16.8.14

APPLY THE BENEFIT PRINCIPLE.

While I was on my road trip, Congress and the President came up with a temporary fix for the Highway Trust Fund.  Or, more precisely, the "Highway" "Trust" "Fund".  I have to set off each word with its own irony quotes as some of the "highway" money goes for purposes other than roads, which bothers some people who may or may not be in the pay of the highway lobby, but a proper trust conserves assets, which might require some of the money being spent on purposes other than roads, and a fund has money in it.

In The Atlantic, Norm Ornstein suggests that a permanent fix ought to be within our purview.
There should be nothing ideological about finding rational ways to pay for surface-transportation infrastructure, and clearly those who use it more should pay more. But our tribal wars have gotten in the way of rationality on this as in so many other issues—including of course broader infrastructure needs such as rebuilding and strengthening the electrical grid while protecting against cyberthreats; moving to greener and more efficient fuels; expanding high-speed Internet connections to all Americans; rebuilding aging sewers, water lines, and subways; and many more needs that must be addressed to enable the country to compete in the 21st-century global economy.
Sorry, Mr Ornstein, but the assertion that "those who use it more should pay more" is an ideological statement, and where Government provides resources for some components of that infrastructure, and picks winners to provide others, there will be rent-seekers, tribal wars or not.  And the current system of funding the "Highway" "Trust" "Fund" is infected with rent seekers.

Some impressions from my recent road trip.  It's summer, and the orange barrels and brake lights are present.  For the most part, though, I was able to make good time.  Some impressions from the work zones.  First, much of the Interstate System is life-expired, and in Pennsylvania, several stretches of Interstates 80 and 81 were removed down to the sub-roadbed to be replaced.  And Ohio has gotten better at only taking out of service those parts of the Turnpike that are actually under repair.  But where the road is worn out, look at the evidence.  The right-most lane of Interstate 81 in northeastern Pennsylvania has two strips of patch where something heavy has worn through the top of the paving.  In Ohio, the right-most two lanes are similarly more battered than the inside lane, which on the Turnpike is forbidden to trucks.  And it's hard to go more than five miles without seeing tread shreds either in the lanes or at roadside.

Ladies and Gentlemen, I think we have found our rent-seekers.
The Federal Excise Tax on tires has been around since the 1930s. Normally, excise taxes are referred to as "luxury" taxes, though how truck tires can be considered a "luxury" to a fleet, we don't know.

However, there's been pressure to change FET for some time. A couple of times in recent years, there have been moves to add FET to retreaded tires, but those changes never took place.

The big fear was that such a change would price retreads out of the market, drive retreaders out of business and add huge burdens to the manufacturers of new tires to fill the gap. After all, more than half the tires sold in the U.S. every year are retreads, so new tire manufacturers would have to double their capacity if retreads went away.
There has to be a research paper in here: what are the environmental consequences to producing more new tires and fewer retreads, taking into account the propensity of those things to come apart and delay shipments and damage other vehicles?  And how might a transportation policy take into account the true costs those heavy vehicles impose on others?

(Quick riposte to fleet operators: it's a luxury if it's traveling in a 53 foot trailer, if a trailer or container of any length is traveling on the road more than 500 miles where rail haul is an option for part of the trip, if the driver is overtired.)

And according to Illinois governor Pat Quinn, a man with whom I here have occasion to agree with, it's a luxury to endanger other people with your rigs.
The governor on Monday cited recent semitrailer truck crashes that have led to deaths in exercising his veto power over a measure that would have raised the interstate speed limit from 55 to 60 mph in Cook, DuPage, Kane, Lake, McHenry and Will counties.
The bill is the brain-child of state senator and Republican U. S. Senate hopeful Jim Oberweis, who disagrees.  The governor raises a valid point.
Quinn maintained “no amount of fines, penalties or jail time can ever replace the lives of those whom we have lost to fatal accidents on our interstate highways,” Quinn said.

Citing the recent traffic deaths tied to big trucks traveling at high speeds, Quinn said, “The convenience of increased speeds for truckers on roadways does not outweigh the safety risks to children, families and our dedicated public servants.”

Quinn cited a July 21 crash on Interstate 55 near Arsenal Road in the southwest suburbs. An Indiana trucker, Francisco Espinal Quiroz, 51, of Leesburg, Ind., allegedly was speeding in a work zone when his truck slammed into three vehicles, killing five people. He has been charged with falsifying duty logbooks used to verify that a driver is not spending too many hours on the road without rest.
It's a luxury if the driver is overtired, and a hazard to other people. Period.

Thus, if the Highway Trust Fund is worth saving, it ought to be set up in such a way as to hold the highways in trust.  Thus:  Special movement permits for any trailer exceeding 40 feet.  Permit fee to be substantially higher if the movement can be by rail over part or all of the trip.  Federal excise tax on retreaded tires.  And some money devoted to improving railroad tracks for faster trains, with the stipulation that the owning railroads be allowed to path intermodal trains at speeds of 90 or 100 mph on those tracks.

Alternatively, perhaps, the Interstate Highways become toll roads.
Tolls should replace gas taxes on Interstates, be limited to what's needed for the capital and operating costs of the rebuilt Interstates, and be implemented only after an Interstate has been rebuilt and modernized. All tolling would be done via state-of-the-art all-electronic tolling, with no toll booths needed.
I note only that the Illinois Tollways began collecting tolls after the roads opened; initially those were to be collected only until the bonds were amortized, but they never went away, and the electronic tolling is a way of extracting interest-free loans from I-Pass or EZ-Pass purchasers, while extracting extra cash from residents of states west of the Mississippi, where there is likely to be resistance to putting tolls on the Interstates.
Many conservatives are leery of this concept, especially given President Obama's endorsement, but they should support it for several reasons. First, it would be a large (and do-able) first step toward devolving the overextended federal transportation program to the states. Second, it would begin replacing a wasteful gas tax system with a true user fee, under which you pay only for the highways you drive on. Third, it would mobilize private capital for major projects that would otherwise be put off for decades, while the Interstates further deteriorate and become more congested. And, finally, it would allow using congestion pricing on urban Interstates, which would bring relief to long-suffering commuters and express buses.

The Interstate highway system is one of our most important 20th century accomplishments. It handles 25 percent of all vehicle miles of travel despite making up just 2.5 percent of physical highway lane miles. But unless we figure out a way to rebuild and modernize it soon, travel, trade, and the economy will be seriously constrained in coming decades.
Base congestion pricing on weight, and watch the truckers make common cause with the railroads to get those intermodal corridors, or build their own toll roads. In areas with commuter trains, the use of congestion pricing might lead to some interesting substitutions.

A recent Reason-Rupe poll claims some public support for tolls in place of gas taxes.  It's interesting to look at what's missing: money for roads or airways, but not for freight railroads.  Perhaps because the private sector is already taking care of that, at least for 70 mph intermodals.

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