EnoBrief INSIDE POLICY FOCUS THIS ISSUE Front page:
Transportation and the Debt: Big Decisions to be Made
Eno Transportation Foundation Cultivating Creative Leadership, Framing Emerging Issues
BOAR OF ADVISOR CORNER
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Deb Miller: Surface Transportation Needs Federal Attention Now
BOARDROOM Page 6:
Register Today for Two Eno Events: Panel Discussion and the Eno Luncheon Debate
EXECUTIVE LEADERSHIP
AUGUST 2011
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Board Chooses Nicholas Norboge to Author First William P. Eno Paper
Policy Focus Transportation and the Debt: Big Decisions to be Made The political theater around the debtceiling issue and the FAA shutdown that unfolded at the beginning of this month revealed some stark truths about the future of national transportation policy. The outcomes resolved very little, pleased almost no one, and left Americans and the world with reduced faith in the ability of the United States government to tackle policy problems. But they also teed up two long-term transportation policy issues that Congress could be forced to address directly or passively. How these issues are addressed will likely determine the future of U.S. transportation policy.
is going to be shifted to the state and local level, one would think this would mean that the federal government would want to give states, localities, and the private sector every opportunity to raise revenues for transportation investments. And yet, this is not what has happened so far. The proposed FAA bills in both the House and Senate provide inadequate federal funding for NextGen but also fail to give airlines the incentives or assurances they need to make investments in equipage. The House Transportation and Infrastructure Committee has proposed a reduced surface transportation bill funding level but kept in place federal Issue #1: Trust Funds restrictions on tolling. The first issue is whether The federal government is The federal government is pursuing two transportation funds will be pursuing two incompatible incompatible policies simultaneously -protected or unprotected. policies simultaneously – Transportation funding at the reducing federal funding reducing federal funding for transportation federal level has been structured for transportation while while maintaining barriers to investment around the “trust fund” model for maintaining barriers to decades. The Airport and Airway investment from other from other sources. Trust Fund (AATF) collects jet sources. Reasonable people fuel taxes and other charges for can disagree about the the aviation system, the Highway extent of the federal role Trust Fund (HTF) collects gas taxes and Issue #2: The Federal Role in transportation, but the link between this other charges for the surface transportation The second issue is the size and scope of debate and the barriers to state, local, and system, and the Harbor Maintenance Trust the federal role. While most government private investment is often overlooked. Fund (HMTF) provides funds for dredging transportation funding comes from state This issue is going to be forced channels serving our ports. or local sources, the federal government by the continuing standoff over FAA Although these trust funds may not provides a substantial portion of available reauthorization and the dwindling of be the famous “lockbox” often used in public funds and almost half of all funds in the HTF. While it is possible reference to Social Security funding, they capital funding. Proposals to cut federal that the FAA bill will not be resolved in have effectively protected transportation transportation funding imply a policy of a this Congress, thus dooming the industry funding from budget cuts during times smaller national role and greater local role, and the nation to even more extensions of of fiscal distress. But now some of these as a combination of states, localities or the existing law, House Transportation and funds are showing vulnerability. Both private sector would be presumed to pick Infrastructure Committee Chair John Mica the AATF and HTF have depended on up the slack. (R-Fla.) certainly seems prepared to force general fund bailouts for some time, due Of course we know that this would not the issue. Meanwhile, the HTF will run to a deterioration of revenues combined be so simple. States are not exactly flush out of funds sometime next year without a with increases in spending (the HMTF with transportation funds, and would find it cut in funding, gas tax increase or general continues to show a surplus, but also lacks very challenging to replace the lost federal revenue bailout. Congress will have to firewalls). This means that as general fund money. But if more of that responsibility Decisions continued on next page
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revenues become scarcer, overall spending on transportation becomes increasingly vulnerable. However, the problems may extend beyond the lack of general fund supplements if the new Joint Committee created by the debt deal proposes to breach the firewalls that have traditionally protected the AATF and HTF. Given how desperate the federal government is for revenues across the board, this becomes a distinct possibility. They will have to make a decision in November about where to find cuts, thus ensuring some resolution on the issue of whether transportation funds are to be protected in the near future.
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make a decision about how to fix that, one way or the other, and that decision will have a substantial impact on the future federal role.
Cultivating Creative Leadership, Framing Emerging Issues
likely in surface transportation, with Congressman Mica pushing a bill that represents a substantial cut from existing spending. A smaller federal role requires a program more focused on specific national goals. It also requires the elimination of the barriers that currently prevent more state, local, and private investment.
Long-Term Implications Much of the transportation community is focused on funding levels with respect to The Role of the President both of these issues. We tend to argue in The wild card here is the President. favor of trust fund protection and a larger President Obama is on record as being in federal role. But would these short-term favor of a major expansion of the federal “wins” produce longterm gains? Trust funds have If (the President) served us well. For example, the HTF doesn’t come out with was a very effective a strong proposal -mechanism for constructing a federally including a revenue planned, state-owned interstate highway mechanism to support system. Similarly, a whatever investments trust fund (perhaps the AATF) could, with he suggests -- his proper leadership, be an effective means cause will be lost. of building NextGen, another national system. But the trust fund model also presents challenges for transportation. The HTF role in transportation. He has given is partially responsible for the lack of several speeches in favor of increased coordination between surface modes, such infrastructure investment, and he just gave as highways and transit, which should be another this morning. What he has yet to do working together towards the same national is propose a specific source of funding for purposes. The HTF is also partially that investment. responsible for the ongoing “donor-donee” But now the President is coming off battles that have shifted the focus of of a debt-ceiling negotiation in which legislative discussions away from important he insisted on new revenues and lost. He policy issues such as purpose and strategy is facing a Congress that was willing to and towards the parochial issue of rate of shut down much of the FAA and under return. Before concluding that we want to which there is no certainty that surface preserve this model, we might consider transportation programs will be allowed to whether there are preferable alternatives. continue past September 30. If he doesn’t The U.S. model of user fees and trust funds come out with a strong proposal – including for transportation is the exception, rather a revenue mechanism to support whatever than the rule, among our peers. investments he suggests – his cause will be Then there is the issue of the size and lost. scope of both the federal role and the What would a strong proposal look like? level of federal funding. At the moment Here are some essential elements: all signs point to a reduced federal role in l A specific revenue mechanism. The transportation. This will be true in aviation, President should have little to fear from where airline opposition to any kind of tax proposing a gas tax increase or another increases will continue to diminish the mechanism (such as an oil import fee) at this federal role in real-time. It also appears
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point. He is already on record supporting new revenues, and a gas tax increase to support transportation is one of the most conservative revenue increases possible, with evidence of past support from Ronald Reagan and George H.W. Bush. Plus he could propose that some of the new revenues go towards deficit reduction. A legislative proposal. Without specific legislation it will be challenging for the President to move his ideas forward. The administration has not come up with a long-term solution to the FAA impasse; they should draft a legislative concept. The administration has already drafted a surface transportation bill; they need to release it and try to push it through Congress. l
A set of performance measures by which t ranspor tat ion investments will be evaluated. While these measures should be in the bill, the President should also take them to the people. Explain the economic benefits from the investments. He has already indicated that he wants to make transportation investments driven by performance rather than politics, but he needs to explain how that will be done in a way that resonates with the public. Tell us how much safer the roads and skies will be, how much congestion will be reduced, and how much energy will be saved. Then show how you, Congress, and the States will be held accountable for those goals. l
Realistic funding levels and familiar investments. The funding levels proposed in the President’s budget, even with a new revenue mechanism, are probably not realistic. Brand new transportation systems, such as High-Speed Rail, are easily characterized as boondoggles. The proposal needs to be big enough to make a real impact, but conservative enough to allow Republicans to come to the table. l
Joshua Schank is President and CEO of the Eno Transportation Foundation
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EnoBrief Board of Advisor Corner
Cultivating Creative Leadership, Framing Emerging Issues
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Surface Transportation Needs Federal Attention Now
You know that feeling you get when you September 30, 2011. Also expiring on that in funding will also impact cities, counare miles from home and your Check En- day is the authority for the motor fuels ties, and public transit. In Kansas, public gine Light comes on? It is not good. One tax. In the current political environment, transit is often used as means to access of the main frustrations with the Check that is cause for concern. medical services and the proposed reducEngine Light is that there is so much amIf SAFETEA-LU is not extended or tion could have devastating effects on our biguity to it. It could be something as sim- a new act authorized by September 30, rural citizens. ple as needing to tighten the gas cap or potentially devastating job losses will In the current economic climate, with it could mean a serious engine problem. occur as the federal program grinds to many citizens struggling, the loss of That is a big difference and it transportation projects may not makes it tough to know how to seem important. Fewer orange react. Welcome to the world of barrels, right? But these projects We did extensive case studies on five leading a State Department of do more than just improve a road; Kansas transportation projects built Transportation (DOT). they create jobs. In this econoWith important deadlines for my, the jobs created by roadway in the last 20 years. The total cost for the federal surface transportaconstruction are welcome, but of those projects was $231 million but tion program fast approaching, course any type of construction they contributed over $6 billion in DOT leaders are feeling anxwill create jobs. ious. In my 25 years working The real benefit of transportaeconomic value and created over in transportation, I have been tion projects is the long-term jobs 50,000 long-term jobs. through a lot of reauthorizathey generate. We did extensive tions and they all created anxicase studies on five Kansas transety; some more than others. portation projects built in the last For example when SAFETEA-LU a halt and money stops flowing into the 20 years. The total cost for these projects passed in 2005, Kansas received less Federal Highway Trust Fund. In Kansas, was $231 million but they contributed money than anticipated (in fact, we re- we would be looking at suspending over over $6 billion in economic value and creceived less money in the final bill than 90 current projects and we would have ated over 50,000 long-term jobs. For a nawas estimated for us in either the House to stop new construction lettings all to- tion struggling to find its economic footor Senate version). At the time, we were gether. And, even if we get passed Sep- ing, these are the types of investments we mid-way through our 10-year state trans- tember 30, 2011, successfully we are still should be making—not cutting. portation program and the surprise loss of not in the clear. The next reauthorization The recent call for a four-month extenfederal funding increased the threat that is likely to break with the past and rather sion by Senator Barbara Boxer (D-Calif.) we would not be able to complete all of than providing more transportation dol- to give Congress more time to come up our projects as promised. We did complete lars, provide less. with a long-term solution to our funding them thanks to an infusion of state funds, Under the current proposal from House issues is a step in the right direction. good bid prices, and the Recovery Act. Transportation and Infrastructure ChairTransportation has always been one of But in 2005, we had serious doubts and man John Mica (R-Fla.), Kansas would the few bipartisan congressional issues. we were glad when those days of anxiety receive an estimated 37% funding re- And we really hope that does not change were behind us. However, with the recent duction (about $135 million less) for the come the end of September because we bond downgrade, the protracted debt ceil- next six years. In our state, federal funds need everyone working together on this. ing debate, and the partial shutdown of make up about 40% of our overall con- If our transportation system were a car, the Federal Aviation Administration—it struction budget. In May 2010, the Kan- its check engine light would be on—and may be that 2005 could begin to look like sas Legislature passed a 10-year, $8 bil- on to signal a serious issue that needs imthe “good old days.” lion dollar state transportation program, mediate attention. Here is why. SAFTETEA-LU, the cur- T-WORKS. And this spring Kansas Govrent federal transportation authorization ernor Sam Brownback (R) announced 37 Deb Miller a member of the Eno Board act, expired September 30, 2009. The major highway projects totaling over $1.8 of Advisors and is the Secretary of Transnation is currently operating under the billion. A reduction of this size will put portation for the State of Kansas seventh extension of the act and it expires these projects in jeopardy. The reduction www.enotrans.com
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FAA Reauthorization: The Need for a Long-Term Bill Since the Federal Aviation Administration (FAA) authorization bill expired in late 2007, Congress has enacted 21 short-term extensions—each ranging from one week to six months—to the FAA’s trust fund expenditure authority. The latest of these extensions is set to expire on September 16. These short-term extensions have been used to buy time while Congress works toward resolving their differences in the long-term reauthorization bills (H.R 658 and S. 223), the most controversial of which concern recent changes in the National Mediation Board (NMB), a federal entity which oversees labor union elections for airlines and railroads. In July 2010, the NMB issued a new rule allowing air or rail employees to unionize without a majority vote. This redefines “majority” to only those employees who show up to vote yes/no, but the resulting changes then affect all employees in that airline or railway company. The House of Representatives reacted to this change by introducing the Restoring Democracy in the Workplace Act in January, and requiring a provision in the longer-term FAA reauthorization bill that overturns the new rule. The Senate is unwilling to reverse the rule. This rule change has strong implications for Delta Airlines, which merged with Northwest Airlines and began joint operations last year. Northwest’s 17,000 employees are unionized, while Delta is the only legacy carrier in the U.S. without a large proportion of unionized labor. Should a combined election form a union with rules skewed in favor of union operatives, it could have a serious impact on Delta’s labor costs. Efforts are being made in the Senate to form some kind of common ground with the House regarding the NMB rule change. On July 21, Sen. Johnny Isakson (R-Ga.) mentioned a possible provision to give airlines judicial reviews of NMB decisions in order to balance the playing field (Hartsfield–Jackson Atlanta International Airport serves as Delta’s chief hub). Essential Air Service Meanwhile, the House introduced Es-
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sential Air Service (EAS) reform four days before the 20th extension of the FAA’s expenditure authority. The resulting impasse led to the furlough of about 4,000 FAA employees while the trust fund was deprived of about $200 million in tax revenues. On August 5, the Senate agreed to the House version of the extension but only after U.S Transportation Secretary Ray LaHood invoked his authority to waive air-subsidy cuts to rural airports.
The EAS debate is another potential impasse facing long-term reauthorization. EAS provides subsidies to air carriers serving certain rural communities. The House version of the bill plans to phase out EAS with $98 million in 2011, $60 million in 2012, $30 million in 2013, followed by cessation of the program in subsequent years. The Senate version of the bill aims to fund the EAS program at $200 million annually. While cutting EAS funding would save the FAA $77 million annually, it might have consequences for rural airports and communities that rely on EAS to continue service. Even with the EAS program, Delta Airlines has announced they will drop flights in 24 small markets across the country due to low load factors and low profitability. NextGen As policymakers debate NMB and EAS, another important program has been the victim of collateral damage. The Next Generation Air Transportation Modernization
(NextGen) move from radar-surveillance to Global Positioning System (GPS) relies on funds from the FAA’s trust fund. The recent furlough included employees involved in NextGen implementation and research. The foregone tax revenues could have been invested in accelerating this muchneeded transformation. Most importantly, all stakeholders in NextGen require funding certainty which can only be acquired through a long-term bill. Prospects of a timely agreement on a long-term bill look bleak. The FAA shutdown demonstrated that even future shortterm extensions might be challenging if policymakers fail to resolve their differences. In response to the Senate’s decision to pass the FAA bill, Transportation and Infrastructure Chairman John Mica (RFla.) released a statement: “If the Senate refuses to negotiate on the few remaining issues, they can be assured that every tool at our disposal will be utilized to ensure a long-term bill is signed into law.” Length of Extension It will be difficult to sort out remaining policy issues on a long-term bill using short weeklong extensions, the final days of which are usually used to formulate the next extension bill. A longer extension, on the other hand, lacks the urgency to get issues resolved that a deadline in a short-term extension provides. Other differences between the House and Senate versions of the reauthorization bill concern the amount of funds authorized for different FAA programs and the duration of the bill. The Senate bill covers two years between 2010-2011, generally authorizing more annual funds for each FAA program (including the Airport Improvement Program) than the House version of the bill, which would last for four years. Even though previous versions of the House bill called for higher passenger facility charges, the latest bill includes no increase in aviation taxes or fees. The Senate version raises jet fuel taxes for general aviation from current levels of 21.9 cents/gallon to 35.9 cents/ gallon. Sakib bin Salam is a Policy Intern for the Eno Transportation Foundation AUGUST 2011
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Eno to Publish NextGen Paper Analyzing Costs, Benefits and Political Leadership On June 30, 1956, a United Airlines DC-7 collided in mid-air with a Trans World Airlines Constellation flying over the Grand Canyon, killing all 128 passengers and crew on board. This was the most devastating accident in commercial aviation among a rising number of incidents and casualties at that time. The Grand Canyon crash became the catalyst for change in an outdated aviation system struggling to handle the increasing demand for flying in the post-WWII era. More than half a century has elapsed since then and the need to modernize the U.S. aviation system has once again resurfaced. According to the Federal Aviation Administration (FAA), commercial aviation will serve one billion passengers annually by 2021, a 25% increase in traffic from today; congestion and delays will only escalate as air travel demand rises. Eno Research on NextGen Enter Next Generation Air Transportation System (NextGen), the technology to reduce congestion, enhance flight safety, and ensure continued growth and global competitiveness of the US airline industry. The Eno Transportation Foundation is conducting research for a policy paper on NextGen to provide policymakers and airline industry leaders with objective, nonpartisan policy recommendations in the hopes of reigniting the spark plug driving NextGen. Benefits The current aviation system uses radar to scan through an area periodically and report any nearby operating aircraft to air traffic control (ATC). The lack of continuous precise detection means that planes must maintain a minimum distance of at least three miles between each other for safety. Moreover, due to limited radar coverage, airplanes are required to fly through predetermined air corridors like imaginary highways in the air. The precision of Global Position Systems (GPS) would allow reduction in the aircraft separating standard, which would greatly enhance air traffic management and flow, and NextGen’s Area Navigation would allow pilots to choose more direct and shorter routes to their destination. Airline pilots today have to rely on ATC for semi-precise information on their location and navigation of other planes in their vicinity. NextGen on-board display would give pi-
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lots a picture of the precise location of every aircraft around them and direct access to the information that was only available to ATC. This improves the pilot’s situational awareness and flexibility during bad weather and emergency situations. NextGen digital data communication between pilots and ATC reduces the chance of verbal miscommunication. NextGen would also use Optimal Profile Descent (OPD), which allows aircraft to glide prior to landing instead of using additional engine power during the current stepped descending approach.
Without a clear funding strategy... there is no guarantee that NextGen can be implemented in a timely and cost-effective manner. Eno’s NextGen analysis begins with an estimate of benefits to all its users and beneficiaries. These benefits are then used to help develop an adequate and equitable funding mechanism such that the burden of funding NextGen is allocated based on who profit from it. Revenue sources are analyzed and compared based on four main criteria: equitability, transparency, political feasibility and minimal tax burden on users. Eno’s forthcoming policy recommendations are intended to be practical and feasible and that impose minimal burden on passengers and airlines. Politcal Hurdles Modernization efforts today are faced with political stagnancy. Despite congressional acknowledgment regarding the importance of NextGen, there has so far been a lack of political leadership to guide NextGen from the initial stages of policy infancy to a fullfledged funding plan. The failure to extend the FAA authorization this July caused 4,000 FAA employees to be furloughed, many of whom were directly involved with NextGen research and implementation. The Airport and Airway Trust Fund (AATF) that pays for NextGen received no tax revenues during the shutdown. As Congressional leaders bickered over an annual $16 million Essential Air Ser-
vices Program, the trust fund lost $30 million daily for two weeks. Those are funds that could have been used towards NextGen. Recent reports by the Congressional Budget Office and the Government Accountability Office show that current AATF revenues are inadequate to fund NextGen. Furthermore, NextGen is not immune to recent budget cuts and fiscal austerity. Without a clear funding strategy for both continued infrastructural improvements as well as equipage, there is no guarantee that NextGen can be implemented in a timely and cost-effective manner. Costs and Implementation Airlines have been hesitant to bear the costs of equipping their aircraft with NextGen avionics due to financial distress and a lack of clear incentives to justify investing in NextGen. Airlines are not ready to make investments until the FAA is ready to deliver. Implementation of NextGen is of such fundamental importance to the economic competitiveness of the nation, and the safety of our citizens that any delay is costly. NextGen was originally projected in the early 1980s to cost $12 billion and be ready in 10 years. Now it is estimated to cost about $40 billion with no set completion date. Every additional day that congestion is left untended costs airlines millions in additional fuel and operating cost and passengers in time lost in delays. Without strong political leadership, a transparent source of funds, and incentives for airlines to equip, it is unlikely that NextGen benefits will be delivered in a timely manner. Politicians need to make sacrifices and forge bipartisanship towards implementing NextGen now. Sakib bin Salam is a Policy Intern for the Eno Transportation Foundation. He will graduate with a Master’s degree in Applied Economics with a concentration in the airline industry from Oregon State in June 2012. His research paper on NextGen will be published by Eno in early 2012. Send an email to sbinsalam@ enotrans.com.
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From the Boardroom Eno to Hold Three New Policy Events; Register Today Discussion Panel & Book Launch On Wednesday, Sept. 7, Eno will host a discussion panel to address intermodal transportation and the global economy. The event will feature commentary from chapter authors from Eno’s latest publication Inermodal Transportation: Moving Freight in a Global Economy. Participating authors include Michael D. Meyer, David Seltzer, and Stephen Van Beek. The event will be held from 2 to 4 pm at the City Club of Washington, Columbia Square. Click here to register for this free event.
Luncheon Debate Eno continues its luncheon debate series on Wednesday, Sept. 14, at Clyde’s in Washington, DC. The debate will focus on Stability or Sustenance? Resolved: Long-term stability in federal transportation funding must be the priority, even if it results in overall funding cuts. Ken Orski, Editor and Publisher of Innovation NewsBriefs, will argue the PRO position while Bill Millar, President of the American Public Transportation Association, will represent the CON opinion. To register, click here.
Policy Forum Eno’s annual Policy Forum, to be held Wednesday, Nov. 17, will address Transportation Investment as Part of a Deficit-Reduction Package. George Mason University’s School of Public Policy in Arlington, Va., will co-host the event. Online registration will be available next month. *** For details on all three events, contact Pamela Shepherd, Senior Director of Communications, at pshepherd@ enotrans.com.
Eno Newsmakers Recent news features on Eno staff and board members. Joshua Schank, Eno President/CEO Newsworks.org: August 1 Panel Presents Corbett With Funding Options for Pennsylvania Transportation Phil Washington, Eno Board of Advisors Denver Post: August 15 New Light-Rail Platform Debuts in Denver Janet Kavinoky, Eno Board of Advisors Wall Street Journal: August 15 Plan for Highway Bank Faces Uphill Battle
Joshua Schank, Eno President/CEO Governing: August 16 Transpo Officials Await Gas Tax’s Fate
Aaron Gellman, Eno Board of Advisors Morris Daily Herald: August 25 Airlines Avoid City Sales Tax
Rosemarie Andolino, Eno Board of Advisors WBEZ 91.5: August 24 A Bird’s-Eye View of Airports in Chicago
Joshua Schank, Eno President/CEO Streetsblog Capitol Hill: August 31 President Obama Pushes Congress For a Clean Extension of Transpo Bill
Phil Washington, Eno Board of Advisors Denver Post: August 25 RTD Staff Gets Specific in Proposing $12 Million in Bus and Light-Rail Service Cuts
Borrone, Downey Serve on MTA Search Committee Eno Chair Lillian Borrone and Eno Board of Director Mort Downey have been appointed to the MTA Search Advisory Committee by New York Governor Andrew Cuomo where they will find a replacement for outgoing Metropolitan Transportation Authority (MTA) chairman and former www.enotrans.com
Eno Board of Advisor member Jay Walder. “This committee will help conduct a national and international search to find and recommend the most talented candidates for the next chairman of the MTA,” Governor Cuomo said in a statement. “I am committed to appointing a new chairman who
will put straphangers first and who will continue to reform the MTA by reducing costs and waste, while improving efficiency and service.” Borrone and Downey join 18 others from leading public transportation experts and management professionals in the public and private sectors who will assist in recommending and evaluating candidates.
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$1.03 Billion FTA Award to Help Build RTD’s Eagle P3 Project August 31, 2011, is a big day for Denver’s Regional Transportation District (RTD) – a day the agency has anticipated and worked toward for several years. This is the day RTD will receive the Federal Transit Administration’s (FTA) $1.03 billion Full Funding Grant Agreement (FFGA) award. This award marks the largest FFGA award thus far by the Obama administration. The grant will help build RTD’s innovative Eagle P3 project, a public-private partnership that includes the East Rail Line to Denver International Airport, the Gold Line to the western suburbs of Arvada and Wheat Ridge, a commuter rail maintenance facility and a small segment of the Northwest Rail Line. The Eagle project is part of RTD’s FasTracks transit expansion program which will build out six new rail lines, a bus rapid transit corridor, short extensions of three existing light rail lines, 21,000 parking spaces and the redevelopment of Denver Union Station as the transit hub of the Denver metro area. “This coveted award represents our continued partnership with FTA in our united mission to provide safe, quality, reliable transit to the Denver metro region,” said RTD General Manager and Eno Board of Advisor member Phil Washington. “We are humbled and proud of the confidence that
the federal government has in RTD as good stewards of taxpayer dollars.” The $1.03 billion grant is the transit agency’s fourth FFGA award by FTA. The agency was awarded $120 million in 1996 for its Southwest Light Rail Line, $525 million in 2000 for the Southeast Rail Line and $308 million in 2009 for the West Rail Line, also part of RTD’s FasTracks program. Even with the new grant, RTD continues to explore funding alternatives to complete the FasTracks program as intended. Since FasTracks was approved by voters of the Denver metro area in 2004, the program has been hit hard by unprecedented increases in the cost of construction materials like steel, copper, concrete and diesel fuel. In addition, sales tax revenues have come in far below projections due to the recession. One of the strategies RTD has pursued to keep the program on track is the unique public-private partnership – Eagle P3 – where a team of private partners, or concessionaire team, contracts with the agency to design, build, finance, operate and maintain parts of the program in one project. Denver Transit Partners, the Eagle P3 concessionaire team, invested nearly $500 million upfront allowing RTD to preserve cash in the early years of the project and to spread out these costs over a long-term period. RTD’s Eagle P3 is
RTD’s light rail is part of its FasTracks transit expansion program.
the largest transit public-private partnership in the country and has become a model for other public entities looking to build major infrastructure projects in a timely and efficient manner. With the recent federal grant and the P3 project, RTD is closer to completing its FasTracks program and expanding its transit system for the Denver metro region.
Monitoring Green Transportation Progress
US Labor Secretary Visits VTA Bus Division in San Jose, Calif.
Last month U.S. Labor Secretary Labor Hilda L. Solis met with Santa Clara Valley Transportation Authority (VTA) employees to witness green technology and green jobs at work thanks in part to a $53.4 million grant through the American Recovery and Reinvestment Act. Michael Burns, a member of Eno’s Board of Directors, is the General Manager of VTA Last November 90 locally manufactured, low-emission diesel electric hybrid buses were put into service allowing VTA to retire old buses that had exceeded their useful lifespan (see Eno Brief February 2011) The new hybrid technology is reducing greenhouse gas emissions by an estimated 15% while VTA is experiencing over 25% in fuel economy.
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Solis’ visit included a tour of VTA’s Chaboya Bus Division in San Jose that
U.S. Labor Secretary Hilda Solis meets with VTA employees in San Jose, Calif.
houses the hybrid buses and a maintenance career-ladder training program committed to advancing skill levels of VTA transit mechanics to work with the new technology. Secretary Solis learned firsthand about the Joint Workforce Investment (JWI) Program, the successful working partnership between VTA and the Amalgamated Transit Union Local 265 that is focused on the professional development and career advancement of VTA’s operations and maintenance employees. The Secretary also met with mentors and graduates from the JWI program and discussed hybrid engine technology that is contributing to better air quality and a thriving local workforce.
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Obama: Failure to Extend Transportation Bills Is Inexcusable Earlier today President Obama challenged Congress to get serious about jobs and warned against “gamesmanship” that he said could delay transportation bills on which millions of jobs may depend. “At a time when a lot of people are talking about creating jobs, it is time to stop the political gamesmanship that can actually costs us hundreds of thousands
of jobs,” he said. a job just because of politics in WashingAt issue is the renewal of a transporta- ton.” tion bill that expires Sept. 30. A Senate proposal would last only two years and cost $109 billion, while the House is considering a longer, six-year bill that could cut spending from current levels. Obama warned that if Congress did not extend a transportation bill due to expire at the end of September, thousands of jobs Obama called on Congress to pass the highway could be at risk President when they returned to Washington next month. in highway and The President is scheduled to give a bridge repair and mass transit projects. broader economic policy speech before a “It is inexcusable to joint session of Congress on September 7 put more jobs at risk in an in which he is being urged to set out proindustry that has already posals including extending a payroll tax been one of the hardest cut for middle- and low-income workers, hit in the last decade,” boosting infrastructure and green energy the president said in com- spending and tackling the persistent forements at the White House. closures crisis. Eno President and CEO Joshua Schank (right) and APTA President “All of them will be out of Bill Millar attended today’s Presidential speech at the White House.
Eno Analysis of Recent FHWA Grants On August 17, the U.S. Department of Transportation announced $417.3 million in FY2011 discretionary grants from the Federal Highway Administration (FHWA) for state highway projects. In previous years the funding for these grants was subject to Congressional earmarks designated for specific projects. The lack of any new authorization legislation has left a larger pot of funding available for discretionary grants. In June FHWA received more than 1,800 applications for this funding. Applications were evaluated based on programspecific eligibility and criteria. Each state received a portion of the awards and in some cases the percentages were similar to the FY2011 FHWA formula apportionments. For example, the State of Arkansas www.enotrans.com
received 1.335% of the FY2011 FHWA formula apportionments, while its share of total discretionary grants was 1.37%. There were 20 other instances of states where the discretionary grant share was within .3 percentage points of what they would have otherwise received under the FHWA state formula apportionments. Powerful positions of key legislators may also have influenced allocations, which some could argue undermines the intent of banning earmarks and employing a competitive process. According to Transportation Weekly, Senate Transportation-HUD Appropriations Subcommittee Chair Patty Murray’s (D) home state of Washington received 357% more than what it would have under formula funding. Also noteworthy is the 231% increase in funding
for Maine, home state of Ranking Member Susan Collins (R). Many recent research and policy papers have argued that available federal resources for transportation ought to be spent in areas that generate the highest returns in terms of national goals. Though the new grant awarding process was intended to be competitive by adhering to cost-benefit analysis, the outcome does not appear to be markedly different from that achieved by Congressional earmarks. This lends credence to claims of “executive earmarking” that have been made by members of Congress. Sakib bin Salam is a Policy Intern for the Eno Transportation Foundation
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AUGUST 2011
Eno Fellow Nicholas Norboge Chosen to Author First William P. Eno Paper
Eno Fellow Mentors Interns
Nicholas Norboge was recently selected by the Eno Board of Directors as author of the first annual William P. Eno paper. Norboge’s research for the Eno paper will focus on establishing a methodology that will develop the process for determining the economic impacts associated with transportation. “A rigorous analysis of the economics of transportation investment is sorely needed at the Federal level and Nick’s paper will go a long way in moving this effort forward,” said Eno President and CEO Joshua Schank. The paper, which provides young scholars the opportunity to publish their work on issues that are relevant to transportation policy, is open to all attendees of Eno’s
Shain Eversly, a 2011 Eno Transportation Fellow, recently attended COMTO’s 40th National Meeting and Training Conference where he not only listened to Eno Executive Director Barbara Gannon address leadership models, but he also had the opportunity to use the training he received at Eno’ Leadership Development Conference (LDC)—which exposes graduate students to transportation policy—by helping to mentor COMTO’s 15 interns and 10 scholarship recipients. “I got the opportunity to meet a lot of people. I learned skills from relationship building to leadership,” Eversly said. COMTO President and Eno Advisory Board Member Julie Cunningham sponsored Eversly’s attendance to the conference, having met him at Eno’s LDC fundraising dinner in June. “I learned how bright he is and as part of the next generation coming along, knew how important it was for him to come to the conference and keep making connections,” she said. Following the conference, Eversly spoke at the COMTO intern’s closing ceremony in Washington, DC where he urged the interns to set goals for themselves and to make the best of the opportunities presented to them. Eversly turned down a job offer he received at the COMTO meeting in order to complete his Master’s degree in Transportation Planning and Management from Texas Southern University. He will graduate in December.
yearly Leadership Development Conference (LDC). This conference exposes graduate students to transportation policy. “I wanted to keep my research as broad as possible and this paper is a way to showcase the results on a national scale. This methodology will have the most application because it could serve as a good guide for other states to pursue,” Norboge said. Norboge, who attended LDC in June and graduated in May with a Master’s degree in Public Administration from Texas A&M, now works as an assistant transportation researcher with the Texas Transportation Institute (TTI). He will be awarded a $1,000 stipend and participate in a Washington, DC event next spring that will release the paper to the public.
Inspiring the Next Transportation Generation High school students from the New “This is a great opportunity for high Orleans area will be encouraged to think school students to see, touch and feel the about careers in transportareal things that go on in the industion as they attend learning try as well as talk with the peosessions at the American ple whose livelihood depends on Public Transportation Astransportation,” said Jason Schiesociation’s (APTA) annual del, Associate Vice President at meeting and EXPO in OcAECOM and coordinator for the tober. student event. APTA, AECOM and VeSchiedel hopes students will olia Transportation joined see a different side of transportawith the Junior Achievetion that will translate into a new ment Careers with a Pur- Students will wear the generation for the industry. above t-shirts to make pose to make the event— “Conference attendees should which introduces students them recognizable. keep an eye out for these students, to the importance of seeking careers—pos- greet them and and encourage them to think sible. Students will tour the EXPO exhibits about careers in public transportation,” he and listen to professionals share their work said. experiences and discuss career opportuniFor details contact Jason Schiedel at ties in public transportation. jason.schiedel@aecom.com.
Reconnect With Eno Colleagues at Reception During APTA Annual Meeting Join Eno Board members, staff, faculty and CTL alumni at a reception during the American Public Transportation
www.enotrans.com
Association’s annual meeting in New Orleans, La. The reception will be held from 6:30 to 7:30 pm on Monday, Oct.3.
For details contact Lindsey Robertson, Director of the Center for Transportation Leadership, at lrobertson@enotrans.com. AUGUST 2011
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Eno CALENDAR SEPTEMBER
OCTOBER
NOVEMBER
7
2-5
7-10
3
8-10
11-15
8-10
13-17
13-15
Eno Intermodal Dicussion Panel & Book Launch Washington, DC
7-9
Future Travel Experience 2011 Vancouver, Canada
10-14
IBTTA 79th Annual Meeting and Exhibition Berlin, Germany
14
Eno Luncheon Debate Washington, DC
19-23
Eno Transit Mid-Manager Seminar Pittsburgh, PA
About Eno Visitors to the Eno Transportation Foundation website will notice a dramatic change next month as the organization launches a new and more interactive site. The revamped site will feature a new transportation blog and Center for Transportation Leadership discussion forums. Eno Brief readers will no longer have to download a PDF version of the monthly newsletter; rather the allelectronic searchable format will be easier to access on laptops and desktops as well as smart phones and tablets. In the future the site will have the ability
APTA Annual Meeting & EXPO New Orleans, LA Eno CTL Reception at APTA Annual Meeting New Orleans, LA AAPA 100th Annual Convention Seattle, WA AASHTO Annual Meeting Detroit, MI
16-19
Eno Texas Transit Leadership Institute San Antonio, TX
ACI-NA Airports Concessions Conference Atlanta, GA Intelligent Cities Expo Hamburg, Germany Smart Stations & Terminals World Europe 2011 Netherlands, Amsterdam I011 IANA Intermodal Expo & Annual Membership Meeting Atlanta, GA
16-17
Eno Joint Board Conference & Policy Forum Arlington, VA
Eno to Debut New Website Next Month to live stream and house videos of our policy luncheon debates, as well as other Eno events. Also among the changes includes the ability to donate and sponsor Eno events. Additionally, meeting and event attendees will not only be able to register online, but pay as well. Eno will continue introduce new features and improved navigation on the site. Comments and suggestions are encouraged. For details contact Pamela Shepherd, Senior Director of Communications, at pshepherd@enotrans.com.
STAFF EDITOR Pamela A. Shepherd Senior Director, Communications pshepherd@enotrans.com
ENO BRIEF CONTRIBUTORS
Thank you for your interest in Eno Brief, a publication of the Eno Transportation Joshua L. Schank Barbara K. Gannon Foundation. Eno Brief is published monthly and distributed electronically (past President and CEO Executive Vice President editions can be accessed at: www.enotrans.com/enobrief). jschank@enotrans.com bgannon@enotrans.com Lindsey Robertson Melissa Paradis Director, Center for Transportation Leadership Program Coordinator lindsey@enotrans.com mparadis@enotrans.com Paul Lewis Sakib bin Salam Analyst, Policy and Strategic Finance Policy Intern plewis@enotrans.com sbinsalam@enotrans.com
www.enotrans.com
To subscribe, send your name, contact details and your email address with the subject “request to subscribe to Eno Brief” to publicaffairs@enotrans.com. To be removed from our distribution list, include “request for removal from Eno Brief” in the subject field. For comments or to include content, contact Pamela Shepherd at pshepherd@enotrans.com. AUGUST 2011
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ENO BOARDS BOARD OF DIRECTORS Lillian C. Borrone, Chairman
Norman Y. Mineta Vice Chairman Hill & Knowlton
David Z. Plavin President dzp Consult Inc.
Eugene K. Pentimonti Maersk (retired)
Jerry Premo Executive Vice President AECOM
Thomas Albrecht Managing Director BB&T Capital Markets
Tyler Duvall Senior Advisor McKinsey & Company
John E. Lewis Managing Director Bank of America
Rosemarie S. Andolino Commissioner Chicago Department of Aviation
Aaron Gellman Professor of Transportation and Engineering Kellogg School of Management Northwestern University
Ken Mead Special Council, Corporate Baker Botts
Michael T. Burns General Manager Santa Clara Valley Transportation Authority Mortimer L. Downey Senior Advisor Parsons Brinckerhoff BOARD OF ADVISORS
Charles Banks President RL Banks & Associates Cynthia J. Burbank Vice President and National Planning and Environment Practice Leader Parsons Brinckerhoff
John Gray Senior Vice President, Policy and Economics Association of American Railroads Janet Kavinoky Director, Transportation Infrastructure Chamber of Commerce
Kevin Carney Managing Partner Infrastructure Capital Advisors LLC
John G. Larkin Managing Director Stifel, Nicolaus & Company
Julie A. Cunningham President and CEO Conference Of Minority Transportation Officials
Craig Lentzsch Consultant National Surface Transportation Infrastructure Financing Commission
Elaine Dezenski Senior Director and Head of Risk Initiatives World Economic Forum
Eric Mensing Vice President APL Maritime Ltd. Ray Melleady Vice President, Corporate Development Neopart, LLC Deborah Miller Secretary Kansas Department of Transportation Petra Todorovich Director, America 2050 Regional Plan Association Phil Washington General Manager Denver’s Regional Transport District
BOARD OF REGENTS Dr. Michael D. Meyer (Chairman) Professor School of Civil and Environmental Engineering Georgia Institute of Technology Dr. Maria Boile Assistant Professor Civil and Environmental Engineering Rutgers University
Stephen Lockwood Senior Vice President PB Consult Dr. Peter Haas Education Director Mineta Transportation Institute Jennifer Mitchell Manager, Transportation Project Development and Finance - East Parsons Brinckerhoff, Strategic Consulting
Joe Toole Federal Highway Administration (Retired) Dr. Melissa S. Tooley Director, University Transportation Center Texas Transportation Institute Michael Townes National Transit Services Leader Wilbur Smith Associates
CTL ADVISORY BOARD Michael Burns General Manager Santa Clara Valley Transportation Authority
William Millar President American Public Transportation Association
Linda Watson CEO Captial Metro
Nathaniel P. Ford, Sr. Principal The Ford Management Group
Jerry Premo Executive Vice President AECOM
Susan Borinsky (ex-officio member) Federal Transit Administration (retired)
Stephen Kingsberry Executive Director Delaware Transit
Stephanie Pinson President & Chief Operating Officer Gilbert Tweed Associates, Inc.
www.enotrans.com
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