Sen. Lowenthal Defends Himself

by Rafael

In a spirited op-ed piece in the Modesto Bee, Sen. Alan Lowenthal (D-Long Beach, pictured left) defends himself against earlier accusations ("Quit playing high-speed politics") that he was engaged in a "power grab" to prevent the use of prop 1A(2008) funds to construct a central maintenance facility for the HSR network somewhere in the Central Valley.

Lowenthal's claims his beef is not with the location of the maintenance site but something more profound: CHSRA's 2008 Business Plan, which he considers unsound. He notes that prop 1A(2008) only provides $9 billion of the $34 billion price tag he estimates for the entire starter line and that CHSRA has not yet actually secured the balance from non-state sources, i.e. Congress, local counties and cities and private investors. It also does not spell out contingency plans for coping with the possibility that the required funding will never materialize in full.

While claiming to be an ardent supporter of the HSR project, the State Senator has in fact taken a fiscally conservative stance: the state contribution should not be used for component projects such as a dedicated high-speed test track and maintenance facility that will only prove useful if and when HSR actually enters service in California - an outcome that is obviously contingent on securing all necessary funds for constructing the starter line. The whole public-private partnership concept allows CHSRA to remain rather more independent of financial oversight by the state legislature than is typical for a major public works project. Encouraging noises from Congress and the Administration are not enough to get this railroad built and as for private investors, those will come to the party late if at all. In other words, Lowenthal is a risk-averse pessimist who sees the glass as currently 3/4 empty.

Perhaps not as coincidentally as he would have us believe, spending the state funds conservatively implies priority for component projects at either end of the starter line. Orange County politicians, including Anaheim mayor Curt Pringle, insisted on tacking the LA Union Station to Anaheim ARTIC section onto the starter line to ensure at least a section of the BNSF Transcon line along highway 91 gets fully grade separated sooner rather than later. The ports of LA and Long Beach provide roughly one in seven jobs in the LA basin, so freight rail is a big deal both locally and at the state and federal levels. Note that the state-sponsored ACE project to eliminate or improve UPRR's grade crossings in the San Gabriel Valley is already underway.

Note that the Fullerton-Anaheim section is too narrow for quad tracking, so no more than 2-3 HSR trains per hour (each way, PDF p14) will actually serve Anaheim station.

By contrast, CHSRA has thus far taken an approach long favored by planners: build broad political support for the concept, accumulate funding contributions and proceed on the assumption that the balance will be forthcoming. Eventually, the sum already invested becomes so large that it makes more sense to finish the project than to scale back its ambitions or cancel it altogether. Once that tipping point is firmly on the horizon, negotiations with private investors will get down to brass tacks. In other words, the CHSRA board is a group of optimists who see the glass as already 1/4 full, with prospects for more brighter than ever.

This also explains why CHSRA want to prioritize not just the contentious SF peninsula but also the Central Valley test track and associated central maintenance facility: it anticipates these will be needed to secure the all-important "rule of special applicability" required before its engineering staff can pre-qualify vendors of proven, specialized HSR equipment and draw up a shortlist. If the history of HSR projects elsewhere in the world (e.g. Taiwan) is any guide, there will be significant political wrangling over manufacturing jobs etc. that CHSRA may want to stay out of.

On a related note, Susan A. Fleming, Director of Infrastructure Issues at the non-partisan Government Accountability Office released a statement to Congress yesterday underlining that FRA has a vision for HSR but not yet have a well-defined strategic plan or organization for developing it nationwide, beyond the disbursement of already-approved ARRA funds. In particular, she pointed out that $8 billion ($9.5 billion if you include the earlier PRIIA act) represents just a fraction of the federal funds needed to build the California network's starter line, never mind anything else. Implicitly, she questioned the wisdom of using short-term stimulus funds on HSR before Congress has decided to reorganize USDOT and allocate tens of billions in additional funds. To create lasting value for federal taxpayers, HSR must be elevated to a strategic shift in policy. Currently, the numbers suggest merely a make-work effort in the short term.

Fortunately, the next surface transportation bill outlined earlier this week would address the concerns GAO has raised. The snag is that this bill is still quite far from the President's desk.

The Next Federal Surface Transportation Program

Rep. James Oberstar (D-MN) Rep. John Mica (R-FL) Rep. Peter DeFazio (D-OR) Rep. John Duncan Jr. (R-TN)

On Friday, chairman Rep. James Oberstar (D-MN) and ranking member Rep. John Mica (R-FL) of the House Committee on Transportation and Infrastructure issued a press release and held a news conference on their blueprint for the next federal surface transportation program, described in a new committee report. They were joined by chairman Rep. Peter DeFazio (D-OR) and ranking member John Duncan Jr. (R-TN) of the subcommittee on Highways and Transit. The event represents the kick-off for drafting the next iteration of the surface transportation bill, which typically sets priorities and secures funding for public works projects for a period of 5-6 years. Traditionally, it has also been a vehicle for members of Congress to "bring home the bacon" to their districts. This time, Oberstar and his colleagues want to use the opportunity to move away from prescribing specific projects (aka earmark pork) and toward a meritocratic system in which USDOT is instructed to evaluate competing grant applications. Those will have to be integrated into six-year strategic plans developed by the department and its counterparts at the state level, with annual performance metrics for each major project or program of smaller ones. It remains to be seen if members of the full House and Senate will be prepared to support this new philosophy. In the hope that they will, the report details substantial reorganization objectives for USDOT such that it can execute evaluate programs and award grants according to legally binding procedures. For example, it calls for a new infrastructure bank within USDOT endowed with at least $50 billion for the six-year period that the new bill is supposed to cover. This money would be used to support strategic, sustainable investments in transportation systems, specifically High Speed Rail and (connecting) local transit. This would segregate public transportation funding from that reserved for highways, at least at the federal level. This new mechanism could essentially solve the federal component of funding California's HSR project. In addition, there would be a new Office of Project Expediting and also an Office of Livability, presumably charged with enforcing appropriate environmental mitigation for affected residents. Secr. of Transportation Ray LaHood would like to focus his department on executing oversight of stimulus-related projects. He therefore asked Rep. Oberstar to extend current arrangements for 18 months by plugging a growing hole of at least $13 billion in the Highway Trust fund. However, Oberstar and his colleagues are unwilling to wait because they have concluded that the current system is broken.

The report's authors claim that over the past 30 years, many states simply haven't stepped up to the plate to fund their 20% of highway projects, never mind the 50% required until recently for rail and transit projects. As a result, available federal funds were not fully utilized. Perhaps the unspoken fear is that with the 2010 midterms approaching and the 2012 presidential election after that, any delay would make it even more difficult to pass legislation for a root-and-branch reorganization of USDOT. Of course, much the same is true of health care reform, financial re-regulation etc. The President's domestic agenda is already full, yet transportation infrastructure is a high priority in Congress. The committee report calls for a total spending volume of $500 billion through 2015, of which 10% would go into the aforementioned infrastructure bank. Federal and state governments combined currently spend around $85 billion a year on transportation infrastructure, a sum the committee says is too small to maintain and expand the nation's aging systems and structures. It would like to see the number ramped up to $225 billion and then held at that level for the next 50 years. To fund the federal portion of this substantial expansion, the report calls for both federal and state gas taxes to be roughly doubled. Republicans in particular will presumably resist legislative efforts to implement that, though they may soon face a filibuster-proof Democratic majority in the US Senate. Note that raising gas taxes to help fund rail and transit infrastructure construction is reasonable in that it reduces the pressure to keep adding lane-miles highways which are more expensive per passenger-mile of capacity, require far more land and lock in the country's arguably excessive dependence on oil.

by Rafael