Funding Options for Freight Transportation Projects (2009) / Chapter Skim
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1Introduction During the 1990s, capacity constraints became evident in parts of theU.S. freight transportation system, the consequence of economic and population growth and changing patterns of domestic and global commerce.
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16 Funding Options for Freight Transportation Projects to local residents and noncommercial travelers (e.g., reduced congestion from elimination of conflicts between passenger and freight traffic)
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Introduction 17 BOX 1-1 Definitions: Assistance, Finance, Finance Arrangements, Financing, Funding,Government, Project Assistance: In this report, assistance refers to a grant, tax incentive, loan, or loan guarantee offered by a governmental entity to private firms or individuals or to other governments (e.g., by the federal government to the states)
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incentives for efficient operation of facilities, or discourage privatesector provision of infrastructure. The Transportation Research Board (TRB)
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Introduction 19 CHARGE TOTHECOMMITTEE The committee's charge (defined in the study task statement approved by the National Research Council) is as follows: This study will analyze the rationale for public investment and evaluate financing strategies for freight transportation projects of national significance.
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20 Funding Options for Freight Transportation Projects At the time of the commission's report, freight interests, and particularly the ports, which were experiencing unprecedented growth, were frustrated that ISTEA had not increased funds for their high-priority projects. A 1996 report concluded that less than 1 percent of ISTEA funds had gone to projects that could be identified as intermodal freight (GAO 1996)
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Introduction 21 serve freight bound for every part of the nation and affect the economy of every state, they are properly a federal responsibility, and the federal government should directly ensure that they receive adequate investment. For example, the "Findings" paragraph of SAFETEA-LU, Section 1301, states the following: "A program dedicated to constructing projects of national and regional significance is necessary to improve the safe, secure, and efficient movement of people and goods throughout the United States and improve the health and welfare of the national economy." The term has been used solely as a criterion for determining eligibility for federal assistance.
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the proper balance of federal, state, and local government responsibilities with regard to these activities, as well as the rationale for public involvement at any level of government. The private sector undertakes nearly all infrastructure investment in railroads and provides facilities at ports, airports, and intermodal terminals.
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Introduction 23 but also to the likelihoodof its success. The finance system is amajor influence on decisions about which projects and services are provided and how existing facilities are utilized.
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24 Funding Options for Freight Transportation Projects introduce some of the policy questions implied in the study charge, as described at the end of the section. Chapter 3 presents a more comprehensive description of finance arrangements for government-provided infrastructure and case studies of a variety of projects.
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Introduction 25 portation services are for trucking (see Table 3-3 in Chapter 3)
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26 Funding Options for Freight Transportation Projects ratio has been fairly constant throughout most of the program's 50-year history. In outline, the program functions as follows (FHWA 1999; TRB 2006, 31–33)
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Introduction 27 joint federal–state responsibility, formula allocation of federal aid, and state and local control of project selection) historically has been well suited to its task and has contributed to the success of the highway program in delivering a positive return on the public investment.
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28 Funding Options for Freight Transportation Projects make use of the program. However, the magnitude of this subsidy has always been very small compared with total project costs, and TIFIA was not created as a subsidy program.
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Introduction 29 are designed. The third example, a large bistate highway project, will serve primarily passenger vehicles but also will have high value for freight mobility.
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30 Funding Options for Freight Transportation Projects revenue source in the form of a fee imposed by the operating authority on the users of the authority's facility. Railroads pay a fee for each container and loaded bulk commodity railcar that they move through the corridor.
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Introduction 31 important to the private developer of the new Craney Island container terminal at the port. The estimated cost is $309 million.
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32 Funding Options for Freight Transportation Projects 16,400 freight trucks daily in 2004, 9 percent of all traffic (Cambridge Systematics 2005, 5-9)
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Introduction 33 vations about the challenges of paying for major freight-related projects and possible shortcomings of existing finance arrangements. For the Interstates and other highway freight routes, a highly organized program, with wide acceptance from the public and the interested groups, has provided funds and direction for hundreds of billions of dollars of construction over the past 50 years.
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34 Funding Options for Freight Transportation Projects systematic or uniform approach to public participation in nonhighway freight projects might be useful. CONCLUSIONSOF EARLIER TRBCOMMITTEES ON FINANCE POLICY Previous TRB studies on related topics provided a starting point for the work of this committee.
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Introduction 35 finance strategies, criteria for evaluating finance options, and the definition of national significance. Rationale for Public Involvement Four kinds of activities directly involve government in the freight transportation industry: government plans and builds infrastructure, operates transportation facilities, raises funds from taxes and user fees to pay for construction andoperationof facilities, and imposes regulations (e.g., with regard to traffic management, pollution, safety, and carrier competition)
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36 Funding Options for Freight Transportation Projects with nonmarket costs. Government also .
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Introduction 37 ments, environmental and safety regulation, imposition of transportation user taxes and fees, and general taxation -- the federal government exerts far-reaching influence on freight system performance and capacity development. Scope of Project Finance The earlier TRB committees argued that finance policy options must be defined in a way that takes into account the inevitable connections among practices with regard to sources of funds, pricing, facilities operation, project selection, and governance.
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38 Funding Options for Freight Transportation Projects the spending that the public and private sectors are willing to undertake; and that in the public sector, this gap is the result of bias against projects important for freight in spending decisions, arbitrary restrictions on project eligibility in aid programs, and unwillingness of elected officials to increase the special taxes that provide the funds for most government transportation spending (USDOT 2001; GAO 2003; U.S. Chamber of Commerce 2007)
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Introduction 39 A project of national significance may be defined as a freight project that has important consequences for the performance of the nationwide freight system. State and local governments often carry out such projects without need of federal leadership.
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40 Funding Options for Freight Transportation Projects infrastructure finance arrangements today, with the aid of examples and observations from case studies of freight projects that the committee commissioned. Chapter 4 considers how the national significance of a freight project can be defined and the problem of determining the scope of federal government responsibilities for freight infrastructure.
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Introduction 41 Dalton, H
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42 Funding Options for Freight Transportation Projects TRB.
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