Streetsblog Capitol Hill

Cross-posted from Strong Towns blog.

Today we spend money on infrastructure in the hopes of creating growth. That’s backwards. Infrastructure should not be a catalyst for growth but something that emerges in support of productive patterns of development. There has to be a relationship between the infrastructure we build and the value that is created.

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Altoona, Pennsylvania is a classic railway town, built using a traditional value capture method that helped railroads finance their investments. Image: ePodunk

Late last month I wrote about the return on investment of our highway projects (Paved with good intentions, April 30). I pointed out what is obvious to anyone who thinks it through: Even if modern transportation improvements really did create a lot of wealth, we capture too little of it to be able to continue this system as we have built it.

The example I used was a diverging diamond in Colorado, a high return investment by today’s standards. The official numbers were that this $7.2 million investment would generate $157 million in wealth and prosperity. Instead of debating that — demonstrating the fiction of such numbers is old hat for us – we simply pointed out that $157 million in GDP growth would only return $260,000 to the federal coffers for highway projects.  Since $260,000 is substantially less than $7.2 million, repeating this great wealth generation trick, not to mention maintaining this diverging diamond, is going to be difficult.

I was really disappointed that nobody took me up on my challenge to defend the value of the overall system. I did receive a second hand rebuttal that essentially argued that my analysis was too simplistic, that I’m overlooking all of the (unidentified) second order and third order growth effects. This is what I call the “it’s the system, dude” argument. Sure, we may lose money on each project that you measure, but the overall effect of the system generates more than enough wealth to keep it all going.

This is what I call the Infrastructure Cult. We have no proof for our belief that highway spending creates prosperity, we just believe it to be true. We believe it so strongly that we can easily dismiss evidence to the contrary.

I’m going to repeat my challenge: Someone demonstrate how highway funding, and American post WW II development in general, is not simply a large Ponzi scheme, where spending generates the near term illusion of wealth in exchange for massive, unfunded, long term obligations. Show us how it is making the country financially stronger. I’m dying for someone to make this case as opposed to simply spout the belief.

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Before and after: Sidewalk on Marshall Avenue, St. Paul. Source: Bike Walk Twin Cities

If you ever doubted whether a small investment in biking and walking could have a large impact, here is your proof.

The last transportation law, SAFETEA-LU, provided four communities with four years of funding to build an infrastructure network for nonmotorized transportation (a fancy way of saying “sidewalks and bike paths”). It wasn’t a lot of money — $25 million each to Columbia, Missouri; Marin County, California; Minneapolis, Minnesota; and Sheboygan County, Wisconsin.

The program built 333 miles of on-street biking and walking routes, 23 of off-street facilities, and 5,727 bike parking spaces in the four municipalities — not to mention some outreach and education. Not bad, especially when you consider that $100 million would only buy about five miles of new four-lane highway in an urbanized area [PDF].

Total two-hour bicycling and walking counts for all pilot communities, fall 2007 and fall 2010. Source: FHWA Report to the U.S. Congress on the Outcomes of the Nonmotorized Transportation Pilot Program

FHWA summed up the results in its report on the outcomes of the pilot program [PDF]:
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Cross-posted from Strong Towns blog.

How can a country that is so wealthy be in such enormous debt? How can a country that can build such marvelous transportation systems not find the money to sustain them? How can a people that enjoyed decades of unrivaled economic hegemony — staggering levels of growth beyond anything seen in human history — be facing such economic turmoil after a couple years of, not even decline, but just slowing growth? The answer to these questions reveal some uncomfortable truths about who we are, how we got here and what options we have for our future prosperity.

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I’m struck by how strongly our culture associates growth and prosperity with highway construction and expansion. Tom Friedman, a respected left-of-center columnist with the New York Times, had an entire chapter in his most recent book, That Used to Be Us: How America fell behind in the world it invented and how we can come back, devoted to the concept that “our winning equation” is, in part, to invest in infrastructure and then watch prosperity flourish, just like it did in the 1950?s and 1960?s.

Of course, this ignores that fact that our investments during the first generation of America’s Suburban Experiment (1950-1975) were higher return investments that generated a lot of positive cash flow. I like to point out that, when we built the 35W bridge here in Minnesota for the first time, it connected far flung areas of the Minneapolis/St. Paul metropolitan region in a way that had not been done before. Following that investment, new commercial real estate was developed, new residential housing went in and the resulting influx of tax receipts made us feel wealthy. When the bridge fell down and had to be rebuilt, we didn’t experience all that new growth, just the costs of construction and delay. Maintenance has an entirely different set of financial metrics than new construction.

Which is why our transportation spending is set up to favor new construction. It is just so much more fun. Maintenance is simply a pain, a local concern. That highway fix it project means nothing but congestion and delays and, when it’s all done, all you have is a little smoother ride. By contrast, new construction is so much better. Not only do the politicians get a ribbon cutting scene, but we can all (once again) “solve” congestion while getting a new WalMart, Taco Bell and Quiki Mart in the process. New growth just feels so much better.

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Former Transportation Secretaries Mary Peters, James Burnley, Rodney Slater, Samuel Skinner, and Norman Mineta participated in the conference that produced a report and communications strategy. Photo from Miller Center.

If 80 percent of the American people agree that federal infrastructure investment will create jobs, and two-thirds say better infrastructure is important, why is the call for a robust transportation bill being made in whispers? And why is Congress already two and a half years late in producing one?

There are many political reasons — from the earmark ban to wariness of “Bridge to Nowhere” projects to the anti-spending frenzy that’s taken over the House — that it’s been a tough time to pass a transportation bill. But five former U.S. Secretaries of Transportation have said that the voice for change has to be louder. They released a report yesterday, with the University of Virginia’s Miller Center, calling for a new communications strategy. (See “Is Transpo Funding Fundamentally a PR Problem? Five Ex-DOT Chiefs Discuss,” Dec. 2, 2011, for more on the conference the report is based on.)

The communications strategy is both visionary and tactical. Its more nuts-and-bolts elements include social networking campaigns and election-year news hooks to bring attention to the issue and make candidates talk about infrastructure.

The strategy is aimed at both leaders and the public. After all, both say they want better transportation infrastructure (and the jobs that will be created to build it), but no one wants to pay for it. The American people haven’t woken up to that contradiction. “Seventy-one percent of voters oppose an increase in the federal gas tax,” the Miller Center report says, “with majorities likewise opposing a tax on foreign oil, the replacement of the gas tax with a per-mile-traveled fee, and the imposition of new tolls to increase federal transportation funding.”

That’s a pretty comprehensive list of funding mechanisms, and the public has rejected them all. Part of a communications strategy, therefore, has to explain to the American people – not just about transportation but about all government services – that you can’t get something for nothing.

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The U.S. DOT announced this morning that it’s allocating almost $1.6 billion for repairs to roads and bridges that were damaged in recent floods and storms. If House Republicans had gotten their way, this money would have come out of high-speed rail funds.

Thanks to FHWA, Missouri (and 29 other states) is finally getting some relief from the devastating floods of last year. No thanks to Republicans in Congress, that relief is not coming at the expense of transportation programs that, one day, could prevent such climate events from happening. Photo: Paul Davis / AP

The House voted in July to transfer over a billion dollars of high-speed rail funds over to flood relief, but according to sources at U.S. DOT, “there has been no effort” to tie today’s emergency appropriation to a rescission of high-speed rail funding. Indeed, these dollars came from the omnibus funding bill that passed last month.

U.S. DOT had the chance to spend the money on rail projects quickly enough that by the time they could start on the emergency relief appropriation, the money would have already been spent out. That’s just what happened. So, instead of the $1.028 billion going to the Army Corps of Engineers for relief work, it went to rail projects as intended.

It’s good to see that these essential emergency relief funds were spent without cutting into HSR. Cloaking a partisan attack on a Democratic program in disaster relief was a cynical move by House Republicans.

These communities, from Maine to Montana, never should have had their recovery from 2011′s devastating storms made into a political football. Besides, increasingly extreme weather events are likely tied to the larger trend of climate change. It’s a little short-sighted to apply a band-aid to disaster relief while hobbling development of a transportation mode that could, potentially, reduce climate change and the disasters it causes.

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Can you guess who? Image: YouTube

Match the quotation to its Speaker (hint, hint!):

“Let’s go ahead and be really bold, and go head-to-head with the Chinese in developing and implementing maglev trains that move at 280 to 300, 320 miles an hour. [...] You cannot talk about American national security in the long run without a fundamental redevelopment of this country economically… And you cannot talk about a competitive American economy without a dramatically more robust and more modern infrastructure.”

Is it Obama, stumping for reelection? Not this time. What about Mitt Romney, who recently said he’s okay with borrowing money if it’s for infrastructure that provides a revenue stream? Getting closer.

No, these words belong to one Newton Leroy Gingrich, and they were delivered at a June 2009 event co-hosted by Building America’s Future and the National Governors Association. That’s right: Mr. Balanced Budget Amendment, the Deficit Hawk’s Deficit Hawk, wants to build maglev trains, per-mile one of the most expensive modes ever devised.

His speech outlined “8 Principles for a 21st Century Infrastructure System,” and featured: rewriting the budget act to allow for multi-year capital investing (number one), involving and incentivizing the private sector (number four), and an “energy infrastructure investment comparable to transportation investment” (number eight).

This last point, no doubt, refers to the six-word mantra that served as the title of Gingrich’s 2007 book, Drill Here, Drill Now, Pay Less. He also wrote a book – that same year! – called A Contract with the Earth about environmental stewardship. If nothing else, you have to admire his chutzpah. (That, and his skill at delivering focus group-tested talking points that advance the agenda of his patrons in the fossil fuel industry.)

The Republican presidential field’s resident idea man and self-styled “organizer of the pro-civilization activists” has a rather extensive public record when it comes to his stance on transportation investment, one that dates back to his years as Speaker of the House in the 1990s. Not that he’s ever had much to say about urban transit or other transportation issues that touch the daily lives of city dwellers.

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Congress has already delayed their holiday recess by a week, and members are hoping another delay won’t be necessary. Among the yet-unfinished business: an extension of the payroll tax cut. House Speaker John Boehner plans to hold a vote today on his bill, which marries an extension of the payroll tax cut to the controversial Keystone XL pipeline. While expected to sail through the House, such a partisan bill is unlikely to pass the Senate. Enter Senators Claire McCaskill (D-MO) and Susan Collins (R-ME).

Senators Collins, left, and McCaskill at their press conference. Image: STLtoday

Last week, McCaskill and Collins introduced the ambitiously-named Bipartisan Jobs Creation Act. The bill begins with the payroll tax cut and wraps it in additional tax cuts, deregulation measures, and a $35.8 billion infrastructure investment program. The whole thing would be paid for by eliminating some subsidies for oil companies and by instituting a surtax on millionaires’ income—though exceptions will be made for small business owner-operator “job creators.”

The two senators are generally touting this bill as a tax relief bill first, and a pay-your-fair-share bill second—infrastructure gets third-stringed at best, but the provisions are still worth looking into.

The McCaskill-Collins infrastructure plan [PDF] includes $10 billion to capitalize state infrastructure banks and $25 billion for highways and bridges—just highways and bridges. Out of $25 billion—about half an average year’s transportation spending by the federal government—not a dime goes to transit.

By promoting state infrastructure banks, McCaskill and Collins are throwing their weight behind the Republican vision for infrastructure spending and against the President’s. The President and a number of other prominent figures have advocated to no avail for the creation of a National Infrastructure Bank, and Politico reports that they’ll try again next year—to the familiar tune of $10 billion. Meanwhile, House Transportation Committee Chair John Mica has included support for state infrastructure banks—not a national one—in his reauthorization bill. The senators opted for state I-banks in this case because they are an existing program that could be expanded, while “there is no consensus yet on how to address a National Infrastructure Bank,” according to Senator McCaskill’s press secretary, John LaBombard.

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Two competing versions of a transportation-related job creation bill went down yesterday in the Senate. The first, the Rebuild America Jobs Act (S.1769), was a Democratic proposal, modeled on President Obama’s job creation bill, to invest $50 billion for infrastructure and another $10 billion as seed money to create a new national infrastructure bank.

Bills to put unemployed construction workers back on the job keep going down in Congress.

Given Republican opposition to what they consider a repeat of a failed stimulus – and to an infrastructure bank they say is unnecessary at best and politicized at worst — the failure of the bill is no surprise. The bill garnered a slim majority — 51-49 — but not enough to overcome the threat of a GOP filibuster.

Meanwhile, the Republican proposal would have pushed back many health, safety, and environmental regulations that corporations consider onerous. Defeated in a 47-53 vote, the bill also would have extended SAFETEA-LU for two more years — nearly matching the length and spending levels in the bipartisan EPW proposal — without funding the shortfall such spending would cause to the Highway Trust Fund. The bill wouldn’t have been a “clean” extension of current law, though, since it eliminated the “set-aside” for bike and pedestrian infrastructure, making it the fourth attempt in less than two months by Senate Republicans to eliminate or weaken TE — and the fourth failure.

This morning, the Senate is debating two transportation-related bills: the Rebuild America Jobs Act (S.1769) and the Long-Term Surface Transportation Extension Act (S.1786).

Sen. Hatch makes yet another attempt to "give states the authority" to kill bike/ped spending.

The Rebuild America Jobs Act is a piece of President Obama’s jobs bill that was broken off in hopes that it could pass on its own. It would invest $50 billion on infrastructure projects and another $10 billion in seed money for an infrastructure bank, to be paid for with a 0.7 percent surtax on incomes over $1 million.

Taxing the rich and increasing government spending — now there’s a recipe for some partisan rancor.

So far Democratic Leader Harry Reid and Republican Leader Mitch McConnell have traded barbs that each is just engaged in election-year sloganeering. Reid said 76 percent of the American people approve of the plan to tax the “top two-tenths of one percent.” But McConnell said those 76 percent might change their minds if they knew that “four out of five of those high-income individuals are actually business owners.” They haven’t talked much about the merits of infrastructure investment.

Note that not all of the big players who lined up behind increased investment and an infrastructure bank favor this bill. Bruce Josten of the U.S. Chamber of Commerce, for instance, said yesterday in a letter to senators [PDF] that the Rebuild America Jobs Act “fails to provide the multi-year funding certainty and fails to establish the policy and program reforms sorely needed to create jobs and support economic growth” and “only continues to delay and frustrate the serious and much needed debate on the sustained long-term investment required to address America’s infrastructure crisis.”

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White Flint, Maryland, a suburb of Washington, DC, should be a shining example of transit-oriented development. It’s centered on a metro station on the busy red line, sandwiched between the bustling suburban downtowns of Bethesda and Rockville.

Developers and the public are together preparing to turn White Flint's Rockville Pike from this...

... into this. Images: MontCo Planning Director's Blog (above) and White Flint Partnership (below).

But instead, it’s “sprawling suburbia,” covered in surface parking lots and lacking a true road network. “Community members say they’re within spitting distance of White Flint Mall but they have to drive to get there because of the road network,” says developer Francine Waters, who manages the transportation and smart growth program at Lerner Enterprises.

Seeing the wasted potential of the area, Lerner and five other developers that own much of the land in White Flint came together to figure out how to make Rockville Pike, White Flint’s main artery, a destination and not just a thoroughfare. Waters told the story this week at Rail~Volution to an audience eager to learn how public-private partnerships and value capture strategies could work in their neck of the woods.

Not only are the White Flint developers looking to include more mixed-use development in the community, they want to build new local streets to fill in a viable street grid and redesign the eight-lane Rockville Pike into a “21st century boulevard” with wide sidewalks, bike lanes, six rows of trees, and dedicated transit lanes. They want to fill those lanes with bus rapid transit to take short-haul commuters off of the at-capacity red line.

The infrastructure total is estimated to cost $601 million – and the federal government isn’t picking up a dime of it.

White Flint is at the forefront of a new kind of infrastructure financing – one which involves the private sector more than the government. As federal funds dry up, all eyes have turned to public-private partnerships, but the topic is still often the subject of much head-scratching and hand-wringing in Congress. Indeed, some have rung the alarm bell about over-reliance on the private sector when it comes to building high-speed rail, saying the public often bears too much of the risk while the private developers carry off all the profit.

Through an extended series of community consultations, White Flint’s developers appear to have gained the public’s trust, and now they’re charging forward with ambitious plans to remake an auto-centric suburban sprawl zone. And by bypassing federal aid, they’re also bypassing the reams of paperwork and bureaucratic processes that come with it, which often add years and millions of dollars to total project cost.

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