This article seems to pretty well sum up a lot of what gets discussed round and round on this forum.
What is being overlooked by Frailey is that government has a long history of funding by loan many private enterprise infrastructure projects because it is good for the economy or for interstate commerce or whatever. And how does it differ from outright tax abatements or other subsidies given other industries like oil and gas exploration for instance? Yes, we claim we have a free enterprise system in this country but it also has been supported financially and by laws, etc. from various levels of government.
The author shows how Frailey was quite disingenuous about the bonds. Even without the endless disputes about “how subsidized is X?” any familiarity with history and current practices reveals how important government is to private enterprise through tax abatements, bonding power, etc.
One argument originated with Andrew Jackson: Transportation projects, when funded by the government, get paid for with taxes levied on all to the extent that government funds them. However, the benefits disproportionately go to managers and speculators (of the same people) and also to private investors (although some investors loose their investment). While loans are not as objectionable as outright grants long term loans begin with the government (taxpayers) putting up money in return for a promise. But that promise may be (and historically has often been) re-negotiated and corruption in both government and the company involved may get all or part of the loan forgiven.
In the 1932 there was a big change. There was a depression and Franklin D. Roosevelt was elected president. He didn’t care about the the Jacksonian argument. He wanted public projects to put money in the pockets of people who were out of work. The result was our first national highway system. But the state governments retained ownership which limited corrupt practices to those who build the highways. And the highways were free or low cost to users and paid no property tax. Railroads, meanwhile had to pay property taxes (often to support the highways) and there railroads were anything but free. Then in 1950 President Eisenhower, impressed with the Autobahn, wanted one for the US. A second national highway system. Our interstate highway system had all of the taxpayer funding of FDR’s in the 30’s although part of the funding was paid by a Federal excise tax on motor fuel. But they were largely free to users. And, unlike the Autobahn, were often routed through cities taking enormous amounts of property off the tax rolls and, of course,
Indeed it does! And like some of the postings to these forums, Mr. Harnish is long on emotion and short on in-depth data. His claims are laced with wide sweeping generalities.They have little if any supporting data. Sounds to me like he might have been a preacher in his previous life.
Most people’s views regarding any number of subjects, including passenger rail, are hardened. They are not likely to be persuaded by facts. It is not unlike elections.
I have a friend who is a political consultant. She tells me that elections are won in the middle by a relatively small number of independents who have not made up their minds. Going after the hard core base at the ends of the political spectrum is a waste of time.
People who believe that the government should operate a passenger rail system will never be persuaded otherwise. People who believe that government should get out of the passenger rail business will never be persuaded otherwise. Both sides will cherry pick the numbers to support their point of view and will ignore the data that doesn’t.
FWIW I stumbled across an article yesterday that says FRA has discontinued its review of the proponent’s $5.5 Billion RRIF loan. That is likely the death knell for the project.
Mac McCulloch
It is a little more complicated than that.
You have to satisfy your base in order to raise money to pay for the TV commercials and direct mail and phone banks to sway the independent voters.
You also have to get your base to get out and vote. A person may be ideologically (idealogically?) committed to your side, but there may be impediments of getting off work, getting out of the house for the elderly and disabled, inclement weather. You need to rally your get-out-the-vote troops to follow up on your likely voters to encourage them to vote – check who is registered but has not voted (there’s an App for That!), phone them at dinner time offering them a ride to the polling place, and so on.
I guess one aspect of “cherry pick the numbers to support their point of view” is not so much to sway the persons with independent opinions on trains but to rally the base, to encourage people believing in trains to join Mr. Harnish’s MWHSRA, join NARP, write letters-to-the-editor, e-mail Congress, and so on.
There is some tension on this forum as to whether this is the proper place to discuss pros and cons of Amtrak and passenger rail and how Amtrak could do things differently . Or whether the proper role of this forum is endorsing passenger trains and directing criticism at anyone who doesn’t like passenger trains, that is, rallying the base. Suggestions that we are “going round and round”, “beating a dead horse”, and that persons who don’t endorsing trains without qualifications “should go elsewhere” are signs of impatience with weighing the pros and cons. In the words
This passenger forum seems to be pretty immune (so far, knock wood) from the heavy-handed censorship by moderators doled out on the general forum. Many ideas expressing at least three (maybe four) categories ofl viewpoints get regularly expressed. As is typical with discussions, much tends to get repetitive and predictable (“going round and round”, “beating a dead horse”) but that does not necessarily solely signify, IMO, “impatience with weighing the pros and cons” nor that this forum is not a proper place to discuss pro’s and con’s of Amtrak or passenger rail more broadly. I think it is, instead, mostly a desire for the occasional fresh thought or new illuminating piece of data. Eg., the recent post about the proposal to build a sorta-HSR line CHI-COL was something new.
On March 15 Fred wrote a column where he explains his perspective. He opposes a government low interest loan for Xpress West. There are 5 pages of comments agreeing and disagreeing. The issues are not new; they have been present in American politics for a great many years. And the American government responds very differently to different kinds of transportation projects. A big part of the controversy is the different government ways of dealing with different kinds of transportation.
While the government puts money into highways and airports, those assets remain in public ownership. If they loan money for a HSR line, then the line should remain publicly owned until the company pays off the loan. If they default, then the government will have a line they could bid out for lease. They could even bid out time slots like an airport, and have something of an open access passenger line.
Public ownership of ROW will of course set off those who want Government to be totally out of our lives.
However, the idea as such is not too different from what’s being done in some European countries. In Sweden, for instance, almost the entire track infrastructure is government owned. Train operators apply for slots on the various lines to run their trains. This applies to freight companies as well as passenger services.
I would say the Midwest item is a summary meant to quickly get a point across. They have published several professional and informed reports making the case for both corridor type and long distance routes. I took the time to put down the “proofs” behind many of the same points they made regarding subsidies in the Intercity Marketplace thread based on my experience as a P.E. letting highway contracts and seeing the process through from begining to end. It took me 80 some pages, several of which were references. So I’ll say this in summary, there is a large amount of leverage built into the gas tax system from local to longer distance roadways, and this is causing a lot of financial problems now that a lot of these facilities need to be rebuilt.
Except if you look closely at what those people want, they only want the Government services they personally don’t use to be out of our lives. They would not, for example, support putting tolls on all Interstate Highways.
Couldn’t agree more with you on both points.
Personally I think toll roads make a whole lot of sense in a lot of situations.
Bite your tongue!
No thanks. Won’t bite my tongue. But if I go driving around Dallas, Denver, Chicago or try to get into New York, there are toll roads or toll tunnels. Seems to work just fine. It’s all got to be paid for somehow…
Although they are not popular in many areas of the country, they have one or two distinct advantages. The people who use them pay for them. Moreover, motorists using toll roads see the cost of the road. At least when they get their electronic bill or drop their coins in the toll buckets.
The earliest phases of the Interstate Highway System consisted of toll roads, i.e. Pennsylvania Turnpike, New York State Thruway, etc. Had the whole system been laid out as toll roads, with the cost of using them clear to the users, we may have had less urban sprawl than occurred. And we may have gotten a better balanced transport system. Read retention of passenger rail in relatively short, high density corridors where it makes sense.
I have long believed that people should see the true cost of what they use. It tends to result in more rational use. This goes for motorists, rail passengers, airline passengers, etc. It is proper for the government to fund the infrastructure, i.e. roads, airways, railways, etc., if the risk is too great for private investors, as long as there is a high probability that the government (taxpayers) will get their money back.
You do know that the states were paid back out of the HTF for the toll roads built prior to the interstate network and later incorporated into the system. I believe it was in the 1991 ISTEA bill. So the leveraging inherent in the gas tax continues across almost the entire system.
What exists now is a toll/ leveraged gas tax/ general fund hybrid system. Further, all of the recent toll proposals I have looked into have a significant non-user financial component, the SH-130 and Indiana tollroad were set up to be a little better from the user pays side but are now having revenue generation problems, aka the marketplace expectation doesn’t fit. On all the big interstate rebuilding projects the tolls are being used for a minority of the revenue and of course congestion management of select lanes. I went into some of this in the marketplace paper.
The point is that the number chrunchers 70 years ago realized that you couldn’t charge enough in the marketplace to users through tolls to build the network we understand to be the interstates, except foe the very urban routes. Hence the expansion of the gas tax and leveraging. They were just trying to figure out a way to stop the carnage on the two lane US and State routes and overcrowded due to underpricing.
This is the marketplace Amtrak exists in, partial coverage of costs. If you went to full coverage of costs the amount of travel would be much less. (I edited this post to add to it)
Please provide a reference to the 1991 ISTEA Bill, i.e. how the construction costs of the toll roads were reimbursed and the amounts toll road by toll road, as well as a reconciliation of the funds generated by the toll roads and reimbursed by the federal government. Having grown up in Pennsylvania, I would like to see a longitudinal reconciliation for the Pennsylvania Turnpike.
I have long agreed that most Americans don’t understand how their transport options are financed. Having said that, if someone pays a toll, they have a better understanding of its impact of on their pocket book than if the fee is buried in the fuel tax. And a greater potential to shape their behavior that could result in a better balanced transport system.
Had the nation’s major highways been paid for in part by
Section 1014 of the 1991 ISTEA
http://ntl.bts.gov/DOCS/istea.html (better link)
PA was supposed to have gotten 1.888 Billion ($1991) to their STP account. There was no breakdown of routes in each state. Now I don’t know if the money was pulled down then or latter within the legislative life of ISTEA as only $2b a year was given for this program. The amount was calculated at the 90% Federal cost coverage rate then in existence using construction records kept by the states.
I am not arguing that automobiles are not the best fit in many circumstances but they were/ are not solely the best technology for all conditions. The financial leveraging off local roads/ cross-subsidy arrangements outside congested areas had a significant influence, otherwise automobile driving rates for the rural interstates would not have declined when gas increased in price. BTW I modified my earlier post probably while you were typing and have done the same for this one.