It’s More Than Just Increasing The Gas Tax To Put It Together!
By Rail Provocateur/M.E. Singer
This past week PROGRESSIVE RAILROADING ran an intriguing story on the epiphany of the now lame duck Mayor of Chicago, Rahm Emanuel, “Chicago Mayor Emanuel Calls for State Gas Tax Hike to Fund Transportation Infrastructure Needs” (12 Dec), https://www.progressiverailroading.com/rail_industry_trends/news/Chicago-Mayor-Emanuel-calls-for-state-gas-tax-hike-to-fund-transportation-infrastructure-needs–56306?
This story evidences that just like California, other politicos are beginning to gather the courage to face the reality that transportation and infrastructure funds will not be forthcoming from an open federal spigot. Although Mayor Emanuel finally confronted the facts that he no longer had a friend in Washington, as previously under Obama, he failed to go further than acknowledge the obvious need for drastically raising gas taxes.
In response to what I interpreted as a narrow vision, my perspective is that just as electric and battery-operated autos and trucks are in sight of seriously entering the scene, merely proposing an increase in the long ignored gas tax will not even begin to cut into the problem. Regrettably, today’s politicos have narrow, short-term vision that does little to solve the overall transportation issues.
What is required, and is quite applicable to California, includes:
1) VMT to cover the increased electric and battery vehicles that otherwise will evade the gas tax.
2) Axle weight tax to ensure trucks start paying their share for road maintenance triggered by their excessive weight and multiple trailers.
3) Immediate 30% increase in gas tax; set to CPI going forward.
4) Refuse any governmental investment to accommodate A/V until correcting current deficit of infrastructure.
5) Require all curbside bus firms to use the available bus depot, or, pay municipalities for the extra cost for police and street cleaning; but no more free-loading of such private firms.
6) Invest in Chicago’s commuter line, METRA, to evolve into a true regional line, as the RER is in France. This would include funding infrastructure and equipment to extend service from Chicago to DeKalb, Rockford, and Milwaukee (via UP along North Shore suburbs, Waukegan, Kenosha, and Racine).
7) I strongly believe this should also be a propitious moment to evaluate the value of current Amtrak Midwest Corridor services in relationship to their costs:
a) Under the Passenger Rail Investment & Infrastructure Act of 2008 (PRIIA), Amtrak prepared and secured this legislation from Congress that ordained the continuation of no costs to the states along the Northeast Corridor (NEC) for trains scheduled bi-directionally every 30 minutes; however, subjected all other states (e.g., Illinois, California) to pay full cost per Amtrak’s own much maligned cost allocation methodology, which does not follow GAAP. State and local politicos should require their members of Congress and Senate to revamp PRIIA in 2019 to:
i) prevent state payments from being converted by Amtrak to subsidize the NEC;
ii) that all such payments are re-invested in that specific state;
iii) stop the “Animal Farm” analogy and either require all states, or none, to pay their share of their corridor trains, per a true and accurate cost allocation methodology derived from an external forensic audit of costs.
b) Require overhaul of Amtrak’s full cost methodology which excessively dumps unrelated NEC infrastructure and corporate costs into the state-supported corridor payment formula. Such a SWAG approach to cost allocation held in disrepute by financial professionals serves to only discourage states from fulfilling the purpose of their intercity/inter-regional trains by increasing frequencies and/or expanding routes. The key is to facilitate “day-trippers” with schedule convenience and frequency.
c) Given Amtrak’s overt bias towards the NEC, perhaps the best answer is for Illinois, the other Midwest states, and California to assert their right to contract their corridor services to a vetted, well-financed, experienced private operator. How long will we have to wait for Virgin Trains USA to either compete head-on with Amtrak, or, to simply replace Amtrak?
8) In lieu of Amtrak, between an expanding regional service by METRA and the private operation of intercity/inter-regional services, passenger rail will be in an improved position to provide a wider service, on greater frequencies, and at a lower cost. For example, just imagine the cost to a state for the inclusion of the Amtrak cafe car (despite being fully depreciated); the employee cost of an LSA at $48/hour; plus, the cost to the state for lost revenues due to the unacceptable menu and lack of bartender skills, equipment, and supplies.
As we look at the big picture for solving transportation needs, what need not come into play is the chatter promoting hyperloop or non-privately financed high speed rail. For now, given the thrust of infrastructure improvements from the feds onto the states, funding will continue to be limited. Funding resources demand we follow an incremental approach. Therefore, such funds must be focused on resolving the above issues, eventually to allow for higher speed passenger rail.
Looking forward, in respect to how the recent 2018 election in California validated the state’s self-imposed increase in gas and other taxes to directly support transportation and infrastructure, while totally decimating the anti-tax, anti-transit and rail GOP, this story must be told in detail, as the other states are in dire need to learn how to confront reality and pushback on the lobbyists and land owners. California has set the example of providing the value of investing in regional commuter rail, inter-connecting regional intercity rail, streetcars/LRTs, and subways to support their proven ability to enhance mobility and economic development.
Ideally, we are turning the corner from the past rapacious 30 years of anti-tax, self-indulgence best exemplified by Leona Helmsley who exclaimed, “Only the little people pay taxes.” And just in time, as even New York City is learning how its decrepit transportation system is pushing out company HQs, as noted in THE NEW YORK TIMES (13 Dec), “Maybe It’s Not Taxes That Scare Off Business but Failing Subways,” which significantly noted that “The number one reason companies chose not to expand in New York was the condition of transportation infrastructure.”
Perhaps, ideally we can also take heart from the recent protests in France which directly attacked funding a proposed HSR line from Paris to De Gaulle Airport; instead, demanded such funding go towards rehabilitating the parallel RER “B”Line. Could this possibly encourage a sense of political logic here to stop the pillaging of funds from the Amtrak National Network by clout heavy Northeastern federal politicos, in collusion with Amtrak’s Board? Just imagine what a severe reduction, if not total elimination, of those slanted PRIIA payments would mean for state-supported corridors. For California, it would be like a B12 shot to stop paying excessive leases for fully depreciated equipment; with steady revenues to lease new equipment; no interference in marketing efforts; the ability to directly negotiate with the BNSF and UP to increase frequencies and expand inter-regional routes.
In respect to how I persistently pursue this theme, who else chuckled when they saw Amtrak’s latest marketing effort to promote the “Northeast Regionals” and “Acelas” at the end of this holiday season, “1-2-3 Free Northeast Regional”? (https://www.amtrakguestrewards.com/NER?utm_source=AGRWebsite&utm_medium=Web&utm_content=HomepageTile&utm_campaign=WinterPromo2019) Although Amtrak initially killed last year the JPAs wise marketing program to induce off-season travel, before restoring it at the insistence of the JPAs, it appears Amtrak indeed could learn from the JPAs! And just in time, given the CBO’s release of proposed budget cuts for this year, highlighting Amtrak and EAS as non essential; with Mick Mulvaney ascending to White House Chief of Staff, while maintaining his position as Director of the Office of Management and Budget. With so much piling up against Amtrak’s sandhouse, I wonder how many wish they could reincarnate former CEO Graham Claytor or former CEO David Gunn and their management teams..?
Frankly, given California’s support of taxing itself to improve transportation; Chicago’s Mayor Emanuel securing suburban political support for increasing gas tax; and New York acknowledging how its transportation system is pushing out HQs, perhaps we can take solace from what Marshall Ferdinand Foch said in 1914 at the First Battle of the Marne, “My centre is giving way, my right is retreating, situation excellent, I am attacking”!