes to report. The new SGO requires monthly reporting of incidents only if they involve property damage expected to exceed $1,000 or, if damage is expected to cost less than $1,000, the covered vehicle was the only vehicle involved and/or it struck another vehicle or object. Monthly reports are only required if the covered entity has any incidents to report.

In addition to the revised SGO, NHTSA also announced in an open letter to AV developers that it was expanding an existing exemption program that from 2016 to 2024 had exempted 347 ADS-equipped vehicles for research purposes, but only if those vehicles had been manufactured abroad. The expanded exemption program for non-commercial research vehicles will now allow domestic manufacturers to seek the same exemptions as their foreign counterparts.

Secretary Duffy’s statement that he seeks to “slash red tape and move us closer to a single national standard that spurs innovation and prioritizes safety” correctly identifies the key policy impediments faced by AV developers. The growing patchwork of AV regulation at the state level is needlessly raising compliance costs and barriers to entry, while the failure to modernize federal auto safety regulations to incorporate AVs is needlessly limiting the growth potential of this technology. While we don’t yet know exactly how Secretary Duffy will pursue this innovation-focused AV policy agenda, the revised posture at U.S. DOT is a welcome change.

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News Notes

Indiana Legislature Sends Interstate Tolling Bill to Governor
House Bill 1461 was approved by the state Senate and sent to the governor to be signed. It would allow all the state’s Interstate highways to be tolled, per a detailed HNTB study for Indiana DOT, released in Nov. 2018. Federal approval would be required for each such conversion, via either the never-used ISRRPP program (allowing only one toll conversion per state) or via the “bridge” provision of federal law, which permits tolling to replace non-tolled bridges on Interstate highways. Indiana DOT’s rationale for the HNTB study was the need to rebuild Indiana’s aging Interstates using toll financing.

Tennessee Shortlists Four Teams for First Choice Lanes Project
Infralogic reported (April 28) that TDOT has selected four teams as best-qualified to design-build-finance-operate-maintain the planned new express toll lanes on I-24 in the Nashville metro area. The teams are as follows: Cintra/Transurban, Plenary/Shikun and Binui/Sacyr, ACS/Meridiam/Acciona, and ASTM North America/FCC. The winner will sign a 50-year P3 concession agreement, with toll revenue as the primary funding source. Commercial close is expected in July 2026 and financial close by April 2027.

US DOT Rescinds $63.9 Million Grant for Texas High-Speed Rail
Last month, DOT Secretary Sean Duffy announced an agreement between the Federal Railroad Administration and Amtrak to terminate a previously announced grant for the proposed high-speed rail line between Dallas/Ft. Worth and Houston. In his announcement, Duffy stated that “FRA and Amtrak are in agreement that underwriting this project is a waste of taxpayer funds and a distraction from Amtrak’s core mission.” For some background on this troubled project, see Jeff Luse’s article, “In 12 Years, This $40 Billion High-Speed Rail Line in Texas Has Not Laid a Single Foot of Track.

Maryland Will Protect Another Major Bridge from Ship Collisions
The Maryland Transportation Authority (MDTA) has finished a safety study of the Chesapeake Bay Bridge, resulting in plans for $160 million worth of enhancements to limit the damage from ships colliding with its piers. This is the kind of study the agency never performed for the now-demolished Francis Scott Key Bridge, per the findings of the NTSB report on that bridge’s collapse. The twin spans of the Bay Bridge date from the 1950s and 1970s, respectively, and do not comply with current safety standards. The upgrades will include beefier fenders and the addition of “dolphins” to protect the piers.

US DOT Rescinds Two Biden DOT Guidance Documents
One guidance document urged state DOTs to prioritize grant projects dealing with climate change and vehicle electrification, in programs where Congress did not call for such priorities. The second Biden memo wanted DOTs to focus on existing infrastructure rather than adding new capacity, and to focus their formula funding on environmental impacts and equity. Both new DOT memos nullify the Biden DOT guidance. In a follow-up notice of funding opportunity for grants, DOT announced that it will not give priority to road diets, lane reductions, and sidewalk expansions, which were priorities of the previous administration. These memos illustrate that earmarks are not only a legislative phenomenon. Congress should reject administrative earmarks, as well.

I-77 Express Toll Lanes Get Bond Rating Upgrade
Fitch Ratings last month announced that the revenue bonds for the I-77 North express toll lanes (ETL) project near Charlotte, NC, have been upgraded from BBB to BBB+. The upgrade is due to the strong demand fundamentals in this corridor, and it bodes well for the now-planned I-77 South ETLs, which will extend the current ETLs southward to the South Carolina border.

Federal Private Activity Bonds Nearly All Allocated
The U.S. DOT’s Build America Bureau announced at the end of April that $27.6 billion in tax-exempt revenue bonds for surface transportation projects had been issued or allocated by that date. The federal cap on private activity bonds (PABs) was increased by Congress in 2021 from $15 billion to $30 billion. A large pipeline of P3 projects will be seeking PABs financing in the next five years. Hence, it will be incumbent on Congress to either increase or (preferably) eliminate the cap. When PABs were first authorized by Congress in 2005, they were considered experimental, and it took more than 15 years for the initial $15 billion to be allocated. The large and growing demand suggests that PABs are now widely accepted. Just as there is no cap on tax-exempt municipal bonds, there is no reason for a cap on PABs.  

Virginia Beltway Express Toll Lanes Project Faces Upcoming Decisions
Virginia DOT’s several alternatives to fill in the missing link in its I-495 express toll lanes will be reviewed by the Commonwealth Transportation Board this month. The gap extends from I-95 on the west to the Woodrow Wilson Bridge on the east. In addition, whether the ETLs will traverse the bridge and transition onto a Maryland expressway is still being discussed with Maryland officials. VDOT will hold public meetings in June to seek input on its draft Environmental Assessment (EA) document, prior to seeking FHWA approval in early 2026.

Troubles in View for California High-Speed Rail Project
The California Legislative Analyst’s Office told legislators at a March hearing that the High-Speed Rail Authority is still short $7 billion to complete the 171-mile starter segment between Bakersfield and Merced, and it reminded the legislators that the Authority has still not come up with a plan to fund the rest of that initial segment. In April, U.S. DOT Secretary Duffy said the Federal Railroad Administration will “soon” complete its review of the $4 billion in federal grants the CHSRA received during the Biden administration. He suggested that if “what many people have reported on [this project] is true, we’re gonna pull the funding for this boondoggle endeavor.”
 
New Toll Roads Proposed in Fast-Growing Urban Areas
In three suburban areas in fast-growing Florida, North Carolina, and Texas, local demand for less-congested travel has led to serious proposals for new tolled corridors. In the exurbs of Orlando, the Central Florida Expressway Authority is considering a tolled connector between Orlando’s tolled beltway, SR 417, and the Orlando Sanford airport; Seminole County officials are supporting the idea. In Cedar Park, Texas, a northwestern suburb of Austin, the City Council has asked the Central Texas Regional Mobility Authority to assess the feasibility of an eight-lane tollway along the route of Ronald Reagan Blvd. And in Raleigh, NC, the Capital Area MPO and NCDOT are studying the potential conversion of Capital Blvd. (U.S. 1) to either a toll road or an expressway with express toll lanes.

Trump Executive Order Targets Certain State Climate Laws
In an E.O. titled “Protecting American Energy from State Overreach,” the order goes after state laws that seek to penalize energy companies for damage from emissions-induced climate change. For example, recent laws in Maryland, New York, and Vermont propose to tax fossil fuel companies retroactively for emissions that were legal in previous years. California and a number of other state governments are planning similar measures. Researcher Steve Goreham points out that the U.S. Constitution forbids ex post facto laws that seek to punish actions that were legal when they occurred. He notes that 22 states filed a lawsuit in February against New York’s retroactive legislation.

Texas County Needs to Replace Aging Toll Bridge
County commissioners in Galveston County, TX voted unanimously to eliminate San Luis Pass bridge tolls. But the 1966 bridge is in poor condition and needs to be replaced. So instead of self-financing it by keeping and increasing the toll rates (which only covered staffing costs for obsolete toll collectors), the Commission plans to seek federal funds to build the replacement. That way, all U.S. taxpayers (or their grandchildren) will pay for the new bridge, rather than those who use and benefit from it. This kind of moral hazard is created by “free federal money.”

New Zealand Plans Its Fourth Toll Highway
The new Tauriko West highway will almost certainly be tolled, reported the Bay of Plenty Times on April 24. The estimated cost is NZ$2.8-3.2 billion. Transport Minister Chris Bishop told the news service, “The reality is that roads have to be paid for.” New Zealand already has three toll roads, all on the more populous North Island, like this one.

New Report on California High-Speed Rail
With its very long history, controversial bond issue, and very large cost overruns and construction delays, it is hard for even transportation professionals (let alone journalists reporting for the general public) to keep track of this now nearly 30-year-old project. So, for those wanting to keep track, I can recommend a concise new report by transportation analyst Wendell Cox, commissioned by a national organization called Unleash Prosperity. I’m saving this report as a comprehensive reference document.

Correction to Previous Issue
In last month’s article, “Assessing U.S. Transportation’s Impact on Greenhouse Gas Emissions,” there was an error in the second paragraph. In listing global CO2 emissions by geographical area, based on Figure 2 in Prof. Polzin’s paper, I read the caption for Europe as 28.9%. That was incorrect. The caption on the pie chart read EU 28-9, which I reported as 28.9%. But the wording referred to the “EU-28” whose emissions were 9%. This error has been corrected in the online version of this newsletter.

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Quotable Quotes

“The Bipartisan Infrastructure Law [IIJA] did little to increase the root causes of the United States’ long-standing infrastructure unaffordability problem—excessive environmental reviews, labyrinthine permitting processes, and laws requiring that workers are paid prevailing wages—and, in some respect, worsened the crisis by adding new requirements. The permitting reform that was supposed to pass in parallel with the climate bill never became law. . . . Spending such a huge amount all at once without any steps to increase construction capacity led to even higher cost increases for building materials than was reflected in the overall inflation rate.”
—Jason Furman [former chair of the Council of Economic Advisers in the Obama administration], “The Post-Neo-liberalism Delusion—and the Tragedy of Bidenomics,” Foreign Affairs, March/April 2025

“Construction costs today are so inflated compared to pre-pandemic trends that it is unclear how the industry will recover, and the trend looks much worse for the large infrastructure projects targeted by some of the most important IIJA grant programs. Construction cost inflation will undoubtedly overshadow the IIJA’s legacy and could arguably consume the IIJA itself. By some metrics, U.S. infrastructure investment has even declined in real terms, despite the nominal spending boost from IIJA.”
—Michael Bennon, “Lessons from the IIJA: Inflation and Federal Infrastructure Legislation,” Public Works Financing, Feb. 2025

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The post Surface Transportation News: Can the Department of Transportation terminate New York’s cordon pricing program? appeared first on Reason Foundation.

• How to jump-start U.S. mileage-based user fees
• Assessing U.S. transportation’s impact on GHG emissions
• California’s dubious road user charge plan
• NTSB rips Maryland over Key Bridge collapse
• An obscure federal rule may delay driverless trucks
• Rethinking the federal role, continued
• News Notes
• Quotable Quotes

How to Jump-Start U.S. Mileage-Based User Fees

The need to shift highway funding from fuel taxes to per-mile charges is widely acknowledged in transportation policy circles. Seventeen states have carried out pilot projects to test the idea with volunteer motorists, and three pilot projects have involved trucking firms, covering numerous states. Yet, there are serious roadblocks to actually implementing road user charges that apply to all motor vehicles.

In the most recent reauthorization of the federal surface transportation program (the Infrastructure Investment and Jobs Act, 2021), Congress authorized a national pilot program intended to test multi-state per-mile charges. The Department of Transportation (DOT), in a long-delayed process, appointed an advisory board staffed with knowledgeable people, but the Biden administration waited until its last days in office before announcing its members.

Thus far, the new Trump administration has been mum on this subject, and many expect it will not pursue this project. Congress intended that the results of this national pilot project would be available in time to enable provisions in the 2026 reauthorization bill for the next steps for nationwide MBUF/RUC implementation. Given the moribund state of this project, there will be no such results in time for the 2026 bill.

There is an alternative way to begin a serious national transition to per-mile charging, which Congress could authorize in the 2026 legislation. As explained in a new Reason Foundation policy paper, the key idea would be to start the transition not with a type of vehicle (e.g., electric cars) but with a type of roadway. The obvious candidate is limited-access highways, which is why the title of the policy paper is “Interstates First: Why Road User Charges Should Begin with Limited-Access Highways.”

This proposal seeks to address several concerns that seem to be holding back large-scale adoption of per-mile charges. One is privacy—many people fear that with per-mile charges, all their trips will be tracked by the government (“Big Brother in your car”). However, mileage charges on limited-access highways would be based solely on the miles driven from on-ramp to off-ramp. Where each trip actually begins or ends would be known only to the vehicle’s driver.

A second concern is “double taxation”—that politicians would add a road user charge in addition to existing fuel taxes. That fear is genuine in California, where several such proposals have been made by regional governments and the state government. (See Baruch Feigenbaum’s article in this issue.) Therefore, any state that plans to implement a per-mile charge system must provide refunds of the state fuel tax for the miles driven on any highway converted to the new per-mile charge. Presumably, a state adopting this approach would implement it one Interstate (or other limited-access highway) at a time, so its state fuel tax would remain in effect for all other roadways. It’s important to know that two states already offer refunds of some state highway user taxes on toll roads: Massachusetts on the Massachusetts Turnpike and New York on the New York Thruway have long offered such refunds. Truck fleets that subscribe to the services of Fleetworthy (formerly Bestpass) have their refunds processed as part of that company’s array of services. The data come from the electronic tolling systems on those two toll roads.

Perhaps the most important drawback to near-term implementation is the cost of collection. As the trucking industry often reminds us, the cost of collecting fuel taxes is about two percent of the revenue collected. By contrast, per a recent study by consulting firm WSP, a hypothetical per-mile charging system using an in-vehicle device and a new state office (staff, software, etc.) would likely have a per-vehicle cost of collection of $9.65 per month in a low-volume state and $4.25 per month in a high-volume state. For gasoline, the monthly cost of collection is about 42 cents per month for the average motorist. Thus far, no one in the road user charge technology community has come up with a lower-cost approach than WSP’s estimates.

At some point in the future, perhaps when all vehicles are equipped with some form of telematics that can add up miles driven on each category of road, there may be a monthly collection cost somewhere in the vicinity of the fuel-tax collection cost. But until that technology exists and is ubiquitous, charging for all miles traveled will not be feasible.

On the other hand, a 2012 study by a team of electronic tolling experts estimated that an all-electronic tolling approach designed for limited access highways could have a collection cost as low as 5% of the revenue collected. That estimate was based on personal vehicles. Since the actual cost of collection is the same for heavy trucks and cars, and since heavy trucks typically pay four times as much as cars, the cost of collection for a heavy truck is one-fourth that of cars. So if it is 5% for cars, it would be 1.25% for heavy trucks.

A per-mile collection cost for cars that amounted to 5% of the revenue would be 2.5 times the cost of collection for fuel taxes, so instead of being 42 cents/month, it would be a bit over $1 per month—far less than the estimated $4.25 to $9.65 per month for a hypothetical all-roads user charge.

In the 2026 reauthorization, Congress could jump-start the implementation of “Interstates first” road user charging. There is a never-used pilot program called the Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP) that, in its current form, authorizes up to three states to each select one of its Interstates to rebuild with toll financing. ISRRPP could be opened to all states and all of each state’s Interstates. Two additional changes would be that the new tolls be charged electronically on a per-mile basis and that the state would provide refunds of state fuel taxes for all miles driven on newly tolled Interstates.

Over the past 15 years, nine states have commissioned feasibility studies of converting their Interstates to toll finance in order to rebuild and modernize them. But doing this for only one Interstate is politically unviable. With a much broader ISRRPP, one or more of those nine states are likely to take advantage of the new opportunity. And those pioneers will blaze the trail for other states to follow.

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Assessing U.S. Transportation’s Impact on Greenhouse Gas Emissions

With the advent of the Trump administration, changes in federal environmental policy have been taking place, mostly via executive orders. Congress has yet to weigh in on these changes. At this critical point in U.S. greenhouse gas (GHG) policy, it makes sense to take a careful look at the best data on the effect of U.S transportation on GHG emissions. Reason Foundation just released the first of three reports on this topic, “Transportation and Climate Change: Travel Trends and GHG Emissions.” The author is Prof. Steven Polzin of Arizona State University, whose PhD and prior education is in civil engineering. Polzin was also a senior advisor for research and technology at U.S. DOT in the past decade.

This initial report provides basic data on GHG emission trends, some of which are quite surprising. For example, the U.S. share of global CO2-equivalent emissions between 1800 and 2016 peaked near the end of World War II at about 55% and was down to 14.5% by 2016. And, as of 2014, the U.S. share of global CO2 emissions from fossil fuel consumption and related industries was 15%, compared with 30% for China and 9%* for Europe. (Sources for all figures and tables are provided in the report.) And U.S. CO2 emissions from energy use peaked at 6 billion metric tons in 2007 and were down to 4.5 billion metric tons in 2019.

The study next turns to GHG emissions from transportation, with an emphasis on U.S. transportation. As of 2019, transportation accounted for 28.6% of the U.S. total. The largest contributors are personal vehicles (40.4%), light-duty trucks (17.1%), and medium/heavy trucks (23.5%). That personal vehicle percentage is 11.55% of total U.S. GHG emissions. Polzin goes on to look into changes in vehicle miles of travel (VMT) between 2009 and 2017. Many may be surprised that household VMT’s share shrank due to the substitution of utility and commercial household-services travel, a trend which is likely ongoing today.

How much personal travel is potentially shiftable from personal vehicles to other modes? Polzin’s detailed analysis of Federal Highway Administration (FHWA) travel volume trends first identifies 44.5% of passenger miles as largely unsuitable targets due to being too long and involving locations where there is little or no transit available. In urbanized areas, work trips are the most likely candidate for such shifts. Pre-pandemic, those trips accounted for 29.4% of household VMT, but with 15% telecommuting, that share would decrease to 26.1%.

Part 5 of the study discusses evolving U.S. travel trends. Besides the growth in telecommuting, another ongoing trend is travel that shifts from households themselves to commercial service providers (e.g., pool maintenance, lawn services, house-cleaning services, meal delivery, package delivery, etc.). Another post-pandemic change is the growth of recreational travel, including social recreational travel. Yet another factor is travel changes resulting from households increasingly relocating from central cities to suburbs and exurbs—driven in part by telecommuting and the other factors noted in this section. Transit is much less viable in suburbia and is essentially non-existent in exurbia.

The implications of these trends will be addressed in more detail in the forthcoming Parts 2 and 3. You can read part 1 here.

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California’s Dubious Road User Charge Plan
By Baruch Feigenbaum

California legislators are preparing to draft a bill to create a permanent road usage charge program. While the legislation is unlikely to pass until 2026 or 2027, the general concepts will be fleshed out in the next six months.

Normally, Reason Foundation would cheer a new road usage charge (RUC) program. California would join the likes of Hawaii, Oregon, Utah, Vermont, Virginia, and possibly Washington state with a permanent, sustainable alternative way to pay for highways. The fuel tax will cease to be a viable option in about 10 years, and leaders need to start testing a viable alternative now. However, nothing is ever simple in California, and the bill looks to have one major problem

The current bill, Senate Bill 1421, introduced in 2025, would extend the authority of the existing Road Usage Charge executive committee until 2035. However, it does not actually implement a program. That is left to successor bills that are likely to be passed in the next few years.

But the current proposed legislation, as well as details provided by the Democratic majority, and the lack of communication between Democrats on the transportation and finance committees with Democrats and other Republicans suggest a problem.

Many California lawmakers and proponents are treating a RUC as a supplement, not a replacement, for the fuel tax. In all other states as well as RUC educational efforts, two multistate groups (The Eastern Transportation Coalition and Road Usage Charge America), and legislative groups, the RUC is a replacement, not a supplement. There are three major reasons why RUC must be a replacement.

The first reason is political. RUCs need to be supported by both Democrats and Republicans. And if RUC is seen as a backdoor tax increase, which is what it would be in California, it will lose support among Republicans and many moderate Democrats. Already, Democratic governors in Maryland and Pennsylvania have slowed RUC rollouts over this fear. The public hates paying higher fees and taxes, especially when they feel they have been duped.

And this is not a hypothetical argument, as California lawmakers should know based on an experience in San Diego, discussed three years ago in this newsletter. The Metropolitan Planning Organization (MPO) San Diego Association of Governments tried and failed to implement a RUC. The RUC would have been added onto a fuel tax and two half-cent regional sales taxes. The RUC would have started at 3.3 cents per mile in 2030. After anti-tax activist Carl DeMaio started having town hall meetings about the proposed layers of taxes, drivers across the political spectrum complained, a number of city officials changed their minds, and the plan was killed. Yet, some in California think the biggest mistake of the campaign was bad marketing.

Second, RUCs as a supplement may distort or break all five technical advantages of a users-pay system: fairness, proportionality, self-limiting, predictability, and investment signal. Special interest groups, including rail transit boosters, recreational trails enthusiasts, environmental remediation experts, and even non-transportation project boosters such as education building lobbyists and health funding lobbyists, are lining up at the trough of transportation revenue sources that could be more easily tapped for other uses. Highway users paying for health care costs is definitely not fair, proportional, or self-limiting. It’s challenging to see two revenue sources as serving as an investment signal. And given that the rates would adjust at different levels, they are not especially predictable. Having multiple highway funding sources complicates more than it helps if the revenue isn’t funding highways.

Third, it’s not as if California needs extra revenue. If the state is able to double-tax drivers, it sets a bad precedent for other states. California has by far the highest state per capita transportation funding in the country. The state has the highest fuel tax in the nation, at almost 60 cents a gallon. It has one of the highest registration fees in the nation, often more than $800 every year. The most populated counties have a 0.5 to 1.5 cent sales tax to pay for transit and other transportation improvements. And other taxes, such as the income tax, are some of the highest in the country.

And it is not as if those taxes are generating outstanding roads. Our recent Annual Highway Report found that overall California ranked second to last of all states in overall performance and cost-effectiveness, in part because it ranked in the bottom ten of per-mile spending in three of the four disbursement categories, the bottom 10 in pavement quality in all four pavement categories, the bottom 10 in traffic congestion, and a fatality rate that is significantly higher than the national average. Basically, the state’s high spending is not translating to better roadways in any categorical group. And more spending will exacerbate, not cure, that problem.

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NTSB Rips Maryland Over Key Bridge Collapse

The March 20 report by the National Transportation Safety Board (NTSB) strongly criticized the Maryland Transportation Authority (MDTA) for not having performed a risk assessment that would have found the bridge highly vulnerable to a collision with a large vessel. As I pointed out in the April 2024 issue of this newsletter, the 1980 collapse of the Sunshine Skyway Bridge near Tampa led to a major study of bridge vulnerability to such collisions. The American Association of State Highway and Transportation Officials (AASHTO) in 1990 released guidelines for major bridges over waterways with major cargo shipping traffic. It recommended “dolphins” and other safety measures. As NTSB Chair Jennifer Homendy noted, Maryland had been part of that effort. Yet Maryland officials did nothing to reduce the Key Bridge’s vulnerability, despite repeated warnings from the Baltimore Harbor Safety and Coordination Committee, as I also reported in the April 2024 issue.

At the news conference, Homendy said Maryland authorities should have known that the risk of collapse due to collision was 30 times above the accepted threshold. “What’s frustrating is not only did MDTA fail to conduct the assessment on the Key Bridge, nor did they provide the NTSB with the data used to conduct an assessment. We asked them for that data; they didn’t have it.”

MDTA’s negligence and denial of any responsibility for the bridge collapse should have undercut its case for all U.S. taxpayers to pay the estimated $1.9 billion cost of replacing the bridge, especially when the state itself has a $350 million insurance policy on the bridge, and the global shipping industry has about a dozen ship insurance pools, with up to $3.1 billion available per ship disaster. By requiring U.S. taxpayers to pay for the replacement, Congress essentially sanctioned the state’s negligence.

This newsletter has also documented the large number of major U.S. bridges with fracture-critical designs and those lacking protections such as dolphins. The NTSB’s preliminary report included a list of major bridges that are at risk and need assessing for protection or replacement. The list includes seven in California, three in Delaware, two in Florida, one in Georgia, one in Illinois, seven in Louisiana, two in Maryland, one in Michigan, one in New Hampshire, two in New Jersey, 11 in New York, six in Ohio, two in Oregon, four in Pennsylvania, one in Rhode Island, six in Texas, and one each in Washington and Wisconsin.

These are not rinky-dink bridges. They include the Golden Gate Bridge in San Francisco, the Coronado Bridge in San Diego, the Sunshine Skyway Bridge in Florida, the Huey Long and Hale Boggs Bridges in Louisiana, the Chesapeake Bay Bridge in Maryland, the Mackinac Bridge in Michigan, the Verrazzano Narrows and George Washington Bridges in New York, the Walt Whitman Bridge in Philadelphia, and the Buffalo Bayou Toll Bridge in Texas. Many were financed by toll revenues, but in a dismaying number of cases, the tolls were removed once the initial bonds were paid off. In those cases, the implicit assumption was that the bridge would be there forever and not need additional investment or replacement.

A number of these bridges are also on a list resulting from an analysis performed by researchers at Johns Hopkins University. They found that the Francis Scott Key Bridge, were it still standing, would have been in the top 10 most-vulnerable U.S. bridges. For each bridge in their study, the Johns Hopkins researchers estimated the number of years until a major collision. For example, the Crescent City Connection in New Orleans was estimated to have such a collision once every 34 years. Their report is estimated to be completed by late summer.

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An Obscure Federal Rule May Delay Driverless Trucks
By Marc Scribner

After years of work, automated heavy-duty trucks without drivers onboard are finally coming to Texas public roadways. Aurora Innovation, a leading truck automation developer, is expected to introduce 10 of its outfitted Class 8 trucks in the first half of 2025 on a route between Dallas and Houston. This will mark the first time driverless semi-trucks have carried goods on public roads in regular commercial service. The company plans to expand across state lines later in 2025 via a route from El Paso to Phoenix. However, an obscure federal regulation may delay interstate expansion.

Since 1972, federal regulations have required that whenever a truck is stopped on a highway, including the shoulder, reflective warning triangles or road flares must be placed around the truck to alert passing motorists of the potential hazard. Specifically, 49 C.F.R. § 392.22(b) requires that within 10 minutes of stopping, the operator must exit the vehicle cab and set three warning devices on the roadway: one on the side of traffic placed approximately 10 feet from the truck, one 100 feet in front of the vehicle, and one 100 feet behind the vehicle.

The warning device rule poses a unique challenge for driverless operations of automated commercial vehicles because it implicitly assumes an operator will be seated in the vehicle and able to immediately exit the cab to deploy warning devices. This rule was never intended to apply to driverless commercial motor vehicles, which had not yet been conceived when the warning device requirement was promulgated more than 50 years ago.

In Jan. 2023, automated vehicle developers Aurora and Waymo petitioned the Federal Motor Carrier Safety Administration (FMCSA) for an exemption from the warning device requirement. To ensure that the broader safety intent was preserved, the petitioners proposed that driverless, autonomous commercial vehicles would, in lieu of placing warning devices, be equipped with cab-mounted warning beacons.

The warning-beacon system Aurora and Waymo proposed would consist of at least one rearward-facing light mounted on each side of the cab and at least one forward-facing light mounted on the front of the cab. The warning beacons would be installed between the upper edge of the sideview mirrors and the top of the cab for both forward- and rear-facing lights. The companies provided two studies—one from Aurora and another from the Virginia Tech Transportation Institute prepared for Waymo—that they argued had demonstrated that cab-mounted warning beacons would achieve a level of safety at least equivalent to the warning-device requirement.

After nearly two years of waiting, FMCSA denied the exemption petition at the end of Dec. 2024, citing a lack of data on the safety equivalence of cab-mounted warning beacons. This justification was especially odd because the agency has conceded it has never conducted any research on the effectiveness of its warning-device requirement in enhancing safety. The suggestion from FMCSA seems to be that there is no official safety baseline by which to compare alternatives to warning devices, which thereby renders the agency unable to consider alternatives—even those that offer superior safety.

On Jan. 8, 2025, FMCSA announced it was planning to study the effectiveness of warning devices on traffic safety, admitting that federal regulators have “never conducted experimental research on the impact of using warning devices.” Clearly not content to wait years for regulators to determine whether or not their rules have any value, Aurora filed suit two days later on Jan. 10 in the U.S. Court of Appeals for the D.C. Circuit, asking the court to overturn FMCSA’s December denial “because it is arbitrary, capricious, an abuse of discretion and otherwise not in accordance with the law.”

FMCSA could cure this policy defect by reconsidering and reversing its denial of the Aurora/Waymo exemption petition, which would provide immediate clarity for the industry’s near-term efforts to deploy driverless automated trucks on public highways. But it shouldn’t stop there. FMCSA should initiate a rulemaking proceeding to modernize its warning-device regulations to allow alternatives such as the cab-mounted warning beacons proposed by Aurora and Waymo.

To ensure the agency acts, Congress should explicitly direct FMCSA to conduct this needed rulemaking. As part of a forthcoming memo to congressional authorizers, Reason Foundation has drafted model legislative text for Congress to consider including in the surface transportation reauthorization bill due in 2026.

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Rethinking the Federal Role in Surface Transportation, continued

In response to my article on this subject in the Feb. 2025 issue, which suggested devolving surface transportation funding from the federal level to the states that actually own and operate highways and transit, I received a thoughtful commentary from a transportation consultant I have known for many years. When I asked him if I could print an abridged version of it, he agreed, on condition that I not disclose his name. The scope of his more than 30 years of consulting includes HOT/managed lanes, congestion pricing, mobility as a service, VMT-related policy, and various ITS disciplines. Here is an abridged version of what he wrote.

I agree with much of what you wrote in that article. We need to copy what other first-world countries do and make the U.S. DOT a policy-making entity and FHWA an R&D and experimental entity to assist DOT in determining the impact of policies (rather than a funding source for the operation of transportation infrastructure owned and operated at state and local levels). For example, how should we address the transition of technology into our national networks? How can road charging, tolling, HOT/express lanes, and public-private partnerships (P3s) exist harmoniously? I can even see a DARPA-like entity advancing the state of the art. The new FHWA could run computer simulations for network capacity, a national cost-allocation model, and an overall pricing model to evaluate the impact of all vehicle costs and human behavioral impacts. The National Highway Traffic Safety Administration (NHTSA) has a place in FHWA for safety analysis and crash analysis. In short, the Federal Highway Administration (FHWA) would be focused on ground transportation and mobility services.

I may see grants differently from you. Under the above system, I could see grants and pilot tests as part of our national concept development. I would suggest “concept development programs” with specific funding for R&D into specific mobility concepts. This would be a national investment to improve mobility services, integrate ground transport and safety, and provide the states and the market with the fruits of that investment.

Regarding road charging, MBUF, tolling, HOT/express lane charges, and parking fees, I could imagine a small (1-2%) federal tax on the revenues. While states would be responsible for collecting these “mobility taxes,” they would forward the federal portion to the DOT and a new Highway Trust Fund (HTF) supporting R&D, etc. as discussed above. This would be the funding source for that new HTF, with the new FHWA constrained to spend no more than the amount it receives from this source.

As Buckminster Fuller once said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

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News Notes

Interstate Tolling Bill in Indiana Legislature
House Bill 1461, from Rep. Jim Pressel (R-Rolling Prairie) aims to have tolling on all the state’s Interstate highways. Specifically, it would allow the Indiana DOT to ask FHWA for a waiver to permit such tolling. If granted, the legislature would then enable the Indiana Finance Authority to take action on tolling. The bill was discussed by a state senate committee the third week in March. A 2018 study for InDOT by HNTB laid out a Statewide Interstate Tolling Strategic Plan. That study stated that FHWA had confirmed that a state could use federal permission to toll existing Interstate bridges as the basis for tolling the state’s long-distance Interstates. That plan included significant toll-financed investment to upgrade those Interstates.

U.S. Vehicle Miles of Travel Up One Percent in 2024
In the December issue of FHWA’s Traffic Volume Trends, the data show that U.S. VMT increased by 1.0% in 2024. We drove 3.279 trillion miles last year, an increase of 32.3 billion miles. As Jeff Davis of the Eno Center for Transportation pointed out, this increase is part of a post-Covid reversion back to historical trends. The 2024 total finally exceeded the 2019 total. However, U.S. per-capita VMT peaked in 2004 at 10,117 miles, compared with 2024’s 9,641 miles.

Ownership Changes for Canada’s Highway 407 ETR
Two of the shareholders in Canada’s first long-term P3 toll road—the 407 ETR—are selling their stakes in the tollway. CPP Investments and Atkins Realis made the announcement on March 13th. PSP Investments will acquire a 7.51% stake valued at $1.65 billion (US). Primary shareholder Ferrovial will buy up to a 5.06% stake from Atkins Realis for $1.44 billion (US). Closing these transactions is expected in the second quarter of 2025. The 407 Express Toll Route is the 108 km all-electronic toll road in the Toronto metro area.

California Truck Electrification Hits a Roadblock
Politico reported that the Golden State’s ambitious plan to mandate heavy truck electrification is jeopardized by Trump administration policy changes. A week before Trump’s inauguration, the California Air Resources Board (CARB) withdrew its request for a federal waiver to implement its clean-truck purchasing mandate. Shortly thereafter, the Trump administration issued an executive order to pause the disbursement of funds from both the Inflation Reduction Act and the Bipartisan Infrastructure Law, holding off billions of federal dollars for truck charging infrastructure. The trucking industry had already filed suit over the state’s requirement to phase out diesel truck purchases by 2045.

Tampa’s New Howard Frankland Bridge Opens
Last month saw the opening of most of the replacement of the 1960s-era Howard Frankland Bridge between Tampa and St. Petersburg. Construction of the $865 million project began in 2020. The replacement bridge includes four lanes each way, two of which in each direction are express toll lanes. The oldest portion of the original bridge will be demolished in 2026.

Express Toll Lanes in Dallas Upgraded to BBB+
Fitch Ratings has increased the rating on the private activity bonds (PABs) and TIFIA loan for the express toll lanes on the LBJ Freeway (I-635) from BBB to BBB+. The rating increase was based on those lanes’ high traffic, strong revenue, and a lifetime debt service coverage ratio of 3.9X. These express lanes were developed and are operated and maintained by Cintra, under a long-term design-build-finance-operate-maintain P3 agreement. Despite the congestion relief and self-funding inherent in such projects, for more than a decade, the Texas Legislature has refused to approve TxDOT entering any new agreements of this kind, despite many cases where they would be a good fit. A prime case in point is I-35 through downtown Austin. In a multi-billion-dollar project soon to get underway, TxDOT will add capacity to this hugely congested corridor—but wholly at taxpayers’ expense and without the value pricing that would keep new lanes flowing smoothly during peak periods.

Canada Plans C$90 Billion High-Speed Rail Route
The project would link Toronto and Quebec City, a distance of 621 miles. The top speed is planned to be 186 mph. The cost is estimated at between C60B and C90B ($37B to $56B, with the planning period alone to cost $2.7B). The line would have seven stops, one every 89 miles on average. The project team is to be led by CDPQ Infra, with others including AtkinsRealis, Keolis, Systra, Air Canada, and SNCF Voyageurs. Canada’s Via Rail estimates that the high-speed train will attract 25 million annual passengers, compared with around 4 million on the current slower-speed train in that corridor.

Economic Analysis Concludes New York Congestion Tax Is Working
A new paper from the National Bureau of Economic Research used economic analysis to assess the impact of New York City’s cordon tax to enter the Manhattan central business district. Compared with a set of control cities (which have no such charge), the eight-member team found that average NYC speeds increased, and travel time decreased by 8%. The modeling is complex, and I’m not in a position to judge its accuracy. Their paper, “The Short-Run Effects of Congestion Pricing in New York City,” is online as NBER Working Paper 33584 on the NBER website.

Florida DOT Dedicates $4 Billion to Highway Improvements
The 2024 project is called Moving Florida Forward. Its focus is to relieve bottlenecks in the state’s major highway system. The projects include adding lanes on I-4 in Polk and Osceola Counties, adding lanes on I-75 near Ocala, redesigning and rebuilding the always-congested Golden Glades interchange in Miami, and adding express toll lanes to I-275 in Pinellas County, near Tampa. The $4 billion was allocated from a general revenue surplus.

Amtrak Seeking Partner for Dallas-Houston High-Speed Rail
Despite the demise of the former Texas Central project, Amtrak is seeking to revive the project by finding a development partner. Recent cost estimates for the project are in the vicinity of $30 billion. The now defunct Texas Central project planned only one intermediate stop—in College Station, where Texas A&M University is located.

V2X Implementation Planned for I-4 in Orlando
A research project from Florida Polytechnic University and FDOT aims to test the impact of vehicle-to-everything (V2X) communications for reducing accidents. The first phase evaluated potential safety benefits (2020-2023), and the second phase will add 350 roadside units to the I-4 corridor. The benefits, alas, depend on “all vehicles in the corridor being equipped with on-board units.” Few, if any, new cars come equipped, so it’s difficult to predict when safety benefits will actually be achieved.

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Quotable Quotes

“Jenna Bentley, vice president of government affairs for the Indy Chamber, said the organization supports House Bill 1461 [Interstate tolling] because it will increase economic development throughout the state. The chamber ‘strongly supports’ tolling highways, she said. ‘In a transportation system largely funded by user-pay models, it’s critical that out-of-state commuters pay their fair share, and tolling is one mechanism to capture that revenue,’ she said.”
—Alexandra Kukulka, “Indiana Toll Road Bill Heard in Senate Committee, Legislators Voice Support for Tolling,” Post-Tribune, March 20, 2025 

“Considering California’s environmental and economic record since 2006, one can reasonably conclude one of two things: either it is not possible to achieve deep emission reductions without slowing growth and making inequality worse, or California is doing something wrong. The state’s Democratic leaders have long rejected the former possibility. Now, it appears, some elected leaders, if not the state’s unelected regulators, are beginning to recognize just how inequitable the state’s climate policies have been. Extraordinary growth rates in a handful of tech-centric counties have obscured the costs of the state’s climate regime. California’s climate policies have contributed to slow economic growth for most of the state and have disproportionately punished the poor and non-college educated workers. Until the state demonstrates it can cut its emissions equitably, such that working people once more see the Golden State as a land of opportunity rather than fleeing it, California should not be held up as a model of climate governance. Expensive policies, supported by high and keyboard-economy tax revenue, are simply not exportable to the rest of the country, much less the rest of the world.”
—Jennifer Hernandez and Lauren Teixeira, “Time to Reset California’s Climate Leadership,” The Breakthrough Journal, Jan. 6, 2025

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*This newsletter has been updated to correct the European Union’s percentage of global CO2 emissions from fossil fuel consumption and related industries.

The post Surface Transportation News: How to replace gas taxes with mileage-based user fees appeared first on Reason Foundation.

• Big news on environmental permitting
• Addressing transit productivity
• California High-Speed Rail: the saga continues
• Time to repeal the Jones Act
• For access to jobs, driving remains king
• Donald Shoup, RIP
• News Notes
• Quotable Quotes

Big News on Environmental Permitting

When I researched and wrote the Reason Foundation policy paper “Reforming Environmental Litigation” last year, I included a fairly long list of potential reforms. One of these was that a future president could rescind President Jimmy Carter’s Executive Order 11991 enabling the White House Council on Environmental Quality (CEQ) to issue regulations (as opposed to policy guidance to the White House). That was not among what I included among a set of pragmatic, near-term reforms that I thought might receive bipartisan support in Congress.

Consequently, I was pleasantly surprised that on his first day in office, President Donald Trump issued a new Executive Order 14154 rescinding E.O. 11991. The new executive order also instructed CEQ to rescind existing National Environmental Policy Act (NEPA) regulations and instead issue guidance that would significantly accelerate the permitting process. Trump’s action was preceded by an unexpected appeals court decision last November. In its Marin Audubon decision, the Court of Appeals for the DC Circuit ruled that CEQ has no authority to issue binding NEPA regulations. Shortly thereafter, the District Court for the District of North Dakota issued an order in Iowa v. CEQ vacating the Biden administration’s expansive Phase 2 revisions of CEQ NEPA regulations.

On Feb. 19, 2025, CEQ issued “Implementation of the National Environmental Policy Act” (Guidance). That is intended to be a framework for agencies to develop their own procedures for environmental review, focused on simplifying the NEPA process. This guidance gives agencies 12 months to develop their revised regulations and procedures.

That same day the Senate Environment & Public Works (EPW) Committee held a hearing on “Improving the Federal Environmental Permitting Processes.” Chair Shelly Moore Capito (R-WV) and Ranking Minority Member Sheldon Whitehouse (D-RI) said they “shared a common goal of demonstrating strong bipartisan interest in broad permitting reform.” 

The Eno Center for Transportation’s Rebecca Higgins reported that “witnesses uniformly agreed to the premise posed by Sen. Capito that there is a need for bipartisan legislation,” and that “members and witnesses shared a range of complaints on the permitting process, including not only transportation and renewable energy but also broadband, water lines, housing, wildfire mitigation, manufacturing, and other sectors.”

I was also pleased to know that “proposals for permitting reform suggested by witnesses centered mostly on constraining litigation through reducing the statute of limitations for judicial review of permit decisions.” Litigation was the main focus of last year’s Reason policy paper, but it has not been meaningfully addressed in previous legislation. Let’s hope Congress gets serious on litigation reform this year.

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Addressing the Transit Productivity Crisis
By Marc Scribner

Reason Foundation recently released my report aimed at “Addressing the Transit Productivity Crisis.” It is no secret that the COVID-19 pandemic upended the transportation sector, with public transit in particular getting hit hard by changes in travel behavior. One result has been a collapse in transit productivity, which has translated into spending more to provide less transportation.

As I detail in the report, while the pandemic exacerbated existing trends, the decline in transit productivity long predates COVID-19. Some of this decline was inevitable given the inherent limitations of transit relative to alternatives and the growing affluence that drove Americans to those alternatives. But the situation could be much better—if not for an outdated federal law that has frozen transit system labor relations in place since the 1960s.

Transit’s sharp productivity decline following the onset of the COVID-19 pandemic has understandably alarmed policymakers. But while conditions have substantially worsened in recent years, public transit productivity has trended downward since the end of World War II, largely due to increasing household incomes, growing private automobile ownership, and the dispersal of households and then workplaces into the suburbs. Between 1945 and 1960, transit systems lost 60% of their riders. From 1960 to 2019, nationwide transit ridership was basically flat while the U.S. population grew by 46%. By 2017, just 2.5% of U.S. personal trips were made by transit, compared to 82.6% by private automobile. Despite this sea change in consumer demand for transit, the level of transit service provided (measured in vehicle revenue miles) has more than doubled since 1960. As a result, inflation-adjusted operating costs per transit trip increased by more than five-fold during this period.

Following the onset of the COVID-19 pandemic, public transit ridership collapsed. As of 2023, nationwide ridership had only recovered to approximately 71% of 2019 levels. More recent estimates from Dec. 2024 show transit ridership at 77% of 2019 levels. Much of this ridership decline can be explained by changes in work travel. Many transit systems were designed to facilitate journeys to and from work in central business districts, and working from home remains two to five times its pre-pandemic share of “commuting”—and four to eight times the share of mass transit commuting—depending on how it is measured.

Depressed ridership led Congress to authorize unprecedented federal subsidies for transit agencies. Supplemental COVID-19 appropriations during FYs 2020 and 2021 provided $69.5 billion in emergency support for transit agencies, equivalent to nearly five years of pre-pandemic federal transit funding. The Infrastructure Investment and Jobs Act enacted in FY 2022 increased federal transit funding by 67% over the levels previously authorized by the Fixing America’s Surface Transportation (FAST) Act of 2015 in nominal dollars.

This large increase in federal funding allowed transit agencies to continue to provide service close to pre-pandemic levels, with transit service provided between 2019 and 2023 falling by only 10.3% (in vehicle revenue miles) despite ridership declines of 29.3%. These dynamics had predictable effects on transit labor productivity, with productivity declines almost entirely driven by decreased ridership.

Two strategies show the most promise for improving transit productivity. First, competitive contracting—whereby transit agencies select from competing private companies to operate transit systems—is commonly used abroad to provide large urban transit networks and is used today in the United States, primarily for commuter rail, paratransit, and demand-response service. Under this model, the transit agency would serve as the coordinating and oversight entity, developing performance requirements and ensuring private partners adhere to them. A 2017 study published in the Journal of Public Economics estimated that contracting out bus service in the United States could reduce operating costs by 30%.

The second strategy is vehicle automation. Around the world, urban rail transit is increasingly automated. A 2023 report from the C2SMARTER university transportation center compared fully automated rail transit lines abroad with U.S. rail lines. It found automation has the potential to reduce U.S. rail transit operating costs by up to 46%. In addition to rail transit automation, numerous companies are developing automated road vehicles. Glydways, a rubber-tire automated transit company that is developing two projects in California, claims it can reduce operating costs by approximately 80% compared to average costs faced by conventional transit systems.

Unfortunately, both competitive contracting and automation face substantial deployment barriers in the United States. Section 13(c) of the Urban Mass Transportation Act of 1964 established transit worker labor protections. This provision was included to ensure collective bargaining agreements continued to be honored during the period when transit systems and their workforces were transitioning from heavily unionized private ownership to—at the time—sparsely unionized government ownership.

Section 13(c) requires transit agencies that receive federal funding to certify employee “protective arrangements” with the Department of Labor. As a consequence, transit agencies are greatly constrained in enacting any operational change involving employees. Section 13(c) generally requires transit agencies to either incur substantial upfront costs to buy out affected employees or delay the realization of labor-saving benefits. Transit agencies largely dependent on annual government appropriations face a strong financial disincentive to adopt practices and technologies that would improve service and reduce growing operating subsidies.

Transit employee labor protections included as part of the Urban Mass Transportation Act of 1964 were designed to address the particular circumstances of the time, when just 2% of state and local government employees were authorized to collectively bargain. But this transition period has passed, and all affected employees have long since retired. Further, most states have authorized public-employee collective bargaining since the 1960s, with 63% of state and local employees being authorized to collectively bargain as of 2010.

Section 13(c) exists alongside federal, state, and local labor laws that apply to public-sector workers. Importantly, federal transit labor protections supplement rather than substitute for other general labor protections. As a result, Section 13(c) provides transit workers—and only transit workers—with special protections beyond those enjoyed by other government employees.

Following the 1994 Northridge earthquake in Los Angeles, the Clinton administration ran into trouble disbursing emergency grants to affected transit agencies. The culprit was Section 13(c) certifications at the Department of Labor, which were delaying relief funding. In a 2004 article, Martin Manley, an assistant secretary of labor in the Clinton administration, recounts how he proposed repealing Section 13(c). He suggested this idea first to Vice President Al Gore, who was leading his Reinventing Government efficiency initiative. Vice President Gore told Manley to “make sure Norm Mineta is on board,” referring to the powerful chairman of the House Transportation Committee. To Manley’s surprise, Chairman Mineta expressed support for repealing Section 13(c) and told Manley to communicate as much to the Department of Labor and the White House.

Unfortunately, despite the federal government principals being supportive of Section 13(c) repeal, Congress never acted. And it turned out this was the last serious effort to take on the special transit labor protections. There was lingering interest throughout the 1990s about the negative impact of Section 13(c), especially within the Senate Banking Committee, but it gradually faded from political discussions. Yet the harms of Section 13(c) persist.

The new Congress and administration have expressed support for eliminating wasteful federal programs. Section 13(c) is not only wasteful from a federal perspective, but its continued existence also acts as a barrier to transit agency self-help and condemns transit to its present status in the United States as a dysfunctional mode of last resort. Low-income Americans dependent on transit deserve better, and the surface transportation reauthorization due in 2026 is the perfect opportunity for Congress to prioritize the interests of transit riders over those of providers.

My full report, “Addressing the Transit Productivity Crisis,” is available on Reason Foundation’s website.

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California High-Speed Rail: The Saga Continues

The last two months brought new problems for the beleaguered California high-speed rail (HSR) program. To get voters to approve a $10 billion bond issue in 2008, the system was promoted as costing $45 billion and was supposed to launch high-speed service between Los Angeles and San Francisco by 2020. Today, the California high-speed rail system is estimated to require about $130 billion and is way behind schedule. Its starter segment, 171 miles between Bakersfield and Merced in the Central Valley, is now estimated to cost $33 billion (much of which has not been raised). And that starter line is unlikely to meet its latest targeted opening date of 2033.

Nevertheless, Gov. Gavin Newsom held a news conference in Kern County in January touting a proposed addition to the system—a 54-mile link between Palmdale and Victor Valley (where Brightline West is supposed to have a station stop as it builds high-speed rail between Las Vegas and Southern California). The High Desert Corridor Joint Powers Authority is promoting that project.

As to where California can get the missing $100 billion needed to complete the original LA-SF corridor promised to voters, Gov. Newsom’s new idea is public-private partnerships (P3s). The California High-Speed Rail Authority hosted an industry forum on HSR P3s Jan. 30-31, with about 400 attendees, according to Infralogic (Feb. 6). California High-Speed Rail Authority (CHSRA) CEO Ian Choudri told attendees that P3s, along with federal and state funding, have the potential to provide stable funding for the program. What Choudri appears to have in mind are real-estate developments on state-owned land adjacent to yet-to-be-built stations along the HSR’s route. It’s hard to see how such projects could provide a return on investment to the P3 investors and also help fund the high-speed rail system’s construction.

Meanwhile, bad news for the project continues. On Feb. 21, the California High-Speed Rail Authority Inspector General released a report on further delays for the Central Valley corridor. It turns out that 52 miles of that corridor have not yet begun construction, meaning the project will likely not meet its timeline of opening by 2033. CHSRA did not meet the deadline for having the final configuration footprint completed by the end of 2024. The main reason is that the agency still needs to reach agreements with 12 of the 38 local agencies and utilities on utility relocations.

Simultaneously, the rail authority received a letter from Kyle Fields, chief counsel of the Federal Railroad Administration (FRA) informing it that FRA is about to initiate a review of the CHSRA’s compliance with FRA-administered grants to the project. Per the letter, FRA completed its annual monitoring review in October. It identified six areas of interest and said that “FRA intends to seek additional information to evaluate CHSRA’s performance and ability to perform under FRA-administered funding agreements.” The letter also noted that “the compliance review and resulting findings may result in remedial action up to and including withholding of reimbursement and termination of cooperative agreements.” And finally it warned that “any work completed from the date of this notice forward is at the risk of CHSRA.”

This implicit threat to the project’s future aroused the U.S. High-Speed Rail Coalition, which announced that it is “going to war to protect the Calif. project.” Specifically, the coalition plans to lobby in favor of CHSRA continuing to receive 25% of the proceeds from California’s cap-and-trade system, which has been providing about $1 billion per year to CHSRA. Politico’s Feb. 25 article on the subject noted that HSRA has received about $7 billion in proceeds from the greenhouse gas permits since 2012. That’s more than the two FRA grants that totaled $4.1 billion for the Bakersfield to Merced segment.

It’s still unclear where the California High-Speed Rail Authority expects to get enough money to finish the one segment on which it has actually begun construction, let alone the remainder of the promised Los Angeles to San Francisco corridor.

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Time to Repeal the Jones Act

America’s shipbuilding has declined precipitously over the past hundred years, thanks to the enactment of the Merchant Marine Act of 1920 (the Jones Act). Intended to incentivize robust U.S. shipbuilding and commercial fleet, this law has done just the opposite. By requiring all ships built in the United States and operated between U.S. ports to be U.S.-built, operated by U.S. companies, and crewed by U.S. crews, it has led to an aging fleet (fewer than 100 now, compared with more than 250 in 1980).

Besides decimating U.S. shipping, the Jones Act has needlessly increased the cost of goods needed by residents of Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, and other overseas U.S. territories because of the Act’s requirement for all goods transported between U.S. ports to be Jones Act compliant. With only a handful of very costly ships available, residents there pay much higher prices for everything they “import” from the mainland. Beyond that, the Jones Act also penalizes residents of the New England states who cannot receive natural gas shipments from Texas or Louisiana because there are no Jones Act-compliant LNG tankers.

With previous attempts to repeal the Jones Act having failed in Congress, a new front was opened last month, when the Pacific Legal Foundation (PLF) filed a lawsuit in federal district court arguing that the Act violates a provision of the U.S. Constitution. Article 1, Section 9 forbids any federal law that gives preference to one port over another. PLF argues that from its outset the Jones Act has served a “discretionary” purpose. PLF attorney Joshua Thompson told Reason’s Eric Boehm that “The Port Preference Clause was designed to prevent this exact type of economic discrimination.” Sam Heavenrich, in a 2023 Wall Street Journal op-ed, wrote that “A case arguing that the Jones Act violates the Port Preference Clause would hew to Founding Era understandings of the Constitution—an important consideration for an increasingly originalist Supreme Court.”

As I’ve often pointed out, I have no legal training beyond one business law course decades ago. But I’m glad to see this constitutional point being raised. Perhaps the Supreme Court will do what Congress has been unable or unwilling to do.

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For Access to Jobs, Driving Remains King
By Baruch Feigenbaum

In Oct. 2024, the Access Observatory at the University of Minnesota released the 2022 version of the Access Across America report. The Observatory has been tracking accessibility using a longitudinal method for the last 15 years. While the number of jobs that can be reached in 30 and 60 minutes changed slightly compared with 2019 data, the takeaway remains the same: commuters choosing automobiles can reach far more jobs than those choosing transit, bicycling, or walking.

To better illustrate the differences, I chose to examine in more detail the largest metro area (New York City), a very large metro area (Atlanta), a large metro area (Milwaukee), and a medium-sized metro area (Salt Lake City). (The study uses the same Metropolitan Statistical Area (MSA) boundaries as the Census Bureau). These metro areas also represent different areas of the country with different average ages, and different majority/minority groups. I compared the 2022 data with 2019 data that my colleague Marc Scribner sorted for a different project.

The study looked at four modes: driving, transit, bicycling, and walking. For driving, the study also examined the percentage of trips impacted by congestion. For cycling, the study measures trips on low-stress and medium-stress roads. (Low-stress trips are more suitable for bicycling based on factors including traffic volume, prevailing speed, and curb lane width). Finally, walking data is limited to 2022.

Let’s start with the auto mode. Commuters in most MSAs can reach about 30% of jobs within 30 minutes and 80% of jobs within 60 minutes. Table 1 provides more details.

 
Comparing 30-minute-trips and 60-minute trips, more jobs are accessible in every MSA. Between 2019 and 2022, the percentage of jobs accessible increased in all MSAs. Decreasing congestion, likely due to working from home, was a major factor. All MSAs saw statistically significant decreases in congestion, led by Atlanta, where congestion as a significant factor in trips declined from 27% to 16%.

Table 2 shows that accessibility by transit is much lower.

For trips under 30 minutes, transit’s share of access was 2% or less in all MSAs in both years. For trips up to 60 minutes, the highest number was 21% in Salt Lake City due to a single entity (the State of Utah) providing well-designed service. In 2022, in the transit capital of the U.S., New York City, only 13% of people could reach jobs via transit in less than 60 minutes. Five times as many New Yorkers, 10 times as many Milwaukee residents, 12 times as many Salt Lake residents, and 43 times as many Atlantans, could reach their jobs by autos compared with transit.

And the numbers aren’t much better for the active transportation modes.

For trips less than 30 minutes, bicycling’s share of access was 6% or less for all MSAs. Atlanta had fewer than 1% of commuters who could reach jobs on either the low or medium-stress roadways. In 60 minutes, the numbers increased to 3%, 7%, 14%, and 24% in Atlanta, New York, Milwaukee, and Salt Lake, respectively. Also, noteworthy is that bicycle accessibility increased in three of the four metro areas between 2019 and 2022. But comparing 60-minute auto and bike accessibility, auto was still 8 times better in Salt Lake, 10 times better in New York, 13 times better in Milwaukee, and 29 times better in Atlanta.

Table 4 shows that walking performs the worst.

Walking’s share of accessibility was less than 1% in all regions and only 3% at best for any region in 30 and 60 minutes respectively. Walking is the slowest mode, so it’s not surprising that it lags. But comparing 60-minute auto and walking accessibility, auto was 64 times better in Salt Lake City, 67 times better in New York, 86 times better in Atlanta, and 91 times better in Milwaukee. In other words, in all metro areas, walking is not competitive in most situations.

The study does have some limitations. It measures jobs in percentages, not absolute numbers. Even though a higher percentage of jobs are reachable in Salt Lake, New York City has a much higher absolute number. When it comes to matching employers and employees, New York or even Atlanta have significant advantages. For 60-minute trips, it is easier to drive or take transit than it is to bicycle or walk. Few Americans are going to bicycle for two hours, five days a week, and fewer will walk. And that’s not taking into account extreme heat, cold, rain, or snow.

Driving is significantly better than any other mode in both time buckets that I examined. While each mode is competitive for some types of trips, driving is the best mode for all of them. Many detractors of the status quo will point out that changing land uses and development patterns could make other modes more competitive with driving. While this is certainly true, one type of development pattern change, mixed-use communities, tend to be more expensive, limiting options to wealthier residents. More importantly, we’re not going to tear up existing developments to change travel patterns. The 2022 data reaffirm that for the development patterns that we have, driving will remain king. 

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Donald Shoup, R.I.P

It’s not often that an academic, especially one whose specialty is a mundane topic like parking, gets major obituaries in both The Economist and The Wall Street Journal. But Donald Shoup became known for his encyclopedic knowledge of how and where cars should be parked, and an array of related topics.

I got to know Don during the 17 years my wife and I lived in Los Angeles, Lou in the Chancellor’s Office at UCLA and me at Reason Foundation in West Los Angeles. Lou remembers Don as one of several outstanding UCLA scholars, including for his commitment to his students and his financial honesty in managing grants. I got to know him at the annual UCLA transportation conferences at Lake Arrowhead—and at least once, giving him a ride home from a conference in Orange County or San Diego because Don didn’t drive. He rode his bicycle from his Westwood home to the UCLA campus.

Don did pioneering work on all aspects of urban parking, including variably priced parking meters  (which appealed to me), building-code parking space minimums (in my view over-done, but not wrong in principle), and parking benefit districts. His ideas reformed parking in Old Town Pasadena, where Lou and I loved to spend evenings, going to a restaurant and then perusing galleries and bookstores. We never had trouble finding a parking space in the new parking structure behind the commercial real estate along Colorado Blvd.

When Don’s magnum opus (The High Cost of Free Parking) came out in 2005, I eagerly bought a copy and would have had him autograph it, but we’d moved to Florida in 2003, and I seldom flew back for the annual Lake Arrowhead conference.

One thing I learned from The Economist’s piece was that Don was a fan of Henry George’s single tax (on land, not buildings), which I would love to see implemented somewhere to see how it would actually work.

Thanks for all you taught us, Don. R.I.P.

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News Notes

Georgia DOT Finalists for I-285 East P3
Late last month the Georgia Department of Transportation announced that four teams have been selected as finalists for the $3.2 billion first phase of the I-285 Eastside Express Lanes project. The RFP will be released in March, with proposals due in the second quarter of 2026, and the preferred bidder announced in the third quarter. The project will add express toll lanes to the northeastern portion of the I-285 ring road around Atlanta. The four teams are led by (1) ACS Infrastructure/Meridiam/Acciona, (2) Plenary/Sacyr/Shikun & Binui, (3) Vinci Highways International, and (4) Cintra/Transurban/Tikehau Star Infra. The project, like the ongoing SR 400 project, will be a revenue-risk design-build-finance-operate-maintain P3.

North Carolina DOT Planning I-77 South Express Lanes P3
After the Charlotte Regional Transportation Planning Organization agreed with NCDOT that a P3 was the best way forward for this $3.2 billion project, the department of transportation (DOT) has begun work to define how this will be carried out via a working group with CRTPO. They plan to have defined the terms of a Request for Qualifications by June, with the release of it tentatively in August. Because most of the corridor between downtown and the South Carolina border will have to be elevated, this will be the most costly transportation project in North Carolina’s history.

Some Progress on Truck Bottlenecks
The trucking industry think tank, ATRI, has released its annual report on this country’s 100 top truck bottlenecks. Most occur at major intersections where capacity is overwhelmed at busier times of day. In this year’s study, one of the long-term top 10 bottlenecks has been removed from the top 10: the interchange where I-290 and I-90/I-94 intersect in the Chicago area has been rebuilt and is now only #14 after years as #1. The current top 10 includes perennial “winner” I-95 at SR 4 in Fort Lee, NJ, with #2 this year being I-294 at I-290/I-88 in the southern portion of Illinois’ Tri-State Toll Road. Perennial bottlenecks 3, 4, and 5 are old friends in Houston, Atlanta, and Nashville.

Major Italian Toll Road Concession Up for Bids
The A22 Brennero-Modena motorway P3 concession is nearing its end, so the incumbent and others are preparing to bid later this year for the new concession to begin next January. The new concession will be for 50 years and the existing company (Autobrennero) will have a right to match offers from other bidders. Autobrennero is proposing to add a third lane each way along the 314 km motorway, bringing planned investment under a new concession to €9.2 billion.

Congressional Budget Office on Highway Trust Fund Deficit
In a report released in January, the CBO calculated that under current highway user tax rates and spending policies, a five-year renewal of the Highway Trust Fund would require at least $150 billion in new general-fund bailouts. That sum would add to federal government budget deficits and would increase the national debt by that amount. In order not to make those problems worse, Congress would need some combination of user-tax increases and reduced surface transportation spending. The problem will get worse each year, due to continued replacement of older vehicles by those with higher mpg or some form of electric propulsion. Congress needs to bite the bullet on this as it crafts the 2026 reauthorization bill.

Florida I-4 Express Lanes Switch to Variable Rates
Unlike nearly all express toll lanes across the country, the relatively new ones on I-4 in and near Orlando have charged flat rates since they opened in 2022. On Feb. 24, dynamic pricing was introduced on these lanes. Toll rates will now vary in real time, based on traffic levels in the lanes. FDOT’s decision was based on reviewing the performance of variably priced express lanes in metro areas including Miami and the Virginia suburbs of Washington, D.C.

Nikola Bankruptcy Raises Questions About Hydrogen Trucks
On Feb. 19, Nikola Corporation filed for Chapter 11 bankruptcy protection, planning to auction off its meager assets. Nikola went public in 2020 with a market valuation of $30 billion. Upon filing, it had only $47 million in cash on hand and has proposed to auction off its remaining assets. Another hydrogen truck company, Hyzon, in December warned of mass layoffs, according to an article in the Wall Street Journal headlined “Hydrogen-Powered Big Rigs Face Reckoning After Nikola Bankruptcy.” Reporter Paul Berger noted that only Hyundai retains any sizeable profile in producing hydrogen fuel cell big rigs.

India Plans to “Monetize” 24 Highway Assets
Infralogic (Feb. 25) reported that India’s National Highway Authority plans to monetize 1,4721 km of highways, with annual revenues of $213.6 million in 2023-24. These motorways will be monetized by highway companies under the established Toll-Operate-Transfer policy. Would-be operators would pay an up-front concession fee and propose a toll rate schedule over the life of the concession period. The Highway Authority would use the proceeds to upgrade other categories of roads.

Inglewood’s $2.2 Billion Transit Connector Cancelled
A planned 1.6-mile transit connector project in Inglewood, CA was recently canceled after several former supporters turned against it. The concept was to connect an existing light rail line to the new SoFi Stadium, the Intuit Dome, and an existing venue called The Forum. The project had federal and state grant commitments for $1.4 billion plus funds from two Los Angeles transportation sales taxes ($108 million from Measure M and $250 million from Measure R), but that still didn’t cover the projected $2.2 billion cost. According to Public Works Financing (Jan. 2025), a key factor in the cancellation was a former booster, Rep. Maxine Waters (D-CA) turning against the project as simply too costly.

Dulles Greenway Sues Virginia
Infralogic reported (Feb. 24) that Toll Road Investors Partnership II (TRIP II) has filed suit objecting to the state having taken some of its property for public use, without compensation. This suit is separate from a previous appeal by TRIP II of the State Corporation Commission’s 2024 toll rate decision. The Dulles Greenway was approved prior to the enactment of Virginia’s P3 legislation, so it was set up as a new category of public utility. That means its toll rates are regulated by the Corporation Commission just like it regulates electric utilities. Trip II is owned by P3 company Atlas Arteria.

A $10 Billion Bus Terminal
The long-planned replacement of the Port Authority Bus Terminal in Manhattan recently won a federal TIFIA loan of $1.89 billion toward its $10 billion cost. The 1950 terminal is aging and under-capacity for a large number of buses, primarily bringing New Jersey commuters into Manhattan via the adjacent Lincoln Tunnel. The first phase of construction is due to start this year, with a completion date of 2029. The main terminal schedule calls for completion by 2032.

Rivian Starts Producing Its Commercial Van
Electric vehicle company Rivian, having delivered some 20,000 electric delivery trucks to Amazon, announced the launch of its Rivian Commercial Van in partnership with J.B. Poindexter and Co., a work truck and van body producer. The new Commercial Van is built on the same platform as the vans produced for Amazon.

Good Reading on Intercity Bus Service
Greg Cohen recently authored a commentary on the role of intercity bus service as a cost-effective alternative and supplement to Amtrak and other rail transportation services. The piece points out that intercity bus service for some routes is eligible for very small federal subsidies, compared with Amtrak and other rail services. The report was released by the Eno Center for Transportation last month.

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Quotable Quotes

“The Bipartisan Infrastructure Law did little to address the root causes of the United States’ long-standing infrastructure unaffordability problem—excessive environmental reviews, labyrinthine permitting processes, and laws requiring that workers are paid prevailing wages—and in some respects worsened the crisis by adding new requirements. The permitting reform that was supposed to pass in parallel with the climate bill never became law. . . . Spending such a huge amount all at once without any steps to increase construction capacity led to even higher cost increases for building materials than was reflected in the overall inflation rate.”
Jason Furman, “The Post-Neoliberalism Delusion and the Tragedy of Bidenomics,” Foreign Affairs, March/April 2025

“None of these projects [Erie Canal, Transcontinental Railroad, Interstate Highways] could be built today. Would environmentalists, if given a time machine, insist on canceling them? Some could certainly have been done better—for example avoiding Interstate highways through the heart of cities. But even knowing these harms, would it have been smart to delay the Interstate Highway System for a few decades while the impacts of the first 20,000 miles were studied? America’s economy today consists of millions of moving parts that come together on the spine of our nation’s infrastructure. Most of that infrastructure was built by our ancestors without the wisdom imparted by environmental review. Roads, rail, ports, power, electric lines, water, waste disposal, and other shared resources allow markets to hum, entrepreneurs to innovate, defense to mobilize, and citizens to be safe and comfortable. Those demanding a ‘hard look’ at details of projects are doing so from the comfort of a society that never could exist on the terms they demand.”
—Philip K. Howard, “Escape from Quicksand: A New Framework for Modernizing America,” The Manhattan Institute, Feb. 2025

“Even the Biden Energy Department, in a 2023 report, estimates that power from new onshore wind farms costs more than from gas-fired plants on a per-megawatt basis if you exclude subsidies. On the other hand, offshore wind costs two to three times more than gas power even with subsidies. These estimates notably don’t account for the cost of backing up wind generation. Power from so-called peaker plants and batteries costs three to four times more than from baseload generators. It’s far cheaper to run gas, coal, and nuclear plants around the clock than to use wind (and solar) some of the time and have to back them up with other forms of energy.”
—Editorial, “Trump Speaks Truth to Wind Power,” The Wall Street Journal, Jan. 13, 2025

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The post Surface Transportation News: Big news on environmental permitting appeared first on Reason Foundation.

• Is it time to rethink U.S. DOT’s role?
• INRIX report details global traffic congestion
• State bills banning driverless vehicles
• Can New York’s congestion charge actually finance $15 billion in transit?
• Michigan bill seeks to mandate cash tolling
• U.S. EV sales increased in 2024, at a slower pace
• Cliff Slater, RIP
• News Notes
• Quotable Quotes

Is It Time to Rethink the U.S. Department of Transportation’s Role?

Prior to last November’s election, there was considerable concern over the Heritage Foundation’s Project 2025 report, which proposed major changes across the federal government. The only part of it that I have read is Chapter 19, on the U.S. Department of Transportation (DOT). That chapter, edited by policy researcher Diana Furchtgott-Roth, includes a number of reasonable ideas. In a discussion of this chapter in his newsletter The Dispatcher, editor Michael Sena summarizes its message as “DOT is not doing what it should be doing and is doing things that either should not be done at all or would be better done by states and the private sector.”

Sena also notes the chapter’s statement that much of the DOT “has become a de facto grant-making organization, choosing winners and losers and neglecting the real needs of American citizens.”

Rather than further summarizing what that report recommended, let’s take a look at the first DOT policy notice released by the new Trump administration. The copy I received and printed comes from the Office of the Secretary and is signed by Sean Duffy, but it has no date. Its subject is: “Ensuring Reliance Upon Sound Economic Analysis in Department of Transportation Policies, Programs, and Activities.” It’s hard to argue with that objective, but this DOT Order goes well beyond that. It applies to all of DOT’s operating administrations, including the Federal Highway Administration (FHWA) and Federal Transit Administration (FTA).

The heart of the document is section 5, “Policies.” The first states that all grantmaking, lending, policymaking, and rulemaking activities “shall be based on sound economic principles and analysis supported by rigorous cost-benefit requirements and data-driven decisions.” In explaining this, it goes on to say that “benefits must be estimated to outweigh the costs.” (I would have changed “estimated” to “demonstrated.”) It also notes that the Environmental Protection Agency (EPA) administrator has been ordered to issue guidance on calculating the “social cost of carbon.”

The next several paragraphs go on to require that transportation department policies, programs, and activities must avoid “adverse effects on families and communities” and maximize benefits for families and communities. Another paragraph states that all DOT-assisted programs and activities “shall not be used to further local political objectives,” and all such projects must “not depend on continuous or future DOT support or assistance.”

But the really radical part of the document is “5f,” which has five requirements:

• Utilize user-pay models [good, in my view]
• Direct funding to local opportunity zones, where permitted [OK]
• Mitigate impacts of DOT activities on families…and give preference to communities with marriage and birth rates higher than the national average…[Huh?]
• Prohibit recipients of DOT support or assistance from imposing vaccine and mask mandates [???]
• Require local compliance or cooperation with Federal immigration enforcement.[!!!]

Also, every Department of Transportation Operating Administration is directed to: “Review their existing grant agreements, loan agreements, and contracts, and, to the extent permitted by law, unilaterally amend the general terms and conditions to ensure compliance with Federal law and consistency with this Order.”

For those who worried about radical change after reading the Heritage Project 2025 document, there was nothing in its Department of Transportation chapter to compare with this. Republicans and conservatives have often complained about federal agencies imposing all kinds of policy changes on recipients of federal grants, loans, etc., imposing things never enacted by Congress. They complained repeatedly about the Biden administration imposing whole-of-government “equity” policy mandates on grant recipients. It now appears that the Trump administration is doing the same kind of thing—imposing its own social policy preferences.

There was nothing in the Heritage Project 2025 report’s transportation chapter about devolving much of the transportation department’s funding to the states, as some critics expected or feared. But it strikes me that if DOT proceeds with these kinds of social mandates in its grant and loan programs, there could well be a backlash that revives interest in something like the kind of devolution that was on the congressional agenda in the 1990s. The high point of that effort was the devolution bill sponsored by Sen. Connie Mack (R-FL) and Rep. John Kasich (R-OH). It would have phased out over two years all but two cents of the federal gas tax, with that remainder dedicated to roads on federal lands and Indian reservations plus some FHWA oversight. In that scenario, FHWA would be more of a regulatory and research agency than a grant-maker. There was support for this idea from Brookings scholar Alice Rivlin and Harvard Kennedy School scholar David Luberoff. I wrote a Reason Foundation policy study, “Defederalizing Transportation Funding,” that year and spoke about it at transportation conferences.

Given this background, I wouldn’t be surprised if new support for devolution came from the center-left rather than from the right.

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INRIX Report Details Global Traffic Congestion

Last month, data firm INRIX released its “2024 INRIX Global Traffic Scorecard.” Its congestion data elements are from 2024, with mode choice data from 2023. So, the congestion data are more current than the 2022 congestion data that I reported on in the Jan. 2025 issue of this newsletter.

INRIX uses data collected from smartphones in vehicles traversing 946 urban areas in the United States, Germany, and the United Kingdom. The scorecard does not list all of these; its tables generally focus on the top 25 metro areas in each of the three countries. Other tables zero in on the most congested roadways in these countries.  Overall, 55% of the metro areas saw increased congestion in 2024 vs. 2023; 28% experienced less; and the remainder had negligible change.

The average annual amount of travel delay was 43 hours in the U.S., 43 hours in Germany, and 62 hours in the U.K. The estimated annual congestion cost per driver was $771 U.S., $726 U.K., and $489 Germany. The estimated total cost of these delays was $74 billion U.S., $9.5 billion U.K., and $3.9 billion Germany.

One data element tracked by INRIX is the average commute distance. Figure 8 in the report is a bar graph showing the range for U.S. commuters. These figures range from a low of 3.7-4.2 miles to a high of 9.5 to 10.1 miles. As a former commuter in Los Angeles, I’m skeptical of those numbers. I realize that super-long one-way commutes are outliers, but I wonder what fraction of large metro areas are included in INRIX’s data collection. Interestingly, the average INRIX commute distance by country is reported as 7.2 miles in the U.S., 8.8 miles in the U.K., and 9 miles in Germany. That’s the opposite of what I would expect, given widespread images of U.S. urban sprawl versus denser and more compact urban areas in Europe.

Of the world’s largest cities, 2024’s 25 most-congested ones range from Istanbul at #1 to Toronto at #25. On this list, three U.S. metros are in the top 10 (New York, Chicago, and Los Angeles), and of the top 25, 10 are American cities (adding Boston, Philadelphia, Miami, Houston, Atlanta, Washington, D.C., and Seattle). In the table of the 25 most-congested U.S. metro areas, New York, Chicago, Los Angeles, and Boston retain the top four positions, with Philadelphia moving up to #5 (from #6 in 2023). The only newcomer to this top-25 is Tampa, which was 28th in 2023. The 2024 cost per commuter ranged from $1,825 in New York to $609 for Tampa.

Total congestion cost in the top 10 U.S. metro areas according to INRIX is as follows:

The INRIX Scorecard also reports changes in U.S. telecommuting, in this case relying on 2023 Census Bureau data. Its headline finding is “telecommuting drops most in tech-heavy metros.” Its Table 3 shows work-from-home decreasing by between 33% (San Jose) and 14% (D.C.) in 2023. But to put those numbers in context, Table 4 compares 2023 with pre-pandemic 2019 and shows that telecommuting is still 234% greater than 2019 in San Jose, 185% greater in New York, and 248% greater in Washington, D.C. I expect those percentages to be somewhat lower when 2024 figures are available, given many firms’ attempts to get employees to spend more time in the office. The same Census Bureau (ACS) data show that as of 2023, transit use was down 40% in San Jose, 49% in San Francisco, and 37% in Washington, and nobody knows how much of 2019 transit use is gone forever.

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State Bills Banning Driverless Vehicles Introduced
By Marc Scribner

The automated vehicle (AV) industry may on balance have a more supportive federal policy environment under the Trump administration, which I discussed in last month’s newsletter. However, the state AV policy landscape in 2025 may be trending in the wrong direction. Union-backed legislation would require commercial vehicles equipped with automated driving systems to operate with human operators inside the vehicles. This would outlaw driverless vehicles and undermine the business case for AVs—and thereby prevent the realization of the safety benefits promised by AV developers.

California was the first state to propose a statutory ban on driverless vehicles exceeding 10,000 pounds with Assembly Bill (A.B.) 316 in 2023. As I highlighted in the Feb. 2023 issue of this newsletter, the International Brotherhood of Teamsters made no secret that they were responsible for this bill, hosting a large rally with the bill sponsors outside the state capitol in Sacramento just days after it was introduced. Bill sponsor Assemblymember Ash Kalra told the union truck drivers in attendance that his legislation was aimed at protecting “the jobs that you all rely on.”

The Teamsters also framed their campaign in California—a union-friendly state controlled by a single-party supermajority—as a national bellwether for protecting the union’s ability to collect dues from human drivers against the tide of robot competition. “So goes California, so goes the rest of the nation. If we lose this, we’re never getting them back,” Teamsters Vice President Lindsay Dougherty told the crowd, according to a Los Angeles Times report on the rally.

A.B. 316 passed the California State Assembly in a lopsided 69-4 vote and the Senate in an equally lopsided vote of 36-2. Then something surprising happened: Gov. Gavin Newsom vetoed the bill. When legislation to ban AV trucks was introduced again in 2024 as A.B. 2286, and again passed the legislature in lopsided votes, Gov. Newsom again vetoed the bill.

Two back-to-back failures have so far deterred California legislators from reintroducing the bill in 2025. But the Teamsters’ prediction of California as a national bellwether may have been premature. In the current legislative session, various bills to ban driverless vehicles have been introduced from Delaware to New Mexico. They vary in their drafting and application, but each bill would require a licensed driver to be seated inside a driverless-capable vehicle while that vehicle is operated on public roads.

Some bills focus on banning driverless vehicles based on their weight. Following California’s failed approach, Maryland House Bill (H.B.) 439 and its companion Senate Bill (S.B.) 405 would require any autonomous vehicle weighing more than 10,000 pounds to have a human driver “fully present” in the vehicle during operation. Colorado’s H.B. 1122 adopts the California approach with a superficial difference by prohibiting driverless “commercial motor vehicles,” which are defined in state law as vehicles weighing over 16,000 pounds designed to carry freight or at least 16 passengers.

Other bills focus specifically on banning driverless semi-trucks. In Delaware, S.B. 46 bans driverless operations by any vehicle that “requires a Class A commercial driver license without an O restriction”—which is the license required to drive a tractor-trailer. In Indiana, both H.B. 1057 and H.B. 1377 would ban driverless “automated tractor-trailers.” In North Dakota, H.B. 1614 would ban driverless “automated truck tractors.”

Indiana’s H.B. 1057 and North Dakota’s H.B. 1614 which would prohibit driverless semi-trucks are especially interesting because they were introduced by Republicans in states with right-to-work laws that prohibit “closed shop” workplaces that condition employment on union membership. This would have been politically unthinkable just a few years ago, but the increasingly populist Republican Party has been wavering in its skepticism toward organized labor.

This anti-AV unionism on display within the GOP is perhaps most surprising in Tennessee. The Volunteer State is not only one of the 26 right-to-work states but also the most recent of nine that enshrine right-to-work laws in their state constitutions, with 70% of Tennessee voters approving the right-to-work constitutional amendment in 2022. Tennessee’s recently introduced S.B. 310 would outlaw driverless vehicles carrying both property or passengers “for hire or compensation.” This ban would encompass autonomous semi-trucks on Interstates as well as robotaxis on Nashville streets.

Nashville is attempting to position itself as a technology-focused regional economic powerhouse, much like Austin before it. Leading robotaxi developer Waymo has already announced plans to expand to Austin and Atlanta in 2025, and Miami in 2026. Nashville’s future growth and the state’s general reputation for business friendliness will undoubtedly be damaged if Tennessee adopts pro-union legislation that was rejected in California for being too extreme.

With S.B. 310, Tennessee’s proposed ban on driverless vehicles operated “for hire or compensation” is only slightly more permissive than legislation introduced in union-friendly New Mexico (H.B. 148) and Washington State (S.B. 5042) that would ban all driverless vehicles, regardless of whether they are operated for commercial or non-commercial purposes. This could have significant consequences for transportation safety.

The latest research conducted by leading reinsurance company Swiss Re and Waymo analyzed 25.3 million miles of driverless operations and insurance claims at the ZIP code level in the Austin, Los Angeles, Phoenix, and San Francisco metropolitan areas. The researchers found that Waymo’s automated driving system was far safer when compared to a typical human driver—with an 88% reduction in property damage claims and a 92% reduction in bodily injury claims.

The safety benefits of AVs are real and are already being realized. State legislators pursuing anti-AV legislation should understand that they are preventing their residents from enjoying a safer transportation future. Fortunately, it is not too late for public officials to prioritize the public interest over special interest groups and avoid most of the potential harm of anti-AV policies.

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Can New York’s Congestion Charge Actually Finance $15 Billion in Transit Improvements?

The original congestion pricing plan for Manhattan called for financing $15 billion worth of transit improvements based on a new congestion charge for all motor vehicles in the busiest part of Manhattan. However, when Gov. Kathy Hochul introduced the revised plan in December (implemented last month), the original charge for passenger vehicles was reduced from $15 to $9 to make it more palatable politically. Less widely known, the plan calls for increasing that charge to $12 in 2028 and increasing it again to $15 in 2031.  But can a plan with lower initial revenues still finance $15 billion worth of improvements?

That question was raised in a standing-room-only session at the annual Transportation Research Board (TRB) conference in Washington, D.C., on Jan. 7. Prof. Jonathan Peters of the City University of New York gave a presentation that raised numerous questions about the Metropolitan Transportation Authority’s (MTA) plan, one of which was how this phased-in congestion charge affects the bond issue. These are still early days in the program, and no one yet knows how paying customers for Manhattan streets will adapt to the $9 charge over time, let alone to the two planned increases.

I asked Prof. Peters how bond buyers might react if the two planned increases did not take place as scheduled. There are no current disclosures of how bond buyers could be protected from the increased rates being deferred or not implemented at all, given potential changes in the state legislature or office of the governor. Perhaps this is analogous to toll-financed express lanes, which have been revenue-bond financed based on “investment grade” traffic and revenue projections. However, in those cases, there is a growing body of empirical evidence from successful projects that gives bond buyers confidence. Furthermore, these public-private partnership-type agreements often have toll escalation clauses included in the agreement so that bond buyers have a legal commitment by the operator to increase tolls in accordance with that contract. Because of that contract, the developer/operator can typically bond against the additional revenue provided by future increased toll rates.

In his TRB presentation, Peters showed several alternative financing plans for the MTA’s congestion-revenue bonds. Assuming $15 billion ”triple tax-free bonds with a 20+ year maturity at 3.50% interest,” he modeled the original project with the $15 charge from the outset. His spreadsheet showed 21 years to pay off the bonds (assuming the revenue met expectations). His second spreadsheet showed the payoff projections if they kept the initial $9 charge indefinitely. In that case, the bonds would take 61 years to pay off. Peters’ third spreadsheet assumed MTA again issued $15 billion worth of bonds, but with reduced revenues in the first six years until the $15 rate finally kicked in as of 2031. The lower revenues in the first six years made a significant impact, with the bonds not paying off before 26 years. And that assumes that the government will hold to the stated increases. If they delay the increases or change the rates, the payoff could be 30 years or far longer.

The problem here is likely MTA’s insistence on borrowing the original $15 billion in order to pay for all the promised transit improvements. I wonder if anyone at MTA has considered prioritizing that whole set of improvements, reducing the total to downsize the bond issue to match the reduced revenue in the early years.

Another question, beyond my financial knowledge, is what assurance can MTA, New York City, or New York state provide to bond buyers (of the $15 billion bond) that the increases to $12 and then to $15 will actually take place? Even once MTA has a year’s worth of traffic and revenue from the first year at the $9 rate, how elastic will the response to higher prices be? Even if the increases have solid political “guarantees,” will the revenues increase proportionally?

These questions all need to be answered before MTA attempts to issue its bonds.

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Michigan Bill Seeks to Mandate Cash Tolling
By Baruch Feigenbaum

While most states and other countries are moving to All Electronic Tolling (AET) cashless toll collection systems, a group of Michigan lawmakers wants to move the state in the other direction. Michigan House Bill (HB) 4015, introduced in the Legislature and referred to the House Transportation Committee, would mandate all toll roads and bridges accept cash as a form of payment.

One goal of the bill is to strengthen privacy and provide choice, two important elements in any transportation system. The authors worry that toll transponders could be used to determine the location of a vehicle. And they want drivers to have multiple payment options.

However, multiple payment options already exist on different toll roads. Instead of mandating cash, the bill’s sponsors should amend the bill to ensure choice.

Before detailing the other options, let’s examine the problem with cash. First, the cash collection costs are about three times higher than those with AET. Cash collection requires building toll booths and hiring and paying tollbooth operators. Cash collection is prone to “shrinkage,” or lost revenue. For example, if drivers pay $100 million in cash tolls, the state might collect only $98 million because the rest disappears, often into toll collectors’ pockets. Sometimes, drivers who don’t have a transponder account will not have the cash, especially exact change. How many people carry a bunch of quarters, dimes, and nickels in their wallet these days? Sometimes, toll booth operators will allow vehicles through who do not or cannot pay.

Second, the quarter mile on either side of a toll plaza is the most dangerous section of a limited-access highway. Vehicles must change speed and change lanes to enter a queue to pay a toll. Occasionally, a toll booth operator will walk across the highway to speak with a manager. A nationwide U.S. Department of Transportation study found that removing toll booths reduces crashes by 73%. A second study of 750 miles of toll roads in Florida found that AET reduced crashes between 68% and 80%.

Third, toll booths create traffic congestion, especially in metro areas. The Florida study found that vehicle throughput can increase by up to 18% when toll booths are removed. That might not seem like a lot, but even an increase of 5% can significantly reduce congestion. Eighteen percent is roughly equivalent to adding two lanes to an eight-lane highway. And unlike new highway lanes, which will cost millions if not billions of dollars, the cost of removing toll booths is a rounding error.

But the Michigan bill sponsors are correct that Michiganders, and all U.S. drivers, deserve options. Thankfully, we have two options, both of which have low collection costs, no safety problems, and do not worsen traffic congestion.

The first option is license plate tolling. Approximately 20 states use license plate tolling, with the top five being Florida, New York, California, Texas, and Virginia. Drivers pass through the toll gantry and are sent a bill. License plate tolling usually includes an administrative fee, but in most states, if the driver goes to the toll operator’s website within 48 hours of driving on the road, the fee is reduced or waived. For example, Florida’s Turnpike charges a flat $2.50 administration fee for all of the tolls drivers incur over a 30-day period. Drivers do not need an account. They do not need to install a transponder. Often, the state does not have their information since a private contractor collects the tolls.

However, for customers who have privacy concerns and/or want to avoid any administrative fees no matter how small, another option long popular in Europe is roadway vignettes. With a vignette, drivers purchase a sticker for a given number of days that a motorist can drive in a given geographic area or for a distance that a motorist can drive on a highway. For example, when I was in Austria for a conference, I purchased a 14-day vignette to drive on tollways in the country.

In Michigan, drivers could go to gas stations or toll road service centers and purchase a pass based on the distance that they planned to drive. They would not need a credit card; they could purchase the vignette with cash or a debit card. Motorists who don’t buy a vignette, or who try to manipulate the system by buying a vignette for five miles and then traveling 20 miles, would be subject to license plate tolling. But as long as drivers pay for the amount of roadway that they use, their information will not be collected, the government/private sector will not have any information about where they traveled, and they will not need to buy a transponder.

I applaud Michigan lawmakers for wanting to give their constituents options. But mandating cash tolling is not the answer. Offering options such as license plate tolling and vignettes will give drivers choices without burdening transportation agencies with high collection costs, worse roadway safety, and added traffic congestion.

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U.S. Electric Vehicle Sales Increased in 2024, But at a Slower Pace

Several readers questioned last month’s article about setbacks for electric vehicles (EVs) in the United States. The reference in the article to “declining EV sales” should have referred to a reduction in the rate of increase rather than a net decline.

Traffic consultant Ed Regan sent me a detailed spreadsheet after the January newsletter went out, with data on U.S. light-duty vehicle sales per month for the years 2011 through 2024 (but only 11 months for the last year). Overall, light vehicle sales totaled 15.9 million in 2024, a 2.6% increase over 2023. Total plug-in electric vehicles (BEVs and PHEVs) reached 1.59 million, which was a 6.5% increase over 2023. By comparison, the increase from 2022 to 2023 was 14.3% and from 2021 to 2022 was 25%, and the increase the year before that was 50%. So, while there was an increase in EV sales last year, the rate of increase has been steadily decreasing, likely for some of the reasons mentioned in the article.

Thanks to Ethan Elkind of the University of California-Berkeley for bringing this to my attention, and to Ed Regan for providing the detailed data.

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Cliff Slater, R.I.P.

I was saddened to learn that transportation history analyst (and my long-time friend) Cliff Slater, of Honolulu, had died on Jan. 20 at age 91.

Cliff was a contemporary model of a Renaissance man. He grew up in London and joined the Royal Air Force (RAF) at age 17½. He served seven and a half years as an RAF navigator based in East Asia. After that, he became a charter boat captain in Europe, and while delivering a yacht to New Zealand, had to divert to Hawaii for repairs. He fell in love with Hawaii and ended up settling there, founding Maui Divers, which he built into an islands-wide chain specializing in high-end coral jewelry. And he met Bobbie, who became his wife for the rest of his life.

In addition to being active in the Honolulu business community, Cliff had a strong interest in transportation, especially transit. Several decades ago, after seeing the film Who Framed Roger Rabbit? Cliff decided to research the alleged General Motors plot to destroy America’s trolley lines by selling cities buses. His research led to a journal article documenting the dire straits of trolley lines nationwide, and their turning to more-flexible and less-expensive buses in cities where the GM group was active and everywhere else where it was not. (Roger Rabbit is not based on a true story.)

Cliff and I became friends in the 1980s when he became a fan of Reason Foundation, and over quite a few years he arranged speaking engagements for me in Honolulu, mostly about transportation. Thanks to his extensive research on urban transportation, he was an early skeptic of plans for a heavy-rail transit system for Honolulu, which after many years got approved and is still under construction (and way over budget).

Over the past decade, Cliff researched and wrote a detailed history of transit in the United States. Its controversial title is Transit: Its Growth, Decline, and Pending Demise. It’s encyclopedic in scope and well-documented with tables and citations to a great many books and journal articles, many of which I remember from decades ago. I reviewed the book in the Feb. 2024 issue of this newsletter. And I was honored to be listed as one of 14 researchers from whom Cliff had learned things that contributed to the knowledge base that enabled him to write this superb book.

Rest in Peace, my dear friend and colleague.

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News Notes

Highway Trust Fund Deficits in the Spotlight
Jeff Davis of the Eno Center for Transportation keeps reminding Congress that the federal Highway Trust Fund (HTF) is in serious trouble. In October, he cited a Monthly Treasury statement finding that the FY2024 shortfall (the gap between user-tax revenue and highway/transit spending) was $21 billion, up from $11.9 billion the year before. And on Jan. 20, 2025, Davis reported the Congressional Budget Office’s Highway Trust Fund forecast. The bad news is that under current tax rates and spending policies, the HTF would need at least $150 billion from the General Fund over the next five years (meaning borrowed from future taxpayers).

Think Tank Provides Facts About the Panama Canal
In the midst of claims that U.S. shipping is getting a raw deal from the Canal company, and that China somehow controls the Canal, Alvaro Vargas Llosa of the Independent Institute authored a commentary, “Setting the Record Straight about the Panama Canal.” The canal is operated and managed by the Panamanian Canal Authority, a government corporation. The recently completed project to enable much larger ships to traverse it cost $5.25 billion, financed largely by Canal tolls. Canal traffic to and from the United States generated $2.4 billion in tolls in FY2024. U.S. ships (military and civilian) pay the same toll rates as all other Canal users, based on the features of each ship. As for China, two of the six ports serving the Panama Canal are run by CK Hutchison Holdings, a Hong Kong based company with port operations in 27 countries, including our own Port of Long Beach. And the Port of Colon is operated by a Taiwanese company.

Colorado DOT’s WAL-E Wins Award
Last year, Colorado DOT implemented a new toll enforcement system on the I-70 Mountain Express Lane Corridor, after a two-year trial period. It uses a new technology solution from Blissway, called Wireless Autonomous Lane Enforcer (WAL-E). The inexpensive detectors are spaced alongside express toll lanes to identify vehicles without the required transponder that are in the tolled lanes illegally. Weaving in and out of the lanes to avoid toll gantries had become a problem. Identified violators are confirmed by Blissway’s human observers who send the information for enforcement. In the first year of operation, toll violations were reduced by 80%. WAL-E is now being added to all the CDOT’s express toll lane corridors. CDOT’s project was selected as one of five winners of the International Bridge, Tunnel & Turnpike Association 2024 Toll Excellence Awards.

Trump Revokes California Waiver on Banning Gas-Powered Cars
The Wall Street Journal reported on Jan. 23 that among several deregulatory executive orders from the Trump White House was one that rescinded the long-standing waiver that allowed California to adopt more stringent vehicle emissions requirements than federal regulations call for. The implications go beyond California since 11 states and the District of Columbia have passed laws piggybacking on the California waiver.

Laredo Considering Express Toll Bridges
Laredo, Texas’s first city council meeting of 2025 included a lengthy discussion of shifting from fixed tolls on the city’s bridges to variable tolls, aiming to improve traffic flow and reduce emissions from idling vehicles waiting to cross the bridges. Both the World Trade Bridge and the Colombia Solidarity Bridge are slated for expansion projects. Councilmembers directed city management to conduct a study of such a tolling change.
  
National VMT Pilot Advisory Board Finally Appointed
The Infrastructure Investment and Jobs Act (IIJA) included creating an advisory board for the long-planned national pilot program for per-mile (Vehicle Miles Travelled) charges. The blue-ribbon advisory board was supposed to be in place by Feb. 2022, but although qualified candidates were selected, the Biden White House took no action in 2023 and only released the names (with no publicity) on Dec. 3, 2024. The IIJA provision intended the pilot program to be designed and ready to implement early enough that lessons learned from it could be included in the 2026 surface transportation reauthorization legislation. That now looks highly unlikely, since the advisory board has not yet had a single meeting to begin designing the long-awaited national pilot test. Fortunately, those appointed appear to be well-qualified.

Electric Truck Mandates Under Fire in States
According to Kerry Jackson of the Pacific Research Institute, support for a mandated transition to electric trucks is in question. California’s plans for truck electrification were adopted by 10 other states, including Massachusetts, New Jersey, New York, and Oregon. Jackson cites concerns being raised in these states, for reasons such as the non-availability of electric snowplows and street sweepers. Separately, Nebraska Attorney General Mike Hilgers had an op-ed in the Wall Street Journal (Jan. 18) explaining that his state is part of a 24-state lawsuit against the EPA and a 17-state lawsuit against the California climate regulators.

SH 130 Concession Gets New CEO
The 41-mile toll road between Austin and San Antonio has recruited a new CEO, after its current one ended his term and relocated to Australia. Taking the reins is Ananth Prasad, former Secretary of Transportation in Florida and more recently CEO of the Florida Transportation Builders Association. Prasad has over 25 years of transportation experience, with HNTB and Florida DOT.

U.S. Highway Construction Costs Down Slightly in FY2025 Second Quarter
Quarterly increases in transportation construction costs soared at double-digit rates during fiscal years 2021, 2022, and 2023. Since then, quarterly changes have been in the single-digit range, with the April-June quarter actually down by 3.66% The data were released by FHWA on Dec. 26.

European Commission Considers Softening EV Mandate
As part of its new Competitiveness Compass plan, the European Commission is considering introducing some flexibility in its electric vehicle mandates, the Wall Street Journal noted. It suggests that the vehicle energy/emissions targets could be changed to be technology-neutral.
 
Reconsidering Robert Moses
As a transportation geek, I was fascinated by Robert Caro’s lengthy 1974 biography of Robert Moses, the powerful transportation leader who managed major transportation improvements in metro New York City for decades. As portrayed in The Power Broker, Moses bulldozed his way through opponents to impose his vision. But according to “Robert Moses, Reconsidered,” by Nicole Gelinas of the Manhattan Institute, many of the projects Moses led and managed were originated and championed by powerful planning groups, such as the authors and promoters of the 1929 Regional Plan of New York and Its Environs. It’s worth another look at Moses, who championed a whole system of parkways that were far “greener” than subsequent expressways.

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Quotable Quotes

“The idea that the last Administration and Congress, much less this one, would do goldilocks [permitting] reform, only fixing problems that environmentalists, clean energy advocates, and the climate movement were concerned about, was always fanciful. Just as a simple matter of politics, reducing the permitting burdens for clean energy was going to require fixing those burdens for everything—not just fossil infrastructure but things like transportation, forest management, and mining. Moreover, the days in which NEPA and other legacy environmental laws were used exclusively by environmentalists to stop things that were bad for the environment are long gone, if they ever existed. Even in that mythical past, those tools were often used to block things like nuclear power plants, rail projects, and housing that were clearly, on balance, good for the environment.”
—Ted Nordhaus and Nikki Chiappa, “Permitting Reform for Me and Not for Thee,” The Breakthrough Journal, Jan. 27, 2025

“[Gov]. Newsom only inspires more cynicism. It’s irrational and irresponsible to dismiss the many accurate critiques from the Legislative Analyst’s Office, an official engineering ‘peer review,’ and journalists who have documented a decade-plus of broken state promises. Examples:

• Voters were told in 2008 the $43 million project would be completed by 2020, But no route is close to done, and the price tag is now at least $135 billion.
• Voters were told in 2008 that private investors would be eager to invest in the project . . . But High Speed Rail Authority analysts warned months before Proposition 1A’s approval that private investors were very unlikely to team with the state because the measure banned public subsidies if the system was losing money. The analysts were exactly right. No credible private partner has ever come forward.
• The only conceivable way a bullet train could get from Los Angeles to San Francisco in less than three hours [as promised] is if it can go over 200 mph for much of the way. But it faced extreme obstacles in acquiring land in Silicon Valley and northern Los Angeles suburbs—way back in 2011! Instead, a ‘blended’ system reliant on regular commuter rail for the last 40 miles or more on each end of the trip was pushed through by Gov. Jerry Brown.

“This is only a short list of all that has gone wrong with the project on course to be the biggest public works boondoggle in U.S. history. Newsom should have listened in 2014 when a wonky, well-informed state leader announced he had concluded that the troubled project was no longer a worthwhile use of billions in taxpayer funds in a state with so many other needs. That leader: Lt. Gov. Gavin Newsom.”
—Editorial Board, “Sticking with Bullet Train Fiasco a Bad Look for Democrats,” San Diego Union-Tribune, Jan. 10, 2025

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The post Surface Transportation News: Rethinking the Department of Transportation’s role appeared first on Reason Foundation.

• Congestion is back, for trucks as well as cars
• Addressing diversion from toll roads and bridges
• Study analyzes NEPA permitting delays
• The electric vehicle debacle
• Federal automated vehicle outlook
• The evolution of Bestpass
• News Notes

Congestion Is Back, for Trucks as Well as Cars

Two reports have crossed my screen in recent months, both quantifying U.S. traffic congestion. The first, from several months ago, is the “2023 Urban Mobility Report” from the Texas A&M Transportation Institute (TTI). The second is the American Transportation Research Institute’s “Cost of Congestion to the Trucking Industry, 2024 Update.” Because of the delays in the availability of detailed congestion data, both of these 2024 reports cover U.S. congestion in 2022. The message of both studies is that traffic congestion is back, but not quite to the level of 2019.

The TTI report covers 494 U.S. urban areas, far more than in some of its earlier editions. The most detailed data are from 101 “intensively studied urban areas.” From the entire data set, the average annual delay per auto commuter was 54 hours in 2022, equaling the pre-pandemic delay from 2019. Most of the other 2022 data elements from this largest set of urban areas were 5-8% lower in 2022 than in 2019. Also, in this larger set, total travel volume (billions of miles traveled) was 5% lower in 2022 than in 2019. The only large increase was in urban truck congestion cost, which was 16% higher in 2022 than in 2019.

Turning to the 101 larger urban areas, in 2019 only five of them had less than 30 hours of delay per commuter, but in 2020 that number increased to 73; by 2022 only five urban areas had that little delay, the same as in 2019. In a table tracking key parameters for every year since 1982, the only figure that reached a new high in 2022 was the total cost of congestion, at $224 billion compared with $217 billion in 2019.

The American Transportation Research Institute (ATRI) report on trucking congestion is not solely focused on urban areas, although that is where the most severe truck congestion occurs. It relies on a very large truck GPS database that records truck miles and speed, among other parameters from more than a million commercial trucks. Truck vehicle miles of travel (VMT) are obtained from the Federal Highway Administration’s (FHWA) Highway Statistics tables that can be segmented by state, region, and metro area. To calculate truck congestion cost, ATRI draws on data on the operational cost per hour of Class 7 and Class 8 tractor-trailer combination trucks, which are the focus of this study. ATRI updates those costs every year.

The findings on truck delays and congestion costs are somewhat different than TTI’s overall findings. For example, annual average truck speed in “bottleneck” locations was on a downward trend from 2016 through 2019. Not surprisingly, with far fewer vehicles on the roads in 2020, average truck speed increased. As personal travel began to return, truck speeds declined slightly in 2021 but increased again in 2022. So trucks were going faster in 2022 than in 2019, unlike cars.

But that’s not the end of the story. Truck VMT increased significantly in 2022 as they were operating in less congested conditions. But due to the rising cost of fuel and labor, their cost of congestion continued to increase, making their overall cost of congestion reach a new high in 2022, even though their hours of congested travel declined. Table 1 in the report shows that trucks’ cost of congestion in 2022 was 15% greater than in 2021, at nearly $109 billion.

The states with the highest truck congestion costs in 2022 were Texas, followed by California, Florida, New York, and Georgia. And the states with the largest percentage increases in truck congestion cost were Hawaii (up 92%), followed by Vermont, Minnesota, Kentucky, and Alaska. An indication that post-pandemic economic recovery is somewhat uneven is that 25 states had decreases in truck congestion in 2022 compared with 2021. The largest decreases were in Louisiana (almost 13% less), with smaller decreases in New Mexico, Maryland, California, and Ohio.

Needless to say, very large metro areas still had large percentage increases in truck congestion cost in 2022, with New York leading the pack at 21.6% increase and by far the highest cost ($6.7 billion), followed by Miami, Chicago, Philadelphia, and Dallas.

For auto commuters, the highest delay (person-hours) in 2022 was once again in Los Angeles, followed by San Francisco/Oakland, New York/Newark, Washington, D.C., and Atlanta. Almost the same ranking appears for annual congestion cost per commuter: Los Angeles, San Francisco, New York, Atlanta, and San Diego, with Washington this time in 6th place.

We can see that for both commuters and truckers, the cost of congestion was higher in 2022 than in 2021. But for commuters in large metro areas, the extent of congestion was greater in 2022 than in 2021, while the opposite was true for truckers. I suspect that when we get the comparable data for 2023, both the extent of congestion and its cost will increase for both commuters and trucking.

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Addressing Diversion from Toll Roads and Bridges
By Baruch Feigenbaum

The number of vehicles that avoid toll roads by diverting to non-toll roads has long been a knotty topic. Several studies have attempted to address the question, but due to the large number of variable factors, there was no consensus. Recently, Robert Bain and Deny Sullivan of CSRB Group released a study titled “The Traffic Impact of Road Pricing“, in which they combined both a literature review and their own research to determine a true diversion rate.

The authors examine the increased interest in tolling due to greater regulatory permission, a need for more highway funding, accelerated project construction, blended funding, and advances in technology. Bain and Sullivan studied fixed-rate toll systems only. They did not analyze priced managed lanes or highways using dynamic pricing.

In the United States, the authors cite several other studies in their literature reviews. The first is Nichols and Belfield’s study of the Midtown and Downtown Tunnels in Hampton Roads, Virginia as well as the State Route 520 bridge in Washington state. In Virginia, after tolling began, traffic decreased 8% on the Midtown tunnels and 20% on the Downtown Tunnel. In Washington state, traffic declined by 30%. Breaking down the traffic volumes by day of week and time of day, the studies found that diversion was a bigger problem during off-peak hours than peak periods. A separate meta analysis of nine tolled facilities in North America shows that facilities had 10-36% less traffic after tolling.

A Minnesota Department of Transportation (DOT) study that relied on modeling examined different types of roadways. Urban Interstates were found to have a 15% diversion rate, rural Interstates 20%, urban freeways 20%, and rural freeways 25%. Frontage roads increase diversion by 5%; competing roads within 10 miles increase diversion by 10%.

Bain and Sullivan combined these studies with those in their database for a total sample size of 83 tolled highways. They used research reports, academic papers, media reports, toll operator data, and transportation department websites. Many were not true academic research papers, as they did not undergo double-blind peer reviews, but they do provide useful information. The U.S. had by far the most toll highways with Portugal, Australia, the U.K., and Canada rounding out the top five. There were 35 road and 20 bridge projects, the two most common types of tolled infrastructure.

Using all those papers, Bain and Sullivan calculated the median diversion impact of tolling as -25%. In other words, for every four people who used the infrastructure before tolling, only three used it after tolling. But the spread was 4% to -85%, indicating local conditions are paramount. Further, there were no clear patterns among urban or rural roads.

The one exception is toll bridges with no realistic alternatives. They had a lower diversion rate— -15% —than other highways. Given the lack of alternatives, drivers may have no other option than a boat.

While the Bain study has the largest sample size, its results did not differ from the other studies that found a diversion rate of 20-25%.

Using the results, Bain created a predictive model to explain which toll roads will have the highest diversion rates. The model examines alternative routes and alternative modes and uses a decision tree (chose one of several options in multiple steps) instead of a mathematical model. The study found that 84% of impacts lie within the range, which would be similar to having an r-squared value of 0.8, if this were a mathematical model.

Overall, the paper presents the best model so far for toll diversions. The model captures most of the diversion and the predictive model is helpful in explaining what types of roadways will have higher diversion rates. But I’m most interested in how we can reduce toll road diversions. We need to address problems including traffic congestion, high costs, user behavior, and status-quo thinking. 

One option would be to focus on reducing congestion, but that might not always be cost-effective, especially on urban freeways with limited right-of-way.  While they weren’t in the study, I have encountered congestion on the New Jersey, Massachusetts, and Pennsylvania Turnpikes in urban areas. On rural tollways, adding new lanes will reduce congestion.

For the trips that are taken on roads without significant congestion, we could reduce the diversion problem by using carrots or sticks. I recommend carrots.

Why not sticks? The study shows that one factor impacting diversion is the lack of parallel routes. The stick approach would be to pull new non-tolled highways out of regional transportation improvement plans and long-range transportation plans or to tear-down existing roads, similar to what USDOT has tried to do with some urban freeways. Technically, this would end diversion, but even if it survives court challenges and potential riots, it has a few problems. It would harm economic development. That method would imperil emergency services. And it would make congestion so bad that drivers might choose to stay home or move to a different region.

A carrot-based approach would be to create a win-win for roadway operators and drivers alike. One approach would provide a frequent traveler discount or reward, the way that many airlines already do. The provider might lower a driver’s tolls, if she used the roadway five or more times per week. New drivers could be incentivized to try the toll road by paying a lower toll rate for the first 30 days. The provider might work with employers to see if their office could begin flexible scheduling or telework. Either would decrease the cost of using the toll road. Finally, the provider might add additional exits or motor services to make the toll road more convenient.

Toll diversion is not anywhere close to the biggest problem toll providers face, but it is still a problem. It is not easy to solve, and a small number of drivers will always take another route to avoid tolls. But where we can, we should encourage new toll paying customers to use the toll road by making the experience better and not worse.

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Study Analyzes NEPA Permitting Delays

The process that major infrastructure projects must go through to obtain federal permission to build is increasingly costly and time-consuming, as I’ve previously discussed in this newsletter and analyzed in a 2024 policy study. A recent empirical study sheds some light on what factors affect project approval under the legal framework that has evolved since the enactment of the National Environmental Policy Act (NEPA) in 1970. The paper is “A Hazard Analysis of Federal Permitting Under the National Environmental Policy Act of 1970,” by Michael Bennon, Daniel De La Hormaza, and R. Richard Geddes, published in the Journal of Regulatory Economics.

The authors relied on data from the Council on Environmental Quality (CEQ) regarding 1,269 Environmental Impact Statements (EISs). A key variable was the duration from the Notice of Intent to file to the eventual Record of Decision (ROD). They used a statistical technique called a Cox proportional hazard model to estimate the impact of a number of factors on the duration of the permitting process.

One of the interesting findings was that projects proposed as privately financed public-private partnerships (P3s) completed the EIS process faster than others. The authors speculate that the typical team proposing such projects may have a better understanding of the process, enabling a faster review than would otherwise be possible. They also speculate that faster permitting for energy projects may be due to the volume of such projects, leading to analysts’ greater familiarity with their impacts.

The authors also compared project permitting durations for projects located in states with restrictive environmental laws. Those projects did take longer to reach the ROD, but this was not due to the state restrictions, per se. They hypothesize that opposition groups may be stronger in those states, leading to more public opposition and threats of litigation.

Another finding concerned projects that were designated for inclusion in the federal permitting “dashboard.” These projects had longer durations, which seems contrary to the intent of the dashboard, but the authors speculate that projects designated for the dashboard are likely to be larger and more complex, leading to a longer permitting process. Higher EIS page counts have longer durations in getting to a final EIS, but they also have a longer duration between the final EIS and the ROD.

One other interesting finding concerns permitting of projects connected with a federal economic stimulus program such as the American Recovery and Reinvestment Act. They hypothesize that because elected leaders and administrators desire quick impact from stimulus projects, they tend to focus on “shovel-ready” projects that have already completed the NEPA process. But they point out that “This may lead to the allocation of stimulus funds to projects with lower expected returns on investment.”

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The Electric Vehicle Debacle

The last six months have been dismal for those hoping for a U.S. electric vehicle (EV) future. Here is a small sample of news articles from this period.

• “Auto Industry’s Retreat from EVs Hastens,” Mike Colias and Christopher Otts, The Wall Street Journal, Aug. 23, 2024
• “Electric Vehicle Sales Are Stumbling: Here’s Why,” Joshua Gallu, Bloomberg, Sept. 29, 2024
• “Low Used-EV Prices Pinch Dealers, Owners,” Sean McLain, The Wall Street Journal, Oct. 14, 2024
• “Dream of Cheap U.S. Electric Car Fades,” Tim Higgins, The Wall Street Journal, Nov. 18, 2024
• “Things Get Worse for EV Startups,” Amrith Ramkumar and Shane Shifflett, The Wall Street Journal, Dec. 2, 2024.

The last of these articles includes graphs showing the shrinking cash balances among EV startups and the dismal share prices of those (such as Fisker, Lucid, and Rivian) that are publicly traded. The declining sales of electric vehicles have led to setbacks for plans to build huge EV battery plants, not only here but also in EV-friendly Europe. Volvo has put on hold plans to build a large plant to make batteries for its electric trucks. And the very ambitious startup Swedish EV battery company Northvolt filed for bankruptcy soon after.

Those failures were warning signs to our federal and state governments that large-scale subsidies to build battery plants would not be a wise move. Several state governments have provided state aid for EV battery plants, but the most enormous subsidies have come from the federal government. The latest was announced in November with great fanfare by the Biden Department of Energy: a $6.6 billion loan to nearly-bankrupt Rivian for an EV factory in Georgia. If built, it would have the capacity to produce 400,000 SUVs and crossovers per year. Rivian has lost about $4 billion on the 37,396 vehicles it sold in the first nine months of 2024, and it has $1.25 billion in debt. The Department of Energy recently finalized an even larger $9.6 billion loan for a Ford EV battery plant in Tennessee. Ford has also been losing tons of money on its poorly selling EVs.

It turns out that the $6.6 billion loan to Rivian is “conditional” on the company meeting certain technical, legal, environmental, and financial conditions. A Wall Street Journal editorial (Dec. 26) explained that these conditions include pro-union policies that Rivian has been resisting at its vehicle factory in Illinois. But Ford recently agreed to a neutrality agreement with the United Auto Workers for its Tennessee EV battery plant.

I can’t imagine any private investor making such loans and expecting them to be repaid. And in the federal government’s nearly insolvent condition, giving away tens of billions of dollars is the last thing it should be doing. Fortunately, with a new administration and new Congress, these policies can be changed.

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Federal AV Policy Review and Outlook
By Marc Scribner

There will be many fundamental policy differences between the outgoing Biden administration and incoming Trump 47 administration. One area to watch is automated vehicle (AV) policy. The Biden administration departed from the AV enthusiasm of the previous Trump and Obama administrations. The new Trump administration is expected to pick up where the first Trump administration left off on AV policy. On balance, the Trump administration is likely to be friendlier to AV technology development and deployment than the Biden administration. But the scrambled populist politics of our time introduce some sizeable uncertainty.

While most of its actions did not actively undermine AV technology development and deployment, the Biden administration was content to mostly do nothing on AVs. The Biden administration’s stance on AVs was modulated by its close ties to organized labor. Fearing competition from robots, unions have emerged as the primary opponents of advanced automation technologies in the transportation sector. The official Teamsters union position, for instance, is a national ban on driverless commercial vehicles. Given this political environment, inaction on federal AV policy may have been the best attainable outcome from the self-described “most pro-union, pro-worker President in history.”

The most significant AV policy action by the Biden administration was the National Highway Traffic Safety Administration’s (NHTSA) Standing General Order (SGO) on mandatory crash reporting, which was issued in 2021 and revised in 2023. Under the SGO, poorly defined reporting parameters coupled with aggressive compliance requirements led AV companies, out of an abundance of caution, to submit a lot of incident data that have little bearing on safety. In July 2024, NHTSA announced it would propose a rule to reform and codify the SGO’s incident reporting requirements by the end of the year, although this has since been delayed until at least May 2025.

Aside from the SGO, the most notable action on AVs taken by the Biden administration was the finalization of a rule that revised occupant protection safety standards to account for future vehicles that lack manual driving controls. The Biden NHTSA deserves praise for promulgating this rule in March 2022, although not too much credit because this rule was fully baked and ready for publication at the end of the Trump administration in Jan. 2021.

Much less praiseworthy was the Federal Motor Carrier Safety Administration’s last-minute decision on Dec. 27 to deny an exemption petition submitted by two AV truck developers, in which the companies proposed to use special cab-mounted hazard lights in lieu of placing warning triangles outside a disabled truck on the side of the road. The placement of warning devices around stopped commercial vehicles is a legacy federal requirement with which it is impossible to comply if there is no driver in the vehicle. The supposed basis for denial was insufficient information submitted in the exemption application, but it should not have taken 23 months to review a 15-page document for the claimed basic deficiencies.

But AV policy under the Biden administration didn’t end completely on a sour note. Just before Christmas, NHTSA announced it was releasing its long-promised proposed AV STEP voluntary national framework. The goal of AV STEP is to leverage existing authorities to give AV developers greater latitude to produce and deploy their vehicle technologies in exchange for submitting more information to regulators. However, the final decision on what—if anything—comes from the AV STEP proposal will be made by the incoming Trump administration.

The new Trump administration’s likely emphasis will be on the geopolitical strategic importance of advancing AV technology in the United States—which is to say, “winning the AV race with China.” This means enthusiasm for AV policymaking is likely to return to federal agencies and could bode well for the industry.

However, there is concern that China hawks may disrupt supply chains and limit international market access. The Commerce Department’s Bureau of Industry and Security in September proposed restrictions on transactions involving Chinese or Russian firms that affect AVs. The current Biden proposal preserves AV developer access to most global markets and limits damage to supply chains, but a final rule that is less cautious could do serious damage. The Trump administration should understand that needlessly aggressive trade restrictions on AV technologies could undermine their goal of strategic global AV dominance.

To advance continued U.S. leadership in AV innovation, the Trump administration should focus on modernizing NHTSA’s federal motor vehicle safety standards (FMVSS) so AVs can be incorporated into the national auto safety regulatory ecosystem. This would have the effect of preempting many state regulations and preventing an unworkable compliance patchwork. It would also obviate the need for Congress to act because the primary justification for congressional AV action over the past decade has been to increase the statutory cap on and duration of temporary FMVSS exemptions. But if NHTSA promulgates revisions to FMVSS and thereby allows AVs to self-certify to FMVSS just like other vehicles, there is no need for temporary exemptions.

The Trump administration has a golden opportunity to reinvigorate AV policy in the United States. To do so, it must stay focused on systematically identifying and addressing safety regulatory barriers and gaps. But the Trump administration may face challenges from within related to trade, national security, and even labor that could undermine its AV policy goals.

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The Evolution of Bestpass

Unless you are part of the U.S. trucking industry, you’ve probably never heard of Bestpass. I’ve been a fan for many years, when I learned that it offers service to the over-the-road trucking industry, including weigh-station bypass services and management of their company toll accounts. Bestpass was launched in 2001 by people from the Trucking Association of New York. It came to my attention when I learned that, among its toll management services, it assisted subscribing truck fleets in taking advantages of refunds from certain state highway user charges for those using the New York State Thruway and the Massachusetts Turnpike. I’ve gotten to know Bestpass people at various transportation conferences such as those of the International Bridge, Tunnel & Turnpike Association.

Over the past decade, Bestpass has acquired several other companies that serve the trucking industry. In 2023 it acquired Fleetworthy, self-described as a fleet compliance, safety, and risk management solutions provider. Fleetworthy came with a platform called CPSuite, which as part of Bestpass provides what CEO Tom Fogarty told FleetOwner serves as “a single pane of glass for fleet executives to be able to view what’s working and what’s not in their overall operation.” As a result, Bestpass was rebranded as Fleetworthy.

But that was not all. Last year Fleetworthy acquired Drivewyze, a firm with a long track record in dealing with weigh station bypass (and possessing the largest share of that market). The two companies had already agreed on a partnership in 2023, but this progressed to a merger in 2024. Fogarty told FleetOwner that this merger simplifies many things that are not trucking companies’ mission. “Their core mission is safety and keeping the fleets operating on the roads, but being able to do that in a much simpler way is something they strive for.”

Recently Fleetworthy announced an agreement with data provider Geotab, to interface with that company’s telematics ecosystem. Bestpass customers can use the MyGeotab interface to match Geotab vehicle data and GPS locations with charges reported by Bestpass.

Long-term readers of this newsletter may guess why I’m especially interested in these developments. Sooner or later the United States will need to shift from per-gallon fuel taxes to per-mile charges. Keeping track of who owes what as this transition takes place will be complicated. It strikes me that for the long-haul trucking industry, service providers such as Fleetworthy will be well-positioned to play a key role in this future.

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News Notes

Maryland Extends I-95 Express Toll Lanes
Last month the Maryland DOT opened a 6.5-mile extension of the ETLs on I-95, extending them to MD 152. Current plans call for further northward extensions to MD 24 by the end of 2027. The lanes charge fixed toll rates for peak, off-peak, and night, with rates also based on the number of axles (up to six or more). The lowest rates are for E-ZPass customers, with somewhat higher rates for Pay-by Plate and Video Toll customers.

New Zealand Planning $5.8 Billion Tollway P3
According to Infralogic (Dec. 6), New Zealand’s relatively new National Party-led coalition government “has rolled out the red carpet to private infrastructure investors.” The project currently entering procurement is the $5.8 billion Northland Expressway, to be built in three sections heading north from Auckland. Expressions of interest from potential public-private partnership (P3) consortiums are being sought, with a request for proposals (RFP) likely to be released in second-quarter 2025. Up to five consortia appear to be organizing to submit proposals once the RFP is issued.

Thailand Plans $1.4 Billion P3 Expressway
The Thai cabinet in December OK’d a plan to use a long-term P3 to finance, develop, and operate the $1.4 billion M9 Motorway linking Bangkok with Nonthaburi. The government plans a 30-year P3 concession for the project. The current schedule calls for developing procurement documents for a tender to be launched near the end of 2025, with the P3 deal reaching financial close in the second half of 2026.

Washington State Developing Port Tollway
To improve access to the Seattle/Tacoma seaports, Washington state DOT is under way on the SR 167 Completion Project. The plan calls for extending SR 167 westward to the Port of Tacoma by means of a four-lane tollway. The new tollway will facilitate access to the port by trucks (which currently congest local streets). It will also provide faster, uncongested trips for motorists, including those who use the express toll lanes on the existing SR 167. The new corridor appears to be a combination of truck tollway and express toll lanes for motorists. The second of four phases is now under construction, with last phase to be completed by 2030.

Supreme Court Considering Challenge to California Emissions Mandate
A legal challenge to California’s permission to exceed federal vehicle emission regulations was rejected by the D.C. Circuit Court, which ruled that the plaintiffs lacked standing. Last month the U.S. Supreme Court agreed to hear an appeal of that ruling. If the case is sent back to the circuit court, it will have to analyze whether, under existing law, California can use its long-standing permission to impose tougher regulations on tailpipe smog precursors to also regulate CO2 emissions (which have no impact on smog).

Committee Chair Not Supportive of Federal MBUF
Politico reported (Dec. 16) that Rep. Sam Graves (R-MO), incoming chair of the House Transportation & Infrastructure Committee, is not supportive of replacing federal motor fuels taxes with mileage-based user fees (MBUFs). He suggested that a better way to ensure that the growing population of electric vehicles (EVs) pay their way would be a tax of some kind on EV drivers. He told Politico that he plans to discuss this subject with House Budget Committee chair Jodey Arrington (R-TX). The federal Highway Trust Fund increasingly generates far less than the amount of federal highway and transit spending, and getting EV users to pay their share would help address this problem.

Schneider Battery Electric Trucks Top Six Million Miles
A December news release from trucking company Schneider announced that its fleet of 100 Freightliner eCascadia battery-electric vehicles (BEVs) has surpassed six million “zero emission miles.” The release added that this is a reduction of 20 million pounds of CO2 emissions—which sounds like a lot, but the usual unit of measurement is tons, which amounts to only 20,000 tons of CO2. Truck producer Daimler says the eCascadia has a range of 250 miles and can be recharged up to 80% of capacity in 90 minutes, which is a lot more time than refueling a diesel rig.

Louisiana Mississippi River Crossing Location: Decision This Year
Joe Donahue, Secretary of the Louisiana Department of Transportation and Development, announced that the final site for the planned $2 billion toll bridge across the Mississippi River will be announced in 2025. After several years of study and gathering public input, the alternatives have been narrowed down to three. The bridge is needed to address serious congestion on I-10 in the vicinity of Baton Rouge, the state capital. The plan calls for the new bridge to be south of Baton Rouge, with connections to I-10 via a new southern loop on both sides of the river. Current plans assume toll finance and a long-term P3 procurement model, similar to what is in use for the replacement of the I-10 bridge across Louisiana’s Calcasieu River.

San Francisco P3 Bus Yard Decision This Spring
Infralogic reported last month that the planned 30-year P3 project to modernize the San Francisco Municipal Transportation Agency’s (SFMTA) bus yard needs two important votes this spring: one by the SFMTA board and the other by the San Francisco Board of Examiners. SFMTA has a provisional agreement with a Plenary-led consortium for a 30-year availability-payment design-build-finance-operate-maintain P3 concession. Construction cost is estimated at $560 million and the annual availability payments are to be $42.2 million per year.

Arizona Plans Another Stretch of New I-11
Thanks to a $26 million federal grant, Arizona DOT plans to upgrade 4.5 miles of US 93 to prepare it for becoming part of the long-planned I-11 between Phoenix and Las Vegas. Over the last several years, ADOT has spent nearly $500 million on upgrades to US 93, which is planned to be the primary component of I-11 in Arizona. Nevada DOT has built about 45 miles of I-11 southeast of Las Vegas since 2018.

Pennsylvania Turnpike Revamps Tolling Policy
In addition to shifting the Pennsylvania Turnpike to all-electronic tolling as of this month, the agency has implemented two changes in its toll rates. All toll charges will now reflect consistent per-mile charges across the system; this is a step toward eventually charging per mile traveled on all American highways. Second, truck tolls will no longer be based on gross weight; instead they will be based on axle-weight, which more accurately reflects the extent of pavement damage from heavy vehicles. Kudos to the turnpike for these sensible changes.

Mixed Results on Bridge Condition
There’s good news and bad news in the Better Roads Bridge Inventory, compiled by Equipment World from FHWA data. Between 2020 and 2024, the number of bridges in “good” condition declined from 278,000 to 274,000, a decline of 1.3%. On the other hand, the number in only “fair” condition increased by 3.8%, from 293,000 to 305,000. The worst category—bridges in “poor” condition—were down 0.9% and account for only 6.72% of all bridges. So it would appear that the increase in fair-condition bridges came largely from more good bridges declining to fair condition. The states with the lowest percentage of poor-condition bridges are Nevada, Arizona, Texas, Delaware, and Georgia. On the other end of the scale, state with the highest extent of poor-condition bridges, in order, are Iowa (19.6% poor), West Virginia, South Dakota, Maine, and Rhode Island. States with the highest percentage of bridges in good condition are Georgia, Arizona, Ohio, Florida, and Nevada. And those with the lowest percentage in good condition are Utah, Rhode Island, Maine, Massachusetts, and West Virginia.

Tesla EV Plug Now Standardized
SAE International as of last month was finishing work on an open EV charger standard, J3400, based on the Tesla EV charging connector. Simultaneously, FHWA said it was finalizing a new standard for federally funded EV chargers, based on Tesla’s charging plug. Over the past year and a half, nearly every automaker and charger manufacturer adopted Tesla’s charging standard.

Trucking Industry Loses Rhode Island Truck Tolling Case
Last month a federal appeals court rejected the trucking industry’s case that Rhode Island’s trucks-only toll charges were unconstitutional. Although the court found that daily toll caps are unconstitutional, the overall tolling system, in which the toll revenue is dedicated to bridge improvements, was found to pass muster.

Highway Tolling Discussed Again in Michigan
An article by MLive (Dec. 11) reported on year-end discussions among Michigan legislators and transportation groups about how to pay for upgrading the state’s aging highways. Alternatives discussed included increasing state fuel taxes or vehicle registration fees, using toll revenue to pay for rebuilding/modernizing the state’s Interstate highways and freeways, or replacing fuel taxes with per-mile charges. A major tolling study by HNTB and CDM Smith in 2022 found that modest toll rates could finance the reconstruction and modernization of 545 route-miles of limited access highways, enabling $18.5 billion to be financed based on the toll revenue. (For details, see the lead article in the Feb. 2023 issue of this newsletter.)

MARTA Seeks to Enforce Bus-Only Lanes
Georgia’s MARTA transit agency will soon be opening its first dedicated-lanes bus rapid transit system, a 5-mile round trip route between downtown and Summerhill. MARTA has asked the state legislature for automated traffic cameras so that it can ticket drivers who move into the bus lanes. Since adding lanes to a highway is very costly, “bus-only” makes sense only where the bus person-throughput (per lane per hour) is more than what the lane would handle in mixed-flow traffic. A wiser plan would be for “bus toll lanes” that charge motorists variable pricing to keep the traffic moving smoothly to enable fast and reliable bus service. (See “Enhanced Transit and Managed Arterials: A Win-Win Combination,” Reason Foundation, Oct. 2016.)

Trump Misunderstands Panama Canal Tolls
President-elect Trump mis-spoke when he claimed that “the fees being charged by Panama are ridiculous [and] highly unfair.” In fact, as the Wall Street Journal pointed out in an editorial on Dec. 26, “Every vessel, regardless of its flag, pays the same rate according to tonnage and type. . . . About 75% of the total price is a toll [to pay for capital costs] and 25% is for services like tugboat or locomotive escorts.” The Panama Canal is a business and is far better run than highly subsidized U.S. inland waterways.

Riverside County’s Express Toll Lanes Credit Upgraded
Fitch Ratings last month announced that it has increased the rating on Riverside County Transportation Commission’s SR 91 express toll lanes from BBB+ to A. The upgrade reflects traffic and revenue levels exceeding Fitch’s base case. Until recently, the only express toll lanes with a rating of A or above was the world’s first ETL project, on SR 91 in neighboring Orange County. Most other express toll lane projects financed by their toll revenues have Fitch ratings of BBB or BBB-.

Denmark Shifts to Per-Kilometer Tolling
The Danish government, as of Jan. 1, 2025, shifted its heavy-vehicle tolling system from the Europe-wide Eurovignette (a multi-country electronic tolling system) to per-kilometer charges. The system charges vehicles weighing 12 tonnes or more, except for buses. Instead of a transponder, trucks will have to sign up with UTA Edenrod’s UTA One system. The Danish toll road system comprises 10,900 km of highways.

New Commentary Suggests NEPA Litigation Reform
In a recent Substack post, R. Richard Geddes and Joshua Rauh review the high cost and time of infrastructure projects getting through the current NEPA process, especially the litigation that often follows the release of the final Environmental Impact Statement (EIS). They offer a menu of changes that could streamline that system.

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The post Surface Transportation News: Congestion is back, for trucks as well as cars appeared first on Reason Foundation.

• Hydrogen propulsion: hope or hype?
• A major change in environmental law
• New York to proceed with transit tax
• Japan’s proposed automated logistics roads
• Bike lane battles in Washington, DC
• News Notes
• Quotable Quotes

Hydrogen Propulsion: Hope or Hype?

With government agencies and a growing number of vehicle producers and operators committed to phasing out fossil fuels within the next several decades, there is growing interest in hydrogen as an alternative energy source for vehicles—ranging from personal vehicles to heavy trucks, freight and passenger railroads, and even commercial airlines (outside the scope of this newsletter).

Here are a few headlines from some of the many articles I’ve seen discussing mostly hydrogen fuel cells, but, in some cases, hydrogen is also being considered as a replacement fuel in conventional fossil-fuel engines:

• “BMW and Toyota Partner on Hydrogen-Powered EVs”
• “The Great Hydrogen Train Debate”
• “Bosch Ramps Up Trucking’s Hydrogen Future”
• “Trucking’s Hydrogen Future Nears Reality Overseas”

There is no question that hydrogen fuel cells can be built and can deliver energy to power electric motors in cars, trains, and trucks. Indeed, for long-distance heavy trucks, the trucking research group the American Transportation Research Institute (ATRI) has found that hydrogen fuel cells would be far more useful than battery-electric power –in terms of weight and payload, “refueling” time, and cost (see my article summarizing this study in the June 2022 issue of this newsletter).

On the other hand, for railroad locomotives, one study found that “Hydrogen trains currently require roughly three times more energy per mile than trains powered by overhead wire.”

The underlying reason for considering hydrogen to power vehicles is to reduce or eliminate greenhouse gases that are released from fossil fuel use. Whether hydrogen really does that depends on how it is produced. Hydrogen cannot be mined or directly extracted from the air around us. Until very recently, commercial hydrogen has been produced by either an energy-intensive process called electrolysis of water (H2O) or using the energy-intensive Haber process to produce hydrogen from natural gas. The electricity used for generating hydrogen has nearly always been fossil-fuel electricity. This is not a green solution. “Blue” hydrogen is produced using conventional electricity, but with the carbon emissions from the process captured. “Green” hydrogen is produced using green energy to begin with, and that is the only form of hydrogen that directly yields the sought-after benefits.

The problem with green hydrogen is its cost. A new study in the science journal Joule, from Harvard University researchers, found that “for every metric ton of carbon dioxide that it now reduces, green hydrogen costs between $500 and $1,250. By contrast, using current technology to capture and store the same carbon dioxide costs between $100 and $1,000 a ton, making it more viable to extract atmospheric carbon dioxide instead.”

A further concern is what the rate of growth in producing green hydrogen must be in order to have a significant impact on greenhouse-gas reduction. In September, the International Energy Agency published its most recent global review of progress toward the hydrogen economy. While hydrogen demand is increasing (by 2.5% in 2023 compared with 2022), “for the full project pipeline to materialize, the sector would need to grow at an unprecedented compound annual growth rate of over 90% from 2023 until 2030, well above the growth experienced by solar PV during its fastest expansion phases.”

One ray of hope for green hydrogen is using nuclear energy to generate the required heat. Rockefeller University researcher Jesse Ausubel explained the process and its implications in a 2015 paper, “Power Density and the Nuclear Opportunity.” But as of now, no such projects are planned or under way.

To sum up, current plans to convert large fractions of personal vehicles, commercial trucks, and railroads to green hydrogen over the next two decades appear to be impossible. There are fractions of various markets where the advantages of hydrogen fuel cells (long-distance trucking, railroad lines where overhead electrification would be enormously costly) might be viable despite the high cost of blue or green hydrogen. But in the lifetimes of many of us, hydrogen will most likely serve a few niche markets, at very high cost, where it is the least-bad green option.

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A Major Change in Environmental Law

On Nov. 12, the U.S. Court of Appeals for the D.C. Circuit issued a ruling that invalidates the power of the White House Council on Environmental Quality (CEQ) to issue regulations. CEQ has done this since the late 1970s thanks to Executive Order (EO 11991) by President Jimmy Carter giving CEQ that authority. The 2-1 vote of the Circuit Court upheld a long-standing precedent that the President may not authorize a government official (in this case, an executive branch official) to issue rules and regulations. As a Nov. 13 issue brief from the Nossaman law firm explains, “neither NEPA nor any other statute specifically confers rulemaking authority on CEQ.” It was created to advise the President regarding agencies’ NEPA compliance and to make policy recommendations to the President.

In my recent Reason Foundation policy study, “Reforming Environmental Litigation,” I pointed out that the Carter executive order empowering CEQ to regulate was one possible provision that could be rescinded via a bipartisan bill to reduce the cost and time imposed by extensive litigation against energy and transportation infrastructure projects. Empirical studies of the outcomes of such litigation from both Stanford University and the Breakthrough Institute show that only a small fraction of large infrastructure projects are cancelled due to lengthy litigation, but they typically lead to long delays and hence increased construction costs.

Assuming this decision is upheld, it’s an important reform that should enable many CEQ regulations to be challenged. But it’s unlikely to significantly reduce or eliminate litigation against needed energy and transportation projects. Streamlining environmental litigation is still a key task for the new Congress that will take its seats in January.

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New York to Proceed with Transit Tax

New York Gov. Kathy Hochul announced last month that a new version of the congestion tax she rescinded this summer will go into effect in January. Instead of taxing personal vehicles $15 to enter Manhattan below 60th Street, the new plan calls for it to be $9. Higher rates apply to commercial vehicles.

New York officials continue to refer to the new tax as either a “congestion price” or a “congestion toll.” A toll is intended to pay for the capital and operating costs of a roadway, bridge, or tunnel. But from the outset, the plan has been to bond the revenue stream to pay for a very large array of projects solely for the New York subway and bus system. So, it is very clearly a transit tax.

The original $15 per day amount was arrived at to generate $15 billion for projects that include extending the Second Avenue subway, purchasing new electric buses, replacing obsolete subway signaling systems, and much more. The unfunded transit system budget determined the rate, not any empirical research into what daily amount would be most effective at reducing traffic congestion.

Obviously, a 40% lower daily rate will not generate the targeted $15 billion. But a New York Times article explains how Gov. Hochul and the Metropolitan Transportation Authority plan to deal with the shortfall. The key is that the $9 daily amount is only temporary. In the fourth year, the amount will increase to $12, and it will go up to the original $15 in 2031. After six years, the revenue stream would be back to the original amount.

That will have consequences. First, some of the transit improvement projects will likely be delayed in starting, while transportation construction costs continue to increase year after year. Second, the NYT reporters note that “tinkering with the borrowing terms attached to the $15 billion in bond financing could also yield higher costs for the authority, fiscal experts said.”

There are also threats to the plans being implemented. At least nine lawsuits against the program are still in process, mostly from residents of New Jersey and New York City’s outer boroughs. Moreover, President-elect Donald Trump has said he will kill the project when he takes office in January.

Manhattan’s congestion is a serious problem that has worsened in recent decades. Some form of congestion pricing would likely make sense there. But congestion charges should be based on serious modeling of traffic flows under various types of pricing. And, as in Stockholm, the proceeds could be dedicated to both street operations and maintenance and the transit system. But, the purpose would be to reduce congestion, not to raise an arbitrary amount for the subway system. This program, if it is actually implemented, will impose a tax, not a toll.

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Japan’s Proposed Automated Logistics Roads
By Marc Scribner

A shrinking truck driver workforce and a new labor policy limiting driver hours have spawned a looming logistics crisis in Japan, known as the “2024 problem.” Japanese industry turned quickly to automation as a potential solution. The government, for its part, has been similarly investigating automated freight transportation, including new dedicated infrastructure and cargo vehicles that would constitute a new mode of surface transportation. Japan’s approach to its partially self-inflicted logistics problem can be contrasted with freight automation efforts in the United States, where developers of automated road and rail cargo vehicles plan to mostly leverage existing infrastructure.

In April 2024, the Japanese government ended an exemption on overtime hours for truck drivers. These stricter labor regulations coupled with a shrinking driver workforce have alarmed the broader business community that is dependent on reliable freight movements. In response to widespread concern that government policies have amplified a looming goods-movement crisis, Japan’s Ministry of Land, Infrastructure, Transport, and Tourism established a Study Group on Automated Logistics Roads that began meeting in Feb. 2024.

On Oct. 10, 2024, the Study Group published a market sounding survey (Microsoft Word document in Japanese) for the preferred project type. They envision a fully automated (including loading and unloading) cargo transportation system capable of moving 3.6-foot Type 11 pallets up to 5.9 feet tall that would be propelled by clean energy at 18 mph.

The automated logistics road must utilize existing road space between Tokyo and Osaka (e.g., highway medians on the Tomei Expressway, Shin-Tomei Expressway, Meishin Expressway, and Shin-Meishin Expressway). The 320-mile system should have at least eight stops (one for each prefecture between Tokyo and Osaka) and be able to handle between 120,000 and 140,000 tons of cargo per day.

The market sounding survey explicitly asked about contractor qualifications to develop the automated logistics road as a public-private partnership. The survey further suggested that a concession consortium should involve companies with expertise in infrastructure design-build, financing, vehicle manufacturing, system operation, toll collection, maintenance, and disaster recovery. Responses were due to the Study Group on Nov. 7.

I have two general concerns with automated logistics roads. First, procuring new dedicated infrastructure—and indeed a new mode of cargo transportation—is much riskier than leveraging existing road or rail infrastructure. Even if the project moves forward and is completed on time and within budget, operating uncertainties are large and may be difficult to manage. Second, moving individual pallets will not allow Japan’s automated logistics roads to realize the economies of scale that arise from the movement of larger standardized containers or trailers loaded with pallets.

Part of the Study Group’s focus on the automated logistics road model may be due to Japan’s relative inexperience with palletization, as well as more stringent size and weight limitations on highways and railways than those found in the United States. But existing truck-load capacity is underutilized in Japan, suggesting substantial efficiency gains are possible even before automation enters the picture. By committing to a vertically integrated and pallet-centric transportation system, the Japanese government may be less inclined to examine long-standing policies and business processes that may be hindering Japanese domestic freight transportation productivity.

The Study Group’s infrastructure-intensive approach to freight transportation automation standards is in stark contrast to the approach of U.S. developers, which are mainly focusing on creating automated vehicles capable of using existing infrastructure networks.

In an Oct. 30 investor presentation, autonomous truck developer Aurora Innovation said it plans to launch commercially in the I-45 corridor between Dallas and Houston in April 2025. In 2026, the company aims to add a new route between Fort Worth and El Paso, and then begin operations on I-10 to Phoenix. Aurora hopes to be able to cover the entire Sun Belt on public highways in 2027 before gradually moving north into snowier states in 2028.

One of Aurora’s Texas competitors, Torc Robotics, has planned for a slightly slower commercial deployment. Prominent automated driving consultant Richard Bishop wrote in November for Forbes that Torc projects it will begin testing “production-intent” autonomous trucks next year on the I-35 corridor between the Dallas metro area and Laredo on the Mexican border, which is home to the largest U.S. inland port. Torc’s majority owner is Daimler Trucks, which has given the autonomous truck developer unique access to embed its automated driving technology directly into Freightliner Cascadia truck tractors. Torc has announced it is aiming for a full commercial launch in 2027, after which it will begin adding routes to scale service for shipping customers.

Beyond over-the-road automated trucking, freight railroads are also examining automation opportunities. One particularly interesting automated freight rail application comes from Parallel Systems. Parallel was founded in 2020 by former SpaceX engineers to develop fully automated, self-propelled, battery-electric railcars. Each automated railcar can move standard 40-foot containers weighing 65,000 pounds at up to 25 mph. Parallel’s railcars are designed to be operated individually or in a platoon formation, which can reduce stopping distances by 90% when compared to conventional trains of the same mass. A major selling point for Parallel is that it hopes the enhanced flexibility offered by its autonomous, self-propelled railcars will allow railroads to compete with trucks in the short-haul market.

In Aug. 2023, the Georgia Central Railway and Heart of Georgia Railroad—both owned by short-line railroad holding company Genesee & Wyoming—petitioned the Federal Railroad Administration to conduct a seven-phase test of Parallel’s technology. The proposed 160-mile pilot territory runs from Pooler near the Port of Savannah to Cordele in central Georgia, which has a large inland port and interchanges with two Class I railroads. This test petition remains pending.

In the United States, emerging automated freight transportation technologies share two characteristics, regardless of if they are road- or rail-based: a narrow focus on vehicle automation while leveraging existing infrastructure; and carriage of large, standardized containers or trailers commonly in use today. While Japan’s proposed automated logistics roads are intriguing from an engineering perspective, the economics are more dubious.

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Bike Lane Battles in Washington, D.C.

The Washington Post on Nov. 15 published a fairly long article about citizen battles for and against adding “bike lanes” on various D.C. streets. In recent visits to D.C., I’ve been surprised that some streets downtown have fewer traffic lanes than a few years ago, with the former lanes now used for either parking or bike lanes. This has a very negative impact on travel by taxi, ride-share, bus, or car.

Five days after the news article appeared, conservative Post columnist Marc Fisher posted an op-ed, “The Truth About Bike Lanes: They’re Not About the Bikes.” In discussing recent battles about proposed bike lane projects (mostly in D.C. residential areas), Fisher argued that very few D.C. residents bike to and from work. That’s true, but largely irrelevant. As my Reason colleague Marc Scribner pointed out, nationally the share of travel by bike for all trips is about 80% greater than the bike commuting share.

Marc referred me to a “successful” bike lane added recently on Maine Avenue in a rapidly growing area near the Wharf in Southwest D.C. The automated bicycle counter installed for that project measured only about 1,000 trips per day, or only about 25% of the average daily auto trips per lane on Maine Avenue.

Columnist Fisher makes the more relevant point, also brought out in the Nov. 20 news article, that the real purpose of D.C.’s bike lanes program is to implement “road diets” so as to slow down traffic and reduce accidents and deaths due to speeding. There is evidence that fewer, narrower traffic lanes lead to reduced auto speeds in the remaining lanes. Proponents argue that converting one lane to a protected bike lane is the lowest-cost way to implement a road diet (e.g., compared to widening the sidewalks as part of narrowing but not eliminating the traffic lanes).

But if a residential street has a speeding problem, there are simpler and lower-cost ways to reduce speeds. One is adding speed humps and posting lower speed limits. Just posting a lower speed limit does very little, but speed humps really do lead to slower speeds. We have them on the street where I live, so I’ve seen this effect, but my street does need several more to really be effective.

Although Fisher was mistaken about bike commuting, I think his concluding point is on target: “It’s obviously healthy to provide bicyclists with safe lanes where it makes sense. What doesn’t make sense is to hand over car lanes to cyclists when your real motive is to gum up traffic to discourage people from driving. That’s not an honest way for government to push its goals.”

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News Notes

Tennessee Proceeds with First “Choice Lanes” Project
Tennessee Department of Transportation (DOT) in mid-November issued its request for qualifications (RFQ) for teams interested in bidding on the state’s first express toll lanes project. The project would add 26 miles of express lanes (dubbed Choice Lanes) on I-24 between Nashville and Murfreesboro. Teams must document their experience with design-build-finance-operate-maintain (DBFOM) public-private partnerships (P3s) in order to qualify. The expected term of the long-term P3 agreement is 50 years. The RFQ notes that TDOT is prepared to seek a federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan and arrange for tax-exempt private activity bonds (PABs) to assist with financing the project. A draft environmental assessment of the project is expected in March 2025.

Austin May Get More Express Toll Lanes
The Central Texas Regional Mobility Authority (CTRMA) is proposing to extend its existing express toll lanes (ETLs) on the MoPac expressway eight miles through South Austin. Some portions of the project would add two ETLs each way, while lower-traffic portions would get one new lane each way. This project was first proposed in 2015, but it faced significant community opposition. CTRMA revised the design and re-introduced it in 2021. A 48-day comment period began on Nov. 12. Independent toll agencies such as CTRMA are not affected by the Texas legislature’s current ban on the Texas Department of Transportation’s involvement in ETL projects.

$1.4 Billion Expressway Under Way in Malaysia
World Highways (Nov. 7) reports that the P3 company East Coast Road Sdn Bhd is proceeding with the $1.4 billion West Ipoh Span Expressway (WISE), a 61 kilometer tollway from Gopeng to Kuala Kangsar in Perak. It will provide a bypass of the existing expressway’s “winding and steep gradient.” The concession term is 55 years and the projected opening date is 2028. WISE will make use of Multi-Lane Fast Flow tolling technology.

Elevated Expressway for Jakarta Outer Ring Road
Metro Pacific Tollways Corp., a toll road developer/operator, will invest $1.36 billion to add a 21-km elevated section to the 65 km tolled ring road around Jakarta, Indonesia. The elevated addition is aimed at relieving congestion on the highest-traffic portion of the ring road. Construction will begin next year and will take three to four years. The Jakarta Outer Ring Road (JORR) is part of the Trans-Java Toll Road.

Japan Fund Exits Texas High-Speed Rail
Infralogic reported (Nov. 8) that the Japan Overseas Infrastructure Investment Corporation has notified the Texas Central passenger rail company that it will no longer provide financial assistance to its planned Dallas-Houston high-speed rail (HSR) project. The corporation has lost $272 million on the Texas Central project. It did not rule out possibly investing in the successor project which Amtrak is considering taking on. In a Nov. 27 follow-up, Infralogic reported that a government-appointed committee recommended that the Corporation not invest equity in overseas high-speed rail projects because these “are high-risk and do not offer a potential for earnings.” Meanwhile, a Texas legislator on Nov. 21 pre-filed a bill that would require TxDOT to support an HSR project between Dallas and San Antonio.

Argentina Launches Privatization of Railroad Company
The state-owned railroad company, Trenes Argentinos Cargas, owns 4,722 miles of track over which it operates freight trains using 4,429 employees. Under the plan announced by the reform government late in October, the company’s rail lines and land will remain state-owned, but the operations will be taken over by private companies under concession agreements. A similar railroad privatization plan in the United Kingdom has not worked very well due to poor coordination between the government’s track management and the needs of the train operators.

Can $2.50 Tolls Finance a $3.5 Billion Alabama Bridge?
Back in 2019, when the new Mobile River Bridge and Bayway project was planned as a $2.1 billion public-private partnership, the proposed toll rate of $5 per crossing for passenger vehicles led to the P3 plan being abandoned. State policymakers promised that when the project was revived, tolls would be limited to $2.50. Then construction cost inflation took place, and the project cost is now between $3.3 and $3.5 billion. The Alabama Toll Road, Bridge, and Tunnel Authority said it would borrow $940 million for the project, but that is a very low share of debt for a $3.5 billion project. Alabama DOT continues to maintain that tolls must not exceed $2.50 per crossing. “Something’s gotta give,” to make this project feasible.

New Mississippi River Bridge A Year Behind Schedule
The planned new bridge across the Mississippi River near Baton Rouge, LA, envisioned as a long-term P3 concession, has slipped behind the original schedule by one year, reports the Louisiana Department of Transportation & Development. Project manager Paul Vaught told The Center Square on Oct. 2 that negotiations with Atlas Technical Consultants, dealing with environmental policy, topographical studies, and geotechnical issues has led to the schedule change. The bridge will be tolled, and could become Louisiana’s third P3 toll bridge, with an estimated cost of at least $2 billion.

License-Plate Flippers Now Illegal in Pennsylvania
Reacting to high losses on the Pennsylvania Turnpike since it switched to all-electronic tolling, the legislature this year enacted Act 150, which makes use of license-plate flippers illegal. These devices are increasingly being used on U.S. toll roads that rely on license-plate imaging for electronic toll collection. Act 150 imposes a fine of up to $2,000 for those caught using such devices.

Oklahoma Completes Transition to Cashless Tolling
Last month, the Will Rogers Turnpike became the last toll road in Oklahoma to cease cash toll collection. All tolling on the Oklahoma Turnpike System will henceforth be done via either Pikepass (transponder) or PlatePay (license plate imaging).  

New Mobility Winners & Losers
Bloomberg’s Hyperdrive newsletter released an assessment of which “new mobility” sectors have succeeded and which seem to be failures. One winner is ride-hailing, at the expense of the traditional taxi industry (which has been improved thanks to the competition, but has shrunk in size). Car-sharing is also a loser, in both the United States and Europe. But micromobility (bike and scooter-sharing) continues to grow, despite some setbacks and bankruptcies.

Florida DOT and Florida State University Launch Transportation Study
Transportation Today News reported that FDOT and FSU have launched a two-year research project, the Florida Freight Corridor Planning project. Study Director Sam Staley of FSU said that the focus will include major highways, seaports, and airport facilities.

San Francisco Muni Plans to Replace Floppy Disks
The San Francisco Municipal Transportation Agency (Muni) in October approved a $212 million contract with Hitachi Rail for a new train control system for its light-rail trains. As Govtech.com reported, “The software that runs the system is stored on floppy disks that are loaded each morning and an outmoded type of communications using wire loops that are easily disrupted.” That system was installed in 1998. The new system is planned to be operational by 2028, and Hitachi will provide support services for 20 years.

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Quotable Quotes

“Protecting a company from the discipline of the market all but guarantees if gets worse rather than better. It doesn’t help that politicians often load the beneficiaries with counterproductive requirements. Take the news that the Environmental Protection Agency handed out $3 billion in Clean Ports Program funds from the Inflation Reduction Act on the strict condition that ports do not use automation. Welcome to the industrial policy stone age, where ‘keeping America competitive’ doesn’t mean keeping costs low for us as consumers through efficiency.”
—Veronique De Rugy, “Central Planning Won Big on Election Night,” Reason.com, Nov. 7, 2024.

“Just three California gravy trains are on track to burn through billions of dollars. The California High-Speed Train is costing about $1.8 million a day to build and won’t be completed for another decade. The current cost estimate to complete the project is $128 billion—nearly $100 billion more than the original price tag. President Trump previously cancelled federal funding for the project, but President Biden restored the money. The price tag of Nancy Pelosi’s six-mile subway extension from San Francisco to Silicon Valley is $9.3 billion, more than $1.5 billion per mile. The 1.3 mile extension of San Francisco’s Caltrain service is one of the costliest transit projects in the world, with a price tag of $6.7 billion, or $5.15 billion per mile.”
—Sen. Joni Ernst (R-IA), memo to Elon Musk and Vivek Ramaswamy, Department of Government Efficiency, Nov. 28, 2024

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The post Surface Transportation News: Will hydrogen fuel replace fossil fuel in vehicles? appeared first on Reason Foundation.

• Transportation planners and VMT: some fresh thinking
• What are asset concessions? Depends on who’s defining them
• Mileage-based user fees: academic research or pilot testing?
• Transportation ballot measures and road user charges
• New travel behavior data yields uncertainty
• The battle over port automation
• News Notes
• Quotable Quotes

Transportation Planners and VMT: Some Fresh Thinking

Several state governments have adopted policies aimed at reducing the growth of vehicle miles of travel (VMT) on their state’s roadway system. California leads the pack with a goal of reducing VMT by 20% by 2030. Other states with similar goals include Washington (reducing by 16%), Colorado (8%), Minnesota (7%), and Massachusetts (3%). I’m pleased to report that a number of transportation professionals have serious concerns about such policies.

One of these is UCLA’s Michael Manville. In an important report titled “Induced Travel Estimation Revisited,” part of which I reviewed in last month’s issue, Manville takes a detailed look at California’s VMT-reduction policy. Most of this is contained in the latter sections of the report, which I did not cover in the October issue.

The first of these sections goes into detail on “The VMT Effects of Adding Free Capacity,” raising a number of points about the many sources of vehicle miles of travel, including the potential that “some VMT that seems induced might actually have been anticipated,” leading to a decision to add capacity. This section also covers factors that might have been omitted from some induced demand papers, including a thoughtful discussion of post-2010 changes in VMT per capita and significantly reduced highway expansion since then.

The next section discusses “The VMT Effects of Managed Lanes.” Manville suggests that there is no empirical work on how a priced lane may affect regional VMT. He notes that thanks to pricing, at least during the busiest times of day, a priced lane will have higher VMT than a general-purpose lane. In addition, we also know empirically that trips in the priced lane are generally higher-value trips than in general-purpose lanes. These are not the kinds of trips “induced” by new capacity; they are existing trips that shift to the priced lanes. He also suggests that vehicles let into priced lanes without paying (e.g., electric vehicles) may rapidly congest those lanes, destroying much of their congestion-reduction benefits.

Manville also notes that the shift of high-value trips from general purpose (GP) lanes to priced lanes opens up capacity in the former (the “backfilling” effect), but he notes that the same “backfilling” is likely if drivers shift from general purpose lanes to a rail transit line.

I found part 3 of the report especially interesting: “What VMT Does and Doesn’t Tell Us.” First, in terms of greenhouse gas (GHG) emissions, Manville explains that “the relationship between VMT and transportation carbon emissions has been weakening over time,” and will continue to do so as hybrids and EVs make up larger shares of all vehicle miles of travel. Second, he discusses the very important point that VMT’s costs should not be separated from its benefits. To stimulate thinking on this, he notes that current carbon-based electricity has environmental costs, but also provides enormous benefits.

Manville explicitly challenges the premise of California policy that including benefits is not relevant for vehicle traffic, citing a Caltrans document “that compares VMT to a smokestack.” But the smokestack is a residual of the production of electricity, like a vehicle’s exhaust pipe is a residual of producing mobility. The sensible approach is to “write policies that target the externalities,” i.e., what comes out of the smokestack and the exhaust pipe. Carbon monoxide (CO), as he illustrates, has been hugely reduced from vehicle travel in recent decades, while we still have a long way to go with carbon dioxide (CO2).

He also criticizes the idea that VMT has no benefits (which is the implicit premise behind VMT reduction as opposed to targeting greenhouse gase reduction). And he goes on to explain that some modes of transit also generate significant GHGs. For example, “Many American bus miles, because they are on low-ridership coverage routes, emit more GHGs than the transit average, and some emit more per mile than a standard automobile trip.”

Lastly, Manville takes on the idea that “VMT Suppresses the Use of Other Modes.” But as he points out, in 20 large urban areas between 2000 and 2019, VMT grew almost everywhere while transit use fell in some places but not others. He also notes that in Los Angeles during this period, both VMT and transit ridership declined.

In summing up, Manville recommends that in future studies dealing with induced travel, researchers should separately analyze general-purpose-lane capacity additions and priced-lane capacity additions. He also repeats that it is a mistake to classify vehicle miles of travel solely as a cost (as California policy does), and he thinks “the state would do well to revisit this practice.” And I will add, so should Washington, Colorado, Minnesota, and Massachusetts.

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What Are Asset Concessions? Depends on Who’s Defining Them

Several years ago, there was considerable discussion in Washington, D.C., about infrastructure asset recycling. Pioneered in Australia, the idea was that a government would inventory its existing infrastructure assets and decide if some could be offered to investors under long-term public-private partnership (P3) leases. (One such U.S. example is the long-term P3 lease of the Indiana Toll Road.) The usual practice with such “brownfield concessions” is that most or all of the lease payments are delivered up-front, as a lump sum. The government in question then uses that windfall for needed new infrastructure investments.

I recall phone conversations with House staffers for then-Rep. Mike Gallagher (R-WI), explaining how such asset recycling works. In the Senate, colleagues and I advised Sen. Bill Cassidy (R-LA) on asset recycling, and he got a provision into the Infrastructure Investment and Jobs Act (IIJA) legislation that defines the new program. The explanation of what became 23 USC 611: Asset Concessions and Innovative Finance Assistance is available online at https://uscode.house.gov.

Some months ago, the Department of Transportation’s (DOT) Build America Bureau (BAB) put out a Notice of Funding Opportunity for the first set of planning grants funded by that IIJA provision. In September, BAB announced the first round of Innovative Finance and Asset Concession Grant Program (IFACGP) grants awarded—49 planning grants totaling $49.46 million. But as Public Works Financing explained in a September article about the grants, there is not a single brownfield lease among them. On the contrary, because the BAB-drafted conditions limit potential projects to those that would be eligible for a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, they must be greenfield projects that improve an existing asset.

That’s not what Australia pioneered, nor what Rep. Gallagher and Sen. Cassidy worked hard to include in IIJA. And if you read the full text of “23 USC 611: Asset Concessions and Innovative Finance Assistance,” you will see that it refers to long-term leases of existing infrastructure assets. The actual language in the statute discusses points such as value-for-money analysis for the proposed long-term P3 leases. There is no mention of asset concessions to improve existing infrastructure via a P3—or of TIFIA loans.

Some of us cheered when the asset concessions measure made it into what became IIJA. It seemed like a small but important first step in enabling state and local governments to assess potentially long-term leases of existing (brownfield) infrastructure that could be leased for large sums that could be invested in new (greenfield) infrastructure that would not otherwise be affordable. Unfortunately, that is not what Build America Bureau is doing.

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Mileage-Based User Fees: Academic Research or Pilot Testing?
By Baruch Feigenbaum

When I was a student pursuing a master’s degree in transportation planning at Georgia Tech, our program director detailed a survey of what educators and practitioners prioritized in a planning degree. Some skills, such as good communications ability, were valued by both groups. However, one skill, multi-variable quantitative analysis, received vastly different scores from the two groups. Educators thought this spreadsheet- or model-based tool was essential to a planning-based education, placing it in the five most essential skills to learn. Practitioners held the opposite view, placing it in the five least essential skills to learn.

There is an important parallel in the world of mileage-based user fees (MBUFs). Educators and researchers feel that unlimited studies examining all aspects of MBUFs are fascinating. Most educators are required to conduct a large amount of research as part of their jobs and wouldn’t have chosen the research profession if they didn’t like research. Partitioners are much less interested in unlimited research; they want to get things implemented. Research is important if it leads to implementation, but research for research’s sake is not.

Exhibit A in the research for research-sake toolkit is the Mineta Institute’s report titled, “What Do Americans Think About Federal Tax Options to Support Transportation? Results from Year Fifteen of a National Survey.” The annual study has used a longitudinal approach to examine public opinion on this topic over the last 14 years.

This year’s study asks participants a series of questions about MBUFs:

1. Which Option Would you Prefer:  A flat three-cent per-mile rate, a “green” rate that charges vehicles based on propulsion technology, or a business road fee that would be charged to heavy-duty vehicles, taxis, and ride-hailing vehicles.
2. How Frequently Should MBUFs be Paid: A monthly bill or an annual bill after the miles are driven.
3. Should Less Driving be Incentivized: A lower rate charged for the first 5,000 miles?
4. Should Electric Vehicles Receive a Preferred Rate?
5. Should Low-Income Drivers Receive a Discount?
6. Should Drivers Pay a Flat Annual Fee Instead?

For what it’s worth, here are my answers to the study’s questions. Charging a green rate or charging electric vehicles a lower rate would increase the general MBUF rate needed to fund roads. (For now, forget about the question of whether adding more electric vehicles to the roads is the best way to reduce greenhouse gas emissions.) A special rate for commercial vehicles makes sense, but it needs to be tied to the vehicle’s weight, and that needs to be clearer in the question.

Drivers are already incentivized for traveling fewer miles. That’s the whole purpose of a users-pay/users-benefit system. Giving drivers an additional discount does not make sense.

Generally, low-income drivers don’t drive as much as other drivers. Given the users-pay principle, I don’t see a reason to provide a discount here. A related policy question is whether local transit agencies are providing high-quality bus service for these customers.

Adopting a flat annual fee instead of a mileage-based user fee goes against the entire principle of a users-pay system. Those who drive more would pay less, while those who drive less would pay more. That’s the all-you-can-eat buffet approach to infrastructure use, and it would exacerbate transportation funding challenges.

Regardless of my preferences, public policymakers will solve these kinds of questions in the implementation process. Some of the states that are implementing permanent programs, such as Washington, are having these discussions. But fixating on these problems before a state conducts a pilot project threatens implementation across the board, regardless of the type of system.

Sometimes, research can be educational. But this stated preference research is not the best way to educate people. Asking survey questions when the participant is distracted by their children in the other room does not increase education or acceptance. Physically experiencing the technology increases acceptance. The MBUF community has found that participating in pilots provides the best education. My colleagues at Reason and I have a saying along the lines of, ‘If you think mileage-based user fees are the best idea ever, you should support a pilot. And If you think MBUFs are the worst idea ever, you should support a pilot.’

We need a greater focus on pilot projects and implementation, given the likely 10-year time frame from when a MBUF pilot is implemented to when a state program in which all drivers participate begins.

But research can still be helpful if it is focused on the implementation questions of political viability, cost of collection, and different collection mechanisms. Political viability includes whether there is a path forward for legislation can be passed by the legislature and signed by the executive. Typically, this involves creating coalitions. The cost of collection in some pilots has been well above 25% of the revenue collected. Actual collection costs need to be no higher than 10% of revenue, program-wide, to be viable. Finally, to help reduce those costs, states are examining new collection methods including smartphones and piggybacking on back-office tolling systems.

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Transportation Ballot Measures and Road User Charges

The American Road & Transportation Builders Association (ARTBA) released its usual report, the day after election day, on the fate of state and local transportation tax ballot measures. The headline notes that “Voters Approve[d] $41 Billion in Local Transportation Investment.” That result is due to 370 transportation funding measures that were approved, representing 77% of all those on state and local ballots.

The most common form is a time-limited (e.g. 20-years) transportation sales tax that typically funds roads, bridges, transit, and perhaps sidewalks and bikeways. This approach was pioneered in California. By the time my wife and I left Los Angeles for South Florida in 2003, every urban area in California had this kind of transportation sales tax, generally at the county level, and those counties were referred to as transportation “self-help counties.”

The U.S. transportation community is in the early stages of devising ways to shift roadway funding from per-gallon fuel taxes to per-mile charges, generally referred to as mileage-based user fees (MBUF) in the East and road user charges (RUC) in the West. Many MBUF/RUC advocates assume that the new per-mile charges should fund all kinds of transportation, as these transportation sales taxes do. I’d like to offer an alternative approach.

As most transportation people know, per-gallon gas taxes were invented in Oregon and first implemented there in 1919. Within a decade, all 48 states had done likewise. The overwhelming desire for paved roads was the driving force for this. Nearly all these new state fuel taxes were dedicated to highway funding, either by statute or via constitutional amendments. It was only much later, in the 1950s and 1960s, that state governments converted their highway departments to transportation departments and began using some fuel-tax receipts for other modes, including sometimes even airports and seaports.

When Congress created the first dedicated fuel taxes in the 1956 law authorizing the Interstate Highway System and the federal Highway Trust Fund, those gasoline and diesel taxes were likewise 100% dedicated to building the Interstates. It was only after much of the Interstate system was completed that Congress began to realize it could win political support by shifting portions of the revenue to transit, and later to dozens of other transportation purposes.

There is an uphill road ahead in gaining enough motorist/trucking/taxpayer support to phase out fuel taxes and phase in MBUF/RUC. One lesson from state pilot projects is ‘keep it simple!’

The replacement should be dedicated to fully supporting highways and bridges rather than being an ever-expanding revenue source for state governments. But here is the sticking point: how, then, will transit be funded (since we don’t know any way to make transit self-supporting from the farebox)?

The answer could be the already popular local transportation sales tax. Once a robust MBUF/RUC is in place in a state, those local measures could be re-purposed as transit sales taxes. This would have the advantage of local support and control, removing the tension between roadway and transit funding. And it would make it clear that the MBUF/RUC would not be an all-purpose tax for anything that could conceivably be considered transportation.

Replacing 100-year-old per-gallon fuel taxes with dedicated road user charges is a once-in-a-hundred-year opportunity. The transportation community should give this serious consideration.

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New Travel Behavior Data Yields Uncertainty

Data for 2023 from three federal sources are provided in a new report by Steven Polzin, Irfan Batur, and Ram Pendyala, “Emerging Travel Behavior Insights from 2023 National Surveys.” The three surveys are the American Community Survey (ACS), the American Time Use Survey (ATUS), and the Consumer Expenditure Survey (CES). For those interested in post-pandemic transportation patterns, this report will be of great interest.

The most familiar report is the ACS, which is widely used to evaluate changes in commuter behavior. Table 1 in the report shows commute mode choices from 2005 through 2023. Among the surprising results are that drive-alone commuting in 2023 shows up as only 69.2% compared with annual figures in the high 70s pre-pandemic. Carpooling is down slightly at 9% in 2023 compared with figures ranging between 10.7% (2005) and 8.9% (2019). Public transit has recovered somewhat from a low of 3.2% in 2020 but is well below the average for 2005-2019 which is slightly less than 5%. Walk, bike, and other is about the same as pre-pandemic, at 4.4% in 2023. What I found most surprising is the 2023 figure for work from home, down to 13.8% from 17.9% in 2021.

The ATUS presents a contrasting picture, especially for work from home. Its figure for 2019 (pre-pandemic) is 7.8% in 2019, leaping to 27.0% in 2021, 24.2% in 2022, and 21.6% in 2023. The reason for this disparity with the much lower ACS telecommuting figures is explained by how the two reports obtained their data. The ACS procedure is to ask full-time workers their “usual” means of commuting in the prior week. That means for those who worked at home part of the week, we have no way of knowing how many answered that as work-from-home and how many listed drove-alone, rode transit, etc. By contrast, ATUS asked respondents the mode used on the day of the interview. The considerably higher numbers logged by ATUS strike me as less ambiguous than the more-random nature of answers given to ACS interviewers.

The ACS work-from-home figures seem unrealistically low, given the ongoing controversies between employers and employees over employees’ unwillingness to return to the office full-time. They also seem somewhat at odds with continued downtown office building vacancies. In addition, higher-than-ACS levels of telecommuting help to explain ACS’s reduced drive-alone and transit mode shares.

There is a lot more interesting material in this new report, including insights provided by the CES data. So if you are a transportation data maven, this report is for you.

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The Battle Over Port Automation
By Marc Scribner

The three-day strike in early October by the International Longshoremen’s Association (ILA) at East Coast and Gulf Coast ports brought public attention to long-simmering disputes over the future of U.S. port infrastructure and operations. One main source of the dispute is the ILA’s demand that a new collective bargaining agreement include “absolute, airtight language that there be no automation or semi-automation,” according to ILA President Harold Daggett. The United States Maritime Alliance (USMX), which represents ocean carrier and port employers, has resisted a strict ban on all forms of automation. The ILA and USMX reached a tentative agreement to increase wages by 61% over six years and extend the current contract until Jan. 15, but both parties appear no closer on the issue of automation, so this strike pause may prove temporary.

Automated cargo handling equipment is increasingly used at seaport container terminals around the world. These technologies can be categorized as semi-automated or fully automated. Semi-automated terminals involve manned equipment to move containers from the ship berth to the storage yard and then automated equipment stacks them. Fully automated terminals complete all vertical and horizonal container movements within the terminal without human intervention.

There are numerous safety and productivity benefits. Removing human operators from hazards in the field reduces injury risk, which can be especially serious given the heavy equipment and cargo involved. Safety risks aren’t eliminated because human handling onboard ships is still necessary, and often a major source of accident risk, but researchers have estimated that terminal automation could reduce injury rates by 40%.

While reducing safety risk itself represents a financial benefit to terminal operators, their economic motivations are primarily centered on reducing the unit cost of container handling, increasing performance consistency, and reducing labor costs. Unsurprisingly, it is that final motivating factor for automation that has engendered backlash from organized labor.

In the United States, terminal operators are particularly interested in automation as a means to address physical capacity constraints. New terminals are few and far between, and most existing ports have little or no room to add acreage. Hence, densifying container yards through more efficient stacking is seen as critical for accommodating growing import and export volumes. In recent negotiations with the White House, USMX made clear that “[t]here is not enough land or berth capacity in US ports to handle future trade growth without implementing new technology,” according to documents obtained by the Journal of Commerce.

As it stands, automated cargo handling equipment is uncommon given its novelty, with a 2021 survey identifying just 63 semi-automated or fully automated container terminals in 23 countries globally. That being said, a 2024 Government Accountability Office (GAO) report found that U.S. ports are already lagging behind comparable ports in Asia, Europe, and the Middle East in the adoption of automated gantry cranes, automated guided vehicles, and remotely operated ship-to-shore cranes.

The GAO report also noted that while some jobs might be eliminated by automation, others would be created. The new jobs would be more focused on operations strategy rather than manual tactical work. And if enhanced port efficiency leads to greater throughput, more jobs will be needed to handle the additional traffic. These jobs will tend to be in safer and more comfortable office environments, rather than the dangerous manual labor that occurs mostly outdoors today. While automation-related jobs require a different skillset, some port stakeholders interviewed by GAO said they plan to “upskill” their existing workforces to fill these new positions.

The ILA is hardly alone among unions in opposing the adoption of labor-saving technology. As I have highlighted repeatedly in this newsletter, unions representing truck drivers, freight railroaders, and transit workers oppose any movement towards automated operations. What makes the ILA’s anti-automation demands stand out is the union is seeking to prohibit automation technologies that are already widely deployed, such as automated truck entry and exit gates at ports. In expressing his opposition to automation in all forms, the ILA’s Daggett lamented the proliferation all-electronic tolling and self-service retail checkout kiosks.

The ILA enjoyed sympathy during President Joe Biden’s administration, which rejected calls to exercise its authority under the Taft-Hartley Act of 1947 to end the strike, as President George W. Bush did when West Coast dockworkers and maritime employers reached an impasse in 2002. Section 206 of the Taft-Hartley Act (29 U.S.C. § 176 et seq.) grants the president the authority to halt or prevent strikes by seeking a court injunction to force employers and employees to continue negotiating. The Biden administration’s support for union demands on the eve of the 2024 election undoubtedly affected the calculus of both the ILA and USMX.

The election of Donald Trump will significantly alter the negotiating strategies of both unions and employers as the Jan 15 deadline approaches. The new Trump administration is likely to be much less tolerant of labor actions that negatively affect wide swathes of the economy and more inclined to invoke its authority under the Taft-Hartley Act to prevent strikes that affect national security. This may dash the ILA’s hopes of securing a total ban on any future automation, but unions are unlikely to make the deployment of automated cargo-handling equipment cheap or easy for terminal operators.

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News Notes

Charlotte Transportation Planning Organization Approves I-77 South Express Lanes P3 Project
The Charlotte Region Transportation Planning Organization (CRTPO) voted last month to proceed with developing the P3 procurement process for the proposed express toll lanes on I-77 between Charlotte and the South Carolina border. Earlier this year, the North Carolina Department of Transportation explained its assessment that conventional state construction would delay this much-needed project for many years, compared with a toll-revenue-financed public-private partnership. Because much of the project will be elevated, the estimated cost has increased to $3.2 billion. The project has been in CRTPO’s long-range transportation plan since 2014.

Texas A&M Considers 4.3-Mile Tunnel Transport System
University administrators are considering a $350 million below-grade tunnel system to be called the Aggie Loop. The project, offered by Elon Musk’s Boring Company, would be somewhat like the larger underground system the company is developing in Las Vegas, but it would be entirely on the Texas A&M campus. It would include six surface stations and three subsurface stations in “pedestrian hot spots.” It would run from a parking area on the east side of campus to apartments on the west. Boring Company’s headquarters, formerly in Hawthorne, CA, is now in Austin.

VDOT Unveils Beltway Express Lanes to Maryland
After several years of study, Virginia DOT has released its plan for the last link in its I-495 Beltway express lanes network, extending from I-395 to the Woodrow Wilson Bridge and terminating at Maryland 210. Maryland opponents have already described it as “Lexus lanes,” ignoring the popularity and high usage (for both motorists and express buses) of the existing lanes in Virginia. Last year Maryland’s new governor and DOT director abandoned the former administration’s plan to add express toll lanes to its portion of the I-495 Beltway and I-270.

Urban Institute Points Out Politicization of Discretionary Grant Programs
Researchers at the Urban Institute studied more than 1,200 projects that received $14.3 billion from 15 rounds of transportation discretionary grant programs enacted by Congress, between 2009 and 2024. Only about 9% of the applicants received a grant, and the choices made by U.S. DOT reflected each administration’s priorities: Democratic administrations favored transit and other non-highway projects, while Republican administrations priorities were the opposite. The four major recommendations were more-procedural than substantive. I hope these findings encourage Congress to scale back or eliminate discretionary grants in favor of formula funding, in the 2026 surface transportation reauthorization.

More Toll Roads Planned in Austin
Despite the populist opposition to tolling and express toll lanes in the Texas legislature, two additional toll road projects are in the planning stage in rapidly growing Austin. The Central Texas Regional Mobility Authority (CTRMA) is studying an expansion and extension of tolled US 290. New industries served by this highway include Samsung and Tesla. CTRMA is also considering adding a fourth lane each way to the SH 183A Toll Road.

Dynamic Tolling to Begin on Two Denver Express Toll Lanes
Colorado DOT announced last month that time-of-day variable pricing will soon be replaced by dynamic tolling, adjusted every 5 to 15 minutes based on the level of traffic in those lanes. The change will be implemented this fall. The change will apply to 18 miles of express toll lanes on I-25, between Monument and Castle Rock. It will also be implemented on the 12-mile express toll lanes on I-70.

Oregon and Washington State Discuss I-5 Bridge Tolling
The Joint Washington State and Oregon Transportation Commission met in late September to discuss the tolls that will be charged to help pay for the I-5 replacement bridge across the Columbia River, now expected to cost close to $9 billion (compared to a 2020 estimate of $4.8 billion). Up to $3 billion of that cost is attributed to Oregon’s commitment to extending its light rail line across the bridge to Vancouver, WA. The relatively low variable toll rates being considered (either between $1.55 and $3.20 per trip or between $2.00 and $4.70) are estimated to finance either $1.24 billion or $1.6 billion, respectively. That would be a much larger contribution if the bridge cost $6 billion (without light rail, using express buses instead) rather than $9 billion with light rail. Oregon DOT has also proposed new tolling rules, allowing any government agency or any private group to propose toll financing of specific highway projects.

Can Robotaxis Be Much Less Costly?
Forbes contributor Brad Templeton discussed Waymo’s 2nd-generation robotaxi, which is made in China by Geely/Zeekr in his Aug. 20 column, using it to assess how such vehicles could become far less costly due to technological progress and large-scale production. He cites today’s $5,000 LIDARs that could drop to as low as $1,000 if autonomous vehicle production volumes greatly increased. He also itemized an array of costly components that would not be needed, including steering wheel, pedals, power steering motor, dashboard, adjustable driver’s seat, rear-view and side-view mirrors, high-end audio, and (for local-driving robotaxis) no extra-range batteries. The high cost of today’s prototype robotaxis is partly due to them being conversions of conventional vehicles.

More Bad News for U.S. Downtowns
Office vacancies have hit 20.1% as of September, according to Moody’s, the highest vacancy rate since 1979 when it started keeping track of this parameter. Downtowns are generally the worst-affected. The Economist (Sept. 7) cited downtown vacancies of 32% in San Francisco and 23% in downtown Austin, whose overall population is still growing rapidly. Partly empty downtown offices have dire implications for mass transit systems, most of which are designed to bring commuters to and from downtowns.

Sao Paulo Plans $1.07 Billion Port Tunnel
The Port of Santos is the largest container port in Latin America. Yet roadway access to nearby Guaruja takes place via ferry. Last month the Sao Paulo legislature approved a long-term public-private partnership (P3) to build and operate a $1.07 billion roadway tunnel beneath the waterway. Because no tolls will be charged, the project will be financed 86% by the federal and Sao Paulo governments, with the balance from private investors. Presumably the revenue stream will be government availability payments. Travel time using the tunnel is estimated at less than five minutes, far faster than the current ferry. The project is related to the upcoming privatization of the Port of Santos.

North Carolina Express Toll Lanes to Open in 2025
NC DOT has announced that the new express toll lanes on I-485 in Charlotte will be open to traffic by late summer 2025. The $346 million project is adding one express toll lane in each direction on that freeway between I-77 and US 74. This is the second step in the gradual implementation of a network of express lanes in the Charlotte metro area, with the third project being the planned elevated express lanes on I-77South.

CCR Wins Concession for Brazil’s Rota Sorocabana
Infralogic reported (Oct. 30) that transportation conglomerate CCR won the auction to design, build, finance, operate, and maintain the $1.5 billion Rota Sorocabana highway in the state of Sao Paulo. The project will modernize a system of 12 highways crossing 17 municipalities. The roads will be widened and adjacent walkways and bus stops will be added on the shoulders. CCR has operated a portion of the route under contract since 2005. The P3 concession is for 30 years.

Highway Construction Costs Continue to Increase
The Federal Highway Administration (FHWA) reported in late September that U.S. highway construction costs increased in the first quarter of 2024 at an annual rate of 9.6%. Since FHWA began the National Highway Construction Cost Index in 2003, highway construction cost has increased to become 3.19 times higher than in 2003. That equates to an annual increase averaging 15.2%. The most recent series of high annual increases began during the recovery from the Covid pandemic.

MassDOT Begins Service Plaza P3 Procurement
Like most other toll roads east of the Mississippi, the Massachusetts Turnpike has service plazas that offer fuel, food, restrooms and other services. MassDOT recently released an RFP for a project to redevelop and modernize its 18 service plazas under 30-year P3 agreements. Initial responses are due Nov. 19. Requirements include trucker amenities and DC fast chargers for electric vehicles. The 30-year P3 concession(s) will be structured as leases with an option for a 10-year extension, as reported by Public Works Financing (Sept. 2024). Interestingly, only 11 of the 18 service plazas are on the Turnpike. The others are on I-95 and state routes 3, 6, and 24.

Italy Needs €70 Billion in Toll Road Investment
World Highways (Nov. 4) reports that the country’s Ministry of Infrastructure and Transport is in the process of determining long-term investments needed to maintain, upgrade, and develop Italy’s vast toll roads network. The scope of the analysis is comparable to the U.S. Transportation Research Board’s 2019 report on the future of our Interstate Highway System, which is much larger than Italy’s toll roads system. The TRB estimated a $1 trillion price tag over several decades to rebuild and modernize the Interstates.

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Quotable Quotes

“While robotaxis spare the expense of paying a human driver, they are far from cheap. Analysts from Bernstein estimate that Waymo’s driverless cars cost between $150,000 and $200,000 apiece, factoring the cost of the vehicle itself and the sensors and computing power to run them. And those cars are nearly always operating and—thus—generating costs for their operators, while fleets of cars with human drivers can be scaled up and down based on demand and don’t generate costs when not carrying passengers. The high fixed costs of a fully autonomous vehicle network ‘creates economic questions around up-front costs and utilization rates during non-peak hours.’ Bernstein’s analysts wrote in a report last month.”
—Don Gallagher, “Uber Has a Leg Up on Tesla in the Robotaxi Race,” The Wall Street Journal, Oct. 5-6, 2024

“I think one of the biggest challenges for our industry is getting the public to appreciate the real costs of infrastructure projects. It is the easiest thing in the world to argue to reject or cancel a project, but given the time value of money for these projects, changing the delivery model or going back to the drawing board would simply never pencil out. Owners need to be constantly emphasizing that tradeoff and pushing projects forward, because these projects simply aren’t going to get any cheaper by waiting. . . . At the same time, I think we need to understand that user fees are part of the solution, and not necessarily going to cover the entirety of these projects. For us, Calcasieu and the [new] Mississippi River bridge collectively will cost more than $6 billion. To put that into perspective, that’s more than our total capital construction spend over the previous 7.5 years combined.”
—Shawn Wilson (WSP, former Louisiana Secretary of Transportation & Development) in Michael Bennon, “PWF Interview with Shawn Wilson,” Public Works Financing, Sept. 2024

“In Europe, the term ‘induced traffic’ has been weaponized by the anti-road (ultimately anti-car) lobby to the extent that the phrase has become confused and meaningless. More and more professional folks are avoiding it (and being more precise with their language). The argument generally goes as follows: ‘Build new roads and after a short time, congestion returns, so you’re back to square one. So there’s no point.’ However, expanded highways are built in places where congestion has clearly become a problem. The additional traffic is not ‘induced’ by the road as such. In many cases, it’s simply the release of pent-up demand. And who is to say that these ‘new’ trips (when and where they crystalize) are any less valid than other trips that folks are currently making on the highway network.”
—Rob Bain, CSRB Group transportation consultant, email to Robert Poole, Oct. 10, 2024. Used with the author’s permission.

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The post Surface Transportation News: Fresh thinking about vehicle miles of travel appeared first on Reason Foundation.

• Does new highway capacity always “induce” more travel?
• Are metro area roadways too costly to expand?
• New data on automated vehicle safety
• Update on the Key Bridge replacement funding
• Caltrain electrification—not so green
• The problem with discretionary grants
• News Notes
• Quotable Quotes

How Much Does New Highway Capacity “Induce” Demand?

Current California highway policy requires that analysis of proposed highway lane additions be assessed by an “induced vehicle miles of travel (VMT) calculator.” Essentially, the analyst plugs in the location, the facility type, and the number of lane-miles proposed to be added and the calculator generates the annual amount of new VMT generated by the added capacity.

A long, detailed paper by UCLA urban planning professor Michael Manville reports the results of an expert panel that looked into induced-demand modeling. It found consensus that the elasticity found in credible studies is 1.0—i.e., for every 5% increase in lane-miles, there will be a 5% increase in induced VMT.

After many years of reading research reports on induced demand, as well as discussing the subject with many civil engineers and other transportation gurus, I suspect that these models fail to distinguish between new trips that would take place for other reasons and those that are due to the increased highway capacity itself.

I recently watched a video interview of Arizona State University transportation policy analyst Steven Polzin discussing induced demand. His assessment of what happens when highways in urban areas are expanded parallels mine. Here are five reasons for additional travel when a metro-area highway is expanded.

First, some trips shift from local roads to the expanded highway. These are not new trips in the metro area; they have just changed their route. So they have not been “induced” by the added capacity.

Second, some trips shift from other times of day because the highway now appears to be less congested. Again, these temporal shifts are not new trips in that metro area.

Third, if there are new developments (housing, commercial, industrial) in the region, they will likely generate new trips, some of which may be on the expanded highway. But their cause is the new development, not the added highway capacity.

Fourth, we must distinguish between rapidly growing metro areas (e.g., Austin) and low-growth or shrinking metro areas (e.g., Cleveland, Detroit). While capacity expansions are unlikely in the latter, places like Austin desperately need new capacity to cope with the huge population increase of recent decades. Those trips will use the expanded capacity, but they are not “induced” by it—they are already there.

Fifth, some people may shift from carpools or transit in order to get a faster trip on the expanded highway. This would add to total highway trips (and can be considered “induced”), but since carpool and transit use are far lower than 20 years ago, there aren’t that many trips of this kind to shift in most metro areas, so this is a small amount “induced.”

Polzin considers that most actual induced demand comes about in cases where, because of the new capacity, some people change the location of their residence or their job, so they can benefit from having a better job or residence, and they expect that using the new capacity will be better than making a longer trip on surface streets.

Generally ignored in induced demand studies are large changes in highway travel over the past 20 years. VMT per capita peaked in 2005 and has continued to decline due to substitution of communications for travel. Today we have huge amounts of online shopping, mostly online banking, and some degree of real estate and medical transactions taking place online. The major socioeconomic changes of the 1960s and 1970s that greatly expanded the participation of women in the workforce have pretty much topped out, which also helps explain the much slower VMT growth of the past decade.

The metro area roadway network is essential for economic prosperity. Seemingly ignored in induced demand studies is the ongoing growth in all kinds of commercial vehicles: deliveries of online shopping, provision of residential services (yard maintenance, pool maintenance, electricians and plumbers, trash pickup, etc.). Distribution centers in large metro areas are served by heavy trucks, which need to get to and from them (and are often not fully factored into planned highway expansions).

In his online interview, Polzin also reminds us that good urban mobility is virtuous. He cites the ability of emergency vehicles to get where they need to go as quickly and reliably as possible; the ongoing growth of home delivery of online purchases that reduces shopping trips; preserving neighborhoods from cut-through traffic (of which I was guilty when I lived in Los Angeles and had to commute daily via I-405 through the Sepulveda Pass); and especially the urban agglomeration benefits due to people being able to reach a huge number of jobs in a relatively short time. None of that seems to be taken into account by the assumptions built into restricting highway capacity due to concerns over induced demand.

If nearly all the induced demand models find that a five percent increase in lane miles generates a five-percent increase in VMT (which would not otherwise be taking place), then something in the models is wrong, and I suspect it is failing to distinguish between new trips that arise for other reasons from those actually “induced” by added capacity. We need a lot more careful thinking about capacity expansion and its benefits.

P.S.: One modeling expert who disagrees with conventional induced demand analysis is Alex Anas of the State University of New York at Buffalo. His Dec. 2022 paper, “’Downs’s Law’ Under the Lens of Theory: Roads Lower Congestion and Increase Distance Traveled,” takes issue with the much-cited 2011 induced demand paper of Duranton and Turner, but Anas’s modeling is beyond me.

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Are Metro Area Roadways Too Costly to Expand?

A new working paper from the National Bureau of Economic Research (NBER) seeks to quantify the amount and value of the land occupied by metro area roadways in the United States. The identical paper, “Urban Roadway in America: The Amount, Extent, and Value,” by Erick Guerra, Gilles Duranton, and Xinyu Ma, was published simultaneously in the Journal of the American Planning Association. The NBER version is Working Paper 32824.

The paper’s focus is roadways in 316 Primary Metropolitan Statistical Areas (PMSAs). Using Landsat data, the study’s authors estimated that roads occupy between 20% and 25% of all PMSA land area, though the amounts vary considerably: very large PMSAs have by far the highest valued land, but suburban areas devote a larger fraction of it to roads.

Most of the paper explains their methodology for obtaining those estimates, but most of the attention will be drawn to the authors’ “back-of-the-envelope cost-benefit analysis of US roadway investment.” That exercise leads them to conclude that “the costs of widening roadways exceed the benefits to drivers and truckers by a factor of three on average, after accounting for the value of land.” And “removing and narrowing roadway, by contrast, may have the potential to generate substantial benefits.”

I have quite a few concerns about this paper and how it will be used by anti-auto/anti-highway groups to oppose needed widenings for safety (protected bike lanes), congestion relief (variably-priced express toll lanes), and simply to accommodate projected high growth in auto and commercial trucking traffic in high-growth PMSAs.

One immediate reaction is that today’s high central city and suburban land values result in part from the access provided by a PMSA’s roadway network. Without the anywhere-to-anywhere access provided by such networks, we would not have massive empirical evidence that, on average, U.S. commuters can reach 22 times as many job locations in 40 minutes via personal vehicle than via transit. That, in turn, leads to today’s significant urban agglomeration benefits, which result from many more high-value transactions between employers and employees across the entire PMSA landscape. Similar findings are found in European metro areas, as I reported in the Aug. 2024 issue of this newsletter.

The paper acknowledges different magnitudes for the effects in three sets of urban land: the urban core, the main city, and the overall Primary Metropolitan Statistical Area. It would be more enlightening if the third category were suburbia, which is not separately reported. I noted this when the authors reported that their street values per capita range from $20,000 to $275,000.

Overall, they estimate that roadway land in all 316 Primary Metropolitan Statistical Areas is now worth $4.1 trillion. When they break this down by the three components (PMSA overall, city, and core), the standard deviations are huge, especially for road value per hectare, as much as 4.6 times the average value for core cities. This means that their eventual back-of-the-envelope cost/benefit analysis for roadway expansion would vary enormously from one PMSA to another, but the paper only provides one calculation and generalizes that roadway expansion anywhere has costs greater than benefits.

Their cost/benefit analysis assumes a very modest reduction in congestion from roadway widening, evidently assuming that added lanes are general-purpose lanes rather than variably priced express toll lanes (ETLs). As we have learned, express toll lanes offer faster and more reliable trips during peak periods for express bus service as well as for personal-vehicle commuters.

Also not considered is the use of elevated or tunneled lane additions, such as Tampa’s elevated express lanes on the Selmon Expressway and Dallas’s below-grade express toll lanes on the LBJ Freeway. Those alternatives cost a lot to build, but if land for widening is as costly as the authors suggest, toll-financed below-grade and above-grade additions are important alternatives.

Overall, this is an ambitious paper, but with a number of shortcomings. Unfortunately, it will likely be used by anti-highway advocates as yet another reason to kill proposed highway expansions.

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Automated Vehicle Safety Evidence Grows, But Regulators Need to Catch Up
By Marc Scribner

Automated vehicle (AV) developers have long emphasized the potential safety benefits of eliminating the driver error and misbehavior responsible for the vast majority of crashes. Given the novelty of the technology, demonstrating these safety benefits in early deployments remains a challenge. One leading AV developer, Waymo (formerly the Google Self-Driving Car Project), has been producing increasingly credible evidence to support its safety claims. From now on, more AV developers should adopt a Waymo-like approach to demonstrating safety. Policymakers should also take note, as current AV data-reporting mandates leave much to be desired.

Traditional safety analysis often relies on statistical analysis of historical crash data. Since AVs are brand-new and not widely deployed, these traditional tools are of little use. The general challenge was surveyed in a 2020 RAND Corporation report, which I discussed in the Dec. 2020 issue of this newsletter. To bolster their safety cases, AV developers have been working to develop alternative but still-credible methodologies.

In this endeavor, Waymo is undeniably the leader, regularly publishing its safety analyses on its website and in peer-reviewed journals. In the second half of 2023, for instance, Waymo released three studies making use of insurance and police-report data that found a 57% reduction in the police-reported crash rate, a 76% reduction in property damage claim frequencies, and an 85% reduction in the “any injury reported” crash rate. These analyses were discussed in the Jan. 2024 issue of this newsletter.

Waymo’s safety studies from last year covered at most 7.14 million miles driven through Oct. 2023 in Los Angeles, Phoenix, and San Francisco. Since then, Waymo has been ramping up its robotaxi service in the few markets it serves, going from 50,000 paid rides per week in May 2024 to more than 100,000 per week in September. The company has announced plans to expand commercially into at least two new markets in 2025, Atlanta and Austin.

In September, Waymo also released new data and a safety analysis of 22.2 million driverless miles through June 2024. This total is composed of 15.399 million miles in Phoenix, 5.931 million miles in San Francisco, 855,000 miles in Los Angeles, and 14,000 miles in Austin. In selecting crashes for analysis, Waymo adhered to requirements of the National Highway Traffic Safety Administration’s Standing General Order on AV crash reporting, which amounted to 192 crashes—or a crash every 115,620 miles.

Of those 192 crashes, 82 (42.7%) were crashes involving changes in velocity of less than 1 mph, indicating very minor low-speed collisions. When these types of crashes occur with human drivers, many go unreported. To make more accurate comparisons to human drivers, Waymo has developed a human driver benchmark that adjusts for underreporting, as well as Waymo’s different vehicle characteristics and driving conditions. When compared to Waymo’s human driving benchmark, the company estimated its vehicles produced 48% fewer police-reported crashes, 73% fewer injury-causing crashes, and 84% fewer crashes where airbags deployed.

Technology journalist Tim Lee, who publishes the excellent Understanding AI newsletter, did a deep dive into Waymo’s latest safety data. Lee examined the 25 most severe crashes that either caused an injury, caused an airbag to deploy, or both. He found:

• 17 crashes involved another car rear-ending the Waymo vehicle;
• 3 crashes involved another vehicle running a red light prior to colliding with a Waymo vehicle;
• 2 crashes involved a Waymo vehicle getting sideswiped by another vehicle in an adjacent lane;
• 2 crashes involved another vehicle making a left turn into the path of a Waymo vehicle; and
• 1 crash involved a Waymo making an unprotected left turn that was struck by another vehicle that was traveling in a bicycle lane.

Based on the crash report narratives for these 25 most severe crashes, Lee believes “that a non-Waymo vehicle bore primary responsibility for most, and possibly all, of these crashes.”

In his review of Waymo’s public dataset, Lee discovered a few minor errors. First, three crashes that the company had reported to federal regulators had not been included in its initial release, which Waymo staff quickly corrected after Lee notified them. Second, four crashes had their injury status categorized as “unknown” while the crash report narratives indicated injuries were present. Waymo told Lee it is looking into these apparent discrepancies.

Lee believes these errors “were honest mistakes rather than deliberate efforts to cover up crashes,” leading him to conclude, “I find Waymo’s data to be fairly credible, and those data show that Waymo’s vehicles crash far less often than human drivers on public roads.”

Waymo has set a high bar for safety case credibility, and other AV developers should follow its lead. Debacles like the one that occurred with GM subsidiary Cruise in San Francisco last October threaten to undermine public confidence in this nascent industry. With Cruise entering a two-year consent order with federal regulators on Sept. 30, the AV industry would be wise to be as transparent as they can be about safety.

But regulators have responsibilities too, and one under-discussed facet of regulatory oversight is the quality of the safety data reporting requirements that regulators impose on the AV industry. California was the first state to require standardized safety data reporting, most notably for “disengagements” of the automated driving system. I coauthored comments to the California Department of Motor Vehicles (DMW) in 2017 warning that crude disengagement reporting would discourage AV developers from testing in more complex settings and thereby undermine the validity of this supposed safety metric. The California DMV is currently in the process of revising its AV regulations, including data reporting requirements, and Gov. Gavin Newsom just vetoed a bill that would have reduced the integrity of AV data reporting in the state.

A central goal of the California DMV’s AV data reporting requirement revision is better conformity with the National Highway Traffic Safety Administration’s (NHTSA) Standing General Order (SGO) requirements. While better alignment across jurisdictions makes sense, the underlying problem is that the SGO requires the reporting of trivial events that have no bearing on AV safety. These include incidents of electric scooter riders lightly impacting AVs and then continuing on their way as if nothing had happened—or my favorite, when an apparent drunken fight broke out in the driveway of a Las Vegas hotel, and the two belligerents stumbled into a Zoox taxi moving at 2 mph before they fled the scene.

Due to poorly defined reporting parameters, the SGO incident database is littered with junk data of little use to safety researchers. This signal-to-noise problem will only worsen as AV deployments scale and reportable events inevitably increase. In July, NHTSA announced it was moving forward with a rulemaking project to codify AV incident reporting requirements. This gives the agency an opportunity to consider the views of outside experts—something NHTSA failed to do when it abruptly issued the SGO without public input. In particular, NHTSA should examine the cutting-edge safety analysis conducted by Waymo and other AV developers to ensure any reporting requirements are actually useful for advancing safety.

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Update on Key Bridge Replacement Funding

Despite heavy lobbying of Congress, Maryland officials failed to obtain legislation to guarantee federal funding for 100% of the cost of replacing the Francis Scott Key bridge prior to Congress going on recess in the run-up to Election Day. Meanwhile, there is initial progress for replacing the bridge, which collapsed after a container ship hit it in March, and news about recovering damages from the shipping industry’s insurance policies.

First, the Maryland Transportation Authority (MDTA) signed an initial $73 million contract with Kiewit Infrastructure Company as the first step toward a progressive design-build contract, which Kiewit priced at $1.3 billion for the construction project.

Second, also in August, MDTA received its first insurance payout regarding the bridge collision: $350 million from Chubb under its “property and business interruption policy” on the bridge.

Many other financial transactions will be played out over the next year or two. On Sept. 24, the State of Maryland sued the ship’s Singapore-based owner and operator, Grace Ocean Private Ltd. and Synergy Marine Group, for having knowingly sent an unseaworthy ship into U.S. waters. Grace Ocean and Synergy Marine filed a court petition only days after the collision seeking to limit their liability for the collision. The State of Maryland, the City of Baltimore, the International Longshoremen’s Association, and several others filed opposing claims, which were consolidated into one liability case near the end of September. Also, under maritime law, shippers of cargo on a ship involved in a disaster share in the ship line’s liability, and shippers on the Dali must pay $20,000 per 40-ft. container. With about 5,000 containers on board, that totals $100 million. Not yet heard from, as far as I know, are any of the shipping industry insurance pools, such as the London-based Brittania P&I Club. The Wall Street Journal reported that up to $3.1 billion is available per shipping disaster from these pools.

It appears that insurance proceeds could be ample to cover the $1.3 billion cost of the replacement bridge. This suggests that if Congress provides up-front money for the construction project (whether 90% or 100%), it should be in the form of a loan, not a grant. There’s no good reason for federal taxpayers to be on the hook for this.

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Caltrain Electrification is Less Green than Expected

Last month, the oldest commuter rail line in the western United States, Caltrain on the San Francisco peninsula, ditched its old diesel locomotives for new electric locos, using Caltrain’s new overhead electric lines. The cost of the locomotives and electrification was $2.5 billion. For most of the 20th century, this line was operated by Southern Pacific Railroad, using steam locomotives retired from long-distance service to haul the commuter trains until 1957, when they were replaced with diesels. Growing losses led Caltrans, the state’s transportation department (DOT), to take over the funding in 1980. It bought the right of way from SP in 1991, and the next year it hired Amtrak to operate the line, ending SP’s involvement.

The electrification of Caltrain this year has been hailed as a major step toward cleaner air and reduced CO2 emissions. But technology expert Brad Templeton recently took a closer look. Caltrain notes proudly that electrification will reduce greenhouse gas emissions by 250,000 metric tonnes per year, as well as being quieter, faster, and more frequent.

Templeton’s first surprising point is that the old diesel Caltrain “was using many times more fuel than its passengers would have burned if they each drove a one-person SUV.” Oh-oh! As he explains, the numbers show that the diesel trains were using about 25 million gallons of diesel fuel per year, which equated to 3.5 gallons of diesel (equivalent to 4 gallons of gasoline) per boarding. A 30-mile round trip in a car with an average of 1.5 occupants would use 2 gallons of gas per person. If a diesel Caltrain were a car, “it would be classed as one of the heaviest polluters per passenger.”

But doesn’t electrification fix all that? Unfortunately, Caltrains don’t run full, even peak-time/ peak-direction. And they run all day, rather than operating inbound in the morning and outbound in the afternoon, as many commuter trains do. Thus, “the theoretical efficiency of the [electric Caltrain] is good, but moving empty seats isn’t of value.” Yes, the new Caltrain will pollute much less than the old one, but “it’s likely it will use several times as much energy per passenger mile as the average electric car.”

Looking to the near future, Templeton notes the availability of driverless commuter trains, with vehicles sized to actual demand at various times of day. But he also notes the paradox of shared transport. “When people share a vehicle, each makes some compromise from their ideal door-to-door route and time. The more people in the vehicle, the more efficient but also the more compromise…In the U.S., the most efficient transit is the vanpool, because vanpools tend to have higher load factor.”

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The Problems with Discretionary Grants
By Baruch Feigenbaum

For 60 years, federal surface transportation funding was funded almost entirely by formulas. These formulas were created by leadership on the Transportation and Appropriations committees in the House and Senate with input from majority and minority party leaders. The process was somewhat political in nature as bill authors received more funding than other members. Many hoped the federal discretionary grant programs, which have exploded over the last 20 years, would be less political. But that has not been the case.

I’ve written previously about problems with major discretionary grant programs: Transportation Investment Generating Economic Recovery (TIGER), Better Utilizing Investments to Leverage Development (BUILD), and Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants.

This time, I want to examine the 101 discretionary grant programs in the IIJA. While these grants are intended to complement formula funds, with $150 billion of grant funding available, many projects can be funded without formula funding.

To determine if the grants meet the key goals of being nationally-oriented, solving transportation problems, and being cost-effective, I selected one project in 11 of the 101 programs. Projects were selected at random and stratified using an Excel spreadsheet to ensure that they were representative of all projects. For example, I did not just choose roadway projects but transit and complete streets projects as well. (For this exercise I did not choose aviation, freight, and port projects). I used the most recent round of grantee awards, often 2024 but sometimes 2023 or 2022:

Let’s examine these 11 projects.

1. The Appalachian Regional Initiative for Stronger Economies (ARISE) program provided $9 million to the Boone’s Ride and Cumberland Trails Conference Improvements, for trails and a wastewater treatment plan in eastern Kentucky and Tennessee. This is a local project that lacks a transportation component.
   
2. The Bridge Investment Program provided $73 million to Bay City, MI, to replace an aging, functionally obsolete bridge. This bridge is federal in focus, transportation-related, and cost-effective.
   
3. The Delta Workforce Grant Program provided $447,000 to the Memphis Chamber Foundation to build a STEM-focus pipeline for manufacturing jobs in Memphis. This project is neither transportation- nor federally-focused.
   
4. The Federal State Partnership for Intercity Passenger Rail awarded $1.1 billion to upgrade a stretch of track between Raleigh and Wake Forest, NC, approximately 18 miles long. This stretch is federally-focused and transportation-related, but a poor use of funding. Assuming equivalent cost, more than $10 billion would be required to upgrade the 175 miles of track for limited ridership.
   
5. The Low or No Emissions Grant Program awarded $4.6 million to the Roaring Fork Transportation Authority in Aspen, CO, to establish a fleet of electric buses. Electric buses’ battery life is shortened significantly in both the extreme heat and the extreme cold, making them unusable in some parts of the country. A ski resort with an average January temperature of 22 degrees would seem to be one of those places. In addition to not being federal in nature, the project seems a bad use of funding.
   
6. The National Infrastructure Project Assistance (Mega) Program funds projects that are too large or complex for traditional funding projects. The $150 million for the Cross Bronx Expressway Multimodal Corridor would provide a car lane, a bus lane, and a bicycle lane on a new arterial roadway paralleling the Cross Bronx Expressway. The program is transportation related, but it is not federal nor is it cost effective.
   
7. The National Scenic Byways program awarded $714,000 to the Iowa Department of Transportation to install 51 kiosks at key entry points on the state’s scenic byways. The kiosks provide maps, intrinsic information, and on the importance of the byways. The project is not federal and may not be transportation-related.
   
8. The Northern Border Regional Commission is a program to improve rural economic vitality in Maine, New Hampshire, New York, and Vermont. Lyons, NY, received $3 million for road, water, and sewer infrastructure improvements. Of the 37 projects funded in this economic development program partly funded by transportation revenue, this is the only one that was transportation-related, and the project is not federal in nature.
   
9. The Public Transit on Indian Reservations program awarded the Village of Unalakleet in Alaska $1.4 million in funding to acquire equipment to maintain transit corridors in the winter. Again, this project is not federal in nature.
   
10. The RAISE program awarded funding to the Cedar Lake Road Realignment in Lake County, IL, to construct a new alignment for Cedar Lake Rd including bicycle paths, pedestrian crossings, and improvements to the local commuter rail station. The roadway project is not federal in nature.
    
11. The Thriving Communities program allows disadvantaged and under-resourced communities to improve their transportation systems. USDOT gave an undetermined amount of money (the grant totals were not listed on DOTs website) to build a Complete Streets network in Baltimore, which is not federal in nature and may not be cost-effective.

Of the 11 projects that I analyzed, only one met all three criteria (federal in focus, transportation-related, good use of funding).

The biggest problem is that discretionary funding has gone from federally-focused and transportation-related to locally-focused and often tangentially related to transportation. For example, Congress created the Appalachian Regional Commission to develop the Appalachian Region. Some local leaders saw the program as a way to get ‘free money’ for their districts. As other regions saw the benefit of this entity, Congress created the Delta Regional Authority in the south and the Northern Border Regional Commission in the northeast.

Another problem is that almost every specialized interest group seems to have a program. Do Indian reservations need a separate transit funding program? Does Complete Streets need a dedicated program? Even if these projects were a core federal transportation funding need, they could be (and often are) funded in a formula program.

For the next surface transportation reauthorization Congress should sharply reduce or eliminate transportation discretionary programs. While the idea of a merit-based selection process seems better than formula grants, the actual results have been far worse.

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News Notes

Oregon Releases I-5 Bridge EIS
The Oregon Department of Transportation released the draft supplemental Environmental Impact Statement (EIS) for the I-5 bridge replacement project between Portland, OR, and Vancouver, WA. The next step is a 60-day public comment period for the project, estimated to cost between $5 billion and $7.5 billion. The EIS estimated large peak-period reductions in congestion in both directions. It also estimated potential property takes that could displace up to 47 residents and 36 businesses. The replacement bridge will be tolled, which will reduce the amount of federal and state transportation funding needed.

New York Congestion Pricing Might Still Go Forward
Lawsuits that challenge New York Gov. Kathy Hochul’s cancellation of the plan to implement congestion pricing in Manhattan were upheld in late September by state Supreme Court judge Arthur Engoron, the New York Times reported on Sept. 27. The program was scheduled to go live on June 30, but Gov. Hochul cancelled it at the last minute. The two lawsuits were filed by transit advocacy group Riders Alliance and by the City Club, a civic organization.

Tampa’s Replacement Bridge Nearing Completion
Last month, Florida DOT held an open house for reporters on the nearly finished Howard Frankland Bridge replacement. Construction work should be wrapped up by year-end, and it should be open to traffic in spring 2025. The bridge will include two express toll lanes in each direction, enabling faster and more reliable trips during peak periods for motorists and express bus commuters alike.

Greece Privatizes Athens Toll Road
Reuters reported that the Greek government has signed a $3.64 billion public-private partnership (P3) lease of the 44-mile Attica Motorway.  The long-term P3 lease went to winning bidder GEK Terna. The concession will run for 25 years. Under a revenue-sharing plan, the government will receive 7.5% of gross toll revenue in addition to the up-front lease payment. Greece uses the proceeds from P3 leases and asset sales to reduce its national debt.

Partial Opening of Expanded Houston Ship Channel Bridge
To accommodate rapid growth in truck and other traffic, the Harris County Toll Road Authority (HCTRA) has been expanding the Ship Channel Bridge from two lanes each way to four lanes. Near the end of September, HCTRA announced the reopening of the southbound lanes, in their expanded condition. The cost of the expansion, $1.3 billion, is being financed via toll revenues generated by the bridge.

Investors Refinancing Texas SH 130 Concession
Infralogic (Sept. 20) reported that the primary owner of the long-term P3 concession of this north-south highway between Austin and San Antonio is refinancing the 41-mile toll road. Strategic Value Partners (SVP) acquired the project out of bankruptcy, along with several partners. SVP’s fund that invested in SH 130 is due to expire soon, so it is seeking new investors in the concession, which has 38 years remaining. The new investments will also add a non-tolled connection to I-35 at the southern end and a truck parking facility. Toll revenue has doubled from 2019 to 2023, thanks to both a toll rate increase and a 60% increase in traffic.

Argentina Planning Highway Privatizations
As reported by Infralogic, Argentina plans to auction off state-owned highway operator Correadores Viales, which manages 6,000 km of roads across 13 provinces. A separate auction will be held for each highway, with private companies and provincial governments eligible to participate. Separately, a three-company consortium has submitted a proposal to the Economics Ministry to operate 618 km of routes 12 and 14 between the cities of Zarate and Paso de las Libres. They propose investing over $650 million and also devoting $300 million to the operation and maintenance of the two highways.

Alabama Bridge Gets Federal Grant
The long-planned project to build the new Mobile River Bridge and modernize the nearby Bayway received $550 million from the federal Bridge Investment Program, at long last completing a financing process that has dragged on for years. Originally planned as a toll-revenue-financed P3 project, it stalled over local transportation planning organizations’ opposition to what they saw as too-high tolls. Alabama DOT revived the project in 2022 as a non-P3 with a pledge to keep the tolls at no more than $2.50 one-way for passenger vehicles. The federal grant will complete the funding plan for what is now expected to cost over $3 billion, reports Public Works Financing (Aug. 2024).

India Plans $12 Billion for Tunnel Construction
World Highways reported that the Ministry of Road Transport & Highways plans 74 new highway tunnels totaling 273 km and costing an estimated $12.2 billion. India has a long history of using various forms of long-term P3 projects for transportation infrastructure. For the tunnel projects, the Ministry says that non-Indian firms may hold up to 51% of joint-venture projects to develop and operate new highway tunnels. Thus far, India has implemented 35 new highway tunnels totaling 49 kilometers.

Argentina Plans Railroad Privatizations
The reformist government plans to privatize government-owned long-distance railroads and metro area commuter trains, according to Infralogic (Sept. 6). There are several government-owned railroads, as well as the Buenos Aires metro system operated by state-owned Trenes Argentinos Operaciones. Transport Minister Franco Mogetta says bidding documents will be ready by January.

Eurostar Competitors for Cross-Channel Passenger Rail
Infralogic reported (Aug. 23) that Spanish company Evolyn is working with Santander to finance the start-up of competing service from London to major cities in Europe. The company is negotiating with passenger rail manufacturer Alstom for up to 12 trains for this service. Virgin Group, headed by Richard Branson, has also launched a process to find investors for a cross-channel venture of its own. The Channel Tunnel is operating at only 45% of its capacity.

Transurban Using AI to Improve Toll Collection
Transurban, which operates toll roads in Australia and express toll lanes in northern Virginia, is now using artificial intelligence to identify vehicle license plate numbers that automatic license plate cameras have difficulty reading. At a conference in Australia, the company’s head of data reported that the AI-based auto-correction model has reduced the number of images sent for human review by up to 40%.

Megabus Files for Bankruptcy
After many years as one of the largest and most successful over-the-road bus companies, Megabus recently filed for bankruptcy, reported Business Insider (Sept. 11). The COVID-19 pandemic took a heavy toll on the bus industry, as ridership plummeted. Federal aid was provided to airlines and Amtrak but not to intercity bus companies, which were equally impacted, noted Fred Ferguson, CEO of the American Bus Association.

2024 Toll Excellence Awards from IBTTA
On Sept. 9, the International Bridge, Tunnel, and Turnpike Association (IBTTA) announced its annual toll excellence award winners. The Orange County Transportation Authority won the Administration & Finance Award for its huge I-405 express lanes project. The Illinois Tollway won in the Customer Service category for its I-Pass Assist program. Indra USA won the Private Sector Innovation award for its advanced tolling technology on the I-66 Outside the Beltway express toll lanes. Other winners included the Colorado Transportation Investment Office for its Wireless Autonomous Lane Enforcer, the Windsor-Detroit Bridge Authority for its community engagement on the Gordie Howe International Bridge, and the North Carolina DOT for its new toll processing back-office technology.

Rising Toll of Lithium Battery Fires
First, it was the occasional electric vehicle (EV) catching fire and becoming a total loss. Then, electric bikes stored in apartments in New York and other cities became a source of building fires. More recently, a Tesla semi-truck crashed into trees alongside I-80 in California, igniting a battery fire that led to the Interstate being closed for 15 hours. Another crash and fire involved a truckload of lithium batteries on I-15 near Baker, CA, which closed that freeway for 44 hours. Beyond EV fires, on May 15, a Gateway Energy Storage facility near San Diego caught fire and ended up burning for 11 days. These examples are from Steve Goreham’s Wall Street Journal commentary, “If Green Energy Is the Future, Bring a Fire Extinguisher.” He is the author of Green Breakdown: The Coming Renewable Energy Failure. (Note: I have not read this book.)

Good Reading from a Noted Economist
Tyler Cowen of George Mason University posted a very interesting piece on his Marginal Revolution blog, “Mobility vs. Density in American History.”

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Quotable Quotes

“The reality is that increased costs have eroded that buying power. What I say is it has kept our head at water level. On some projects, we have gone below water and on some projects we come up for a breath of air. In fact, our data looking back to the end of calendar year 2020 into October 2023, we’ve seen asphalt resurfacing projects in Georgia increase by 80%. Bridge costs during that same time—just for the bridge, not ancillary items like roadway approaches—have increased by 61% per square foot.”
—Russell McMurry, Commissioner, Georgia Department of Transportation, in “How the Infrastructure Law Helps GDOT Keep Pace with a Booming Economy,” ARTBA Transportation Builder, July-Aug. 2024

“Clearly lit signs with the word HYBRID are everywhere. According to Cox Automotive, sales of conventional hybrids were up 100% in the second quarter of 2024, compared with the same quarter a year earlier. Sales of plug-in hybrids rose 59% during the same period. Together, they made up 11% of total light vehicle sales, which is a record high. GM has revised down its BEV goal on the 11th of June from 300,000 to 200,000-250,000 and delayed the start of its electric pickup truck until 2025. Ford postponed a new electric pickup and a three-row BEV SUV, and VW has put on hold its ID7 BEV launch in the U.S, and Canada.”
—Michael L. Sena, “BEV Owner Survey Results,” The Dispatcher, Sept. 2024

“Touchscreens could be enhanced by the use of head-up displays (HUDs). As more and more controls move from physical switches to cheaper touchscreens, concerns are growing that fiddling around with screen icons and sub-menus can be dangerously distracting. The addition of voice-activated controls can help keep a driver’s eyes on the road, although spoken commands can be misunderstood, which often results in drivers looking at a touchscreen to find out why. That can be avoided if a spoken request is confirmed with a HUD message.”
—“My Other Car Is a Hologram,” The Economist, July 27, 2024

The post Surface Transportation News: How much does new highway capacity ‘induce’ demand? appeared first on Reason Foundation.

• Questions about the Key Bridge replacement
• Win-win benefits of express toll lanes
• The problem with revenue-maximizing managed lanes
• American port inefficiency and dockworker strike
• Stockholm’s congestion tax
• The real case for driverless mobility
• Kenneth Orski, RIP
• News Notes
• Quotable Quotes

Questions About the Key Bridge Replacement

Maryland Gov. Wes Moore is making an all-out effort to get 100% federal funding for the estimated $1.9 billion cost of replacing the demolished Francis Scott Key Bridge in Baltimore. As of early September, the governor and his allies were racing against the congressional clock to find some kind of pending bill to which a 100% federal-funding bridge measure could be attached. I think this effort is misguided for several reasons.

First of all, the standard approach for emergency replacement of bridges on the Interstate highway system is 90% of the replacement cost, coming out of a federal fund for this purpose. There are many claimants for the dollars available from this fund, and it’s not clear why Maryland is entitled to special treatment.

Second, the Key Bridge has always been a toll bridge, and there is no reason why the replacement shouldn’t also be a toll bridge. Some Maryland officials have been complaining about the expected four-year loss of toll revenue that the Maryland Transportation Authority (MDTA) had planned to spend on other infrastructure statewide. But those tolls were paid by Key Bridge users presumably for the capital and operating costs of that bridge. Using tolls to finance some or all of the $1.9 billion cost of the replacement bridge would continue the users-pay/users-benefit principle.

In a recent release, the International Bridge, Tunnel and Turnpike Association (IBTTA), said:

“The formal designation of the I-695 corridor as an Interstate highway…federalized the bridge replacement project, extending all the limitations on revenue uses contained in Section 129 of Title 23 of the U.S. Code.”

This statement implies that there would be a federal problem with using toll financing to replace the Key Bridge. That’s false. Congress explicitly revised that section of the statute in 1991 to make clear that toll financing can be used to replace bridges on the Interstate system, regardless of whether they were tolled or not. That is how Louisiana is underway replacing the aging Calcasieu River Bridge with a toll-financed new bridge.

Also relevant to the question of who pays for the replacement bridge is the various insurers involved. As I noted in the April issue of this newsletter, Maryland itself has a $350 million insurance policy on the bridge. And cargo ship insurers have about a dozen insurance pools, such as the Brittania P&I Club.

The Wall Street Journal reported that up to $3.1 billion is available per ship disaster. Back in March, both Sen. Chuck Grassley (R-IA) and Rep. John Garamendi (D-CA) suggested using insurance proceeds to pay for the bridge replacement.

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

Finally, there is a moral question. If Maryland Transportation Authority is the innocent victim of an unavoidable accident, they might have a case for all American taxpayers to pay for the replacement bridge. But that is not what the record shows. First, MDTA ignored the lessons of the 1980 Sunshine Skyway bridge-collision/collapse and did not retrofit meaningful dolphins to protect the Key Bridge piers.

Second, as I reported in the April issue of this newsletter, MDTA ignored repeated warnings over the years from the Baltimore Harbor Safety and Coordination Committee about the lack of meaningful protection of the bridge piers. It was not an innocent victim of this disaster.

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Win-Win Transportation Benefits of Express Toll Lanes

A 2003 Reason Foundation policy study was titled “HOT Networks: A New Plan for Congestion Relief and Better Transit.” While express toll lane projects have proliferated over the past decade, totaling more than 60 in operation across the country, not all are taking full advantage of the potential transit benefits. This may be due to state departments of transportation (which are usually the project sponsors) not being providers of transit service, which is usually always the job of local or regional transit agencies.

At this year’s annual public-private partnership (P3) conference of the American Road & Transportation Builders Association (ARTBA) in July, I was pleased to see a panel devoted to bus transit service on current or planned express toll lanes in four large metro areas: Atlanta, Denver, northern Virginia, and Nashville (in the planning stage). I asked the presenters to provide details on each of these, and here is a summary of what is going on.

Atlanta has three operational express toll lane (ETL) projects (with variable tolling to manage traffic): I-85 North, I-75 North, and I-75 South. The Atlanta Transit-Link Authority operates express bus service on all three. Additional express bus service on I-85 is provided by Gwinnett County, and on I-75 North, it is provided by the Cobb County transit agency.

Express bus service in each corridor existed prior to the express toll lanes, but new services were added, and where feasible, pre-existing express bus routes shifted to the ETLs.

New express toll lanes are in the planning or procurement phase on SR-400 and the northern half of the I-285 ring road, and express bus service will exist on those ETLs also. (Thanks to Hiral Patel at Georgia Department of Transportation and Annie Gillespie at the State Road & Tollway Authority.)

Denver has 176 miles of express toll lanes in operation, and of these, 116 miles currently have express bus service. Two agencies currently provide those services. Colorado Department of Transportation (CDOT) contracts with Bustang and Pegasus for express bus service on I-25 north and south and on I-70. The Denver Regional Transit District (RTD) operates express bus routes on US 36 and I-25 North. Transit service in metro Denver, as in most metro areas, is still recovering from the pandemic, but CDOT reports express bus ridership growth from the 2023 fiscal year (FY) to FY24 as up 11%. And RTD reports FY21 to FY23 express bus growth of up 27% on US 36 and 11.5% on its I-25 service. (Thanks to Piper Darlington at CDOT.)

Northern Virginia (DC suburbs) has 85.5 miles of express toll lanes in operation (on I-95, I-395, I-495, and I-66 outside the beltway), and express bus service exists on all four of them. Three transit agencies—Fairfax Connector, OmniRide, and Metrobus—are the express bus operators. The Virginia Department of Rail and Public Transportation provided most of the data but does not operate any of the bus services. Total express bus ridership post-pandemic is growing, but has not reached pre-pandemic levels. (Thanks to Susan Shaw at ATCS and Todd Horsley of the Virginia Department of Rail and Public Transportation.).

Nashville is the location of the first of four ETL projects planned by the Tennessee Department of Transportation (TDOT). It will add two such lanes each way to a congested 14-mile section of I-25 southeast of Nashville. The plan to include express bus service in these new Choice Lanes increased support for the 2023 legislation that authorized the new lanes. The city of Nashville is promoting a Choose How You Move initiative that includes its planned transit improvements in the I-24 corridor. (Thanks to Bryan Ledford at TDOT).

I’m encouraged that in all four of these metro areas, both the state transportation departments and the local/regional transit agencies understand the synergy between express toll lanes and express bus service. In a number of cases where only high-occupancy vehicle lanes exist, many of them are congested during peak periods (e.g., Nashville today), so any “express” buses operating in them offer service that is little better than operating in the general-purpose lanes. It frustrates me to see the Texas Department of Transportation, for example, being forbidden to add express toll lanes on freeways being expanded in Austin and elsewhere. Substituting “HOV managed lanes” is a misleading use of the term. The synergy between express bus success and managed lanes exists only where traffic flow is managed by variable pricing.

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The Problem with Revenue-Maximizing Managed Lanes
By Baruch Feigenbaum

The U.S. has more than 60 priced managed lane (MLs) projects operating from Florida to Washington and California to Maryland. But as MLs have grown and networks have developed, the transportation community has encountered new challenges that need to be addressed.

One of the biggest challenges is the growing number of MLs priced to maximize revenue. (The other type of ML pricing is called throughput-maximizing). Generally, operators of revenue-maximizing lanes set the tolls to raise the most revenue, while operators of throughput-maximizing lanes set the toll to move the most vehicles. For the most part, public agencies operate throughput-maximizing lanes while many public-private partnership (P3) companies operate revenue-maximizing lanes. Finally, few operators truly maximize revenue completely, but on a scale of 1-10 where 10 maximizes revenue, the projects are a “7” or an “8”.

The two types of managed lanes affect vehicle-throughput very differently. During peak periods, charging too high a toll can degrade the corridor. Throughput is maximized on most highway lanes at free-flow speeds of about 55 mph. Highways can handle between 2,000-2,400 vehicles per lane per hour at this speed. However, when the highway is heavily congested, traffic flow breaks down, speeds can fall to 5-10 mph, and highways can only handle 800-1,200 vehicles per lane per hour.

When ML tolls are set at a level to maximize vehicle throughput, say $0.75 per mile, they incentivize more drivers to move to the managed lanes and pay the toll. When they are set to maximize revenue, say $1.50 per mile, fewer drivers will choose the managed lanes.

Let’s do a little basic math to see how this works. One hundred solo drivers, 40 carpoolers, 10 vanpools, and two buses choose to use 10 miles of express lanes operating at level of service C (on a scale where A is free-flow speeds and F is stop and go traffic). Vehicles traverse the managed lanes at speeds of 55 miles per hour when the price is $0.75 per mile, for a total of $750 in revenue. But when the price increases to $1.50 per mile, the ML level of service improves to A, vehicles can travel 80 miles per hour, and only 60 drivers choose to use the lanes for a total of $900 in revenue. This creates more revenue for the public-private partnership company. It is a somewhat better travel experience for the commuters who choose to use the managed lane. But the general purpose (GP) lanes now operate at level of service F, throughput of the GP lanes declines by more than 50%, traffic spills out onto side streets, greenhouse gas emissions increase, and the majority of commuters have a more expensive trip or spend significantly longer using the GP lanes.

Finally, let me clarify that priced managed lanes work by varying toll rates. Some managed lanes may need to charge $1.50 per mile at peak hours to operate at 55 miles per hour. ML prices should not be capped or be flat time-of-day pricing. The problem is when ML operators charge $1.50 per mile and the lanes are 50% empty. 

Complicating matters, on some priced MLs two- or three-person carpools go for free. These vehicles use the lane, regardless of the toll rate crowding out toll-paying customers. The lane price could be $20.00 per mile, and no carpools would switch to the GP lanes. Further, unlike buses and vanpools, which are legitimate high-occupancy vehicles, many carpools are simply family members riding together, especially during evenings and weekends.

There are other negative externalities from the higher prices. For example, stop-and-go traffic leads to more traffic accidents. Most of these accidents are fender benders, but they make congestion in the corridor even worse. 

While it would be easy to dump on the P3 companies that have taken this approach, they are simply responding to what the state DOTs request in their request for proposals (RFPs). There is no free lunch, yet some agencies are asking P3 companies to pay for amenities that are unrelated to the project. For example, some state DOTs have received $500 million or more in direct funding from the P3 company, commitments to fund bus service, commuter rail, bicycling paths, sidewalks, and funding for transportation projects five or more miles from the corridor. That leads to a policy of revenue-maximizing.

Often political officials have non-transportation goals in mind. It is much easier to generate press for cutting the ribbon on five different projects than it is for one. And it is easier to pass along an insufficiently funded transportation program to the next administration than it is to implement a new fee, perhaps a mileage-based user fee for non-limited access highways, today. But such demands encourage managed lane companies to opt for revenue-maximizing pricing.

Just because a state DOT can ask for these projects doesn’t mean it should. The P3 companies need to make the money to pay back the construction, maintenance, and operating costs. These are not altruistic ventures. And if they must also pay for an array of other DOT projects, revenue-maximization is the way to do it.

What’s the best way to solve this problem? First, make one of the policy goals of managed lanes vehicle throughput. This does not mean that profit maximization doesn’t have some role, but it should not be the focus. Second, don’t require the P3 company to pay for non-ML projects because that requires higher toll rates. Third, proposals should be evaluated over the life of the contract, which could be 50 to 75 years. Fourth, carpools should not be allowed free access to priced managed lanes.

Public-private partnership companies bid on projects that make financial sense. State transportation departments need to protect taxpayers by making decisions that focus on the life of the project. Managed lane P3s that maximize throughput meet both objectives.

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American Port Inefficiency Should Figure in Dockworker Strike Settlement

As this newsletter is being written, the Biden-Harris administration faces a dilemma: the planned International Longshoremen’s Association (ILA) strike of all East Coast and Gulf Coast seaports. If the strike goes forward and plays havoc with supply chains during this fall’s elections, the administration may be blamed for not having intervened before the strike deadline of Oct. 1. But if the Biden administration does intervene, it risks a huge backlash from U.S. labor unions, whose election support it is counting on.

What the ILA is after is outrageous: a 76% increase in wages over the six-year period of a new contract. As the Journal of Commerce pointed out in a recent article, last year’s West Coast ports settlement with the International Longshore & Warehouse Union (ILWU) called for only a 32% increase in its renewed contract.

The June 2024 issue of the same magazine presented a list of the world’s largest container ports based on the Container Port Performance Index, produced jointly by the World Bank and S&P Global. These are all sizeable ports, but they are listed in order of productivity, not size. The top 25 ports are nearly all in Asia, except for Cartagena in Colombia (#3), Hamad Port in Qatar (#11), and Port Said in Egypt (#16). Between the 26th and 50th ports, by productivity score, there are still no US ports, but the Western hemisphere does get Rio de Janeiro (#42) and Mexico’s Lazaro Cardenas (#50). We don’t find a single US port until we get to ports ranked from 51 to 75. The winners are Charleston (#53), Philadelphia (#55), Port Everglades (#65), Miami (#74), and Boston (#75). In the group ranked from 76 to 100, we find only Wilmington (#81), New York and New Jersey (#92) and Jacksonville (#99). Los Angeles and Long Beach do not show up anywhere in this list of 200.

A significant factor in the relatively low productivity of U.S. container ports is resistance to automation, which undoubtedly leads to the generally higher productivity of Asian and other top-50 ports. The last time longshore unions grudgingly accepted significant automation was when containerization became increasingly used by ocean carriers, as documented in Marc Levinson’s award-winning book, The Box (Princeton University Press, 2006). The great compromise in 1960 between the unions and ports led to the acceptance of containerization along with guaranteed employment until retirement age for workers no longer needed with containerization.

The United States is long overdue for another great compromise like that of 1960. Longshore unions should not get double-digit compensation increases while insisting on no automation. What ILA wants should be ignored unless its leadership and members agree to significant automation that would bring major U.S. container ports into the top-50 container ports on the Container Ports Performance Index.

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Stockholm’s Congestion Tax
By Michael L. Sena

Having experienced driving in and around Stockholm for over 40 years, I can say unequivocally that the one objective Stockholm’s congestion tax did not achieve is a reduction in congestion. It is called officially a “congestion tax” because the central government determined that it is a tax, and not a fee, like parking. Therefore, since communities in Sweden cannot create new taxes, the operation of the charging system and the money collected by it are under the control of the national government, not Stockholm. The money collected is used for roads, not transit, because transit is a local responsibility, and roads are a national one—except for roads that are controlled by the communities or are private.

There was a referendum on the congestion tax scheme following a six-month trial in 2006, which was not long enough to prove anything except that the technology to read license plates actually worked. Fifteen communities in Greater Stockholm voted, and only the City of Stockholm voted in favor. The referendum was non-binding. The scheme became permanent in Aug. 2007 and operates today.
 
Following the institution of the Stockholm congestion tax, we pay to drive on a road system that was dimensioned for traffic in the 1980s. Stockholm’s governing policies have been based on a belief that all vehicular traffic within its boundaries would be banned because residents would not need to drive, and national government policies have been based on a belief that intelligent transportation systems would allow safer and congestion-free vehicular movement without the need to build new roads. Both have been shown to lack a firm foundation in reality. All national north-south traffic on the E4 motorway has had to pass through Stockholm because of a refusal by government officials to believe that a bypass around the city was necessary. Vehicles passing through Stockholm traveling in either direction have been forced to share the road with vehicles that have Stockholm as their destination, and the result has been increased traffic congestion on the single motorway carrying that traffic.

The Stockholm congestion tax has done nothing to alleviate the congestion, but it did result in the political establishment agreeing to build the bypass for north-south traffic. It is called E4 Förbifart (bypass) Stockholm. It should have been completed a few dozen years ago. It has been under construction (in part with money raised from the congestion tax) since 2016, and it is due to open for traffic in 2030. When that opens, we shall see how it affects the amount of traffic on the current road system. What the cities and the national road authority in Sweden have not done, and are still not planning to do, is build multi-modal park-and-ride centers, apparently because this would encourage driving. But perhaps, like the bypass which finally was accepted as a good idea, this penny will drop.

Michael L. Sena is the editor and publisher of the international transportation newsletter The Dispatcher.

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Book Review: The Real Case for Driverless Mobility
By Marc Scribner

Earlier this year, a new book was published making The Real Case for Driverless Mobility (Elsevier, 2024). Princeton University professor Alain Kornhauser and longtime transportation technology consultant Michael Sena provide a detailed overview of not only automated vehicles (AVs) but of the historical role of transportation in society. They then argue that an important promise of automated driving system technology is to enhance access to employment and social opportunities of the transportation-poor—or, as they put it in their book’s subtitle, Putting Driverless Vehicles to Use for Those Who Really Need a Ride.

Kornhauser and Sena (K&S) are no strangers to those who follow AV developments. Kornhauser’s SmartDrivingCar newsletter and Sena’s The Dispatcher newsletter have entered their second decades, and both offer informative and entertaining analysis at the bleeding edge of automotive technology. Kornhauser and Sena’s book is written in a style familiar to readers of their newsletters, blending engaging storytelling with trenchant technology assessments—and refreshingly free of jargon. Many of the book’s chapters begin with K&S recounting discussions that took place at the annual SmartDrivingCars Summits held at Princeton.

The book is organized into 10 chapters, each with the same structural elements: an introduction, overview of key principles, appraisal of current conditions, future predictions, and concluding with a summary of takeaways. The book opens with an examination of how automobiles became the dominant mode of transportation today, which is in part a crash course in Western Civ.

Kornhauser and Sena note that improving artillery “made simple walls around towns obsolete” and led to the first wave of “urban sprawl” in Europe. Sprawl accelerated following the Industrial Revolution, as the more affluent fled dense and polluted city centers for more bucolic environs on the urban periphery, migration that was eventually supported by the first mass transit systems. Rather than causing sprawl, as critics so often argue, the development of affordable automobiles merely democratized a long-standing trend that had been initiated by the wealthy seeking “breathing space, a green spot of land adjacent to the house, a place with a view of trees and water that was not polluted.”

The outflow of middle-income households from central cities in the 20th century was followed by the dispersal of jobs into the suburbs. Lower densities increasingly required high-speed automobile transportation to access the destinations people wanted to reach. Since the 1960s, a large focus of urban transportation policy has been on how to help those who have been left behind. Too often, this has meant lavish subsidies for conventional fixed-route mass transit. This strategy has largely failed to connect people unable to afford suburban living and private automobile transportation with the employment and social opportunities that were now scattered throughout the broader metropolitan area.

With these spatial and demographic trends in mind, Kornhauser and Sena urge a rethinking of public transit to better serve the transportation-poor. They examine improvements to conventional transit that escape the confines of the fixed route—namely on-demand shuttles—but find “microtransit” solutions lacking due to their high operating costs. As with all forms of transit, operating costs are mostly attributable to labor, leading K&S to conclude that the only way to offer better transportation to “those who really need a ride” is to eliminate the role of the human driver.

The next several chapters examine the technology readiness of AVs, how and where they can operate, the advancements of various component and complementary technologies, and the business and policy landscapes. K&S make the important point that at least three actors will be involved in making affordable AVs a reality: those that develop the core automated driving system (ADS) technology, those that incorporate ADS technology into vehicles, and those that will provide the driverless transportation services. Some ADS developers, such as Waymo and Zoox, have aimed to deliver on two if not three of those tasks. Others, such as Uber—with its focus on providing the ride-hail network but having little involvement in ADS or vehicle development—plan to take on one.

This point reminded me of the late economist William J. Baumol’s The Microtheory of Innovative Entrepreneurship, which studies the important role of what he calls the “innovative entrepreneur” in market economies. Innovation breakthroughs are often driven by individual inventors or small entrepreneurial firms. These inventions are frequently acquired by large established firms, who then commercialize them for consumers. Think of the evolution of Orville and Wilbur’s Wright Flyer to the Boeing 787s operated by American Airlines today.

Contra the prediction of economist Joseph Schumpeter who argued that the role of the entrepreneur would be minimized by large innovative firms, Baumol shows that large firms are able to effectively outsource breakthrough innovations to entrepreneurs. This allows these major companies to specialize in making the incremental improvements needed to meet consumer demand and compete in the marketplace. The upshot is that we should not expect the current crop of developers of core ADS technologies to pursue the types of transportation service offerings that K&S propose in the last quarter of their book.

The concluding chapter is the longest and sketches a service model they call the Mobility Opportunity—Vehicle Equity Systems (MOVES). MOVES is designed to serve the transportation-poor in urban areas, with Trenton, New Jersey, as the case study. The MOVES service provider would procure driverless shuttles to operate point-to-point on surface streets between standardized stops they call “kiosks.” From the kiosks, residents would hail a shuttle that could take them directly to any of the other kiosks. The purpose of the kiosks is to allow for uniform vehicle docking to facilitate easy access for the disabled and promote “casual ridesharing,” which they analogize to elevators.

This approach can be contrasted to a driverless transportation model being advocated by a company called Glydways, which I discussed in the June 2023 issue of this newsletter. Glydways is rubber-tire personal rapid transit (PRT) that makes use of specialized vehicles traveling on dedicated fixed guideways. Sharing is entirely at the discretion of the person ordering the ride, unlike Kornhauser and Sena’s proposed service model, where sharing is encouraged as a cost-saving measure.

Glydways claims it can achieve operating costs as low as 25 cents per passenger-mile, but this excludes the capital costs associated with dedicated infrastructure and purpose-built vehicles. K&S believe their model could potentially support costs below 50 cents per passenger-mile, all-in. If realized, both approaches would offer substantial cost savings over conventional public transit while enhancing accessibility relative to the alternatives. But the MOVES model, which eschews fixed guideways, is much more flexible and much less capital-intensive than the Glydways PRT approach.

As Kornhauser and Sena explain, there is a massive accessibility gulf between conventional transit and private auto transportation. The University of Minnesota’s Access Across America series finds that drivers in the 50 largest U.S. metro areas can on average access more than 30 times as many jobs as transit riders in 30 minutes of travel (33% of potential jobs vs. 1%). Deploying K&S’s MOVES service at scale would fall somewhere in between, but would that be enough to meaningfully enhance employment and social opportunities for the previously transit-dependent? I’m not so sure. Door-to-door robotaxi service would be a great opportunity equalizer, but robotaxis as affordable as the MOVES service envisioned by K&S are many years away.

Kornhauser and Sena make a provocative and thoughtful contribution to the AV discussion. The Real Case for Driverless Mobility should be required reading for anyone interested in the future of urban transportation, whether you’re an automated vehicles expert or a robo-rookie.

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Kenneth Orski, RIP

I was sad to learn that my long-time transportation friend and colleague passed away on Aug. 8. Ken had already had an impressive public policy career before I met him in the early 1990s. Harvard Law School, Atomic Energy Commission, and a position at the Organization for Economic Cooperation and Development in Paris, prior to joining the Urban Mass Transportation Administration in 1974 as associate administrator for programs and policy and then a stint at the German Marshall Fund. In 1982, Orski established his own consulting firm, Urban Mobility Corp. In 1989 he began its monthly newsletter, Innovation Briefs, to which I eagerly subscribed. Ken’s wide-ranging knowledge about an array of transportation ideas and projects deepened my interest in focusing more of my own policy research on transportation.

I don’t recall how or when we met—likely at a transportation conference, probably the Transportation Research Board annual meeting. We became friends, and he got very interested in the emerging phenomenon of high-occupancy toll lanes as an improvement over HOV lanes. That led to us co-authoring a 1999 Reason policy study, “Making a Case for HOT Lanes.” Several years later, as more high-occupancy toll (HOT) lanes were being implemented, I talked with Ken about the larger potential of networks of HOT lanes, which led to our second collaboration, the 2003 Reason policy study, “HOT Networks: A New Plan for Congestion Relief and Better Transit.” It included sketch-level plans for such networks in the Atlanta, Dallas/Ft. Worth, Houston, Los Angeles, Miami, San Francisco, Seattle, and Washington, D.C. metro areas. I’m sure Ken was as pleased as I am that such networks are being developed in all eight areas. When we released that study, Ken set up meetings to brief senior people at federal transportation agencies and industry organizations, drawing on his large network of transportation contacts.

For many years Ken and I kept in touch via email. I was dismayed when Innovation Briefs ceased publication in 2015. In hindsight, I’m sure his newsletter inspired me to begin this newsletter, Surface Transportation Innovations, in 2002. Ken evidently retired from transportation policy when the newsletter ended, and I’ve missed exchanging ideas with him in recent years. Until learning from his obituary that he was born in 1932, I had not realized that Ken had reached the age of 92.

Goodbye, dear friend, and thanks for all that you have contributed to the world, and especially to transportation.

—Bob Poole

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News Notes

Georgia DOT Timeline for I-285 East Express Lanes P3
On Aug. 29, the Georgia Department of Transportation unveiled its timeline for procuring a long-term DBFOM revenue-risk concession for its largest-ever P3 procurement: adding 30 route miles of express toll lanes to I-285 East in Atlanta. It has issued its request for qualifications and plans to release a draft request for proposals to the best-qualified teams in the first quarter of 2025. The project will include connections to existing express lanes on I-85 and SR 400. Phase 1 of this project is expected to cost between $2.6 and $3.1 billion. After construction, the developer/operator will be responsible for 50 years of operation and maintenance.

$2.1 Billion Louisiana P3 Bridge to Start Construction
After reaching financial close on Aug. 15, the Louisiana Department of Transportation and Development gave the green light to the P3 consortium led by Plenary Americas to begin preparations for construction. The 50-year concession is financed largely by toll revenues from the project, which will replace the 70-year-old four-lane I-10 bridge across the Calcasieu River with a state-of-the-art eight-lane bridge plus approach roads, totaling 5.5 miles. Tolls will not be collected until the new bridge is open to traffic. The design-build contractor is an ACCIONA/Sacyr joint venture. The two companies are equity members of the consortium, along with Plenary.

Tennessee Timeline for First Choice Lanes P3
Tennessee DOT plans to issue its Request for Qualifications (RFQ) for the I-24 Choice Lanes project in November. The 26-mile project will add express toll lanes to that congested Interstate between Nashville and Murfreesboro. TDOT will hold a pre-bid event in mid-October, followed by one-on-one meetings with potential P3 teams. Assisting TDOT with the procurement are HNTB, KPMG, and Hunton Andrews Kurth. The P3 is planned as a revenue-risk DBFOM. The state legislature has authorized four Choice Lanes projects, of which the I-24 project is the first.
 
Toyota Plans to Focus on Hybrids
A report from Reuters cites two Toyota officials saying the company will focus on producing hybrids as it phases out internal combustion engine vehicles for North America in coming years. “Going forward, we plan to evaluate, car line by car line, whether going all-hybrid makes sense,” David Christ, head of sales and marketing for Toyota North America, told Reuters. Toyota chairman Akio Toyoda in January discussed a multi-pathway strategy that may include hydrogen-fueled vehicles, green fuels, and possibly other technologies.

North Carolina DOT Finds More Roles for Highway P3s
Infralogic (Aug. 29) reported that the North Carolina Department of Transportation has assessed conventional versus P3 procurement for two important projects: the Mid-Currituck Bridge and I-77 South express toll lanes. On the latter, the agency on Aug. 21 presented the results of its comparative analysis of conventional and P3 procurement to the Charlotte Regional Transportation Planning Organization (CRTPO): “The I-77 South express lanes comparative analysis shows a traditional NC Turnpike Authority project delivery would not currently be feasible, due to rising costs and funding constraints.” The CRTPO board deferred making a decision for 30 days, pending further details from NCDOT.

First Nevada Toll Road Proposed
On Aug. 12, the Sparks City Council unanimously approved a draft bill for the 2025 state legislative session to authorize a 13-mile toll road to alleviate commuting congestion in the I-80 corridor. The estimated cost is $500 million. The new road would cut the commute time in half for those now using congested I-80 to go to and from work in the Reno/Taho Industrial Center. Toll roads are not currently authorized in Nevada.

California HSR Authority Approves Another Link
Engineering News-Record reports that the California High-Speed Rail Authority has voted to approve the route and certify the environmental review of the Palmdale to Burbank portion of the planned Los Angeles to San Francisco route. The 38.3-mile route, the majority of it in tunnels beneath the San Gabriel Mountains, has an estimated cost of $22.6 billion. Not mentioned in the article is that the rail authority has no plans for where to obtain that staggering sum. Its current starter segment, 171 miles in mostly flat terrain in the Central Valley, is far short of funding for its current estimated price tag of $33 billion, despite a recent $3 billion federal grant.

50,000 Miles of Autonomous Trucking for J.B. Hunt and Kodiak Robotics
During the first half of 2024, Hunt Transport Services has shipped Bridgestone tires from Atlanta to Dallas using Kodiak Robotics driverless trucks. The tires are produced at Bridgestone’s Graniteville plant in South Carolina and hauled conventionally to a Kodiak hub near Atlanta. Kodiak autonomous trucks with safety drivers deliver the loads to another Kodiak hub south of Dallas. From there, conventional trucks take them to a nearby Bridgestone distribution center. J.B. Hunt identifies alternative cargo for the return trip from Dallas to Atlanta. The story was covered by FreightWaves on Aug. 7.

Express Toll Lanes Continue to Increase
Ten miles of express toll lanes on I-10 near Ontario, California, opened just in time for the Labor Day weekend. The new lanes extend from the Los Angeles County line on the west to just before the interchange with I-15. When two additional construction phases are completed, the I-10 express lanes in San Bernardino County will total 33 miles. Nearing completion in six months will be two express toll lanes each way on the replacement (I-275) Howard Frankland Bridge in the Tampa, Florida, area. Also, the addition of express toll lanes on I-485 in Charlotte is due for completion by late-summer 2025.

Triangle Expressway Opens an 18-mile Section
The North Carolina Turnpike Authority on Aug. 27 opened the first of two final segments of the Triangle Expressway in the Raleigh metro area. The 18-mile section that is now in use will leave only the final 10 miles in the 540 Outer Loop to be constructed, with completion expected in 2028.

Texas DOT Finalizes SH 288 Buyback
Infralogic (Aug. 23) reported that TxDOT announced that day the imminent purchase of the P3 concession that developed and has been operating express toll lanes on SH 288 in the Houston metro area. TxDOT plans unspecified reductions in the variable toll rates and the addition of a general-purpose lane each way in the corridor. TxDOT operates another express toll lane project, on I-35 East in the Dallas/Fort Worth metro area.

Major Motorway P3 in the Czech Republic
On Aug. 7, the Czech Ministry of Transport issued a Request for Qualifications for a 60 km upgrade of the D35 motorway. The project will include the construction of two tunnels on the motorway. Responses to the RFQ are due Sept. 25, and up to four teams will be prequalified in Jan. 2025. The project will be financed via availability payments, as noted in an article in Infralogic (Aug. 7). The country’s first highway P3 was for the D4 motorway, won by a consortium of Meridian and Vinci.

Houston Gets Major TxDOT Highway Funding
The Houston Chronicle reported that TxDOT’s 10-year $104 billion unified transportation program includes major funding for additions to Houston’s I-45 and I-10, with $9.9 billion planned for Houston roads. That will include the first half of the projects planned for the $11 billion reconstruction of I-45 and $2.6 billion for I-10, including extending the Katy managed lanes inside Loop 610, extending I-10 managed lanes in Fort Bend County, and rebuilding the I-10 bridges across the San Jacinto River.

What Role for Post-Covid Rail Transit?
With the dramatic increase in working from home leading to nationwide declines in transit ridership, some voices are calling for a rethink of transit’s role. The Denver Gazette carried a detailed critique of the metro area transit system (RTD) by Randal O’Toole of the Independence Institute, “RTD’s Ride to Nowhere.” Instead of building more rail lines, O’Toole urged RTD to add express toll lanes for regionwide express bus service, to better accommodate actual anywhere-to-anywhere commuting patterns (vs. RTD’s downtown-focused system). And in the San Francisco Bay Area, BART board member Debora Allen, in a commentary for the San Jose Mercury News, called for BART to rethink its operations and spending plans rather than promoting additional ballot measures calling for more money but no change in expansion plans. This piece is also well worth reading.

Brazilian State Offers $1 Billion Highway Concession
The state of Mato Grosso do Sul is planning to offer a P3 concession for a 540-mile highway project, with an estimated capital cost of $1 billion. Infralogic reports (Aug. 16) that the state’s P3 unit expects to offer a 30-year concession for the project on the Sao Paulo B3 stock exchange in December. The project will involve upgrading five existing highways, adding lanes in both directions along two segments of the overall 540 miles. The route will link the state capital primarily to important agricultural regions.

Indiana DOT Completes I-69 Missing Link
The $2 billion project to build the last unbuilt segment of I-69 in Indiana has been completed ahead of schedule. With that link now open, I-69 extends from Evansville to Indianapolis, where I-69 already continued on through Michigan to the Canadian border at Port Huron. A number of planned but unbuilt segments of I-69 still exist in Texas and several other states south of the Indiana border.

New Zealand Will Seek Private Investment in Transportation Infrastructure
A new Revenue Action Plan, released last month by the New Zealand government, calls for implementing P3s to leverage private-sector capital and innovation. The plan also aims to reform tolling legislation to generate additional highway investment, implement new funding tools, including value capture, and transition all light vehicles to road user charges by as early as 2027.

Indian State Mandates Cattle-Free Toll Roads
The public works department of the central India state of Madhya Pradesh has issued a requirement that highway toll plaza operators in Bhopal must form patrolling teams to make toll highways “cattle-free.” Apparently, the state’s toll roads are not fenced off from livestock because the directive requires the patrolling teams to chase away stray cattle. The teams must be equipped with a hydraulic vehicle to lift and transport injured or dead cattle to the state’s  Animal Husbandry department.

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Quotable Quotes

“For discretionary grants, like the one [Pennsylvania’s] I-83 bridge received, the problem is that federal grant programs, for good reason, try to target the projects with the greatest need, but that creates a perverse incentive for state and local governments. Those that do nothing to address their infrastructure problems will tend to have the greatest needs, and thus attract more federal spending. Everyone knows that ‘the squeaky wheel gets the grease,’ but for discretionary funding programs it is actually the broken wheel that gets the grant.”
—Michael Bennon, “Obstruction Pays? Big Federal Grant for I-83 Bridge Replacement in PA,” Public Works Financing, July 2024

“The initial market for EVs was overwhelmingly composed of upper-income liberals. A CalMatters analysis from 2023 found that EV registrations in California are overwhelmingly concentrated in the wealthiest zip codes in the state. A UC Berkeley study from the same year found that close to half the EVs registered nationally over the last decade were clustered in the top 10% of the most Democratic counties nationally and over a third in the top 5%. There is only so much market share to be captured if that share is limited to rich coastal liberals. As that market has saturated over the last several years, growth in the share of EVs in the U.S. new-vehicle market has flatlined.”
—Ted Nordhaus, “Could Climate Hawks Dream of Hybrid Vehicles?” The Breakthrough Journal, Aug. 7, 2024

“The Federal Highway Administration continues to pursue its final rule to force a greenhouse gas performance measure on state departments of transportation and metropolitan planning organizations, despite lacking the statutory authority to do so. As I have said many times in this subcommittee, this policy was considered and disposed of during negotiations of the Infrastructure Investment & Jobs Act. Two federal courts issued opinions earlier this year finding the rule exceeds the Administration’s statutory authority. The U.S. District Court for the Northern District of Texas went so far as to vacate the rule.”
—Rep. Rick Crawford (R-AR), “Crawford Opening Statement from Hearing on DOT’s Regulatory Agenda,” House Committee on Transportation & Infrastructure, July 24, 2024

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The post Surface Transportation News: Questions about the Key Bridge replacement appeared first on Reason Foundation.

• Breakthrough study on environmental litigation
• Per-mile toll charging: a first step toward road user charges
• Why did some bridge projects get large federal grants?
• Microtransit wins in North Carolina
• Taking the California model worldwide?
• The (not so?) surprising decline of electric vehicles
• News Notes
• Quotable Quotes

Breakthrough Study on Environmental Litigation

Last month’s issue’s lead article discussed a new Reason Foundation study that presented empirical data on the extent of litigation over energy and transportation projects, that challenged findings of their completed environmental impact statement (EIS) or environmental assessment (EA). It provided data on the extent of project cancellation or delays to implementation, and it suggested that it’s time to reform what is permitted in the name of environmental litigation.

In July, a comparable report was released by the Breakthrough Institute, “Understanding NEPA Litigation.” Like the Reason study, this one also relied on empirical data, in this case, 387 National Environmental Policy Act (NEPA) cases heard by federal appellate courts between 2013 and 2022. This represented 56% more cases than in the prior seven years. One surprising finding was that agencies won about 80% of all these cases, yet the litigation delayed the large majority of the projects that were cleared—by an average of 4.2 years, with 84% cleared after six years. The cost of these delays was not estimated.

One of the study’s major conclusions is that “NEPA litigation at this level [Circuit Court] rarely changes environmental outcomes or protects environmental justice communities. Instead, judicial review of NEPA decisions largely serves as an advocacy tool for a small number of well-organized nonprofits to stall projects that align with their values.”

While the focus of the Breakthrough Institute is primarily energy and environmental issues, their dataset included 45 non-energy infrastructure projects, such as transportation. For these projects, the average delay due to litigation was 3.42 years and the maximum was 9.4 years.

Major national environmental non-governmental organizations (NGOs) constituted 72% of all the cases in the dataset. Their overall success rate was 22%, only marginally higher than the overall average of 20.4%. The report cites claims made by such organizations on their clout in challenging projects.

For example, the Sierra Club notes that it has “perfected the art of campaign litigation and lawyer-organizing,” and the Center for Biological Diversity claims that it “melds cutting-edge legal strategies and grass-roots organizing.” Their litigation is not focused only on improving environmental outcomes but also “to obstruct and delay projects themselves, often for the purpose of preventing the project from ever moving forward at all.”

The study also notes that “While project cancellation is not the intent of the statute, litigation represents a creative and effective strategy.”  In addition, “these groups frequently contest projects that serve national policy objectives set by national officials.” Yet there is no available process for balancing local impacts with regional or national benefits.

This Breakthrough Institute report does not focus on potential solutions to the current extent of environmental litigation, but it does suggest that “the window for eligible challenges to environmental review could be shortened substantially without meaningfully affecting environmental outcome.” For a long menu of additional options, check out the Reason study that I wrote about last month.

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Per-Mile Toll Charging: An Important First Step Toward Road User Charges

A recent article about the Pennsylvania Turnpike replacing its toll plazas with all-electronic tolling held a welcome surprise. Instead of continuing the historic toll rates, the Turnpike Authority will be re-stating its tolls on a per-mile basis. I don’t think they are the first U.S. toll road to make this change (and I’d welcome reader input on this). The initial passenger car rate will be 7 cents per mile plus $1.09 per segment, for E-ZPass customers (86% of the total). Those who are billed based on their license plate number will pay double that, reflecting the much higher cost of billing and collection.

Also, last month, an article in The New Indian Express explained something similar taking place in India. That country’s major highways, managed by the National Highway Authority of India (NHIA), are required to charge user fees, and since 2015 this has been done via FASTag, similar to our E-ZPass. But plans are under way to transition to a road user charge system based on GPS/GNSS, with an onboard unit required in the vehicle. Initially, one or two lanes at each plaza will be designated for open-road tolling based on the on-board unit. That will provide the system with the number of miles that vehicle traversed on the highway, from entrance to exit, and the charge will be based on that. This distance-based tolling will be offered first to commercial vehicles, and later to all others.

A debate on road user charging (RUC) is also under way in Europe, which is facing the same decline in motor fuel use as the United States. Europe’s problem is more complex than ours because, in most countries, the revenue from fuel taxes is general government revenue, not dedicated to highway capital and operating costs—and in most countries, the rate per gallon is three or four times the average U.S. state fuel tax plus federal gas tax rate. A second complication is that in France, Italy, Portugal, and Spain, a large percentage of the limited-access system consists of toll roads, financed and operated based on their toll revenues and a large fraction of which are operated under long-term public-private partnership (P3) leases.

To the best of my knowledge, so far, there are no RUC/mileage-based user fee pilot projects underway in Europe (though several countries have truck tolling systems in operation on non-tolled highways). A February article in Traffic Technology International reviewed several efforts to move toward road user charges. In the Netherlands, KPMG has a project under way to consider extending the RUC for trucks to light vehicles by 2030. And Transport Infrastructure Ireland has begun a project called Better Road User Charging Evaluation to look into RUC options.

An informal group of RUC consultants called SPRUCE (Specialists Providing Road User Charging Expertise) is also discussed in that article. Member Steve Morello notes that “Ireland and France have [toll road] concessions that are ending soon. And the question is, what do we do?” Another SPRUCE consultant says the “many of the private road concessionaire are worried that RUC for cars will be a new tax . . . so they are afraid they will lose some of their concessions.” Morello adds that the dominance of traditional toll operators is a barrier to RUC.

This is a critically important point to think through. First of all, if the existing European toll operators convert their toll charges to a per-mile basis, they will become the pioneers of RUC in Europe, not an obstacle to it. Second, toll road customers in Europe pay current fuel taxes in addition to motorway tolls when they choose to travel on toll roads. If the new RUC yields about the same revenue per mile as the current fuel tax, there should be no diversion of traffic away from the toll roads.

European governments also have the opportunity to consider making at least part of the RUC revenue dedicated to the capital and operating costs of the roadway system, rather than leaving roadway funding to the politics of legislators each session. One of the SPRUCE consultants offers the example of Switzerland, where 45% of the fuel tax revenue is dedicated to roads and the remainder goes to the government’s general budget.

Far from being an obstacle to the RUC transition, Europe’s toll roads—public and private—can and should be the pioneers, helping to demonstrate the technology that will subsequently be implemented far more widely.

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Why Do Some Bridge Projects Get Large Federal Grants?

Last month, U.S. Department of Transportation (DOT) awarded $5 billion in a second round of grants under the Bridge Investment Program that was part of the bipartisan Infrastructure Investment & Jobs Act (IIJA). In announcing the grants, Transportation Secretary Pete Buttigieg said, “For too long, America let bridges fall into disrepair, which left people less safe, disrupted our supply chains, and cost people time and money—but now the Biden-Harris administration is changing that with the biggest investment in our bridges since the Eisenhower era.”

Let’s unpack that statement. All the aging bridges getting these grants are owned and operated by state or local governments. The states all get Federal Highway Administration (FHWA) highway funding for use categories defined by Congress, but the majority of state highway funding comes from state transportation budgets. The fact that the United States has a large backlog of deficient bridges primarily reflects a failure by governors and state legislators to provide proper stewardship of these vital assets.

A one-time bonanza of federal funding to a handful of projects does not address the underlying institutional failure to properly invest in maintaining and eventually replacing highways and bridges. To be sure, on average state transportation departments and legislatures have done a better job of increasing highway user taxes to keep pace with highway costs than has Congress. However, many states have rejected or ignored long-term financing of major projects, which means a worn-out Interstate can only be rebuilt in short segments over many years, rather than raising the cost up-front via revenue bonds and building the replacement over a short span of years. A bridge, of course, has to be replaced as a single project.

The table below provides data on this latest round of grants, which went to an odd assortment of bridge projects, from megaprojects to local ones.

One has to ask: Why this set of bridge replacements rather than hundreds of others? Why such a wide range of the percentage of estimated total cost to come from the federal government? Could politics have anything to do with the selections? I will leave that last question for others to look into. But I also learned, decades ago when I first started doing serious transportation policy research, that standard practice with federal grant announcements is that the members of Congress (House and Senate) from the state and relevant House district get first dibs on announcing the grant, to enable them to claim, “See what I delivered for you.”

Once more: occasional manna from Washington is no substitute for proper ongoing stewardship of vital transportation infrastructure. States that follow responsible infrastructure policies should not need occasional windfalls.

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Microtransit Wins in North Carolina
By Baruch Feigenbaum

The growth of microtransit in North Carolina has been a trending topic on both the right and the left. In The Carolina Journal, David Larsen discussed how “North Carolina (is) Leading a Public Transit Revolution,” while in The American Prospect Micah Morton Jones noted, “North Carolina Fuels a Microtransit Revolution.” Microtransit is an emerging transportation mode that can provide better service at an equivalent cost. North Carolina provides a good blueprint for how to implement such service.

For the past 35 years, North Carolina has provided state transit operating funding support for transit systems in each of the state’s 100 counties through the Rural Operating and Assistance Program (ROAP). The program can fund 100% of the cost of the service, but typically requires a local match. The amount of funding is dictated by the General Assembly and changes each year. The funding supports operations only; new construction or capital funding is not eligible. Only rural areas are eligible, so the cities of Charlotte and Raleigh cannot apply. As a result of the comprehensive state program, many counties already have a pot of funding to operate transit.

The federal government is a source of capital funding, which can help buy vehicles. The program which provides the most direct funding is the Rural Areas Formula Grant program that provides capital, planning, and sometimes operating assistance to rural areas with fewer than 50,000 people.

Both of these programs are discretionary. Neither guarantees funding. Local transit agencies need well-designed, efficient programs to receive assistance. New microtransit services are the type of promising programs likely to receive funding.

The city of Wilson, located on the I-95 corridor in Eastern North Carolina, is a good example. During the COVID-19 pandemic, it eliminated fixed-route bus service, because ridership was extremely low and the farebox recovery rate was below 10%. Instead, it partnered with Via to provide on-demand van service for $2.50. The advantage of on-demand service is it picks riders up at their homes or workplaces instead of riders having to walk in the heat or rain to bus stops. While transit ridership has been declining or flat in other places, Wilson has seen a ridership increase of 300%.

Other cities besides Wilson have contracted with private providers. Having Via or another private provider operate the service can decrease costs and increase quality. In the past, one rule of thumb was that contracted service could be 75% of the cost of equivalent service operated in-house, or 90% of the cost of in-house operation for better service. With rapid inflation over the past two years, the advantages of contracting have decreased, but the city of Wilson shows that contracting can provide significantly better service at an equivalent cost, a win for riders and taxpayers.

In 2023, nearby Johnson County chose a different paratransit option. It developed Quick Ride, a rideshare network where passengers pay a flat $6.00 per ride. Anyone in the cities of Smithfield and Selma can order a ride for a destination in the service area. The service also offers connections to the airport and the Amtrak station. About 75 riders per day use the new system, which operates with a $600,000 budget.

Let us examine the financial aspects of the Quick Ride service; the cost is $21.93 per ride. With a ticket price of $6.00 per ride, the service requires a $15.93 subsidy. While that subsidy is high, other peer systems have a per-rider subsidy of $30-$40. Further, the system only has 75 daily riders. Moving forward, Quick Ride wants to expand service to the neighboring town of Davis, which should increase ridership. If riders can be increased to 150 the subsidy would decrease more than 50%. 

Other jurisdictions in North Carolina have taken notice of the success of microtransit. Five other jurisdictions: Orange County, Morrisville, Wilmington, Elkin, and Wake County have started microtransit. Further, there are 13 other microtransit services that have recently launched or will be launching in the next 12 months. Some of these services will supplement existing fixed-route bus service or replace bus service in part of the service area.

One of the challenges North Carolina jurisdictions face is the stigma of riding the bus. Most choice riders, (those who have access to a vehicle), and even some transit-dependent riders, (those who do not have access to a vehicle), refused to ride the fixed-route bus service. In many small towns, where folks tend to know each other, many residents do not want to be seen riding the bus. While this is a mindset that may need to change, for now on-demand transit systems, which are perceived as a more-premium option, have overcome the social stigma.

These new North Carolina services areas not about saving money but increasing service quality. Microtransit systems replace, and sometimes supplement, existing fixed-route service. However, with ridership increases of 30-300%, their per rider cost is much lower. Further, transit in smaller cities will always be subsidized. The key is prioritizing service for transit-dependent riders. And by offering service 14-hours a day and every day but Sunday, microtransit operate, not just during peak commuting patterns, but also during off-peak hours when transit-dependent shift workers are more likely to travel. Jurisdictions in North Carolina have found a successful model for microtransit. Municipalities in other states would be wise to follow their lead.

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Taking the California Model Worldwide?

Readers of this newsletter have seen several critiques in recent years of California’s long-term plan to stop adding capacity to highways, shift more funding to transit and other non-auto modes, and densify metro areas to produce neighborhoods where people won’t need to drive to reach work or go shopping. The goal is to eliminate greenhouse gases from surface transportation

Could this possibly work? Several months ago I received, from the University of California-Davis Institute of Transportation Studies, a summary of a plan that claims to show how to accomplish this. Checking further, I learned that this study was not focused on California. The project was sponsored by the Institute for Transportation and Development Policy for application worldwide. What UC Davis released was simply the U.S. version of plans produced for many countries.

These studies follow a common structure, analyzing four scenarios:

• Business as usual, with gradual phase-in of electric vehicles (EVs);
• Electrification, in which the EV transition is as rapid as considered possible;
• Mode shift, in which policies lead to the “maximum feasible” amount of non-auto travel, and;
• Electrification and shift, which combines scenarios 2 and 3.

The key question is how realistic scenarios 2, 3, and 4 are, and what their downsides would be if actually implemented. UC Davis’s Lewis Fulton provided a useful summary dated March 11, 2024. Scenario 2 would have light-duty EV sales reach 60% of all vehicle sales by 2030 and 100% by 2050. To accomplish this, the study assumes that EVs would be less costly to own than conventional vehicles, have sufficient range to meet all driving needs, and that EV charging locations would be widespread. But even with those attributes, Lewis notes that “the main challenge would be convincing [all] Americans that EVs are desirable and meet their needs.” No mention here of federal regulations that would make conventional vehicles unaffordable for most people.

A much larger and more difficult approach is Scenario 3, Mode Shift. This assumes that personal vehicle travel in 2050 would be 25% less than in Scenario 1. Many people would shift to walking, cycling, and transit. What would it take to accomplish this? A major increase in density in urban areas—from today’s 12,500 people per square mile to 17,000 per square mile in 2050 is assumed. That would be brought about by legalizing up to six or eight housing units on all lots, eliminating off-street parking requirements, expanding public transit, adding protected pedestrian and bike paths, etc.

Clearly Scenario 4—all the above—is the study’s recommended way forward. The section called Action Plan lays out some of the federal, state, and local policy changes needed.  They include:

• Increase taxes on conventional cars to make them more expensive than EVs;
• Subsidize a large-scale expansion of EV charging locations;
• Shift all transportation funding from roadways to transit, sidewalks, and bike lanes;
• Add bus rapid transit along all major highways; and,
• Shift existing fossil fuel subsidies to expansion of green electricity production and transmission.

This kind of scenario is not new. A major Urban Land Institute study in 2009, “Moving Cooler,” outlined a similar densification plan. A subsequent study by the Transportation Research Board, “Driving and the Built Environment,” found that a more-realistic approach to densification would reduce a metro area’s greenhouse gas emissions by only 1.5% if it achieved (an unlikely) densification of 25% of its land area. And a follow-up Reason Foundation study in 2016 raised many practical questions about people’s residential location decisions. Most families do not select their housing location based on closeness to employment, but based on an array of factors including (often) more than one employed person’s job, good schools, and many other factors.

Another important research finding is the relationship between a metro area’s economic productivity and the extent to which very good matches can be made between employers and employees. This is referred to as “urban agglomeration benefits.”

A growing amount of evidence finds that a metro area’s productivity is directly related to how many potential jobs can be reached in a given amount of time (say, 30 or 45 minutes). Numerous “access to jobs” studies find that in both Europe and the United States vastly more jobs can be reached in a given amount of travel time via personal vehicle than via transit or, needless to say, walking or biking. Thus, large-scale urban densification is a recipe for reduced metro area gross domestic product. One of the more recent discussions of this effect is in chapter two of Alain Bertaud’s outstanding book, Order Without Design (MIT Press, 2018). 

The United States may be in for a natural experiment if California and a few other states actually try to implement the whole enchilada of policy changes recommended by UC-Davis and ITDP. The rest of the country will be able to learn from their experience.

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The (Not So?) Surprising Decline of Electric Vehicles

Recent headlines in business media report trouble with the electric vehicle market. Last month, (all-EV) Tesla reported a 45% profit decrease in the most recent quarter, due to lower sales and the lower prices it’s recently been charging due to increased EV competition. GM announced delays in two planned EV factories—one for electric Buicks and the other for electric trucks. And Ford CEO Jim Farley announced that the company would focus more on smaller, less-expensive EVs, since its large ones are selling poorly. Ford’s EV unit had a $1.1 billion loss for the second quarter of this year.

What accounts for EVs’ declining popularity? A survey of electric vehicle owners by J.D. Power found that their battery electric vehicles (BEVs) and plug-in hybrids went back to the dealer for repairs at three times the rate of gasoline-fueled cars. And despite early claims that EVs would be low-maintenance due to fewer moving parts, etc., repairs and maintenance average more labor hours (possibly because mechanics are still getting familiar with them).

Kelly Blue Book and Manheim found that the residual value of BEVs after two years is significantly lower than that of gasoline cars, while hybrids held slightly more value than gas cars after two years.

Finally, when an EV gets into a collision, it is significantly more likely to be declared a total loss, rather than being repaired.

My engineer friend in Sweden, Michael Sena, editor of The Dispatcher, reported in the Summer 2024 issue the results of a survey of EV buyers by McKinsey & Company’s Center for the Future of Mobility, released June 12. They found that 46% of BEV purchasers say they will go back to an internal combustion vehicle for their next purchase. Their main concerns were about charging, the high cost of ownership, and the complexity of long-distance travel. Respondents were also upset that the range of the BEVs they purchased is considerably less than what it says on the sticker. They were also surprised by poor performance in very cold and very hot weather. Sena also reports the result of a different survey of residual value, by Cox Automotive, whose results paralleled those reported above—a faster decline than for internal combustion vehicles.

These may be short-term problems, due to the technology being new and charging networks still being rudimentary. But these findings certainly put down a caution flag for an expected total EV replacement within the next several decades.

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News Notes

Takeover of Texas SH 288 P3 Finalized
On July 30, the Texas Transportation Commission voted to have the State Transportation Finance Corporation (STFC) take over the State Highway 288 express toll lanes project only eight years into the 52-year term of the long-term public-private partnership agreement with Blueridge Transportation Group, owned by Abertis and ACS Infrastructure. STFC will pay $1.73 billion to Blueridge, per the “termination for convenience” provision in the long-term agreement. The successful project’s market value is considerably higher. The projected termination date is Oct. 8. This is the first state takeover of a successful revenue-financed design-build-finance-operate-maintain (DBFOM) transportation P3.

Alabama’s Mobile River Toll Bridge Project Financing Decided
Alabama’s long-debated Mobile River Bridge and Bayway project will break ground next year with a projected 2030 opening date. The cost has grown to $3 billion, and toll revenue will be part of the financing package, with an estimated one-way car toll of $2.50. The financing package will include a $550 million federal Bridge Investment Program grant and a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, which Alabama DOT hopes will cover 49% of the project’s cost.

Brightline Florida Now Getting Mostly Long-Distance Trips
The privately financed higher-speed rail service, linking Miami with Orlando since last year, has seen a large increase in customers in 2024, with long-distance travel now outstripping commuter travel in the West Palm Beach/Fort Lauderdale/Miami corridor. In June 2024, Brightline Florida ridership totaled 223,369, of which 62% were long-distance trips. To meet the increased demand, the company has ordered additional trainsets, with the first ones due to arrive before the end of the year.

Bonds Approved for $2.1 Billion Calcasieu River Bridge Project
On July 25, the Louisiana State Bond Commission approved up to $2 billion in tax-exempt revenue bonds for the replacement of the aging bridge on I-10 crossing the Calcasieu River. The $2.1 billion long-term DBFOM P3 project was approved by the legislature in January. Calcasieu Bridge Partners is led by Plenary Americas, with equity members Acciona and Sacyr.

Thailand Considering $1.7 Billion Highway Tunnel
The Expressway Authority of Thailand has proposed a 6.3 km tunnel as part of a congestion-reduction effort on the N1 Expressway in Bangkok. The alternative elevated highway section is estimated to cost $500 million. World Highways reports that an environmental study will take place in 2025, and whichever alternative is selected, construction would begin in 2026, aiming at completion by 2031. Bangkok’s traffic congestion is among the highest in the world.

New Zealand Think Tank Lays Out Steps To Highway Pricing
A detailed study by Matthew Birchall for The New Zealand Initiative think tank sets forth a five-year transition from fuel taxes to road user charges (RUC). The proposed Smart RUC model would give motorists a choice between an automated pay-as-you-drive system based on in-vehicle technology or a pre-purchased RUC license, similar to a system already in use for New Zealand trucks. The plan includes many interesting ideas. New Zealand is a small country (population 5.1 million) with no traffic coming across borders (as with states in the United States). So this model would not be easily transferable to this country.

Key Bridge Collapse Means $141 Million Less Toll Revenue
Several recent news articles reminded people that the Key Bridge in Baltimore was financed based on toll revenues, and the absence of its toll revenues means a significant shortage for the Maryland Transportation Authority, which operates a number of tolled facilities in the state. What I find odd about the plans for replacing the bridge, in Congress and elsewhere, is zero mention of tolling for the new bridge. There are no federal obstacles. In fact, Congress years ago specifically authorized the use of tolling to finance replacing bridges on Interstate highways, which the road traversing the Baltimore harbor is. So what gives?

North Carolina DOT Nears Decision on Mid-Currituck Bridge
Infralogic reported (July 19) that the North Carolina Department of Transportationis finishing up an analysis of how best to procure a new toll bridge across the Currituck Sound, to supplement the only existing bridge linking the Outer Banks to the mainland. The plan is for a two-lane 4.7-mile toll bridge. The study will decide whether a long-term P3 or a NC Turnpike Authority project is a better fit for the new bridge. The study is expected to wrap up before the end of this year. The latest cost estimate for the project is $1 billion.

Mass. DOT Planning Turnpike Service Plaza Upgrade P3
Like many other operators of long-distance toll roads, Massachusetts makes use of long-term lease concessions for the Mass. Turnpike’s service plazas. In leading up to a competitive procurement as current leases expire, MassDOT issued a request for information (RFI) from potential operators earlier this year, and conducted a customer experience survey. Infralogic reported (July 24) that the request for proposals (RFP) will be issued in late summer. Possible enhancements to the service plazas could include highway rest areas or truck weigh stations, in addition to the required EV charging facilities, food and beverage, fuel, and convenience store facilities.

P3 Risk Allocation Guide Released
One of the benefits of a well-executed long-term public-private partnership agreement is a better allocation of risks between the public sector (taxpayers) and private providers. Unlike traditional construction projects, a long-term DBFOM agreement must deal with both short-term and longer-term risks, assigning each risk to the party best capable of handling it. Since long-term P3s are still relatively new, risk allocations in some projects have been difficult. Now the Association for Improvement of American Infrastructure has released a detailed guide to this complex subject. It should be of interest to any government entity interested in long-term P3 projects and be of at least equal interest to infrastructure developers and their financial partners.
 
Johns Hopkins Researchers Take On Large Bridge Conditions
A team of researchers at Johns Hopkins University is researching large bridges near major ports of entry to identify other bridges that might be subject to a collision like the one that destroyed the Key Bridge in Baltimore. They will seek to estimate the likelihood of a ship/bridge collision and identify needed safety upgrades. The project, announced at the end of May, is expected to take a year, with some initial findings potentially available by this autumn.

Bipartisan Senate Bill on Environmental Litigation
The Wall Street Journal (July 31) editorial board supported a bill introduced by Sen. Joe Manchin (D-WV) and John Barrasso (R-WY) that, among other things, would set a 150-day limit on litigation challenging environmental impact statements—but only for energy and mineral projects. Any such reforms should apply at least to both transportation and energy infrastructure projects.

Colorado Express Toll Lane Violations Are Plummeting
As noted in an article in the February issue of this newsletter, Colorado DOT last year implemented a highly cost-effective technology that identifies toll-lane violators and generates a citation sent to the vehicle owner. A July 22 article in CPR News noted a daily average of 5,625 violations (mainly weaving into and out of toll lanes without paying) in September, when the system was first turned on; that average soon fell to 3,400 per day and by June 2024 was down to just 1,100 per day. Colorado DOT expects that the greatly reduced violations will lead to fewer crashes on the expressways with express toll lanes, but they will likely wait until they have several years of before and after crash data to do that analysis.

Fascinating Economic Research on Affordable vs. Unaffordable Places
The Cato Institute’s Scott Lincicome has written a fascinating piece titled, “Remote Work Liberated Us from Unaffordable Places—and Might Do What Decades of ‘Place-Based Policy’ Couldn’t Do.” He notes an ongoing trend of people leaving metro areas with very high housing costs and moving to smaller towns where housing is affordable, and they can work mostly remotely.

Correction re: Texas Transportation Institute Congestion Reports
Last month’s article about the latest traffic congestion report from INRIX noted the apparent discontinuation of such reports from the Texas A&M Transportation Institute (TTI). David Schrank of TTI emailed me to say that they had issued a 2023 Urban Mobility Report with data through 2022, and they will be releasing a 2025 UMR with data through 2024. Neither I nor my Reason transportation colleagues knew about the 2023 report, despite being on the TTI mailing list; nor had we seen any media coverage of that report. David provided the following link to their UMRs: https://mobility.tamu.edu/umr.

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Quotable Quotes

“The fairest way to obtain money for many infrastructure projects is to get it directly from the users. One good example is the gasoline tax, which replenishes the Highway Trust Fund. Unfortunately, there’s no political will to lift it from 18.4 cents a gallon, where it has sat since the last increase in 1993. Two of the best alternatives for user-paid infrastructure are toll roads and variable-fee express lanes. States with fast-growing populations, including Georgia, Florida, and Texas, are embracing toll projects because they can’t wait for federal funding to expand traffic capacity. These highways shouldn’t be funded with Infrastructure Act money, and it just so happens that private capital is eager to invest in solid transportation projects. Booming cities such as Atlanta, Dallas, Nashville, and others must stay ahead on infrastructure or face congestion that reduces the quality of life, which eventually kills the boom.”
—Thomas Black, “Infrastructure Requires Money; Tolls Are the Way,” Bloomberg Opinion, June 13, 2024

“So there we are. Rather than ‘brazenly seizing power from the other two branches,’ the Supreme Court has returned power to Congress, where the Constitution put it to begin with. The brazen seizing, in fact, was undertaken by the unelected administrative state, what even FDR’s Commission on Administrative Government called a ‘headless fourth branch of government.’ And that was in 1937; there’s been a lot more seizing since then. Of course, the political class likes the administrative state for the precise reason it is constitutionally dubious—because it is not accountable to the voters. Instead, it is run by people like them, screening their often-subjective policy preferences behind confusing nomenclature, complex procedure, and (often dubious) claims of expertise. Like anything else that is a threat to the political class’s power or prestige, a return to something closer to constitutional government generates fear, hostility, and— as we can see—over the-top-language. The good news is that nobody listens to the political class much anymore.”
—Glenn Harlan Reynolds, “Chevron, the Supreme Court, and the Law,” Instapundit, July 1, 2024

“Toyota chairman Akio Toyoda has it right: Fully electric cars are not the answer. Climate policy that mandates EVs is making the ideal the enemy of improvement. People will just keep their gas cars longer—and if you think taking guns is politically hard, just try it with cars. EVs appeal almost entirely to people who have plenty of money and don’t drive much. A contractor or gardener driving his truck around L.A. puts a lot more miles on it than a work-from-home screenwriter, but it’s the latter who is going electric—even with gas prices that look good when they dip below $4.50 a gallon [in California]. . . . EV purchases are motivated by a combination of ideology and tech lust.”
—Virginia Postrel, “Don’t Talk About Electric Cars!” Substack, July 8, 2024

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The post Surface Transportation News: Breakthrough study on environmental litigation appeared first on Reason Foundation.

• Reason study on reforming environmental litigation
• Assessing New York’s congestion pricing debacle
• INRIX: traffic congestion is back, worldwide
• What will it cost to collect per-mile charges?
• Automated trucking nears commercial deployment, but questions remain
• Intriguing study projects city population losses
• News Notes
• Quotable Quotes

Reason Study Seeks Reform of Environmental Litigation

Building needed U.S. infrastructure is plagued by long delays, cost overruns, and an increased risk that projects will be cancelled rather than implemented. Concerns have increased as U.S. policy moves toward major increases in the supply of “green” electricity, requiring massive investments in energy generation, long-distance transmission lines, mining and processing of needed minerals, etc. We also need to rebuild and modernize our aging Interstate Highway System and add facilities for new forms of air and surface transportation. In a Reason Foundation policy study, I outline a case for environmental litigation reform.

Since 2020 a growing number of opinion leaders have published critiques of the U.S. environmental review process, with a new focus on environmental litigation, its last stage. These critiques all refer to the excessive use of “citizen voice” to prevent projects from gaining needed federal approvals. While some critiques come from conservatives, a growing number arise from centrists and liberals, including in major national media outlets like The New York Times and The Atlantic.

As Matthew Yglesias wrote, “Delay is a policy choice—one governments at various levels have opted for over the past half century, regularly prioritizing community input and litigation avoidance over the goal of getting something done quickly.”

In 2023, a new study from Stanford University sought to identify the impact of environmental litigation, using White House Council on Environmental Quality (CEQ) data on environmental impact statements (EISs) from 171 large energy projects and 184 large transportation projects. Some categories of projects of each kind faced average litigation rates of 50% or more and permit process duration averaging as much as seven years for energy projects and as much as 9.6 years for transportation projects. Their assessment concluded that environmental litigation prioritizes local concerns over broader regional and national concerns and, even more importantly, that it provides no mechanism by which such a balancing could even be attempted.

U.S. environmental assessment appears to be an outlier compared with many peer nations in Europe along with Australia and New Zealand. A study by the Competitive Enterprise Institute on environmental reform showed very few examples of U.S.-type litigation delays, except for the United Kingdom, whose common-law system is similar to ours. In 2023, Germany enacted sweeping reforms of litigation related to major infrastructure. Many peer governments impose time limits for their environmental review process, and some provide a streamlined process for projects with national significance.

Two major studies of the cost of rail transit projects in other countries were released in 2023. The Eno Center for Transportation found that the average construction cost premium for U.S. rail transit projects is 48% for at-grade rail transit projects and 57% for tunneled projects. The Marron Institute at New York University, using a database of 900 transit projects in 59 countries, found striking differences, identifying relatively low costs per kilometer in Greece, Italy, Portugal, South Korea, Spain, and Switzerland. The 10 most costly countries, in addition to the United States, included Hong Kong, the Netherlands, New Zealand, Singapore, and United Kingdom. While the study did not focus on litigation per se, its case study of Italy revealed a dramatically different approach to such reviews, with the first stage addressing environmental (ecological) impacts, and with public objections addressed by specialized administrative tribunals at that early stage—not in post-EIS litigation.

Congress has adopted several environmental reforms in recent legislation. The Infrastructure Investment & Jobs Act (IIJA) in 2021 codified aspects of the One Federal Decision policy from the Trump administration, limited the alternatives analysis in EISs to 200 pages, and required the release of a Record of Decision within 90 days of the final EIS.

In the Fiscal Responsibility Act (FRA) of 2023, Congress imposed time limits and page limits for EISs and Environmental Assessments (EAs) and codified CEQ requirements that an EIS must consider only “reasonably foreseeable” environmental impacts and a “reasonable range” of alternatives that are “technically and economically feasible.”

None of these changes addressed the problems caused by environmental litigation. Hence, my Reason policy study outlines an array of potential litigation reforms. Some of these originated from centrist organizations, including the Bipartisan Policy Center and the Institute for Progress. Others come from legal analysts and university researchers, and another from an affiliate of the Federalist Society. The Reason study suggests an initial bipartisan reform agenda along the lines of the BPC and IFP proposals.

The study’s final section assesses the political feasibility of bipartisan litigation reform in Congress. It cites a wide array of organizations assembled by the U.S. Chamber of Commerce in 2023—96 national organizations and state business groups in 46 states—arguing for streamlining the environmental permitting process. Signers also included several major labor unions and an array of think tanks. Potential reform originators could be the Conservative Climate Caucus (CCC) and the bipartisan House Problem Solvers Caucus, whose members overlap somewhat with the CCC. There are no Senate counterparts to these organizations, but these two groups have worked with bipartisan groups of Senators in 2020 and 2021.

The growing support for streamlining environmental litigation and the existence of potential sponsors in Congress suggest this should be a priority for the new Congress that will take office in Jan. 2025.

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Assessing the New York Congestion Pricing Debacle

While I have long supported various forms of road pricing, I was not surprised at the extent of opposition to the plan that was terminated by New York Gov. Kathy Hochul only days before it was about to start last month. The congestion pricing plan was ill-conceived from the outset.

First, its primary purpose was to raise $1 billion per year to support the capital program of the city’s Metropolitan Transportation Authority (MTA), which runs the city’s subways and buses. Working backward from the revenue target led to decisions such as charging vehicles 24/7 rather than, perhaps, only during business hours. It also ended up leading to what many considered very high daily rates, especially for those who already pay tolls to get to Manhattan from New Jersey.

Second, the congestion pricing project’s planners should have looked more carefully at the three successful cases of congestion charges to enter city centers—Singapore, London, and Stockholm. The first of these is not very relevant since Singapore is governed as a one-party state, with some laws and regulations that would seem authoritarian if they were proposed for a U.S. city.

London’s congestion zone is a much smaller fraction of the city’s downtown than the Manhattan charging zone, and those who use cars to commute to and from “the city” in London are among its most-affluent residents.

Stockholm is the example New York City could have learned a lot from. Stockholm’s congestion pricing plan was first implemented as a six-month experiment, to be followed by a referendum in which commuters, as well as those living within the charging zone, were entitled to vote. A majority in the referendum judged the pricing system to be beneficial, so only then was it adopted permanently. The prices charged were based on models of how well they would reduce congestion, not on how much revenue would result. The proceeds were used to improve both transit service and the Stockholm metro area roadway system.

The New York MTA is now faced with a funding crisis. The revenues from the congestion tolls (more accurately congestion taxes) were to have been placed in a “lockbox” along with revenues from a relatively recent “mansion tax” and two “internet market taxes.” MTA bonds would then be issued against the lockbox revenue stream, as Jeff Davis reported in a June 7 Eno Center for Transportation commentary.

A June 26 presentation to the MTA board on the impact of the congestion pricing cancellation said the net impact of losing the projected pricing revenues will be $16.5 billion less for the coming five-year period. Among the impacts are deferring $5 billion in system expansion (primarily Phase 2 of the Second Avenue Subway), $2 billion in “accessibility” projects such as Americans with Disabilities Act compliance, $500 million for zero-emission buses, $1.5 billion for subway rolling stock, $3 billion for signal modernization, $3 billion for “state of good repair” projects (i.e., resulting from deferred maintenance), and $1.5 billion for miscellaneous infrastructure upgrades.

I’m not sure that the federal Environmental Assessment (EA) for the project was correct in finding that the project would have “no unmitigated impacts.” That 4,000-page EA (far less complex than an EIS) showed that by diverting some traffic around Manhattan, the plan would lead to increased traffic (and emissions) in the Bronx, Staten Island, and northern New Jersey. There would be an estimated 700 more trucks per day on the Cross-Bronx Expressway, reported Manhattan Institute’s Nicole Gelinas in a New York Times guest essay.

It seems doubtful that the current congestion pricing plan will be re-instated after the November election, when Gov. Hochul hopes Democratic members of Congress from New York will all be re-elected. But as the world’s most-congested city, per the latest INRIX analysis, there might be hope for something like Stockholm’s successful approach to be considered in New York.

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INRIX Finds Traffic Congestion Is Back, Worldwide

Last month, the folks at transportation data firm INRIX released their “2023 INRIX Global Traffic Scorecard.” While it lacks the level of detail about U.S. metro areas that used to be provided by the Texas A&M Transportation Institute (TTI), it provides a global context for U.S. metro area congestion—which is back, in a big way.

The overall report (not the summary released in June) includes data from 947 urban areas for 2023 and comparisons with both 2022 and pre-Covid 2019. Overall, 78% of those metro areas experienced increased congestion compared with the prior year, and 54% experienced more delays in 2023 than in 2019.

Transit ridership has declined globally, as in the United States, and few transit systems have achieved 2019 passenger levels. U.S. transit ridership grew 15% last year but is still down 28% from 2019.

Regarding both car traffic and transit, INRIX suggests that 2023 data may be the “new normal.” One aspect of that is the changed daily pattern of personal trips, with a large peak in the late afternoon but not in the morning (their Figure 6).

How do major U.S. metro areas compare with their global counterparts?

Of the world’s 25 most-congested metros, nine are American, with New York being the most congested, followed by Chicago (ranked third most congested), Los Angeles (#7), Boston (#8), Miami (#11), Philadelphia (#13), Washington, DC (#18), Houston (#19) and Atlanta (#21). Non-U.S. metro areas in the top 10 congested rankings are Mexico City (#2), London (#3), Paris (#4), Istanbul (#6), Cape Town (#9), and Jakarta (#10).

Here is how the largest U.S. metro areas fared in congestion figures for 2023, adapted from a table in the INRIX summary report.

 
Here are a few points to keep in mind in interpreting the above data. First, from the comparison of current delay hours with pre-Covid 2019 delays, you can get an indication of which metro areas’ economies have come back more robustly post-pandemic. The delay/congestion cost per driver is the impact per individual, but the last column’s cost to the metro area depends considerably on the size/population of that area, as you can see from Dallas’ relatively low per-driver cost of $658 per year compared with the $2.2 billion cost to that very large metro area.

The delay/congestion cost is calculated by multiplying the average number of delay hours by the Federal Highway Administration’s suggested $17.45 per hour (inflation-adjusted to 2023 by INRIX). The former TTI congestion reports also included the per-vehicle cost of wasted fuel due to stop-and-go traffic, so its cost estimates would have been somewhat higher.

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What Will It Cost to Collect a Mileage-Based User Fee?

Despite a growing consensus within the transportation community that per-gallon fuel tax revenue is shrinking and will continue to shrink, there is still no good model for a state or national mileage-based user fees/road usage charging (MBUF/RUC) program that identifies both the technology needed and the cost of collecting this new form of highway user fee.

Back in 2021, the trucking industry research group American Transportation Research Institute (ATRI) produced a 50-page report, “A Practical Analysis of a National VMT System,” which I reviewed in the April 2021 issue of this newsletter. Basically, the report identified an array of unresolved questions and made assumptions unfavorable to affordable costs of collection. For example, it asserted long-obsolete cost of toll collection estimates based on 20th-century cash toll collection rather than today’s much lower-cost all-electronic tolling. Second, it drew on figures from several small state MBUF/RUC pilot projects to assert that 40% of the revenue raised would be needed for administrative costs. This ignores the very large economies of scale that would be inherent in a statewide or nationwide per-mile charging system.

Unfortunately, estimates of the more-likely administrative/collection costs of statewide systems are practically non-existent. Fortunately, such work is finally starting to get under way. One of my Reason colleagues shared with me a presentation at a recent conference by Nate Bryer of WSP, titled “Costs of a RUC Program.” It begins by reminding the audience of the typical monthly costs people willingly pay for services like Netflix, Amazon, smartphones, and connected-vehicle systems like GM’s OnStar ($30-$50/month).

After that comes a serious attempt to figure out what kinds of back office functions would be required for a large-scale state RUC system and the staffing skills required to perform those functions. It also lays out other costs such as in-vehicle device(s) and related costs, plus an array of software that would be needed. This is followed by an estimated cost of staffing for a smaller (low-volume) and larger (high-volume) state system. After this comes a breakdown of tangible asset costs, which is summarized at about $99 for the in-vehicle device and an operating cost of 45 cents/month. Added to this are monthly software costs for the system, estimated at between $35K/month (low-volume system) to $130K/month (high-volume system). Putting this all together, Bryer estimates that in a low-volume system with an in-vehicle device the monthly cost per vehicle would be around $9.56 which he estimates would be 30-61% of the revenue connected. In a high-volume system, the corresponding figures are $4.25/month, which would be 13.5-27% of the revenue collected. If a system like these were implemented, ATRI would be correct that the collection cost would be much higher than the 2 to 3% of revenue needed to collect fuel taxes.

Bryer goes on from there to hypothesize an alternative system without a device added to the vehicle whose monthly cost of collection would be 20 to 41% of the revenue collected (low-volume system) to 3.3 to 6.7% of revenue collected. The latter approach would be in the ballpark of collection cost for today’s all-electronic tolling.

The lesson I take from this is that an all-roadways MBUF/RUC system for all vehicles is far from ready for prime time, no matter how much it will be needed in coming decades. So besides encouraging serious R&D on potential systems, what do we do in the meantime as fuel-tax revenue continues to shrink?

This is a good reason not to attempt an all-vehicles/all-roadways MBUF/RUC program within the next decade. However, we could cost-effectively convert about one-third of all vehicle miles of travel to per-mile charges if the conversion took place only for the limited-access highways—freeways and Interstates. This initial step could rely on today’s all-electronic tolling technology (no new in-vehicle technology needed) and would basically convert those freeways and Interstates to toll roads. For the large majority that are not currently tolled, the state would provide refunds of the fuel taxes paid for the miles driven on the converted roads, in response to concerns about “double taxation.”

Converting the limited-access system first would give the fledgling MBUF/RUC technologists a decade or two to develop and prove out cost-effective ways for vehicles to report all their other miles traveled, at low cost. Nate Bryer has laid out the challenge for the future all-vehicles/all-roadways MBUF/RUC system. It’s time for extensive R&D to address this problem.

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Automated Trucking Nears Commercial Deployment, But Questions Remain
By Marc Scribner

In May, automated vehicle (AV) expert Richard Bishop released his latest issue of Automated Driving Industry Trends: Automated Trucks, which is available for free download on the Bishop Consulting website. Bishop’s survey of AV progress is a valuable resource and provides a high-level overview as well as company-level reporting. Several AV truck developers have promised to introduce commercial driver-out services this year, so attention is especially warranted. That said, emerging policy threats may limit the potential of AV trucking. Bishop divides automated trucking into four use types: long-haul, short-haul/middle-mile, terminal tractors, and off-road.

However, he notes that “boundaries between these four buckets will become increasingly permeable as the technology matures. Companies focusing on off-highway already have their sights set on public road operations near the industrial site.”

For long-haul AV trucking, Bishop notes that both Aurora Innovation and Kodiak Robotics plan to introduce commercial driver-out service in Texas later this year. Aurora has announced an aggressive deployment timeline. It plans to have thousands of vehicles on the road by 2026, begin mass production through OEM partners (Volvo Group and PACCAR) in 2027, and become profitable in 2028. While Aurora will launch under a highway-only “transfer hub” model between Dallas and Houston, where loads will be manually driven on local streets, the company is currently developing surface street automated driving capability to enable dock-to-dock operations in the future.

In the short-haul/middle-mile market, Gatik remains the business-to-business AV trucking leader, with plans to deploy large numbers of its driverless trucks in the Dallas metro area in 2024 and 2025. Gatik uses medium-duty box trucks to drive repetitive routes on surface streets between distribution centers and retail stores. Its customers include Georgia-Pacific, KBX, Kroger, Loblaws, Pitney-Bowes, Tyson Foods, and Walmart. Nuro, which operates in the short-haul business-to-consumer market, remains the only AV developer to have received an exemption from Federal Motor Vehicle Safety Standards for its R2 vehicle—a low-speed vehicle that lacks manual driving controls. According to Bishop’s report, Nuro plans to introduce its new purpose-built automated delivery vehicle, the R3, in late 2024.

Turning to terminal tractors, Bishop’s report features two companies, ISEE and Outrider, that have developed robotic arms to connect and disconnect air brake lines between tractors and trailers. These types of technologies will be necessary to achieve full end-to-end automation and support Bishop’s point about increasingly permeable boundaries between AV trucking use types.

Finally, for off-road AV trucks, the most interesting example in Bishop’s report comes from Australia. The Pilbara region is the center of Australia’s iron ore industry. Since 2022, AV truck developer Hexagon has been operating partially automated truck platoons on a 62-mile private road from a Pilbara iron mine to a port. Hexagon plans to introduce fully automated iron ore platoons in 2025. It estimates a 100-truck fleet could realize up to $236 million in annual savings. This has implications beyond reduced trucking costs. There is great potential for Hexagon-like AV truck platooning to enter bulk commodity transportation markets traditionally dominated by freight rail, which I discussed in a presentation at the Transportation Research Board’s Annual Workshop on Transportation Law earlier this month.

While 2024 is shaping up to be a big year for AV trucking, the future remains uncertain. This is especially true with respect to political barriers. Bishop notes that organized labor has mobilized against AV trucking. Encouraged by the Teamsters union, politicians in states from California to Delaware have introduced legislation in 2024 that would require a licensed driver to remain in the driverless truck cab during operation. Ostensibly to promote safety, these bills are politically aimed at killing the labor-saving business case for AV trucks. So far, these efforts have been unsuccessful—and California Gov. Gavin Newsom vetoed a similar bill in 2023—but union opposition is unlikely to dissipate in the near future. Federal preemption will likely be necessary to allow AV trucking to scale in the United States.

At the federal level, the Biden administration has deprioritized AV policy, which most attribute to President Biden’s close ties to organized labor. A foundational rulemaking for AV trucks at the Federal Motor Carrier Safety Administration has been languishing well past its 90-day review period at the Office of Management and Budget since Dec. 2023. This proposed rule may continue to be held until after the election, which will perpetuate nationwide regulatory uncertainty for AV trucks. While the rule will almost certainly be published eventually, this episode illustrates how easily political horse-trading can dictate the terms of AV policy.

Bishop’s report is a must-read if you wish to understand the state of AV trucking, both the promise and the problems facing the industry. As an optimist, I believe many of these challenges—including the seemingly intractable political ones—will be eventually addressed, but it is important to be realistic about the near-term prospects of this technology and its impact on the transportation system.

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Intriguing Study Projects City Population Loss
By Baruch Feigenbaum

A provocative study titled Depopulation and Associated Challenges for U.S. Cities by 2100 by University of Illinois-Chicago researchers Uttara Sutradhar, Lauryn Spearing, and Sybil Derrible was released earlier this year. The study examined how population declines could affect planning for transportation and other services. Ultimately, the study hits the bullseye on some reforms yet misses badly on others.

Some of the study’s projections were surprising. By 2100, half of U.S. cities would be losing population, and that loss would average between 12-23% of all residents, the study said. Currently 43% of cities are losing population, 40% are gaining, and 17% roughly are even. Almost all states have some cities gaining population and some losing population, but the percentage varies wildly. Both sets of numbers are a noted change from the historic average of 1/3 of cities gaining population, 1/3 of cities losing population, and the other third holding steady.

The population loss is occurring mostly in central cities like New York City and in rural towns like Thomasville, GA. The suburbs and exurbs of larger metro areas are still gaining population.

The study notes that cities gaining population are better suited deal with adversity. One example is failing water infrastructure. Atlanta, Flint, MI, and Jackson, MS all poorly managed their water infrastructure with government incompetence, policies that incentivized customers to use more water, and deferred maintenance playing major roles. Yet, Atlanta had enough taxpayer revenue (an approved 1% sales tax) to fix its system, while the other systems cannot rely on a taxpayer bailout.

The study makes several recommendations for cities losing population. First, they should shift away from growth-based planning, which is largely the reliance on the construction of new infrastructure for new residents. One example of how new construction can benefit growing cities is impact fees. Many governments use these fees to balance the budget. But moving to a non-growth based approach is challenging to implement, and will likely lead to higher taxes. In a growing city, these fees generate a large amount of revenue and are easy to implement because current residents largely don’t pay them. Harvey Molotch of the University of California Santa Barbara detailed in the City as Growth Machine why, for cities, growing is the easiest thing to do politically, while focusing on existing residents and asking them to pay higher taxes is the hardest.

Second, the study says cities should redesign their transit service. The study does not provide any details, but I will. Cities need to focus on transit-dependent customers. They need to run bus or micro-mobility services 18 hours a day, seven days a week, because many transit-dependent customers work on weekends. They need to contract out transit service where it makes sense. Finally, they need to scale back rail service extensions, which transit-dependent customers in most cities use far less than buses.

Third, the authors say cities should embrace international immigration. This may be a good recommendation, but the federal government controls immigration policy. Also, while this is a solution for big cities, some rural towns may have a harder time attracting immigrants.

Fourth, the study acknowledges that it is generally much easier to reach jobs via automobile than via other modes. It doesn’t recommend every resident have an automobile, but having one certainly has its advantages. Automobiles expand employees’ circle of opportunity compared to other modes allowing them to reach more potential jobs and find the best job. Employers have access to more employees, allowing them to find the best candidate.

But there are some important areas that I think the study misses. It does not address domestic migration, the largest source of population growth for some metro areas. Many southern states, including Florida, Georgia, North Carolina, Tennessee, and Texas, have benefited from migration from the Northeast and Midwest. Not including or examining why people are moving is a critical study omission.

As Brookings demographer William Frey notes, one of the two largest factors affecting population growth is the average January temperature. That’s one reason why Georgia has grown a lot faster than Wisconsin. Both states have similar costs of living.

Another factor is the state and local tax burden. Combine tax burden with average January temperature and compare Florida and Texas, which are two of the fastest-growing states in the country, with New York, which is rapidly losing population.

Cities cannot solve their weather problems, but solving their tax problems is more doable. States with an income tax higher than 6% have some of the worst out-migration numbers. Reducing the income tax to 6% or lower would have major benefits for many areas.

Methodologically, all the study’s projections are based on the 2020 census. The 2020 census was started in 2019, but tabulating the totals and double-checking the answers stretched into 2020. And we know that 2020 was not representative of anything, due to the COVID-19 pandemic. It would have been helpful if the authors went back four decades to try to build on much longer growth trends.

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News Notes

Tennessee DOT Gets Good News re Choice Lanes
The Federal Highway Administration has agreed with the Tennessee Department of Transportation (TDOT) that an Environmental Assessment (EA) is the appropriate evaluation method for its first Choice Lanes project for I-24 between Nashville and Murfreesboro. An Environmental Impact Statement (EIS) might have taken several years longer than the EA, which is estimated to take a year or less. TDOT expects to issue a request for qualifications for this large public-private partnership (P3) project by the end of this year.

Atkins Realis Plans Sale of Highway 407 Stake
Atkins Realis Group (formerly known as SNC-Lavalin) has announced plans to sell its 6.76% share of ownership in the 99-year P3 concession for Highway 407 in the suburbs of Toronto. The stake in this very profitable urban toll road is estimated to be worth $1.7 billion, which the company can use for other investments. Other owners of the 407 include the Canada Pension Plan Investment Board (CPPIB) and Cintra Global.

Threats to Tolling Emerge in Three States
Legislators in two states and a local agency in another have raised concerns about tolled facilities in their jurisdictions. The Virginia Joint Legislative Audit and Review Commission last month presented findings of its research on toll projects and long-term public-private partnerships, citing motorist confusion about different signage and fee levels at various tolled facilities, and suggesting standardization of contract provisions with toll operators. At the end of May, Texas House Speaker Dade Phelan expressed similar concerns about toll facilities in that state, suggesting a need for unspecified “toll reforms” in the 2025 legislative session. And in California, the Metropolitan Planning Organization in San Diego County, SANDAG, authorized funding for a study of the feasibility of eliminating tolls on the SR-125 expressway.

Colorado Ground-Breaking for Latest I-25 Express Lanes Project
Last month, Colorado DOT held a ground-breaking ceremony for the I-25 North Express Lanes project, which covers six miles between Mead and Berthoud. The project will close the last missing link in the I-25 express toll lanes project. When this addition is completed, I-25 will have 26 miles of continuous express toll lanes in each direction.

Electric Vehicles Losing Popularity in the United States
In a survey released by McKinsey & Co. last month, 46% of current electric vehicle owners said they would likely switch back to an internal combustion engine (ICE) vehicle for their next vehicle. The most cited reason was inadequate charging facilities, followed by high cost of ownership and too much restriction on long-distance trips. In other bad news for the EV industry, research firm Insurify found that monthly insurance premiums average 12% higher for EVs for drivers with comparable driving records. More details are provided in Telis Demos’s recent article in The Wall Street Journal. 

Portuguese Toll Road Attracts Bidders
The Auto-Estradas do Douro Litoral (AEDL) is accepting bids from investors. Infralogic reports that bidders include toll road companies Abertis and Globalvia, as well as investment fund Igneo Infrastructure Partners. AEDL manages 79 kilometers of tolled motorways in the Porto metro area. With earnings before interest, taxation, depreciation and amortization (EBITDA) of €35 million this year, the estimated value is €400 million—12X EBITDA.

California Organization Offers VMT Summer School
In an effort to get buy-in for California’s new focus on limiting vehicle miles of travel (VMT) rather than trying to improve highway level of service (LOS), the California Association of Councils of Government is holding four online sessions on the subject from July 9 to Aug. 8. Topics will be Why VMT, the National Center for Sustainable Transportation (NCST) Induced Travel Calculator, the great mitigation (driving people to drive less), and the future of VMT. More details can be found at https://calcog.org.

Minnesota Aims for 20% Less VMT by 2050
The Minnesota state legislature has amended a 2023 law that focused on reducing vehicle miles traveled 20% by 2050 to also require MnDOT and the Twin Cities’ metropolitan planning organization to assess whether each highway expansion project is consistent with the state’s climate goals, including the 20% VMT reduction. The law applies to all highway projects worth $15 million or more in the Twin Cities or $5 million elsewhere in the state, even if they do not add any capacity. The law will now cover 12,000 miles of state trunk highways that handle more than 60% of all miles driven in the state.

Green Tax Credits Go Mostly to the Wealthy—UC Berkeley
A new study by the Energy Institute of the Haas School of Business at the University of California-Berkeley analyzed who received the $47 billion in federal and state tax credits for solar panels, heat pumps, electric vehicles, and other clean energy technology. Using information from tax returns, they found that the credits have gone primarily to high-income households. The bottom three income quintiles received about 10%, while the top quintile received about 60% of the tax credits.

Irish Toll Motorway Conversion Will Provide Value for Travelers
Toll financing over the past several decades has upgraded thousands of miles of two-lane highways in South America into four-lane divided toll roads, enabling safer and faster travel. Ireland has a new project based on this model. The Cork-Limerick Highway will be upgraded to toll motorway standards at a cost of €2 billion via toll financing. A major benefit is that trips will take 30 minutes less than on the existing road. The project is also expected to reduce accidents and eliminate an estimated 70 highway deaths that would otherwise occur over the next 30 years.

Texas Central HSR Hits Speed Bumps
While the planned high-speed rail line between Dallas and Houston has been revived, it received two bits of bad news in June. First, the Dallas City Council voted 14-0 against any elevated passenger rail facilities in the city’s central business district, at least until an economic impact analysis is completed by early 2025. Second, the Japan Overseas Infrastructure Corporation for Transport and Urban Development announced it was booking a loss of $261 million related to its loans to and investments in the Texas Central rail project.

Two Efforts Seek Competing European Passenger Rail Service
Virgin Group announced last month that it is seeking to raise €600 million for a potential project to create and operate a competitor to the Eurostar that links London and Paris via the Channel Tunnel. And in France, Antin Infrastructure Partners announced plans to invest in a new company called Proxima that would compete with existing high-speed trains operated by state-owned rail operator SNCF. European Union law allows competing companies to operate on state-owned rail lines both within and between EU countries.

Brent Spence Bridge Corridor Project Gets Its FONSI
The $3.6 billion project to refurbish the aging Brent Spence Bridge and build an additional crossing of the Ohio River beside it has completed its federal environmental review with a finding of no significant impact (FONSI), despite adding highway capacity. The assessment included social, economic, and environmental impacts of the project. It has been awarded $1.635 billion from the bipartisan infrastructure law, which led to this megaproject being developed without any toll financing. 

Cost of Railroad Electrification
A short item in ENR’s June 17 edition was headlined “Caltrain Electrifies Rail Lines.” It reported on the completion of a $2.4 billion project to upgrade 52 miles of the Caltrain commuter rail line between San Jose and San Francisco, including a photo of equipment installing overhead wires. Dividing the project cost by the number of miles yields $46 million per mile for this electrification. We hear a lot of talk about greening U.S. freight railroads by electrifying their lines. To get a ballpark estimate, the Class 1 railroads operate 92,000 route-miles; if 50% of that is dual trackage, that’s 138,000 track-miles to electrify. While not all costs would be as high as California’s, at $46 million per mile, that works out to $6.35 trillion. If any reader can provide a better estimate, I’ll be glad to publish it.

Ferrovial Listed on NASDAQ
One of the world’s leading infrastructure developers, Spain-based Ferrovial, on May 9 began trading on the NASDAQ exchange based in New York. A letter from CEO Ignacio Madridejos noted that “more than 80% of Ferrovial’s equity value comes from its North American operations.” The company is also traded on stock exchanges in Spain and the Netherlands. Public Works Financing noted that in preparation for its U.S. listing, Ferrovial relocated its headquarters to the Netherlands in 2023. Ferrovial’s Cintra subsidiary operates express toll lane projects in North Carolina, Texas, and Virginia. Ferrovial is also an investor in the John. F. Kennedy International Airport’s new Terminal One project in New York.

Queensland Considering Major Highway Tunnel
Severe congestion on Gympie Road between Kedron and Carseldine in the northern suburbs of Brisbane could be alleviated by a tolled highway tunnel estimated to cost between $5.1 and $6.5 billion. The government is spending $213 million to finalize plans for the tunnel, reported World Highways last month.

Article Explores Growing Unaffordability of Housing
Urban geographer Joel Kotkin, drawing on the 20th edition of the Demographia International Housing Affordability Report, draws a connection between “anti-sprawl” land-use policies and very high housing costs in major metro areas in Australia and the United States. Provocatively titled “The Road to Neo-Feudalism,” the article was published in online publication Quillette. Highly recommended.

“Halfway Between Kyoto and 2050”
That’s the title of a 43-page policy paper from the Fraser Institute, a Canadian think tank. The author is Vaclav Smil, a professor emeritus at the University of Manitoba and author of numerous books and peer-reviewed policy papers. The subtitle of the paper—”Zero Carbon Is a Highly Unlikely Outcome” is backed up by extensive data from sources such as the International Energy Agency.

Transit Productivity Pre- and Post-Pandemic
My Reason colleague Marc Scribner testified before the House Subcommittee on Highways and Transit in June. His testimony assembled data on transit ridership (which is pretty familiar) and transit labor productivity, which is hardly ever discussed. He shows that not only has transit ridership not recovered from the pandemic but that transit productivity is now even more dismal than most of us realize. These findings are very important as transit agencies and external funders grapple with transit in a changed, post-pandemic world.

New Transportation Senior Fellow at Reason Foundation
I’m pleased to announce that James Moore, recently retired from a long teaching career at USC, and author or co-author of Reason transportation policy studies in the 1990s, has become a senior fellow at Reason Foundation. Jim received his B.S. and M.S. degrees in industrial engineering and urban planning at Northwestern University and his PhD in civil engineering from Stanford University. Jim is both a colleague and a long-time personal friend who hosted my book-tour presentation at USC for Rethinking America’s Highways.

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Quotable Quotes

“Procedural obstruction works so well under current environmental laws because it can gum up the works for what are already complex and capital-intensive endeavors. A permit delay or an injunction doesn’t seem impactful in isolation, but for a large infrastructure project, it can be devastating.  With any delay, however seemingly small, contracts may expire and need to be renegotiated, or, much worse, the project could already be under way and all of the contractors may need to stop work (and prepare claims). A permit delay could completely change the economics and financing terms for a project as well: financial markets do not remain static while permitting lawsuits are resolved, and all lender term sheets have an expiration date. Even the uncertainty around an unresolved environmental permit or lawsuit can materially impact the economics of a complex infrastructure project.”
—Michael Bennon, “It’s Rush Hour for Lawsuits Over New York’s Congestion Pricing,” Public Works Financing, May 2024

“The original idea of the federal motor-fuel tax and Interstate highway system was that the new roads would be funded by the people using them. This approach incorporates fairness and proportionality, since those who get more use of the roads pay more for them. It is also self-limiting, since the revenue is stable year-over-year and represents a ceiling for what can be built. But we have abandoned those principles, first by allowing motor-fuel revenues to be spent on mass transit, and then by supplementing them with general funds for highways. Restoring that principle would mean limiting the role of federal funds—which is already mostly true, since state and local governments spend three to four times as much as the feds on highways and transit.  Focusing only on maintaining and modernizing Interstates would accomplish that.”
—Kyle Wingfield, Georgia Public Policy Foundation, “A New Approach for Maintaining the Interstate System Is Needed,” June 12, 2024

“Two of the best alternatives for user-paid infrastructure are toll roads and variable-fee express lanes. States with fast-growing populations, including Georgia, Florida, and Texas, are embracing toll projects because they can’t wait for federal funding to expand traffic capacity. These highways shouldn’t be funded with infrastructure act money, and it just so happens that private capital is eager to invest in solid transportation projects. Booming cities such as Atlanta, Dallas, Nashville, and others must stay ahead on infrastructure or face congestion that reduces their quality of life, which eventually kills the boom.”
—Thomas Black, “Infrastructure Requires Money. Tolls Are the Way,” Bloomberg Opinion, June 13, 2024

“I did early empirical work on induced travel—trying to build a path econometric model—that sought to apportion what part of the almost inevitable increase in traffic years after a road improvement is due to truly new traffic . . . And in time, what new traffic is from the added population/employment growth that almost always follows major infrastructure investments, particularly in the suburbs/exurbs where most new traffic is added. While newly generated traffic attributable to faster, more-smoothly-flowing traffic occurs, this does get whittled down in time (all else being equal), yet some 5-10 years out (for the CA highway corridors I empirically studied) a good portion of the benefit of smoother, faster flows remained. . . . While I can see the value of a calculator to get a first-cut, rough-hewn estimate of impacts, what generated traffic in a specific location for a specific time period is so multi-layered, always complex, and often a convoluted set of relationships that pivoting off of empirical demand elasticities provides no better than a ballpark guesstimate—certainly not what decision-makers should hang their hats on when making major highway investments/expansion decisions.”
—Robert Cervero, Prof. Emeritus, City & Regional Planning, UC Berkeley, email to Robert Poole, May 9, 2024 (used with permission)

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