Damien Block - Amazon Web Services
*****50 States CP*****
1NC 50 States Shell (User Fees)
Puentes 2k11
(senior fellow with the Brookings Institution’s Metropolitan Policy Program where he also directs the Program's Metropolitan Infrastructure Initiative, “State Transportation Reform: Cut to Invest in Transportation to Deliver the Next Economy,” pg online @ //um-ef)
III. A New State Approach An emphasis on fiscal responsibility does not mean states should slow down investing in transportation. In fact, these investments are more important than ever. But to do them right in a constrained environment, states should consider a set of low (or no) cost recommendations to enable them to marshal the resources they already have by making sure that state efforts are coordinated and efficient. Use transportation dollars to leverage other state investments and the strengths of metropolitan areas. All too often, state agencies pursue goals and activities that work at cross-purposes or are counterproductive to one another, such as transportation and environment. The resulting duplicated services, haphazard spending, and wasted tax dollars are untenable under normal circumstances but have greater urgency as state budgets are tightening. As the governors are putting together their cabinets they should consider strategic reorganization and appoint a “super secretariat” with the authority to link up those departments that have responsibility over investments related to transportation, economic development, commerce, housing, land conservation, and other infrastructure such as water and sewer. In this way, the state can coordinate investments to maximize economic returns in the short term (such as job creation), strategically invest
for the future, and increase governmental efficiency. The state benefits not only from strategic funding
and alignment of programs, but also from mechanisms for state departments to collaborate and
work together in pursuit of common state goals.
For example, in California the secretary of the agency for Business, Transportation, and Housing
coordinates and oversees 14 departments and several economic development programs and commissions.
By executive order, Connecticut’s Governor Jodi Rell established the Office of Responsible
Growth in 2006 to link up policy development and capital planning in the areas of economic and
community development, environmental protection, agriculture, and transportation.13 In 2003,
Massachusetts Governor Mitt Romney created a super agency called the Office of Commonwealth
Development to coordinate the capital budgets of agencies responsible for environment, transportation,
housing, and energy.14
These examples were intended mainly to coordinate resources around sustainability-type goals, but
today states would benefit from better cabinet-level coordination between transportation and economic
development. Michigan, for example, has a department of Energy, Labor & Economic Growth
that brings together job, workforce, and economic development functions under a single agency. That
office could be expanded to include transportation and environment and to centralize the economic
development planning that is now carried out by the state’s 14 regional agencies. New York also has a
multiplicity of these agencies and has made some attempts at coordination through entities such as
the Economic Recovery and Reinvestment and Smart Growth Cabinets, but there is room for deeper
synchronization of these efforts.
State investments must also be coordinated with the land use and zoning regulations that localities
fiercely protect. So after the policy link-up described above, they should sponsor an interagency,
statewide Sustainability Challenge Competition to ensure that land use, housing, transportation, and
energy conservation and efficiency are always taken into account when planning regionally for new
land use and development. The competition would encourage multi-jurisdictional planning efforts and
broad visions for needs like congestion relief and carbon reductions (a long-term necessity for the next
economy) and reward those that can pull these disparate strands together with extra flexibility in using
those funds. The sustainability challenge idea is similar to, but more ambitious than, Ohio’s $1 million
Local Government Services and Regional Collaboration Grant Program which is intended to improve
and enhance collaboration and regional economic development among the state’s municipalities.15
States should protect the investments that they have made over the course of decades in their
metropolitan areas. A fix-it-first approach that makes system preservation the priority creates more
jobs than building new capacity, up to 17 percent more jobs.16 There is also an economic imperative
to keeping transportation in a state of good repair. Infrastructure deterioration caused by deferred
maintenance (presumably because of budget squeezes in the short term) can lead to greater costs in
the long run. One study found that reconstructing a poorly maintained road after 25 years of neglect
costs three times as much as the regular maintenance of that road over the same period. 17 And places
with heavy truck traffic—such as around major ports and freight corridors—tend to see the greatest
deterioration.
Only 17 states have some kind of fix-it-first policy in place to prioritize existing places and existing
infrastructure.18 In Virginia, the state code dictates that transportation funds must first be spent to
pay debt service, then operations and maintenance of existing assets, then construction. To adhere to
this mandate the state recently transferred $511 million in funds from its construction account to its
maintenance account.19 However, fix-it-first has to be coupled with rigorous benefit-cost analyses for all
new capacity increases. In some states the reconstruction of an exurban two-lane road into a four-lane
road could technically be considered a maintenance project.
Use market discipline to find savings and new revenue sources. Governors should order a full
audit of their state’s transportation program to ensure it is functioning in the most efficient, effective
manner possible. The audit should start with standard (and useful) examinations of the inner workings
of transportation departments’ accounting, procurement rules, fleet management, and training.
When he took over as Governor of Virginia in January 2010, Bob McDonnell called for an independent
assessment of his transportation department’s organizational structure, programs, and operations. His
request was approved by the state legislature and in September 2010, the audit found over $600 million
in immediate savings due mainly to better contracting and project acceleration.20 A January 2009
audit of Idaho’s transportation department found over $30 million in one-time savings over five years,
and $6 million annually thereafter.21
But the audit must go farther, to investigate the entire scope of how transportation investment
decisions are made within a state. For example, how closely aligned are project decisions to a cohesive
strategic vision for economic growth? How coordinated are infrastructure projects? It makes no sense
to make efficiency gains in a program that needs a thorough overhaul. For example, a recent audit of
the Texas department of transportation recommended organizational changes intended to diminish
the “singular, deeply entrenched culture” of the agency and more emphasis on business and financial
management including the use of metrics to determine performance.22
Governors and legislators should also recognize that the fiscal crisis creates the opportunity to talk
about new sources of transportation revenues – including sources that were previously considered
politically infeasible. States should consider adopting market mechanisms like congestion pricing to
maximize metropolitan road networks, as well as the expansion of user fees. And even voter-approved
tax increases (which are evidence of willingness to pay for services) should be part of the discussion.
Residents in metropolitan Phoenix, for example, recently approved a half-cent sales tax for regional
transportation that is expected to generate $11 billion. Los Angeles county voters approved a half-cent
increase that is projected to raise $40 billion for transportation improvements. Notably, that vote
came in November 2008, right it the middle of the economic downturn.23 Governors should encourage
this kind of self help.
States are better at transportation infrastructure – the federal government is plagued with pork-barrel politics and bureaucratic bungling
Edwards ’11 (Chris Edwards. The Cato Institute. "Infrastructure Projects to Fix the Economy? Don't Bank on It. | Downsizing the Federal Government." Infrastructure Projects to Fix the Economy? Don't Bank on It. | Downsizing the Federal Government. N.p., october 21, 2011. Web. 20 June 2012. .)
In a recent television ad for her network, MSNBC host Rachel Maddow stands below the Hoover Dam and asks whether we are still a country that can "think this big" — Hoover Dam big. The commercial is built on the assumption that American greatness is advanced by federal spending on major infrastructure projects. If I had my own television commercial, I'd stand in front of the wreckage of Idaho's Teton Dam,which, like the Hoover Dam, was built by the federal Bureau of Reclamation. The Teton Dam was based on shoddy engineering and a flawed economic analysis. It collapsed catastrophically in 1976, just a year after it was built. Increased infrastructure spending has bipartisan support in Washington these days. President Obama wants a new federal infrastructure bank, and members of both parties want to pass big highway and air-traffic-control funding bills. The politicians think these bills will create desperately needed jobs, but the cost of that perceived benefit is too high: Federal infrastructure spending has a long and painful history of pork-barrel politics and bureaucratic bungling, with money often going to wasteful and environmentally damaging projects. For plenty of examples of the downside of federal infrastructure, look at the two oldest infrastructure agencies — the Army Corps of Engineers and the Bureau of Reclamation. Their histories show that the federal government shouldn't be in the infrastructure business. Rather, state governments and the private sector are best equipped to provide it. The Corps of Engineers has been building levees, canals and other civilian water infrastructure for more than 200 years — and it has made missteps the entire time. In the post-Civil War era, for example, there were widespread complaints about the Corps' wastefulness and mismanagement. A 1971 book by Arthur Morgan, a distinguished engineer and former chairman of the Tennessee Valley Authority, concluded: "There have been over the past 100 years consistent and disastrous failures by the Corps in public works areas ... resulting in enormous and unnecessary costs to ecology [and] the taxpayer." Some of the highest-profile failures include the Great Mississippi Flood of 1927. That disaster dramatically proved the shortcomings of the Corps' approach to flood control, which it had stubbornly defended despite outside criticism. Hurricane Katrina in 2005 was like a dreadful repeat. The flooding was in large part a man-made disaster stemming from poor engineering by the Corps and misdirected funding by Congress. Meanwhile, the Bureau of Reclamation has been building economically dubious and environmentally harmful dams since 1902. Right from the start, "every Senator ... wanted a project in his state; every Congressman wanted one in his district; they didn't care whether they made economic sense or not," concluded Marc Reisner in his classic history of the agency, Cadillac Desert. The dam-building pork barrel went on for decades, until the agency ran out of rivers into which it could pour concrete. Looking at the Corps and Reclamation, the first lesson about federal infrastructure projects is that you can't trust the cost-benefit analyses. Both agencies have a history of fudging their studies to make proposed projects look better, understating the costs and overstating the benefits. And we've known it, too. In the 1950s, Sen. Paul Douglas (D-Ill.), lambasted the distorted analyses of the Corps and Reclamation. According to Reisner, Reclamation's chief analyst admitted that in the 1960s he had to "jerk around" the numbers to make one major project look sound and that others were "pure trash" from an economics perspective. In the 1970s, Jimmy Carter ripped into the "computational manipulation" of the Corps. And in 2006, the Government Accountability Office found that the Corps' analyses were "fraught with errors, mistakes, and miscalculations, and used invalid assumptions and outdated data." Even if federal agencies calculate the numbers properly, members of Congress often push ahead with "trash" projects anyway. Then-senator Christopher Bond of Missouri vowed to make sure that the Corps' projects in his state were funded, no matter what the economic studies concluded, according to extensive Washington Post reporting on the Corps in 2000. And the onetime head of the Senate committee overseeing the Corps, George Voinovich of Ohio, blurted out at a hearing: "We don't care what the Corps cost-benefit is. We're going to build it anyhow because Congress says it's going to be built." As Morgan noted in his 1971 book, these big projects have often damaged both taxpayers and ecology. The Corps, Reisner argues, has "ruined more wetlands than anyone in history" with its infrastructure. Meanwhile, Reclamation killed wetlands and salmon fisheries as it built dams to provide high-cost irrigation water to farmers in the West — so they could grow crops that often compete with more efficiently grown crops in the East. Taxpayers are double losers from all this infrastructure. They paid to build it, and now they are paying to clean up the environmental damage. In Florida, for example, the Corps' projects, along with federal sugar subsidies, have damaged the Everglades. So the government is helping to fund a multibillion-dollar restoration plan. In the West, federal irrigation has increased salinity levels in rivers, necessitating desalination efforts such as a $245 millionplant in Yuma, Ariz. And in a large area of California's San Joaquin Valley, federal irrigation has created such toxic runoff that the government is considering spending up to $2 billion to fix the damage, according to some estimates. When the federal government "thinks big," it often makes big mistakes. And when Washington follows bad policies, such as destroying wetlands or overbuilding dams, it replicates the mistakes across the nation. Today, for instance, Reclamation's huge underpricing of irrigation water is contributing to a water crisis across much of the West. Similar distortions occur in other areas of infrastructure, such as transportation. The federal government subsidizes the construction of urban light-rail systems, for example, which has caused these systems to spring up across the country. But urban rail systems are generally less efficient and flexible than bus systems, and they saddle cities with higher operating and maintenance costs down the road. Similar misallocation of investment occurs with Amtrak; lawmakers make demands for their districts, and funding is sprinkled across the country, even to rural areas where passenger rail makes no economic sense because of low population densities. When the federal government is paying for infrastructure, state officials and members of Congress fight for their shares of the funding, without worrying too much about efficiency, environmental issues or other longer-term factors. The solution is to move as much infrastructure funding as we can to the state, local and private levels. That would limit the misallocation of projects by Congress, while encouraging states to experiment with lower-cost solutions. It's true that the states make infrastructure mistakes as well, as California appears to be doing by subsidizing high-speed rail. But at least state-level mistakes aren't automatically repeated across the country. The states should be the laboratories for infrastructure. We should further encourage their experiments by bringing in private-sector financing. If we need more highway investment, we should take notes from Virginia, which raised a significant amount of private money to widen the Beltway. If we need to upgrade our air-traffic-control system, we should copy the Canadian approach and privatize it so that upgrades are paid for by fees on aviation users. If Amtrak were privatized, it would focus its investment where it is most needed — the densely populated Northeast. As for Reclamation and the Corps, many of their infrastructure projects would be better managed if they were handed over to the states. Reclamation's massive Central Valley irrigation project, for example, should be transferred to the state of California, which is better positioned to make cost and environmental trade-offs regarding contentious state water issues. Other activities of these two agencies could be privatized, such as hydropower generation and the dredging of seaports. The recent infrastructure debate has focused on job creation, and whether projects are "shovel ready." The more important question is who is holding the shovel. When it's the federal government, we've found that it digs in the wrong places and leaves taxpayers with big holes in their pockets. So let's give the shovels to state governments and private companies. They will create just as many jobs while providing more innovative and less costly infrastructure to the public. They're ready.
1NC 50 States Shell (SIB’s)
Text: The 50 state governments, territories, and Washington DC should _____________, and establish new state infrastructure banks to finance the plan.
State infrastructure banks are comparatively the best mechanism for transportation funding
Council of State Governments 11 (“ Capitol Research: State Infrastructure Banks”, June 2011, ) CM
State infrastructure banks can help states stretch their state and federal dollars and meet the demands of financing large, impactful, long-term infrastructure projects. When government agencies and authorities must seek yearly grants and allocations to finance projects, the completion of those projects can be delayed for months or years. State infrastructure banks can identify, promote and lend money to creditworthy transportation projects to ensure they’re built within a reasonable timeframe and in a financially sustainable way. And because these banks act as a “revolving fund,” more projects can ultimately be financed. When bonding is used to finance a project, the bonds are usually one of two types: revenue or general obligation. Revenue bonds often are used to finance infrastructure projects that have the ability to produce revenue through their operations; for ex- ample, new highway lanes that can be tolled or public transit facilities on which fares can be collected. These types of bonds are typically guaranteed by the project revenues, but not by the full faith and credit of a state, city or county. General obligation bonds, on the other hand, are backed by the full faith and credit of the issuing authority. These are used to finance projects that rely on government’s general revenues, such as income, sales and property tax revenue. Cities, counties and states pledge these revenues to issue the bonds and repay them. But the revolving fund aspect of a state infrastructure bank means states can lend funds for projects and receive loan repayments, which can be returned to the system for more project loans. The funding also can be turned into much larger credit lines, multiplying transportation investment capacity. When transportation projects are financed in a traditional way, funds from a state department of transportation or the federal Highway Trust Fund are spent and two types of risk are assumed. Projects are at risk of delay as state officials wait for the state or federal funds to become available, which may increase the costs and delay the project’s benefits. Secondly, states face the risk that a poorly selected project will fail to produce social or economic benefits and tie up scarce capital resources that could have gone to other potentially more successful projects. Both of those risks are diminished with state infrastructure bank financing. First, projects don’t have to wait for funding and delays and cost overruns are avoided. Secondly, a state infrastructure bank has a built-in project evaluation process. Projects are assessed based on their financial viability, which pro- vides a level of economic discipline that is not always present with traditional state project funding. Better, more benefit-producing projects can be the result.
1NC 50 States Shell (PPP’s)
Text: The 50 state governments, territories, and Washington DC should grant regional transportation agencies the ability to enter into an unlimited number of Public-Private Partnerships and remove all necessary restrictions and regulations prohibiting public-private partnerships from cooperating on [________]
Free Enterprise ’12 (Free Enterprise. "Free Enterprise." States Pursue Public-Private Partnerships to Fix America's Transportation Infrastructure. N.p., apr 18, 2012. Web. 25 June 2012. . AMR)
In the face of adversity, America innovates, and that has been evident with infrastructure investment. On the state level, businesses and governments are forging new partnerships to jointly bring America’s infrastructure up to speed. These public-private partnerships (PPPs) give governments and the private sector a way to fund infrastructure investment. While PPPs can take different shapes, with structured agreements tailored to a specific project, partnerships generally have private sector partners supplying much of the initial capital needed to cover commercial functions, like construction and operation. They also assume much of the risk inherent in building, maintaining and operating infrastructure projects. Construction delays, access to workers, and other factors can impact building costs, but the advantages are that private partners enjoy long-term, largely stable investments. On the public side, governments can avoid many of the risks involved in major investments while still playing a role in updating and expanding America’s infrastructure. This model is one way America can fund the massive investment needed to bring U.S. infrastructure back from the brink. “Every type of infrastructure offers limitless opportunities for properly structured agreements,” says Senator Mark Kirk (R-IL), who spoke at the U.S. Chamber’s Infrastructure Investment Forum in November. “The only thing that holds us back is our own creativity. In my time as a public servant, one critical fact is quite clear – if you don’t innovate, you get left behind. Chicago, Illinois, and the nation can lead the way on public-private partnerships, or we can lose the competition to China, Europe, and others. It’s our choice.” According to a Brookings report, between 1989 and 2011, 24 states engaged in at least one transportation PPP project. Florida, California, and Texas led the states in total number of projects, and Colorado and Virginia accounted for 56 percent of the total amount of all U.S. transportation PPP projects. In Chicago, infrastructure needs and a tight budget led city leaders to pursue PPPs to finance the $7.2 billion in projects for the city's subways, schools and other infrastructure. Not only is this important for the city’s infrastructure; it helps Chicago’s job seekers as well. The projects funded will create 30,000 jobs over the next three years. Whereas the state and local budgets preclude Chicago from footing the bill directly, under PPPs, the city can fund needed updates and enjoy the direct benefits of growth and jobs. Virginia is also reaping benefits from PPPs. The I-495/Capital Beltway HOV/HOT lanes project, for example, is a joint effort between the Virginia Department of Transportation and private companies. The state contributed $409 million to the project, while private partners provided $1.5 billion. This and other projects have proven so successful that Virginia created an office within the Virginia DoT to identify other infrastructure projects where PPPs could be useful. “By partnering with the private sector,” says Virginia Secretary of Transportation Sean Connaughton, “Virginia is moving forward on this project much more quickly than would be possible using traditional funding and construction methods – capitalizing on the best technology, financing methods, engineering and innovation.” While some states are finding benefits in using PPPs, overall, the United States still lags behind the rest of the world in terms of using these innovative approaches to financing infrastructure improvement. From 1985 to 2011, there were only 377 PPP infrastructure projects in the United States, representing just 9% of costs for infrastructure PPPs around the world, according to Brookings. This is due in part to a lack of legislation in many states that enables the state and local governments to pursue PPPs for transportation infrastructure. California passed legislation in 2009 giving regional transportation agencies the ability to enter into an unlimited number of PPPs; it also removed restrictions on the types of projects that can be pursued under a partnership. And Colorado has passed legislation creating a Statewide Bridge Enterprise that can enter into PPPs for bridge repairs and a High-Performance Transportation Enterprise (HPTE) to look for other PPP opportunities. The benefits of PPPs extend beyond the ability to finance much-needed transportation infrastructure updates. Governments are concerned with providing a public service, but businesses are profit driven. As such, under PPPs, it is in the best interest of the private partners to be efficient and reliable; their profit and success depends on it. The proposal for the Denver Regional Transportation District’s Eagle PPP Project, for example, was about $300 million cheaper and 11 months faster to completion than the district’s estimate.
2NC PPP’s Solve
P3’s solve funding of transportation infrastructure
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
An emerging strategy for transportation finance is known as Public Private Partnerships (PPPs). PPPs, according to the FHWA definition, are contractual agreements formed between a public agency and private sector entity that allow for greater private sector participation in the delivery of transportation projects.91 PPPs typically involve significant partici- pation by both sectors and take into account the ob- jectives of each sector. PPPs have been successfully implemented in a number of states and around the world, notably in Europe and Australia. The primary benefits of PPPs for states or other public sector entities include ac- cess to significant private capital, the potential for reduced costs and accelerated project delivery, shar- ing or shifting project risk, and the opportunity for more efficient management. Challenges for the pub- lic sector include concerns with public acceptance, how to determine appropriate levels of return on in- vestment for the private sector, how to ensure fair rates for users, and the need for enhanced expertise in legal and financial areas. PPPs can take a variety of forms, including man- agement and operations PPPs; asset leases; and pri- vate financing and management of new facilities (which could include long-term concession agree- ments for design, construction, finance, operation, and maintenance). There also are some specific PPP finance models that relate to transit.Private Financing and Management of New Facilities In addition to leasing existing transportation facili- ties, states can utilize PPPs that involve the private sector taking on the responsibility of designing, building, financing, operating, and maintaining (DBFOM) a new facility. In some cases the same model is used but without private sector financing. This is called the Design, Build, Operate and Main- tain (DBOM) PPP. The benefit of either approach for a new facility is accelerated project delivery and, as a result, less total cost. The potential downside is the possibility of less project oversight. A well-written Innovative State Transportation Funding and Financing • 29 30 • Innovative State Transportation Funding and Financing concession agreement with the private partner can help protect the public sector’s interest and achieve its objectives. Florida, Texas, and Virginia are among the leading states utilizing tolls and PPPs to finance new road construction.
And, public private partnerships provides an effective funding mechanism for transportation infrastructure
Poe 2k11
(Sheryll, “Experts Call for Public-Private Partnerships in Transportation,” pg online @ )
Abundant and available private capital should be considered as a resource for infrastructure investments when traditional funding is unavailable or less efficient, according to transportation advocates attending the U.S. Chamber’s Infrastructure Investment Forum. “Public-private partnerships are not the complete solution to all our infrastructure needs. The money raised won’t fill the coffers of the federal Highway Trust Fund,” said Sen. Mark Kirk (R-IL), author of a new bill to help build highways, transit, rail and airports, wipe out barriers to private investment, and provide tools to states to raise more money. “But infrastructure and pension funds and other investment pools could provide the backing for major infrastructure projects.” Kirk and transportation experts attending the November 8 event estimated that private infrastructure funds have grown from $60 billion in 2006 to more than $190 billion in 2009. Kirk is advancing legislation that could mobilize $100 billion in private investment to build new roads, airports and railroads. The bill is paid for by limiting the rate of pay increases for federal workers. The Chamber’s event, held in conjunction with its Let’s Rebuild America coalition, shined a spotlight on efforts in Virginia and other states to use alternative contracting and financing mechanisms to deliver solutions to transportation needs. Virginia Secretary of Transportation Sean Connaughton said that his state has created an independent office within the agency to identify a “pipeline of projects” that could benefit from public-private partnerships. He touted the use of private funds in projects such as the Capital Beltway HOT Lanes project which is being delivered by Virginia Department of Transportation (VDOT) in partnership with Transurban-Fluor. “By partnering with the private sector, Virginia is moving forward on this project much more quickly than would be possible using traditional funding and construction methods – capitalizing on the best technology, financing methods, engineering and innovation,” Connaughton said.
1NC States Solvency (General)
States are better at transportation infrastructure – the federal government is plagued with pork-barrel politics and bureaucratic bungling
Edwards ’11 (Chris Edwards. The Cato Institute. "Infrastructure Projects to Fix the Economy? Don't Bank on It. | Downsizing the Federal Government." Infrastructure Projects to Fix the Economy? Don't Bank on It. | Downsizing the Federal Government. N.p., october 21, 2011. Web. 20 June 2012. .)
In a recent television ad for her network, MSNBC host Rachel Maddow stands below the Hoover Dam and asks whether we are still a country that can "think this big" — Hoover Dam big. The commercial is built on the assumption that American greatness is advanced by federal spending on major infrastructure projects. If I had my own television commercial, I'd stand in front of the wreckage of Idaho's Teton Dam,which, like the Hoover Dam, was built by the federal Bureau of Reclamation. The Teton Dam was based on shoddy engineering and a flawed economic analysis. It collapsed catastrophically in 1976, just a year after it was built. Increased infrastructure spending has bipartisan support in Washington these days. President Obama wants a new federal infrastructure bank, and members of both parties want to pass big highway and air-traffic-control funding bills. The politicians think these bills will create desperately needed jobs, but the cost of that perceived benefit is too high: Federal infrastructure spending has a long and painful history of pork-barrel politics and bureaucratic bungling, with money often going to wasteful and environmentally damaging projects. For plenty of examples of the downside of federal infrastructure, look at the two oldest infrastructure agencies — the Army Corps of Engineers and the Bureau of Reclamation. Their histories show that the federal government shouldn't be in the infrastructure business. Rather, state governments and the private sector are best equipped to provide it. The Corps of Engineers has been building levees, canals and other civilian water infrastructure for more than 200 years — and it has made missteps the entire time. In the post-Civil War era, for example, there were widespread complaints about the Corps' wastefulness and mismanagement. A 1971 book by Arthur Morgan, a distinguished engineer and former chairman of the Tennessee Valley Authority, concluded: "There have been over the past 100 years consistent and disastrous failures by the Corps in public works areas ... resulting in enormous and unnecessary costs to ecology [and] the taxpayer." Some of the highest-profile failures include the Great Mississippi Flood of 1927. That disaster dramatically proved the shortcomings of the Corps' approach to flood control, which it had stubbornly defended despite outside criticism. Hurricane Katrina in 2005 was like a dreadful repeat. The flooding was in large part a man-made disaster stemming from poor engineering by the Corps and misdirected funding by Congress. Meanwhile, the Bureau of Reclamation has been building economically dubious and environmentally harmful dams since 1902. Right from the start, "every Senator ... wanted a project in his state; every Congressman wanted one in his district; they didn't care whether they made economic sense or not," concluded Marc Reisner in his classic history of the agency, Cadillac Desert. The dam-building pork barrel went on for decades, until the agency ran out of rivers into which it could pour concrete. Looking at the Corps and Reclamation, the first lesson about federal infrastructure projects is that you can't trust the cost-benefit analyses. Both agencies have a history of fudging their studies to make proposed projects look better, understating the costs and overstating the benefits. And we've known it, too. In the 1950s, Sen. Paul Douglas (D-Ill.), lambasted the distorted analyses of the Corps and Reclamation. According to Reisner, Reclamation's chief analyst admitted that in the 1960s he had to "jerk around" the numbers to make one major project look sound and that others were "pure trash" from an economics perspective. In the 1970s, Jimmy Carter ripped into the "computational manipulation" of the Corps. And in 2006, the Government Accountability Office found that the Corps' analyses were "fraught with errors, mistakes, and miscalculations, and used invalid assumptions and outdated data." Even if federal agencies calculate the numbers properly, members of Congress often push ahead with "trash" projects anyway. Then-senator Christopher Bond of Missouri vowed to make sure that the Corps' projects in his state were funded, no matter what the economic studies concluded, according to extensive Washington Post reporting on the Corps in 2000. And the onetime head of the Senate committee overseeing the Corps, George Voinovich of Ohio, blurted out at a hearing: "We don't care what the Corps cost-benefit is. We're going to build it anyhow because Congress says it's going to be built." As Morgan noted in his 1971 book, these big projects have often damaged both taxpayers and ecology. The Corps, Reisner argues, has "ruined more wetlands than anyone in history" with its infrastructure. Meanwhile, Reclamation killed wetlands and salmon fisheries as it built dams to provide high-cost irrigation water to farmers in the West — so they could grow crops that often compete with more efficiently grown crops in the East. Taxpayers are double losers from all this infrastructure. They paid to build it, and now they are paying to clean up the environmental damage. In Florida, for example, the Corps' projects, along with federal sugar subsidies, have damaged the Everglades. So the government is helping to fund a multibillion-dollar restoration plan. In the West, federal irrigation has increased salinity levels in rivers, necessitating desalination efforts such as a $245 millionplant in Yuma, Ariz. And in a large area of California's San Joaquin Valley, federal irrigation has created such toxic runoff that the government is considering spending up to $2 billion to fix the damage, according to some estimates. When the federal government "thinks big," it often makes big mistakes. And when Washington follows bad policies, such as destroying wetlands or overbuilding dams, it replicates the mistakes across the nation. Today, for instance, Reclamation's huge underpricing of irrigation water is contributing to a water crisis across much of the West. Similar distortions occur in other areas of infrastructure, such as transportation. The federal government subsidizes the construction of urban light-rail systems, for example, which has caused these systems to spring up across the country. But urban rail systems are generally less efficient and flexible than bus systems, and they saddle cities with higher operating and maintenance costs down the road. Similar misallocation of investment occurs with Amtrak; lawmakers make demands for their districts, and funding is sprinkled across the country, even to rural areas where passenger rail makes no economic sense because of low population densities. When the federal government is paying for infrastructure, state officials and members of Congress fight for their shares of the funding, without worrying too much about efficiency, environmental issues or other longer-term factors. The solution is to move as much infrastructure funding as we can to the state, local and private levels. That would limit the misallocation of projects by Congress, while encouraging states to experiment with lower-cost solutions. It's true that the states make infrastructure mistakes as well, as California appears to be doing by subsidizing high-speed rail. But at least state-level mistakes aren't automatically repeated across the country. The states should be the laboratories for infrastructure. We should further encourage their experiments by bringing in private-sector financing. If we need more highway investment, we should take notes from Virginia, which raised a significant amount of private money to widen the Beltway. If we need to upgrade our air-traffic-control system, we should copy the Canadian approach and privatize it so that upgrades are paid for by fees on aviation users. If Amtrak were privatized, it would focus its investment where it is most needed — the densely populated Northeast. As for Reclamation and the Corps, many of their infrastructure projects would be better managed if they were handed over to the states. Reclamation's massive Central Valley irrigation project, for example, should be transferred to the state of California, which is better positioned to make cost and environmental trade-offs regarding contentious state water issues. Other activities of these two agencies could be privatized, such as hydropower generation and the dredging of seaports. The recent infrastructure debate has focused on job creation, and whether projects are "shovel ready." The more important question is who is holding the shovel. When it's the federal government, we've found that it digs in the wrong places and leaves taxpayers with big holes in their pockets. So let's give the shovels to state governments and private companies. They will create just as many jobs while providing more innovative and less costly infrastructure to the public. They're ready.
2NC Counterplan Solves (General)
And, there are multiple avenues the states can use to fund the plan – your takeouts and state budget d.a.’s don’t apply
Kotkin et al ’11 (The Report Was Prepared by Praxis Strategy Group and Joel Kotkin. Authors from the Praxis Team Include Delore Zimmerman, Mark Schill, Doug McDonald, and Matthew Leiphon. Zina Klapper and Marcel LaFlamme Provided Editing and Additional Research. Praxis Strategy Group Is an Economic Research and Community Strategy Company That Works with Leaders and Innovators in Business, Education and Government to Create New Economic Opportunities. Joel Kotkin Is an Internationally Recognized Authority on Global, Economic, Political and Social Trends. His Book The Next 100 Million: America in 2050 Explores How the Nation Will Evolve in the next Four Decades. "Enterprising States 2011 Recovery and Renewal for the 21st Century." U.s. Chamber of Commerce and the National Chamber Foundation. N.p., 2011. Web. .)
infrastructure Infrastructure plays a critical role in economic development, and states work with local, regional and national governments to put it in place. The basic infrastructure package for a sustainable economy includes highways, airports, harbors, utility distribution systems, railways, water and sewer systems, and communications networks. As high-value services become more important to state economies, the value of high-quality passenger air service and broadband increases as well. Investments that improve performance of transportation infrastructure provide positive long-term value for the U.S. economy.55 State expenditures on transportation infrastructure include investments in highways, air transport facilities, and port facilities. Most states have programs in place for funding public works in industrial or research parks and for infrastructure associated with individual business developments. States can use their bonding authority to finance infrastructure, and a few states have developed infrastructure banks. Broadband telecommunication infrastructure is at the forefront of many state public policy initiatives and is viewed as indispensable to economic and community development. The share of employees working from home has increased 31 percent since 2000, and if current trends continue, telecommuting could overtake transit for work trips by 2017.56 Many states, especially those with large rural regions, have created specific broadband infrastructure investment and incentive programs. States are ranked based upon two broadband measures and one comprehensive measure of transportation infrastructure performance: • Share of internet telecommunication lines that are high-speed. • Share Census tracts with high broadband penetration. • The U.S. Chamber of Commerce’s state transportation infrastructure performance index. top infrastructure states state and university officials and private companies created the Three Ring Binder project, a dark fiber network designed to provide the “middle-mile” telecommunications infrastructure needed to serve the state’s business, academic, and telemedicine needs. The network is funded with both federal and private sources. 2. Vermont—Already a top ten state in broadband access, the Green Mountain State has made improvement of its rural technology infrastructure a point of emphasis. Governor Peter Shumlin recently launched ConnectVT, a coordinated effort to expand broadband and wireless communications access to all parts of the state by 2013, in an attempt to support rural business job creation. The initiative also convened experts to identify areas of need, and examine ways to coordinate ongoing public and private efforts. 3. North Dakota—The Peace Garden State ranks first in the U.S. Chamber of Commerce’s transportation performance index. The state’s recently passed budget diverts oil extraction and mining revenues to fund needed road improvements in the western half of the state, to improve transportation infrastructure needed by booming drilling activities.
And, only the counterplan solves the flexibility net benefit and avoids the cost-overruns turn
Roth 10 Civil engineer and transportation economist, research fellow at the Independent Institurem Worked with the World Bank on transportation prokects(Gabriel, “Federal Highway Funding,” June 2010, )
The flow of federal funding to the states for highways comes part-in-parcel with top-down regulations. The growing mass of federal regulations makes highway building more expensive in numerous ways. First, federal specifications for road construction standards can be more demanding than state standards. But one-size-fits-all federal rules may ignore unique features of the states and not allow state officials to make efficient trade-offs on highway design. A second problem is that federal grants usually come with an array of extraneous federal regulations that increase costs. Highway grants, for example, come with Davis-Bacon rules and Buy America provisions, which raise highway costs substantially. Davis-Bacon rules require that workers on federally funded projects be paid "prevailing wages" in an area, which typically means higher union wages. Davis-Bacon rules increase the costs of federally funded projects by an average of about 10 percent, which wastes billions of dollars per year.27 Ralph Stanley, the entrepreneur who created the private Dulles Greenway toll highway in Virginia, estimated that federal regulations increase highway construction costs by about 20 percent.28 Robert Farris, who was commissioner of the Tennessee Department of Transportation and also head of the Federal Highway Administration, suggested that federal regulations increase costs by 30 percent.29 Finally, federal intervention adds substantial administrative costs to highway building. Planning for federally financed highways requires the detailed involvement of both federal and state governments. By dividing responsibility for projects, this split system encourages waste at both levels of government. Total federal, state, and local expenditures on highway "administration and research" when the highway trust fund was established in 1956 were 6.8 percent of construction costs. By 2002, these costs had risen to 17 percent of expenditures.30 The rise in federal intervention appears to have pushed up these expenditures substantially.
And, we’ll win a new disad here – states are critical to foster private investment in new growth companies – key to the economy
Kotkin et al ’11 (The Report Was Prepared by Praxis Strategy Group and Joel Kotkin. Authors from the Praxis Team Include Delore Zimmerman, Mark Schill, Doug McDonald, and Matthew Leiphon. Zina Klapper and Marcel LaFlamme Provided Editing and Additional Research. Praxis Strategy Group Is an Economic Research and Community Strategy Company That Works with Leaders and Innovators in Business, Education and Government to Create New Economic Opportunities. Joel Kotkin Is an Internationally Recognized Authority on Global, Economic, Political and Social Trends. His Book The Next 100 Million: America in 2050 Explores How the Nation Will Evolve in the next Four Decades. "Enterprising States 2011 Recovery and Renewal for the 21st Century." U.s. Chamber of Commerce and the National Chamber Foundation. N.p., 2011. Web. .)
hard choices now – hard work ahead Enterprising States 2011 confirms that states are the fulcrum of change and opportunity in key areas of education, infrastructure, energy, innovation, and skills training. States and localities are far better positioned than the federal government to foster strategic investment, regulations, taxes and incentives that encourage business creation and private sector prosperity. A state, however, can neither cut nor tax itself into prosperity. The evidence regarding job creation among the states shows that fiscal probity is an essential ingredient, but states can deal with the fundamental problems they face only by spurring growth and upward mobility. In the final analysis, to simply proclaim an enterprise- friendly environment is no longer adequate. States that are doing it right today are responsive and are taking on a cooperative and supportive approach to dealing with new and existing companies. Enterprising states are making the hard choices today by trimming costs and prioritizing investments that establish the conditions for business creation and expansion. Enterprising states are getting ready for the hard work ahead in a globally competitive economy by modernizing government and focusing on creating and sustaining high- growth, higher-wage, 21st century industries.
*****AT’s*****
Implement Cost-benefit Analysis
Cost-benefit analysis at a state level is best strategy for investment decisions
Greenstone and Looney 11 (Michael Greenstone, Director, The Hamilton Project 3M Professor of Environmental Economics, MIT, Adam Looney, Policy Director, The Hamilton Project Senior Fellow, The Brookings Institution,” Investing in the Future: An Economic Strategy for State and Local Governments in a Period of Tight Budgets” February 2011, ) CM
Getting the most out of public investments requires that the benefits of the investment in the form of increases in trade, productivity enhancements, traffic reductions, quality-of-life improvements, or environmental benefits exceed the costs to taxpayers and disruptions to local residents. The standard way to weigh these tradeoffs is cost-benefit analysis, which rigorously quantifies both the anticipated costs and the expected benefits to determine if an investment makes economic sense. Although some governments already use cost-benefit analysis to help make investment decisions, most do not, and seldom do governments look back after the fact to evaluate whether old projects were worth their cost. The nation as a whole could benefit from building capacity at the state level for more and better analysis. Properly implemented, cost-benefit analysis would encourage decisionmakers to weigh less-tangible factors such as noise from highways that makes homes less restful and air pollution from automobiles that contributes to respiratory disease, to promote infrastructure that enhances both the economy and quality of life. Setting even a small percentage of funds from each program aside for ex post evaluation of programs would allow state and local governments to determine which investments have the greatest return.
AT: Transparency DA
States would implement CommonMuni
Greenstone and Looney 11 (Michael Greenstone, Director, The Hamilton Project 3M Professor of Environmental Economics, MIT, Adam Looney, Policy Director, The Hamilton Project Senior Fellow, The Brookings Institution,” Investing in the Future: An Economic Strategy for State and Local Governments in a Period of Tight Budgets” February 2011, ) CM
In their Hamilton Project discussion paper, “Lowering Borrowing Costs for States and Municipalities Through CommonMuni,” Andrew Ang and Richard Green (2011) examine the high costs in the market for municipal bonds and propose establishing an institution called “CommonMuni” to address these problems. CommonMuni would provide municipal issuers with independent, high-quality advice, help centralize and disseminate financial information to market participants, increase price transparency, and encourage practices to improve market liquidity.
AT: Ineffective State Coordination
National focus solves coordination issues
Ross 8 – Dr. Ross is an Urban Land Institute Fellow, a National Science Foundation ADVANCE Professor, and has recently been named a member of the National Academy of Public Administration, served as Senior Policy Advisor on the Executive Committee of the Transportation Research Board of the National Academy of Sciences (“Proceedings of the Megaregions and Transportation Symposium and Structured Telephone Interview Summaries”, U.S. Department Of Transportation Federal Highway Administration, June 20th 2008, ) CM
A large scale focus needs to be insentivized. There is a link between the global economy and MPOs. What if GA had said they don’t want I-75 running through the state? You have to draw the line. There is a strong need for a National Plan. An example used of freight in Chicago, how Cal Tran was able to push it through mobility of freight from east ports. There should be differential funding based on priority
AT: States unpredictable
Its predictable – states will step up – empirics
Katz et al. 10 – (Bruce, Vice President and Director, Jennifer Bradley, Fellow, Amy Lui Senior Fellow and Deputy Director, all at Brookings “Delivering the Next Economy: The States Step Up”, Brookings-Rockefeller Project On State And Metropolitan Innovation, November 10th, 2010, ) CM
Thus the roads, rails, and ports through which U.S.-made goods move to foreign markets, the workers who build advanced batteries, the scientists who develop new solar technologies, and the seed funds for good ideas will all rely to a large extent on state policies, systems, administrative apparatus, and investments. And so do the metros where those roads, ports, laboratories, factories, and people are located. States not only have a major investment stake in the mechanisms of the next economy, they also have a history of taking the lead on urgent issues when Washington is frozen. To take just one of the most recent examples, in the mid-2000s, even as state officials argued that a national policy on greenhouse gas emissions was ideal, they forged ahead on their own climate policies.6 California limited tailpipe emissions of greenhouse gases, and that state law not only became a model for adoption by other states, but will strongly shape national standards in the future. The state also moved aggressively in 2006 to limit greenhouse gas emissions from other sources, with a goal of reducing emissions to 1990 levels by 2020.7 Ten northeastern states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont) have created the Regional Greenhouse Gas Initiative, a regional cap-and-trade scheme that will lead to 10 percent reductions in carbon dioxide emissions from power generation in these states.8 Most states have climate action plans, and 24 have greenhouse gas emissions reductions targets.9 More might follow, given that climate legislation has once again stalled in Congress. As one lobbyist told the Financial Times late last year, “A number of states and regions are holding back to see if a federal program can be enacted... If not, you’ll begin to see more agitation at the state level—history shows that in the absence of federal action, the states are the ones who do the work.”10 Finally, judging from their campaigns, some new governors appear ready to act decisively on the economy in ways that Washington will not. The anti-government rhetoric of Tea Party candidates has obscured the emergence of a different group, a pragmatic caucus of governors from both parties who understand how to use public policies to unleash markets so that businesses, people, and communities can flourish.
Transportation policy will shift to the states
Katz et al. 10 – (Bruce, Vice President and Director, Jennifer Bradley, Fellow, Amy Lui Senior Fellow and Deputy Director, all at Brookings “Delivering the Next Economy: The States Step Up”, Brookings-Rockefeller Project On State And Metropolitan Innovation, November 10th, 2010, ) CM
While it is possible that a few smart, focused federal policy actions, such as a National Infrastructure Bank, or a sharp, performance oriented, transportation law, or investments in advanced energy research, development, and commercialization could occur in the next few years, most of the unfinished federal business will almost certainly remain unfinished because of concerns about the size of the deficit and deep philosophical differences between the parties on the proper role of government So the burden of jump-starting the next economy and supporting its metropolitan engines will shift to the states and metros.
State investments more likely than federal investments
Katz et al. 10 – (Bruce, Vice President and Director, Jennifer Bradley, Fellow, Amy Lui Senior Fellow and Deputy Director, all at Brookings “Delivering the Next Economy: The States Step Up”, Brookings-Rockefeller Project On State And Metropolitan Innovation, November 10th, 2010, ) CM
Yet for all these impediments, a new wave of policy creativity may soon emerge from the states. Unlike 2009, the federal government will not provide Recovery Act funds to plump up state coffers for Medicaid, education, and infrastructure spending. In fact, given concerns over the deficit and the likelihood of a standoff between the administration and a divided Congress, Washington is unlikely to do much in the immediate term to bring relief. The states will innovate because they have to. State innovation is part of the genius of our federalist system.1Health care reform was law in Massachusetts years before the recent passage of federal legislation. During the 1980s, governors from both parties experimented with welfare and healthcare reforms, paving the way for federal advances in the next decade. Throughout the 1950s, public university systems, established by states like California and North Carolina, set the stage for the federal technology investments of the 1960s and 1970s. And before he was president, New York Gov. Franklin D. Roosevelt experimented with interventions that foreshadowed the New Deal. State efforts, spurred by Washington’s stalemate, paradoxically create an opening for Washington to act creatively as a partner in advancing economic transformation. Rather than working with Congress to advance particular goals, the administration can achieve its aims in collaboration with willing governors, using tools such as formula grants, matching funds, competitive grants, and regulatory changes. But today’s new governors have to do more than pick up the baton from a hobbled Washington. To create jobs and build the next economy, states have to recognize the power of their economic engines: the metropolitan areas that house most of their people and generate an even greater portion of their GDP.2 Metropolitan areas are critical for job creation, revenue generation, and economic growth. State policies have to unleash their potential with targeted investments and strategies that help metropolitan areas build on their distinct and concentrated assets. This brief explains how the imperatives of the next economy will create a new balance of federalism in the years ahead, with a particular focus on the relationship between states and metropolitan areas. First, it details why states are likely to be on the front lines of laying the foundation for the next economy. Second, it describes a three-part playbook for states, noting that the most effective states will act as partners with their metros. Finally, the brief notes what the federal government must do to secure the next economy and how it can support state and metropolitan action, particularly if Congress is reluctant to act in the near term.
States will take the lead
Katz et al. 10 – (Bruce, Vice President and Director, Jennifer Bradley, Fellow, Amy Lui Senior Fellow and Deputy Director, all at Brookings “Delivering the Next Economy: The States Step Up”, Brookings-Rockefeller Project On State And Metropolitan Innovation, November 10th, 2010, ) CM
In our federalist system, all levels of government are responsible for supporting the next economy, and each level interacts with, influences, and learns from the others. In the short term, though, states will move to the forefront in developing policies that support the next economy and metropolitan economic engines because they can, and they must. The demands of a global marketplace, the need to find new sources of jobs, and the imperative to replace the broken economy will not recede just because the president and Congress disagree on how to move forward, or are preoccupied (with good reason) with the federal deficit.
AT: 50 State Fiat Bad
1. Realistic and limited - forcing affs to defend responsible funding is key to limit out contrived affs that fiat “development” of any tech they think is sweet – allowing these affs promotes a useless model of space policy education since it’s divorced from the real world
2. Advocacy Skills- Forcing the aff to defend federal key warrants encourages the development of better researched and planned policies and is vital to being a competent transportation advocate because ideas aren’t enough in congress, that’s key to social change and avoiding the lack of planning that caused poor policies like Iraq
3. Vital education- Being a space transportation policy maker requires in depth knowledge of how the fifty states conduct policies
Peppard 2k10
(Collin, National Resource Defense Council, “Getting Back on Track: States, Transportation Policy, and Climate Change,” pg online @ //um-ef)
In the past, this blog has focused on what the federal government must do to address this problem. As important as the federal transportation bill is, we also must remember that the 50 states are in a unique position to bring down transportation-related GHG emissions. States have a major role in making transportation policy decisions, and are responsible for directing massive amounts of funding to transportation projects across the country.
4. Info Processing- Forcing the aff to research every intricacy of the plan encourages more holistic processing of information that encourages better research practices and critical thinking and causes more precise plan writing
5. Relevant Policy Choice – State Lawmakers must compare and choose in the absence of Federal Action – means our cp provides a real-world policy option
Puentes 2k11
(Robert, senior fellow with the Brookings Institution’s Metropolitan Policy Program where he also directs the Program's Metropolitan Infrastructure Initiative, “State Transportation Reform: Cut to Invest in Transportation, to Deliver the Next Economy,” pg online @ //um-ef)
In the absence of federal action, the debate on transportation policy will shift to the state level. Few areas of policy are as critical to states’ long term economic health. Transportation is also a relatively significant portion of most states’ budgets. At 7.9 percent of general state expenditures, “transportation” generally ranks third among state spending categories after only “education” and “public welfare,” though this varies quite a bit among the states (Alabama ranks last at 3.1 percent; Nevada ranks first at 16.7 percent. Missouri is the median at 10.7 percent).1
Uniform Action Ev
Uniformity Solves Better – Inefficient state laws and federalism
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
Proponents of uniform state laws see them as a solution to the problem of inconsistent and hard-to-find state laws that avoid the need for a federal solution that would shrink state autonomy."' Although federal legislation obviously can achieve these goals as well as or better than state uniform laws, since complete state uniformity is rare, proponents of uniformity long have rejected a federal solution." 9 Indeed, some advocates of uniform state laws view uniform laws as a way of averting the great evil of federal law. 20 Our theory and evidence provides some insights on the appropriate trade-off between state uniform and federal law. Data indicating that the states generally choose along efficiency lines which NCCUSL proposals to adopt suggest that federal law is unnecessary to achieve efficient uni- formity. Thus, the costs of federal law in reducing experimentation and efficient jurisdictional competition may outweigh its benefits. Uniformity induced by the NCCUSL leaves individual states free to vary uniform statutes where the costs of doing so are outweighed by the benefits of adopting customized terms. These customized provisions may become widely accepted and eventually incorporated into subsequent versions of the uniform law."'2 Although business-oriented interest groups may have a smaller advantage over consumer groups at the federal level than they do in the uniform lawmaking process,'22 it does not follow that particular groups can dominate enough state legislatures to achieve a uniform state law. In any event, even if winners and losers may differ under federal and state law, it does not follow that the outcome of one process is more likely to be efficient. Finally, affected parties' ability to avoid the effect of oppressive state laws suggests that a single strong interest group is less likely to be able to force wide adoption of a welfare-reducing state uniform law than an analogous federal law. In short, even if business groups generally win at the uniform lawmaking level, they may inflict less damage than the consumer groups who win at the federal level.
States Key Part of TI Policy
State collaboration in the lit
SGA 11 (Smart Growth America, “Recent Lessons from the Stimulus: Transportation Funding and Job Creation”, February 2011, ) CM
However, states have a variety of unique roles and responsibilities that place them at the nexus of this joint responsibility. States play the lead role in establishing and administering overarching goals, standards, and policies for their regions and municipalities. States receive tens of billions of dollars in annual federal transportation grants. Combined with revenue from state fuel taxes, states oversee and distribute a greater amount of transportation funds than any other level government. States determine how these funds will be allocated geographically and prioritize infrastructure options, modes, and facilities, which in turn trigger different local infrastructure decisions and land development patterns. Each state has an executive agency or department that has responsibility for transportation planning, programs (including maintenance, safety, and environmental review), project implementation and construction, and in some cases operations, for multiple modes of transportation. The state departments of transportation (DOT) also collaborate with other transportation authorities, including tolling authorities, transit agencies, ports, and local governments (including specially designated districts), each of which are responsible for different portions of the transportation network. State transportation departments often have the lead responsibility for major infrastructure planning decisions, as well as the task of overseeing the design, review, and construction of a project, and ensuring compliance with any applicable federal standards or policies. These powers and responsibilities position states as the dominant players in the transportation policy and investment decision-making process, determining the trajectory of the transportation system, land development, and transportation-related GHG emissions.
AT: Investment D.A./Fed k Private
Federal funding measures are inefficient and politically impossible—states empirically have been the only actors capable of effective investment
Wallis and Weingast ‘6 (John Joseph Wallis and Barry R. Weingast* - *Professor of Economics, University of Maryland, and National Fellow, Hoover Institution, Stanford University; and Senior Fellow, Hoover Institution, and Ward C. Krebs Family Professor, Department of Political Science, Stanford University. "Dysfunctional or Optimal Institutions?: State Debt Limitations, the Structure of State and Local Governments, and the Finance of American Infrastructure." N.p., february 2006. Web. .)
In two previous papers we considered why states were able to undertake significant infrastructure investments in transportation and finance in the early 19th century (Wallis, 2005) and why the national government was not able to do so (Wallis and Weingast, 2005). The basic intuition is simple. There are four types of government financing options for infrastructure: Normal Taxation: Normal taxation relies on the use of existing taxes and, as we have already noted under normal conditions, is politically incapable of financing infrastructure. Projects with concentrated benefits that are financed by taxes spread over all taxpayers fails to meet condition (3). Typically, a majority of voters pay taxes and receive no benefits and thus refuse to support the project. Universalism, or Something for Everyone: This approach to expenditure policy covers two different means of allocating government expenditures among all of the districts, counties, or states (or individuals). The first is that expenditures are governed by an explicit formula allocate funds to states or districts. For example, the current formula for allocating national highway funds among the states depends on population, land area, and miles of rural post roads. Similarly, the legislation authorizing spending under homeland security guarantees each state a minimum of 0.75 percent of the total expenditures, regardless of risk and other factors. As a result, every state is guaranteed a positive share of these funds. Dysfunctional or Optimal Institutions: State Debt Limitations 17 The second mechanism is universalism (Weingast 1979). The idea is that, although allocation to districts may be discretionary, most districts expect to receive some funds. Coalition politics, demographics, and programmatic need may also play a role in allocation. Something for everyone policies are the easiest policies to implement politically. The problem with something for everyone policies is twofold. First, standard models of a higher jurisdiction providing local projects face a standard common pool problem, sometimes call the “law of 1/n”: in the presence of n local jurisdictions represented in the legislature, each representative comes from a district that gains the full value of the project, but pays on the order of only 1/n of the total costs (Weingast, Shepsle and Johnsen 1981, see also Inman 1988 and Knight 2006). Therefore, the demand for the local public good by local voters is for far larger projects. The result is significant economic inefficiency. Second, this method of finance faces significant difficulties in providing large scale, lumpy, geographically specific infrastructure investments.12 In particular, something for everyone policies could not be used to finance the public infrastructure investment with the highest returns for states in the early 19th century, namely canals. It was simply too expensive to build enough canals to command a majority of votes, let alone a canal to every county in the state. In contrast, something for everyone could be used to finance highway construction in the 20th century, since it is feasible to build a road to every county in a state.
States can and should be in charge of transportation funding; they are comparatively better than the federal government
Edwards ’11 (Chris Edwards - Joint Economic Committee, United States Congress) "The Downside of Federal Infrastructure Spending | Downsizing the Federal Government." The Downside of Federal Infrastructure Spending | Downsizing the Federal Government. N.p., october 24th, 2011. Web. 21 June 2012. .
My Washington Post op-ed on federal infrastructure yesterday elicited a large and vigorous response. The comments on the WaPo site and emails to my inbox were about 80 percent in opposition to my views. Here are some critiques of my article and my responses: Critique: My view of devolving infrastructure funding to the states is unrealistic because only the federal government has enough “resources” to do big projects. Response: The federal government has no magical source of money. All “federal dollars” ultimately come from taxpayers who live in the 50 states. It is true that the federal government can run larger deficits that state governments, but that’s a reason not to give the Feds responsibility for spending activities because they tend to go hog wild. Critique: Maybe the federal government screws up, but so do state governments and private companies. Response: Of course. But as the op-ed noted, when the Feds screw-up they botch it for the entire country, often for many decades. The federal government is a monopoly, and monopolies breed inefficiency. By contrast, the states compete with each other and learn from each other to an extent. And when private companies screw up repeatedly, they go belly up. Critique: Maybe the federal government screws up, but we should just try to make it work better. Response: The histories of the Corps and Reclamation illustrate patterns of failure for more than a century. And we’ve explored similar patterns with other federal agencies at . Federal problems are often deep-rooted and systematic, and they defy the many well-meaning efforts at reform, such as Al Gore’s “reinventing government” initiative in the 1990s. So it’s time to try something different—like exploring privatization. Critique: We need the federal government for things like the Interstate Highway System because infrastructure crosses state lines. Response: Numerous people made this point regarding my op-ed, but I’m afraid they didn’t put their thinking caps on. Private energy pipelines cross state and international borders, and so do the huge systems of the private freight railroads, such as Union Pacific.
Even if budgets are tight, states can use P3’s and higher taxes to finance infrastructure
Ardis ’12 (Jimmy Ardis – staff writer at the Lucy Burns Institute, founding partner of a research and consulting firm , previous research associate at the Riley Center for Urban Affairs. "Local and State Governments Look for Creative Ways to Fund Transportation Projects Publications State Budget Solutions." Local and State Governments Look for Creative Ways to Fund Transportation Projects Publications State Budget Solutions. N.p., may 14, 2012. Web. 25 June 2012. . AMR)
The Urban Land Institute released their annual infrastructure report on May 9th, Infrastructure 2012. It assesses the nation's infrastructure at all levels and looks at how state and local governments are creatively funding improvements in the face of revenue shortfalls. Constrained budgets and deficit reduction efforts mean federal fewer dollars for infrastructure. As the report notes, "the country's Highway Trust Fund-the mainstay for both road and transit projects-is running short of cash." As such, the burden is shifting more to state and local governments, which are being forced to find funding solutions. In their search for transportation funding, state and local governments are increasingly asking voters to cough up more money at the ballot box. The report suggests that voters are willing to pay for projects where there is a clear and direct benefit to their communities. "From 2008 to 2011, ballots that allocated funds to transit capital or operations had a 73 percent success rate, while those that included a combination of road and transit capital and operations had a 64 percent success rate." Even if voters are showing a willingness to approve new funding at the ballot box, higher taxes in a recession can only go so far. Local and state governments are also slowly becoming more receptive to the idea of public-private partnerships (PPP). While many localities are still weary at entering into these arrangements, others are finding that private sector entities can bring much needed capital to the table. "Over the past decade, about half the states have used PPPs to help build nearly 100 transportation projects, totaling approximately $54 billion." Interest is growing but PPP's remain a small percentage of overall transportation projects at this time. Other creative financing mechanisms being utilized on the state and local levels include tax increment financing and special assessment districts. Sovereign wealth funds and pension plans are also showing some interest in investing in infrastructure projects. The outlook for transportation funding remains tight in the coming decade. As budgets continue to be reduced and governments are forced by necessity to do more with less, innovative solutions will be needed more than ever. The full report can be read here: Infrastructure 2012: Spotlight on Leadership
“Bottom-up” state efforts attract funding from private companies
Phillips ’12 (Patrick Phillips - Chief Executive Officer of the Urban Land Institute and Howard Roth- Global Real Estate Leader at Ernst & Young LLP. "Infrastructure 2012: Spotlight on Leadership." Infrastructure 2012: Spotlight on Leadership « InfrastructureUSA: Citizen Dialogue About Civil Infrastructure. N.p., may 10th, 2012. Web. 25 June 2012. . AMR)
Local Leadership unfortunately, the united states is one of the few major economic powers lacking a national infra- structure policy direction: initiatives are left to percolate from local and state levels, often com- peting for resources. But in the current environment, at least, bottom-up “self-help” efforts will more likely attract funding from federal and pri- vate sources, especially when they help meet clearly defined economic and strategic objectives. although partisan bickering in congress has prevented policy makers from reaching meaningElevated rail tracks in downtown Chicago link historic buildings and new construction. (Jeremy Woodhouse/Getty Images) cHaPter 1 / settInG PrIOrItIes 5 ful consensus on infrastructure funding, and defi- cit cutters resist infrastructure spending, more leaders at least talk about repairing rusting bridges and replacing crumbling roadbeds. after not investing heavily on new systems for many years, the life cycles of existing infrastructure noticeably and more alarmingly run out of time and can no longer be ignored.
Federal funding discourages privatization
Roth 10 – a transport and privatization consultant and a research fellow at the Independent Institute and 20 years working at the World Bank (Gabriel, CATO Institute, Downsizing the Government, “Federal Highway Funding” June 2010, ) CM
By subsidizing the states to provide seemingly "free" highways, federal financing discourages the construction and operation of privately financed highways. A key problem is that users of private highways are forced to pay both the tolls for those private facilities and the fuel taxes that support the government highways. Another problem is that private highway companies have to pay taxes, including property taxes and income taxes, while government agencies do not. Furthermore, private highways face higher borrowing costs because they must issue taxable bonds, whereas public agencies can issue tax-exempt bonds.
AT: State Budgets D.A.
“Bottom-up” state efforts attract funding from private companies
Phillips ’12 (Patrick Phillips - Chief Executive Officer of the Urban Land Institute and Howard Roth- Global Real Estate Leader at Ernst & Young LLP. "Infrastructure 2012: Spotlight on Leadership." Infrastructure 2012: Spotlight on Leadership « InfrastructureUSA: Citizen Dialogue About Civil Infrastructure. N.p., may 10th, 2012. Web. 25 June 2012. . AMR)
Local Leadership unfortunately, the united states is one of the few major economic powers lacking a national infra- structure policy direction: initiatives are left to percolate from local and state levels, often com- peting for resources. But in the current environment, at least, bottom-up “self-help” efforts will more likely attract funding from federal and pri- vate sources, especially when they help meet clearly defined economic and strategic objectives. although partisan bickering in congress has prevented policy makers from reaching meaningElevated rail tracks in downtown Chicago link historic buildings and new construction. (Jeremy Woodhouse/Getty Images) cHaPter 1 / settInG PrIOrItIes 5 ful consensus on infrastructure funding, and defi- cit cutters resist infrastructure spending, more leaders at least talk about repairing rusting bridges and replacing crumbling roadbeds. after not investing heavily on new systems for many years, the life cycles of existing infrastructure noticeably and more alarmingly run out of time and can no longer be ignored.
AT: Perm
Federal intervention increases construction costs – disad to permutation
Roth 10 – a transport and privatization consultant and a research fellow at the Independent Institute and 20 years working at the World Bank (Gabriel, CATO Institute, Downsizing the Government, “Federal Highway Funding” June 2010, ) CM
The flow of federal funding to the states for highways comes part-in-parcel with top-down regulations. The growing mass of federal regulations makes highway building more expensive in numerous ways. First, federal specifications for road construction standards can be more demanding than state standards. But one-size-fits-all federal rules may ignore unique features of the states and not allow state officials to make efficient trade-offs on highway design. A second problem is that federal grants usually come with an array of extraneous federal regulations that increase costs. Highway grants, for example, come with Davis-Bacon rules and Buy America provisions, which raise highway costs substantially. Davis-Bacon rules require that workers on federally funded projects be paid "prevailing wages" in an area, which typically means higher union wages. Davis-Bacon rules increase the costs of federally funded projects by an average of about 10 percent, which wastes billions of dollars per year.27 Ralph Stanley, the entrepreneur who created the private Dulles Greenway toll highway in Virginia, estimated that federal regulations increase highway construction costs by about 20 percent.28 Robert Farris, who was commissioner of the Tennessee Department of Transportation and also head of the Federal Highway Administration, suggested that federal regulations increase costs by 30 percent.29 Finally, federal intervention adds substantial administrative costs to highway building. Planning for federally financed highways requires the detailed involvement of both federal and state governments. By dividing responsibility for projects, this split system encourages waste at both levels of government. Total federal, state, and local expenditures on highway "administration and research" when the highway trust fund was established in 1956 were 6.8 percent of construction costs. By 2002, these costs had risen to 17 percent of expenditures.30 The rise in federal intervention appears to have pushed up these expenditures substantially
*****Cost Overruns Net Benefit*****
1NC Cost Overruns
A. Federal Transportation Policies Cause Cost-Overruns
Edwards ‘9 (Chris Edwards - Joint Economic Committee, United States Congress "Government Cost Overruns | Downsizing the Federal Government." Government Cost Overruns | Downsizing the Federal Government. N.p., march 2009. Web. 21 June 2012. .)
Introduction People tend not to spend other people's money as carefully as they spend their own. In governments, policymakers and administrators deal with large amounts of other people's money, and so wasteful spending is a big problem. One manifestation is the pattern of cost overruns on procurement and large government projects — projects that begin with a price tag of $1 billion often end up costing $2 billion. Federal cost overruns are chronic in budget areas such transportation, energy, defense, and technology. The problem of cost overruns is widely recognized, but policymakers seem unable or unwilling to stop it. This essay provides examples of the problem and suggests reasons why it occurs. A table at the end includes a sampling of cost overruns on large federal projects. Cost overruns are illustrative of the persistent failures of federal management and provide one justification to downsize the government. Chronic Problem Areas Transportation. Large cost overruns are routine on federally funded transportation projects. A good example was the Springfield, Virginia, highway interchange project. When initiated, Virginia officials claimed that the project would cost $241 million, but it ended up costing $676 million by the time it was completed in 2007.1 To add insult to injury, Virginia officials said that the project was finished "on time and under budget," but the Washington Post correctly pointed out that "the final cost was nearly three times what was first projected."2 The most infamous budget buster in highway history was probably Boston's "Big Dig," or Central Artery project. In 1985, government officials claimed that the Big Dig would cost $2.6 billion and that it would be completed by 1998. The project's cost ballooned to $14.6 billion and it was finally completed in 2005.3 The federal share of the cost was $8.5 billion. What happened? The Big Dig was grossly mismanaged, as the Boston Globe revealed in a detailed investigation.4 One problem was that the state government bailed out bungling Big Dig contractors on more than 3,000 separate occasions rather than demanding accountability from them. Contractors were essentially rewarded for delays and overruns with added payments and guaranteed profits. Auditors warned state politicians about developing problems, but they did not seem to care.5 As a final blow to the public, hundreds of leaks were found in the project's tunnels after it was completed, and a tunnel ceiling collapsed on a motorist. Not all government highway projects are as mismanaged as the Big Dig, but cost overruns and delays are routine. A Government Accountability Office study found that half of the federal highway projects it examined had cost overruns of more than 25 percent.6 Similar problems plague other government transportation projects. One example was the grossly over-budget Denver International Airport. In 1989, both Congress and Denver voters agreed to the construction of a new $1.7 billion airport. But by the time the airport was opened in 1995 the cost had mushroomed to $4.8 billion.7
B. Means the project will fail or be delayed – turns the aff
Poole and Samuel 2k11
(Robert, and Peter, “Transportation Mega-Projects and Risk,” pg online @ //um-ef)
One obvious question provoked by this discussion is: what happens, in a concession project, if the investors guess wrong and the project ends up with significant cost overruns and/or much less usage than projected? A good example of such an outcome is the Channel Tunnel between the U.K. and France. Developed privately under a 55-year concession agreement with the two governments, the “Chunnel” opened in 1994, several years late and 80% over its original budget. After six years in operation, its traffic numbers had reached only 43% of the original estimate for the opening year. Clearly, this must rank alongside the Big Dig as a mega-project debacle. Yet unlike the Big Dig, where taxpayers footed the bill for enormous cost increases, the lower revenues and higher costs of the Channel Tunnel were borne entirely by the investors (mostly European banks and about a million individual shareholders). The project had to be refinanced, with the banks taking a significant “haircut.” And the share price plunged to a few percent of what it had been in the project’s early days. The only relief offered by the two governments was to extend the life of the concession, so that the investors would, over a very long period of time, have some possibility of receiving an eventual return on their investment. In two other cases in the past decade, concession projects have actually gone under, after seriously overestimating traffic and toll revenues. The first is a truck-oriented toll road near Laredo, Texas called Camino Columbia. The 21-mile tollway was built to offer trucks a shorter route from a border crossing near Laredo to I-35, a key NAFTA highway route. It opened in 2000, but attracted so little traffic that it declared bankruptcy at the end of 2003, after lenders foreclosed. Principal creditor John Hancock Life Insurance Co. purchased the project at auction in January 2004 for just $12 million for the toll road that had cost $90 million to develop. Five months later, the Texas DOT purchased the toll road from John Hancock for $20 million (about 22 cents on the dollar). It is still in service today. The other case is a toll tunnel in Sydney, Australia’s largest city: the Cross-City Tunnel. Intended to reduce congestion on major downtown streets, the four-lane, 1.3 mile $585 million project opened in 2005, but attracted only one-third of the forecast traffic. By the end of 2006 the concession company filed for bankruptcy. At that point, a syndicate of creditors appointed a receiver, which took control of the tunnel and has kept it in operation while the finances are sorted out. There are several important lessons to be drawn here. The first is that having to persuade investors to part with capital for such mega-projects will typically produce a far higher degree of scrutiny of the project’s underlying feasibility than is all too often the case for conventionally done megaprojects. The second is that even when such scrutiny is overtaken by events and a concession project does badly, it is investors who are at risk, rather than taxpayers. Third, despite financial difficulties, the project remains in service, meeting transportation needs. In extreme cases the original company may go bankrupt and the assets get purchased by new owners (with approval of the government agency that is a party to the concession). By purchasing the asset at a fraction of the original cost, the new owners hope to operate it in a financially sustainable manner (much as happened with failed telecom companies such as Global Crossing and Iridium). Thus, the case for using the concession approach for transportation mega-projects is a strong one.
In the case of typical mega-project risks of cost overruns and insufficient traffic and revenue,
experience has shown that the private sector can and will take on those risks under well-drafted
concession agreements.
2NC Cost Overruns
And, the plan would be subject to cost overruns
Poole and Samuel 2k11
(Robert, and Peter, “Transportation Mega-Projects and Risk,” pg online @ //um-ef)
Boston’s Big Dig project is not an isolated case. The track record of transportation mega-projects is terrible. The costs are usually significantly underestimated, and traffic is typically dramatically overestimated. Many recent rail projects have similar, well-documented histories. It will be difficult to get public and political support for much-needed mega-projects without betterperforming project delivery models. This challenge was taken up several years ago by Danish academic Bent Flyvbjerg and colleagues in a book called Megaprojects and Risk (Cambridge University Press, 2003).15 They document the global nature of the problem, analyze its causes and offer useful ideas on doing better. First, Flyvbjerg and colleagues cite studies showing that this is hardly a new problem, nor is it unique to a few countries. One of the most comprehensive studies (from Aalborg University) covers 258 highway and rail projects ($90 billion worth) in 20 countries.16 Nearly all (90%) suffered cost overruns, with the average rail project costing 45% more than projected, the average highway project 20% more. Traffic forecasts were also far from accurate, with rail projects generating an average of 39% less traffic than forecast (though highway projects averaged a 9% under-estimate of traffic). Flyvbjerg concludes that the “cost estimates used in public debates, media coverage, and decisionmaking for transport infrastructure are highly, systematically, and significantly deceptive. So are the cost-benefit analyses.” Many other analysts have reached similar conclusions. Flyvbjerg goes on to explain why this comes about. First, he cites two MIT researchers’ conclusion that “the incentives to produce optimistic estimates of viability are very strong and the disincentives weak.” And the reason for that is a lack of accountability of the parties involved, not a lack of technical skills or insufficient data. Another key insight is that “risk is simply disregarded in feasibility studies . . . by assuming what the World Bank calls the EGAP principle: Everything Goes According to Plan.” But in megaprojects like the Big Dig, the Channel Tunnel or the Los Angeles Red Line subway, things seldom go according to plan, and nobody should expect that they would. Asking why risk is disregarded leads Flyvbjerg to question the conventional approach to project development, in which government is the project promoter and financier, and private firms are only too happy to do the best-case feasibility studies, produce the designs, and take on construction contracts fattened by numerous change orders. That is sometimes called a “public-private partnership,” but it is a perverse use of the term, since that model does not adequately protect the public interest. The conventional approach puts the major risks—of cost overruns and of inadequate traffic—onto the shoulders of hapless taxpayers. If somebody else is picking up the tab, neither government officials nor private contractors have strong incentives to anticipate the kinds of things that will lead to problems and then costly change orders. Not only is this inherently undesirable, but a system set up in this way “is likely to increase the total risks and costs of a project.” It leads directly to the kinds of results seen with the Big Dig and documented in the Aalborg University study.
The federal government routinely overspends on transportation infrastructure – empirics prove
Edwards ’12 (Chris Edwards, Director of Fiscal Policy, Cato Institute. "More Government Cost Overruns | Downsizing the Federal Government." More Government Cost Overruns | Downsizing the Federal Government. N.p., n.d. Web. 22 June 2012. .)
One reason to shift infrastructure financing to the private sector is that governments and their contractors often give taxpayers the shaft. They say a big project will cost a certain amount, but then the project gets underway and they reveal that—whoops!—the project actually costs much more. No one gets fired, the money has been spent, taxes and debt have been increased, and officials move onto the next boondoggle. Here is a 2009 essay on the topic, and here are a few recent examples that have piled up on my desk: High-Speed Rail. California voters approved bond funding for what they were promised was a $43 billion rail project in 2008. But a new report by the plan’s sponsors shows that the project is now expected to cost $98 billion, although part of the higher cost estimate reflects inflation. Air Traffic Control. “The Federal Aviation Administration continues to struggle with budgets, deadlines, and management of its multi-billion dollar upgrades to the nation’s air traffic control systems.” One project — the En Route Automatic Modernization system — “is about five years behind schedule and as much as $500 million over budget.” FBI Computer System. “The Sept. 11, 2001, attacks exposed the FBI’s troubles with information sharing, and the bureau accelerated plans to replace its unwieldy case-management system with new software. That technology project was called Trilogy and was supposed to deliver software called Virtual Case File that was to help FBI agents share investigative documents electronically. The inspector general called the project a fiasco and said the FBI and its contractors wasted $170 million and three years.” The FBI then launched a new project, Sentinel, but by last Fall the new system was already two years behind schedule and $100 million over budget. Washington Bicycle Trail. “The cost to rebuild the Capital Crescent Trail along a future Purple Line has ballooned from an estimated $65 million to $103 million, almost half of which would be spent to squeeze the trail and light-rail trains through a tunnel in downtown Bethesda.” Wow! That’s got to be the world’s most expensive bicycle trail at $103 million. Washington, D.C. Subway. The final bill isn’t in yet on the Metro’s Silver line to Dulles Airport, and the cost of the proposed Purple Line has crept up only modestly, but the precedents aren’t good. Historian Zachary Schrag found that the cost of the original system in 1969 soared from a promised $2.5 billion to $3.8 billion. Schrag comes to a similar conclusion as I have: “It is kind of a vicious spiral where people low-ball the estimates to get their project approved,” he told the WaPo.
2NC Links: Cost Overruns
The Federal government is inefficient at funding infrastructure – cost overruns and unequal funding to states
Edwards ‘3 Chris Edwards, Director of Fiscal Policy, Cato Institute. "Government Schemes Cost More Than Promised." The Cato Institute. N.p., september 2003. Web. .
In 1985 government officials claimed that Boston’s “Big Dig” highway project would cost $2.6 billion and be completed by 1998. The cost ballooned to $14.6 billion and the project is still not finished. In 1988 Medicare’s new home health care benefit was projected to cost $4 billion by 1993; the actual 1993 cost was $10 billion. Congress is now considering a prescription drug bill with a $400 billion price tag. If enacted, the actual cost will almost certainly be much higher. Large cost overruns are commonplace in government construction projects, procurement, and entitlement programs. Politicians and officials routinely deceive taxpayers by low-balling cost estimates to win initial spending approval. Then, when programs go over budget and do not work as promised, politicians place the blame on particular management blunders by the bureaucracy and private contractors. But the evidence indicates that cost overruns and program failure are not isolated errors; they are systematic and widespread in the federal government. Planes, Trains, and Automobiles Federally funded projects often turn into debacles plagued by large cost overruns, as illustrated by a wide range of examples in Table 1. For example, Boston’s Central Artery project, the Big Dig, has been grossly mismanaged, as described by a recent Boston Globe investigation.1 The state government bailed out bungling Big Dig contractors 3,200 times instead of demanding accountability. Contractors were essentially rewarded for delays and overruns with added cash and guaranteed profits. The project’s estimated total cost rose from $2.6 billion in 1985 to $14.6 billion today. In the 1980s Denver’s mayor Federico Pena sold the public on a new international airport on the basis of bad cost estimates. The public agreed to a $1.7 billion airport in a 1989 referendum, but the cost mushroomed to $4.8 billion by the time the airport was opened in 1995.2 In 1994 Virginia officials claimed that the Springfield interchange or “mixing bowl” project would cost $241 million. The cost has now soared to $676 million.3 On the other side of the Potomac, there are cost overruns at the $300 million Capitol Hill Visitors Center, and the cost of the Kennedy Center parking lot has jumped to $88 million from the original 1998 estimate of $28 million.4 High above the Potomac, the cost of NASA’s Space Station has skyrocketed from $17 billion in 1995 to $30 billion today.5 (graph deleted) These are not isolated cases of bad management. Reports by the Government Accounting Office make it clear that overspending permeates federal budgeting, as it does in Pentagon procurement and Department of Energy contracting (see Table 1).6 DOE contracting was put on GAO’s watch list for waste, fraud, and abuse more than a decade ago. But a recent GAO review found that little had changed.7 In 2001, 38 percent of projects examined had more than doubled in cost, and the National Research Council concluded that DOE is "not in control" of many of its contracts. Billions of dollars have been wasted on DOE projects that were terminated, such as the $2 billion spent on the Texas Superconducting Super Collider.8 A study last year by Danish economists looked at 258 government transportation projects in the United States and abroad with a combined value of $90 billion. They found that cost overruns are routine and stem from government deceit, not honest errors.9 Nine of 10 projects examined had cost overruns, with an average overrun of 28 percent. The study concluded that lying, or intentional deception, by public officials was the source of the problem: “Project promoters routinely ignore, hide, or otherwise leave out important project costs and risks in order to make total costs appear low.” Politicians use “salami tactics” whereby costs are only revealed to taxpayers one slice at a time in the hope that the project is too far along when true costs are revealed to turn back. Salami tactics are just one problem that makes federal funding of state, local, and private activities wasteful. Another problem is that the states compete with each other to secure federal dollars, and thus they are prone to exaggerate benefits and minimize costs of projects. When cost overruns occur, state officials seek to cover up poor contractor performance in order to conceal their own bad oversight, as occurred with the Big Dig. In addition, the federal government does not ensure efficient use of funds sent to states. For example, the GAO found that half of the federally funded highway projects it examined recently had cost overruns of greater than 25 percent.10
The federal government is inefficient at infrastructure investment – cost overruns
O’Toole ’10 (Randal O'Toole, Federal Transit Administration. "Comments on Advance Notice of Proposed Rulemaking." The Cato Institute. N.p., n.d. Web. 22 June 2012. . July 15, 2010.)
Cost overruns: In 1989, Department of Transportation researcher Don Pickrell found that then-recent rail transit projects had gone over their original projected costs by an average of 46 percent. He noted that, "The systematic tendency to overestimate ridership and to underestimate capital and operating costs introduces a distinct bias toward the selection of capital-intensive transit improvements." Since then, transit agencies have somewhat improved their forecasts of future ridership, but recent rail transit projects are still costing an average of 40 to 50 percent more than the projections made at the time of the original cost-effectiveness/alternatives analysis.
Federal funding is inefficient – earmarks and no incentive for states
Roth 10 Civil engineer and transportation economist, research fellow at the Independent Institurem Worked with the World Bank on transportation prokects(Gabriel, “Federal Highway Funding,” June 2010, )
1. Funds Used Inefficiently and Diverted to Lower-Priority Projects Federal aid typically covers between 75 and 90 percent of the costs of federally supported highway projects. Because states spend only a small fraction of their own resources on these projects, state officials have less incentive to use funds efficiently and to fund only high-priority investments. Boston's Central Artery and Tunnel project (the "Big Dig"), for example, suffered from poor management and huge cost overruns.21 Federal taxpayers paid for more than half of the project's total costs, which soared from about $3 billion to about $15 billion.22 Federal politicians often direct funds to projects in their states that are low priorities for the nation as a whole. The Speaker of the House of Representatives in the 1980s, "Tip" O'Neill, represented a Boston district and led the push for federal funding of the Big Dig. More recently, Representative Don Young of Alaska led the drive to finance that state's infamous "Bridge to Nowhere," discussed below. The inefficient political allocation of federal dollars can be seen in the rise of "earmarking" in transportation bills. This practice involves members of Congress slipping in funding for particular projects requested by special interest groups in their districts. In 1982, the prohibition on earmarks in highway bills in effect since 1914 was broken by the funding of 10 earmarks costing $362 million. In 1987, President Ronald Reagan vetoed a highway bill partly because it contained 121 earmarks, and Congress overrode his veto.23 Since then, transportation earmarking has grown by leaps and bounds. The 1991 transportation authorization bill (ISTEA) had 538 highway earmarks, the 1998 bill (TEA-21) had 1,850 highway earmarks, and the 2005 bill (SAFETEA-LU) had 5,634 highway earmarks.24 The earmarked projects in the 2005 bill cost $22 billion, thus indicating that earmarks are consuming a substantial portion of federal highway funding. The problem with earmarks was driven home by an Alaska bridge project in 2005. Rep. Don Young of Alaska slipped a $223 million earmark into a spending bill for a bridge from Ketchikan—with a population of 8,900—to the Island of Gravina—with a population of 50. The project was dubbed the "Bridge to Nowhere" and created an uproar because it was clearly a low priority project that made no economic sense.
*****Spending Net Benefit*****
Pork Barrel Spending
States should finance their transportation infrastructure – the federal government is inefficient at spending and swayed by corrupted federal politics
Edwards ‘5 (Chris Edwards, Director of Fiscal Policy, Cato Institute "Downsizing the Federal Government." The Cato Institute. N.p., 2005. Web. .)
The states can balance the costs and benefits of transportation facilities better than politicians and bureaucrats in Washington can. Federal intervention makes some states winners and others losers. The GAO notes that the formula used for highways ‘‘allocates funds among the states based on their historic share of funding. This approach reflects antiquated indicators of highway needs, such as postal road miles and the land area of the state.’’189 The result is that tax dollars are not efficiently directed to the states with the largest conges- tion problems. Another problem is politics. Highway spending is one of the big- gest pork-barrel machines in Washington. When gasoline tax dollars go through Congress, powerful politicians steer them to highway projects in their own states rather than the states most in need. For example, former Senate Appropriations Committee chairman Ted Stevens has ensured that his state of Alaska receives five times more in highway money than Alaska residents pay in gas taxes.190 The number of earmarked ‘‘high-priority’’ projects for particular congres- sional districts has soared from 152 in the 1987 highway bill to 4,128 in the House version of the 2005 highway bill, as shown in Figure 8.3. 190 Appendix 2: Discussion of Selected Budget Cuts The Washington Post ran a series of stories in 1998 that revealed the corrupt manner in which highway spending is doled out.191 Then–House Transportation Committee chairman Bud Shuster (R- PA) dished out funding for highway projects in exchange for millions of dollars in campaign donations. Shuster did not soberly analyze the nation’s highway needs, ponder the views of experts, and steer resources to the areas with the highest needs. Rather, Shuster lived a jet-setting lifestyle, frequently winging around the country to hand out highway projects in exchange for campaign cash based on raw political calculations. When such scandals hit the newspapers, there are usually calls for campaign finance reform. But a better reform would be to repeal the federal gasoline tax and terminate federal highway and transit spending. That would end the money flow to corrupt federal politi- cians. States could fund transportation according to their own local demands, and they would be free to experiment with new alterna- tives such as privately financed highways.
The federal government empirically fails at investing and implementing transportation infrastructure because of pork barrel politics, bureaucratic bungling, low accountability, and inefficiency
Edwards ’11
(Chris Edwards Joint Economic Committee United States Congress. "Federal Infrastructure Investment." The Cato Institute. N.p., november 16, 2011. Web. 19 June 2012. .)
Problems with Federal Infrastructure Investment There are calls today for more federal spending on infrastructure, but advocates seem to overlook the downsides of past federal efforts. Certainly, there have been federal infrastructure successes, but there has also been a history of pork barrel politics and bureaucratic bungling in federal investment spending. A substantial portion of federal infrastructure spending has gone to low-value and dubious activities. I've examined spending by the two oldest federal infrastructure agencies — the Army Corps of Engineers and the Bureau of Reclamation.7 While both of those agencies constructed some impressive projects, they have also been known for proceeding with uneconomic boondoggles, fudging the analyses of proposed projects, and spending on activities that serve private interests rather than the general public interest. (I am referring to the Civil Works part of the Corps here). Federal infrastructure projects have often suffered from large cost overruns.8 Highway projects, energy projects, airport projects, and air traffic control projects have ended up costing far more than originally promised. Cost overruns can happen on both public and private infrastructure projects, but the problem is exacerbated when multiple levels of government are involved in a project because there is less accountability. Boston's Big Dig — which exploded in cost to five times the original estimate — is a classic example of mismanagement in a federal-state project.9 Perhaps the biggest problem with federal involvement in infrastructure is that when Washington makes mistakes it replicates those mistakes across the nation. Federal efforts to build massive public housing projects in dozens of cities during the 20th century had very negative economic and social effects. Or consider the distortions caused by current federal subsidies for urban light-rail systems. These subsidies bias cities across the country to opt for light rail, yet rail systems are generally less efficient and flexible than bus systems, and they saddle cities with higher operating and maintenance costs down the road.10 When the federal government subsidizes certain types of infrastructure, the states want to grab a share of the funding and they often don't worry about long-term efficiency. High-speed rail is a rare example where some states are rejecting the "free" dollars from Washington because the economics of high-speed rail seem to be so poor.11 The Obama administration is trying to impose its rail vision on the nation, but the escalating costs of California's system will hopefully warn other states not to go down that path.12 Even if federal officials were expert at choosing the best types of infrastructure to fund, politics usually intrudes on the efficient allocation of dollars. Passenger rail investment through Amtrak, for example, gets spread around to low-population areas where passenger rail makes no economic sense. Indeed, most of Amtrak's financial loses come from long-distance routes through rural areas that account for only a small fraction of all riders.13 Every lawmaker wants an Amtrak route through their state, and the result is that investment gets misallocated away from where it is really needed, such as the Northeast corridor. Another problem is that federal infrastructure spending comes with piles of regulations. Davis-Bacon rules and other federal regulations raise the cost of building infrastructure. Regulations also impose one-size-fits-all solutions on the states, even though the states have diverse needs. The former 55-mph speed limit, which used to be tied to federal highway funds, is a good example. Today, federal highway funds come with requirements for the states to spend money on activities such as bicycle paths, which state policymakers may think are extraneous.14
States Avoid Pork (AT State Budgets D.A.’s)
State governments are comparatively more likely to make sound transportation investments
O’Toole ’12 Randal O'Toole - American public policy analyst. "Transportation Agreement Seems Remote." Cato @ Liberty. February 3, 2012. Web. 21 June 2012. .
Although most highway funds have been distributed to the states using formulas based on such things as population, land area, and road miles, competitive transit grants are handed out on a project-by-project basis. Though the money was supposed to be used for the best projects, in fact most of it was distributed based on political power. Mica’s compromise would keep spending at current levels—which are as much as $10 billion a year more than revenues—but include no earmarks and replace all competitive grants with formula funds. Instead of pleasing everyone, the compromise has simply ticked everyone off. LaHood and various transit advocates are upset because they lose their funds dedicated to light-rail, streetcar, and other rail transit construction. Conservative groups hate the bill because it almost certainly will require deficit spending. Mica could have compromised in the other direction: reducing spending to be no more than revenues, but maintaining competitive grants, earmarks, and other pork-barrel programs. This might have been more successful, as fiscal conservatives couldn’t complain about deficit spending while pork-barrelers could point with pride to the earmarks they were funding. The negative response to Mica’s proposal makes it unlikely that Congress will pass a bill this year. Instead, it will have to once more extend the 2005 bill (which it has already done eight times), as the current extension expires on March 31, 2012. But the extensions maintain spending at current levels, which means the Highway Trust Fund is quickly running out of money. Advocates of increased spending claim funds are needed to repair crumbling infrastructure. But America’s highways and bridges are actually in pretty good shape, partly because they are largely paid for out of user fees. The infrastructure that is crumbling is mainly those things paid for out of taxes, such as urban transit systems, which have at least a $78 billion maintenance backlog. Even President Obama’s head of the Federal Transit Administration complains that transit agencies are too eager to get federal funds to build new rail lines when they can’t afford to maintain the ones they have. The real question is why the federal government should be involved at all in highways, urban transit, bike paths, and other surface transportation projects. State and local governments, not to mention private transportation companies, are more likely to make wise transportation investments and less likely to be swayed by pork barrel. Congress should simply eliminate the federal gas tax or, as some have proposed, allow states to opt out of federal programs by raising their gas taxes by the amount of the federal 18.3-cent-per-gallon tax. Such alternatives will be taken more seriously if Tea Party candidates win more Senate and House seats in the 2012 election. If they lose seats, however, Congress is more likely to raise gas taxes so the transit industry and other interests can continue to get their largely undeserved shares of highway user fees.
*****Federalism Net Benefit*****
Fism is a N.B.
Federal funding destroys any national project in seven ways and impedes federalism
Edwards 09 (Chris Edwards, MA in economics, director of tax policy studies at the Cato Institute, member of the Fiscal Future Commission at the National Academy of Sciences former senior economist on the congressional Joint Economic Committee, former manager at PricewaterhouseCoopers, former economist with the Tax Foundation, February 2009, “Fiscal Federalism,” ) GZ
The theory behind aid to the states is that the federal government can operate programs in the national interest to efficiently solve local problems. The belief is that policymakers can dispassionately allocate large sums of money across hundreds of activities based on a rational plan designed in Washington. The federal aid system does not work that way in practice. Most federal politicians are not inclined to pursue broad, national goals, but are consumed by the competitive scramble to secure subsidies for their states. At the same time, federal aid stimulates overspending by state governments and creates a web of complex federal regulations that destroys state innovation. At all levels of the aid system, the focus is on regulatory compliance and the amounts spent, not on delivering quality services. The following are seven reasons why Congress should begin cutting federal grants-in-aid. 1. Grants spur wasteful spending. The basic incentive structure of aid programs encourages overspending by federal, state, and local politicians. The system allows politicians at each level to claim credit for spending on a program, while relying on another level of government to collect part of the tax bill. Federal politicians design aid regulations that prompt states to increase their own funding of programs. For example, Congress often includes "matching" provisions in programs, which means that the costs of expansion are split between federal and state taxpayers. Under a 50–50 arrangement, for every $2 million a state spends on a program, the federal government chips in $1 million. Matching reduces the "price" to state officials' added spending, thus prompting them to expand programs. Two-thirds of federal aid spending is on grant programs that have matching requirements. The open-ended federal match under Medicaid, for example, has prompted state governments to continuously expand health benefits and the number of eligible beneficiaries. Indeed, many states have designed complex schemes to artificially raise federal matching payments under Medicaid and to fleece federal taxpayers. One way to limit the gold rush response of state politicians to matching grants is to convert them to block grants. Block grants provide a fixed sum to states and give them flexibility on program design. For example, the 1996 welfare reform law turned Aid to Families with Dependent Children, an open-ended matching grant, into Temporary Assistance for Needy Families, a lump-sum block grant. Similar block grant reforms should be pursued for Medicaid and other programs. Converting programs to block grants would reduce incentives to overspend and would make it easier for reformers to cut and eliminate programs in the future. 2. Aid allocation is haphazard. The theorists favoring federal grants assume that aid can be rationally distributed to those activities and states with the greatest needs. But in the real world, the aid system has never worked that way. A 1940 article in Congressional Quarterly lamented: "The grants-in-aid system in the United States has developed in a haphazard fashion. Particular services have been singled out for subsidy at the behest of pressure groups, and little attention has been given to national and state interests as a whole."10 A June 1981 report by the Advisory Commission on Intergovernmental Relations concluded, "Regarding national purpose, the record indicates that federal grant-in-aid programs have never reflected any consistent or coherent interpretation of national needs."11 Today, for example, states receive varying amounts of highway funding for each dollar of gasoline taxes sent to Washington. While some congested and fast-growing states that need new highways lose out, some slow-growing states get "highways to nowhere" because they have skilled politicians representing them. A major highway law in 2005 included 6,371 "earmarks" directing spending to particular projects that were chosen by individual politicians, not by transportation experts based on merit. Even if a program could be operated in a rational way, outside of politics, the states can often nullify the policy choices of federal officials. The Department of Education's $15 billion Title I program, for example, is supposed to target aid to the poorest school districts. But evidence indicates that state and local governments use Title I funds to displace their own funding of poor schools, thus making poor schools no further ahead than without federal aid. In such cases, there is no reason to federalize an activity to begin with, even if one believes in the theory behind federal aid. 3. Grants reduce state policy diversity. Federal grants reduce state innovation because federal money comes with regulations that limit policy flexibility. Grants put the states in a straitjacket of federal rules. The classic one-size-fits-all federal regulation that defied common sense was the 55-mile-per-hour national speed limit. The limit was enforced between 1974 and 1995 by federal threats of withdrawing state highway grant money. It never made sense that the same speed should be imposed in the wide-open western states and the crowded eastern states, and Congress finally listened to motorists and repealed the law. However, federal regulations tied to grants are increasing in other areas, such as education. Federal education spending has exploded, and so have federal regulatory controls. The No Child Left Behind law of 2002, for example, mandates that all teachers be "highly qualified," that Spanish-language versions of tests be administered, and that certain children be tutored after school. State officials have complained bitterly about these new federal rules, and 30 state legislatures have passed resolutions attacking NCLB for undermining states' rights. 4. Grant regulations breed bureaucracy. Federal aid is not a costless injection of funding to the states. Its direct cost is paid by federal taxpayers who live in the 50 states. In addition, the system generates an enormous amount of bureaucracy at all three levels of government. Each level of government consumes grant program funding with proposal writing, funding allocations, review, reporting, regulatory compliance, litigation, and many other bureaucratic activities. State and local agencies must comply with long lists of complex federal regulations, which is one reason why the nation employs an army of 16 million state and local government workers. There are three types of federal aid regulations. The first are the specific rules for each program. Each program may come with hundreds or thousands of pages of rules for grantees to follow. The second are "crosscutting requirements," which are general provisions that apply across aid programs, such as labor market rules. The third are "crossover sanctions," which are the various penalties imposed on the states if certain federal regulatory requirements are not met. What makes matters worse is that the more than 800 federal grants have overlapping mandates, and each program has unique rules. For example, state and local governments deal with 16 different federal programs that fund first responders, such as firefighters.12 That complicated federal intrusion has led to fragmented disaster response planning and to much first-responder funding going to projects of little value and to regions with little risk of terrorism. 5. Grants cause policymaking overload. A serious problem caused by the huge scope of federal grant activity is that federal politicians spend their time dealing with local issues, such as public schooling, rather than crucial national issues. The huge array of grant programs generates endless opportunities for federal politicians to earmark projects for their home districts, in a chase for funding that consumes much of their time. Each new aid program has stretched thinner the ability of policymakers to deal with truly national problems because local spending issues divert their attention. Grants have helped create an "overload" on federal decisionmaking capability. It is hard to quantify this problem, but it is clear that most federal policymakers ignore important national problems, such as they did the increasing threat of terrorism before 9/11. Even after 9/11, a number of investigations have revealed that most members of the House and Senate intelligence committees do not bother, or do not have time, to read crucial intelligence reports.13 President Calvin Coolidge was right in 1925 when he argued that aid to the states should be cut because it was "encumbering the national government beyond its wisdom to comprehend, or its ability to administer" its proper roles.14 6. Grants make government responsibilities unclear. The three layers of government in the United States no longer resemble the tidy layer cake that existed in the 19th century. Instead, they are like a jumbled marble cake with responsibilities fragmented across multiple layers. Federal aid has made it difficult for citizens to figure out which level of government is responsible for particular policy outcomes. All three levels of government play big roles in such areas as transportation and education, thus making accountability difficult. Politicians have become skilled at pointing fingers of blame at other levels of government, as was evident in the aftermath of Hurricane Katrina. When every government is responsible for an activity, no government is responsible. 7. Common problems are not always national priorities. Over the decades, policymakers have argued that various state, local, and private activities needed federal intervention because they had become "national priorities." A fact sheet from the secretary of education begins: "The responsibility for K–12 education rests with the states under the Constitution. There is also a compelling national interest in the quality of the nation's public schools. Therefore, the federal government . . . provides assistance to the states and schools in an effort to supplement, not supplant, state support."15 Education is, of course, a priority of many people, but that does not mean that the federal government has to get involved. Indeed, there are few activities that the federal government performs that are not also priorities of individuals, businesses, and state and local governments. The states are certainly free to share their policy experiences in areas such as education, but there is no need for top-down control from Washington. In a 1987 executive order, President Ronald Reagan observed: It is important to recognize the distinction between problems of national scope (which may justify federal action) and problems that are merely common to the states (which will not justify federal action because individual states, acting individually or together, can effectively deal with them).16 The confusion between problems that are national in scope and those that are merely common to the states even extends to areas such as homeland security. Much "homeland security" funding goes toward items that should be funded locally, such as bulletproof vests for police officers and radio systems for first responders. Federalizing such spending only creates bureaucracy and a tug of war between the states over funding. By contrast, when funding and spending decisions are made together at the state or local levels, policy tradeoffs will better reflect the preferences of citizens within each jurisdiction.
Fed Guts Fism
Federal funding destroys any national project in seven ways and impedes federalism
Edwards 09 (Chris Edwards, MA in economics, director of tax policy studies at the Cato Institute, member of the Fiscal Future Commission at the National Academy of Sciences former senior economist on the congressional Joint Economic Committee, former manager at PricewaterhouseCoopers, former economist with the Tax Foundation, February 2009, “Fiscal Federalism,” ) GZ
The theory behind aid to the states is that the federal government can operate programs in the national interest to efficiently solve local problems. The belief is that policymakers can dispassionately allocate large sums of money across hundreds of activities based on a rational plan designed in Washington. The federal aid system does not work that way in practice. Most federal politicians are not inclined to pursue broad, national goals, but are consumed by the competitive scramble to secure subsidies for their states. At the same time, federal aid stimulates overspending by state governments and creates a web of complex federal regulations that destroys state innovation. At all levels of the aid system, the focus is on regulatory compliance and the amounts spent, not on delivering quality services. The following are seven reasons why Congress should begin cutting federal grants-in-aid. 1. Grants spur wasteful spending. The basic incentive structure of aid programs encourages overspending by federal, state, and local politicians. The system allows politicians at each level to claim credit for spending on a program, while relying on another level of government to collect part of the tax bill. Federal politicians design aid regulations that prompt states to increase their own funding of programs. For example, Congress often includes "matching" provisions in programs, which means that the costs of expansion are split between federal and state taxpayers. Under a 50–50 arrangement, for every $2 million a state spends on a program, the federal government chips in $1 million. Matching reduces the "price" to state officials' added spending, thus prompting them to expand programs. Two-thirds of federal aid spending is on grant programs that have matching requirements. The open-ended federal match under Medicaid, for example, has prompted state governments to continuously expand health benefits and the number of eligible beneficiaries. Indeed, many states have designed complex schemes to artificially raise federal matching payments under Medicaid and to fleece federal taxpayers. One way to limit the gold rush response of state politicians to matching grants is to convert them to block grants. Block grants provide a fixed sum to states and give them flexibility on program design. For example, the 1996 welfare reform law turned Aid to Families with Dependent Children, an open-ended matching grant, into Temporary Assistance for Needy Families, a lump-sum block grant. Similar block grant reforms should be pursued for Medicaid and other programs. Converting programs to block grants would reduce incentives to overspend and would make it easier for reformers to cut and eliminate programs in the future. 2. Aid allocation is haphazard. The theorists favoring federal grants assume that aid can be rationally distributed to those activities and states with the greatest needs. But in the real world, the aid system has never worked that way. A 1940 article in Congressional Quarterly lamented: "The grants-in-aid system in the United States has developed in a haphazard fashion. Particular services have been singled out for subsidy at the behest of pressure groups, and little attention has been given to national and state interests as a whole."10 A June 1981 report by the Advisory Commission on Intergovernmental Relations concluded, "Regarding national purpose, the record indicates that federal grant-in-aid programs have never reflected any consistent or coherent interpretation of national needs."11 Today, for example, states receive varying amounts of highway funding for each dollar of gasoline taxes sent to Washington. While some congested and fast-growing states that need new highways lose out, some slow-growing states get "highways to nowhere" because they have skilled politicians representing them. A major highway law in 2005 included 6,371 "earmarks" directing spending to particular projects that were chosen by individual politicians, not by transportation experts based on merit. Even if a program could be operated in a rational way, outside of politics, the states can often nullify the policy choices of federal officials. The Department of Education's $15 billion Title I program, for example, is supposed to target aid to the poorest school districts. But evidence indicates that state and local governments use Title I funds to displace their own funding of poor schools, thus making poor schools no further ahead than without federal aid. In such cases, there is no reason to federalize an activity to begin with, even if one believes in the theory behind federal aid. 3. Grants reduce state policy diversity. Federal grants reduce state innovation because federal money comes with regulations that limit policy flexibility. Grants put the states in a straitjacket of federal rules. The classic one-size-fits-all federal regulation that defied common sense was the 55-mile-per-hour national speed limit. The limit was enforced between 1974 and 1995 by federal threats of withdrawing state highway grant money. It never made sense that the same speed should be imposed in the wide-open western states and the crowded eastern states, and Congress finally listened to motorists and repealed the law. However, federal regulations tied to grants are increasing in other areas, such as education. Federal education spending has exploded, and so have federal regulatory controls. The No Child Left Behind law of 2002, for example, mandates that all teachers be "highly qualified," that Spanish-language versions of tests be administered, and that certain children be tutored after school. State officials have complained bitterly about these new federal rules, and 30 state legislatures have passed resolutions attacking NCLB for undermining states' rights. 4. Grant regulations breed bureaucracy. Federal aid is not a costless injection of funding to the states. Its direct cost is paid by federal taxpayers who live in the 50 states. In addition, the system generates an enormous amount of bureaucracy at all three levels of government. Each level of government consumes grant program funding with proposal writing, funding allocations, review, reporting, regulatory compliance, litigation, and many other bureaucratic activities. State and local agencies must comply with long lists of complex federal regulations, which is one reason why the nation employs an army of 16 million state and local government workers. There are three types of federal aid regulations. The first are the specific rules for each program. Each program may come with hundreds or thousands of pages of rules for grantees to follow. The second are "crosscutting requirements," which are general provisions that apply across aid programs, such as labor market rules. The third are "crossover sanctions," which are the various penalties imposed on the states if certain federal regulatory requirements are not met. What makes matters worse is that the more than 800 federal grants have overlapping mandates, and each program has unique rules. For example, state and local governments deal with 16 different federal programs that fund first responders, such as firefighters.12 That complicated federal intrusion has led to fragmented disaster response planning and to much first-responder funding going to projects of little value and to regions with little risk of terrorism. 5. Grants cause policymaking overload. A serious problem caused by the huge scope of federal grant activity is that federal politicians spend their time dealing with local issues, such as public schooling, rather than crucial national issues. The huge array of grant programs generates endless opportunities for federal politicians to earmark projects for their home districts, in a chase for funding that consumes much of their time. Each new aid program has stretched thinner the ability of policymakers to deal with truly national problems because local spending issues divert their attention. Grants have helped create an "overload" on federal decisionmaking capability. It is hard to quantify this problem, but it is clear that most federal policymakers ignore important national problems, such as they did the increasing threat of terrorism before 9/11. Even after 9/11, a number of investigations have revealed that most members of the House and Senate intelligence committees do not bother, or do not have time, to read crucial intelligence reports.13 President Calvin Coolidge was right in 1925 when he argued that aid to the states should be cut because it was "encumbering the national government beyond its wisdom to comprehend, or its ability to administer" its proper roles.14 6. Grants make government responsibilities unclear. The three layers of government in the United States no longer resemble the tidy layer cake that existed in the 19th century. Instead, they are like a jumbled marble cake with responsibilities fragmented across multiple layers. Federal aid has made it difficult for citizens to figure out which level of government is responsible for particular policy outcomes. All three levels of government play big roles in such areas as transportation and education, thus making accountability difficult. Politicians have become skilled at pointing fingers of blame at other levels of government, as was evident in the aftermath of Hurricane Katrina. When every government is responsible for an activity, no government is responsible. 7. Common problems are not always national priorities. Over the decades, policymakers have argued that various state, local, and private activities needed federal intervention because they had become "national priorities." A fact sheet from the secretary of education begins: "The responsibility for K–12 education rests with the states under the Constitution. There is also a compelling national interest in the quality of the nation's public schools. Therefore, the federal government . . . provides assistance to the states and schools in an effort to supplement, not supplant, state support."15 Education is, of course, a priority of many people, but that does not mean that the federal government has to get involved. Indeed, there are few activities that the federal government performs that are not also priorities of individuals, businesses, and state and local governments. The states are certainly free to share their policy experiences in areas such as education, but there is no need for top-down control from Washington. In a 1987 executive order, President Ronald Reagan observed: It is important to recognize the distinction between problems of national scope (which may justify federal action) and problems that are merely common to the states (which will not justify federal action because individual states, acting individually or together, can effectively deal with them).16 The confusion between problems that are national in scope and those that are merely common to the states even extends to areas such as homeland security. Much "homeland security" funding goes toward items that should be funded locally, such as bulletproof vests for police officers and radio systems for first responders. Federalizing such spending only creates bureaucracy and a tug of war between the states over funding. By contrast, when funding and spending decisions are made together at the state or local levels, policy tradeoffs will better reflect the preferences of citizens within each jurisdiction.
1NC Net Ben (from Packet)
The counterplan accelerates federalism; the plan reverses this by dictating priorities to the states
McGuigan, 11 – Editor of the Free Congress Family, Law & Democracy Report (Patrick, “CapitolBeakOK: Transportation Federalism -- and Flexibility -- Proposed in New Bill from Coburn, Lankford,” 7/29, )
In his statement, sent to CapitolBeatOK, Sen. Coburn said, “Washington’s addiction to spending has bankrupted the Highway Trust Fund. For years, lower-priority projects like earmarks have crowded out important priorities in our states, such as repairing crumbling roads and bridges. “Instead of burdening states and micromanaging local transportation decisions from Washington, states like Oklahoma should be free to choose how their transportation dollars are spent. I have no doubt that Oklahoma’s Transportation Director Gary Ridley will do a much better job deciding how Oklahoma’s transportation dollars are spent than bureaucrats and politicians in Washington.” Lankford applauded Coburn's leadership in the matter, observing, “This has been one of my top priorities since coming to Congress, and I’m happy to join Senator Coburn in this effort. This bill is a giant step for states by increasing transportation flexibility while improving efficiency. “By allowing states to opt-out of the federal bureaucracy, they will be able to take more control of their own resources. It will free Oklahoma to keep our own federal gas taxes and to fund new projects at our own discretion.” Joel Kintsel, executive vice president at OCPA, told CapitolBeatOK, "I am so proud of the leadership shown by Senator Coburn and Congressman Lankford. Hopefully, this is the beginning of a broader effort by Congress to return to federalism and withdraw from areas of activity rightfully belonging to the States.” Sen. McCain, the 2008 Republican nominee for president, said, “As a Federalist, I have long advocated that states should retain the right to keep the revenue from gas taxes paid by drivers in their own state. This bill would allow for this to happen and prevent Arizonans from returning their hard earned money to Washington. Arizonans have always received 95 cents or less for every dollar they pay federal gas taxes. This continues to be unacceptable, and for that reason I am a proud supported of the State Highway Flexibility Act.” Sen. Vitter asserted, “It’s very apparent how badly Congress can mismanage tax dollars, especially the Highway Trust fund which has needed to be bailed out three times since 2008. The states know their transportation needs better than Congress, so let’s put them in the driver’s seat to manage their own gas tax.” Hatch contended, “The federal government’s one-size-fits all transportation policies and mandates are wasting billions of taxpayer dollars and causing inexcusable delays in the construction of highways, bridges and roads in Utah and across the nation.
*****Federal Control Bad*****
Fed Bad: Inefficient
Federal transportation investment is swayed by political pressure and inefficiency – states should finance their transportation
Edwards ‘5 (Chris Edwards, Director of Fiscal Policy, Cato Institute. "Downsizing the Federal Government." The Cato Institute. N.p., 2005. Web. .)
The federal government is an unneeded middleman in transporta- tion that misallocates resources as a result of political pressures and inefficient top-down planning. Americans do not need ‘‘highways to nowhere’’ in the districts of important members of Congress, and they do not need the large cost overruns common in federal transportation projects. Instead, Americans need a more efficient transportation system based on state, local, and private financing and control.
Fed Bad: Manipulation/States Solve
Federal transportation funding fails and is manipulated by politics – states should be able to finance and manage their infrastructure.
Roth ‘5 (Gabriel Roth – civil engineer and transportation economist. "Liberating the Roads Reforming U.S. Highway Policy." The Cato Institute. N.p., march 17, 2005. Web. .)
Introduction The most recent congressional reauthor- ization of the federal fuel tax and the federal transportation programs it funds expired in September 2003. Currently, Congress decides the financing and allocation of federal capital spending on highways (consisting, at present, of 39 percent of all such spending nationally), and enacts many of the regulations governing expenditures financed by various federal agen- cies.1 Deliberations on reauthorizing the fed- eral transportation programs dragged on through the summer of 2004 and were not completed in the 108th Congress. Whether the federal fuel tax and the programs it funds should be renewed is the central question of this paper. There may have been good reasons to choose such a federal system to finance the Interstate Highway System in 1956—when the federal fuel tax and the federal highway system legislation was enacted—but the IHS is now complete. What was established as a trust fund fed by fuel taxes to be spent on roads for the mutual benefit of road users has now become a mechanism for the exercise of polit- ical power and for distributing favors to indi- vidual members of Congress. The congressional deliberations on reau- thorizing the federal financing of roads that took place in 2004 were mainly about how much to spend—not about policy. As Robert Puentes of the Brookings Institution noted: The differences are not arguments over policy. As far as Washington is con- cerned, transportation is all about money—how much and who gets it. . . . The sad fact is that the national trans- portation system is broken and in dire need of fundamental reform. That is why billions and billions of dollars of additional federal investments, with- out significant reform, will do precious little to ameliorate the transportation problems of the modern metropolis.2 This study makes the case that the completion of the IHS removed any argument there might be to maintain federal control and financing of roads; that market pricing and investment principles, which govern the provision of most goods and services in free societies, could usefully be applied also to roads; and that significant reform should start with phasing out the federal role in road finance. This would require a phase-down of the federal fuel tax and would effectively turn back to the states full financial responsibility for their roads, allowing them to manage and finance highways and the transportation sec- tor as they deem appropriate.
Federal funding is misallocated and un-encouraging of long-term in infrastructure
Miller ’10 (Jonathan D. Miller - Journalist and a Lawyer Who Turned to Real Estate Analysis. "Infrastructure2010: Investment ImperatIve." Urban Land Institute. N.p., 2010. Web. .)
Enduring federal funding formulas continue to parcel out grants and funds without regard for merit or impact. By and large, the funding process doesn’t encourage long-term infra- structure planning or ensure financing of major multimodal or multijurisdiction projects that could create efficiencies and improve productivity. But the rethinking of the federal surface transportation bill provides an opportunity to move toward merit, with base funds being used for system maintenance, bonus or discretionary grant funds for capacity expansions, and a new national infrastructure bank to make investment-grade decisions about infra- structure projects. At least, with the federal Sustainable Communities Partnership, various federal agencies are beginning to discuss how to coordinate housing, transportation, and environmental poli- cies. And a number of programs created and funded by stimulus (ARRA) dollars also show some silo-busting promise.
Fed Bad: No Uniformity
Federal funding for highway infrastructure is unequal and means not all states receive funds
Roth ‘5 (Gabriel Roth – civil engineer and transportation economist. "Liberating the Roads Reforming U.S. Highway Policy." The Cato Institute. N.p., march 17, 2005. Web. .)
The Current System Allows Congress to Allocate Funds between States by Political Fiat A major inequity is that some states (called “recipient states”) persistently get more from the FHTF than they pay into it. The data on the amounts paid into and received from the fund, each year by each state, are published in the Federal Highway Administration’s Highway Statistics (see Table 2). Because supporters of the federal highway programs use these types of figures to show how beneficial the current system is to all states, these figures merit considerable scrutiny. The ratios at the far right of the table divide the dollar amounts of the apportionments and allocations for each state by the amount of revenue paid into the fund by each state. This sounds like a reasonable way to present the data, but because of failure to adjust for various peculiarities in the way the money is distributed, this table overstates the benefits of the federal highway system to individual states. For starters, careful observers notice that the amounts taken out of the Fund exceed the amounts paid in—in other words, the grand total ratio exceeds 1. For the whole period 1956–2003, the excess was around 10 percent, and for FY 2003 it was 4 percent. This excess was 19 percent in 2002.33 This was not because of any money-creating powers possessed by the FHWA. The cumulative excess was the result of interest earned on the Fund’s bal- ances. However, this interest would have been earned on invested balances even without the FHTF—say, for instance, if the states had kept the fuel tax money and invested it themselves. To say that this accumulated interest is a ben- efit of keeping a centralized federal financing system is disingenuous. There is a further complication. The 1998 TEA-21 reauthorization included a “mini- mum guarantee” provision that no state would receive less than 90.5 percent of the amount it pays into the fund. To implement this guarantee, $35 billion—16 percent of the total authorized—was set aside to increase the shares of those states that, under the tra- ditional formulas, received less than 90.5 per- cent of what they paid into the Fund. Yet some of this money also went to states that were already receiving more than they paid into the fund, thereby doing very little to remedy the disparity between donor and recipient states. As there was no such guaran- tee before 1998, this rule’s effect on total dis- tributions over time cannot be gauged from the data in Table 2.
Fed Fails: No Local Solutions
Federal Government Fails – Not attuned to local problems
Puentes, 8 - a fellow at the Metropolitan Policy Program at Brookings and the director of the program’s Metropolitan Infrastructure Initiative (Robert, “A Bridge to Somewhere”, Blueprint for American Prosperity, 2008, )//AL
For one thing, the federal government is still not attuned to the needs, problems, and challenges of metropolitan areas. The intent established in 1991 to elevate the importance of metropolitan decision making to better align with the geography of regional economies, commuting patterns, and social reality has largely been subverted. Federal transportation policy has only haltingly recognized metros’ centrality to transportation outcomes, and continues to assign states the primary role in transportation planning and programming Left to their own devices, most states have not embraced the intent of federal law and have not devolved sufficient powers and responsibilities to their metropolitan areas. They remain the principal decisionmaker on transportation projects, including those within metropolitan areas. Many state DOTs still wield considerable formal and informal power and retain authority over substantial state transportation funds. By the same token, the Metropolitan Planning Organizations (MPOs) have been dealt a weak institutional hand, and the visions and expectations for metropolitan decisionmaking were not accompanied by a supportive regulatory and funding framework. 11 The governor and state DOT still have veto authority over MPO-selected projects. The GAO found that although large MPOs (in areas with populations over 200,000) also have authority to veto projects, the reality is that the state receives and manages all the federal transportation money, as well as large amounts of state transportation money, and the state’s political leverage is far greater than the MPOs. 12 Such arrangements create an unfavorable climate for the flowering of federal policy reforms and frequently cut against metropolitan interests. Although the federal government is loathe to interfere with the project decisions of state DOTs, one recent example in Portland, OR shows that metropolitan area plans do not enjoy the same freedom. In response to that MPO’s regional transportation vision the FHWA admonished the Portland plan for being too focused on “land use goals” and that “the plan should acknowledge that automobiles are the preferred mode of transport.” 13 One positive step to enhance metropolitan decision making was the suballocation of funds directly to the regional and local government structures initiated by ISTEA. This helped strengthen metropolitan areas by changing the decisionmaking body for a portion of the overall funding, giving local officials the ability to spend federal transportation funds based on the unique needs of their region. However, the reality is that these funds still make up only a very small share of the overall funding pie. Taken together, federal law only gives metropolitan areas direct control over a small share of road and bridge funding under SAFETEA-LU. This misalignment has led to a dramatic shift in the way funds are raised in major metropolitan areas as these places are increasingly turning to voter-approved “local option taxes” to pay for certain metropolitan-scale projects. 14 Funding analyses in several states show how these biases harm metropolitan areas. 15 These areas contribute significantly more in tax receipts than they receive in allocations from their state’s highway fund or through direct local transfers. In other words, although the donor/donee debate is alive and well on the national level between states, that same rationale—logical or otherwise—does not appear to have had anywhere near the same impact on spatial funding allocation within states. 16 A comprehensive analysis of metropolitan spending based on estimates of federal gas tax revenues generated found that U.S. metropolitan areas together were net donors of over $1 billion in transportation revenues from 1998 to 2003. 17 This uneven allocation on the highway side—which is repeated in state after state, and metropolitan area after metropolitan area—is starving the older portions of our metropolitan areas areas. This at the very time when those places are struggling with the highest need for repairs and congestion relief, and are ultimately central to economic prosperity and growth in this nation.
Fed Bad: Funding Fails
Federal Government Fails – Outdated Funding methods
Puentes, 8 - a fellow at the Metropolitan Policy Program at Brookings and the director of the program’s Metropolitan Infrastructure Initiative (Robert, “A Bridge to Somewhere”, Blueprint for American Prosperity, 2008, )//AL
Federal transportation dollars continue to be distributed to its grantees based on archaic funding and equity formulas The formulas for allocating federal highway trust fund dollars are largely made on the basis of highway mileage and use. More than half of the funds authorized in SAFETEA-LU are appointed to states based on the traditional factors: amount of roads, miles driven, and fuel consumed and/or gas tax paid. Less than onefifth comes from other measures of need such as number of deficient bridges, roadway fatalities, or population in air quality non-attainment areas. While this may seem intuitive on some level, it also presents obvious problems in that it rewards those places with road expansions and high gas consumption. There is no reward for reducing consumption in any of these formulas. In fact, any investment in transit or promotion of land use to reduce fuel consumption or substitute for lane miles may result in fewer federal dollars Partly as a result, transportation spending from all levels of government on new highway capacity increased $20 billion (40.9 percent) from $48.4 billion in 1997 to $68.2 billion in 2002. At the same time unfortunately, spending on maintenance and services only increased $6.4 billion (23.8 percent) from $26.8 billion to $33.2 billion. 18 This legacy of the Eisenhower interstates illustrates that our nation has done a good job in building new highway infrastructure. Fixing, updating, and modernizing that infrastructure is where the nation is falling short. Some argue that the critique of these formulas is overblown because of provisions guaranteeing that states receive a portion of their highway trust fund payments back from Washington-currently at least 92 percent. Nevertheless, states that take steps to manage demand and/or reduce consumption receive fewer funds overall based on current formulas.
Fed Bad: Metro Laws
Federal Government Fails – Outdated Metro Laws
Puentes, 8 - a fellow at the Metropolitan Policy Program at Brookings and the director of the program’s Metropolitan Infrastructure Initiative (Robert, “A Bridge to Somewhere”, Blueprint for American Prosperity, 2008, )//AL
The policy framework for the intermetro passenger rail continues to be the 1970 law that reorganized the network The National Railroad Passenger Corporation—known as Amtrak—is in disarray as it continues to operate under the 1970s Rail Passenger Service Act that created it from private rail companies’ passenger service. Private railroads retained control of profitable freight service. Since Amtrak is neither a publicly traded private corporation, nor a public entity, its results are not subject to normal accountability mechanisms. Since it is not an instrument of the U.S. government, it not subject to federal disclosure requirements or the Government Performance and Results Act, nor is it answerable to shareholders, like other companies, or Securities and Exchange Commission reporting rules. 22 Since Amtrak has never enjoyed full support of any presidential administration, it does not have the certainty of funding to conduct strategic, long-range planning. No doubt Amtrak has received significant public subsidies since its creation in 1971. But the $30 billion Amtrak received in that time pales in comparison to what the airlines have received. First, airlines received nearly $15 billion in direct subsidies following 9/11 – and several are still facing financial ruin. 23 Also, according to the GAO, general fund revenues have composed on average 20 percent of the Federal Aviation Administration’s (FAA) budget since Fiscal Year 1997. 24 With the FAA’s average annual budget exceeding $10 billion, the total general fund contributions were at least $20 billion over those ten years. Further intensifying the discrepancy, the airline industry supports a proposed additional $40 billion in subsidies to upgrade its air traffic control system. 25 This number dwarfs the $11.4 billion in total, six-year subsidies for Amtrak recently passed by the Senate. 26
Fed Fails: Pricing Schemes
Federal Government Fails – Fails to adjust pricing schemes to be more efficient
Puentes, 8 - a fellow at the Metropolitan Policy Program at Brookings and the director of the program’s Metropolitan Infrastructure Initiative (Robert, “A Bridge to Somewhere”, Blueprint for American Prosperity, 2008, )//AL
The federal program has not embraced market mechanisms or a range of pricing schemes to better operate and manage the system Economists have long criticized the current system of roadway pricing contending user fees should be structured such that those levied on different classes of vehicles reflect the costs borne by governments to provide those vehicles with the opportunity to travel. 27 One such study found that single-unit trucks weighing more than 50,000 pounds contribute in user fees only 40 percent of the estimated costs of their use. Autos contribute 70 percent of their costs; pickup trucks and vans, 90 percent; and single-unit trucks weighing less than 25,000 pounds contribute 150 percent of their costs through the taxes and fees that they pay. 28 Another found that even though the gas tax is commonly considered a “user fee” drivers only pay about 80 percent of the costs of the roadways. This does not even account for the external costs of driving. 29 Other studies show this is true within many states. If charges were levied fairly in proportion to the costs imposed by vehicle type and those charges vigorously enforced, and if roads were constructed to more demanding standards, savings in road maintenance and replacement costs over time would be great enough to permit lower user fees for all classes of vehicles. But getting the prices right also means taking into account the range of impacts such as social costs and environmental impacts on climate change. For example, though the 1978 Energy Tax Act established a “Gas Guzzler Tax” on fuel inefficient vehicles, personal trucks such as pickups and SUVs are exempt. 30 The expanded use of tolling and other market mechanisms is, as discussed above, an effective and practical solution for mitigating the growth in congestion. Sir Rod Eddington called congestion pricing an “economic nobrainer.” 31
Fed Fails: General
Federal Policy is bad – General
Puentes, 8 - a fellow at the Metropolitan Policy Program at Brookings and the director of the program’s Metropolitan Infrastructure Initiative (Robert, “A Bridge to Somewhere”, Blueprint for American Prosperity, 2008, )//AL
The conversations about these critical challenges are taking place in a fiscally-constrained environment that should be the motivating factor and opportunity for real reform. The question of how to pay for transportation—both in the short and long term—is vexing policy makers nationwide. So prevalent is this concern, in fact, it spawned two national commissions, several congressional hearings, and a sustained drumbeat for more funding. The problem is that while there is a pervasive desire to invest, a growing mountain of evidence and analysis shows that the real challenges facing the network are far more fundamental. In short, the current slate of federal policies—and the lack of clear policy in specific areas—appear to exacerbate the ability for federal, state, and local leaders, with their private sector partners, to meet our competitive and environmental challenges. First, for the vast majority of the program the federal government is absent when it should be present. The federal transportation system lacks any overarching vision, goals, or guidance. It is no wonder, then, that the U.S. Government Accountability Office recently referred to transportation as a “cash transfer, general purpose grant program.” Second, as a program with its roots in the 1950’s the federal surface transportation program is woefully outdated. Federal transportation policy has only haltingly recognized metropolitan areas’ centrality to transportation outcomes, and continues to favor roads over transit and other non-motorized alternatives to traditional highway building. The third major policy problem is that the lack of a 21st century approach to government means the program is underperforming and failing to maximize efficiencies. Formal benefit/cost analyses are not used and regular evaluations of outcomes are typically not conducted. The tools that are employed today for tracking federal transportation spending and performance data are archaic and out of step with today’s needs. Without a vision, goals, purpose, or means for targeting, the U.S. approach to transportation has been to keep throwing money at the problem. Little attention is being given to managing the demand for revenues, how existing funds are spent and for what purpose, or how these spending decisions affect metropolitan areas. Taken together, the absent federal leadership in certain areas means that the broad issues that transcend state and metropolitan areas go unaddressed; outdated policies pursued under federal law work against many states and metropolitan areas’ efforts to maintain modern and integrated transportation networks; and underperforming grantees means the transportation program has little ability to strongly shape economic competitiveness, environmental quality, and the nation’s quality of life.
Fed Bad: Coordination
The current system fails – new large-scale state coordination key
Ross 8 – Dr. Ross is an Urban Land Institute Fellow, a National Science Foundation ADVANCE Professor, and has recently been named a member of the National Academy of Public Administration, served as Senior Policy Advisor on the Executive Committee of the Transportation Research Board of the National Academy of Sciences (“Proceedings of the Megaregions and Transportation Symposium and Structured Telephone Interview Summaries”, U.S. Department Of Transportation Federal Highway Administration, June 20th 2008, ) CM
From an economic and infrastructure investment perspective, there are certain returns to scale: the larger the system, the better the decisions economically. If planning and funding were handled at a megaregion scale, a lot more would probably get done and conflicts would be minimized. High-speed rail and airport issues cannot be addressed within the current system without a megaregional effort. There needs to be an approach to strategic investments which look at the region as a whole, and not state by state. Within the current system, it is difficult to effectively coordinate the competition of transportation facilities in the region. For example, there is port competition between Baltimore and other surrounding ports. MPOs expressed the necessity of establishing a Comprehensive National Transportation System that would include all modes. However, in the absence of such a nationwide system plan, they would support more corridor organizations such as the I-95 Corridor Coalition.
Fed Bad: Productivity
Federal subsidies decrease productivity – local governments can solve
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
Federal transit operating subsidies have also had a negative effect. While productivity in the private bus industry has increased during the period of public transit subsidies (by 8.3 percent in the 1970-95 period), economist Charles Lave found that productivity in public transit systems plummeted during this period. 17 Indeed, Lave estimates that if transit productivity had merely remained constant since 1964, total operating expenses would have been 40 percent lower by 1990 sufficient cost-reduction to erase most of the transit operating deficit without raising fares. DOT economist Don Pickrell links the ready availability of operating subsidies to transits declining productivity, showing that the majority of the funds made available from operating subsidies found their way into increased operating expenditures per vehicle mile, rather than to expansions of service. 18 The federal labor-protection provisions under Sec. 13(c) of the Urban Mass Transportation Act have helped to lock in place inefficient work-rules and to severely restrict the introduction of competitive contracting of bus service, which would have encouraged productivity increases and significant reductions in operating costs. In response to such findings, a number of transit policy experts have proposed abolishing federal transit subsidies, permitting decisions about such local/regional issues to be made at the local/regional level. And the FY 1996 and 1997 House budget resolutions included the elimination of new-start capital grants and the phase-out of transit operating subsidies by 2002. The previously cited CBO report is relatively sanguine about the consequences of such a move: Replacing [current federal transit subsidies] would require a variety of responses from local governments. Many agencies would be forced to improve efficiency, raise fares, find new local sources of finance, and/or modify services.@ 19 CBO looked both at capital grants and at operating subsidies. For the former, they concluded that The expansion needs of all but the major rail systems over the next several years could easily be met by improving the productivity of existing capital. That was before some of the new rail starts of the early 1990s (such as the Los Angeles subway), but since most such systems are being built in stages, the cities in question could decide whether to simply complete those starter rail lines and supplement them with bus service or seek to persuade state and local taxpayers that further rail construction was warranted without federal aid. Without the biasing effect of federal capital grants, more urban areas might opt to build cost-effective busways usable as well by door-to-door shuttle vans 20 (as in Houston, Pittburgh, and Seattle) rather than non-cost-effective rail systems (as in Dallas and Los Angeles).
Federal Investment Bad: Highways
Federal financing results in excessive expenditures
Roth 5 – a transport and privatization consultant and a research fellow at the Independent Institute and 20 years working at the World Bank (Gabriel, “Liberating the Roads Reforming U.S. Highway Policy”, CATO institute, March 17th, 2005, ) CM
Decisions regarding federally financed highways—for which federal contributions range from 75 percent to 90 percent—require the involvement of both federal and state administrations. The states retain formal responsibility for their highways but do not have to meet more than a small percentage of the bills. This allows them to fund low-priority projects at the expense of road users in other states. The federal funding of state roads results in excessive demands for expensive facilities, because, to the states, federal funds are almost costless, and state officials are accountable to their voters only for state funds. Thus, the system encourages the construction of expensive road projects, such as Boston’s Central Artery and Tunnel project (popularly known as “The Big Dig”), for which local funding would have never been considered. Initially estimated to cost $3.3 billion, the cost is now more than $14.6 billion.24 Speaker of the House of Representatives “Tip” O’Neill, who represented a Boston district, led the push for the use of federal funds.
Federal regulations exuberate the costs
Roth 5 – a transport and privatization consultant and a research fellow at the Independent Institute and 20 years working at the World Bank (Gabriel, “Liberating the Roads Reforming U.S. Highway Policy”, CATO institute, March 17th, 2005, ) CM
Federal regulations and programs make building roads more expensive.
• First, federal specifications for road construction can be higher, and therefore more expensive, than state standards.
• Second, states are required to adopt federal regulations, such as the Davis- Bacon and ‘Buy America’ provisions, which can raise highway costs substantially. Davis-Bacon rules, by themselves, can increase project costs by anywhere between 5 and 38 percent.29
• Third, there are significant administrative costs to sending tax money from the states to the federal government and then back to the states. According to published FHWA data assembled by transportation economist John Semmens and updated for this paper, total expenditures (federal,state and local) on “Administration and Research” at the establishment of the Highway Trust Fund in 1956 were 6.8 per- cent of construction costs, and in 2002 they were 17.0 percent.30 This suggests that federal financing increased these expenditures by about 10 percent of con- struction costs. Furthermore, in the peri- od 1956–2002, construction expenditures (not adjusted for inflation) increased 12- fold, but administration and research expenditures increased 35-fold.
Fed Bad: Innovation
Federal investment fail to spur innovation
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
As prospects for increased federal infrastructure investment have given way to likely decreases (as part of budget balancing efforts), the federal government has attempted to encourage innovative financing and the investment of private capital. The 1991 ISTEA measure included provisions for public-private partnerships and innovative financing. In addition, the Bush administration issued Executive Order 12803 (in 1992) on infrastructure privatization, and the Clinton administration followed up with a complementary measure, Executive Order 12893, in 1994. But little real activity has been generated by these measures. Instead, it is the states and cities that have been the principal innovators. By the end of 1995, 12 states and Puerto Rico had enacted public-private partnership measures for surface transportation infrastructure, and three private toll projects had been financed and opened to traffic. A growing number of mayors and governors are proposing to sell or lease airports and other infrastructure facilities, seeking to substitute private capital for increasingly limited public capital (so that the latter can be reserved for more inherently governmental needs). This disparity between federal and state/local governments suggests that greater innovation and new forms of private investment would occur if the federal government devolved the responsibility and funding authority for most infrastructure to the state level
State investment is better than federal for innovation
Roth 10 Civil engineer and transportation economist, research fellow at the Independent Institurem Worked with the World Bank on transportation prokects(Gabriel, “Federal Highway Funding,” June 2010, )
To make progress toward a market-based highway system, we should first end the federal role in highway financing. In his 1982 State of the Union address, President Reagan proposed that all federal highway and transit programs, except the interstate highway system, be "turned back" to the states and the related federal gasoline taxes ended. Similar efforts to phase out federal financing of state roads were introduced in 1996 by Sen. Connie Mack (R-FL) and Rep. John Kasich (R-OH). Sen. James Inhofe (R-OK) introduced a similar bill in 2002, and Rep. Scott Garrett (R-NJ) and Rep. Jeff Flake (R-AZ) have each proposed bills to allow states to fully or partly opt out of federal highway financing.47 Such reforms would give states the freedom to innovate with toll roads, electronic road-pricing technologies, and private highway investment. Unfortunately, these reforms have so far received little action in Congress. But there is a growing acceptance of innovative financing and management of highways in many states. With the devolution of highway financing and control to the states, successful innovations in one state would be copied in other states. And without federal subsidies, state governments would have stronger incentives to ensure that funds were spent efficiently. An additional advantage is that highway financing would be more transparent without the complex federal trust fund. Citizens could better understand how their transportation dollars were being spent. The time is ripe for repeal of the current central planning approach to highway financing. Given more autonomy, state governments and the private sector would have the power and flexibility to meet the huge challenges ahead that America faces in highway infrastructure.
Innovation is discouraged – HOT proves
Roth 10 Civil engineer and transportation economist, research fellow at the Independent Institurem Worked with the World Bank on transportation prokects(Gabriel, “Federal Highway Funding,” June 2010, )
One of the promising advances to relieving urban congestion is High-Occupancy or Toll (HOT) highways. Networks of HOT lanes can be structured for use by vehicles with payment of variable tolls combined with buses at no charge. The tolls are collected electronically and set at levels high enough to ensure acceptable traffic conditions at all times. A current obstacle to expanding HOT lane programs is that it is difficult to add tolls to roads constructed with federal funds. The first HOT lanes in the United States were introduced in 1995 on California's State Route 91 near Anaheim. The California Private Transportation Company conceived, designed, financed, constructed, and opened two pairs of "express lanes" in the median of a 10-mile stretch of the highway.40 Express lane users pay tolls by means of identifiers, similar to those used by EZPass systems, with the payments debited electronically from accounts opened with the company. Following the lead of the private sector, California's public sector implemented a similar project on Route I-15 north of San Diego. It has also proven popular. The rates charged on the I-15 lanes are varied automatically in real time to respond to traffic conditions. HOT lanes have also been implemented in Denver and Minneapolis, and are planned for the Washington, D.C., area. Payments for the use of roads can now be made as easily as payments for the use of telephones, without vehicles having to stop. Such changes in payment methods can have profound effects on the management and financing of roads. If the federal government removed itself from highway financing, direct payments for road use could be made directly to state governments through tolls. These sorts of tolls are already in place in New York and New Jersey. An even better solution would be payment of tolls for road use directly to private highway companies, which would cut out government financing completely. This is now technically feasible. Following the success of the HOT lanes in Southern California, many other projects are being pursued across the country. One project is in Northern Virginia. Fluor-Transurban is building and providing most of the funding for HOT lanes on a 14-mile stretch of the Capital Beltway. Drivers will pay to use the lanes with electronic tolling, which will recoup the company's roughly $1 billion investment. HOT lane projects are attractive to governments because they can make use of existing capacity and because the tolls can pay for all or most of the costs.41 Such networks offer congestion-free expressways for those wanting to pay a premium price, in addition to reducing congestion on other roads and creating faster bus services. There are many exciting technological developments in highways, and ending federal intervention would make state governments more likely to seek innovative solutions. Technological advances—such as electronic tolling—have made paying for road services as simple as paying for other sorts of goods. In a world where a fuel tax that is levied on gasoline is an imperfect measure of the wear-and-tear each driver puts on roads, it is vital to explore better ways to finance highways.
*****Solvency: Generic*****
States key Innovation
States are the “laboratories of democracy” – they are the backbone of true economic growth and innovation
GIOCD ’11 ("Smart Investment Helps States to Reinvent Economies." - Governors' Institute on Community Design. N.p., march 4, 2011. Web. 22 June 2012. .)
A multi-disciplinary panel at the Brookings Institution on February 25, 2011 called for states to invest in infrastructure to reinvent their economies. Bruce Katz, Vice President and Director of the Metropolitan Policy Program at Brookings, emphasized the states’ critical role as investors in education, innovation and infrastructure and as the “laboratories of democracy.” State and local governments are the primary investors in the cornerstones of economic growth, accounting for 80% of public spending on K-12 education and 74% of spending on both higher education and infrastructure. Panelists Governor Ed Rendell (PA) and Mike Finney, CEO of Michigan Economic Development Corporation, emphasized the need for governors to get their own houses in order to effectively coordinate and focus investment. “Government that doesn’t invest in its own growth will wither and die.” Pennsylvania and Michigan each established an economic supra-cabinet to coordinate the efforts of the various agencies devoted to the development of the economy, transportation, workforce and communities. Through coordination and investment, Pennsylvania ranked 11th in the nation for job growth in 2010. On transportation spending, Matt Kahn, Professor of Economics at UCLA, explained the need to “Fix it First, Expand it Second, Reward it Third – A New Strategy for America’s Highways.” Tyler Duvall, Associate Principal at McKinsey and Company, and Robert Puentes, Senior Fellow at Brookings, cited the need for states to upgrade their tool-kits to meet investment challenges by, for example, incorporating cost/benefit analysis into decision-making processes, implementing asset-pricing, and enacting state legislation to enable public/private partnerships. He observed that “government will help those who help themselves, like going directly to the voters and not waiting for Federal funds or an increase in gas tax.” The Governors’ Institute on Community Design is developing state workshops to: prioritize transportation spending, develop strategic approaches to state economic development, channel investment to infrastructure-rich redevelopment areas and adopt new design approaches for communities hit hard by foreclosures and vacancies. States will need these and other sound strategic and programmatic approaches to fulfill their destiny as laboratories of democracy and effective stewards of infrastructure funds.
Generic Solvency Advocates
States should invest in transportation projects
SGA 11 (Smart Growth America, “Recent Lessons from the Stimulus: Transportation Funding and Job Creation”, February 2011, ) CM
States: Nationwide, states face the impacts of recession, including unprecedented budget challenges, and in many cases, severe shortfalls. Continued high road repair needs will make hose shortfalls even more challenging. Too many states missed a golden opportunity to get caught up on repair needs thus reduce future costs. They also missed a golden opportunity to create more jobs. States can and should use what we learned from the stimulus: that transportation dollars can be better used to maximize job creation — helping to put Americans to work now. That is especially true in the 26 states with new governors, who have an opportunity to change the direction of transportation spending. They can invest more in repair and maintenance and change the way they evaluate investments in new capacity to ensure that these serve long tenn job creation, economic development, and affordability.
Solvency: Comparison
States are comparatively better at investing in transportation infrastructure
Edwards ‘10 (Chris Edwards. The Cato Institute. "Proposed Spending Cuts." Department of Transportation. N.p., june 2010. Web. 20 June 2012. .)
Most Department of Transportation activities are properly the responsibility of state and local governments and the private sector. There are few advantages in funding infrastructure such as highways and airports from Washington, but there are many disadvantages. Federal involvement results in political misallocation of resources, bureaucratic mismanagement, and costly one-size-fits-all regulations imposed on the states. The Federal Highway Administration should be eliminated. Taxpayers and highway users would be better off if federal highway spending and gasoline taxes were ended. State governments could more efficiently plan their highway systems without federal intervention. The states should look to the private sector for help in funding and operating highways, and they ought to move forward with innovations such as expressways with electronic tolling. The Federal Transit Administration should be eliminated. Federal transit subsidies have caused local governments to make inefficient transportation choices. Federal aid favors rail systems, which are more expensive and less flexible than bus systems. The removal of federal subsidies and related regulations would spur local governments to discover more cost-effective transportation solutions, such as opening transit markets to private operators. Air traffic control should be removed from the federal budget, and the ATC system should be set up as a stand-alone and self-funded agency or private company. Many nations have moved towards such a commercialized ATC structure, and the results have been very positive with regard to efficiency and safety. Canada's reform in the 1990s to create a private nonprofit ATC corporation is a good model for the United States to follow. U.S. ATC is currently overseen by the Federal Aviation Administration, which has serious funding problems and a poor record on implementing new technologies. Moving to a Canadian-style ATC system would help solve these problems and allow our aviation infrastructure to meet rising aviation demand. Amtrak has provided second-rate rail service for decades, while consuming almost $40 billion in federal subsidies. It has a poor on-time record, and its infrastructure is in bad shape. As a government agency, it is hamstrung in its decisionmaking regarding routes, workforce polices, capital investment, and other aspects of business. Amtrak should be privatized to give it the management flexibility it needs to operate in a more efficient and competitive manner. The table shows that federal taxpayers would save about $85 billion annually by closing down the agencies and programs listed. The department would retain its current activities regarding highway safety, aviation safety, and some other regulatory functions. Those functions could be reformed as well, but the most important thing is to end federal subsidies for transportation activities that would be better handled by the states and private sector. America should take heed of the market-based reforms being implemented abroad, and pursue similar solutions to its transportation challenges.
Solvency: Decision-making
States are better positioned to invest in their transportation infrastructure
Horsley ’12 (John Horsley - Executive Director, American Association of State Highway and Transportation Officials. "Reforming the Buddy System - Transportation Experts." Reforming the Buddy System - Transportation Experts. N.p., n.d. Web. 22 June 2012. .)
$90 billion is being invested each year in highway and bridge improvements by states and their local governments to enable safe and efficient travel throughout America. About $36 billion of that amount is provided by the federal government. States deliver these projects as swiftly and efficiently as possible and are held accountable for results by their governors, state legislators, state laws, the press and the citizens of their states. Each week AASHTO features a success story of states that are delivering projects ahead of time and under budget. When federal dollars are involved, project delivery often takes longer which results in higher costs. We are working with Congress to fix these problems. If anything, states need less oversight from the federal government, not more. The recent GAO review cited by the National Journal made several recommendations which, we believe, make sense. The recommendations are first, that the federal highway program becomes one that is performance-based; and second that FHWA narrows its responsibilities and devolves more responsibility for managing the program to the states. One other matter noted by GAO was that "over the years, the federal-aid highway program has expanded to encompass broader goals ... As the program grew more complex, FHWA's oversight role also expanded while its resources have not kept pace." We support the reforms included in both House and Senate legislation to consolidate the federal highway program and speed up the process of project approval. We also support their initiatives to require states to measure performance and report on results. We believe a two-part approach will be essential to implement this concept. First, USDOT in partnership with state DOTs and their local governments and stakeholders should develop a list of factors to be measured and how best to measure them. Second, state DOTs and metropolitan planning organizations should establish targets for improving performance and report to Washington regularly on the progress being made. In legislation pending before the joint Senate-House Conference Committee are proposals to eliminate Congressional earmarks, reduce discretionary programs where decisions on how to distribute funding are made in Washington, and increase the percentage of the program distributed by formula to the states. Congress recognizes that states and their local governments are better positioned to select which investments best meet community priorities and which will do the most good. We did want to take one minor exception to your description of the federal-aid highway system, with the states implementing projects and maintaining them, and the federal government "setting standards and providing funding." Actually, the states, through AASHTO, set standards for highways and bridges in this country and have done so since 1914. From time to time, FHWA adopts our standards as their own through formal rulemaking. FHWA is charged with assuring that states comply with a complex array of federal laws which govern the program. But standard setting is something in which state DOTs, through AASHTO, continue to lead the way.
Solvency: Generic
Federal investments are inefficient – earmarks and district incentives – states are comparatively more efficient
Roth 10 – a transport and privatization consultant and a research fellow at the Independent Institute and 20 years working at the World Bank (Gabriel, CATO Institute, Downsizing the Government, “Federal Highway Funding” June 2010, ) CM
Today, gasoline taxes and other revenues flowing into the FHTF total about $36 billion annually. Congress spends the money on highways and many other activities, often inefficiently. The following sections discuss six disadvantages of federal highway financing, and thus indicate the advantages of devolving highway financing to the states and private sector. 1. Funds Used Inefficiently and Diverted to Lower-Priority Projects Federal aid typically covers between 75 and 90 percent of the costs of federally supported highway projects. Because states spend only a small fraction of their own resources on these projects, state officials have less incentive to use funds efficiently and to fund only high-priority investments. Boston's Central Artery and Tunnel project (the "Big Dig"), for example, suffered from poor management and huge cost overruns.21 Federal taxpayers paid for more than half of the project's total costs, which soared from about $3 billion to about $15 billion.22 Federal politicians often direct funds to projects in their states that are low priorities for the nation as a whole. The Speaker of the House of Representatives in the 1980s, "Tip" O'Neill, represented a Boston district and led the push for federal funding of the Big Dig. More recently, Representative Don Young of Alaska led the drive to finance that state's infamous "Bridge to Nowhere," discussed below. The inefficient political allocation of federal dollars can be seen in the rise of "earmarking" in transportation bills. This practice involves members of Congress slipping in funding for particular projects requested by special interest groups in their districts. In 1982, the prohibition on earmarks in highway bills in effect since 1914 was broken by the funding of 10 earmarks costing $362 million. In 1987, President Ronald Reagan vetoed a highway bill partly because it contained 121 earmarks, and Congress overrode his veto.23 Since then, transportation earmarking has grown by leaps and bounds. The 1991 transportation authorization bill (ISTEA) had 538 highway earmarks, the 1998 bill (TEA-21) had 1,850 highway earmarks, and the 2005 bill (SAFETEA-LU) had 5,634 highway earmarks.24 The earmarked projects in the 2005 bill cost $22 billion, thus indicating that earmarks are consuming a substantial portion of federal highway funding. The problem with earmarks was driven home by an Alaska bridge project in 2005. Rep. Don Young of Alaska slipped a $223 million earmark into a spending bill for a bridge from Ketchikan—with a population of 8,900—to the Island of Gravina—with a population of 50. The project was dubbed the "Bridge to Nowhere" and created an uproar because it was clearly a low priority project that made no economic sense.
Solvency: Efficiency
States are more efficient in spending and investing in infrastructure – they aren’t plagued with deficits and mismanagement
Edwards ’11 (Chris Edwards Joint Economic Committee United States Congress. "Federal Infrastructure Investment." The Cato Institute. N.p., november 16, 2011. Web. 19 June 2012. .)
Conclusions In its report on the state of U.S. infrastructure, the American Society of Civil Engineers gives America a grade of "D."37 However, the ASCE report mainly focuses on infrastructure provided by governments, so if you believe that this low grade is correct, then it is mainly due to government failures. The ASCE lobbies for more federal spending, but OECD data shows that public-sector spending on infrastructure is about the same in this country as in other high-income nations. Some of the infrastructure shortcomings in the United States stem from mismanagement and misallocation by the federal government, rather than a lack of taxpayer support. So part of the solution is to decentralize infrastructure financing, management, and ownership as much as possible. State and local governments and the private sector are more likely to make sound investment decisions without the federal subsidies and regulations that distort their decisionmaking. This committee's description of today's hearing noted: "Transportation infrastructure is especially important to the manufacturing sector, which relies on various modes of transportation to obtain raw materials and to transport end products to the marketplace." That is certainly true, and I think transportation privatization is part of the answer to improve America's competitiveness in global markets. For example, nearly all airports and seaports in this country are owned by governments, but many airports and seaports abroad have been partly or fully privatized. The World Economic Forum rates America's seaports only 23rd in the world, but the first- and third-best seaports in the world, according to the WEF, are private — Singapore and Hong Kong.38 The federal government cannot afford to expand its infrastructure spending because of today's massive deficits.
Solvency: Innovation
States able to fund their own roads manage more efficiently and compete with each other, inspiring innovation
Roth ‘5 (Gabriel Roth – civil engineer and transportation economist. "Liberating the Roads Reforming U.S. Highway Policy." The Cato Institute. N.p., march 17, 2005. Web. .)
States fully responsible for their own roads would have stronger incentives to ensure that funds paid by road users were spent efficiently. For example, in the absence of federal grants for new construction, some states could prefer to better manage and maintain their existing roads rather than build new ones. Others might find ways to encourage the private sector to assume more of the burden of road provision—for exam- ple, by contracting with private firms to maintain their roads to designated standards or to provide new roads. Some states might stop discriminating against privately provid- ed roads, most of which are currently ineligi- ble to receive funding from the federal Highway Trust Fund although their users pay the required federal taxes. New arrangements would be noticed by other states, and those that brought improve- ments could be copied, while failed reforms could be avoided. In time, road users would get better value for their money, and some would even get the road services they were pre- pared to pay for, while their states could expend their scarce resources on activities such as public safety, which could not be made commercially viable. Yet much of this is impossible or discour- aged under the current system of federal financing of roads. Instead of haggling over how to tweak a broken system, Congress should let the current transportation author- ization expire and liberate the roads by pass- ing turnback legislation.
Solvency: States Best
States can finance their own transportation infrastructure – the federal government doesn’t need to be involved in investment.
Edwards ’12 Chris Edwards, Director of Fiscal Policy, Cato Institute. "Reporters Should Think Big on Budget Reforms | Downsizing the Federal Government." Reporters Should Think Big on Budget Reforms | Downsizing the Federal Government. N.p., february 15th, 2012. Web. 21 June 2012. .
The Washington Post did a great job last week comparing spending earmarks by members of Congress with the locations of property they own in their states. Some members are apparently using our tax dollars to expand infrastructure near their homes and businesses, thus gaining a personal benefit from federal spending. Washington Post reporters usually do great research on the spending behaviors of politicians, but they often don’t ask the big-picture questions. The Post has uncovered waste and corruption in earmarking, housing programs, and other federal activities, but the paper usually only suggests superficial reforms such as better ethics rules. When you read the Post story on earmarks, the obvious problem with all the projects identified is that they are properly state, local, and private activities. The story summarized questionable earmarks for 30 members of Congress, and the spending activities included repaving roads, expanding highways, building parking lots, replenishing beaches, dredging harbors, improving traffic signals, and building light rail projects. States, cities, and private businesses can and should finance these sorts of activities by themselves. There is no economic or technical reason why the federal government needs to be involved. Indeed, there are many disadvantages of federal involvement—including the pork barrel politics that the Post does a great job researching. Today in the Post, I see the same problem with Walter Pincus’s interesting article on port dredging, which is carried out by the Corps of Engineers. Members of Congress have been battling to secure Corps’ projects in their districts for 150 years, and it’s always been a wasteful process. (Watch for my forthcoming essay on DG). Pincus hints that port dredging is a subsidy to the “multibillion-dollar import-export business,” and he is right.
Solvency: Uniformity
Uniformity Good – Efficiency
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
This subsection describes uniform law proposals that may reduce the costs of operating the federal system. Procedural Statutes. Statutes such as Attendance of Out of State Wit- nesses and Certification of Questions of Law reduce the costs of de- termining and applying the applicable state law in ways that cannot easily be accomplished by advance contracting since the affected parties nor- mally cannot predict or draft for procedural matters at the time of the contract or other event that ultimately gives rise to the litigation.63 Also, the types of procedural laws promulgated by the NCCUSL probably do not further the goals of strong interest groups because they do not system- atically or predictably affect the outcomes of categories of cases.6 They also probably do not reduce valuable innovation and experimentation because they do not involve important differences of state policy. Rather, they are more like "rules of the road," on which some certain answer is more important than a "right" answer. Achieving Interstate Cooperation. Statutes such as Child Custody Ju- risdiction and Reciprocal Enforcement of Support, which reduce the risk that one parent will exploit differing state laws in child custody or support disputes,65 provide a focal point to help achieve beneficial interstate coop- eration6 where legislators otherwise have incentives to engage in reciprocity.67 This type of uniform law is most likely to be successful where there are many in the state who will be hurt by similar laws in other states, the problems of nonuniformity cannot be solved by contract, and there is no strong interest group in the state that will gain from the law.6 Commercial Legislation. Some of the most successful NCCUSL stat- utes provide default rules for commercial dealings. The most prominent example is the Uniform Commercial Code (UCC), which has been adopted in nearly every state. These statutes deal with transactions that often occur without advance planning or written agreements or with is- sues that parties only rarely think to include in their contracts, avoid costs of determining at the time of contracting or dispute which state's laws should apply to a multistate transaction, include mostly default pro- visions that minimize exit costs, and facilitate development of a national case law to aid construction of contract terms.69 Estates, Probate, and Related Rules. The Probate Code, which in- cludes rules on intestacy, rights of spouses, and other matters, as well as analogous nonprobate provisions, reduces the costs of determining the applicable law at death where different states' laws may apply concerning such matters as spousal and children's allowances. Even where the courts clearly apply the law of the decedent's residence state at the time of death, the applicable law still may be impossible to predict at the time of inter vivos planning. Also, it may be costly for testators to keep up with differences in rules as they move from state to state
Uniformity by the NCCUSL solves better than federal action
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
Despite this unpromising background, the NCCUSL still might produce at least some efficient proposals that are widely adopted, thus reducing the costs of operating a federal system with more than 50 different legal re- gimes. Further, state legislators, for their part, might widely adopt only those proposals that would achieve efficient uniformity. That is, even if the NCCUSL produces both appropriate and inappropriate uniform proposals, the state legislatures may reduce the costs of inappropriate uniformity by acting as an efficient sorting mechanism. Whether or not the legislators are motivated by public interest considerations in choosing to adopt widely NCCUSL proposals, inefficient uniformity may not be a stable equilibrium because of competition among jurisdictions or interest groups.17 The existence of agency costs at the NCCUSL and the efficient sorting of these proposals by state legislatures is consistent with the large number of uniform law proposals with few adoptions observed in the data. It also suggests the following empirical prediction: Those uniform law proposals with relatively large numbers of adoptions will be the ones in which the benefits of uniformity outweigh the costs.
Solvency: Uniformity
Uniform State Laws Good
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
3. Litigation Costs Uniform laws may reduce litigation expense by trivializing otherwise difficult choice-of-law issues and eliminating deadweight litigation costs involved in forum shopping 4. Instability Costs Once contracts are negotiated and priced in the light of existing law, changes in the law that are applied to existing deals transfer wealth. Costs incurred in effecting these transfers, including the costs of political deals, are deadweight losses.23 Uniform laws reduce these costs by focusing public attention on legislative changes that destroy uniformity.24 How- ever, NCCUSL proposals also may give states an apparent public interest justification for making opportunistic changes in existing law.
Uniformity Good
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
1. Uniformity produces benefits such as reducing the costs of inconsis- tency and of determining the law, facilitating development of a coherent body of case law, and reducing externalization of costs and opportunistic changes in the law. 2. These benefits are greater than the costs of the uniform law process in terms of reducing exit opportunities, innovation, and diversity. 3. The benefits of uniformity cannot be obtained through lower cost alternatives to NCCUSL proposals, such as by enforcing contractual choice of law
Can Solve - NCCUSL solves Uniformity
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
WHILE a large literature has used economic analysis to examine law- making by public legislatures, the economic literature on legislation so far has paid little attention to the potentially influential role that may be played by private or pseudopublic groups, such as the National Conference of Commissioners on Uniform State Laws (NCCUSL), the Ameri- can Law Institute, and the American Bar Association.' This article addresses this gap in the literature by analyzing the adoption of uniform state laws proposed by the NCCUSL.2 The NCCUSL operates by prom- ulgating uniform law proposals,3 which are then considered for adoption by state legislatures. The NCCUSL has proposed uniform laws in virtu- ally every area of state law. Some, notably including the Uniform Com- mercial Code, have been adopted in nearly every jurisdiction. Many oth- ers, however, have received few adoptions.4
Can Solve - NCCUSL solves Uniformity
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
Because the NCCUSL must rely on the state legislatures to enact their proposals, agency costs can arise at two levels during the uniform law- making process-that is, agency costs could arise because of misincen- tives on the part of NCCUSL commissioners or the state legislatures or both. These agency costs can result in the creation and enactment of uniform state laws when uniformity is not efficient or can result in the failure to enact efficient uniform laws. The potential outcomes are illus- trated in Table 1.
Solvency: Uniformity
Uniformity can be achieved
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
In general, our results support, at the state legislature level, the public interest model of uniformity developed in this article by showing that the categories of NCCUSL proposals in which the net social benefit of uni- form state laws is greatest are also those which have been adopted by the greatest number of states. This analysis shows that some of the NCCUSL's work can serve to increase welfare, since uniform laws that are in the public interest will be widely adopted. Also, by validating this article's public interest theory of uniformity, this regression analysis shows a way that the NCCUSL can focus its work on proposals that are most likely to make a contribution to uniformity.
Uniform 50 State Uniformity is possible
Ribstein and Kobayashi, 96 – Larry E., is the Mildred Van Voorhis Jones Chair in Law in the University of Illinois, and Bruce H., who is a professor of law at the University of Illinois (“An Economic Analysis of Uniform State Laws”, The Journal of Legal Studies, Vol. 25, No. 1 (Jan., 1996), pp. 131-199, )//AL
In the setting examined here, a lack of agency costs would lead to the NCCUSL's generally proposing efficient laws that would be widely adopted by the states (case 1). An examination of the adoption history of NCCUSL proposals suggests otherwise. Figure 1 shows the distribu- tion of the number of states that have adopted the 103 uniform laws proposed by NCCUSL.9 On average, an NCCUSL proposal is adopted by just over 20 (out of a possible 53) states or territories. The median number of adoptions is 17, and the mode is zero. Further, only 8 of the 103 proposals have been adopted by 50 or more states (7.8 percent), and only 20 (19.4 percent) have been adopted by 40 or more states. In con- trast, 62 uniform proposals have fewer than 20 adoptions (60.2 percent), and 39 (37.9 percent) have fewer than 10. The large number of proposals with few adoptions is consistent with the existence of agency costs in the uniform lawmaking process.
Solvency: Comparative
States Solve better – Federal Oversight loses money and is ineffective at control
Glazier, 6/1 – is a reporter at the Bond Buyer, a paper on public financing (Kyle, “Lax Oversight Leads to Waste of Federal Road Funding, GAO Says”, The Bond Buyer, 6/1/12, )//AL
Between 3% and 8% of federal money earmarked for the highway system since 2010 has gone to waste on inactive projects, according to a new Government Accountability Office Report, which cites lax federal oversight and recommends a narrower role for the Federal Highway Administration. The report is the result of a request by Rep. Peter DeFazio, D-Ore., a member of the House Transportation and Infrastructure Committee. He asked the GAO to examine how the FHWA's partnership with state departments of transportation affects its oversight of the roughly $40 billion of federal funds sent to states to maintain and build roads and bridges. His request comes as the Senate transportation bill has proposed new standards that states would have to meet to receive federal funding. The GAO report concludes that the relationship between the FHWA and the states is mostly beneficial. But it notes that the 52 nationwide FHWA division offices have often been hesitant to utilize their most powerful oversight techniques, such as withholding federal funding. The report also shows that millions of dollars from the financially imperiled Highway Trust Fund continue to be sent to inactive projects despite an effort by the U.S. Department of Transportation over the past few years to curtail that problem. "FHWA benefits from using recognized partnership practices to advance the federal-aid highway program and conduct program oversight -- such as clear delineation of roles and responsibilities between FHWA and its state partners and formal and informal conflict resolution -- that are recognized as leading practices," the report says. "FHWA's partnership approach allows it to proactively identify issues before they become problems, achieve cost savings and gain states' commitment to improve their processes." The report details how state DOTs have sometimes managed to work with the FHWA to slash project costs to a fraction of an original estimate, or to make a program eligible for federal funding after originally failing to meet U.S. standards. Though the FHWA division offices have been required to conduct quarterly reviews of inactive road projects since 2008, about 3.4% of federal highway money was being funneled to such projects as of March. As recently as September 2008, that percentage was 8%, the report says. Though FHWA division offices can de-obligate funds for such projects, the GAO reports that officials in three offices visited said they were hesitant to do so because it might damage their working relationships with state officials. One office described the choice to de-obligate funds as "walking the tight rope," according to the report. "That's been a perennial problem for over 20 years," said Jack Basso, director of program finance and management at the American Association of State Highway and Transportation Officials, and a former chief financial officer at the FHWA. Basso said the report is primarily positive, and that a variety of factors, such as disputes with contractors, can contribute to inactive projects remaining on the books. The GAO report concludes that states should take more responsibility away from the federal government. "Based on this review, there may be areas where national interests are less evident and where Congress may wish to consider narrowing FHWA's responsibilities," it says. "In fiscal year 2011, about 48% of federal aid funds were obligated for projects for which oversight could be assumed by the states." Basso said there has long been a push for FHWA to do less micromanagement, and that the agency has already done so to some extent over the years. Additionally, state DOTs would have no problem picking up extra responsibility, he said. The report said that states are less likely than FHWA officials to view the relationship between them as a true partnership.
Solvency: Comparative
CP solves better – Laundry List (P3)
Rall et al, 10 – Jamie Rall is a transportation policy specialist who works for the NCSL (National Conference of State Legislatures), James B Reed is the head of the transportation program at NCSL, and Nicholas J Farber is a Transportation Policy Associate in the National Conference of State Legislatures (“Public-Private Partnerships for Transportation: a Toolkit for Legislators”, NCSL Partners Project on Public-Private Partnerships (PPPs) for Transportation, )//AL
By providing access to additional capital from private-sector financing sources, PPPs can facilitate the delivery of projects that otherwise might have been delayed or not built at all because of state and local fiscal constraints. More than $180 billion in private capital is estimated to be available now for infrastructure investment. 31 Innovative financing mechanisms such as availability payments or Grant Anticipation Revenue Vehicles (GARVEEs) (see Glossary) may help further by spreading the public sector’s investment in a project over an extended period of time. 32 Monetization of Existing Assets PPPs that involve up-front payments or revenue-sharing arrangements, it is argued, can be used to extract value from existing transportation assets and raise substantial funds for other public projects and purposes. These funds also may be leveraged to create other potential long-term financial benefits for the public sector. For example, part of the $1.83 billion up-front payment for the lease of the Chicago Skyway was used to pay off some of the city’s general obligation debt—which improved the city’s credit rating and reduced the cost of future debt—and to create a reserve fund that can generate substantial net revenue in interest. This asset had previously operated at a loss and had outstanding debt, which also was paid off by lease proceeds. 33 The $3.85 billion lease of the Indiana Toll Road was used to fund the 10-year statewide “Major Moves” transportation plan; the transportation infrastructure to be improved or built under this plan also may yield indirect economic benefits to the state. It has been noted, however, that fluctuations in the economy and rising construction costs affect the real value of up-front lease payments to the public sector. 34 Cost and Time Savings Current data indicate that PPPs often can result in significant project cost and time savings compared to traditional procurement. Causes can include direct incentives to the private contractor for on-time delivery; use of warranties (see Glossary) or performance-based contracting; competition among bidders; transfer of risk to the private sector for cost and schedule overruns or revenue shortfalls; and lifecycle efficiencies (see below). 35 Some private contractors, however, may lower their costs by cutting staff, hiring non-union employees, or reducing pay and benefits, which could raise laborrelated concerns (see Labor Concerns on pages 12 to 13). Lifecycle Efficiencies Lifecycle efficiencies also can result in significant cost savings—up to 40 percent—for PPP projects. 36 In an integrated, lifecycle approach to project delivery—such as a design-build or DBOM approach (see Glossary)—a single contractor is responsible for multiple project phases such as design, construction, operations and/or maintenance. This, in theory, gives the private contractor an incentive to reduce costs across a facility’s entire lifecycle, for example through innovative design that reduces construction costs, high-quality project delivery that lowers the cost of maintenance and improvements, or up-front maintenance that avoids costly rebuilds down the road. 37 Some analysts assert that integrated delivery approaches also can reduce delays due to collaboration between those responsible for different project phases. 38 Improved Project Quality Analysts have identified several ways in which PPPs can potentially improve project quality. Innovative contracting methods can give a private contractor more flexibility to incorporate state-of-the-art technologies and techniques, which may result not only in better quality for one project, but also provide examples of best practices that can be applied to other projects. 39 Use of warranties or performancebased payment arrangements can give a private contractor direct incentives to build a higher-quality project. Integrated project delivery approaches can also, in theory, encourage a private contractor to prioritize quality during design and construction, in order to lower costs during the operations and maintenance phase. 40Public Control and Accountability Although some analysts warn that PPPs can diminish public control over public assets (see Loss of Public Control and Flexibility on page 11), others assert that PPPs actually enhance public control over, and accountability for, transportation infrastructure. In a PPP, the contract details the many responsibilities and performance expectations the public agency requires of the private entity, including penalties, incentives, and default and termination provisions, as well as limits on tolls, fees or rates of return. Thus, by specifying the desired performance standards in the PPP contract and holding the private entity financially accountable for meeting them, it is argued, the public sector can potentially enhance its control over the project’s outcomes. 44
Solvency: States Key
States should get the primary role in transportation infrastructure development.
Puentes, 08- Senior Fellow at the Metropolitan Policy (Robert, “A Bridge to Somewhere: Rethinking American Transportation for the 21st Century”, Brookings Institute, June 12, )//MC
What we need now is a new 21st century compact that flips the pyramid and challenges our nation’s state and metropolitan leaders to develop deep and innovative visions to solve the most pressing transportation problems. The federal government should become a permissive partner in such an effort but should hold these places accountable for advancing this tailor-made, bottom-up vision. Metropolitan areas should have the predictability of funding necessary to make long-term planning possible, and the ability to make innovative strategic decisions. We need to go further than the federal experiment that began in 1991 by devolving more decision-making power and funding to metropolitan entities. This means moving to a tripartite division of labor: (a) the STIC deciding major national transportation expansions and investments as discussed; (b) the states retaining the primary role on most decision-making, for preserving and maintaining the interstates, and in small and medium sized metropolitan; and (c) the major metropolitan areas with a population over two million are given more direct funding and project selection authority through a new program we’re calling METRO (Metropolitan EmpowermenT pROgram).
State Coordination Impossible
Metropolitan planning and mega-regional planning is impossible – no hope for all 50 states
Ross 8 – Dr. Ross is an Urban Land Institute Fellow, a National Science Foundation ADVANCE Professor, and has recently been named a member of the National Academy of Public Administration, served as Senior Policy Advisor on the Executive Committee of the Transportation Research Board of the National Academy of Sciences (“Proceedings of the Megaregions and Transportation Symposium and Structured Telephone Interview Summaries”, U.S. Department Of Transportation
Federal Highway Administration, June 20th 2008, ) CM
Conformity The whole conformity process has made effective planning virtually impossible. To think that regions and doing planning for 20, 25, 50 years down the road and have to know the number of lbs that will be produced years from now is ridiculous. Greenhouse gasses will soon be moved to the conformity process. Trying to conform to a 30 yr. process in inhibiting innovation in the present. There is a great need to focus on innovation in the present. Institutional fragmentation MPOs reach economic or environmental issues they must deal with. They inevitable hit road block when trying to do things that have effects outside of the MPO. The federal government is becoming less of a partner in the process yet gets to make the rules, the lesser partner shouldn’t make the rules. There is a clear mismatch of rules. Until late in the planning process, the local government does not have enough of a stake. There is also the issue of defining direction, needing to set high level priorities and goals. Money should first go into preservation of the existing system. Extra money comes from deferring the preservation of roads, bridges, etc. Broken relationships Relationships between MPOs and DOTs are a problem. The system needs to be more egalitarian. There is also a disconnect in terms of priorities even when it is in the TIP. The playing field needs to be level. DOTs can feel as if they do not have any partner. California is a good model of MPOs working with the DOT, but in this example MPOs have the necessary scale and resources. Again, we need to rethink size of MPO. 50,000 is far too small. There is no incentive for projects to go beyond MPO boarders. Small MPOs too often turn to DOTs for projects. Too much leverage to consultation With the emphasis on consultation, the is no one held directly accountable. People are left asking, who is really in charge of making decisions? There is a need for a strong strategic arm with real reach.
Organizational planning dooms success
Ross 8 – Dr. Ross is an Urban Land Institute Fellow, a National Science Foundation ADVANCE Professor, and has recently been named a member of the National Academy of Public Administration, served as Senior Policy Advisor on the Executive Committee of the Transportation Research Board of the National Academy of Sciences (“Proceedings of the Megaregions and Transportation Symposium and Structured Telephone Interview Summaries”, U.S. Department Of Transportation Federal Highway Administration, June 20th 2008, ) CM
Organizational fragmentation would be the greatest obstacle to success in megaregion planning. Each locality does not share common problem definitions, common sustainable solutions, and common performance measurements. Currently, there is not a venue for such sharing to occur, nor is anyone charged with making that happens. In other words, no mechanism exists to address megaregional problems. Multi-state coordination and collaboration depends on states’ representatives being able to perceive benefits for their states in such efforts. In other words, states should not be asked to collaborate without expectation of return. There should be very strong leadership to facilitate cooperation among different interests. The top-down approach would be useful for implementing megaregional planning by establishing a venue where fragmented organizations coordinate and provide rules of incentives for successful collaboration. On the other hand, one representative of MPOs asserted that the only effort to push for a National Transportation System at the megaregion scale would be coming from MPOs because the Federal Government must consider states’ objections and states are too parochial. One possible form of multi-jurisdictional collaboration could be a consortium of MPOs, DOT officials, and others.
Solvency: Investment key
Despite economic climate state investments are a necessity
Greenstone and Looney 11 (Michael Greenstone, Director, The Hamilton Project 3M Professor of Environmental Economics, MIT, Adam Looney, Policy Director, The Hamilton Project Senior Fellow, The Brookings Institution,” Investing in the Future: An Economic Strategy for State and Local Governments in a Period of Tight Budgets” February 2011, ) CM
As state and local governments confront near-term budget challenges, there are tremendous pressures to focus on the very real short-run needs of residents at the expense of longer- term investments, such as education and infrastructure. This tension is understandable: many Americans remain unemployed and the demand for state and local resources is unusually high. Indeed, state and local governments are on the front lines of providing critical services to their residents— they are the final public safety net for people in need. At the same time, state and local governments play a central role in laying the foundation for future economic growth by educating the next generation of workers, building the necessary roads and bridges, and making sure that homes and businesses have access to broadband and a stable power supply. Making these investments will be even more challenging in the coming years as states face rising pressures from entitlements, such as retirement benefits and health care, which are projected to consume a significant part of future budget resources. Therefore, state and local leaders must find new and innovative ways to continue to make long-term investments or they will place our children’s living standards at risk.
Solvency: General Transportation
States are investing in transportation infrastructure in the status quo
Miller ’10 (Jonathan D. Miller - Journalist and a Lawyer Who Turned to Real Estate Analysis. "Infrastructure2010: Investment ImperatIve." Urban Land Institute. N.p., 2010. Web. .)
Building on extensive research, interviews, and data collection, Infrastructure 2010 reviews the specific water issues and concerns confronting 14 metro- politan areas throughout the country. Across the nation, there are signs of a renewed commit- ment to infrastructure. Innovative state and local governments are taking the initiative on building and funding new and often costly infrastructure projects, including transit and rail. And more and more Congressional and adminis- tration leaders recognize the importance of infrastructure to national competitiveness, even if they can’t agree on pri- orities or how to fund it. At the federal level, creative part- nerships between agencies—including the sustainability partnership between USDOT, HUD, and the EPA—are link- ing and coordinating environmental, transportation, and land use programs. Federal agencies are experimenting with new grant programs that award dollars in more merit- based, competitive ways, and revising old grant criteria to be more holistic and wide ranging. These are promising moves, but more needs to be done. As in previous editions, Infrastructure 2010 provides a glimpse of global infrastructure initiatives in 16 major inter- national markets, highlighting China’s continued strong in- vestments in rail and water infrastructure. This year’s report also reviews water conservation efforts in Australia. An investment in infrastructure is a promise to future generations. Done well and strategically, it can help guar- antee increasing prosperity and rising standards of living. Countries around the world—in particular, China, but also those in Europe and elsewhere in Asia—recognize the in- frastructure investment imperative. America must now do the same.
States solve Best
States are necessary for accomplishing national goals and executing domestic programs.
Conlan & Posner, 11- Professor of Government and Politics at George Mason University and Director of Centers on the Public Service at George Mason University (TIMOTHY J. CONLAN and PAUL L. POSNER, “Inflection Point? Federalism and the Obama Administration”, The State of American Federalism 2010–2011, 6/7, )//MC
The reliance on the states of an administration devoted to a more active federal role may come as a surprise to some, as would the use of more cooperative and decentralizing policy tools to carry out the new initiatives. Analysts were similarly caught up short when President George W. Bush, arguably the most conservative President in the postwar period, nonetheless reached for centralizing and coercive mandates and preemption to enforce his own national priorities over the states. While each administration developed a unique mix of cooperative, cooptive, and coercive federalism strategies, they both illustrated the continuing political and institutional relevance of states in our system for national leaders of any ideological stripe. However, both administrations also illustrated the variable roles that states came to play across differing policy initiatives. The role of states was defined not by a consistent set of federalism or administrative principles but rather by an opportunistic approach that viewed states as instrumental to more primary national goals and programs (Conlan 2006).
States Solve Local Needs Best
States solve local needs best, empirics prove
Dilger 11 (Robert, Senior Specialist in American National Government for the Congressional Research Service, Director of the Institute for Public Affairs at West Virginia University, "Federalism Issues in Surface Transportation Policy: Past and Present," 4-20-11, SL)
States have traditionally opposed state MOE requirements as an infringement on their sovereignty. For example, on January 15, 2008 the National Governors Association, National Conference of State Legislatures, and State Higher Education Executive Officers sent a letter to the chairs and ranking Members of the House Committee on Education and Labor and Senate Committee on Health, Education, Labor, and Pensions opposing a proposed MOE mandate in the College Opportunity and Affordability Act (H.R. 4137) because they believed that it infringed on state autonomy: Governors, legislators, and higher education officials share your desire to help make higher education accessible and affordable for students and families. They also share your concern with the rising cost of higher education, and are committed to making higher education easily accessible and affordable to all our citizens. That said, state budgeting decisions should be made by state officials. The decision to fund a new building or campus, expand student aid, help low-income families to access health care, or improve high schools, must remain with the officials closest to the needs of their specific communities.112
*****Solvency: Specific Affs*****
Solvency: Ports/Waterways
Federal investment in ports and waterways fails – states are preferable
Edwards 09 director of tax policy studies at Cato, he was a senior economist on the congressional Joint Economic Committee (Chris, “Privatization,” Downsizing the Federal Government, February 2009, )
Army Corps of Engineers. The Corps of Engineers is a federal agency that builds and maintains infrastructure for ports and waterways. Most of the agency's $5 billion annual budget goes toward dredging harbors and investing in locks and channels on rivers, such as the Mississippi. In addition, the corps is the largest owner of hydroelectric power plants in the country, manages 4,300 recreational areas, funds beach replenishment, and upgrades local water and sewer systems. Congress has used the corps as a pork barrel spending machine for decades. Funds are earmarked for low-value projects in the districts of important members of Congress, while higher-value projects go unfunded. Further, the corps has a history of scandals, including the levee failures in New Orleans and bogus economic studies to justify expensive projects.7 To solve these problems, the civilian activities of the corps should be transferred to state, local, or private ownership. A rough framework for reform would be to privatize port dredging, hydroelectric dams, beach replenishment, and other activities that could be supported by user fees and charges. Levees, municipal water and sewer projects, recreational areas, locks, and other waterway infrastructure could be transferred to state governments.
Solvency: Ports and Freight
States can fund ports and freight transportation using P3’s and user fees
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
Freight transport plays a large and growing role in the U.S. economy. According to the U.S. Bureau of Transportation Statistics, trucks haul about 65 per- cent of the freight value, 58 percent of freight ton- nage, and 32 percent of the ton-miles of total ship- ments. In most U.S. metropolitan regions, freight trucks represent close to 10 percent of roadway vehicles. Measured in tons, railroads carry approxi- mately 30 percent of intercity freight and 47 percent of U.S. freight in ton-miles.108 The number of con- tainers handled at U.S. ports also is growing rapidly. Between 1995 and 2001, the number of containers moving through the top 10 U.S. ports grew by 47 percent, and container traffic across the United States has increased 6.6 percent over the last decade.109 Freight demand growth in ton-miles is expected to increase 92 percent by 2035, but the interstate highway system and the connections with ports and rail facilities are not designed to handle this level of volume.110 In fact, some key roadways are bottle- necked, causing congestion. The costs of shipping for businesses operating in the United States had been declining through the lat- ter half of the last century. However, as congestion grows and fuel prices rise, logistics costs are rising as well, growing to 9.5 percent of gross domestic product (GDP) in 2005 as compared to 8.6 percent of GDP in 2003.111 This was the largest rise in the past 30 years, and at least one-third of the increase in costs is believed to be a result of congestion and inefficiency in the transportation system. Alongside its economic benefits, the growth in freight transport has created new challenges for states, including additional traffic bottlenecks in key regions or cities and environmental impacts. For example, truck freight traffic is now rising more than twice as fast as passenger traffic (3 percent annually as com- pared to about 1.5 percent annually for passenger cars). This demand has been outpacing the road and rail capacity for intermodal containers, especially near port facilities and in congested urban areas. States can use several options to upgrade and im- prove their capacity to move freight. For instance, some federal loan programs specifically target freight finance. Additionally, states can consider increased use of PPPs and increased freight-focused user fees. These options mirror those discussed earlier, but are modified for freight. In addition, some states are examining the potential for truck-only lanes or roads to facilitate freight movement while reducing freight-related congestion on roads and highways.
Local governments are in charge of ports – and their funding
AAPA 2009 – American Association of Port Authorities (“US Public Port Facts,” September 2nd 2009, )
The United States is served by some 360 commercial ports that provide approximately 3,200 cargo and passenger handling facilities, according to the U.S. Coast Guard. Depending on the individual port facilities, they may accommodate anything from recreational watercraft, to barges, ferries, and ocean-going cargo and passenger ships. Governance of these ports in the United States is a function of various state and local public entities, such as port authorities, port navigation districts and municipal port departments. Currently, there are more than 150 deep draft seaports under the jurisdiction of 126 public seaport agencies located along the Atlantic, Pacific, Gulf and Great Lakes coasts, as well as in Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands. Many of these seaport agencies are governed by an elected and/or appointed body, such as a port commission. The top 85 U.S. public seaport agencies are members of, and represented by, AAPA. Established by enactments of state government, public port agencies develop, manage and promote the flow of waterborne commerce and act as catalysts for economic growth. These agencies include port authorities, special purpose navigation districts, bi-state authorities and departments of state, county and municipal government. Seaport authorities develop and maintain the terminal facilities for intermodal transfer of cargo between ships, barges, trucks and railroads. Port authorities also lease land, and in some cases build and maintain facilities, for the growing cruise, excursion and ferry passenger industry. Examples of ports with ferry operations include Port of Portland (Maine), Delaware River Port Authority and Port of San Francisco.
Solvency: Ports
State Government oversight is key to port development
Young-Tae Chang, Meifeng Luo, and Thomas Grigalunas 2001 – Thomas Grigalunas, Ph.D. in economics, all work at the university of Rhode Island Transportation Center (“Comprehensive Framework for Sustainable Container Port Development for the United States East Coast,” October 11 2001, )
State governments, of course, have an important role in supporting programs that increase the well-being of their citizens. This role is particularly important when the private sector, acting alone, would undertake projects in ways that are economically inefficient or otherwise socially undesirable. Container port development invariably raises many issues with potential external costs (and possible benefits), and port development often requires provision of many public goods/collective goods, including environmental studies and formal Environmental Impact Statements, mitigation measures, navigational aids, dredging of channels, highway improvements, overpasses, and monitoring and oversight. Hence, port development involves many potential sources of market failure. Public goods and collective goods typically are not adequately provided by the private sector since businesses capture little, if any, of the benefits that these goods provide. In such cases, collective actions are needed through government, interest groups, as well as the private sector to provide for, internalize, or otherwise avoid the unfavorable consequences of market failure.
Solvency: Ports
Federal direction key to security programs
Husch et al. 12 (Ben Husch, NCSL-D.C., Jaime Rall, NCSL-Denver, Jennifer Arguinzoni, NCSL-D.C., NSCL/ National Conference of State Legislatures, “2011-2012 Policies for the Jurisdiction of the Transportation Committee”, ) CM
Port security is a state-federal partnership that is critical to the nation’s homeland security strategy. The states need clear federal direction to ensure that resources are focused on the most needed security improvements. Ninety-five percent of overseas cargo and millions of cruise and ferry passengers transit through ports each year. Ports are spending enormous sums to harden these vulnerable targets and need federal assistance. NCSL supports the Department of Homeland Security’s Port Security Grant Program, which is vital to ports’ abilities to make improvements quickly and comply with the Maritime Transportation Security Act of 2002. States have been directed to enhance the security of publicly operated ferries and provide for the inspection of vehicles and freight. In some cases, federal directives have preempted state laws and policies to the extent of superseding state constitutional provisions. Federal assistance should fund these requirements to avoid unfunded mandates.
Federal involvement is critical to leadership in trade
Husch et al. 12 (Ben Husch, NCSL-D.C., Jaime Rall, NCSL-Denver, Jennifer Arguinzoni, NCSL-D.C., NSCL/ National Conference of State Legislatures, “2011-2012 Policies for the Jurisdiction of the Transportation Committee”, ) CM
The U.S. system of waterways and ports provides substantial benefits to the nation by providing access to the world’s markets. The National Conference of State Legislatures (NCSL) recognizes the combined efforts of all levels of government and users in sharing the cost of port and waterway development and maintenance. NCSL further acknowledges the distinctive roles played by the states and the federal government in financing waterways and ports. The increase of state and local financial support in recent years should be concomitant with an increased planning authority, which is particularly important for the integration and support of other transportation systems for enhanced waterway and port activity. Investment in the U.S. water transportation system is a partnership between state and local governments and the federal government. State and local authorities significantly invest resources to enhance marine terminal capacity and efficiency, dredge berths and approach channels, and share the cost of new dredging projects to widen and deepen navigation channels. The federal government traditionally had supported dredging expenses through the General Treasury. In 1986, Congress established the Harbor Maintenance Tax, which is paid on imports and the domestic coastwise movement of goods, to support increased federal operations, and to finance the maintenance dredging of navigable channels and harbors. These taxes are deposited into the Harbor Maintenance Trust Fund. In order to sustain U.S. leadership in global trade, the nation’s ports must receive adequate federal funds to improve and maintain federal navigational channels. NCSL supports the full use of the Harbor Maintenance Trust Fund to maintain the nation’s harbors and calls on Congress to adequately fund deepening projects to modernize our ports. The accumulation of harbor tax receipts at the federal level is a break in faith from the purpose of the Harbor Maintenance Tax and results in the imposition of a competitive burden without providing needed improvements necessary to achieve efficiencies to offset added taxes.
Solvency: Freight
User fees, P3’s and truck-only toll lanes are potent options for state finance of freight transportation
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
Considerations for States In seeking to reduce freight congestion—and en- sure that the nation’s freight transportation system enhances competitiveness and contributes to eco- nomic growth—states have a number of issues to consider. For example, one issue is whether the fees charged for truck access to public infrastructure are properly aligned with the actual impacts on infra- structure; another is whether public policies sup- port shifting freight travel to rail or waterways.115 To some extent, efforts to address regional congestion challenges may also improve freight movement on highways. States may not have the immediate funds on hand to pursue necessary improvements to freight trans- portation. Therefore, tools such as increased user fees, PPPs, and truck—only toll lanes or roads-par- ticularly when used in combination—can be potent options for helping states finance freight transporta- tion improvements. Freight strategies, such as truck VMT fees, can set the stage for wider implementa- tion of new revenue forms as has been the case in Europe. Still, there are clear opportunities. For example, a study of Ohio’s interstate highways indicates that the worst bottlenecks caused up to 2,500 hour of truck delay per day, which wastes fuel, creates more air pollution, and is inefficient for shippers. It is pro- jected that by 2010, these bottlenecks would affect up to $309-billion worth of freight shipments, cost- ing shippers up to $200 per hour of delays.116 Efforts to alleviate this congestion by reconstruction would lead to up to $3.4 billion in travel time savings by 2030 and would produce a benefit/cost ratio of between 10 to 1 and 16 to 1. Moreover, address- ing freight rail congestion challenges also benefits commuter rail, which, in turn, may help offset com- muter demand on the nation’s highway.
Solvency: Freight
State funding in freights solve their advantages – doesn’t drain state funds
STPF 10 (Statewide Transportation Program Funding, “Summary of Statewide Rail Framework Study”, 2010, ) CM
Developing rail for both freight and passenger service is advantageous to the state. From a freight perspective, Arizona can benefit from diversion of truck traffic to rail to free highway capacity for passenger cars, reduce air pollution, conserve energy, and enhance traffic safety. Through truck traffic produces little direct economic benefit for the state, yet demands the state’s resources to build and maintain Interstate and other highways. Furthermore, Arizona is impacted by emissions from tens of thousands of trucks traveling through the state daily. Carried by rail, freight does not drain the state’s limited transportation funds, creates less pollution and greenhouse gases per ton mile, and uses less energy per ton mile. With rail transportation, the responsibility for infrastructure falls primarily to the private parties – railroads, and ultimately their customers.
States investing now – solves the aff
Morgan et al. 5 (C.A. Morgan, J.E. Warner, C.E. Roco, and S.S. Roop, Texas Department of Transportation Research and Technology Implementation Office, December 2004, “Funding Strategies And Project Costs For State- Supported Intercity Passenger Rail: Selected Case Studies And Cost Data”, ) CM
Another successful method states use to invest in improving passenger rail service is to make capital investments in the freight rail infrastructure over which most Amtrak trains operate. As an additional benefit, freight rail service may also be enhanced through such capital expenditures, thereby improving the flow of both goods and passengers over the rails. Often in such projects, the freight railroads can be brought in as partners to assist in joint funding. These projects could be capacity improvements such as adding another track, replacing jointed rail with continuous welded rail, or improving the signal system to allow for generally faster rail service or they could be improvements that are focused more directly on improving passenger train speeds such as superelevation or straightening of curves.
States can solve freight rails
US Fed News, 10 - a company based in Washington, D.C., providing verbatim transcripts, in real time, on their website, , of United States government events including press briefings, presidential speeches, conferences and congressional hearings (“WASHINGTON STATE 2010-2030 FREIGHT RAIL PLAN IDENTIFIES STATEWIDE FREIGHT RAIL NEEDS”, US Fed News Service, Including US State News, 1/8/10, )//AL
The Washington State Department of Transportation (WSDOT) has completed the Washington State 2010-2030 Freight Rail Plan as directed by the Washington State Legislature. This plan is a revision to the Washington State Freight Rail Plan 1998 Update. The plan is available on-line at: . The Freight Rail Plan will provide guidance for rail initiatives and investments in Washington State over the next 20 years that will: * Support Washington's economic competitiveness and economic viability. * Preserve the ability of Washington's freight rail system to efficiently serve the needs of its customers. * Facilitate freight system capacity increases to improve mobility and reduce congestion. * Take advantage of freight rail's modal energy efficiency to reduce the negative environmental impact of freight movement in Washington. "The Freight Rail Plan is an important part of ensuring Washington's freight rail system remains an efficient and economically viable system, since a large part of our economy depends on freight for its competitiveness and growth," said Paula Hammond, Secretary of Transportation. Washington's freight rail system carried 116 million tons of freight in 2007 (most recent data available). Freight rail employed 4,207 people in the state and contributed $533 million directly to the state's gross domestic product. The Washington State Freight Rail Plan complies with the Federal Railroad Administration (FRA) requirements that the state establishes, updates, and revises a rail plan in order to receive federal assistance. The Freight Rail Plan also fulfills state requirements, under the Revised Code of Washington (RCW) 47.76.220 and RCW 47.06.080, that WSDOT prepare and periodically revise a state rail plan that identifies, evaluates, and encourages essential rail services. "This plan is the product of six months of research and development, but ultimately continues the research and planning that has been done since 1978," said Scott Witt, State Rail and Marine Director. "The strategies and recommendations identified within the plan will help guide us in determining the most effective and responsible improvements and investments necessary to our rail system." In the development of the Washington State Freight Rail Plan, an advisory committee was formed involving stakeholders from rail industries, ports, shippers, local entities, tribes, transportation communities, interest groups, and the general public. The advisory committee's role was to help WSDOT assess and evaluate the freight rail system, capacity, and needs assessment, understand concerns of local communities, share information, and provide feedback during the development process.
Solvency: HSR
The Federal Government should not control high-speed rail development.
DeHaven, 10- budget analyst on federal and state budget issues for the Cato Institute (Ted, “High-Speed Federalism Fight”, CATO Institute, November 26th, )//MC
New York Gov.-elect Andrew Cuomo has said he would be happy to take Ohio’s money. Last week, California Democratic Sens. Barbara Boxer and Dianne Feinstein wrote LaHood saying that California stands ready to take some, too, noting that several states that elected GOP governors this month have said they no longer want to use the rail money for that purpose. “It has come to our attention that several states plan to cancel their high-speed rail projects. We ask that you withdraw the federal grants to these states and award the funds to states that have made a strong financial commitment to these very important infrastructure projects,” Boxer and Feinstein said in their letter to LaHood. This is a textbook example of why the Department of Transportation should be eliminated and responsibility for transportation infrastructure returned to state and local governments. If California wishes to pursue a high-speed rail boondoggle, it should do so with its own state taxpayers’ money. Instead, Ohio and Wisconsin taxpayers now face the prospect of being taxed to fund high-speed rail projects in other states. If California’s beleaguered taxpayers were asked to bear the full cost of financing HSR in their state, they would likely reject it. High-speed rail proponents know this, which is why they agitate to foist a big chunk of the burden onto federal taxpayers. The proponents pretend that HSR rail is in “the national interest,” but as a Cato essay on high-speed rail explains, “high-speed rail would not likely capture more than about 1 percent of the nation’s market for passenger travel.”
Federally funded mass transit investments fail- empirically proven
Poole, Robert W. –Director of Transportation Policy at the Reason Foundation in Los Angeles, PhD from MIT- 1996 (October 1996, “Defederalizing Transportation Funding,” )
Since annual federal aid for mass transit was first authorized via the Urban Mass Transportation Act of 1964, the federal government has spent some $130 billion for this purpose, in 1996 dollars. The 1964 act authorized capital grants to assist cities in taking over and rehabilitating mostly bankrupt private transit systems. Further legislation in 1971 added new rail starts to the projects eligible for up to 80 percent federal funding. Another mass transit act in 1974 for the first time authorized operating subsidies, as well, to cover up to 50 percent of a transit agencys operating losses. In 1982 one cent of the federal gasoline tax was dedicated to transit aid (for capital grants). And ISTEA in 1991 further broadened the extent to which highway funds could be shifted to transit projects. The American Public Transit Association estimates that $1.7 billion has been transferred from highways to transit during the years 1992 through 1995 under ISTEA=s provisions. 13 Overall, federal, state, and local transit subsidies since 1964 total $310 billion in 1996 dollars nearly as much as the $329 billion cost of the Interstate highway system. 14 What have been the results? The premise of federal transit aid was that modernized transit systems would reverse the long-term decline in transit ridership, thereby easing traffic congestion, reducing air pollution, and saving energy. Yet as Figure 1 makes clear, the use of transit by commuters has continued to decline, despite the huge sums spent by federal, state, and local governments to subsidize bus and rail services. A 1988 assessment by the Congressional Budget Office concluded the following: After 25 years of federal aid, transit agencies have modern fleets, and many own considerably more vehicles than they need for rush-hour traffic. Yet most of the equipment in service is underused, and the federal operating subsidies go largely to pay for buses and trains running empty rather than for service improvements or fare discounts Indeed, CBO concluded that the ability to have up to 80 percent of capital programs paid for by someone else had biased transit systems= decisions in favor of capital expenditures for bus and especially rail systems that are not cost-effective. Figure 2 depicts the results of CBO=s calculation of the relative cost per passenger mile of five different transit modes. It is doubtful that many cities would have opted for the high-cost rail alternatives had extensive free federal money not been made available. Now, of course, they are stuck with paying to operate those expensive systems. But shifting so much resources to rail transit has had the further consequence of reducing overall transit ridership. Figure 3 depicts transit ridership before and after federally funded rail systems were added to the transit systems of a number of major cities. As CBO and others have pointed out, cities that have added rail systems generally reconfigured their bus systems to feed the rail lines. But that has often had the perverse effect of making the bus system (which covers a vastly greater area) less useful for numerous ordinary trips. That, in turn, has served to reduce overall ridership. Again, the CBO report concludes that, A New transit systems financed with federal aid particularly rapid rail projects have not lived up to their promise. Generally they have lowered the efficiency of transit service by adding expensive unused capacity. The extent of unused capacity is depicted in Figure 4, which shows the measured load factor (fraction of all spaces during hours of operation that are occupied by customers) for the same five transit modes depicted in Figure 2.
Urban mass transit is dramatically cheaper and more successful at local and state levels than the federal level
Poole, Robert W. –Director of Transportation Policy at the Reason Foundation in Los Angeles, PhD from MIT- 1996 (October 1996, “Defederalizing Transportation Funding,” )
As for operating subsidies, CBO found that more than 75 percent of U.S. transit ridership is on systems that rely on federal operating subsidies for only 8 percent or less of their revenue. Modest productivity gains could easily compensate for the loss of federal subsidies in those large-city cases. On the other hand, the smallest 200 cities receiving federal transit aid (all but three with populations under one million) carry only 7 percent of transit ridership but account for 27 percent of federal operating subsidies. CBO notes that while cities in this group would have the most to lose from a withdrawal of federal aid, they would potentially have much to gain also: their transit services are now among the least efficient, and pressure to reduce costs could only improve them.@ Cities could cut costs dramatically via competitive contracting of transit services. Wendell Cox has reviewed the worldwide experience with competitive contracting of transit service (in which firms bid for the right to operate specific groups of routes on the basis of the least amount of subsidy needed). He finds significant reductions in cost per vehicle mile, ranging from 19 percent in Copenhagen to 25 percent in Australian cities (Adelaide, Brisbane, Perth), 33 percent in San Diego, and 42 percent in London. 21 He notes that competitive contracting has begun expanding from bus to rail, with subway service now outsourced in Stockholm and rail system contracting now planned in Adelaide and Perth. Cox has calculated that the loss of all federal formula funding ($1.9 billion in 1994) could be made up via transit system operating efficiencies averaging 11.3 percentCwell within the range of what has been achieved via competitive contracting of bus service in the United States and overseas. 22 Competitive contracting and other productivity improvements would be much easier to accomplish after the end of federal grants, because transit agencies would no longer have to comply with the labor restrictions of section 13(c), which major transit agencies have urged be removed as a costly federal mandate. Of all transportation modes, urban transit is clearly the most obviously local and the furthest removed from being a federal matter. When this fact is combined with an appreciation of the harm done by federal transit aid, the case for shifting this function to the local level is overwhelming.
Solvency: Highways and Roads
States are better at infrastructure investment in highways and roads
Roth ’10 (Gabriel Roth Is a Civil Engineer and Transportation Economist. He Is Currently a Research Fellow at the Independent Institute. During His 20 Years with the World Bank, He Was Involved with Transportation Projects on Five Continents. "Federal Highway Funding | Downsizing the Federal Government." Federal Highway Funding | Downsizing the Federal Government. N.p., june 2010. Web. 20 June 2012. .)
Americans are frustrated by rising traffic congestion. In the period 1980 to 2008, the vehicle-miles driven in the nation increased 96 percent, but the lane-miles of public roads increased only 7.5 percent. The problem is that U.S. road systems are run by governments, which do not respond to the wishes of road users but to the preferences of politicians. Transportation markets need to be liberated from government control so that road users can directly finance the needed highway improvements that they are prepared to pay for. We need to recognize "road space" as a scarce resource and allow road owners to increase supply and charge market prices for it. We should allow the revenues to stimulate investment in new capacity and in technologies to reduce congestion. If the market is allowed to work, profits will attract investors willing to spend their own money to expand the road system in response to the wishes of consumers. To make progress toward a market-based highway system, we should first end the federal role in highway financing. In his 1982 State of the Union address, President Reagan proposed that all federal highway and transit programs, except the interstate highway system, be "turned back" to the states and the related federal gasoline taxes ended. Similar efforts to phase out federal financing of state roads were introduced in 1996 by Sen. Connie Mack (R-FL) and Rep. John Kasich (R-OH). Sen. James Inhofe (R-OK) introduced a similar bill in 2002, and Rep. Scott Garrett (R-NJ) and Rep. Jeff Flake (R-AZ) have each proposed bills to allow states to fully or partly opt out of federal highway financing.47 Such reforms would give states the freedom to innovate with toll roads, electronic road-pricing technologies, and private highway investment. Unfortunately, these reforms have so far received little action in Congress. But there is a growing acceptance of innovative financing and management of highways in many states. With the devolution of highway financing and control to the states, successful innovations in one state would be copied in other states. And without federal subsidies, state governments would have stronger incentives to ensure that funds were spent efficiently. An additional advantage is that highway financing would be more transparent without the complex federal trust fund. Citizens could better understand how their transportation dollars were being spent. The time is ripe for repeal of the current central planning approach to highway financing. Given more autonomy, state governments and the private sector would have the power and flexibility to meet the huge challenges ahead that America faces in highway infrastructure.
Solvency: Highways
States have and can finance their highways—they are better than the federal government
Roth ‘5 (Gabriel Roth – civil engineer and transportation economist. "Liberating the Roads Reforming U.S. Highway Policy." The Cato Institute. N.p., march 17, 2005. Web. .)
Deliberations on reauthorizing the federal fuel tax dragged on through the summer of 2004 and were not completed in the 108th Congress. Whether the fuel tax and the transportation pro- grams it funds should be renewed is the central question of this paper. A federal role may have been necessary to finance the Interstate Highway System in 1956— the year the federal fuel tax was enacted—but the system is now complete. The Federal Highway Trust Fund was established specifically as a means to finance highway construction. It is now a slush fund for Congress to fund programs aimed at appeasing special interests and financ- ing nonhighway projects. The power of Congress to finance road projects was supposed to sunset in 1972 but instead continues to this day. In addition, federal regulations increase construc- tion costs and stifle innovative policy experi- ments in the states. Before the federal government took on the role of financing highways in 20th century, that role was assumed entirely by state governments and, before that, the private sector. This study makes the case that there is no longer any role for the federal government in the construction and financing of roads. Significant reform must include phasing down the federal fuel tax and giving back to the states full responsibility for highway programs.
Solvency: Highways
Federal intervention increases highway costs—it’s counterproductive.
Roth, 10- civil engineer and transportation economist. He is currently a research fellow at the Independent Institute. (Gabriel, “Federal Highway Funding”, CATO Institute, June, )//MC
The flow of federal funding to the states for highways comes part-in-parcel with top-down regulations. The growing mass of federal regulations makes highway building more expensive in numerous ways. First, federal specifications for road construction standards can be more demanding than state standards. But one-size-fits-all federal rules may ignore unique features of the states and not allow state officials to make efficient trade-offs on highway design. A second problem is that federal grants usually come with an array of extraneous federal regulations that increase costs. Highway grants, for example, come with Davis-Bacon rules and Buy America provisions, which raise highway costs substantially. Davis-Bacon rules require that workers on federally funded projects be paid "prevailing wages" in an area, which typically means higher union wages. Davis-Bacon rules increase the costs of federally funded projects by an average of about 10 percent, which wastes billions of dollars per year.27 Ralph Stanley, the entrepreneur who created the private Dulles Greenway toll highway in Virginia, estimated that federal regulations increase highway construction costs by about 20 percent.28 Robert Farris, who was commissioner of the Tennessee Department of Transportation and also head of the Federal Highway Administration, suggested that federal regulations increase costs by 30 percent.29 Finally, federal intervention adds substantial administrative costs to highway building. Planning for federally financed highways requires the detailed involvement of both federal and state governments. By dividing responsibility for projects, this split system encourages waste at both levels of government. Total federal, state, and local expenditures on highway "administration and research" when the highway trust fund was established in 1956 were 6.8 percent of construction costs. By 2002, these costs had risen to 17 percent of expenditures.30 The rise in federal intervention appears to have pushed up these expenditures substantially.
Solvency: Highways
The federal role in highway funding should be ended.
Roth, 10- civil engineer and transportation economist. He is currently a research fellow at the Independent Institute. (Gabriel, “Federal Highway Funding”, CATO Institute, June, )//MC
Americans are frustrated by rising traffic congestion. In the period 1980 to 2008, the vehicle-miles driven in the nation increased 96 percent, but the lane-miles of public roads increased only 7.5 percent. The problem is that U.S. road systems are run by governments, which do not respond to the wishes of road users but to the preferences of politicians. Transportation markets need to be liberated from government control so that road users can directly finance the needed highway improvements that they are prepared to pay for. We need to recognize "road space" as a scarce resource and allow road owners to increase supply and charge market prices for it. We should allow the revenues to stimulate investment in new capacity and in technologies to reduce congestion. If the market is allowed to work, profits will attract investors willing to spend their own money to expand the road system in response to the wishes of consumers. To make progress toward a market-based highway system, we should first end the federal role in highway financing. In his 1982 State of the Union address, President Reagan proposed that all federal highway and transit programs, except the interstate highway system, be "turned back" to the states and the related federal gasoline taxes ended. Similar efforts to phase out federal financing of state roads were introduced in 1996 by Sen. Connie Mack (R-FL) and Rep. John Kasich (R-OH). Sen. James Inhofe (R-OK) introduced a similar bill in 2002, and Rep. Scott Garrett (R-NJ) and Rep. Jeff Flake (R-AZ) have each proposed bills to allow states to fully or partly opt out of federal highway financing.47 Such reforms would give states the freedom to innovate with toll roads, electronic road-pricing technologies, and private highway investment. Unfortunately, these reforms have so far received little action in Congress. But there is a growing acceptance of innovative financing and management of highways in many states. With the devolution of highway financing and control to the states, successful innovations in one state would be copied in other states. And without federal subsidies, state governments would have stronger incentives to ensure that funds were spent efficiently. An additional advantage is that highway financing would be more transparent without the complex federal trust fund. Citizens could better understand how their transportation dollars were being spent. The time is ripe for repeal of the current central planning approach to highway financing. Given more autonomy, state governments and the private sector would have the power and flexibility to meet the huge challenges ahead that America faces in highway infrastructure.
Solvency: Highways
[Fix] State financing is critical to revenue and economic highway foundations
Roth 10 – a transport and privatization consultant and a research fellow at the Independent Institute and 20 years working at the World Bank (Gabriel, CATO Institute, Downsizing the Government, “Federal Highway Funding” June 2010, ) CM
Americans are frustrated by rising traffic congestion. In the period 1980 to 2008, the vehicle-miles driven in the nation increased 96 percent, but the lane-miles of public roads increased only 7.5 percent. The problem is that U.S. road systems are run by governments, which do not respond to the wishes of road users but to the preferences of politicians. Transportation markets need to be liberated from government control so that road users can directly finance the needed highway improvements that they are prepared to pay for. We need to recognize "road space" as a scarce resource and allow road owners to increase supply and charge market prices for it. We should allow the revenues to stimulate investment in new capacity and in technologies to reduce congestion. If the market is allowed to work, profits will attract investors willing to spend their own money to expand the road system in response to the wishes of consumers. To make progress toward a market-based highway system, we should first end the federal role in highway financing. In his 1982 State of the Union address, President Reagan proposed that all federal highway and transit programs, except the interstate highway system, be "turned back" to the states and the related federal gasoline taxes ended. Similar efforts to phase out federal financing of state roads were introduced in 1996 by Sen. Connie Mack (R-FL) and Rep. John Kasich (R-OH). Sen. James Inhofe (R-OK) introduced a similar bill in 2002, and Rep. Scott Garrett (R-NJ) and Rep. Jeff Flake (R-AZ) have each proposed bills to allow states to fully or partly opt out of federal highway financing.47 Such reforms would give states the freedom to innovate with toll roads, electronic road-pricing technologies, and private highway investment. Unfortunately, these reforms have so far received little action in Congress. But there is a growing acceptance of innovative financing and management of highways in many states. With the devolution of highway financing and control to the states, successful innovations in one state would be copied in other states. And without federal subsidies, state governments would have stronger incentives to ensure that funds were spent efficiently. An additional advantage is that highway financing would be more transparent without the complex federal trust fund. Citizens could better understand how their transportation dollars were being spent.
Solvency: Air Traffic/Highways
Federal investment fails -- air traffic and highways
Edwards 09 director of tax policy studies at Cato, he was a senior economist on the congressional Joint Economic Committee (Chris, “Privatization,” Downsizing the Federal Government, February 2009, )
Air Traffic Control. The Federal Aviation Administration has been mismanaged for decades and provides Americans with second-rate air traffic control. The FAA has struggled to expand capacity and modernize its technology, and its upgrade efforts have often fallen behind schedule and gone over budget. For example, the Government Accountability Office found one FAA technology upgrade project that was started in 1983 and was to be completed by 1996 for $2.5 billion, but the project was years late and ended up costing $7.6 billion.2 The GAO has had the FAA on its watch list of wasteful "high-risk" agencies for years.3 Air traffic control (ATC) is far too important for such government mismanagement and should be privatized. The good news is that a number of countries have privatized their ATC and provide good models for U.S. reforms. Canada privatized its ATC system in 1996. It set up a private, nonprofit ATC corporation, Nav Canada, which is self-supporting from charges on aviation users. The Canadian system has received high marks for sound finances, solid management, and investment in new technologies.4 Highways. A number of states are moving ahead with privately financed and operated highways. The Dulles Greenway in Northern Virginia is a 14-mile private highway opened in 1995 that was financed by private bond and equity issues. In the same region, Fluor-Transurban is building and mainly funding high-occupancy toll lanes on a 14-mile stretch of the Capital Beltway. Drivers will pay to use the lanes with electronic tolling, which will recoup the company's roughly $1 billion investment. Fluor-Transurban is also financing and building toll lanes running south from Washington along Interstate 95. Similar private highway projects have been completed, or are being pursued, in California, Maryland, Minnesota, North Carolina, South Carolina, and Texas. Private-sector highway funding and operation can help pave the way toward reducing the nation's traffic congestion.
The federal government fails at budgeting highways- states better
Roth - Civil Engineer and transportation economist, research fellow at the Independent Institute- 2010 (Gabriel, June 2010, “Federal Highway Funding,” )
Today, gasoline taxes and other revenues flowing into the FHTF total about $36 billion annually. Congress spends the money on highways and many other activities, often inefficiently. The following sections discuss six disadvantages of federal highway financing, and thus indicate the advantages of devolving highway financing to the states and private sector. Federal Funds are used inefficiently and diverted to lower-priority projects. Federal aid typically covers between 75 and 90 percent of the costs of federally supported highway projects. Because states spend only a small fraction of their own resources on these projects, state officials have less incentive to use funds efficiently and to fund only high-priority investments. Boston's Central Artery and Tunnel project (the "Big Dig"), for example, suffered from poor management and huge cost overruns.21 Federal taxpayers paid for more than half of the project's total costs, which soared from about $3 billion to about $15 billion.22 Federal politicians often direct funds to projects in their states that are low priorities for the nation as a whole. The Speaker of the House of Representatives in the 1980s, "Tip" O'Neill, represented a Boston district and led the push for federal funding of the Big Dig. More recently, Representative Don Young of Alaska led the drive to finance that state's infamous "Bridge to Nowhere," discussed below. The inefficient political allocation of federal dollars can be seen in the rise of "earmarking" in transportation bills. This practice involves members of Congress slipping in funding for particular projects requested by special interest groups in their districts. In 1982, the prohibition on earmarks in highway bills in effect since 1914 was broken by the funding of 10 earmarks costing $362 million. In 1987, President Ronald Reagan vetoed a highway bill partly because it contained 121 earmarks, and Congress overrode his veto.23 Since then, transportation earmarking has grown by leaps and bounds. The 1991 transportation authorization bill (ISTEA) had 538 highway earmarks, the 1998 bill (TEA-21) had 1,850 highway earmarks, and the 2005 bill (SAFETEA-LU) had 5,634 highway earmarks.24 The earmarked projects in the 2005 bill cost $22 billion, thus indicating that earmarks are consuming a substantial portion of federal highway funding. The problem with earmarks was driven home by an Alaska bridge project in 2005. Rep. Don Young of Alaska slipped a $223 million earmark into a spending bill for a bridge from Ketchikan—with a population of 8,900—to the Island of Gravina—with a population of 50. The project was dubbed the "Bridge to Nowhere" and created an uproar because it was clearly a low priority project that made no economic sense.
The federal government diverts highway investments to other activites- states don’t
Roth - Civil Engineer and transportation economist, research fellow at the Independent Institute- 2010 (Gabriel, June 2010, “Federal Highway Funding,” )
The federal government often diverts funds to non-highway activities. Since 1982, increasing amounts of revenues from the FHTF have been diverted to non-highway uses. The Surface Transportation Assistance Act of 1982 raised the federal gas tax by five cents, with one-fifth of the increase dedicated to urban transit. The 1991 Intermodal Surface Transportation Efficiency Act substituted "flexibility" and "intermodalism" for the "dedication" of fuel taxes to highways. That wording change meant that any transportation-related activity could lay claim to highway money. Under the most recent highway authorization—SAFETEA-LU of 2005—transportation scholar Randal O'Toole figures that only about 59 percent of highway trust fund dollars will be spent on highways.25 Funds from the FHTF will go to mass transit (21 percent), earmarks (8 percent), and a hodge-podge of other activities such as bicycle paths (12 percent). Note, however, that some of the earmark funds will also go to highways. The main diversion is to rail transit, which can be a very inefficient mode of transportation, as discussed in a related essay. Most Americans do not use rail transit and should not have to subsidize expensive subways and rail systems in a small number of major cities that prohibit the use of more modern and effective transit methods, such as shared taxis. As the FHWA table (fhwa.safetealu/safetea- lu_authorizations.xls) indicates, Congress allocates highway money to truck parking facilities, anti-racial profiling programs, magnetic levitation trains, and dozens of other non-road activities. O'Toole finds that the House version of upcoming transportation authorization legislation would reduce the highway portion of FHTF spending to just 20 percent. It would add high-speed rail at 10 percent, fund transit at 20 percent, and provide about 50 percent of the funds to the states to spend on "flexible" projects and earmarks.
States can build the same highways as the federal government for less- states don’t waste money
Roth - Civil Engineer and transportation economist, research fellow at the Independent Institute- 2010 (Gabriel, June 2010, “Federal Highway Funding,” )
Federal intervention increases highway costs. The flow of federal funding to the states for highways comes part-in-parcel with top-down regulations. The growing mass of federal regulations makes highway building more expensive in numerous ways. First, federal specifications for road construction standards can be more demanding than state standards. But one-size-fits-all federal rules may ignore unique features of the states and not allow state officials to make efficient trade-offs on highway design. A second problem is that federal grants usually come with an array of extraneous federal regulations that increase costs. Highway grants, for example, come with Davis-Bacon rules and Buy America provisions, which raise highway costs substantially. Davis-Bacon rules require that workers on federally funded projects be paid "prevailing wages" in an area, which typically means higher union wages. Davis-Bacon rules increase the costs of federally funded projects by an average of about 10 percent, which wastes billions of dollars per year.27 Ralph Stanley, the entrepreneur who created the private Dulles Greenway toll highway in Virginia, estimated that federal regulations increase highway construction costs by about 20 percent.28 Robert Farris, who was commissioner of the Tennessee Department of Transportation and also head of the Federal Highway Administration, suggested that federal regulations increase costs by 30 percent.29 Finally, federal intervention adds substantial administrative costs to highway building. Planning for federally financed highways requires the detailed involvement of both federal and state governments. By dividing responsibility for projects, this split system encourages waste at both levels of government. Total federal, state, and local expenditures on highway "administration and research" when the highway trust fund was established in 1956 were 6.8 percent of construction costs. By 2002, these costs had risen to 17 percent of expenditures.30 The rise in federal intervention appears to have pushed up these expenditures substantially.
Solvency: Air Traffic/Upgrades
Federal transportation infrastructure investment is politically motivated and wasteful – investment should be left to the states
CATO Handbook for Congress ‘12 "Cato Handbook for Congress: Transportation." Cato Handbook for Congress: Transportation. 2012. .
Gabriel Roth. "ObamaÂ’s Transportation Infrastructure Plan Wastes $50 Billion: Newsroom: The Independent Institute." The Independent Institute. N.p., october 9, 2010. Web. 20 June 2012. . President Obama’s recent announcement of a $50 billion “up-front investment” for “renewing and expanding our transportation infrastructure” raises the obvious question: Why should government officials determine the amounts to be spent on roads, railroads, airport runways and air traffic control? The U.S has a long “user pays” tradition, whereby transportation costs are paid for by users. Why abandon this? The president proposed expenditures in the following areas: “Roads: Re-build 150,000 miles of roads.” It would be nice to have 150,000 miles of well-maintained roads, free of excessive congestion, but the Obama government provides no guidance on how to prioritize the required expenditure. “Railways: Construct and maintain 4,000 miles of rail—enough to go coast-to-coast.” Why 4,000? Why not 1,000? Or 10,000? The administration has provided no rationale for spending anything on fixed-rail passenger service, a technology beloved by socialists everywhere for its easier control of trip origins and destinations. “Runways: Rehabilitate or reconstruct 150 miles of runway.” Undoubtedly, some airport runways could usefully be improved or lengthened, but why can this not be financed out of user fees or, where runways are congested, by additional landing and take-off charges? “Air Traffic Control: A robust investment . . . to modernize the nation’s air traffic control system.” Modernization of air traffic control has been needed for the last 50 years, but plans have taken so long to go through Congress that they were invariably outmoded by the time they were approved. “Infrastructure Bank: The president proposes to fund a permanent infrastructure bank, which will base its investment decisions on clear analytical measures of performance.” As existing banks are capable of investing on that basis, one has to assume that the purpose of the infrastructure bank is to fund politically inspired investments that can’t meet conventional banking standards. Thus, it appears that the items in the president’s list of infrastructure improvements are unspecified, unnecessary or downright wasteful. When provided by governments, transportation improvements have to compete for funds against other political priorities. On the other hand, under a market system, consumers themselves determine priorities by their willingness to pay for them. For example, many road users might prefer to spend less on vehicles and more on roads. It is easy to identify at least two types of expenditures to which transportation users would give high priority: First is upgrading unsafe facilities. In 2008, the Department of Transportation categorized 72,868 road bridges as being “structurally deficient.” The National Transportation Safety Board has also questioned the safety of urban rail systems, such as the Washington Metro. Federal grants currently encourage states to extend unsafe systems rather than upgrade them. Second is the provisioning of new express toll lanes to relieve road congestion in urban areas. Such electronically managed and priced lanes already operate successfully in California, Colorado and Minnesota, and are being built to augment the Washington Beltway. The above priorities could be implemented by the states themselves, without any federal involvement. Congress could achieve this by declining to re-authorize the federal Highway Trust Fund. The 1956 legislation that established this fund provided for its elimination on completion of the Interstate Highway System and for the cancellation of the relevant federal taxes, of which the fuel taxes are the most important. In the past, the market provision of roads has been impractical because of the difficulty of obtaining payment for road use. But modern electronics, as used in E-ZPass systems, enable road-use charges to be collected, and paid to road providers, without vehicles having to stop. Instead of vying with Congress to determine expenditures on transportation infrastructure, the president should encourage Congress to leave these decisions to the states—which could employ market mechanisms to provide the transportation facilities users are prepared to pay for.
Solvency: Airports
State governments can finance airports best.
Poole & Edwards, 10- director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation and director of tax policy studies at CATO (ROBERT W. POOLE JR AND CHRIS EDWARDS, “Airports and Air Traffic Control, CATO Institute, June, )//MC
Why has the United States resisted these types of airport reforms occurring around the world?15 One reason is that U.S. state and local airports have for decades received federal aid for development and construction. Federal law generally provides that governments that have received federal aid for an infrastructure facility have to repay previous federal grants if the facility is privatized. Moreover, the FAA has interpreted a legal provision requiring that all "airport revenues" be used solely for airport purposes to apply to any lease or sale proceeds, which prevents a city from selling its airport and using the proceeds for its general fund. Another important factor is that state and local governments can issue tax-exempt bonds to finance airports because they are government-owned facilities. Thus, borrowing can be done at a lower cost than borrowing by private airport owners issuing taxable debt. However, this bias against private ownership can be overcome. The federal government could pursue tax reforms to reduce or eliminate the tax exemption on municipal bond interest. Alternatively, the government could permit private airport operators to make use of tax-exempt revenue bonds ("private activity bonds"), as it has done for companies involved in the toll road business.
Solvency: Airports
State governments can finance airports best.
Poole & Edwards, 10- director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation and director of tax policy studies at CATO (ROBERT W. POOLE JR AND CHRIS EDWARDS, “Airports and Air Traffic Control, CATO Institute, June, )//MC
Why has the United States resisted these types of airport reforms occurring around the world?15 One reason is that U.S. state and local airports have for decades received federal aid for development and construction. Federal law generally provides that governments that have received federal aid for an infrastructure facility have to repay previous federal grants if the facility is privatized. Moreover, the FAA has interpreted a legal provision requiring that all "airport revenues" be used solely for airport purposes to apply to any lease or sale proceeds, which prevents a city from selling its airport and using the proceeds for its general fund. Another important factor is that state and local governments can issue tax-exempt bonds to finance airports because they are government-owned facilities. Thus, borrowing can be done at a lower cost than borrowing by private airport owners issuing taxable debt. However, this bias against private ownership can be overcome. The federal government could pursue tax reforms to reduce or eliminate the tax exemption on municipal bond interest. Alternatively, the government could permit private airport operators to make use of tax-exempt revenue bonds ("private activity bonds"), as it has done for companies involved in the toll road business.
States are more efficient at funding airports – the federal government is plagued with funding disputes
Edwards ’11 (Chris Edwards. The Cato Institute. "Solve the FAA Problem by Privatization | Downsizing the Federal Government." Solve the FAA Problem by Privatization | Downsizing the Federal Government. N.p., august 4th, 2011. Web. 20 June 2012. .)
Everyone agrees that it’s rather stupid for a federal funding dispute to idle about 70,000 workers on airport-related construction. Just as absurd, there have been 20 stop-gap funding bills passed for the FAA since 2007. News stories are digging into the political disputes surrounding the FAA, but they aren’t addressing the root problem. The root problem is that we have federalized the funding of airports in this country, when there is absolutely no need to. Airports are generally owned by state and local governments, and it should be up to them to figure out how to finance them. By federalizing infrastructure financing, we are simply encouraging the misallocation of resources through the political pork barrel. We should get the federal government out of financing airports. Then state governments should look to the advantages of airport privatization, which is a reform that has swept the world from London to Sydney. Private airports can plan their investment programs in an efficient manner, balancing costs and the market demand for services. Privatized airports can raise revenue from debt, equity, fees on airlines and passengers, advertising, retail concessions, and other items. There is no need for taxpayer funding of airports. The FAA dispute doesn’t affect current air traffic control operations, but it is affecting investments in ATC upgrades. Our ATC system needs large new investments in technology, but it is a battle in Congress to secure funding and to make sure the funding is spent efficiently. The FAA has a very poor record at making cost-efficient investments. The solution is to privatize our ATC system, as Canada has done. When the federal government is like an octopus with tentacles stretching into every area of the economy, the economy gets dragged down by political dysfunction in Washington. We see the same sort of dysfunction in the federal government’s other business activities, such as passenger rail and mail delivery. A lot of people worry about the quality and quantity of the nation’s infrastructure investments. But we don’t need to rely on disorganized and indebted governments to fix the problems. We can move ahead with privatization and let America’s entrepreneurs take on the challenge.
Solvency: Roads and Rail
User fees and VMT fees solve funding for roads and rail infrastructure
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
user Fees Beyond these federal and private funding partner- ships, states are examining direct freight-related user fees, such as adding a charge to each imported shipping container and using the revenues to fund necessary road or rail infrastructure capacity expan- sions. California considered and rejected legislation that would have added a $60 charge to shipping containers passing through the ports of Los Ange- les/Long Beach and Oakland to fund pollution and congestion-mitigation strategies such as fixing grade crossings. Had the bill become law, it would have raised about $400 million annually.113 The legisla- tion was based on a successful pilot program involv- ing two ports in Southern California. As discussed earlier, several nations including Germany and the Netherlands have instituted or are in the process of instituting a truck VMT fee. In addi- tion to providing a new revenue source, a truck VMT can help shift freight traffic to rail or waterways and reduce on-road congestion. VMT fees on trucks also can help test technology for wider implementa- tion. For example, Germany found that its VMT fee for trucks, implemented through a PPP, reduced the number of miles traveled without cargo because it gave operators new incentive to maximize the ef- ficiency of trips taken.114
Solvency: Rail
Federal involvement in rails is bad, states solve on their own
Bell, 09 - Treasurer of Families First California Families. First California is an issue advocacy and public education organization dedicated to expanding opportunities for families in California and ensuring that the voices of those in need are heard throughout our federal, state and local entities (Shelley, “Freight Rail: A Vital Role to the Los Angeles Economy”, 3/5/09, Los Angeles Sentinel, )//AL
There is no denying the need to transport goods and supplies across the Los Angeles region. How to transport those goods, in the best interest of California consumers, businesses and even the environment; is the question that needs to be answered. As the economy continues to struggle to rebound, it is in our greatest interest to take a serious look at one mode of transportation that can best accomplish our goals. Although often stuck in the background, freight rail plays a vital role in the success of our everyday lives. Freight rail is responsible for hauling enough wheat to make more than 400 loaves of bread for every man, woman and child in the nation and enough lumber to build 1.1 million average size homes. When looking at the role freight rail plays in our lives, it quickly becomes apparent that it is a vital role. Unfortunately, some in Congress have indicated they are open to making changes to the rail industry that would-although unintended-have dire consequences on how the freight rail industry operates in the Los Angeles region. Prior to the reasonable, balanced set of regulations the rail industry works under today, freight rail was stifled with over-bearing rules that nearly killed the industry. Tracks and bridges were literally falling apart, locomotives sat idle and collected rust, injury rates skyrocketed and the cost of shipping via rail grew faster than the rate of inflation. All of that changed with the passage of the Staggers Act. The Staggers Act of 1980 led to the revitalization of the iron horse. Today, the freight rail industry is leading the way in green technology, pulling one ton of freight 436 miles on a single gallon of diesel, and rail has the ability to remove 280 long haul trucks from highways with one intermodal train. Yet the future of the freight rails success is in jeopardy. In recent years. Congress has proposed legislation that would revert to the old way of doing business and much speculation exists that they will attempt to do so again in the 111th Congress. It is up to us to tell Congress we oppose any and all attempts to do so. Reverting to pre-Staggers conditions of over-regulation would be detrimental to consumers on every level. When rail companies are forced to work under heavily regulated conditions, prices are surely to rise and will most assuredly be passed onto consumers.
States Key to Rail
Empircally, state governments have been critical to railroad development and management.
Callen 09- Assistant Political Science Professor at Allegheny College (Zachary A, “THE SEAMS OF THE STATE: INFRASTRUCTURE AND INTERGOVERNMENTAL RELATIONS IN AMERICAN STATE BUILDING”, UMI, August, )//MC
In this vein, local governments continue to be autonomous, salient political actors in their own right, even within the contemporary, more centralized federal system. Both historically and into the present day, state governments act independently to build infrastructure, regulate the economy, monitor their population's health, and provide numerous other services (Novak, 1996; Teaford, 2002). State governments have proven especially relevant actors in 17 national infrastructure development. In conjunction with the federal government, state government action was central to both the continuing good management of rivers as well as interstate highway planning (O'Neill, 2006; Rose, 1990). In sum, federalism heavily shaped the growth of the American state. Power sharing among governments provided unique opportunities for both social learning as well as particular costs since decentralized policies varied wildly across the country. Even in the current, more centralized political system, local actors persist in setting the policy agenda and thereby affect national policy implementation. Federalism, and its particular role in state building, is a critical factor of American political life that requires more complete integration into current American political development theories. Furthermore, federalism and local governments were especially relevant in American spatial organization and antebellum American railroad development. Though private capital shaped much of American railroad construction, state governments were nonetheless critical agents impacting national rail development. Prior to federal aid, state governments supplied funds to railroads, ranging from merely granting banking rights to actually building state-funded railroads (Goodrich, 1960). Eminent domain was also often used to grant railroads land as a means of encouraging a state's economic growth (Ely, 2001). State power over railroads was so great that when railroads were in economic trouble, state governments could intervene, forcing corporate reorganization (Berk, 1994). Further, through the chartering process, state governments possessed considerable oversight over the routes, fees, and scheduling of railroads within their borders (Benson, 1955). Thus, local political interests and processes, shaped by American federalism, were key in the first phase of the American spatial organization achieved by antebellum railroads.
States Solve Rail
Federalism encourages cooperation and will produce a coherent national railway program.
Callen 09- Assistant Political Science Professor at Allegheny College (Zachary A, “THE SEAMS OF THE STATE: INFRASTRUCTURE AND INTERGOVERNMENTAL RELATIONS IN AMERICAN STATE BUILDING”, UMI, August, )//MC
Additionally, despite being overseen by only state governments, early railroads were surprisingly well coordinated. While state legislatures may strive for economic independence, as a means to maximize their own growth, they nonetheless rely on external markets for their own economic health. Markets in other states provide raw materials, buyers for locally produced goods, and finished products that cannot be manufactured within the state. Given their reliance on other states, state legislatures utilized economic aid and the chartering process to encourage local railroads to efficiently connect with surrounding states. Of course, there were exceptions to this process of efficient local coordination. When states were economic rivals, competing in the same arena for the similar resources, railroad coordination inevitably suffered. State legislatures worried that coordination with a rival was redundant, and therefore a waste of resources. In addition, coordination with an economic rival always carried the risk of harming local economic growth. State legislatures feared that improving24 connectivity with a rival would lead to local revenue being siphoned away from their home state. Yet, for the most part, state legislatures developed a fairly coordinated national rail system through a series of local decisions in regards to connectivity with neighboring states. Local promotion and coordination actually suggest that decentralized state building can occur, driven by sub-national decision-making. Over time, through adjustments that are sensitive to local needs and regional concerns, a coherent national program will emerge from state governments' policies.
Solvency: Pipelines
State coordination on pipelines as a necessity
Kursun 5 (Huseyin, Istanbul Technical University “Importance of GIS for Natural Gas Pipeline, IGABIS (IGDAS Infrastructural Information System) Project” 2005, ) CM
It is desired to be same standards infrastructure maps, produced in our country as developed country infrastructure maps and provided requesting accuracy criteria .This maps which serve and underlying to the engineering projects of corporations and establishments which realizing infrastructure services, especially in the metropolitans, are gaining very importance day by day. It is important point to planning for the future of sector, to be analyse considering to properties such as map engineering techniques , use forms and accuracy criteria and carry out the current situations by comparing with infrastructure maps of some developed world wide countries. The existing natural gas pipelines are become also a inevitable necessity status to be taking hold GIS formations and at the state coordination system.
Solvency: HAZMAT
State investment in hazmat projects are essential
Ilie 11 (Elana, Writer for Railway Pro, an International Magazine Discussing Railways, “Transport of dangerous goods, also weighed by bureaucracy” Apr 26th, 2011, ) CM
Given that transport risks may be considerably increased by the inherent dangers of hazardous goods (dangers of fire, explosion, and toxic emissions) the safety and security aspects are essential. Seen from these aspects, the competitive advantages of rail are considerable overall over long distances. Goods transported by road can usually be transported by rail. The measures to be taken for encouraging and supporting the transport of goods on rails refer to the telematic monitoring of wagon and brake conditions, telematic monitoring of locations, expansion/development of automatic train control (ATC) into railway yards and station areas – especially at stations where large volumes of dangerous goods pass through. “Customers and operators as well as concerned members of the public and politicians, should ensure that Government put in place a safety policy that encourages the movement of freight by rail”, declared for Railway Pro, Lord Tony Berkeley, President of Rail Freight Group. Also, experts believe clear communication paths are necessary, as well as information flow, responsible contact persons, especially for procedures in the event of an accident. Information systems are extremely important, for example common information system for wagon lists and loading information, including information from all traffic providers. Regulations Concerning the International Carriage of Dangerous Goods by Rail includes within the definition of temporary storage, stops made necessary by the conditions of carriage as well as periods involved in order to change the mode or means of transport – transhipment as well as stops necessitated by the circumstances of transport. This also includes locations where wagons are loaded or unloaded, such as oil terminals or container handling facilities. “Dangerous goods are generally much more safely transported by rail than road, but many governments impose and enforce very strict and expensive controls on the movement of dangerous goods by rail, whilst ignoring many safety issues involving movement by road until there is an accident”, Lord Tony Berkeley.
Solvency: Waterway Pollution
States solve inland waterway pollution/port dredging
Achimore, 09 – masters candidate for Public Policy from the Georgetown Public Policy Institute (Ian Garner, “PUBLIC FUNDING AND WATER COALITIONS: DO THEY IMPROVE WATER QUALITY?”, A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University, 4/8/09, )//AL
In California, the State Water Resources Control Board (SWRCB) and its nine Regional Water Boards administer regulations through water quality control plans (or basin plans). The basin plans must contain water quality objectives, which in the judgment of the Regional Water Board will ensure the reasonable protection of beneficial uses and the prevention of pollution into “navigable waterways.” The plans also include a program of implementation for achieving those objectives, including a description of the nature of actions that are necessary to achieve the objectives, time schedules for the actions to be taken, and a description of surveillance to be undertaken to determine compliance with objectives. ii POTWs must comply with the CWA’s regulatory provisions by applying for a permit if they discharge any substance into a “navigable waterway.” 1 Although the State plays a large role in all aspects of water management through the Department of Water Resources (DWR), a water impoundment agency, some 400 large water utilities supply most of California’s homes and businesses. iii Most local utilities and governments fund water management, with a portion of their investments coming from state and federal aid. Regulated entities have criticized the government because of the lack of adequate funding to meet water quality standards. Recently, state bonds have been the major source of funding for ecosystem restoration, while CWA programs like the CWSRF largely help utilities invest in new wastewater infrastructure. iv Throughout the history of the CWSRF, federal and state dollars have been siphoned to the most expensive water quality projects – conventional water treatment facilities.
States Solve Transpo
Empowerment of states is key to developing truly cohesive transportation.
Puentes, 08- Senior Fellow at the Metropolitan Policy (Robert, “A Bridge to Somewhere: Rethinking American Transportation for the 21st Century”, Brookings Institute, June 12, )//MC
The federal government should empower states and metropolitan areas to grow in competitive, inclusive, and sustainable ways. Major metropolitan areas should be given more direct funding and project selection authority to enable them to embrace market mechanisms, pursue a strategy of “modality neutrality,” and develop truly integrated transportation, land use, and economic development plans.
States Solve Transpo
States should get the primary role in transportation infrastructure development.
Puentes, 08- Senior Fellow at the Metropolitan Policy (Robert, “A Bridge to Somewhere: Rethinking American Transportation for the 21st Century”, Brookings Institute, June 12, )//MC
What we need now is a new 21st century compact that flips the pyramid and challenges our nation’s state and metropolitan leaders to develop deep and innovative visions to solve the most pressing transportation problems. The federal government should become a permissive partner in such an effort but should hold these places accountable for advancing this tailor-made, bottom-up vision. Metropolitan areas should have the predictability of funding necessary to make long-term planning possible, and the ability to make innovative strategic decisions. We need to go further than the federal experiment that began in 1991 by devolving more decision-making power and funding to metropolitan entities. This means moving to a tripartite division of labor: (a) the STIC deciding major national transportation expansions and investments as discussed; (b) the states retaining the primary role on most decision-making, for preserving and maintaining the interstates, and in small and medium sized metropolitan; and (c) the major metropolitan areas with a population over two million are given more direct funding and project selection authority through a new program we’re calling METRO (Metropolitan EmpowermenT pROgram).
*****Funding Mechanisms*****
States can fund with Private Public Partnerships – the contractors make an initial investment and then the state pays them back with toll fees
Slone, 12 – a senior Transportation Policy Analyst at the Council of State Governments. He provides staff support to CGS’s Transportation Policy Task Force, state legislators, state department of transportation officials and private sector members. (Sean, “Public-Private Partnerships & Tolling: Summer Conference Agenda, State Project Updates and the Debate in Congress”, Knowledge Center in The Council of State Governments, 5/29/12, ) // AL
Georgia: The Georgia Department of Transportation announced recently that a public-private partnership to add toll lanes alongside Interstates 75 and 575 under the Northwest Corridor is again moving forward, The Northeast Cobb Patch reported. Late last year, Gov. Nathan Deal pulled the plug on the $950 million, 29.7-mile project because he feared the state was potentially giving up too much control of the road and the tolls to the private sector in return for the upfront costs the contractor would pay. Under the revised plan, the state will retain ownership and control of the lanes. The contractor will still be expected to bear some of the upfront costs and the state will repay them out of the tolls. The lanes will have variable tolling, with tolls rising as the interstate becomes more congested, but there will be no high-occupancy requirement for the cars using the lanes as on the high-occupancy toll (HOT) lanes on I-85. Georgia is expected to issue a request for qualifications next month from contractors interested in designing and building the project. The P3 industry likely will be watching closely for any residual effects from Deal’s action last year as the state looks to a construction start date of 2014 and a projected completion date of 2018. Illinois: Chicago Mayor Rahm Emanuel makes the case for his “Building a New Chicago” plan to invest $7.3 billion in the city’s infrastructure in a recent op-ed for Politico. The plan includes an infrastructure trust to pool private capital to put towards the investment. New York: State officials said this month that plans to finance a $6 billion replacement of the Tappan Zee Bridge across the Hudson River with a public-private partnership have been scrapped. It will be paid for mainly with municipal bonds, Reuters reported. The P3 idea was reportedly dropped on the grounds it would take too long for the state to enact a new law required to enter into such a partnership. Ohio: Tollroadsnews reported earlier this month on moves the state Turnpike Commission is making to enhance efficiency and cut costs as the state considers a possible concessioning of the Ohio Turnpike to investors. The article also notes the state DOT’s Division of Innovative Delivery is exploring P3s for some of the state’s largest road projects including a second Innerbelt Bridge in Cleveland, the Brent Spence Bridge project in Cincinnati, the Portsmouth Bypass in Scioto County and an I-71 interchange in Delaware County. Gannett had a story recently on the Brent Spence project. Puerto Rico: Officials on the Caribbean island reported recently they’ve narrowed to two the finalists for a public-private concession to run San Juan’s Luiz Munoz Marin Airport for as long as 50 years, Reuters reported. Consortiums Grupo Aeropuertos Advance and Aerostar Airport Holdings were chosen as finalists from among six bidders. The government of Puerto Rico is hoping for a $1 billion upfront payment from the P3 deal, with most of the money targeted for use in paying off debt issued by the U.S. commonwealth’s port authority. For Puerto Rico, the deal represents the territory’s second large P3 deal. Last year, officials undertook a 40-year concession for two roadways on the island. Virginia: The Associated Press reported last week that Virginia—a state with significant experience in the P3 realm, as indicated above—will consider whether to turn over the operation of its port terminals to a private company. The state received a nearly $4 billion unsolicited proposal from APM Terminals Inc., a division of global shipping company Maersk, to operate state ports in the Hampton Roads region as well as an inland port for a period of 48 years. The Virginia Department of Transportation has issued a request for alternative proposals with submissions due in July. State officials have expressed frustration that the Port of Virginia, the third-largest East Coast port, hasn’t rebounded from the recession as quickly as other East Coast ports. In an effort to spur growth at the port, Gov. Bob McDonnell replaced 10 of the port authority’s 11 commissioners last year.
Funding: Flexible/Laundry List
States have funding mechanisms for transportation – P3’s, infrastructure banks, and tolling—the federal government fails at funding states
Thomasson ’12 (Scott Thomasson, President, NewBuild Strategies LLC. "Council on Foreign Relations." Council on Foreign Relations. N.p., n.d. Web. 24 June 2012. .)
There is no shortage of good proposals to encourage infrastructure investment. For example, President Obama has endorsed the idea of creating a national infrastructure bank to leverage federal funds and encourage PPPs. Bipartisan negotiations in the Senate produced a bill for a scaled-down version of the bank, focused on low-cost federal loans to supplement state financing and private capital. The bill is not supported by House Republican leaders, however, and is unlikely to pass this year. There are also important transportation reforms in both pending highway bills where Republicans and Democrats are on common ground: expanding the popular Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program, streamlining the Department of Transportation bureaucracy to speed approval of new projects, and eliminating congressional earmarks—a huge step toward smarter project selection based on merit rather than political interests. But if the highway bill does not pass, none of these reforms will happen. States are already looking at new ways to finance infrastructure as federal funding becomes uncertain and their own budgets are strained. More states rely on PPPs to share the costs and risks of new projects, and they are finding new sources of nontax revenues to fund investments, like tolling and higher utility rates. But at the same time, federal regulations and tax laws often prevent states from taking advantage of creative methods to finance projects. Federal programs designed to facilitate innovative state financing are underfunded, backlogged, or saddled with dysfunctional application processes. Many of these obstacles can be removed by adjusting regulations and tax rules to empower states to use the tools already available to them, and by better managing federal credit programs that have become so popular with states and private investors. In cases where modest reforms can make more financing solutions possible, good ideas should not be held hostage to "grand bargains" on big legislation like the highway bill or the failed 2010 energy bill. Congress should take up smaller proposals that stand a chance of passing both houses this year—incremental steps that can unlock billions of dollars in additional investments without large federal costs. Any proposals hoping to win Republican support in the House need to have a limited impact on the federal deficit and focus on reducing, rather than expanding, federal regulations and bureaucracy. Some progress can also be achieved by circumventing Congress entirely with executive branch action.
Funding: Infrastructure Banks
States can use infrastructure banks as means of funding
Slone ’11 (Sean Slone - Transportation Policy Analyst for The Council of State Governments. "State Infrastructure Banks | CSG Knowledge Center." State Infrastructure Banks | CSG Knowledge Center. N.p., Tuesday, July 5, 2011. Web. 22 June 2012. .)
An interchange at the Fort Lauderdale airport. A bridge replacement in Cleveland. An interstate around North Augusta, S.C., that will help ease the daily commute for thousands of motorists. The thing they all have in common is that they were all financed with help from a state infrastructure bank, a type of revolving infrastructure investment fund for surface transportation projects with which 32 states and Puerto Rico have at least some experience. Operating much like other kinds of banks, these infrastructure banks can offer loans and credit assistance enhancement products to public and private sponsors of certain highway construction, transit or rail projects. Under the 2005 federal highway authorization bill, known as SAFETEA-LU, all states and territories plus the District of Columbia were given the authority to establish state infrastructure banks. This followed a period during the 1990s when at different times, anywhere from 10 to 39 states were allowed to experiment with these banks under a series of federal pilot programs. The 2005 legislation also allowed for the creation of multi-state infrastructure banks. Federal and state matching funds are generally used to start a state infrastructure bank. States can then contribute state or local funds and seek additional federal funds to provide more capital.1 The bank’s initial capitalization and ongoing revenue can be used in a number of different ways. The funds can be lent directly to selected projects. The bank can leverage its initial capitalization by providing loan assistance, by using loan repayments as dedicated revenue to sell bonds in the bond market and by providing additional loan assistance with the proceeds of the bond. Finally, the bank can use the funds to guarantee bonds issued by cities, counties, public-private partnerships and other entities, in the process enhancing their creditworthiness and lowering the interest rates they have to pay in the capital markets. Loan guarantees can be particularly beneficial in reducing interest rates on projects in states with cities, counties and special districts that have limited financial capacity.2 While the SAFETEA-LU authorization established the basic requirements and overall operating framework for state infrastructure banks, many states have tailored their banks to meet their own needs and offer their own types of financing assistance. That being said, loans remain the most popular form of state infrastructure bank assistance. The Federal Highway Administration reported that through the end of 2008 (the latest year for which complete data is available), 32 states and Puerto Rico had entered into 609 state infrastructure bank loan agreements totaling $6.2 billion.3
States infrastructure banks are effective and economical funding mechanisms
Slone ’11 (Sean Slone - Transportation Policy Analyst for The Council of State Governments. "State Infrastructure Banks | CSG Knowledge Center." State Infrastructure Banks | CSG Knowledge Center. N.p., Tuesday, July 5, 2011. Web. 22 June 2012. .)
Benefits of a State Infrastructure Bank State infrastructure banks can help states stretch their state and federal dollars and meet the demands of financing large, impactful, long-term infrastructure projects. When government agencies and authorities must seek yearly grants and allocations to finance projects, the completion of those projects can be delayed for months or years. State infrastructure banks can identify, promote and lend money to creditworthy transportation projects to ensure they’re built within a reasonable timeframe and in a financially sustainable way. And because these banks act as a “revolving fund,” more projects can ultimately be financed. When bonding is used to finance a project, the bonds are usually one of two types: revenue or general obligation. Revenue bonds often are used to finance infrastructure projects that have the ability to produce revenue through their operations; for example, new highway lanes that can be tolled or public transit facilities on which fares can be collected. These types of bonds are typically guaranteed by the project revenues, but not by the full faith and credit of a state, city or county. General obligation bonds, on the other hand, are backed by the full faith and credit of the issuing authority. These are used to finance projects that rely on government’s general revenues, such as income, sales and property tax revenue. Cities, counties and states pledge these revenues to issue the bonds and repay them. But the revolving fund aspect of a state infrastructure bank means states can lend funds for projects and receive loan repayments, which can be returned to the system for more project loans. The funding also can be turned into much larger credit lines, multiplying transportation investment capacity. When transportation projects are financed in a traditional way, funds from a state department of transportation or the federal Highway Trust Fund are spent and two types of risk are assumed. Projects are at risk of delay as state officials wait for the state or federal funds to become available, which may increase the costs and delay the project’s benefits. Secondly, states face the risk that a poorly selected project will fail to produce social or economic benefits and tie up scarce capital resources that could have gone to other potentially more successful projects. Both of those risks are diminished with state infrastructure bank financing. First, projects don’t have to wait for funding and delays and cost overruns are avoided. Secondly, a state infrastructure bank has a built-in project evaluation process. Projects are assessed based on their financial viability, which provides a level of economic discipline that is not always present with traditional state project funding. Better, more benefit-producing projects can be the result.4
States are using infrastructure banks for funding now; they can finance their transportation projects without federal funds and regulations
Slone ’11 (Sean Slone - Transportation Policy Analyst for The Council of State Governments. "State Infrastructure Banks | CSG Knowledge Center." State Infrastructure Banks | CSG Knowledge Center. N.p., Tuesday, July 5, 2011. Web. 22 June 2012. .)
State Infrastructure Bank Activity While 32 states have used a state infrastructure bank, more than 87 percent of all loans from such banks made through 2008 were concentrated in just five states and nearly 95 percent of activity in just eight states. The states with the most state infrastructure bank activity through 2008 were South Carolina, Arizona, Florida, Texas and Ohio. Established in 1997, the South Carolina Transportation Infrastructure Bank has made more than $3 billion in loans, making it the state infrastructure bank that has provided the highest level of financing of any in the nation. Among the key features of the South Carolina bank: It was initially capitalized with state and federal funds and can receive additional funds from these sources as well as other public and private entities. Private borrowers can use infrastructure revenue and public borrowers can use dedicated local taxes and revenue to demonstrate repayment capacity. The bank can set its own interest rates and repayment terms, though they are subject to agreements with bondholders. Unlike some state infrastructure banks, South Carolina’s bank can be the primary source of financing for some infrastructure projects. However, projects eligible to receive loans must have strong supplementary financing sources and demonstrate solid streams of future income. The legislation creating the bank stated its purpose as assisting infrastructure development through providing financial assistance to both public and private developers, ultimately aiming to contribute to enhancing mobility and safety, promoting economic development and increasing the public’s quality of life.5 One project that has benefited from South Carolina Transportation Infrastructure Bank loans is Interstate 520, a road that encircles the cities of Augusta in Georgia and North Augusta in South Carolina and provides a direct connection to I-20. Completion of the interstate, which is known as the Palmetto Parkway on the South Carolina side, was needed to accommodate increasing traffic volume in the region. The infrastructure bank approved an initial loan of $65 million for the first phase of the project in 2001, an additional $95 million for Phase II in 2005 and a third loan of $18 million in 2007. The South Carolina Department of Transportation, the city of North Augusta, and Aiken County, S.C., have provided additional funding for the project; a countywide sales tax approved by voters in 2000 provided $17 million. It also received $21 million in federal grants. But the South Carolina Transportation Infrastructure Bank loan was the largest funding source for the project, which was completed in 2009.6 State Capitalized Infrastructure Banks Several states—including Florida, Georgia, Kansas and Ohio—have established state infrastructure banks or accounts within their banks that are capitalized solely with state funds.7 Virginia has recently joined the ranks of those four states. Such banks allow funded projects to avoid potentially delay-causing federal regulations and restrictions (such things as labor, environmental and “Buy America” requirements) they would otherwise be subjected to if they were financed using federal funds.
Funding: State Infrastructure Banks
SIBs give states funds and capacities for efficient transportation investment
US DOT 10 (“State Infrastructure Banks (SIBs),” Jan 6 2010, )
State Infrastructure Banks are revolving infrastructure investment funds for surface transportation that are established and administered by states. A SIB, much like a private bank, can offer a range of loans and credit assistance enhancement products to public and private sponsors of Title 23 highway construction projects or Title 49 transit capital projects. The requirements of Titles 23 and 49 apply to SIB repayments from Federal and non-Federal sources. All repayments are considered to be Federal funds. SIBs give states the capacity to increase make more efficient use of its transportation funds and significantly leverage Federal resources by attracting non-Federal public and private investment. Alternatively, SIB capital can be used as collateral to borrow in the bond market or to establish a guaranteed reserve fund. Loan demand, timing of needs, and debt financing considerations are factors to be weighed by states in evaluating a leveraged SIB approach. SIBs are capitalized with Federal-aid surface transportation funds and matching State funds. (Several states have established SIBs or separate SIB accounts capitalized solely with state funds.) As loans or other credit assistance forms are repaid to the SIB, its initial capital is replenished and can be used to support a new cycle of projects.
States can use infrastructure banks as a funding source
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
State Infrastructure Banks In addition to bonding and borrowing, states can use State Infrastructure Banks (SIBs)—which are essen- tially revolving fund mechanisms—to finance high- way and transit projects.42 SIBs typically provide proj- ects direct loans with attractive interest rates, with the revenues from repayment and interest used to fund additional loans. Some state SIBs can issue bonds as well. One key element of a SIB is that it offers states a flexible funding source, which can be tied to a set of state-established criteria that evaluate a project’s ben- efits (such as economic development) and signifi- cance. Thus, SIBs can be more strategic and more nimble than a typical state appropriation process and can be used to complement existing state, local, and federal transportation funding and financing. In par- ticular, SIBs can focus their financing assistance on projects that leverage other federal and/or private capital while helping to achieve state objectives such as environmental, economic, or safety benefits.43 SIBs are initially capitalized with funds from a va- riety of sources, often in combination. States may capitalize SIBs with up to 10 percent of their federal highway and transit capital funds and must provide a match equal to 25 percent of all federal funds used for such purposes. SIBs provide a mechanism to finance large trans- portation projects up front, thus allowing projects to proceed on an accelerated construction schedule. Although SIBs were initially piloted for several states through the NHS Act of 1995, it was not until 1998 when the federal government expanded eligibility for other states and provided $150 million in seed funding—outside of regular apportionments—for initial capitalization, that SIBs became an attractive tool for states.44 Since then, 33 states have established SIBs.
Leveraged SIBs have the money for projects
US DOT 10 (“State Infrastructure Banks (SIBs),” Jan 6 2010, )
To expand the lending power of a SIB beyond its capitalization, a leveraged SIB issues bonds against its initial capitalization, significantly increasing the amount of funds available for loans. Rather than loaning Federal funds and state matching funds, these funds together with anticipated loan repayments can be pledged as security for the bond issue. The proceeds from the debt issuance can then be provided to project sponsors as either loans or credit enhancements. The South Carolina Transportation Infrastructure Bank (SCTIB) is a good example of a leveraged SIB. Since its inception, the SCTIB has approved financing and developed over $3 billion in projects and has issued over $1.2 billion in revenue bonds. The decision of whether or not to leverage a SIB will depend on the assessment of overall loan demand and state policies relative to bond financing. A state may need specific authority through enabling legislation to issue SIB loans. For leveraged SIBs, credit and rating considerations will also be factors in the overall SIB structure. In practice, while most SIBs are unleveraged, leveraging is a viable alternative for states to facilitate a larger dollar investment in transportation.
Funding: State Infrastructure Bank Mechanism
Establishing and enhancing current state infrastructure banks is best transportation infrastructure funding mechanism
Katz et al. 10 – (Bruce, Vice President and Director, Jennifer Bradley, Fellow, Amy Lui Senior Fellow and Deputy Director, “Delivering the Next Economy: The States Step Up”, Brookings-Rockefeller Project On State And Metropolitan Innovation, November 10th, 2010, ) CM
Infrastructure is a good place to start, as it is a critical asset for the next economy, and an area that particularly cries out for new approaches to investment.21 To finance the kind of major investments necessary to support the next economy—such as high functioning global ports and gateways or new freight infrastructure—states should establish a state infrastructure bank (SIB), or enhance one if it already exists. Thirty-three states have established SIBs to finance transportation projects, generally through below-market rate revolving loans and loan guarantees. States are able to capitalize their accounts with federal transportation dollars but are then subject to federal regulations over how the funds are spent. Others, including Kansas, Ohio, Georgia, and Florida, capitalize their accounts with a variety of state funds and thus are not bound by federal oversight. Other states—such as Virginia, Texas, and New York—are also examining ways to recapitalize their SIBs with state funds.22 Once capitalized, these banks can be structured to be self-financing over the long term. Currently, SIBs fall short of their potential because they are simply used to pay for the projects selected from the state’s wish list of transportation improvements, without filtering projects through a competitive application process. This is the wrong approach—states must use these SIBs strategically to finance those transportation projects that are critical to advancing the next economy. The projects should be evaluated according to the likely return on investment, not selected with an eye towards spreading funding evenly across the state. States could also expand their SIBs into true economic development banks to finance not just roads and rails, but also energy and water infrastructure, perhaps even school and manufacturing development. California’s Infrastructure and Economic Development Bank (I-Bank) provides a compelling model.23
Solvency: Funding
States Can Fund – P3
Rall et al, 10 – Jamie Rall is a transportation policy specialist who works for the NCSL (National Conference of State Legislatures), James B Reed is the head of the transportation program at NCSL, and Nicholas J Farber is a Transportation Policy Associate in the National Conference of State Legislatures (“Public-Private Partnerships for Transportation: a Toolkit for Legislators”, NCSL Partners Project on Public-Private Partnerships (PPPs) for Transportation, )//AL
PPPs can be valuable options for states that are seeking innovative approaches and funding to repair crumbling infrastructure and build new projects. Supporters and opponents would both agree, however, that PPPs are best viewed as only one piece of the funding puzzle, as states address overall transportation needs. They can supplement overall public infrastructure investment and, when used, usually are combined with an extensive procurement and financing package on a given project. They are best suited to large-scale infrastructure assets that have ongoing maintenance requirements. 4 It should be noted that PPPs can offer alternative project delivery methods or financing mechanisms, but, in the long term, do not provide new money for infrastructure. Revenues to repay the private investment must come from the same sources of public financing—tolls, fees or taxes. Thus, state decision makers will want to consider PPPs in terms of whether they provide better value or overall public service than could otherwise be purchased by those revenue streams.
Can Find Funds – Pennsylvania found a way to get $2.5 billion in five years
Slone, 12 - a senior Transportation Policy Analyst at the Council of State Governments. He provides staff support to CGS’s Transportation Policy Task Force, state legislators, state department of transportation officials and private sector members. (Sean, “Transportation Funding Commissions”, Capitol Research Transportation, 5/8/12, )//AL
Pennsylvania faces $3.5 billion in unmet transportation funding needs, a gap that is projected to more than double to $7.2 billion by 2020 unless the state can come up with a plan to address the situation. The reasons for the widening gap are laid out in a report issued in 2011 by a Transportation Funding Advisory Commission empaneled by Gov. Tom Corbett: • A projected decline in fuel tax revenue over the next decade as a result of increased vehicle fuel efficiency driven by federal CAFE (corporate average fuel economy) standards. • The impact of inflation, which increases the cost of asphalt, steel, concrete and other materials by about 3 percent each year and reduces buying power. • A 66 percent increase in the portion of the Motor License Fund devoted to the Pennsylvania State Police over the last decade. The consequences of not narrowing the funding gap, the commission concluded, would be severe and widespread. Those consequences would include not only less maintenance on state- and locally owned highways and bridges, but also reduced quality of that maintenance. Degrading road surfaces would lead to safety concerns and higher vehicle maintenance costs for drivers. The commission also noted that delayed reconstruction of roads and bridges will be even more expensive in the future due to inflation. Moreover, the state risks losing ground on recent initiatives to reduce the number of structurally deficient bridges across Pennsylvania. Service cuts on public transit would be unavoidable, congestion would increase and trip reliability (being able to gauge accurately how long it will take to get from point A to point B on a consistent basis) would decrease. Those impacts would significantly degrade the quality of life for Pennsylvanians, the commission said. The commission was instructed not to consider increasing the state gas tax, leasing the Pennsylvania Turnpike or making assumptions about any resources not under state control (i.e. federal funds) in developing a recommended funding package. The governor and his secretary of transportation believed that a flat gas tax increase not indexed to inflation would only be a temporary solution and they saw the turnpike, the state’s heavily traveled East-West route, as too valuable an asset to turn over to the private sector. 1 “If you’re going to Philadelphia from Harrisburg or going to Pittsburgh from Harrisburg, (the turnpike is) your only choice,” said Barry Schoch, the state’s transportation secretary, who chaired the commission. “It is a prime resource for the commonwealth. … There’s a pretty proven inelastic demand on the turnpike. Rates have gone up and we’ve not seen a drop-off in traffic. “So when you have that good of a financial generator, why on earth would you want to turn that over to the private sector? … There’s no risk. Generally, in public-private partnerships, you want the private sector to take some risk on in exchange for the revenue they’re giving you.” 2 With those limitations on what it could consider, the commission ultimately did recommend a series of other policy changes, including: • Capping or moving state police costs to the general fund; • Indexing all vehicle and driver fees to the Consumer Price Index, a measure of inflation; • Uncapping the Oil Company Franchise Tax over five years; • Increasing traffic fines; • Increasing vehicle registration fees, with the revenue designated for local use; • Implementing various modernization and costsaving measures, including putting registration on a biennial schedule and driver license renewal on an eight-year cycle; • Dedicating 2 percent of existing sales tax revenue to transit; and • Consolidating and regionalizing transit delivery. The commission said such a plan could add about $2.5 billion within five years for highways, bridges and transit, still far short of the $3.5 billion required to meet immediate needs. The commission recommended that the state legislature pass enabling legislation so local governments can have the option of raising taxes to support transportation investment, as well as legislation that would allow the state to enter into public-private partnerships to accelerate the maintenance, improvement and expansion of infrastructure. The commission also recommended expanding the state’s authority to toll all interstates, along with studying whether different kinds of usagebased transportation charges—such as one based on vehicle miles traveled—might be feasible in the state in the future. 3
Can get funding - tolls
Wilson, 6/5 – a reporter at Tribune Business News (Todd Allen, “State wants input on possible public-private transportation projects”, Tribune Business News, 6/5/12, )//AL
The state is seeking comments from the public and from private industry on using private-public partnerships to fund sorely needed transportation projects throughout the state, including improvements to the I-64 corridor on the Peninsula and expansion of the Port of Virginia, Gov. Bob. McDonnell announced Tuesday. "We are seeking private sector input on potential (Public-Private Transportation Act) projects," McDonnell said. "These projects are ultimately successful investments for Virginia because together the (Office of Transportation Public-Private Partnerships) and our private sector partners create tremendous synergy, offering the very best of government and private sector innovation and financing." The governor's office and Transportation Secretary Sean T. Connaughton announced eight "candidate" projects and 14 "conceptual" projects that are up for discussion as viable for public-private partnerships. Projects under consideration in Hampton Roads include widening I-64 on the Peninsula, expanding the Port of Virginia, and improving the Hampton Roads Bridge-Tunnel and the Monitor-Merrimack Bridge-Tunnel. Tony Kinn, director of the Office of Transportation Public-Private Partnerships, said his office will be taking comments until July 2. "They can call me directly; they can send us emails; they can send us letters," Kinn said. Kinn noted that this is in addition to a multitude of meetings he has had on these projects with local leaders, Metropolitan Planning Organizations and state lawmakers in recent months. Kinn said he plans to continue with these types of meetings and public outreach in the near future. "We're going to meet with as many state officials, MPOs and local mayors as I can to make sure that we've got all the involvement and input we can -- everything we need," Kinn said. "We're going to be very aggressive because we can't just sit back and maintain what we have. We have to use the funds we have to grow the vitality of the commonwealth." The collection of tolls on the Downtown and Midtown Tunnels due to the public-private partnership agreement on the project was a key sticking point during last session's prolonged budget battle in the General Assembly. The fight was put off in April when at McDonnell's urging the Commonwealth Transportation Board agreed to delay collecting tolls on the Downtown and Midtown Tunnels until January 2014 to mitigate the cost of the tolls on Hampton Roads residents. The tolls were supposed to start this summer. The governor authorized $100 million to cover the cost of the delay. While tolls have made public-private partnerships unpopular in Hampton Roads, Kinn said they are necessary to upgrade and expand the state's transportation infrastructure in tough economic times.
Private Public Partnerships can fund Ports – Port of Baltimore
Pyles, 2/24 – tracks news from the state house, working for the Daily Record (Alexander, “Transportation Secretary says public-private partnership aided Port of Baltimore”, The Daily Record, 2/24/12, )//AL
A big shipping container company signed on at the Port of Baltimore Friday, and Transportation Secretary Beverley Swaim-Staley used the opportunity to further laud the importance of public-private partnerships in Maryland. Germany-based Hapag-Lloyd, the fifth-largest container shipping company in the world, is starting weekly service to the Port, a Maryland Port Administration statement said. The new business could create as many as 600 jobs in Maryland and -- according to Swaim-Staley -- is thanks to a partnership the state entered into with Ports America Chesapeake, which runs day-to-day operations at the Seagirt Marine Terminal. The company is also constructing a 50-foot berth to capitalize on the Panama Canal expansion, the statement said, and the improvement was a key factor in luring Hapag-Lloyd. The timing couldn't have been better for Swaim-Staley and Gov. Martin O'Malley, who is championing legislation that would create rules to govern public-private partnerships, like the one at Seagirt. "The Seagirt port has been a national model in how to do public-private partnerships," Swaim-Staley said in a Environmental Matters Committee hearing on the legislation Friday afternoon.
Funding: Taxes Mechanism
States can use P3’s and raise taxes without voter backlash
Phillips ’12 (Patrick Phillips - Chief Executive Officer of the Urban Land Institute and Howard Roth- Global Real Estate Leader at Ernst & Young LLP. "Infrastructure 2012: Spotlight on Leadership." Infrastructure 2012: Spotlight on Leadership « InfrastructureUSA: Citizen Dialogue About Civil Infrastructure. N.p., may 10th, 2012. Web. 25 June 2012. . AMR)
Greater Urgency although this pragmatic reorientation does not necessarily translate into finding more funds for infrastructure in underfilled federal coffers, many officials, again mostly at state and local levels, seek creative ways, including more private financ- ing, to advance infrastructure programs, borrow- ing from models already developed and tested in europe, canada, and australia. In particular, prop- erly structured PPPs can create efficiencies and reduce costs over the entire life cycle of systems. Local politicians also show newfound backbone; they take chances on raising tolls, train fares, and water district fees rather than risk the increasing possibility of breakdowns in existing systems. Maybe they discern that more of their hard- pressed constituents will be willing to pay if that means maintaining or enhancing service and pro- viding tangible improvements for their areas. anticipated voter ire turns somewhat more muted and less reflexively critical; people slowly and resignedly begin to accept the price for what we had come to take for granted—essential services such as roads, sewers, and water. raising gas taxes remains viscerally unpopular to most politi- cians in the wide swaths of mostly car-dependent suburban and rural america, but that too may change out of necessity.
State politicians can allocate funding and raise taxes without inciting voter backlash
Phillips ’12 (Patrick Phillips - Chief Executive Officer of the Urban Land Institute and Howard Roth- Global Real Estate Leader at Ernst & Young LLP. "Infrastructure 2012: Spotlight on Leadership." Infrastructure 2012: Spotlight on Leadership « InfrastructureUSA: Citizen Dialogue About Civil Infrastructure. N.p., may 10th, 2012. Web. 25 June 2012. . AMR)
is it grace under pressure, simply having no other choice, or maybe a combination of the two?
Dire fiscal conditions show few signs of ameliorating quickly, but attitudes in the united States—at least at the state and local levels—begin to shift toward strategies for dealing with the nation’s infrastructure needs. Federal reluctance forces governors, mayors, state legislators, and others to be creative in addressing metropolitan conges- tion, speeding freight movement, and preparing for population growth. A sharply divided Congress imperils any hope of creating a national consensus at the federal level about how to reverse chronic underfunding, address delayed mainte- nance, or move forward with priorities. Although infrastructure cognoscenti and practi- tioners might wish for a national policy for constructively prioritizing infrastructure proj- ects, allocating funding, and integrating systems, they are figuring out how to make things work without it. The public begins to realize that it must either pony up more in local taxes and fees or forgo the kind of future-focused infrastructure investments that will help secure a higher quality of life. No one really expects the gap between funds and needs to do anything but grow larger; however, a new policy direction, nurtured by necessity, is emerging. Sobered local officials and planners refocus, bagging woe-is-me sentiment for concretely figur- ing out “what we can do under the circumstances.” These more resolute local leaders strive for incremental progress and look to stretch limited resources and seize opportu- nities to make more out of less.
Funding: Taxes
Can Fund – special district taxing
Urban Land Institute, 12 – is a non-profit research and education organization with offices in Washington, D.C., Hong Kong, and London. Its stated mission is "to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide." ULI advocates progressive development, conducting research and education in topics such as sustainability, smart growth, compact development, place making, and workforce housing. (“Infrastructure 2012 Spotlight on Leadership”, Urban Land Institute, Ernst and Young, 2012, )//AL
State officials are thinking more boldly and creatively about other funding strategies as well. Special assessment districts—where property owners are charged additional taxes that support infrastructure projects—can channel resources to transit and other infrastructure projects. Special assessments are a key component of the local funding for the Silver Line heavy-rail expansion to Dulles international Airport in Virginia. Tax increment financing (TiF) is a traditional infrastructure financing tool that—despite a falloff in recent issuances—still shows promise. in a TiF district, the increase in taxes (the tax increment) that results from new development spurred by infrastructure improvements is used to capitalize the bonds that pay for the infrastructure investments. Traditionally, TiF districts have been used to aid struggling neighborhoods. new applications are seeking to extend TiF-style financing across multiple districts and communities and for new kinds of projects, including transit. For example, jurisdictions in the Dallas/Fort Worth metroplex are hoping that TiF will help build the Cottonbelt Line, but issues of phasing and market strength will need to be resolved.
Can fund – Gas tax
Sundeen and Reed, 06 – Matt Sundeen is an attorney and program principal with the Transportation Program at the National Conference of State Legislatures. In his position, Mr. Sundeen tracks activity on a wide variety of transportation topics, including transportation finance, and James B Reed directs the Transportation Program at the National Conference of State Legislatures (“Surface Transportation Funding Options for States”, NCSL Transportation Funding Partnership Committee and the NCSL Transportation Committee, May 2006, )//AL
State taxes on motor vehicle fuel are one of the most significant sources of transportation funding, providing the majority of transportation revenue in 25 states. Often referred to simply as gas taxes, state motor vehicle fuel taxes actually can include several types of taxes on several different types of fuel. State motor vehicle fuel taxes include excise taxes that are assessed as a flat rate per gallon of fuel and sales taxes that are assessed as a percentage of the retail price. States have imposed taxes on gasoline, diesel and gasohol. All states levy excise taxes on gasoline and diesel fuel, and all states except Alaska also impose excise taxes on gasohol. As already noted, only nine states—California, Delaware, Georgia, Hawaii, Illinois, Indiana, Michigan, New York and West Virginia—levy sales taxes on gasoline. States do not collect motor fuel taxes directly from motorists. Although the point of taxation varies from state to state, motor vehicle fuel can be taxed when first imported into the jurisdiction, at the motor vehicle fuel distributor, or at the terminal rack, which is the facility where fuel from bulk storage tanks is loaded into tanker trucks for delivery to retail stations or to bulk users. Because motorists are major consumes of motor fuel—edging close to 2 trillion gallons each year 5 —gas taxes are a tempting source of new transportation revenue. Even small changes in fuel tax rates can dramatically affect the amount of fuel tax revenue collected by a state. Fuel Excise Tax Increases The most common method of increasing revenue through the gas tax is with an increase of the fuel excise tax. Through this option, the state raises the flat tax rate on each gallon of motor vehicle fuel. The advantage is that even small fuel tax increases can generate significant revenue for transportation programs. Motorists consumed more than 1.74 trillion gallons of motor fuel in 2003. A 1-cent increase in taxes on that motor vehicle fuel would have generated $17.4 billion in additional transportation revenue in the United States. Gas tax increases to fund transportation often are viewed as more equitable than other new revenue mechanisms. Motor fuel excise taxes are a “user fee” that puts the burden for funding transportation squarely on the people who use it the most. The more motor vehicle fuel a motorist uses by traveling on roads and highways in the state, the more that motorist will pay for the system in gas tax revenue. Motor fuel excise taxes are assessed as a flat fee on each gallon of fuel, and fluctuations in motor fuel prices do not affect the amount of tax collected by the state. In fact, as motor fuel prices rise, the motor fuel excise tax becomes a smaller percentage of the total cost of a gallon of motor fuel. Because motor fuel prices change so often naturally, there is little public recognition at the pump when motor fuel excise taxes are changed or imposed by legislative action. The disadvantage of relying on motor vehicle fuel excise tax increases to fund transportation is the political challenge of the tax increase. Because these taxes are not elastic, they lose value against inflation every day; however, new or higher taxes are never popular. Many proposals to increase gas taxes have been defeated in state legislatures or by citizen initiatives, and most states have been unable to adjust rates quickly enough to match inflation. Since 1997, legislatures in 14 states—Arkansas, Indiana, Kansas (twice), Maine (twice), Michigan, North Dakota (twice), Ohio, Pennsylvania, Rhode Island, South Dakota (twice), Utah, Vermont, Washington (twice) and Wyoming—voted to increase their state gas taxes a total of 19 times. 6 The average of all the state gas tax hikes was 4 cents. In most cases where the gas tax was raised, strong bipartisan support was the key to successful passage. 7 Connecticut lowered its tax from 32 cents to 25 cents in 2000. In 2005, gas tax increases in Minnesota and South Carolina were voted down by the legislature and in Oklahoma by the voters. Arkansas voted down a 4 cent diesel fuel increase to help fund a bond program for interstate highway repairs in December 2005. 8 Pennsylvania’s complex oil company franchise tax resulted in a 1.2 cent increase in its gas tax effective Jan. 1, 2006. 9 Michigan is considering the elimination of gas tax collections when the price of gas exceeds $2.30 per gallon. 10 Two states raised gas taxes in 2005. North Dakota increased its rate by 2 cents to 23 cents. Washington passed a 9.5 cent per gallon gas tax increase in April 2005, to be phased in over four years; it is projected to raise $8.5 billion in the four-year period. Initiative 912, which would have repealed the increase, was defeated in the November 2005, election, with 47 percent in favor of repeal and 53 percent opposed. Voter support of the largest gas tax increase in the state’s history was attributed to voter frustration with traffic congestion in the central Puget Sound area. 11 To address public concern about accountability and efficiency in use of the funds, performance audit provisions were included in the legislation. The Washington Legislature voted in 2003 to raise the gas tax by 5 cents to 28 cents. Indexing the Gas Tax Some states have attempted to overcome motor fuel tax inelasticity problem by indexing or linking gas tax rates to inflation, federal tax rates or other measures. The most common form of indexing is to link gas tax rates with inflation. To do this, state lawmakers must pass a law to require changes in motor fuel excise tax rates based on changes in inflation. Generally, states use a widely acceptable mechanism such as the Consumer Price Index (CPI) to measure inflation changes. The advantage of inflation indexing is that the gas tax can be adjusted to fluctuations in inflation without legislative approval each legislative session for the increases. Moreover, adjustments can occur much more rapidly, ensuring a consistent revenue stream for transportation projects. According to a Brookings Institute report, “ ... variable rate taxes have emerged as an effective strategy to increase the tax rate and offset declines in revenue without the politically acrimonious task of tax increases by the legislature or through public referendums ... inflation indexing remains an important option for augmenting transportation funding, regardless of inflationary pressures.” 12 The disadvantage to indexing is the perceived lack of control. Some citizens may be opposed to the notion of an automatic tax increase that does not require legislative or executive approval. At least seven states—Florida, Iowa, Kentucky, Maine, Nebraska, New York and North Carolina—have some form of “variable rate” tax linked to inflation, fuel prices or fuel sales. 13 Florida and Maine link their gas tax increases to the CPI, while Iowa’s gas tax rates vary according to the amount of ethanol blended fuel sold in the state. Kentucky’s variable element is based on 9 percent of the average wholesale price of gasoline, with a minimum price of $1.34. New York’s Petroleum Business Tax is assessed according to a formula that is linked to inflation based on the producer price index. North Carolina assesses a flat rate gas tax plus a variable component that is automatically altered twice per year based on 7 percent of the average wholesale price of gasoline during a six-month period. Four states— California, Nevada, Oklahoma and Tennessee—have statutory provisions in their statutes that would increase the state motor fuel excise tax rate if the federal motor fuel tax rate decreases. Some states have evaluated indexing in recent years. A joint committee in Washington studying transportation financing alternatives recommended the use of an index so that existing collections can grow with the economy and population. 14 A 2005 Texas bill to index the state gas tax to inflation had initial support in the House Transportation Committee, but failed to win support in the Ways and Means Committee. Nevada may consider indexing in its 2007 legislative session. Wisconsin repealed its gas tax index in December 2005. Indexing the Gas Tax to Fleet Fuel Efficiency Improvements This option envisions adjusting the fuel tax rate for changes in average fuel economy for a passenger vehicle. Indexing the fuel tax for fuel economy protects the fuel tax revenue stream from changes in fuel economy because vehicles with high fuel economy pay less in fuel tax than other vehicles. However, the method punishes motorists in high efficiency vehicles, which may compete with other governmental interests such as environmental protection. It also could be politically unpopular and generate opposition. Motor Fuel Sales Taxes In addition to the flat excise tax rate assessed on each gallon of fuel, at least nine states— California, Delaware, Georgia, Hawaii, Illinois, Indiana, Michigan, New York and West Virginia—also levy a sales or gross receipts tax as a percentage of the retail price. 15 Revenues from these taxes are linked to motor fuel prices so that states with sales or gross receipt taxes on motor fuel experienced revenue growth as gas prices rose to more than $3 per gallon in late summer 2005 in the wake of hurricanes Katrina and Rita. If these sales taxes are dedicated to transportation purposes, they could become another method of maintaining the purchasing power of transportation revenues. In addition, motor fuel sales tax revenues usually are not dedicated to transportation purposes. State DOTs often face competition from other state agencies that believe they should have first right to sales tax revenues since transportation already receives motor fuel excise tax funds. Local Gas Taxes As noted above, at least 15 states allow local governments to assess an additional gas tax. Allowing local option gas tax is a way for communities willing to tax themselves to solve transportation problems without involving other parts of the state, which may not have the same issues and may be unwilling to support a statewide tax increase. The local gas tax is an important part of a state’s overall transportation funding. The disadvantage of a local option gas tax is that rates may differ from jurisdiction to jurisdiction. Rate changes could cause consumer migration to non-taxing areas.
Can Fund – Gas Taxes
Urban Land Institute, 12 – is a non-profit research and education organization with offices in Washington, D.C., Hong Kong, and London. Its stated mission is "to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide." ULI advocates progressive development, conducting research and education in topics such as sustainability, smart growth, compact development, place making, and workforce housing. (“Infrastructure 2012 Spotlight on Leadership”, Urban Land Institute, Ernst and Young, 2012, )//AL
Over the past year, more than a dozen states have raised fuel taxes, another potentially politically charged move. State and local officials find some cover in highly volatile gas pump prices; drivers have become inured to sudden price hikes and may not factor in a few additional tax cents to the gallon. More states likely will follow suit on such tax hikes, given relatively tempered driver reactions and overriding funding needs. Congress also might take note: maybe the public could handle a gas tax infusion to help suture the ruptured Highway Trust Fund.
Funding: Budget Cuts
Can fund with cuts in other places of the budget
Sundeen and Reed, 06 – Matt Sundeen is an attorney and program principal with the Transportation Program at the National Conference of State Legislatures. In his position, Mr. Sundeen tracks activity on a wide variety of transportation topics, including transportation finance, and James B Reed directs the Transportation Program at the National Conference of State Legislatures (“Surface Transportation Funding Options for States”, NCSL Transportation Funding Partnership Committee and the NCSL Transportation Committee, May 2006, )//AL
One way to increase revenue is to eliminate the diversion of transportation-derived revenue to nontransportation purposes. Many states use transportation revenues for other state programs. For the 2003-04 Wisconsin budget, 25.6 percent of revenue to the transportation fund—$370 million—was provided for general fund programs. 2 Initiative 51 in California in 2002, which failed, would have reallocated 30 percent of certain state revenues collected on motor vehicle sales or leases from the general fund to the Traffic Congestion Relief and Safe School Bus Trust Fund. The money would have been allocated for transportation programs, including highway expansion, specific freeway interchange improvements, mass transit improvements, bus purchase, and expansion of light and commuter rail. 3 A Washington legislative committee studying financing alternatives recommended in 2004 that all transportation-related fees and charges be dedicated to transportation purposes. 4 It specifically referenced the sales tax on transportation construction labor and materials. As a first step, states may want to examine the issue of revenue diversion to see if it is viable to shift transportation-derived revenue sources for use solely on transportation purposes.
Funding: Tax Credits
Can solve – Tax credit Bonds
CBO, 04 – Congressional Budget Office, does nonpartisan analysis for the U.S. federal Congress (“Tax-Credit Bonds and the Federal Cost of Financing Public Expenditures”, Congressional Budget Office, July 04, )//AL
State and local governments are candidates to use taxcredit bonds. Indeed, the only such bonds authorized to date—Qualified Zone Academy Bonds (QZABs)—are designated for their use. QZABs were authorized in the Taxpayer Relief Act of 1997 and its subsequent extensions; that legislation allowed state and local governments to issue up to $400 million of QZABs each year from 1998 through 2003 to finance school renovation and construction projects that met a set of qualifying criteria. In addition, the Clinton Administration twice proposed other tax-credit bonds to be issued by state or local governments—specifically, $9.7 billion in 1999 and 2000 for school modernization bonds and $9.5 billion in 1999 over a five-year period for Better America Bonds (a debt instrument for expenditures related to environmental protection, such as the acquisition of green spaces).
Tax credit bonds at the federal level are worse than state – interest rates
CBO, 04 – Congressional Budget Office, does nonpartisan analysis for the U.S. federal Congress (“Tax-Credit Bonds and the Federal Cost of Financing Public Expenditures”, Congressional Budget Office, July 04, )//AL
The federal government already bears part of the interest costs that state and local governments incur when they issue bonds whose interest income is exempt from federal income taxes. Because of the exemption, purchasers of such bonds are willing to accept a lower interest rate than they would require on taxable bonds of comparable risk and maturity—specifically, an interest rate on the taxexempt debt that equals or exceeds the after-tax interest rate on taxable debt. 10 Consequently, the federal government effectively pays a share—about 25 percent to 30 percent—of the taxable interest that state and local governments would have to pay if their debt were taxable. That contrasts with the interest subsidy of 100 percent that characterizes tax-credit bonds both as currently used and as proposed. Thus, tax-credit bonds deliver a bigger subsidy and cost the federal government more than the exemption of interest on state and local government bonds.
Funding: P3’s
Can Fund – Privatization
Sundeen and Reed, 06 – Matt Sundeen is an attorney and program principal with the Transportation Program at the National Conference of State Legislatures. In his position, Mr. Sundeen tracks activity on a wide variety of transportation topics, including transportation finance, and James B Reed directs the Transportation Program at the National Conference of State Legislatures (“Surface Transportation Funding Options for States”, NCSL Transportation Funding Partnership Committee and the NCSL Transportation Committee, May 2006, )//AL
Another mechanism that can raise new revenue for transportation projects is the sale of highways or other transportation facilities to private industry. In 2005, Chicago completed a $1.83 billion transaction to sell the rights to operate the Chicago Skyway—a 7.8- mile, six-lane toll bridge—to a private company. Since then, lawmakers and transportation officials in at least 13 states have taken steps to evaluate proposals or legislation to privatize public transportation facilities. Although such transactions are relatively new, they already are fairly common in Europe and Asia. At least 19 other countries have sold facilities or concession rights for airports, ports, railways, roads and waterways to private entities. A bill introduced in New Jersey in March 2006 would allow the New Jersey Turnpike and the Garden State Parkway to be sold to a new corporation owned 51 percent by the New Jersey Turnpike Authority and 49 percent by private investors. 18 For state and local governments, the most significant advantages of privatizing a transportation facility are the up-front revenue and elimination of the risk of future losses. Rather than wait for money to collect over many years, the government receives revenue from the facility right away without an immediate tax or rate increase. By selling a facility or concession, the jurisdiction also can shift the operating risk to the private party. Privatization also can provide incentive for the private entity to improve services and streamline operations. For example, a toll road operator can best boost income without raising rates by increasing the traffic volume and the corresponding number of tolls collected. The operator therefore has incentive to make the road more appealing to motorists by improving road capacity, enhancing pavement conditions, shortening the time for toll collections, reducing congestion and increasing travel speeds. Operators also are motivated to use innovative mechanisms such as congestion pricing or electronic fare collection to solve congestion problems.
PVRs check PPP failure – assumes their warrants
Greenstone and Looney 11 (Michael Greenstone, Director, The Hamilton Project 3M Professor of Environmental Economics, MIT, Adam Looney, Policy Director, The Hamilton Project Senior Fellow, The Brookings Institution,” Investing in the Future: An Economic Strategy for State and Local Governments in a Period of Tight Budgets” February 2011, ) CM
In their Hamilton Project discussion paper, “Public-Private Partnerships to Revamp U.S. Infrastructure,” Eduardo Engel, Ronald Fischer, and Alexander Galetovic (2011) propose ways to remedy these drawbacks of PPPs and outline how best to use PPPs to provide infrastructure. They suggest employing innovative Present-Value-of-Revenue (PVR) contracts, in which private contractors bid on the revenue they need to undertake the investment rather than on the cost of the project. Under a PVR contract, toll revenues or other user fees flow to the private partner until the specified revenue level is met. As a result, unexpected changes in demand no longer impose risks on the private partner, reducing the likelihood of bankruptcy or contract renegotiation. They also argue for the transparent accounting of PPPs on governments’ balance sheets to provide accountability for transactions that attempt to shift costs to future taxpayers. Finally, they call for better governance, which would divide the initial execution and ongoing regulation of PPPs contracts between different public agencies.
States can use PPP
Rall et al, 10 – Jamie Rall is a transportation policy specialist who works for the NCSL (National Conference of State Legislatures), James B Reed is the head of the transportation program at NCSL, and Nicholas J Farber is a Transportation Policy Associate in the National Conference of State Legislatures (“Public-Private Partnerships for Transportation: a Toolkit for Legislators”, NCSL Partners Project on Public-Private Partnerships (PPPs) for Transportation, )//AL
In many countries around the world, PPP policies are set at the national level. In the United States, however, state governments own, operate and finance transportation assets. 85 Thus, state-level policymakers decide whether and how each state will allow PPP projects, while state executive agencies such as departments of transportation often act as PPP project sponsors. The states also have considerable authority over whether to implement tolls or congestion pricing. 86 The federal role in the United States has thus far been limited to influencing states’ use of PPPs through guidelines for federal funds and federal-aid highways, innovative financing tools, experimental pilot programs and the provision of information. 87
Funding: Tolls
States can use tolls to finance infrastructure
Bell ‘5 (Mike Bell, David Brunori, Royce Hanson, Chanyong Choi, Lori Metcalf ,Bing Yuan – senior writers at the George Washington Institute of Public Policy . "State and Local Infrastructure Financing." George Washington Institute of Public Policy, 2005. Web. .)
Tolls and Impact Fees Tolls and impact fees are increasingly popular means of financing infrastructure investments because they are perceived to consistent with the user-pay or beneficiary-pay principle of taxation. It should be mentioned that users of and beneficiaries of infrastructure investment are not always the same. Therefore, the beneficiary pays principle of taxation may result in not only users, but also others contributing to the cost of constructing, operating and maintaining infrastructure systems. For example, the Bay Area Rapid Transit (BART) system in the San Francisco bay area is funded 50 percent from tolls and 50 percent from a regional sales tax. The argument is that all businesses within the BART area benefit from improved transportation systems in two ways –first it increases the size of the market and second it increases the size of the labor pool from which businesses can recruit works. Both types of benefits accrue to businesses in the area because of reduced transportation time and costs. Toll roads or bridges are not new to the transportation system. Toll collecting is often viewed as the purest form of user-related revenue as the user is directly charged for the serviced used (Morris 2001). States may create an independent toll authority or commission through legislation. The responsibility of operation and maintenance of toll facilities will then like outside the state transportation department. Backed by computer and wireless technology, electronic toll collection increases efficiency and traffic flow (Morris 2001). There is also opposition to greater reliance on tolls for financing transportation because it makes transportation more costly and more exclusive. Impact fees have become increasingly common in localities. They are imposed to compensate for the additional public sector costs that a new house imposes on the community, such as increased use of roads, parks, and other neighborhood amenities (Cox, Utt, and Corcoran. 2003a). Given the ease of collection, impact fees can be an effective supplement to debt financing infrastructure projects. On the other hand however, impact fees raise considerable equity issues (Tischler 1996).
Tolling fees solve funding
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
The use of tolls—a charge for passage across a bridge or along a road—to fund and finance transportation in the United States is older than the national high- way system.While tolls currently provide only a small share of total transportation revenue, many states are revisiting the use of tolls to help generate needed rev- enue, address capacity expansion, and manage urban congestion. Complementary to tolling, states are ex- ploring user fees: directly charging users for the time and point of access, miles driven, or even the parking spaces they use. As with tolls, these user fees can al- low state and local officials to access private capital, leverage existing public assets, and price transporta- tion facilities to encourage more efficient use of transportation assets. Innovative approaches to tolling and fees include enhanced use of traditional toll au- thorities, congestion pricing, vehicle miles traveled (VMT) fees, and variable parking fees. Some of these approaches may not be as well-suited to less densely populated regions but could be more widely imple- mented in more densely populated regions.
Can fund – tolls
Sundeen and Reed, 06 – Matt Sundeen is an attorney and program principal with the Transportation Program at the National Conference of State Legislatures. In his position, Mr. Sundeen tracks activity on a wide variety of transportation topics, including transportation finance, and James B Reed directs the Transportation Program at the National Conference of State Legislatures (“Surface Transportation Funding Options for States”, NCSL Transportation Funding Partnership Committee and the NCSL Transportation Committee, May 2006, )//AL
This option considers charging motorists tolls for using congested roads during peak driving hours. This option is appealing because it directly affects highway users and could generate significant revenue. It also allows motorists the choose between congested highways or congestion free toll roads. Congestion pricing has more frequently been used as a behavior modification tool rather than a fundraising mechanism. There are concerns that congestion pricing could not generate sufficient funding to meet transportation needs. Facility Tolling This option envisions charging a toll for a motorist’s use of a transportation facility such as a limited access roadway or bridge. Collection of the toll can occur through tollbooths, electronic tolling or other means. Toll rates can be variable, depending on the purpose of the toll. Tolls are a true user fee that taxes only those who use a particular facility. Electronic tolling can eliminate congestion caused by traditional toll booths.
Can Fund – tolls
Urban Land Institute, 12 – is a non-profit research and education organization with offices in Washington, D.C., Hong Kong, and London. Its stated mission is "to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide." ULI advocates progressive development, conducting research and education in topics such as sustainability, smart growth, compact development, place making, and workforce housing. (“Infrastructure 2012 Spotlight on Leadership”, Urban Land Institute, Ernst and Young, 2012, )//AL
The rush to raise or impose new highway tolls appears to grow as state and local officials more willingly advance into once uncomfortable decision-making territory. Driver wrath is muted by state-of-the-art electronic technologies that streamline toll implementation and reduce labor costs (no need for toll takers)—overhead gantries with easy pass and license plate tracking systems eliminate the need for traditional stop-and-pay barriers, which can slow traffic flows, increase the incidence of accidents, and raise driver blood pressures. The whole process is less noticeable and less irksome; user fee charges can get lumped in with monthly charge card billing, easing the apparent effect on drivers. Even though tolling can be regressive, hitting lower-income drivers hard especially when they have few or no mass transit alternatives, many drivers are slowly accepting the increases or changing driving patterns to start using mass transit where it is available. They come to realize the charges are necessary for maintenance and building new systems. “There’s a connect-the-dots aspect to user fees making them more palatable than paying taxes where you’re not sure how the taxes are being used.” Tolls can encourage more efficient use of facilities. Traffic flows eased noticeably on roads leading into the State Route (SR) 520 bridge in Seattle after new tolls were installed.
Funding: VMT’s
VMT fees solve funding
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
Vehicle Miles Traveled (VMT) Fees Vehicle miles traveled (VMT) fees charge drivers di- rectly for each mile traveled. States are exploring VMT fees as a long-term solution for transportation funding, as well as for a number of related reasons. A VMT fee could reduce reliance on the motor fuels tax and allow for a more efficient and flexible form of revenue. Unlike the motor fuels tax, the VMT fee would be unaffected by greater use of more efficient vehicles. In addition, it provides a price signal that encourages drivers to minimize roadway conges- tion. Another advantage of the VMT fee is flexibility: It allows pricing to vary depending on the actual cost of capacity, allowing for higher fees when con- gested and lower fees when traffic is free-flowing. VMT fees also can be directed at segments of users, for instance commercial trucks. In its simplest form, a VMT fee could be applied through periodic odometer readings in conjunction with annual vehicle registrations or inspections, al- though efforts to avoid evasion would be necessary. A vehicle dashboard display can reveal the exact cost per mile on a real-time basis, providing a feedback mech- anism that is likely to modify driver behavior. More sophisticated approaches involve the use of global po- sitioning system (GPS) receivers that can upload in- formation automatically to refueling stations. VMT fees could be paired with congestion pric- ing to provide a disincentive for non-essential and peak period trips.
Funding: Various
States play a key role in transportation funding—they can use P3’s, infrastructure banks, motor fuel taxes, and VMT fees
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
Next, states can seek to increase investment in the system in the near-term. States and the federal government have long-relied on the motor fuel tax, and are likely to continue to do so. However, states have several options to supplement motor fuel tax revenue. Some states have looked to public-private partnerships to attract private sector capital and proj- ect expertise in order to move forward on priority projects. One type of public-private partnership, an asset lease, has the potential to provide states with significant upfront capital which can be used to fund a number of transportation priorities. However, these partnerships often require either new user fees or private collection of existing user fees (such as tolls), that provide a return on investment to the private partner. A public-private partnership strategy alone will not solve all of a state’s transportation challenges, but carefully managed partnerships can complement existing revenue, accelerate project delivery, and at- tract private capital and expertise. States also are looking at debt finance tools such as state infrastructure banks to leverage their federal funds and accelerate projects. Infrastructure banks can operate revolving loan funds and typically have a board that uses specified criteria to make strategic investments in transportation. After they are provided initial capital, they can provide a revolving revenue source to fund priority projects and supplement ex- isting revenue sources. Finally, over the long-term, states may have an in- terest in replacing the motor fuel tax as a primary source of revenue for transportation. One possible replacement states can look to is a vehicle miles trav- eled fee (using GPS or other technology to charge users for every mile driven). A miles traveled fee could provide a technological platform for greater use of congestion pricing and could be more effec- tive in managing demand than the motor fuel tax. It also would be applicable regardless of fuel source, whereas the current motor fuel tax does not apply to many alternative fuel or electric vehicles, which may become more common in the future. States play a key role in funding, operating, and maintaining our nation’s transportation assets. With demand for transportation growing, and with states facing competing budget priorities, there is an increas- ing need for new funding and financing solutions.The solutions that states are identifying and implementing represent an important element in enhancing and im- proving the nation’s transportation system.The United States depends on its surface transporta- tion system for mobility and commerce.The surface transportation system includes roads, bridges, rail, and transit. While vital to both our economic well- being and our quality of life, our surface transporta- tion system is challenged by growth in demand that is outpacing new capacity and an inadequate level of investment. States have an important role to play in addressing each of these challenges through innova- tive funding and financing approaches, efforts to craft comprehensive strategies to manage demand, and initiatives to promote sustainable and equitable solutions.
States can fund transportation infrastructure – multiple mechanisms
NCSL ’12 (NCSL - Provides information about state governing bodies, current legislation and reports, surveys, and policies. "Transportation Funding and Finance." Issues & Research. N.p., updated june 2012. Web. 25 June 2012. .)
America’s transportation infrastructure is at a crossroads. State transportation revenues are not keeping pace with escalating construction costs and burgeoning travel demand, and years of underinvestment in aging infrastructure have built into a crisis. All states face a shortfall between existing transportation revenues and projected needs. The cumulative nationwide shortfall has been estimated at $1 trillion through 2015, and the National Surface Transportation Policy and Revenue Study Commission estimated the next decade’s gap for maintaining and building highway, transit and rail infrastructure at $155 billion to $200 billion per year. Unless there are innovations and new money, roads, bridges and mass transportation systems will fall further into decline and disrepair. States are seeking both funding and financing options that will help expand and maintain their transportation systems. Funding options for transportation include tapping traditional revenue sources such as the gas tax and motor vehicle fees and increasing other sources such as tolls. States also are considering finance solutions that borrow against or otherwise leverage revenues, including bonds, federal credit assistance, state infrastructure banks and public-private partnerships.
States will have multiple means of funding, including tolls, P3’s, taxes, and user fees
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
Each state is facing the challenges of rising de- mand and inadequate revenue to some degree. How- ever, they each have unique needs and strategic goals and objectives. In states with less population and traf- fic density, certain user-fee solutions may not be as feasible as they would be in more densely populated Innovative State Transportation Funding and Financing • 1 2 • Innovative State Transportation Funding and Financing states and regions. Governors are pursuing varied op- tions to address these challenges, and states are pio- neering new means of planning for and funding and financing transportation. Some states have worked to increase or index their motor fuel taxes to overcome purchasing power declines and to increase revenue for transportation projects. Some states also are increasing vehicle registration fees and looking to general fund revenues to fund transportation. More broadly, states are pursuing a number of innovative funding and fi- nancing options that also can help to reduce demand. Options that are discussed in this report include: • Debt financing strategies, including state infra- structure banks; • Tolling, vehicle miles traveled fees, congestion pricing, and other user fees; • Public-private partnerships that leverage private capital and expertise; and • Freight-specific strategies. Considering the magnitude of the challenge, many states will need to consider all of these options to meet their transportation needs. As states consider which solutions to pursue, a priority is examining fund- ing and financing options that also reduce demand. High fuel prices provide an incentive for drivers to carpool, combine trips, reduce or eliminate unnec- essary trips, and consider transit alternatives. How- ever, to more effectively manage demand, states—in coordination with federal and local partners—can implement direct user fee systems such as congestion pricing (charging users a variable toll to use a road based on how congested it is). Such strategies provide additional incentives to users to reduce miles traveled, avoid peak period trips, and shift to alternative modes. Many states are also looking at ways to increase coor- dination between land use planning and transporta- tion projects to help manage demand and ensure that transportation expenditures are consistent with state growth and development objectives.
User fees, P3’s, infrastructure banks, motor fuel and VMT taxes can solve funding
Burwell and Puentes ‘8 (David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
Governors and states—and the nation as a whole— face a number of challenges in funding and financ- ing a transportation system that meets the nation’s needs and achieves strategic objectives. State and fed- eral revenues both are falling below the levels needed to maintain and enhance the system, and demand is outpacing capacity, resulting in congestion in many regions. In addition, users are grappling with high fuel prices, and, in some cases, aging and structur- ally deficient infrastructure. It is outside the scope of this report to address the federal role in funding and financing transportation. Given the challenges that have been outlined, many states are looking to explore a variety of strategies to meet their transportation objectives. States and gov- ernors may want to consider the following options to ensure their ability to fund and finance surface transportation needs, in order of priority: • Work to implement revenue strategies that manage, reduce, and shift demand. To reduce congestion and avoid the need for new capacity, efforts to manage and reduce demand should be a top priority. – There are a number of tools states—and where applicable, municipalities—can imple- ment to help manage demand, including con- gestion pricing, tolling, variable parking fees, and pay-as-you drive insurance. These tools may not all be as feasible to implement in less densely populated regions, but can help to manage demand in congested regions. A less direct option to manage demand, but one that could raise revenue, is to raise fuel taxes. – States also can endeavor to coordinate land use and transportation planning and shift demand to transit alternatives. – In the near-term, states may consider in- creased use of rapid bus service, which re- quires much less infrastructure investment and lead time than light rail or commuter rail, can be dependable and frequent, and could be facilitated by the designation of bus-only lanes or shoulders. Transit capacity in many areas is strained; thus, efforts to reduce vehicular de- mand and shift some users to transit must be met with increased investments in all forms of transit or creative means of expanding transit capacity over the long-term. • Consider revenue alternatives. States have long- relied on motor fuel taxes, both for state revenues and for federal funding. – In the near-term, motor fuel taxes can be sup- plemented by increased use of tolling, con- gestion pricing, and PPPs. States can consider all of these revenue options, and they may want to use each of them to diversify revenue streams and achieve other strategic objec- tives. PPPs do not offer new revenue and will not alone solve all of a state’s transportation challenges. However, with carefully managed concession agreements, states can use PPPs strategically to complement existing revenue, accelerate project delivery, and provide capital and expertise where needed. – State infrastructure banks, through their re- volving loan function, also offer states the op- portunity to finance more projects, and can be tied to strategic state criteria. States can con- sider how best to achieve benefits from the use of infrastructure banks and can examine the possibility of requiring projects to lever- age private capital and/or federal and local funds to receive SIB funding. Innovative State Transportation Funding and Financing • 37 38 • Innovative State Transportation Funding and Financing • Consider long-term revenue replacements for the motor fuel tax. Over the long-term, the mo- tor fuel tax may become less aligned with state objectives. – For example, as states seek to manage demand and increase the use of alternative fuel or elec- tric vehicles, motor fuel taxes becomes a less reliable source of revenue because they are tied to petroleum consumption. Many states and the nation have expressed a desire to re- duce and eliminate their use of petroleum in the transportation sector. Yet, if states rely on the motor fuel tax for revenue, achieving re- ductions in the use of petroleum would mean fewer dollars for infrastructure. Over the long-term, the VMT tax could serve as a replacement for the motor fuel tax. The VMT tax is aligned with state objectives in terms of reducing miles traveled, could pro- vide a technological platform for greater use of congestion pricing, and would be applica- ble to alternative fuel or electric vehicles.
Funding: Bonds
Bonds can fund state transportation infrastructure
LAO 11 legislative analyst’s office – California’s nonpartisan fiscal and policy advisor (“A Ten-Year Perspective: California Infrastructure Spending,” 8/25/2011, )
Increased Spending Provided Through Bonds. In recent years, a growing proportion of transportation funding has come from general obligation bonds passed by the voters. Funding from bonds has increased from an average of 3 percent of total transportation spending at the beginning of the decade to an average of 21 percent in the last three years. This increase is due mainly to Proposition 1B, a $20 billion transportation bond measure that was authorized by voters in 2006. In addition, in 2008, voters approved Proposition 1A to provide $10 billion in bonds for high–speed rail and local transit systems. The state's increased reliance on bond funds to finance transportation projects will put additional pressure on the state's General Fund as these bonds are sold. We estimate that annual debt service on transportation bonds will increase from roughly $700 million in 2010–11 to $2.3 billion in 2020–21 if the state moves forward with selling already authorized bonds at the projected rate. (Currently most of transportation's debt–service obligations are paid with special funds, reducing the effect on the General Fund.)
Funding: Congestion Pricing Mechanism - Highways
Congestion pricing provides funding and independently leads to less highway use
Greenstone and Looney 11 (Michael Greenstone, Director, The Hamilton Project 3M Professor of Environmental Economics, MIT, Adam Looney, Policy Director, The Hamilton Project Senior Fellow, The Brookings Institution,” Investing in the Future: An Economic Strategy for State and Local Governments in a Period of Tight Budgets” February 2011, ) CM
Road congestion is a chronic problem in major metropolitan areas, resulting in delays, productivity losses, accidents, and pollution. One way to encourage drivers to internalize the costs that they impose on others is through congestion pricing. With congestion pricing, road users would pay a fee that fluctuates with the amount of traffic—or more specifically, that corresponds to the additional amount of traffic they cause by trying to squeeze onto an already crowded road. This system would encourage drivers with more-flexible schedules to travel at off-peak times, use alternative routes, and rely on public transportation—while allowing drivers in greatest need to get to their destination on time. California’s SR-91 express lanes are a case study for the effective use of congestion pricing. Along this four-lane, ten-mile stretch, one-way tolls are charged ranging anywhere from $1.20 to $10.00, depending on congestion. Average speed during peak hours on the SR-91 lanes is, as a result, three times the average speed on free lanes at the same time. Lewis (2008) estimated, more generally, that charging a toll of $0.10 to $0.40 per vehicle mile on roads with congestion above a 70 percent volume-to- capacity ratio would lower highway driving by 10 to 16 percent and allow remaining drivers on the highway to drive 7 to 10 percent faster. Congestion pricing promises not only to relieve the economic and social costs of congestion, but also to give clearer signals about the demand for different types of infrastructure. Some resources would be shifted from highways to mass transit, yielding a better balance between these two transportation systems. The need for construction and maintenance would also decrease. The FHWA estimated in 2007 that congestion pricing would reduce the annual amount of money needed to maintain highways and bridges by more than 27 percent (FHWA 2007, Exhibit 10-4). Proceeds from the tolls could be used to supplement dwindling highway and road maintenance funds as well as compensate low-income drivers, who would otherwise bear disproportionate costs from a congestion policy. In a Hamilton Project discussion paper, “America’s Traffic Congestion Problem: Toward a Framework for Nationwide Reform,” David Lewis outlines what a comprehensive framework for congestion pricing would look like (2008).
Congestion pricing solves funding
Burwell and Puentes ‘8(David Burwell and Robert Puentes. "InnovatIve State TranSportatIon FundIng and FInancIng Policy Options for States." N.p., n.d. Web. 2008. 200. AMR)
Congestion Pricing Congestion pricing is a relatively new tolling ap- proach whereby roadway use is priced to reduce de- mand to most efficiently use the road’s capacity and to raise revenue. The core principle of congestion pricing is that the price of accessing available road- way capacity should be higher at the places and the times of day when demand for highways (and thus the benefit from using them) is greatest. If a bridge toll, for example, is raised during periods of highest congestion, travelers are more likely to delay less es- sential trips to off-peak hours, use less crowded al- ternate routes, use public transit, or form car pools.63 Congestion pricing has been adopted in some heav- ily congested U.S. metropolitan areas and is under consideration elsewhere. Variations include tolling the entire roadway (usually a bridge or tunnel), toll- ing one or more existing lanes (while remaining lanes remain untolled), tolling new capacity (one or more lanes), and imposing a “cordon fee” that charges any vehicle that enters a designated area, such as a city center. Benefits of congestion pricing include reducing demand at peak times, which in turn helps to extend the life of the existing infrastructure. For instance, the FHWA found that two congestion priced lanes can move the same amount of peak traffic three times as quickly as four untolled lanes.64 According to U.S. DOT, congestion pricing, if adopted in all areas of ma- jor congestion, could reduce the need for new road- way capacity by $20 billion.65 Additionally, U.S. DOT suggests that increased use of tolling could help states tap into up to an estimated $400 billion in private capital through the use of public-private partnerships (discussed further in the next chapter).66
Funding Aircraft Charging Mechanism
Aircraft charging generate could generate 16 billion annually
Greenstone and Looney 11 (Michael Greenstone, Director, The Hamilton Project 3M Professor of Environmental Economics, MIT, Adam Looney, Policy Director, The Hamilton Project Senior Fellow, The Brookings Institution,” Investing in the Future: An Economic Strategy for State and Local Governments in a Period of Tight Budgets” February 2011, ) CM
Another area where user fees would reduce delays is commercial aviation. As discussed in a Hamilton Project discussion paper, “Air Support: Creating a Safer and More Reliable Air Traffic Control System,” Dorothy Robyn suggests charging airlines and other aircraft operators (rather than passengers, as is current practice) for the cost of air traffic control services and scarce runway space (2008). Charging prices that reflect not just monetary costs, but also delay costs that each user imposes on other users would help reduce airport congestion and flight delays. She furthermore suggests reversing the current bias in favor of small aircraft: at most airports, smaller aircraft use the same runway and air traffic control capacity as larger aircraft. But these aircraft pay far less to use those resources because fees are based on the number of passengers. Some evidence suggests that charging owners of small jets for the delays they cost to passengers of larger planes would generate economic benefits of $16 billion annually (Morrison and Winston 2007).
Flexibility Key
State’s need to be given more flexibility to address their own infrastructure
Building America’s Future 12 - a bipartisan coalition of elected officials dedicated to bringing about a new era of U.S. investment in infrastructure (“Transportation Advocates Urge Congress to Eliminate Barriers to Local and State Infrastructure Investments,” May 16 2012, )
WASHINGTON, DC – A diverse group of transportation organizations released a letter today urging congressional leadership and the conference committee on the authorization of the transportation bill to expand the flexibility and capacity of states and localities to address their transportation infrastructure investment challenges. In the letter, the group urges the conferees to seek all available opportunities to maximize state and local discretion to introduce tolling and user-charge systems. Excerpts from the letter: “As the Senate-House conference on the reauthorization of the surface transportation authorization bill begins, we hope that there will be significant attention directed towards enhancing the capacity of states and localities to attract new and expanded sources of investment capital. Unfortunately, while federal dollars for infrastructure are declining, the demand to fund projects to maintain, restore, and improve our current system is growing. We urge you to eliminate federal barriers to state and metropolitan flexibility and innovation, in raising investment capital and in generating revenues.” “We are also are concerned that certain provisions incorporated into MAP-21 could discourage states from partnering with the private sector and from developing innovative tools to attract private capital to transportation investment, for fear of losing a percentage of federal funding. These provisions would also eliminate the option to use private activity bonds (PABs) to finance leased highway projects and would substantially lengthen depreciation timetables for long-term highway leases, making them less attractive to investors. While we respect the intent to protect the public interest that motivated these provisions, we are concerned that, as currently drafted, they do not respect the ability of states and localities to make such determinations of the public interest on behalf of their citizens and would make it more difficult to attract important new sources of investment capital for transportation infrastructure.” “With the federal government apparently less able or less willing to provide funds to states and localities for surface transportation, we hope that the scope of the conference committee’s work will allow you to adopt a report that will expand the flexibility and capacity of states and localities to address their funding and investment challenges. Old obstacles should be dismantled, and no new barriers should be erected. If states and metropolitan regions are going to be asked to do more in transportation, and if more of the funding and investment responsibilities are to devolve to them, it is essential that this legislation remove the restrictions to their capacity to innovate. Such provisions in the final legislation can be central elements, in advancing innovation, progress, and global competitiveness.”
Re-Allocation key
Funds are misallocated across States
Roth 10 Civil engineer and transportation economist, research fellow at the Independent Institurem Worked with the World Bank on transportation prokects(Gabriel, “Federal Highway Funding,” June 2010, )
Some states persistently receive more federal highway funding than they pay into the federal Highway Trust Fund. The Federal Highway Administration publishes Highway Statistics each year, showing the amounts the fund receives from each state and the allocation paid to each state from the fund.31 Supporters of federal highway financing use these figures to demonstrate how supposedly beneficial the current system is to all states. However, the receipts-and-allocations data presented in Highway Statistics are misleading. The FHWA divides the dollar amounts of the apportionments and allocations for each state by the amount of revenue paid into the fund by each state. The result is a ratio that overstates the benefits of the federal highway system to individual states for a number of reasons: Interest. Larger amounts are taken out of the trust fund than paid in —in other words, the grand total ratio exceeds 100 percent. For the whole period 1956–2008, the excess from the FHTF was around 13 percent, and for 2008 it was 32 percent.32 The excess is the result of interest earned on the fund's balances. But the interest on unspent balances does not represent additional resources that the federal government provides to the states. Minimum guarantee. The 1998 TEA-21 legislation included a "minimum guarantee" that no state would receive less than 90.5 percent of the amount it paid into the trust fund. The 2005 SAFETEA-LU reauthorization raised the minimum guarantee to 92 percent. To implement the guarantee from 1998, $35 billion—16 percent of the total authorized—was set aside to increase the shares of those states that, under the traditional formulas, received less than 90.5 percent of what they paid into the fund. Yet some of this money also went to states that were already receiving more than they paid into the fund, thereby doing little to remedy prior disparities. As there was no such guarantee before 1998, this rule's effect on total distributions over time cannot be gauged from data provided by the Federal Highway Administration. Exclusion of Mass Transit Account and non-road uses. The FHWA data excludes payments that are transferred to the Mass Transit Account and to other non-road uses. As these make up over 30 percent of fuel tax revenues, the data from the FHWA overstate the benefits of the federal highway program. A better way of showing the inequities between the states is to compare each state's share of money taken out of the highway trust fund as a ratio of the share it paid in.33 If a state's receipts were 3 percent of the whole, and its contribution 2 percent, the share ratio would be 1.5. I have presented such calculations elsewhere and found that there are substantial winner and loser states from the Highway Trust Fund.34 Similarly, a recent analysis by Ronald Utt found that half of the states are shortchanged by the current highway trust fund allocations.35 The Congressional Research Service notes that struggles over recent highway bills have focused on these interstate inequities (rather than on ways to make federal expenditures more productive), with the donor states tending to be in the South and Midwest and the donee states tending to be in the Northeast, Pacific Rim, and West.36 Finally, note that these analyses do not take into account the increased costs in every state from federal regulations and administrative costs. If these were taken into account, road users in very few states would derive any net benefits from federal highway financing.
Solvency: Transition
States solve better – better transition
Schank, 4/16 – President and CEO, Eno Transportation Foundation (Joshua, “Yes to VMT - at the State Level”, National Journal Transportation Experts, 4/16/12, )//AL
As state-level gas taxes run out of steam due to increasing vehicle gas mileage and alternative fuels, they will need to be replaced in order to maintain and expand our transportation infrastructure in the future. We should welcome and encourage such replacement, because more accurate user-fees at the state level will allow states to better manage demand and weigh investment priorities. But at the federal level, a VMT fee faces several obstacles that together seem insurmountable. First, we have not yet articulated a clear enough need for a federal program to convince the public to pay any fee at all. We have an existing mechanism in place - the federal gas tax - that would work just fine for the near future if we had the political will to increase it. But instead of support for an increase, we see more evidence of support in Congress for devolving the program to the states. Second, the perception of a privacy issue is unlikely to be overcome in this country, where people are inherently suspicious of the federal government. All the technological fixes in the world are unlikely to convince people that it is ok for the federal government to charge them by the mile for driving. Third, there are large administrative costs associated with a VMT-style fee. Some reports have indicated that this cost is so high that a VMT fee would have to be substantially higher than the existing gas tax on a per-mile basis in order to bring in the same amount of revenue. Finally, VMT fees will perpetuate and exacerbate the donor-donee fights we currently experience with the gas tax. When we know exactly where all the funds are coming from, those paying are likely to demand 100% back on every dollar. In which case, why have a federal program at all? The VMT-fee concept at the federal level is so toxic that we cannot even get anyone to agree to spend federal money to study it. Secretary LaHood got in trouble with the White House for even saying we should "look at" the issue. These things could change, but in the meantime, let's focus our collective energy at the federal level on making the case for the federal program using existing funding mechanisms, and giving states the tools they need to make such transitions at the state level. Once people accept the concept within states, perhaps the federal government will have a shot. We are not backward technologically, but technological innovation in government usually occurs from the bottom-up.
Funding Mechanism: Adaptation
States are already adapting their policies in the absence of federal assistance – means they will have a funding mechanism
Kotkin et al ’11 (The Report Was Prepared by Praxis Strategy Group and Joel Kotkin. Authors from the Praxis Team Include Delore Zimmerman, Mark Schill, Doug McDonald, and Matthew Leiphon. Zina Klapper and Marcel LaFlamme Provided Editing and Additional Research. Praxis Strategy Group Is an Economic Research and Community Strategy Company That Works with Leaders and Innovators in Business, Education and Government to Create New Economic Opportunities. Joel Kotkin Is an Internationally Recognized Authority on Global, Economic, Political and Social Trends. His Book The Next 100 Million: America in 2050 Explores How the Nation Will Evolve in the next Four Decades. "Enterprising States 2011 Recovery and Renewal for the 21st Century." U.s. Chamber of Commerce and the National Chamber Foundation. N.p., 2011. Web. .)
In the past, states could look to Washington for assistance. Now, whatever the intentions or real achievements of the stimulus package, future increases in federal spending seem likely to be meager at best. This presents a new, and perhaps unprecedented, challenge for the states. With Washington effectively forced to the sidelines, states will now have to address fundamental economic issues relating to growth and employment on their own. Most will have to do so without significantly increasing their own spending. For many states the short-term prognosis is dire. Altogether, 44 states and the District of Columbia are projecting budget shortfalls for 2012 amounting to $112 billion. The upcoming fiscal year, according to the Center on Budget and Policy Priorities, will be “one of the states’ most difficult budget years on record. Retiree benefits for state employees add yet another strain, with the states facing a $1.26 trillion shortfall.” Most states have already taken actions to streamline and downsize government to meet the new economic realities and this has proven to be challenging given the increased demand for state services during the national recession. Surely more redesign, streamlining and reforms are on the way. To recoup lost revenue, states have taken such actions as eliminating tax exemptions, broadening the tax base, and in some cases increasing rates as well as raising fees. Low tax rates by themselves are not a silver bullet for growth, but it has become clear that outdated state tax systems can undercut economic vitality. Any state with a budget tilting towards insolvency is in a weak position to make and maintain investments in its workforce and economic infrastructure. Determining where to cut and where to invest is the central challenge of the day. States must carry out short-term strategies to jumpstart and/or sustain an as of yet lackluster recovery and cut costs to make state government more efficient and to avoid financial calamity. Simultaneously, though, they must craft and invest in innovations and structural solutions that will foster long-term economic growth while reining in taxes and regulations that stifle job creation. “Ultimately, there is only one route to sustainable state economies, and that is through broad-based economic growth,“ writes study co-author Joel Kotkin. “The road to that objective can vary by state, but the fundamental goal needs to be kept in mind if we wish to see a restoration of hope and American optimism about the future.” The 2011 Enterprising States study highlights state-driven initiatives to 1) redesign government, including measures to deal with excessive debt levels that inhibit economic growth and job creation and 2) implement forward- looking, enterprise-friendly initiatives with a primary goal of creating the conditions for job creation and future prosperity.
*****Devolution CP*****
Potential 1NC Shell
Text: The United States federal government should devolve all transportation infrastructure authority and funding responsibilities to the 50 state governments, territories, and Washington DC.
Federal funding should be abolished so states are encouraged to take control of their own investment—they’re comparatively more efficient
Roth ’11 Gabriel Roth - Civil Engineer and Transport Economist. "SENATE FINANCE COMMITTEE Testimony on Financing Infrastructure." The Independent Institute. N.p., may 17th, 2011. Web. .
This testimony is designed to show that, for two principal reasons, the federal government should fund no transportation infrastructure at all. The first reason is that, in these times of financial stringency, government should not finance facilities for which users themselves could pay if they wished to cover the costs. For example, those wanting railroads should cover the costs themselves, and those wanting roads should pay more into the dedicated funds that support them. The US air, railroad, and road sectors have a long “user pays” tradition, and the current financial deficits require that this tradition be restored. Government funding for interurban travel can be eliminated for this reason alone. The second reason is that federal payments currently support local services, such as mass transit, and other projects, to promote an undefined concept of “liveability.” Such payments do not seem appropriate for federal funding. Why should farmers in Montana be forced to pay for the travel of wealthier people in New York and Washington DC? If local services are to be subsidized, would it not be better for the funds to be raised from the localities that demand them? These considerations do not apply to appropriations from the federal Highway Trust Fund, which receives dedicated revenues from road users, and has no claims on general revenues. Highway Trust Fund revenues could be increased by raising the dedicated federal fuel taxes but, because conditions vary from state to state, and because of the waste involved in the federal financing of state roads, it would be preferable to meet road funding shortages by raising state charges. For the longer term, for reasons given in my testimony, consideration should be given to phasing out the federal Highway Trust Fund, and for turning back highway and transit funding to the states. States are in a better position than the federal government to reform the current systems of owning, funding and managing highways. For example, they could introduce road-use charges based on distances traveled (rather than on fuel consumed), and give private providers opportunities to maintain existing roads and provide new ones on a commercial basis, eliminating the need for government financing, even by “Infrastructure Banks.” Abolition of federal financing is likely to encourage state and private sector funding, and successful reforms pioneered by some states could quickly be replicated in others. Introduction: Arrangement of my testimony I would like to start by thanking Chairman Baucus for his flattering invitation to testify before the Senate Finance Committee, to explain why federal taxpayers should not be required to finance road infrastructure. My testimony covers four issues: First, whether the federal government should have a role in financing transportation infrastructure; Second, a description of private sector roles in the provision of roads; Third, a description of a plausible alternative to relying on fuel taxes for highway finance; and Fourth, a sketch of how a privately owned and financed road system might function. Federal financing of state roads Modern federal involvement in US highway finance was the result of the 1956 Highway Revenue Act that created the federal Highway Trust Fund to finance the construction of the Interstate Highway System. The federal Highway Trust Fund is funded by dedicated taxes on fuel. Accumulated revenues can be used to pay for up to 90 per cent of the project construction costs without having to borrow or to draw on general funds. The powers under this legislation were designed to expire three years after completion of the Interstate Highway System. However, although the system was deemed complete in 1996, the financing powers are renewed periodically and are still in force. They are now due to expire on September 30, 2011. There are few advantages and big drawbacks to the federal financing of state roads 1: First, the fact that up to 90 per cent of highway costs are paid from federal funds gives states incentives to pay for low-priority projects. For example, the Boston “Big Dig” project, which grew in cost from $2.8 billion to $8.1 billion (both figures in 1982 dollars), would never have been funded by Massachusetts alone. Second, over a third of revenues paid by road users are spent for purposes not directly related to their travel and safety. For starters, 20 per cent of revenues are put into a “Mass Transit Account.” Calculations made by Ronald Utt 2 show that, in the latest highway reauthorization bill passed in 2005 (popularly known as SAFETEALU), road users receive for general-purpose roads and safety programs only about 62 percent of what they pay into the federal Highway Trust Fund. Third, federal involvement raises road costs considerably: - Federal construction specifications can be higher, which increases costs; - The duplication involved by sending money to Washington DC, and back to the states, can increase costs by 10 percent of construction costs; - The application of federal regulations, such as “Buy America” provisions and Davis-Bacon laws also increase project costs. Davis-Bacon alone can increase construction costs by over 35 percent. Fourth, the federal congress uses its powers to favor some states at the expense of others. Alaska, for example gets over five times the amount it pays in to the federal Highway Trust Fund, while Arizona gets 95 per cent. In general, the northwest states tend to get more than they pay into the fund, while southern states get less. Fifth, the federal congress often imposes conditions on the use of the funds it appropriates from the federal Highway Trust Fund. For example, it has in the past forced states to impose 55 miles/hour speed limits. More recently, representatives from California objected a local authority’s decision to allow single-occupant vehicles to use high-occupancy lanes on payment of tolls. In theory, the simplest way to abolish the federal financing of roads would be to stop renewing the 1956 legislation. Then, following a transition period, both the fuel taxes and the congressional powers expire, and the funding of state roads reverts (gets “turned back”) to the states. Many state officials resist this change, possibly because it would force states to incur the odium of raising charges for road use but, for this reason, members of the federal congress should welcome the change. A less drastic and more politically acceptable reform would be to give states the ability to manage their own highway funding free of federal interference. For example, Senator Coburn, a Member of this Committee, and Representatives Lankford and Flake, have developed legislation, the State Highway Flexibility Act, that would effectively and straight-forwardly accomplish this goal. Including this measure as part of a surface transportation reauthorization measure would give states the option to manage highway trust fund monies if they believe they can do a better job than the federal government. And it would also enable states to maintain the current funding system overseen by Congress and DOT. Adoption of this measure would bring some improvement to the current highway financing arrangements, and would not require additional expenditures from general funds. Federal financing by means of an “Infrastructure Bank The objectives of the “Infrastructure Bank” proposed in the BUILD bill are attractive, but it is not clear that its financing has to be federal. Why could not private banks put up $10 billion to achieve the same objectives? Government financing—which would be subsidized by taxpayers—could well discourage private financing. The offer of cheap finance could lead to slower spending on infrastructure, because potential borrowers would line up for the bank’s loans and put their own decisions on hold while waiting for the bank’s action.
States are comparatively better at investing in transportation infrastructure
Edwards ‘10 (Chris Edwards. The Cato Institute. "Proposed Spending Cuts." Department of Transportation. N.p., june 2010. Web. 20 June 2012. .)
Most Department of Transportation activities are properly the responsibility of state and local governments and the private sector. There are few advantages in funding infrastructure such as highways and airports from Washington, but there are many disadvantages. Federal involvement results in political misallocation of resources, bureaucratic mismanagement, and costly one-size-fits-all regulations imposed on the states. The Federal Highway Administration should be eliminated. Taxpayers and highway users would be better off if federal highway spending and gasoline taxes were ended. State governments could more efficiently plan their highway systems without federal intervention. The states should look to the private sector for help in funding and operating highways, and they ought to move forward with innovations such as expressways with electronic tolling. The Federal Transit Administration should be eliminated. Federal transit subsidies have caused local governments to make inefficient transportation choices. Federal aid favors rail systems, which are more expensive and less flexible than bus systems. The removal of federal subsidies and related regulations would spur local governments to discover more cost-effective transportation solutions, such as opening transit markets to private operators. Air traffic control should be removed from the federal budget, and the ATC system should be set up as a stand-alone and self-funded agency or private company. Many nations have moved towards such a commercialized ATC structure, and the results have been very positive with regard to efficiency and safety. Canada's reform in the 1990s to create a private nonprofit ATC corporation is a good model for the United States to follow. U.S. ATC is currently overseen by the Federal Aviation Administration, which has serious funding problems and a poor record on implementing new technologies. Moving to a Canadian-style ATC system would help solve these problems and allow our aviation infrastructure to meet rising aviation demand. Amtrak has provided second-rate rail service for decades, while consuming almost $40 billion in federal subsidies. It has a poor on-time record, and its infrastructure is in bad shape. As a government agency, it is hamstrung in its decisionmaking regarding routes, workforce polices, capital investment, and other aspects of business. Amtrak should be privatized to give it the management flexibility it needs to operate in a more efficient and competitive manner. The table shows that federal taxpayers would save about $85 billion annually by closing down the agencies and programs listed. The department would retain its current activities regarding highway safety, aviation safety, and some other regulatory functions. Those functions could be reformed as well, but the most important thing is to end federal subsidies for transportation activities that would be better handled by the states and private sector. America should take heed of the market-based reforms being implemented abroad, and pursue similar solutions to its transportation challenges.
2NC Devolution CP Overview
And, removing federal policies is critical – spurs innovative state development and innovation
Bipartisan Policy Center ’12 ("Bipartisan Policy Center." Transportation Advocates Urge Congress to Eliminate Barriers to Local and State Infrastructure Investments. N.p., n.d. Web. 24 June 2012. .)
WASHINGTON, DC – A diverse group of transportation organizations released a letter today urging congressional leadership and the conference committee on the authorization of the transportation bill to expand the flexibility and capacity of states and localities to address their transportation infrastructure investment challenges. In the letter, the group urges the conferees to seek all available opportunities to maximize state and local discretion to introduce tolling and user-charge systems. Excerpts from the letter: “As the Senate-House conference on the reauthorization of the surface transportation authorization bill begins, we hope that there will be significant attention directed towards enhancing the capacity of states and localities to attract new and expanded sources of investment capital. Unfortunately, while federal dollars for infrastructure are declining, the demand to fund projects to maintain, restore, and improve our current system is growing. We urge you to eliminate federal barriers to state and metropolitan flexibility and innovation, in raising investment capital and in generating revenues.” “We are also are concerned that certain provisions incorporated into MAP-21 could discourage states from partnering with the private sector and from developing innovative tools to attract private capital to transportation investment, for fear of losing a percentage of federal funding. These provisions would also eliminate the option to use private activity bonds (PABs) to finance leased highway projects and would substantially lengthen depreciation timetables for long-term highway leases, making them less attractive to investors. While we respect the intent to protect the public interest that motivated these provisions, we are concerned that, as currently drafted, they do not respect the ability of states and localities to make such determinations of the public interest on behalf of their citizens and would make it more difficult to attract important new sources of investment capital for transportation infrastructure.” “With the federal government apparently less able or less willing to provide funds to states and localities for surface transportation, we hope that the scope of the conference committee’s work will allow you to adopt a report that will expand the flexibility and capacity of states and localities to address their funding and investment challenges. Old obstacles should be dismantled, and no new barriers should be erected. If states and metropolitan regions are going to be asked to do more in transportation, and if more of the funding and investment responsibilities are to devolve to them, it is essential that this legislation remove the restrictions to their capacity to innovate. Such provisions in the final legislation can be central elements, in advancing innovation, progress, and global competitiveness.”
Devolution Solvency – Airports
Devolution of the federal role in airports is preferable
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
The same general problems that characterize the Highway Trust Fund are also true of the Aviation Trust Fund. There is the same issue of divided responsibilities, with most airports owned by cities or counties and funded largely by users, but with significant federal control over how airports raise and spend their revenues, despite the small fraction of federal funding in most airport budgets. There are costly federal requirements, and long delays in receiving grants for needed improvements. There is also redistribution from large, high-traffic airports to smaller, low-traffic airports; a 1990 analysis showed that many large airports like Boston, La Guardia, Los Angeles, Newark, and San Francisco got back in annual entitlement grants less than 12 percent of what they contributed to the Aviation Trust Fund via airline ticket taxes, while other airports got back far larger amounts (Charlotte got back 36 percent, Dallas Love Field 42 percent, Memphis 31 percent). 24 There is also great difficulty funding intermodal airport-access projects, since there are very narrow limits on the uses to which federally aided airports can put even locally derived revenues such as passenger facility charges (PFCs). New York City has sought to develop a rail line direct from Manhattan to LaGuardia and Kennedy airports using passenger facility charge (PFC) revenues, but approval by the FAA is far from certain, despite the potential benefits to airport users (and the areas congested highway system). Thus far, the FAA has only approved the use of PFC funds for an 8.4-mi. rail link to the subway station nearest Kennedy airport; this is the first off-airport transit facility to be funded with PFC monies. 25 By contrast, London's privatized Heathrow airport is using airport funds to build a dedicated high-speed rail line to central London, tailored to the needs of airport users. For these reasons, in parallel with the proposed devolution of surface transportation to the states, airport funding and responsibility should be devolved to the entities (mostly municipalities) which own Americas airports. In 1987 the U.S. Department of Transportation published a study on the possible defederalization of air-carrier airports. 26 It explored the ability of airports to increase revenues enough to make up for the elimination of federal AIP grants, the attitude of airport managers toward defederalization, and the feasibility of a PFC (which at that time was not legal). DOT researchers made use of a survey of the management of the 288 largest airports, as well as interviews with financial experts and a review of airport financial statements. The study used the commonly accepted typology of airports as large, medium, or small hub airports and non-hub airports. The survey found that 55 percent of large hubs favored defederalization, as did 69 percent of medium hubs and 56 percent of small hubs. These airports account for the large majority of all airline service. For the smallest (non-hub) airports, only 31 percent favored defederalization. That is because federal funds make up a much larger share of the budget of the smallest airports. According to the DOT report, to make up for elimination of federal grants (as of 1985), large hubs would need an average of five percent increase in total revenues, compared with a 20 percent increase for non-hubs. One of the main conclusions of the DOT report was that a PFC would be a feasible way for airports to make up for the loss of federal grant revenue. Using 1985 figures, Table 3 shows the estimated size of the PFC needed, on average, for each category of airport, to fully replace its federal grant revenues for that year, and an inflationadjusted estimate for 1996.
Multiple benefits to airport defederalization – investment, intermodalism, innovation, and private investment
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
For air-carrier airports, the benefits of the defederalization would be several, and parallel to those of devolving surface transportation to the states. ! More Productive Investment. For air-carrier airports, the present AIP system shifts resources from the busiest, most-congested airports (which collect the largest amounts of ticket taxes) to relatively smaller and less-congested airports. Defederalization would permit the busiest airports to generate and keep funds for expansion. Together with the other policy changes discussed in this paper, it would attract capital (including private capital) to those airports and metro areas which most needed to expand airport capacity. ! Intermodalism. Getting rid of the federal modal categories of grant funding would permit states, cities, and the private sector to devise and fund truly intermodal solutions to transportation problems (such as better road and rail access to airports, where this made economic sense). ! Freedom for Innovation. Ending federal micromanagement of airport finances would encourage new ways of adding value to airports via intensive retail/concessions development and value-maximizing land uses on airport properties. It would also permit airports to use market-based landing fee structures to spread out their peak traffic, thereby making greater use of their present capacity. ! Private Investment. Some cities and counties have wanted to sell or lease their airports to private firms, or to franchise new-terminal development to private firms. They have been deterred by provisions of FAA grant assurances. Defederalization will remove these barriers, permitting private capital to flow into airports and airport-development projects.
Federal grants and regulations don’t hurt airports
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
The principal objection to defederalization is the argument that a federal grant system and its accompanying regulations are necessary in order to preserve and expand a national airport system. It is not clear what this term is supposed to mean when it comes to air-carrier airports. As noted previously, some cities may be under some degree of pressure to close down money-losing, subsidized general-aviation airfields in order to put the land to use for activities that do not require subsidies and will be part of the tax base. State grants for general aviation airports could help preserve that system of airports, should a state desire to make such expenditures. But does anyone seriously contend that Albuquerque or Detroit or Norfolk or Reno is likely to shut down or drastically restrict the operations of its air carrier airport, in the absence of FAA grants and grant agreements? Every mayor, city council, and chamber of commerce realizes that convenient airline service is a huge competitive advantage for a city. They are not about to kill this goose that lays golden eggs for them. And to the extent that a city or a private firm attempts to raise airport charges (whether landing fees or PFCs) to ridiculous levels, that airport would quickly lose airline service, as passengers drove to the nearest alternative airport and airlines redeployed their resources to more hospitable locations. (Indeed, Santa Barbara, California recently identified exactly this problem: a leakage of 30 to 40 percent of its passengers to airports within 100 miles such as Burbank and Los Angeles due to excessively high airline fares at Santa Barbara. Presenting a careful study of the problem to the airlines, the airport authority persuaded them to institute dramatic cuts in fares. 30 ) The problem of local control wreaking havoc on the national airport system is not something we should take seriously. Cities, counties, and private airport operators know that well-run, accessible, reasonably priced airports are in their interest. They do not need a federal nanny to keep them in line.
Devolution Solvency – Mass Transit
Federal investment increases the cost of mass transit
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
Since annual federal aid for mass transit was first authorized via the Urban Mass Transportation Act of 1964, the federal government has spent some $130 billion for this purpose, in 1996 dollars 12 . The 1964 act authorized capital grants to assist cities in taking over and rehabilitating mostly bankrupt private transit systems. Further legislation in 1971 added new rail starts to the projects eligible for up to 80 percent federal funding. Another mass transit act in 1974 for the first time authorized operating subsidies, as well, to cover up to 50 percent of a transit agencys operating losses. In 1982 one cent of the federal gasoline tax was dedicated to transit aid (for capital grants). And ISTEA in 1991 further broadened the extent to which highway funds could be shifted to transit projects. The American Public Transit Association estimates that $1.7 billion has been transferred from highways to transit during the years 1992 through 1995 under ISTEA=s provisions. 13 Overall, federal, state, and local transit subsidies since 1964 total $310 billion in 1996 dollars nearly as much as the $329 billion cost of the Interstate highway system. 14 What have been the results? The premise of federal transit aid was that modernized transit systems would reverse the long-term decline in transit ridership, thereby easing traffic congestion, reducing air pollution, and saving energy. Yet as Figure 1 makes clear, the use of transit by commuters has continued to decline, despite the huge sums spent by federal, state, and local governments to subsidize bus and rail services. A 1988 assessment by the Congressional Budget Office concluded the following: After 25 years of federal aid, transit agencies have modern fleets, and many own considerably more vehicles than they need for rush-hour traffic. Yet most of the equipment in service is underused, and the federal operating subsidies go largely to pay for buses and trains running empty rather than for service improvements or fare discounts. 15 Indeed, CBO concluded that the ability to have up to 80 percent of capital programs paid for by someone else had biased transit systems decisions in favor of capital expenditures for bus and especially rail systems that are not cost-effective. Figure 2 depicts the results of CBO’s calculation of the relative cost per passenger mile of five different transit modes. It is doubtful that many cities would have opted for the high-cost rail alternatives had extensive free federal money not been made available. Now, of course, they are stuck with paying to operate those expensive systems.
Federal investment in rails reduced ridership
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
But shifting so much resources to rail transit has had the further consequence of reducing overall transit ridership. Figure 3 depicts transit ridership before and after federally funded rail systems were added to the transit systems of a number of major cities. As CBO and others have pointed out, cities that have added rail systems generally reconfigured their bus systems to feed the rail lines. But that has often had the perverse effect of making the bus system (which covers a vastly greater area) less useful for numerous ordinary trips. That, in turn, has served to reduce overall ridership. Again, the CBO report concludes that, New transit systems financed with federal aid particularly rapid rail projects have not lived up to their promise. Generally they have lowered the efficiency of transit service by adding expensive unused capacity.@ 16 The extent of unused capacity is depicted in Figure 4, which shows the measured load factor (fraction of all spaces during hours of operation that are occupied by customers) for the same five transit modes depicted in Figure 2.
Devolution Solvency – Efficiency
Devolution of federal involvement would make local governments more efficient
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
As for operating subsidies, CBO found that more than 75 percent of U.S. transit ridership is on systems that rely on federal operating subsidies for only 8 percent or less of their revenue. Modest productivity gains could easily compensate for the loss of federal subsidies in those large-city cases. On the other hand, the smallest 200 cities receiving federal transit aid (all but three with populations under one million) carry only 7 percent of transit ridership but account for 27 percent of federal operating subsidies. CBO notes that while cities in this group would have the most to lose from a withdrawal of federal aid, they would potentially have much to gain also: their transit services are now among the least efficient, and pressure to reduce costs could only improve them.@ Cities could cut costs dramatically via competitive contracting of transit services. Wendell Cox has reviewed the worldwide experience with competitive contracting of transit service (in which firms bid for the right to operate specific groups of routes on the basis of the least amount of subsidy needed). He finds significant reductions in cost per vehicle mile, ranging from 19 percent in Copenhagen to 25 percent in Australian cities (Adelaide, Brisbane, Perth), 33 percent in San Diego, and 42 percent in London. 21 He notes that competitive contracting has begun expanding from bus to rail, with subway service now outsourced in Stockholm and rail system contracting now planned in Adelaide and Perth. Cox has calculated that the loss of all federal formula funding ($1.9 billion in 1994) could be made up via transit system operating efficiencies averaging 11.3 percent well within the range of what has been achieved via competitive contracting of bus service in the United States and overseas. 22 Competitive contracting and other productivity improvements would be much easier to accomplish after the end of federal grants, because transit agencies would no longer have to comply with the labor restrictions of section 13(c), which major transit agencies have urged be removed as a costly federal mandate. 23 Of all transportation modes, urban transit is clearly the most obviously local and the furthest removed from being a federal matter. When this fact is combined with an appreciation of the harm done by federal transit aid, the case for shifting this function to the local level is overwhelming.
Devolution Solvency – Highways
Federal devolution is preferable for highways – federal requirements make highway costs higher
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
III. DEVOLVING SURFACE TRANSPORTATION A. Highways In a 1990 analysis prior to the adoption of ISTEA, transportation economist Gabriel Roth summarized the strengths and weaknesses of the Highway Trust Fund. 7 Its main strength is that it has achieved its objective of greatly improving U.S. highways at relatively low cost to its users. But Roth also noted a number of weaknesses. ! Divided Responsibilities. Federal funding and regulations are overlaid on state highway agencies which are the actual owners, operators, and part-funders of the federal highway system. This division of responsibilities hinders sound investment decision-making and businesslike management of our highways. ! Costly Federal Requirements. States must comply with costly and burdensome regulations as a condition of using federal highway funds. Davis-Bacon Act wage provisions, Buy America provisions, and various setasides requirements increase construction costs by 20 percent. 8 Many other requirements, such as (recently repealed) maximum speed limits and minimum drinking age, do not directly increase highway costs but may conflict with state policy priorities. Still others, such as metric conversion requirements, increase operating costs. In addition, Roth estimates that the administrative costs of federal grant programs are on the order of 1.5 percent at the federal level and 5 to 7 percent at the state level. ! The Free-Money Effect. The availability of 80 percent or more federal funding for a new facility leads to a certain amount of gold-plating of projects funded with federal money compared with comparable projects funded solely with state funds. For example, in Phoenix, AZ those portions of the urban freeway system that are state-funded are relatively austere, whereas the federally funded portions boast landscaping, and one portion was built as a cut-and-cover tunnel with an urban park above it at considerably greater cost. Highway engineers can provide numerous examples of this effect. ! Redistribution Among States. The trust fund distributes federal funds among the states according to complex formulas which significantly redistribute resources. Many states are net donors; others are net recipients. While such redistribution may have been necessary to develop the Interstate system, its continuation is questionable now that this system is complete and operational. Supply and demand more accurately reflects the real need for additional transportation investment than the trust fund's arcane formulas. ! Use for Non-Highway Purposes. Administrations and Congress are routinely tempted to use the trust fund for deficit-management purposes. ISTEA devoted a portion of its fuel-tax increase to federal deficit reduction rather than to the trust fund. In addition, federal budgets frequently appropriate less from the Trust Fund than is collected in a given year, in order to hold down the deficit, thereby accumulating multi-billion dollar balances in the Trust Fund. This practice tends to starve the transportation system of needed investment, even though these funds can only be spent on transportation. Moreover, as of 1996, only 12 cents out of each 18.4 cents paid by highway users in gasoline taxes actually goes for highways; 4.3 cents goes for deficit reduction and another 2 cents goes for mass transit. ! Concealment of Trust Fund Costs. Records of trust fund disbursements to the states reflect the accumulated interest earned on trust fund balances and eventually returned to the states. Over the years since 1956, the trust fund has paid out 16 percent more than states paid in, thanks to this accumulated interest. However, states themselves could have earned at least this much, and had access to the funds at times of their own choosing, had the funds been left with the states in the first place. Hence, the amounts recorded as returned to each state should be adjusted downward by 16 percent to account for the artificial nature of these earnings. In addition, the federal costs of operating the trust fund account for another one percent, requiring another downward adjustment of this amount. How would states fare if there were no federal fuel taxes and no federal highway grants i.e., if the money were left to be collected and spent within each state? To begin with, there is the estimated 20 percent cost impact of Davis Bacon and other federal requirements. This number may over-estimate the federal impact, because 19 states have strong state-level equivalents of Davis-Bacon that would still apply if the federal requirement went away and another 12 have weak laws of this type. 9 For a state with local version of Davis-Bacon, how much would project costs be reduced if the federal requirement went away? A 1995 survey of state transportation agencies conducted by the American Association of State Highway and Transportation Officials (AASHTO) turned up very few hard quantitative estimates. 10 The only state that reported such a study was Arizona, which came up with an overall cost increase due to Davis-Bacon of 13 percent. Because Arizona may not be nationally representative (lower labor costs than many other states, right-towork law), we will assume that the average impact in a state with no mini-Davis Bacon Act of its own is 10 percent. For states with a strong mini-act, we will assume zero percent impact from devolution, and assume five percent for states with a weak mini-act. What about the balance of the previously estimated 20 percent federal cost impact? The other identified regulations making up the original estimate (besides Davis-Bacon) were Buy America provisions and minority/women/small business set-asides (and possibly though not mentioned more-costly federal environmental requirements). Nominally, these were apparently being estimated at 10 percent (with Davis-Bacon making up the other 10 percent, for a total of 20 percent). Because some states have regulations in each of these categories, a more conservative estimate of the federal impact We will estimate an average cost increase of five percent due to the free federal money effect, as discussed above. Summing up these various categories of cost impacts, we find that states with strong mini-Davis-Bacon Acts have 16.5 percent higher costs when using federal highway aid; those with weak mini-acts have 21.5 percent higher costs; and those without mini-acts have 26.5 percent higher costs. In addition, before applying this cost factor, we must reduce the federal revenues returned to each state by the 17 percent noted above under Concealment of Trust Fund Costs essentially, the interest foregone by having the funds on deposit with the feds instead of being invested by each state (at a possibly higher rate of return). Hence, each state only gets back 83 percent of the nominal amount reported by FHWA, and the resulting funds are only worth between 73.5 (100 minus 26.5) percent and 83.5 percent as much as state dollars, because of the higher cost of using federal dollars. This gives us overall adjustment factors of 61 percent, 66 percent, and 69 percent for the three categories of statesould be five percent. In addition to these direct cost impacts of federal requirements, we have several other impacts: ! Following Roth, we will estimate 1.5 percent federal administrative costs and five percent state administrative costs for dealing with federal aid and its requirements a total of 6.5 percent. This is a conservative estimate, given that state administrative costs as a fraction of construction outlays have increased from below seven percent in the late 1950s to over 20 percent by the early 1990s. 11Tables 1 and 2 make use of FHWA data on total amounts paid by each state into the Highway Trust Fund and paid out of the Fund, over the years since 1956. The amounts paid out are adjusted by the appropriate factor depending on the existence and/or type of mini-Davis-Bacon Act in each state to produce an adjusted total paid to each state over this time period. The final number in the tables' right-most column is the adjusted ratio between monies returned to each state and monies paid in by it. The result is that only 18 of the 51 states plus the District of Columbia have been net gainers from the Trust Fund's redistribution of funds. All 33 other states would be better off, in dollar terms, if there had been no federal gasoline tax and no federal trust fund. For large states, the Highway Trust Fund is an especially bad deal: California has gotten back only 66 percent of what it puts in, Michigan only 56 percent, Ohio only 64 percent, Florida only 56 percent, and Texas only 58 percent. This analysis suggests that it may be politically feasible to devolve surface transportation funding and responsibility to the state level, reducing the Federal Highway Administration to a small cadre that would maintain uniform standards for Interstate system planning and design. States and metro areas, working with the private sector as they chose, would assume all responsibilities for funding, construction, and operation of highways. The federal gasoline tax would be abolished and states would be free to increase their own gasoline taxes (or other funding sources) to raise the funds necessary to maintain their system at the desired level. The remaining federal ban on tolling Interstate highways would be repealed as part of the change-over.
States would benefit from federal devolution of highways -- productive investment, intermodalism, innovation, and private investment
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
The benefits of such a change could be very large. Among them would be the following: ! More Productive Investment. As noted above, that portion of our highway system constructed with federal aid costs at least 21.5 percent more than highways constructed without that aid. Thus, the same total dollars invested by states and the private sector could produce more needed infrastructure; alternatively, some states might keep net investment levels the same as at present, freeing the remaining resources for other societal needs. ! Intermodalism. In conjunction with defederalization of airports (discussed below), the devolution of surface transportation responsibilities from DOT to the states and cities would get rid of the rigid modal categories of funding, in which transit funds can only be used for transit, highway funds only for highways, and airport funds only for airports. The present system has made it extremely difficult to fund truly intermodal infrastructure, such as surface transportation access to airports. Decentralizing the funding to where the needs are would facilitate the development of needed intermodal facilities. ! Freedom for Innovation. Overly prescriptive federal regulations and standards have stymied innovation in transportation infrastructure. For example, two decades of federal speed-limit mandates precluded potentially large economic gains from the time savings involved in high-speed heavy-truck-oriented tollways, such as the proposed Chicago-Kansas City Tollway and Colorado's Front Range Toll Road. ! Private Investment. The private sector has stepped up to the plate in the 12 states where the law has been amended in recent years to encourage private investment in surface transportation. Yet because of the higher costs involved, private firms have shied away from public-private partnerships involving federal highway funds. Devolving these responsibilities to the states is more likely to encourage greater private-sector investment than is further attempts to fine-tune the federal public-private partnership provisions.
Devolution Solvency – HSR
States should have control of their transportation infrastructure because they understand what practical, economical investments are – High Speed Rail proves
Dehaven ’10 (Tad DeHaven. "High-Speed Federalism Fight | Downsizing the Federal Government." High-Speed Federalism Fight | Downsizing the Federal Government. N.p., november 26th, 2010. Web. 20 June 2012. .)
PrintPrint In October, I speculated that the upcoming elections could be the nail in the coffin for the Obama administration’s plan for a nationwide system of high-speed rail. Indeed, some notable gubernatorial candidates who ran, in part, on opposition to federal subsidies for HSR in their states proceeded to win. However, Transportation Secretary Ray LaHood made it clear in a recent speech to HSR supporters that the administration intends to push ahead. LaHood’s message was targeted specifically to incoming governors John Kasich in Ohio and Scott Walker in Wisconsin, who argued that HSR doesn’t make any economic or practical sense for their states. LaHood said that states rejecting federal HSR subsidies won’t be able to reroute the money to other uses, such as roads. Instead, LaHood said the rejected money will redistributed “in a professional way in places where the money can be well spent” – i.e., other states. And sure enough, other governors were quick to belly up to the Department of Transportation’s bar in order to grab Ohio and Wisconsin’s share. From the Columbus-Dispatch: New York Gov.-elect Andrew Cuomo has said he would be happy to take Ohio’s money. Last week, California Democratic Sens. Barbara Boxer and Dianne Feinstein wrote LaHood saying that California stands ready to take some, too, noting that several states that elected GOP governors this month have said they no longer want to use the rail money for that purpose. “It has come to our attention that several states plan to cancel their high-speed rail projects. We ask that you withdraw the federal grants to these states and award the funds to states that have made a strong financial commitment to these very important infrastructure projects,” Boxer and Feinstein said in their letter to LaHood. This is a textbook example of why the Department of Transportation should be eliminated and responsibility for transportation infrastructure returned to state and local governments. If California wishes to pursue a high-speed rail boondoggle, it should do so with its own state taxpayers’ money. Instead, Ohio and Wisconsin taxpayers now face the prospect of being taxed to fund high-speed rail projects in other states. If California’s beleaguered taxpayers were asked to bear the full cost of financing HSR in their state, they would likely reject it. High-speed rail proponents know this, which is why they agitate to foist a big chunk of the burden onto federal taxpayers. The proponents pretend that HSR rail is in “the national interest,” but as a Cato essay on high-speed rail explains, “high-speed rail would not likely capture more than about 1 percent of the nation’s market for passenger travel.”
Transportation infrastructure investment should be controlled by the states because the federal government fails at making useful investments – Tennessee, Alaska, and Kentucky projects prove
Dehaven ’10 (Tad DeHaven. "Federal Transportation Follies." Cato @ Liberty. N.p., january 21, 2010 @ 10:02 am. Web. 20 June 2012. .)
Federal Transportation Follies Posted by Tad DeHaven The 2009 stimulus bill gave the U.S. Department of Transportation $50 billion to distribute to the states for highways, roads, and bridges. A House bill passed in December would add another $28 billion. According to Washington folklore, spending on infrastructure is always good because it’ll create jobs and spur economic growth. However, three recent examples are a reminder that the government often does a poor job of allocating resources. First, an Alaska legislative audit concluded that the state should not have spent federal transportation money building a road to the site of the proposed “Bridge to Nowhere,” which was canceled after a national outcry. Alaska kept the federal money originally earmarked for the bridge, and then-Governor Sarah Palin agreed to spend $26 million of it on the road despite the fact there was no bridge. Second, the Department of Transportation is supposed to exclude “unethical, dishonest, or otherwise irresponsible” parties from receiving federal funds. But according to a report from DOT’s inspector general, the average case took DOT officials “300 days to reach a suspension decision and over 400 days to reach a debarment decision.” For example, Kentucky awarded $24 million in transportation stimulus money to companies with officials under review by the Federal Highway Administration for bribery, theft, and obstruction of justice. The FHA took 10 months to review the companies before ultimately suspending them, but Kentucky had already given the companies the money. Third, a Tennessee television station analyzed the state’s use of federal transportation stimulus money and found that it “spent an average of $161,500 per job created and that some paving jobs, which were temporary, cost taxpayers more than $1 million each.” The station interviewed a construction company that had been busy during the summer when it had federal money. Now its trucks are idle and the workers it hired have all been laid off. Randal O’Toole says that “The best test of infrastructure value is whether users are willing to pay for it.” There’s almost no connection between infrastructure projects funded by federal taxpayers and the typically local users. Leaving infrastructure projects to state and local governments to fund would make more of a connection. Privatization, which would utilize tolling and other user fees, would be even better.
Solvency: General Devolution
The federal trust fund paradigm fails – devolution would fix the problems
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
The prevailing paradigm for transportation infrastructure in the 20th century has been for a central government to collect tax funds (albeit generally user taxes), deposit those monies in an earmarked trust fund, and then redistribute those funds to lower levels of government to be spent on projects. Much political wrangling takes place over the precise formulas to be used in dividing up these funds, and a large central staff has grown up in each case (Federal Aviation Administration, Federal Highway Administration, Federal Transit Administration) to administer the body of rules and regulations that has evolved. Conventional wisdom has not questioned this paradigm, despite the existence of serious infrastructure problems. Rather, it has called for increased levels of spending as the answer to the problems. But the conventional paradigm is subject to at least five fundamental problems. 1. The Pork-Barrel Problem Federal transportation grant programs. be they airport, mass transit, or highway, are plagued by the problem of porkbarrel spending. Members of Congress traditionally derive great benefits from earmarking projects for their districts, regardless of cost-benefit ratios or the relative value of the project compared with alternate uses of the funds. Since trust fund dollars are always limited, this means that every bad@ project which jumps the queue at the behest of a member of Congress necessarily displaces a a better@ project (better in terms of adding real economic value). Thus, this process systematically wastes scarce transportation infrastructure resources. 2. The Free-Money Problem Providing federal grants that cover 75 to 90 percent of a project's cost encourages local officials to push for capital intensive solutions to transportation problems to build their way out of congestion.@ In some cases a less-costly solutionCe.g., an expanded bus system rather than a light-rail system may make greater economic sense, but if the federal program makes the costly approach look cheap, it is more likely to be chosen. In other cases, a software@ approach (peak-hour pricing) might make better sense than a Ahardware@ approach (another runway or freeway lane). As Harvard's David Luberoff notes, projects such as Miami's $30,000-a-rider rail system and Boston's Central Artery would never have been built if states and localities had to put up more than a token share of the money needed to fund them.@ The illusion of free federal money@ leads to decisions that would not have been taken were the local agency having to make the most cost-effective use of its own resources. 3. The Non-Pricing Problem Traditional Auser taxes@ avoid market pricing. Thus, until the exceptions permitted by ISTEA, federal policy flatly prohibited charging tolls on federally aided highways. Likewise, the way in which the FAA interprets airport pricing policy has discouraged attempts to move toward landing fees that reflect supply and demand for scarce runway space. The results have been serious and costly problems of urban freeway congestion and serious delays at major airports. This creates the impression that the problem is insufficient freeway or runway capacity. In particular cases there may well be insufficient capacity, but the existence of considerable capacity at off-peak times indicates that the congested facility is not being fully or efficiently utilized. Peak-hour pricing would spread out peak loads, thereby reducing (but usually not eliminating) the amount of investment in new capacity required. This would be both economically and environmentally sound. 4. The Ribbon-Cutting Problem The National Council for Public Works Improvement noted that while nearly 75 percent of current infrastructure capital spending comes from users, only about 50 percent of operations and maintenance funding comes from this source. As a result, maintenance is all too often the stepchild which must fight for annual appropriations. Former New York State Comptroller Edward V. Regan has noted that because politicians get considerable publicity and political credit for cutting the ribbons on new facilities, The incentives, therefore, are for public officials to puposefully starve the maintenance budget.@ 6 Deferred maintenance will remain a serious problem until the paradigm is changed, and user-funding becomes standard for infrastructure projects. 5. The Innovation Problem Public agencies tend to be risk-averse and oriented to the status quo. Hence, they are slow to adopt innovations. It is the private sector which is pioneering the introduction of congestion pricing on highways. It is the private sector which is taking full advantage of electronic toll collection to develop the world's first toll road without any toll booths. And it is likely to be the private sector that introduces smart highway@ technology, targeting upscale customers who desire in-car navigation and two-way communications as a niche market willing to pay for valueadded services. Airports, air traffic control, and highways fail to make use of state-of-the-art technology because they are operated by input-oriented public agencies rather than user-friendly service businesses. These fundamental problems lend support to the idea of changing the infrastructure paradigm to one that, as much as possible, relies on user funding, dedicated revenues, and market pricing. Devolving transportation infrastructure responsibilities to lower levels of government would hasten the adoption of the new infrastructure paradigm.
Devolution is beneficial – responsibility is regional, federal funding fails, and states are more innovative
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
Why Devolve? There are three principal reasons for considering the devolution of transportation investment to lower levels of government. First, the responsibility for building, owning, and operating these systems is primarily regional or local, not national. Now that the Interstate highway system has been completed, the federal role in highways can be dramatically reduced, and the federal role in aviation is primarily concerned with the national air traffic control system, not local airports. There is no national interest (as apart from a regional or local interest) in whether San Francisco extends its BART system to the airport or whether Boston puts its Central Artery underground. Second, there are major disadvantages with the centralized federal trust-fund approach to funding transportation infrastructure, as will be discussed below. Third, it is cities and states not the federal government that have been most innovative in seeking new and better ways to invest in infrastructure and improve its performance, by making use of public-private partnerships.
Federal devolution of transportation infrastructure is good – more productive investment, more innovation, and privatization would be possible
Poole 96 president of the Reason Foundation, engineering graduate of MIT, advisor of the US and California DOTs, the White House, and the President’s commission on privitization (Robert W. Poole, Jr. “DEFEDERALIZING TRANSPORTATION FUNDING.” )
Airports, highways, and mass transit systems are primarily state and local responsibilities. They are developed and operated by state and local governments (with increasing private-sector involvement) and funded primarily from state and local sources. Yet the federal government, by collecting transportation user taxes and using them to make grants for these systems, both raises the costs and exerts significant control over these state and local activities. Congress should devolve transportation infrastructure funding and responsibilities to cities and states, ending federal grant programs and their accompanying restrictions. Cities and states have been open to privatization, and most would welcome the flexibility and freedom from costly federal regulations which devolution would give them. Devolving transportation funding would lead to more-productive investment, greater intermodalism, more innovation, and new capital from the private sector. Conventional wisdom suggests that 21 states are net donors to the federal highway program and the rest are net recipients. But this paper's analysis, taking into account the real costs of federal funding and regulations, concludes that 33 states get back less than they contribute in highway taxes and would be better off if the funds were left in their states to begin with. By adding such major states as Illinois, New Jersey, New York, Pennsylvania, and Virginia to the donor-state category, this assessment could change the political dynamics in favor of devolution. Abundant evidence now exists that federal transit programs have stimulated investment in unviable rail systems and have needlessly boosted transit system operating costs. The flexibility created by repeal of federal transit regulations would permit changes (such as competitive contracting of transit operations) that could save enough to offset much of the loss of federal operating subsidies. It would be up to cities and states to decide whether to continue to Ainvest@ in non-cost-effective rail transit. The only truly federal role in aviation is ensuring safety and facilitating the modernization of the air traffic control system. The latter can best be accomplished by divesting ATC to a user-funded corporation, as 16 other countries have done. Airports should be defederalized; all sizes of commercial airports could make up for the loss of federal grants with modest per-passenger charges. States could decide whether to subsidize unviable general aviation airports. Overall, the federal government would retain certain coordination and safety-regulation functions in transportation. But it would henceforth leave investment and management decisions to state, city, and private decision-makers.
Solvency: Devolution Best
States should invest in their infrastructure because they’re able to take into account local conditions and needs
CATO Handbook for Congress ’10 "Cato Handbook for Congress: Transportation." Cato Handbook for Congress: Transportation. N.p.,.20 June 2012. Roth. "ObamaÂ’s The CATO
Institute. N.p., october 9, 2010. Web. 20 June 2012.
Highway Infrastructure, Mass Transit, and Gasoline Taxes This final section analyzes highway and transit infrastructure, which is owned and operated by government. The U.S. Department of Transporta- tion should be abolished and public roads, national highways, and urban mass transit systems returned to the states and municipalities and the private sector. Whatever justification there may once have been for a national transportation department has disappeared; the goal of creating a national road network was achieved long ago. Transportation Policy 381 CATO HANDBOOK FOR CONGRESS If states were allowed to assess and fund their own infrastructure needs, they would be able to select the transportation systems that best suited local conditions. If necessary, they could reintroduce gasoline taxes at the current level, or at higher or lower levels, to pay for their systems. But that is unlikely to be necessary. Ken Small and his colleagues demonstrated more than a decade ago that efficient congestion and axle-weight-related fees on trucks could finance an interstate highway system without the use of a gasoline tax. And the Chilean experience described by Eduardo Engel and his coauthors provides a blueprint for private road franchise contracts that could be used in the United States.
Solvency: General
States are comparatively better at investing in transportation infrastructure
Edwards ‘10 (Chris Edwards. The Cato Institute. "Proposed Spending Cuts." Department of Transportation. N.p., june 2010. Web. 20 June 2012. .)
Most Department of Transportation activities are properly the responsibility of state and local governments and the private sector. There are few advantages in funding infrastructure such as highways and airports from Washington, but there are many disadvantages. Federal involvement results in political misallocation of resources, bureaucratic mismanagement, and costly one-size-fits-all regulations imposed on the states. The Federal Highway Administration should be eliminated. Taxpayers and highway users would be better off if federal highway spending and gasoline taxes were ended. State governments could more efficiently plan their highway systems without federal intervention. The states should look to the private sector for help in funding and operating highways, and they ought to move forward with innovations such as expressways with electronic tolling. The Federal Transit Administration should be eliminated. Federal transit subsidies have caused local governments to make inefficient transportation choices. Federal aid favors rail systems, which are more expensive and less flexible than bus systems. The removal of federal subsidies and related regulations would spur local governments to discover more cost-effective transportation solutions, such as opening transit markets to private operators. Air traffic control should be removed from the federal budget, and the ATC system should be set up as a stand-alone and self-funded agency or private company. Many nations have moved towards such a commercialized ATC structure, and the results have been very positive with regard to efficiency and safety. Canada's reform in the 1990s to create a private nonprofit ATC corporation is a good model for the United States to follow. U.S. ATC is currently overseen by the Federal Aviation Administration, which has serious funding problems and a poor record on implementing new technologies. Moving to a Canadian-style ATC system would help solve these problems and allow our aviation infrastructure to meet rising aviation demand. Amtrak has provided second-rate rail service for decades, while consuming almost $40 billion in federal subsidies. It has a poor on-time record, and its infrastructure is in bad shape. As a government agency, it is hamstrung in its decisionmaking regarding routes, workforce polices, capital investment, and other aspects of business. Amtrak should be privatized to give it the management flexibility it needs to operate in a more efficient and competitive manner. The table shows that federal taxpayers would save about $85 billion annually by closing down the agencies and programs listed. The department would retain its current activities regarding highway safety, aviation safety, and some other regulatory functions. Those functions could be reformed as well, but the most important thing is to end federal subsidies for transportation activities that would be better handled by the states and private sector. America should take heed of the market-based reforms being implemented abroad, and pursue similar solutions to its transportation challenges.
*****Single State CP*****
1NC Single-State CP Shell
Text: _______________Insert a state here _____________should (Do the plan) [insert a funding mechanism if necessary]
If one state significantly invests in new highway funding, other states will follow
Roth - Civil Engineer and transportation economist, research fellow at the Independent Institute- 2010 (Gabriel, June 2010, “Federal Highway Funding,” )
Such reforms would give states the freedom to innovate with toll roads, electronic road-pricing technologies, and private highway investment. Unfortunately, these reforms have so far received little action in Congress. But there is a growing acceptance of innovative financing and management of highways in many states. With the devolution of highway financing and control to the states, successful innovations in one state would be copied in other states. And without federal subsidies, state governments would have stronger incentives to ensure that funds were spent efficiently. An additional advantage is that highway financing would be more transparent without the complex federal trust fund. Citizens could better understand how their transportation dollars were being spent. The time is ripe for repeal of the current central planning approach to highway financing. Given more autonomy, state governments and the private sector would have the power and flexibility to meet the huge challenges ahead that America faces in highway infrastructure.
Positive spillover’s solve economic prosperity
Bruce et al. 7 (Donald, Associate Professor in the Center for Business and Economic Research (CBER) and the Department of Economics at the University of Tennessee, Knoxville, Deborah A. Carroll is an Assistant Professor in the Department of Public Administration within the School of Public and International Affairs at The University of Georgia, John A. Deskins is an Assistant Professor in the Economics and Finance Department at Creighton University. Jonathan C. Rork is an Assistant Professor in the Department of Economics within the Andrew Young School of Policy Studies at Georgia State University. “Road to Ruin? A Spatial Analysis of State Highway Spending” 2007, ) CM
We confirm the existence of positive spillovers from highway spending by estimating state personal income growth regressions in which own-state and neighbor-state highway spending levels are included as control variables. Neighbor-state highway spending is almost always found to have a positive effect on own-state personal income growth, while own-state spending has little to no effect. This result provides further evidence that states gain from infrastructure spending in neighboring states and need not necessarily engage in counter-productive race-to-the-top competition.
2NC Single-State CP Overview
States able to fund their own roads manage more efficiently and compete with each other, inspiring innovation
Roth ‘5 (Gabriel Roth – civil engineer and transportation economist. "Liberating the Roads Reforming U.S. Highway Policy." The Cato Institute. N.p., march 17, 2005. Web. .)
States fully responsible for their own roads would have stronger incentives to ensure that funds paid by road users were spent efficiently. For example, in the absence of federal grants for new construction, some states could prefer to better manage and maintain their existing roads rather than build new ones. Others might find ways to encourage the private sector to assume more of the burden of road provision—for exam- ple, by contracting with private firms to maintain their roads to designated standards or to provide new roads. Some states might stop discriminating against privately provid- ed roads, most of which are currently ineligi- ble to receive funding from the federal Highway Trust Fund although their users pay the required federal taxes. New arrangements would be noticed by other states, and those that brought improve- ments could be copied, while failed reforms could be avoided. In time, road users would get better value for their money, and some would even get the road services they were pre- pared to pay for, while their states could expend their scarce resources on activities such as public safety, which could not be made commercially viable. Yet much of this is impossible or discour- aged under the current system of federal financing of roads. Instead of haggling over how to tweak a broken system, Congress should let the current transportation author- ization expire and liberate the roads by pass- ing turnback legislation.
Positive spillover to other states
Bruce et al. 7 (Donald, Associate Professor in the Center for Business and Economic Research (CBER) and the Department of Economics at the University of Tennessee, Knoxville, Deborah A. Carroll is an Assistant Professor in the Department of Public Administration within the School of Public and International Affairs at The University of Georgia, John A. Deskins is an Assistant Professor in the Economics and Finance Department at Creighton University. Jonathan C. Rork is an Assistant Professor in the Department of Economics within the Andrew Young School of Policy Studies at Georgia State University. “Road to Ruin? A Spatial Analysis of State Highway Spending” 2007, ) CM
Our results have important implications for the state budgeting process. Namely, states need not be overly concerned with keeping up with highway spending in other states if budget constraints dictate other uses of public funds. Indeed, if neighboring states make investments in highway spending, states can enjoy the positive spillovers while reducing their own spending. Another implication of our findings is that planners might wish to consider the spillover effects as they undertake cost–benefit analyses of prospective highway projects. They will also want to monitor highway spending in neighboring states, as reductions in those states can have negative spillovers in the form of lower personal income growth rates. This can have equally important impacts on state revenues, to the extent that income plays a direct or indirect role in the state’s overall tax base.
Solvency: Highways
If one state significantly invests in new highway funding, other states will follow
Roth - Civil Engineer and transportation economist, research fellow at the Independent Institute- 2010 (Gabriel, June 2010, “Federal Highway Funding,” )
Such reforms would give states the freedom to innovate with toll roads, electronic road-pricing technologies, and private highway investment. Unfortunately, these reforms have so far received little action in Congress. But there is a growing acceptance of innovative financing and management of highways in many states. With the devolution of highway financing and control to the states, successful innovations in one state would be copied in other states. And without federal subsidies, state governments would have stronger incentives to ensure that funds were spent efficiently. An additional advantage is that highway financing would be more transparent without the complex federal trust fund. Citizens could better understand how their transportation dollars were being spent. The time is ripe for repeal of the current central planning approach to highway financing. Given more autonomy, state governments and the private sector would have the power and flexibility to meet the huge challenges ahead that America faces in highway infrastructure.
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