Tag: infrastructure

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Has the United States given up on building subway systems?

Has the United States given up on building subway systems?.

Everyone knows that America’s roadways and bridges are crumbling, but the United States has also seemingly given up on its subway systems. Atlanta’s subway system was the last subway system started in the U.S., and its construction commenced in 1979. Since that time no other American city has been able to figure out the financing of a subway system with the disappearance of federal funding support. More from Governing:

The rapid pace of subway construction, especially in developing countries, has driven the number of systems in the world to more than 190, according to the Economist. One reason for the boom has to do with government stimulus programs that followed the financial crisis, allowing investment in subway construction to soar. One country that’s noticeably absent from the project lists that appear in trade publications is the U.S.

With transit funding still uncertain, given the lack of a stable, dependable funding stream from Congress, all but a handful of cities have decided to stay clear of such money-draining projects…Some might argue that we don’t need such large-scale transit systems, which are not only expensive to build but expensive to run. Indeed, debates over the pros and cons of a subway system have killed many plans while delaying some construction projects for decades, not just in the U.S. but in other countries as well. Still, we can’t ignore the fact that the U.S. is becoming an increasingly urbanized country, with more people working and living in cities every year.

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Business News Politics Transportation

President Obama Shifts Attention Toward Economy, Cities in 2013 State of the Union Address

President Barack Obama (D) delivered the annual State of the Union address last evening. The hour-long speech covered a wide range of topics including gun control, military policy, immigration reform, voting rights, domestic economic programs, education reform, and energy policy.

One of the most-discussed topics of the evening was when the President announced his aspirations to see the national minimum wage raised to $9 an hour. The current minimum wage of $7.25 an hour results in an annual income of $14,500 – a number the President says keeps families with two minimum wage earners below the poverty line.

In 2006, Ohioans voted to raise the state’s minimum wage from $5.15 an hour to $6.85 an hour, with an annual cost-of-living escalator.

“This single step would raise the incomes of millions of working families,” President Obama stated. “It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.”

Brent Spence Bridge Alternative 1

Brent Spence Bridge Alternative 2
The President called for a “Fix-It-First” program during his State of the Union address, but will it make a difference for Cincinnati’s Brent Spence Bridge Rehabilitation/Replacement project? Brent Spence Bridge replacement Alternative 1 (TOP) and Alternative 2 (BOTTOM) renderings provided.

Since the last time Congress voted to increase the federal minimum wage, which is effective for all states that have a minimum wage lower than the federal level, 19 different states have voted to raise their respective rates. The President’s $9 an hour proposal with an annual cost-of-living escalator would place it above every state in the union with the exception of Washington which pays its lowest earning workers $9.19 an hour.

In addition to raising the pay for the nation’s lowest earners, the President also pushed for new programs meant to spur job growth in a new economy. He called for the reform of high school education to more effectively train graduates to be able to fill high-tech jobs.

He also asked Congress to create a network of 15 manufacturing innovation hubs, modeled after the National Additive Manufacturing Innovation Institute (NAMII) established in Youngstown, OH in August 2012. Those cities selected, the President says, would work to partner businesses with the Department of Defense and Energy.

The President stated that the goal is to transform “regions left behind by globalization into global centers of high-tech jobs” in an effort to jumpstart the next revolution in manufacturing.

The advanced manufacturing policy proposal is one that should certainly catch the attention of local policy leaders as they work to transform Cincinnati’s Mill Creek Valley into a productive economic engine for the 21st century, as laid out in the Growth & Opportunities Cincinnati Plan published in 2008.

Another point of emphasis during the President’s first State of the Union address of his second term revolved around repairing the nation’s existing built environment.

To that end, he discussed retrofitting buildings to become more energy efficient, and announced a goal to cut energy wasted by homes and businesses in half over the next 20 years. President Obama continued by calling for a program that would prioritize infrastructure spending on existing assets in need of repair, like Ohio and Kentucky’s combined 4,054 deficient bridges.

“I propose a ‘Fix-It-First’ program to put people to work as soon as possible on our most urgent repairs,” said President Obama. “And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children.”

Perhaps the biggest bi-partisan applause of the night went to the President’s condemnation of gun violence and call for action to prevent further atrocities like those at Sandy Hook Elementary School, and those that occur on the streets of America’s cities every day.

“Our actions will not prevent every senseless act of violence in this country. Indeed, no laws, no initiatives, no administrative acts will perfectly solve all the challenges I’ve outlined tonight,” President Obama clarified. “But we were never sent here to be perfect. We were sent here to make what difference we can, to secure this nation, expand opportunity, and uphold our ideals through the hard, often frustrating, but absolutely necessary work of self-government.”

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Up To Speed

Would elimination of the gas tax increase infrastructure investment?

Would elimination of the gas tax increase infrastructure investment?.

With user fees only covering approximately 51% of the costs to build and maintain roads, some are suggesting it’s time to change the way we fund our transportation infrastructure. One of those suggestions is to get rid of the gasoline tax altogether. More from Bloomberg:

As a result, “getting back our share” has become the key objective, so that every state now gets as much (or more) money in transportation grants as it pays in federal gas taxes. Along with the money, the federal government issues various rules for spending it, many of which require the states to put in some of their own money, too. It’s common to hear state transportation officials say that the feds provide 25 percent of the money and 75 percent of the hassle.

Eliminating the federal role would enhance state autonomy and streamline decision making. What’s more exciting is that it would also lead to more and better spending on transportation. In poll after poll, Americans say they are willing to invest in roads and bridges, as long as it brings about improvements they will use. This isn’t just talk; state and local referendums on raising taxes or issuing debt to pay for transportation projects usually pass.

However, people don’t generally support raising the gas tax, for the simple reason that they think their current gas taxes, which are mostly federal, are wasted. Thus, the federal gas tax has become both a ceiling and a floor. It makes raising state gas taxes unpalatable. And since states get back at least what they contribute, the tax encourages them to keep spending even if they don’t really need more roads.

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User fees aren’t coming close to covering roadway costs

User fees aren’t coming close to covering roadway costs.

Roads have long been perceived as self-financing through their user fees (gasoline taxes, tolls, and other fees). As it turns out, Amtrak actually is one of the most self-sustaining transportation programs in America covering about 85% of its expenses through user fees. More from Streetsblog Capitol Hill:

A new report from the Tax Foundation shows 50.7 percent of America’s road spending comes from gas taxes, tolls, and other fees levied on drivers. The other 49.3 percent? Well, that comes from general tax dollars, just like education and health care. The way we spend on roads has nothing to do with the free market, or even how much people use roads.

Even more interesting is to compare roads to Amtrak, a favorite target of self-styled fiscal conservatives in Congress. Amtrak recovers about 85 percent of its operating costs from tickets — a relative bargain compared to other modes. Even accounting for capital costs, Amtrak — which operates mostly on privately owned tracks — covers 69 percent of its total costs through ticket prices and other fees to users.

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Chicago’s infrastructure trust attempting to change the funding game

Chicago’s infrastructure trust attempting to change the funding game.

The Federal Government has failed to reform how it invests in its infrastructure, local governments are working hard to figure it out on their own. In Chicago this has led to the formation of what Mayor Rahm Emanuel (D) is calling the Chicago Infrastructure Trust. Emanuel hopes that the public-private partnership will eventually drive billions of dollars of new investment in the aging cities infrastructure. More from Next City:

Beyond financing public bridges and water systems, the trust must build another sort of infrastructure: That which supports public-private partnerships. In turning to collaborate with the private sector, Chicago has emulated policies more popular around the world than elsewhere in the U.S. Canada, Australia and many countries throughout Europe, including the United Kingdom, all have public-private partnerships that help to finance major capital projects.

But in the U.S., the concept is still in its infancy stage. Why the idea has yet to gain traction here has much to do with the reliance of local governments on direct assistance from Washington and tax-free public bonds. The need to be transformative is especially important in Chicago, which in recent years has ceded control of public assets such as its parking meters and tollways, only to face allegations that the sales benefitted companies — and former Mayor Richard Daley, who negotiated the deals — more than they benefited the public.