Intelligent Transportation System Includes Public-Private Partnerships, Vehicle Mileage Tax, and More Toll Roads

Would More Highway Tolls Cause Commuters to Change Their Ways?

August 30, 2010

Transportation Nation - Mary Peters and Ray LaHood, oddly enough, were both born in places called Peoria. (Peters’s birthplace, a suburb of Phoenix, was named for Lahood’s hometown in Illinois.) Until recently, it might have seemed that this was all that the Secretary of Transportation and his predecessor had in common. LaHood, a Republican Congressman, was appointed with little experience in transportation policy, but has been given billions to spend. Peters had worked for twenty years at the Arizona DOT and was the head of the Federal Highway Administration before Bush nominated her to replace Norman Mineta as Secretary of Transportation in 2006.

Many of the hard issues now facing the Obama Administration—such as crumbling infrastructure, declining gas tax revenues, and disparate opinions on spending priorities—were first recognized during Peters’s tenure. The solutions put forth by the Bush Administration were bold and controversial, and Peters took the lead in encouraging highway privatization and more permissive tolling policies. She stood firm with President Bush (and against many influential Congressional Democrats) in refusing to advocate a gas tax increase.

The Obama Administration’s focus on “livability” and high-speed rail have been in contrast with the past, and yet lately LaHood has been sounding more like Peters, speaking kindly of tolling and private investment. [Editor's Note: Whenever you read that private equity firms or private investors are involved, know that these are the same financial giants who seized trillions of taxpayer dollars through bailouts, corporate takeovers and public-private partnerships since the financial crisis began in 2008.]

Transportation Nation’s Matt Dellinger interviewed Peters last week. She talked about the persistent problems with our transportation policy, her reaction to the Obama Administration’s first steps, and what her own future holds after January, when federal law will allow her to lobby the White House and Congress.

DELLINGER: When you were with the Bush Administration, you told me that you felt like the canary in the coal mine as far as the gap in federal transportation funding, the weaknesses of the gas tax, and the need for innovative thinking. What were the first signals that we were headed for trouble? And have things gotten any better or worse since you left?

MARY PETERS: I would say in terms of the status of the federal Highway Trust Fund, from the perspective of the revenue that it’s collecting, versus what was expected to be collected, it has gotten worse—due to the recession in part, but also due to the fact that we have more fuel efficient cars and we have more alternative and renewable fuels. And then of course Americans are driving less, especially during the recession and, in the summer of ‘08, the very high fuel prices. American driving is picking up a little bit, especially through the summer months this year, but by-and-large we’re not gaining vehicle miles traveled at the rate that we had in the past and I believe won’t in the future. So if anything, yes, it has gotten worse.

Now, the reason that I caveat that a little bit is because Congress has elected to put some fairly significant amounts of money into the Highway Trust Fund. Between the summer of ‘08 and February of this year they’ve put $34.5 billion dollars of General Fund monies into the Highway Trust Fund to maintain its solvency. Absent that, we would be in real, real trouble.

DELLINGER: Generally speaking, President Bush was against using general funds to boost the Highway Trust Fund.

MARY PETERS: He really was. Of course, he did sign off in the fall of ‘08 on the first infusion of money that had to go from the general fund into the Highway Trust Fund, but generally speaking, he felt that the trust fund ought to do what trust funds do: collect revenues from defined resources and operate within the constraints of those revenues. But again, because this came on very suddenly through the summer of 2008 and because the trust fund appeared that it would not remain solvent through September of ‘08, we went to Congress—in fact, just the week before Lehman Brothers failed—and got the first infusion of cash.

DELLINGER: Because of this funding problem that you saw coming, you and the Bush Administration took a position that was pro-toll and pro-public-private-partnership. The Democrats in Congress at the time gave you a lot of pushback. Perhaps they saw this policy as being one that was just ideologically opposed to the gas tax and thought you were doing gymnastics to avoid raising taxes. But now Secretary Ray LaHood and the Obama Administration are saying some very nice things about tolling and public-private partnerships. Do you feel at all surprised by that? Or relieved? Or vindicated?

MARY PETERS: I do feel that they are recognizing the futility of continuing to just use gas taxes or fuel taxes to support the system and recognizing that we have to do something else. They also have been very emphatic, both President Obama as well as Secretary LaHood, about the administration not being willing to support a fuel tax increase. They do caveat that a little bit—“in this economy” or “at this time” is what they’re saying—but I think even leaders such as Dick Gephardt, a very senior former democratic official in congress, have said that there’s just no opportunity to increase fuel taxes today. So that reality, I think, is what has made people more receptive to attracting and using private investment to help supplement our public fund for transportation.

DELLINGER: So it didn’t surprise you that the Democratic administration would embrace these? As you see them, are these bipartisan policies?

MARY PETERS: Generally speaking yes, they are. We in the Bush Administration really liked more of a market based approach to transportation, and charging for transportation, and welcoming private investment. Early on, that just fell a little bit on deaf ears, especially after the Democrats took the majority in Congress in ’06. I think it’s a philosophical difference. I’m not saying, “they’re wrong and I’m right” or anything like this, but I’m saying early on I think that Chairman Oberstar and people like him really believed that it was an inherently governmental responsibility to raise taxes or do what was necessary to provide sufficient funding for surface transportation.

I think they have evolved since that time to the reality that there just is not an appetite to increase fuel taxes in the country, certainly not right now, nor is it a sustainable approach, and that we really have to look at other ways to bring revenue in to support our infrastructure needs in the United States. I think it’s an evolution of their thinking that has happened over time, and I think a welcome evolution.

DELLINGER: If you could go back to 1956 and try to talk to Congress back then when they were devising a way to pay for the Interstate Highway System, do you think you would have advocated for tolls, or privatization?

MARY PETERS: It’s very interesting — early on there were proposals. The Clay Commission, which made recommendations for the Interstate Highway System legislation, and President Eisenhower himself initially both wanted a toll system as opposed to a tax system, but the technology at the time— Even if I were there at the time, I might have gotten in to see President Eisenhower and some members of the Clay Commission and said “You know, we really need to use tolling and free market principals to do this,” but with the technology where it was then, it would have just been pretty limiting in terms of what we could have done. All the toll booths and toll collection facilities that would have had to have been built, as well as manual toll collections. That’s a distinct difference between 1956 and today when technology enables open-road tolling and no one even has to stop in order to be charged for using a road.

DELLINGER: You’re working in the intelligent transportation system sector now. Does any of that technology have anything to do with toll collection, or is it all enforcement?

MARY PETERS: It certainly can be used for enforcement. And it can be used for active traffic management, real time traffic management*. But the technology absolutely enables us to use open-road tolling today and it is part of the overall intelligent transportation system that is going to give us safer systems.

Where we have vehicle-to-vehicle communication, it will help us prevent collisions. If someone is about to run a red light, you can get a warning in your car so you don’t drive into that intersection. All of these things intelligent transportation systems are enabling, and one of those that I think will be extremely helpful is the ability to eventually move to a vehicle miles traveled type of taxing system or payment system as opposed to fuel taxes.

*Peters told us that she currently serves on the board of directors for Aldis, a company working this technology, based in Tennessee.

DELLINGER: The vehicle miles traveled tax could of course be a public mechanism, as the gas tax is. But does your vision for it leave room for public-private partnerships?

MARY PETERS: Most definitely. Very definitely.

DELLINGER: How would those two things work together?

MARY PETERS: It’s very similar to what we’re seeing today in some cases where roads are being built with public-private partnerships. In some cases they’re using static tolling, a standard per mile fee that you would pay for using that facility, but more and more we’re seeing, especially on what we call managed lane projects, where those lanes are private-public partnerships. They’re built by the private sector and operated in most cases by the private sector and those who use the roadway are charged different fees based on how much traffic demand there is at any given time.

Probably the oldest example of that is State Route 91 roughly going from Riverside into Orange County, California. That road, they changed the fee every 8 minutes based on what traffic has been. It’s a little bit of a lagging system because they based it on what traffic had been days before as opposed to real-time, but in Texas, The Katy Freeway and others are operating on real-time traffic information, so if too much traffic is using the facility, the price goes up and more vehicles choose not to go on the facility because of the higher price. That keeps the freeway free-flowing and allows it to move. In the case of State Route 91, they can move almost 50% more vehicles in the same lane configuration per hour that the adjoining so-called “free” or general purpose lanes can move because they keep the traffic moving. So very definitely an opportunity for the private sector to be involved in building and operating these roadway systems, even with the VMT type of tax.

DELLINGER: And, in theory, if the information was feeding back more immediately to the driver, in advance, you wouldn’t have to actually drive to the entrance of that lane to figure out what it would cost?

MARY PETERS: Exactly. You get that information right in your car with the systems that we have in the vehicles today. The Vehicle-Infrastructure Integration, or VII as it’s called in the intelligent transportation system world, creates the ability for the roadway to communicate with the driver, and the vehicle to give them information so that they can know approaching—or maybe even before they leave their home, right as they’re backing out of their driveway—what’s the fee for using the managed lanes today and is it worth it to me to use those lanes. If so, I’ll go on them, if not, I’m going to go on the general purpose lanes.

That motorist will also be able to get information about how congested the general purpose lanes are, they’ll know if there are accidents or something else that has happened out there that is going to impinge their ability to drive on that facility. All of that information will become more readily available in the vehicle and in vehicle communication systems as well as at home by just logging onto a site before you even leave.

And then I mentioned these collision avoidance systems that I think just holds such tremendous promise for helping us further make improvements on the number of people who lose their lives in highway crashes every year. I’ll very specifically call them “crashes,” not “accidents,” because in most every case they are preventable. Again, if the driver had the right information or if we knew for example that ice was forming — black ice was forming — because of temperature sensors in the pavement, we could keep people driving into situations that cause crashes today.

DELLINGER: How many years are we from a system that looks like this and what do we do in the meantime? We have a transportation bill that’s overdue and underfunded, and obviously it’s a little early for a lot of these ideas to really make a difference.

MARY PETERS: Some people think it’s as long as 20 years away from a viable VMT tax system. I’m more inclined to think we’re within a decade of fully implementing these systems. This recent issue that we’ve had with the Highway Trust Fund solvency and declining purchasing power of fuel tax is because, of course, fuel taxes are not based on the cost of gasoline but a static fee per mile and they haven’t been increased since 1993 on the federal level. So you’re losing purchasing power, people are driving less, vehicles are more fuel efficient, they’re going to be more fuel efficient in the future.

All those factors I think are going to cause this transition to occur sooner rather than later, and again, I would put it about a decade out and the way we transition into that is actually what we’re seeing happen today. We’re seeing these managed lanes get put in place and operating with great success in many, many areas around the country and I think we’re going to see more of that, more of those types of lanes, especially in heavily congested areas.

I believe we’re going to see public-private partnerships fund bridges that there just simply isn’t enough money to fund today, but bridges that need to be built and need to be replaced or need to be improved upon like the Tappan Zee Bridge and the Boston area. So I think we’ll see more and more of those types of projects come online.

Eventually, we’ll go to a fuel vehicle miles traveled system but that probably is at the end of that decade but the technology, interestingly, the technology exists today to enable that but what we don’t have answered is how do you employ it on a very broad basis.

What happens to state and local governments and how is revenue sharing occurring and what’s the backroom operations look like because we don’t want to have a bunch of different providers doing that with systems that don’t talk to each other so all of those things I think are going to have to be answered and the real big issues frankly is privacy. With GPS locaters telling us where a vehicle is at any given time so that we can charge the appropriate rate for using that facility at that time, that means there is information that tells you very specifically where that person’s vehicle was and there are folks who are concerned about that, and I think that we can answer those privacy questions and we can answer them very easily by determining how that data can be used but those are things that we have to get through in the ensuing years if we’re going to fully implement a VMT system.

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Would $5 Gallon Gasoline Cause Commuters to Change Their Ways?

September 8, 2009

The Infrastructurist - We’ve frequently bounced around the question of what level of gas prices would start to meaningfully change Americans’ driving behavior. It seemed like we started to get an answer last summer, when pump prices were topping $4.

The financial calculus of commuting from the far suburbs for a middle class salary seemed to be unraveling, but the spike was so abrupt and short-lived, and there was so much other craziness going on with the world of high finance in flames and the real estate market imploding and the stormclouds of an epic recession looming, it was hard to tell exactly what was driving the action.

A new survey from IBM called “The Commuter’s Challenge” confirms that the $4 - $5 range for gas really is the breaking point for a large number of Americans. Asked at what gas price they would seriously consider other options for commuting (besides motoring solo) a stunning 70 percent of people pegged their magic number at $5 or less. If it were a Family Feud question, $5 itself would be “number one answer,” in fact, representing 21 percent of respondents.

With our political system rather mired at the moment and incapable of proactive (or even appropriately reactive) policy-making, it seems more and more likely that meaningful progress toward a more efficient and sensible transportation system will come about only if/when petroleum prices head back into three-digit land. If oil bounces back to $150 or above, we’ll start getting smart as a matter of practical necessity and all this ideological tussling over cars and freedom and rail and socialism will fall to the wayside.

Somewhat related: An interesting notion that’s been gaining some currency lately is the four-day work week, as road-tested by the state of Utah. While it would require some fiddling with the way we do things, a “staggered” four-day week would be a cure to urban congestion in many cities and would instantly cut commuting costs by 20 percent. It would also give Americans a lot more free time.

The IBM study doesn’t mention 4-day weeks per se, but it does pose the question of what people would do if they spent less time driving to the office:

How would people spend their extra time if their commutes could be reduced?
• 52% would spend it with family/friends (+9% points from 2008)
• 37% would partake in recreation (+3% points from 2008)
• 37% would exercise (+6% points from 2008)
• 33% would sleep more (+2% points from 2008)
• 11% would work more (+2% points from 2008)

Sounds wonderfully healthy. Almost European, even (except for the exercising part). In reality, maybe that time would be spent playing first-person shooter games and eating Funyons instead of going on bike rides and having family dinners–but we can always hope.

Congress Passes Telework Enhancement Act for Federal Employees

November 18, 2010

Federal Computer Week - The House passed legislation today that would require the Office of Personnel Management to draw up formal policies and standards related to telework at federal agencies.

The House agreed to the Senate’s changes to the original bill by a vote of 254-152. The Senate passed its version of the measure in September. The bill now goes to President Barack Obama.

Under the House bill (H.R. 1722), OPM would have to help agencies set policies to let employees work from home or at other locations outside their offices. Agencies would need OPM’s guidance regarding pay, leave and performance management. OPM would work with agencies on establishing goals and other ways to measure the policy’s usefulness.

Agencies would also be required to consult with the Federal Emergency Management Agency on continuity-of-operations plans for situations such as the record snowfall last winter in the Washington, D.C., area that shut down the government for several days.

The bill also includes punishments for poor conduct. Federal employees could be prohibited from teleworking if they have been officially disciplined for bad behavior, such as downloading pornography or missing work without permission for more than five days in a year.

Furthermore, Office of Management and Budget, homeland security and technology officials would have to draft policies on information security safeguards for government systems that teleworkers would use. OMB would also have to issue guidance on buying appropriate computers for employees who telework.

Currently, 102,900 of the 1.9 million federal employees regularly work remotely. Of the total workforce, 62 percent are eligible to telework. To encourage the practice, the Obama administration has set a goal of having 150,000 government employees teleworking on a regular basis by 2011.

In debate today, Rep. John Sarbanes (D-Md.) said telework saves money and gives the government the flexibility to continue working under all sorts of circumstances.

“It creates a nimbleness for the federal government,” he said.

Rep. Frank Wolf (R-Va.), who has advocated for telework for 18 years, said the legislation would make the government operate more like the private sector. To the lawmakers who disagreed with the bill, he pointed out their work habits.

“Everyone in this institution teleworks,” Wolf said.

However, Rep. Virginia Foxx (R-N.C.) said the bill does little to boost the use of telework, which is already in place. She said it would not facilitate telework but add more bureaucracy to it.

GSA to Stop Funding D.C.-area Private Telework Centers for Federal Employees

March 2, 2011

NextGov.com - The General Services Administration will discontinue funding for 13 private telework centers in the Washington area at the end of March. About 300 federal employees work at the facilities.

Contracts for the telework centers expired Sept. 30, 2010, and GSA had been working with the center's owners to determine if they would close, or continue to operate under a private sector model. A final decision on the centers' future was due Feb. 28.

According to GSA spokeswoman MaryAnne Beatty, the number of employees working at the centers represented less than 1 percent of the Washington-area federal workforce. The government spent about $3 million annually to operate the centers -- about $10,000 a year per user. Affected employees were notified in December of potential closures.

GSA said in an e-mailed statement that telework is less about where work gets done and more about how it gets done.

"Advancements in technology, connectivity and culture have expanded the choices for telework beyond that of home, telework center, or office to include virtually any place at any time," the statement said.

In October 2010, Administrator Martha Johnson announced that GSA was building virtual meeting centers across the country, including five in the Washington area.

The high-tech centers, which are expected to be operational in mid-2011, were intended to have people "move off airplanes and on to tele presence," she said at the time.

The telework centers that will close March 31 include Bowie, Laurel Lake and Prince Frederick in Maryland; Fredericksburg and Winchester in Virginia; and Kearneysville in West Virginia.

The centers that will remain open but without GSA funding include Manassas, Fairfax, Stafford and Woodbridge in Virginia; and Hagerstown, Frederick and Waldorf in Maryland.

The College of Southern Maryland operates three of the centers that will close.

"The college is extremely disappointed as we have had a longtime association, since 1993, of partnering with GSA to provide this valuable service and convenience to our residents and telecommuting members of our community," CSM President Bradley Gottfried said in a prepared statement.

George Mason University, despite the end of federal funding, will keep its telecommuting facilities open and actually expand the program to operate nine centers across Northern Virginia. The university believes there is a demand for flexible locations among employees for whom working from home is not a great fit, said Keith Segerson, managing director of the Mason Enterprise Center, which runs the facilities. For example, one federal worker told Segerson his wife runs a day care from home, so he cannot work there. Also, the facilities can more easily accommodate work teams than most home offices, he said.

The university will add new features, such as workstations and private offices, Segerson said.

Because the university is a state agency, the space is leased out at a price for the university to break even, not make a profit. Beginning April 1, the daily rate for a federal flex office center client is $59 per day, with lower prices for extended group usage, according to a memo provided to Nextgov.