In This Issue

	FTA Approves Norfolk Light Rail
	Public Works Bonds Struggle
	Gas Prices Affect State Road Work
	Dan Ryan Expressway Escalates toward $1B
	Nonprofit Group Forms in Support of Turnpike Lease
	Northern Virginia Releases Transportation Plan
	Tolls Alone Won’t Fund Corridor
	Ill. Officials Call for Bridge Plan Review
	Maine DOT: TABOR Would Hurt Roads
	Committee Considers Gas Tax ‘Buffer’

FTA Approves Norfolk Light Rail

NORFOLK – Wednesday, the Federal Transit Administration gave the long-awaited approval for Norfolk’s $232 million light rail line. Officials say construction could begin on the 7.4-mile extension as early as November 2007. The proposed route will run from the Eastern Virginia Medical Center through downtown Norfolk and along a rail corridor parallel to I-264 within the City of Norfolk.

State lawmakers will meet later this month to decide how to fund the state’s share of the cost, which amounts to 13 percent, ($29 million). Norfolk City will provide 17 percent ($39 million), $36 million has been earmarked in regional transportation financing, and the final, and biggest chunk, 55 percent ($128 million), will come from the federal budget.

Hampton Roads Transit leaders said Norfolk will receive assistance with operating costs for the first two years, with a regional transportation commitment of $3 million per year. The rest will come from federal and state transit funds.

The rail line will provide access to City Hall, Harbor Park, Norfolk State, TCC, and Sentara General Hospital. The system is planned to carry 20,000 people a day, and will include eleven passenger stations with four park and ride locations.

Public Works Bonds Struggle

SACRAMENTO – Supporters for public works bonds are concerned they don’t have enough money to win voter support for expensive infrastructure improvements as the political television ad market is flooded by lucrative oil and tobacco firms fighting the propositions.

The competition for ad space is adding to the issues facing the massive multibillion-dollar bond measure, such as the disclosure that a significant percentage of the money for transportation would not go directly toward easing traffic congestion. The associated press reported that more than 40 percent of Proposition 1B funds will go toward projects such as new fences around ports in Long Beach and Oakland, school buses for Los Angeles, security cameras and disaster-plan studies for San Francisco’s subway and ferry terminals.

With advertising costs hitting $5 million a week, “It’s going to be difficult to have a voice to be heard in this election,” said Senate leader Don Perata, the key engineer of the public works bonds on the Nov. 7 general election ballot. “We’re not going to be able to be competitive in a $50 or $60 billion campaign marketplace and that’s where we’re headed.”

Voters may be intimidated by the sheer size of the total debt, according to Mark Baldassare, director of the Public Policy Institute of California. The almost $20 billion transportation bond is the single largest bond ever placed in front of California voters. Along with other housing, schools, and flood control measures, the total amount of bonds on the ballot equals almost $43 billion.

“Californians support the concept of using state bonds for infrastructure projects by a nearly two-to-one margin,” Baldassare said. “But many likely voters who say they would vote ‘yes’ on the individual bond measures think the total amount is too much.”

Gas Prices Affect State Road Work

OMAHA – Nebraska’s transportation department is feeling the pinch as drivers try to avoid the high gas prices. The state has $350 million, which is $40 million less to spend on transportation this year, or more than 10 percent less than last year.

Consumers buying fuel-efficient vehicles or just simply buying less gas and diesel fuel are the biggest reasons for the drop, according to Steve Maraman, finance administrator for the state Roads Department. A smaller-than-expected increase in federal funds, as well as less revenue from the state tax on vehicle sales also added to the decline.

Even though the state increased its fuel tax by one cent in January, and again in July – to 27.1 cents per gallon – the results were insignificant. Further increases could also inhibit sales.

So while the higher gas prices have brought down consumption and tax revenue, the cost of road construction has risen because of the higher prices. Fewer roads can be built with the now-smaller budget than when gas prices were lower.

For those not familiar with Nebraska’s system of indexing, there are some automatic increases that kick in based on a 12.5-cent base plus 12.3 percent variable excise tax which is set semi-annually. Even with this tool in place their funding from the motor fuel tax isn’t keeping up in this wildly variable petroleum market. TW

Dan Ryan Expressway Escalates toward $1B

Illinois - The Chicago Tribune has reported the cost of rebuilding the Dan Ryan Expressway has almost doubled the state’s original projection of $550 million, according to a newspaper analysis of budget documents and contracts.

Transportation officials said the result will be forcing the diversion of funding that was planned for scores of other road projects throughout the state. The decisions of which projects to delay or eliminate will not be made until the final cost of the Ryan Expressway is calculated.

However, as labor and materials costs continue to rise, and with over a year of work remaining on the Ryan rehab, Illinois Department of Transportation officials acknowledge the price may exceed $1 billion.

Much of the cost addition is attributed to improvements to safety and capacity, including seven bridges, extra lanes and other elements that were not part of the original plan have been added, said Diane O’Keefe, deputy director of highways at IDOT. Some of the decisions for the extra work were made before inflation in the construction industry skyrocketed over the last several years, she said.

IDOT has not yet asked for bids for major work that includes rebuilding all the local lanes in each direction between 31st Street and the Interstate Highway 57 interchange. The department hopes to keep those expenses under $135 million. IDOT says it has tried to keep Ryan cost overruns at a minimum.

Nonprofit Group Forms in Support of Turnpike Lease

COLUMBUS – A non-profit organization with GOP links has formed to back the lease of the Ohio Turnpike for up to $6 billion. The group of businesspeople, named Road to Work Ohio, says it is unaffiliated with any campaign or candidate, although its plan is identical to the one promoted by Republican gubernatorial Ken Blackwell.

The group’s plan states that private investors would pay to maintain and operate the roadway, and keep all toll proceeds. The state would use the earnings from the sale for economic development programs. Spokesman Mary Anne Sharkey says the nonpolitical committee believes the sale of the turnpike is a good post-election idea for the state, regardless of whether Blackwell or Democrat Ted Strickland wins in November.

The executive director of the group is former Sylvania Mayor, James Seney, who recently retired as head of the Ohio Rail Development Commission. Seney was introduced to the group by Tom Whatman, the leader of a Columbus lobbying firm and former executive director of the Ohio Republican party.

The organization hopes to convince Strickland, a U.S. Congressman, that his economic development plan could receive funding from the turnpike plan if he wins the election.

“I listen to what Ted says and he’s going to need capital to carry it out and here it is – it’s in the turnpike,” said Seney. He said Strickland is already agrees with the idea. Strickland’s spokesman Keith Dailey said Strickland is opposed to the idea because it would “likely put a state asset into a foreign company’s hands and will most definitely raise tolls.”

Northern Virginia Releases Transportation Plan

Virginia - The Northern Virginia Transportation Authority announced its Trans Action Plan 20-30 last Friday, just before the special session on transportation begins on September 25th. The plan includes widening the Beltway to eight general purpose lanes and four HOT lanes, build light rail from Dulles Airport to Manassas, extend Metrorail to Gainesville, and widen I-66 from the Beltway to Gainesville.

It also plans to widen Route 28 to eight lanes from I-66 to the Prince William County line, and construct VRE from Manassas to Haymarket, and implement bus service along the I-66 corridor. The plan also calls for building a light rail line along Columbia Pike, and a busway service in Crystal City in Alexandria and Arlington Counties.

The Authority is hoping an ongoing funding source can be agreed upon by the General Assembly for the $670 million annual cost of the plan. Recent attempts to fund further transportation for Northern Virginia, the state’s economic capital, have failed, possibly because of the strong anti-tax outlook in Richmond.

Tolls Alone Won’t Fund Corridor

UTAH – Tolls will not raise enough to be the sole source of funding to build the 40-mile Mountain View Corridor, which will connect Salt Lake and Utah counties, according the results of a recent study by the Utah Department of Transportation. About one-third of the $1.7 billion will need to come from state residents, through a gas-tax increase, higher sales-tax, vehicle-registration fee-increase or by other funding sources, said the study.

A bill was passed in the 2006 general legislative session that allows Utah to enter into a public-private partnership to build toll roads. The state would then be allowed to lease the road to a private company to build, operate and maintain the road, as well as impose the tolls.

The UDOT study found that if the state ran the toll road it would still leave a $502 million deficit that would need to be funded through taxes or otherwise. If the project were financed through a private concessionaire then the shortfall would be $641 million.

UDOT thought it could raise more money for construction and operating costs by leasing the road to a private consortium, said Teri Newell, UDOT project manager for the proposed Mountain View Corridor.

The agency had looked at Chicago’s sale earlier this year of the Skyway tollway to a Spanish company for $1.83 billion. But that deal involved an existing toll road that had a lucrative history in toll collection, whereas the Mountain View Corridor involves a new road, and greater risk. So investors would likely pay less, Newell said.

Ill. Officials Call for Bridge Plan Review

EAST ST. LOUIS, Illinois – Executives in Illinois St. Clair, Madison, and Monroe counties are calling for an independent review for a bridge plan, which will connect Illinois and Missouri at St. Louis in hopes of jump-starting the stalled project.

Funding disagreements between the two states have caused the plans for the $910 million project to be in limbo for over a year, with Missouri pushing for the span to be made a tollway.

“We have afforded ample time for all sides to weigh in, now is the time for us to act and get this project moving,” said a letter written by Madison County’s Alan Dunstan, Monroe County’s Franklin Kohler, and Mark Kern of St. Clair County to the East-West Gateway Council of Governments.

In response to the letter, the council has confirmed their proposal to place recommendations for an independent bridge analysis on their Sept. 27 agenda, which includes Kern, Dunstan and Kohler.

Investment firms Goldman Sachs and Stifel Nicolaus have already performed separate studies on the feasibility of a tollway and potential revenues from it. However, critics said the studies were not objective because the firms could profit from the sale of bonds if the tollway concept were approved.

Maine DOT: TABOR Would Hurt Roads

PORTLAND – Maine’s Department of Transportation says that roads and bridges in the state would suffer if voters approve a government spending cap. The Taxpayer Bill of Rights would result in fewer transportation projects, cutbacks in maintenance and operations, and additional debt, according to DOT Deputy Commissioner Bruce Van Note.

If TABOR were currently in effect, the DOT would be limited to spending increases of 3.4 percent for the upcoming 2008-2009 biennial budget while capital construction costs are increasing by an annual average of about ten percent, Van Note wrote in a four-page memo. “The bottom line is that Maine DOT will not be able to maintain our existing level of capital program production,” he said.

Many state highway and road repair projects would have to be cut back, such as the Gorham bypass, passenger rail service to Brunswick, and enhanced east-west highway connections, Van Note wrote. TABOR would also result in increased reliance on bonds and fewer construction firms and jobs, he said.

Bill Becker, president and CEO of the Maine Heritage Policy Center, which wrote the referendum, said increasing the DOT budget at a 10 percent annual rate is not sustainable. He said a more important question is why the Legislature has transferred money in recent years from the state’s Highway Fund to the General Fund to pay for items unrelated to roads.

Maine residents will vote on TABOR in November growth in state and local spending to increases in inflation and population growth.

Colorado has a TABOR system in place and after a number of years the electorate voted to override some of its provisions to fund transportation projects. Hard limits on spending don’t recognize variations in revenues, needs and frankly, voter desires for government services…especially transportation projects. California’s famous Prop 13 limited property taxes for some but the overall burden on state residents grew in other ways to address critical needs throughout the state. TW

Committee Considers Gas Tax ‘Buffer’

TOPEKA, Kansas – A proposal to create a gasoline tax buffer zone along Kansas’ state borders is being considered by a state legislative committee. The proposition is in response to gas station owners’ concerns that motorists are driving into neighboring states to avoid paying the higher gas taxes in Kansas.

The Legislature is looking at the proposal which calls for a buffer extending 3,000 feet into Kansas or within the city limits of a border city, and tying the Kansas gas tax to taxes in Oklahoma, Missouri, Nebraska and Colorado. The Kansas tax on gas would be one cent per gallon higher than that of the neighboring state.

The current Kansas gasoline tax is 25 cents per gallon, while rates in nearby states range from 17 cents in Oklahoma to 28 cents in Nebraska. The average state tax on gasoline in the U.S. is 28.4 cents per gallon.

Richard Cram, the Kansas Department of Transportation’s director of policy and research, said the buffer zone would contain about 17 percent of the state’s population. If approved, the 17 percent reduction in fuel tax receipts would cost the state $13.4 million on gasoline sales and $5.4 milion on diesel sales. Of that total, $12.5 million would have to go to the state’s highway construction fund, he said.

The recommendations are expected to be forwarded by the committee to the 2007 Legislature, which convenes in January.