Wednesday, July 6, 2011

The most important thing to watch about High-Speed Rail is the money decisions in Washington


Here, in an over-generalized way, is the money situation.  The federal government; that is, the Administration, is aggressively promoting high-speed rail, but is unable to pay for it.  Even if they came up with $8 or $80 billion, it would only scratch the surface of what it will actually cost to build out the designated eleven high-speed rail corridors. Think at least one trillion dollars!

The other eager advocates are the states that are eligible for such funding.  Three states (or, to be precise, their governors) have rejected the federal pump priming dollars knowing that the states would have to cover all the rest of a capital development expense that we persist in grossly underestimating.  They would also be on the hook for all the necessary subsidies that the rail promoters keep denying in the face of solid evidence of their necessity.  Nonetheless, heavily Democratic states, California among them, are all eager for whatever "free" money they can access from the Department of Transportation. If it's for high-speed rail, then high-speed rail it shall be. Whatever.  It's not about the train; it's about the money.

Since the last Congressional elections, the Republicans, who oppose high-speed rail, have become the majority of the House. Rep. John Mica, Republican, heads the House Transportation Committee and is releasing their version of the next Transportation Budget, which will define the next six years of spending for highways, railways and airways.

While the article doesn't mention high-speed rail, it is possible (I'm being cautious) that there will be either no funding for HSR at all, or only enough to enable HSR development on the Northeast Corridor.  And, as we've said before, this will be the House and Republican version, while the Senate has its version, which is similar to President Obama's budget requests.

Although Democrats are still the majority in the Senate, the Republicans unquestionably have a much louder voice in the upcoming debates over these two budget versions.  It all bears close watching.

What are we looking for? Solid evidence that there will be no further high-speed rail funding.  That will have a major impact on developments in California, but less so in those other states where "high-speed rail" doesn't actually mean high speed, it means somewhat faster Amtrak trains.

And that leads me to an extremely critical issue.  If we don't want to fund high-speed rail, what do we want to fund?

Two major studies in the past year have urged increased spending to revitalize the nation’s aging infrastructure. The Urban Land Institute concluded that the United States needed to invest $2 trillion to rebuild roads, bridges, water lines, sewage systems and dams that are reaching the end of their planned life cycles.
Without that investment, the institute warned that the United States would fall dramatically behind much of the world in providing transportation networks needed to remain competitive in the global marketplace.

We have failed to maintain what passenger rail capacity we have. The costs of our negligence is compounding exponentially.  Our nation's infrastructure has deteriorated.  The Urban Land Institute speculates a need for two trillion dollars to rebuild everything that's broken or needs to be replaced or fixed. We recently mentioned California's decrepit levee system which the next "perfect" storm will devastate with catastrophic consequences.  

As we said, this article doesn't mention high-speed rail once.  Yet, it's the elephant in the living room.  When will we start making some adult decisions about that?
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House GOP expected to ax transportation funds
By Ashley Halsey III, Published: July 5
The next flash point in the debate over the nation’s will to live within its means may emerge this week as House Republicans present a long-term transportation bill expected to cut funding for highways and mass transit by almost one third.

Should the bill emerge from the House unscathed, it may collide head-on with a very different Senate version that is marginally closer to a proposal from the White House.

Whatever the outcome, transportation funding provides one of the most clear-cut and readily understood snapshots of the rivalry swirling around taxation, spending and national needs.

Money to pay for transportation comes from various sources, but the overwhelming majority is produced by the federal tax on gasoline. That tax has not increased since 1993, and voters have made clear in surveys that they don’t want it to. At the same time, there is a need for massive spending to restore the nation’s deteriorating infrastructure.

Disagreement over the three options — raise the gas tax, dramatically cut spending or find new revenue sources — has stalled a renewal of the six-year transportation spending bill since it expired in 2009. Since then lawmakers have passed a series of short-term extensions. But planning for roads and mass transit requires long-term funding commitments, and the lack of such provisions has stalled many state and local transportation projects.

The reauthorization bill expected Thursday from House Transportation and Infrastructure Committee Chairman John L. Mica (R-Fla.) will lay out details of the cut-spending option. Transportation industry officials expect the bill will reduce spending to match gas tax revenues, which have been falling steadily because of the poor economy and the rise of fuel-efficient vehicles.

Before the Democrats lost control of the House last year, the committee now headed by Mica was discussing a $450 billion reauthorization bill.

The Obama administration has sought between $500 billion and $550 billion.

Sen. Barbara Boxer (D-Calif.), chairwoman of the public works subcommittee, is said to be preparing a bill that would maintain funding at the previous level for two years, with an allowance for inflation since that bill was passed in 2003. That would require augmenting the Highway Trust Fund, beneficiary of gas tax revenue, with an additional $12 billion from other sources.

The Mica bill is expected to provide between $215 billion and $230 billion over six years, according to congressional staff members.

“It’s pretty devastating,” said one staff member who spoke on background because of the sensitivity of the discussions. “Last year we were looking at $550 [billion] and now we’re looking at $230 [billion]. Big difference.”

Mica has been dedicated to streamlining and consolidating government enterprises, eliminating environmental programs he feels slow progress, and privatizing federally supported programs — notably elements of Amtrak.

A bipartisan group of House members that included Earl Blumenauer (D-Ore.), Mike Simpson (R-Idaho), Steven C. LaTourette (R-Ohio) and Jerrold Nadler (D-N.Y.) planned to send a letter Wednesday to Mica and ranking committee member Nick J. Rahall II (D-W.Va.), urging them to maintain current funding levels or increase them.

“According to numerous experts, including the American Society of Civil Engineers, the U.S. needs to invest an additional $1 trillion beyond current levels in the next 10 years just to maintain a state of good repair and meet demand,” the letter said.

Two major studies in the past year have urged increased spending to revitalize the nation’s aging infrastructure. The Urban Land Institute concluded that the United States needed to invest $2 trillion to rebuild roads, bridges, water lines, sewage systems and dams that are reaching the end of their planned life cycles.

Without that investment, the institute warned that the United States would fall dramatically behind much of the world in providing transportation networks needed to remain competitive in the global marketplace.

That report buttressed the findings last fall by a panel of 80 experts led by former transportation secretaries Norman Y. Mineta and Samuel K. Skinner. The panel concluded that as much as $262 billion a year must be spent on U.S. highways, rail networks and air transportation systems.

© The Washington Post Company

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