Thursday, February 9, 2012

What's going on with High-Speed Rail in Washington? Good News. Nothing!

Secretary of the Department of Transportation, Ray LaHood, may blather about the miracles of high-speed rail for America and how, in the future, it will restore our white teeth, six-pack stomach, weight loss, full head of hair and otherwise make us look better to the rest of the world than we ever did before.

Unfortunately for Secretary LaHood and his boss, the President of the United States, this coming miracle on wheels costs lots of money and they aren't going to get any more from Congress, which has the key to the petty-cash box.  No money, no train. 

Here's a terrific overview article about the two draft bills, one from the House, one from the Senate, for the Transportation budget re-authorization.

And, here's the bottom line for those of us concerned about high-speed rail.  There ain't goin' to be none. There are no line items for HSR in either draft legislation at this point.  That there is even a mention that high-speed rail is intentionally excluded in the House version comes as no surprise.  But  the Democratic Senate version as well intentionally excludes high-speed rail.

Now, that doesn't mean "it's in the bag." There's a long way to go with lots of negotiations about to take place before there will be a final reconciliation and a final bill voted on in both Houses.  

But, there certainly is strong hope that future funding for HSR, at the very least for two years upon signing of this budget, is assuredly absent.  I say two years since that's the Senate's wish for the time span of this re-authorization. Mica in the House wants it to be five years.  Let's see how that goes.

All this is explained, below.

Thursday, February 9, 2012

Analysis of Passenger Rail Provisions in Surface Transportation Reauthorization

Currently, both houses of Congress are working through the legislative process to reauthorize the nation's surface transportation legislation. The current legislation – the Safe, Affordable, Flexible, Efficient Transportation Act - A Legacy for Users (SAFETEA-LU) – was signed into law in August, 2005 by President George W. Bush, first expired on September 30, 2009, and has since been extended by Congress (with approval by Presidents Bush and Obama) numerous times. The current extension expires on March 31st.

If the current legislation is not extended at the end of March, it must be replaced with new legislation by that date that is approved by both houses of Congress and signed by the President, or the funding statutes that support much of the capital and operating costs of the nation's ground transportation network will disappear, causing significant impacts on that network. This post will not assess the likelihood of either passage of new legislation or another SAFETEA-LU extension, but rather analyze the various provisions that affect all forms of passenger rail in the respective bills under consideration in both the House of Representatives.

In both chambers, there are separate bills – introduced in the appropriate committees of each house – which, if passed, are then combined to form a single piece of surface transportation legislation: one formulating the policy directions of the legislation and another delivering the funding necessary to support the various programs and projects specified under the policy direction.

House of Representatives

In the House, H.R. 7 – the American Energy and Infrastructure Jobs Act of 2012 – was introduced on February 2 and referred to the Transportation and Infrastructure (T&I) Committee. It was the Republican leadership of that Committee that was most responsible for drafting the bill, considering amendments and steering it's approval to return to the full House for a vote. The T&I Committee approved the measure early last Friday (February 3).

Although the bill's public transportation title (Title II) largely maintains much of the same policy structure for programs that support passenger rail projects, there are a few important changes. Most rail transit capital projects are supported through the Section 5309 New Starts Grant program, which now allows the Secretary of Transportation to award Full Funding Grant Agreements (FFGAs) for projects of over $75 million that are "authorized for project development." SAFETEA-LU previously stipulated "final design and construction," which indicates the Secretary – and the subsequent Department of Transportation staff who assist the Secretary in project decision-making – may receive some leeway in awarding FFGAs to projects earlier in the planning, engineering and design process under the House's proposed language, potentially resulting in shorter project timelines and lower costs for the engineering process. This change also fits within the T&I Committee's stated goal of streamlining project delivery.

More significant are the differences in how the Secretary should determine the benefits of federal investment for the project. In SAFETEA-LU, after factoring in the planning and alternatives assessment procedures used in the project proposal, the Secretary was directed to consider a list of factors such as congestion relief, improved mobility, air and noise pollution, energy consumption and the costs of mitigation activities before evaluating benefits such as land use development, impact on existing infrastructure, mitigating suburban sprawl, access for transit dependent populations, overall transit and ridership growth. In the new criteria devised by the House, the Secretary would now be directed to analyze cost effectiveness, mobility benefits and enhanced connectivity, congestion relief, reductions in energy consumption and air pollution, economic development effects and private-sector contributions to the project. The result would be a simplified and also less rigid set of evaluation criteria for capital rail transit projects that could allow the Secretary and their staff new authority to consider the importance of aspects such as Transit-Oriented Development (TOD), connectivity, community mobility and Public-Private Partnerships (PPPs). These new evaluation factors could address much of the criticism of the same criteria outlined in SAFETEA-LU, which have been viewed by some observers as too narrowly focused on the cost effectiveness of a project, avoiding the larger societal and economic benefits passenger rail projects can achieve. Moreover, the provisions acknowledge growing trends in TOD and PPPs that were not as widely-recognized during the drafting of SAFETEA-LU, and are ones that diversify the financial underpinnings of the project and boost it's probability for success.

Also new to the House bill in comparison to SAFETEA-LU are updated criteria for the Secretary to evaluate local financial commitment to the project. While the prior law and its potential replacement both require evaluation of appropriate contingency funds and the availability of local funds for capital and operating costs, the new House language directs the Secretary to consider contributions from the private sector to the project, further entrenching support for the PPP concept. It also substitutes the SAFETEA-LU's third criteria here concerning local support with two new criteria that seem to encourage local commitments to the project that exceed the required levels of non-Federal investment, and the community's overall use of non-Federal funds to support it's entire public transportation system. This measure also reflects an emerging trend involving passenger rail transit projects, where local and regional investment plays a greater role in the project budget, as seen in wide-ranging capital expansion efforts such as the Denver region's FasTracks effort, the the Utah Transit Authority's FrontLines 2015 campaign and the 30/10 plan championed by Los Angeles Mayor Antonio Villaraigosa.   

For Small Starts projects – a subsection of the New Starts program for projects under $75 million in total project cost and under $25 million in federal investment that support many local streetcar projects – the House language largely follows the same pattern as the larger New Starts provisions, prioritizing cost effectiveness, mobility and accessibility benefits, connectivity, congestion relief and economic development in the Secretary's evaluation criteria, as well as similar standards for evaluating local financial commitment. The SAFETEA-LU version placed local land use ahead of cost effectiveness, and included criteria to evaluate forecasting methods that have been removed in the House version. New to the Small Starts provisions in the House bill is also an encouragement that the Secretary award Small Starts investment in a single grant, rather than a multi-year FFGA. It also adds directions on expedited grant agreements.

One of the most important distinctions between the House's transit title and its counterpart in SAFETEA-LU comes in the Capital Investment Grants section (commonly referred to as Section 5309). Here, the House language shifts funds previously provided on a discretionary basis through Section 5309 to Section 5310, which previously provided only operating assistance for elderly individuals and people with disabilities. Here, the House formulaizes the program – in general deferment to Congressional trends on avoiding earmarked items – and prohibits public transportation providers who operate passenger rail transit services (heavy rail, commuter rail and light rail) from receiving any capital investment for their bus systems. This is an unprecedented measure that would impact the ability of nearly every transit system that operates rail transit services – including all of the nation's largest 17 bus systems – to reinvest in new buses and facilities for their bus operations, a massive blow to transit in metropolitan regions.

Two additional sections of H.R. 7 are just as important of passenger rail and rail transit: the measure's overall funding mechanism and its treatment of Amtrak.

First, the bill strikes the Mass Transit Account and replaces it with the Alternative Transportation Account. Now, the precise title of the account is of little practical concern; in fact, the new term actually is a better reflection of the diverse nature of transportation options and services available today, away from the strict buses-and-trains connotation of "mass transit." However, the title shift points to the larger shift by the House Ways & Means Committee in their funding bill (H.R. 3864) of no longer supporting transit investment through the Mass Transit Account – part of the Highway Trust Fund, which is funded through receipts from the national gasoline sales tax – but instead through revenues from the general fund. It is believed by some that the full House of Representatives would consider measures to produce those general fund revenues through taxes on new oil and natural gas exploration and drilling sites in Alaska and offshore areas – a contentious idea, to say the least.

Since President Reagan first led the compromise of shared use of the Highway Trust Fund for both highways and transit in the Surface Transportation Assistance Act of 1982 – which was, in many ways, one of the first true pieces of comprehensive surface transportation legislation – transit and highways have largely functioned in unison on federal transportation policy, with highways receiving 80 percent of the available funds and transit realizing the remaining 20 percent. That balance has produced a stable, predictable and generally non-contentious process where the needs of the majority of the nation's surface transportation network for federal investment were satisfied. And while the news of the Ways & Means Committee's attempt to fracture this longstanding compromise has yet to produce any direct confrontation between the two camps, the Committee's move to shatter the funding precedent could mark a new era in how Congress views the relationship between transit and highways.

Additionally, although less surprising, is the T&I Committee's move to reduce funding to Amtrak by 25 percent and new restrictions how the nation's intercity passenger rail provider may use its funds. The House of Representatives and the T&I Committee under Republican leadership have never been particularly staunch supporters of Amtrak, and the reductions and limitations make sense within that context. However, it should be noted that the railroad recently announced that it would request less operating assistance in the coming year than it did in the current one due to growing ridership and better fiscal management. Nonetheless, many intercity passenger rail advocates argue that sustained support for Amtrak would allow the railroad to provide better service on its existing routes while exploring new lines and corridors.

Elsewhere in the legislation, the T&I Committee voted to end funding for new intercity and high-speed rail projects and discretionary transit capital programs like TIGER and TIGGER overseen by the Secretary of Transportation, as well as ending a requirement that states spend 10 percent of highway funds on alternative transportation projects to mitigate congestion and improve air quality (CMAQ). The discretionary capital programs included several projects to install or expand passenger rail options – from streetcars to commuter rail extensions – in communities across the country, while the CMAQ program supports several rail services, including Amtrak's Downeaster between Boston, Mass., and Portland, Maine.

In the Senate, things are a bit simpler. First, while the House crafted a bill to approach to the more traditional surface transportation authorization period of five years, the Senate preferred a shorter horizon for their bill (yet un-numbered): a two-year authorization. The Senate believes the current federal budget process to be so limited in its ability to generate new revenues for surface transportation that the shorter timeframe to be a more beneficial structure, choosing to revisit authorization again when the nation's fiscal condition to be more conducive to a long-term authorization. The Senate's bill – crafted for policy by the Banking Committee as the Federal Public Transportation Act and funding by the Finance Committee – also generally enjoys more bipartisan support in its chamber than the House received for its authorization proposals.

After an extensive treatment of local and statewide transportation planning procedures – some of which impact planning for rail transit planning and transit-oriented development – the Senate includes an important new protection for transit in emergency situations – including both natural disasters and "catastrophic failures" such as terrorism or other man-made events – through Section 5306, the Public transportation Emergency Relief Program. The Program could serve rail systems with valuable resources to provide evacuation and rescue operations during emergency situations and also re-establish service after an emergency.

For the 5307 program, the Senate includes new support for operating assistance for bus systems in both urbanized and non-urbanized areas based on maximum number of buses and excluding rail transit operations and temporary and targeted economic conditions. While not directly benefiting rail transit systems, the provision could be used to support the bus operations of systems that also operate rail networks, while also assisting smaller transit systems that connect with rail transit stations. Otherwise, the Senate language largely leaves the New Starts and Small Starts capital funding mechanisms unchanged from SAFETEA-LU, aside for a new emphasis on using projects to achieve better access to jobs in each community.

The Senate bill is also largely silent on funding for Amtrak, intercity and high-speed rail, which would likely leave Amtrak's funding levels unchanged while not adding new investment for intercity and high-speed rail projects, continuing recent trends in the Senate on the issue.

Posted by Rich Sampson at 8:14 AM

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