In The Olympian, Adam Wilson reports Washington state officials are bracing for a widening gap of $95 million between expected and actual gas tax revenues through June 2009, as sharply higher gas prices constrict the volume of fuel purchased at the pump. The renewed transportation revenue concerns are indicative of a larger, long-term challenge that's also felt due to the nearly bankrupt federal gas tax trust fund and the shifting landscape in infrastructure.

...construction costs increased by 60 percent in five years, as demand in India and China drove up prices for steel and concrete, and the cost of diesel fuel for construction equipment soared.

In Washington, as elsewhere, some planned road and bridge projects to improve safety and reduce congestion on existing facilities will likely have to be postponed if not cancelled; and funding for important new projects looks even more problematic.

Despite two state gas tax hikes, in 2003 and 2005, totaling 14.5 cents more per gallon, the state is collecting less inflation-adjusted money from the gas tax and car fees in the current two-year budget cycle than in 1998-1999. That was before gas prices spiked, and before a controversial voter initiative, I-695, forced the legislature to dramatically reduce car license tab fees. Some lawmakers want to look at another gas tax hike, but others say that's politically dead in the water and some sales tax revenues used for other priorities should be shifted to transportation. However, advocates for the environment, health care and education would object strongly, and the state faces a budget shortfall next year.

Congestion and safety projects on state roadways are still urgent. The apparent downturn in vehicle miles driven is in the low single digits, coming after years of growth in traffic volume and underinvestment in infrastructure. But it's enough to begin wreaking havoc with plans to catch up with that growth in travel.

What now then? Impetus will grow for tolling. Time-variable tolling on major highway corridors needs to be implemented, but as much if not more to ration peak-hour congestion as to raise money for road projects and transit. Politicians will agonize over revenue enhancement measures, known to most of us as "more taxes." Good luck there, with the economy in a tailspin.

It's time for state lawmakers to consider much more seriously how they can open the door wider for transportation public-private partnerships in Washington state. P3s, as they're sometimes called, are part of the solution to the funding conundrum. They can provide needed investment, stretch public funds farther, transfer risk to the private sector and help ensure stringent performance goals are met.

According to the state, $2 billion is needed for crucial pavement and interchange work on I-5 in Seattle, and another $1.84 billion for safety and traffic improvements on U.S. Route 2 in Snohomish County, the notorious "Highway of Death." In Pierce County, the Cross-base Highway and extension of SR 167 to the Port of Tacoma languish for lack of funding. Federal and state funds would only cover a portion of these projects; a tiny fraction of the first two. When the full environmental mitigation plan is settled, expect total costs for the new SR 520 floating bridge to well exceed current estimates. Across the board in Central Puget Sound, tolls will help but won't come close to paying full freight. Nor should that be their primary purpose.

It's time to bite the P3 bullet. This includes a necessary public education effort involving political leaders, to clear up misconceptions that P3s equal "privatization." That's wrong. The assets are still owned by the public sector, which also retains control over rates and fees. If P3 interest costs can be somewhat higher than with traditional public financing, that's a fair trade-off considering that the pay-off in project delivery comes much sooner; that the payback can stretched out over a longer period and offset with user fees such as tolls rather than general taxes; and can be pegged to construction and project performance milestones met by the private partners.

To get the ball rolling, political leaders should initiate a very public conversation about transportation P3s for Washington state.

Related:

"Are Privately Operated Highways In Your Future?," KPLU-FM, Seattle;

"B.C. Paves The Way To Better Infrastructure," Globe and Mail;

"The P3 Boom," Financial Post;

"Report On The Transportation Innovative Partnerships Program," Washington State Transportation Commission;

"Case Studies Of Transportation Public-Private Partnerships In The United States," for U.S. DOT.

The New York Times recently published essays from writers expressing the national angst over skyrocketing gas prices. The mood was funereal. One was titled "Goodbye to the Great American Road Trip," and needs no further explanation. "Ghosts of the Cul-de-sac" announced, a tad gleefully, a mass exodus from the suburbs and exurbs as people escape their cars for city living.

Blog postings on the subject ranged from expressions of schadenfreude to something more venal. Suburbanites are stereotyped as gas guzzlers commuting to McMansions, the values of which are dropping like granite countertops. One poster predicted rising gas prices will scatter suburbanites like rodents.

...Barring a change in price, we're going to have to change the level of demand. It has already started. Cruising is down...The urge to blame someone - who better than affluent suburbanites and their cars? - is understandable, but a waste. Smart public policy will fail if its relies on emotional attempts to lure people back to the city or offer a bike for every garage. Better solutions are to continue efforts belatedly launched around telecommuting, fuel-efficient vehicle standards and increasing funding for public transit.

Varner's on point. Here are a few more thoughts.

As a transit rider, I want reliable pick-up times and trip times. I don't want to be stuck in traffic on at-grade rail or waiting at a stop for a late bus. But if a trip between the same two points takes longer on one mode than another, I don't care so much, as long as there's on-board WiFi. What if I am paying taxes for 30 years for some or another new transit line(s), but it won't begin service for 12, or 15, or 20 years?

Even assuming I would use it when built, that's a very big problem.

If we who pay sales taxes and vehicle fees are to be tapped again, projects have to be delivered in time for us to benefit in our working years. It's no good if improvements being discussed now only serve our grown children - assuming they even choose to stay here. Real performance guarantees, cost ceilings and accelerated construction timelines are essential. That's going to require a new way of doing business.

Game on?

First, our own quick-take on the event. Then some handy links to media coverage, and speaker PowerPoints.

Discussion Highlights

Democratic State Senator Ed Murray, a member of the legislative majority in Olympia and the ranking majority member of the Senate Transportation Committee, voiced strong support for public-private partnerships as one important tool to help fund the approximately $50 billion backlog of projects in Central Puget Sound. Sarah Clark of Partnerships BC accented the province's leading role in transportation PPPs.

Murray also reiterated his call for regional transportation governance to unify policy, implementation and decision-making. Seattle City Council Member Jan Drago, like Murray, emphasized that a "systems," or regional approach to looming electronic tolling is essential, to avoid diversions from a tolled highway to an untolled one in the same corridor. Murray stressed that tolling revenue can and should be used to help fund transit.

Gary Gallegos of the San Diego Association of Governments discussed the success of time-variable electronic tolling on I-15 and stressed that far from being "Lexus Lanes" for the rich as some critics contend, the High Occupancy and Toll (HOT) lanes are used by all, because time is money. Art James of the Oregon Department of Transportation provided a valuable and at time humorous, historical look at the cultural resistance of Oregonians to tolling but concluded that the Columbia River Crossing project may prove an exception.

Another take-away - underscored in compelling detail by panelists from CalDOT, WSDOT, Microsoft, Inrix and Booz Allen Hamilton - was that the technology for tolling and traffic management is advancing at a fast pace, increasing the likelihood that tolling will become convenient and widespread in highway corridors; and will make more sophisticated decision-making tools available to drivers for trip timing, routing, and payment.

Full TVW Coverage

Here are video segments of the full proceedings from TVW, Washington's public affairs channel. Moderator was longtime Cascadia Center associate Glenn Pascall, an economist and columnist with the Puget Sound Business Journal.

Luncheon speakers - Mark Aggar, Microsoft; David Horner, USDOT; State Senator Ed Murray; State Rep. Doug Ericksen; Seattle City Council Member Jan Drago.

"Technology Transforming Transportation." Former U.S. Senator Slade Gorton; Jack Opiola, Booz Allen Hamilton, London, U.K.; Bryan Mistele, President and CEO, Inrix, Kirkland, Wash.

State and provincial perspectives - Dick Ford, Washington Transportation Commission; David Dye, WSDOT; Art James, ODOT; Randy Iwasaki and Greg Larson, CalDOT; Sarah Clark, Partnerships BC.

Regional perspectives - Aubrey Davis and Matthew Kitchen, Puget Sound Regional Council; Gary Gallegos, San Diego Association of Governments; Andrew Fremier, Bay Area Toll Authority; Rex Burkholder, Tri-Met (the regional transportation governing body for Portland).

User perspectives - AAA and trucking industry representatives.

(TVW technical and programming notes. The video segments can also be accessed here. They may take a few minutes to download. They should play on PCs and Macs, but if there are issues, you may need an updated version of your video player software - there will be a notice and link to a download page at the bottom of the TVW segment page. You will then need to download and install the recommended video player. To watch the segments on cable TV instead of your computer, check TVW's schedule at their main page. In the upper-left hand corner, under "Schedule" are the current day's and week's schedules and the channel locator.)

Speaker PowerPoints

Speaker PowerPoints are here.

Media Coverage Links

The Seattle Post-Intelligencer's veteran political columnist Joel Connelly gave this report. Several major radio stations covered the workshop. KPLU-FM public radio's Liam Moriarty filed a story titled, "Are Privately Operated Highways In Your Future?" KIRO AM 710's Erin Covey also attended and her reports aired throughout the afternoon, evening and following morning, including KIRO-AM's "The Big Story At Six." The day before the event, Cascadia Center Director Bruce Agnew and Microsoft's Environmental Technologist Mark Aggar were interviewed on KIRO-AM 710's Dave Ross Show about traffic management technology (Aggar); and tolling, transit and public-private partnerships (Agnew).

All conference topics and the latest on plug-in electric hybrid vehicles and alternative energy will be featured at our Sept. 4-Sept. 5 "Beyond Oil: Transforming Transportation" conference at Microsoft's Redmond campus.

The Sun's editorial board sums things up thusly:

If all goes as planned, work will begin in September on a fast, low-wake, fuel-efficient prototype ferry. The $3.7 million, 149-passenger, foil-assisted catamaran will be unique, built after more than seven years of wake research to meet the challenges presented by Rich Passage.

At a special meeting on Tuesday, Kitsap Transit board members approved a plan for construction and operation of the craft, using $4.2 million in federal grants and $1.8 million in New Markets Tax Credits in cooperation with the non-profit Marine Transportation Association of Kitsap and Kitsap County Consolidated Housing Authority.

With the funds, MTAK would get a prototype low-wake ferry built by All American Marine in Bellingham, then lease it to Kitsap Transit. The craft would carry passengers between Bremerton and Seattle during a wake and fare research test period of six months or more, beginning next summer or fall and funded by the start-up funding.

Beyond that initial period, operations are uncertain. Kitsap Transit would seek additional grant or loan money; if none is available, the boat may be used on the Port Orchard-Bremerton foot-ferry run, or it could be leased to King County, which is actively pursuing passenger-only ferry service. As traffic volume, gas prices and environmental pressures increase in our land-based transportation systems, the advantages of water transit systems are becoming more evident in the Puget Sound region.

Go Kitsap! Despite the inevitable skepticism of critics, we believe that low-wake high-speed passenger-only ferries will play a growing role in Puget Sound's transit mix. There's an uncongested, free water highway out there we'd be foolish not to utilize more fully with nimble, low-wake passenger-only boats for leisure travelers and commuters alike. The trick will be finding the right public-private funding split; and mustering the political leadership to build support for regional fast foot ferries.

King County's formation of its own passenger-only ferry district to run several demonstration routes in addition to current Vashon Island-Seattle and West Seattle-Seattle service is a good initial step. Also encouraging is the Port of Kingston's winning of a $3.5 million federal grant to help launch passenger-only ferry service between Kingston, in northern Kitsap County, and downtown Seattle. Under the grant conditions, the funds will be released after the state legislature enacts its expected tolling plan for the State Route 520 bridge in King County. This must occur before September 30, 2009, and is all but guaranteed, although the exact nature of that plan remains to be determined. The port has applied for another $900,000 from the state to add to its start-up kitty. Port director Mike Bookey, a former high-tech exec from Seattle's Eastside 'burbs, has a solid business plan for the operation to become self-sufficient, and profitable after four years.

A consortium in Whatcom County last year got a $1 million state grant for a facility where next-generation passenger-only ferries will be built. There's a growing world market for these boats. Let's hope Puget Sound gets a piece of that. At both ends.

The Kitsap effort adds to the slowly gathering momentum here on passenger-only ferries.

We'll stay tuned, so that you can, too.

RELATED

"Foot Ferry Of The Future," KOMO 4 TV, 5/8/08 - coverage of Cascadia's 5/8/08 passenger-only ferry forum;

"Linking Speedier Ferries With A Healthier Sound," Kitsap Sun, 5/8/08 - coverage of Cascadia's 5/8/08 passenger-only ferry forum;

"Imagine A Network Of Foot Ferries: Our Century's 'Forward Thrust' For Puget Sound," Bruce Agnew, Cascadia Center, Seattle Post-Intelligencer, Sunday 2/10/08;

TV and radio coverage of 7/2/07 Cascadia passenger-only ferries forum;

Cascadia Prospectus blog posts on marine transportation.

We will continue to do so. We also back more and better bus service across the region, employer-provided transit such as Microsoft's outstanding "Connector" service, car and van-pooling, and telecommuting. We see variable-priced highway lanes as essential to capping peak-hour solo drives, and also highlight improved roadway and vehicle technologies to ease congestion and pollution.

But all that said, vehicles are here to stay, and we'd better make them clean and green. That's where Cascadia Center's support for PHEVs comes in.

We need green vehicles in part because expanded transit is no silver bullet. Here in environmentally-aware, pro-transit metro Seattle, it's important to note that although the numbers are ticking upward, transit is used on only a small percentage of all trips within the region. This past October, the Puget Sound Regional Council reported on its 2006 Household Activity Survey. In the fourth item from the top, here, you'll see that across the four-county Seattle region, transit's share of 2006 trips is in the low single digits, about four percent based on the bar graph. Single- and multiple-occupant vehicles accounted for 84 percent of trips, with transit, walking and "other" dividing the remaining 16 percent. The four percent estimate is confirmed on p. ES-6 in the survey's executive summary.

Urban affairs and transportation writer Miro Cernetig of the Vancouver Sun earlier this year discussed Vancouver transit ridership in light of British Columbia Premier Gordon Campbell's bold $14 billion plan to beef up rapid transit rail (SkyTrain station at Burnaby pictured at right) and bus service in the next twelve years.

The premier hopes that by 2020 at least 22 percent of all our travels in Metro Vancouver will be on public transit, up from our current 12 percent.

The far-reaching Campbell is one of our favourite public officials, a North American leader on curtailing man-made greenhouse gas emissions, and using innovative public-private financing models to pay for transit and highway improvements. The current 12 percent transit share for metro Vancouver is quite impressive and 22 or 25 percent would be outstanding.

Especially considering the baseline. A recent USA Today story accenting new highs in transit usage contains a sobering counterpoint left out of most similar stories.

Still, only 5% of workers commute by public transit, according to a U.S. Census survey in 2006. (American Public Transit Association President William) Millar says no more than 20% of households have easy access to buses or trains.

Thanks in part to the gas price jump, which is likely permanent, transit's share of trips within regions is growing. But many recent media reports focus on percentage growth in transit use versus the recent past, rather than the more revealing share of trips for transit, which remains exceedingly modest in most metro regions.

One response is that increased density will change that. Except that in Puget Sound, as former Washington State Transportation Secretary Doug MacDonald painstakingly documented in the online newspaper Crosscut, newcomers are moving to the edges of the region more than the inner rings. There is a limit to the coercive power of the government, and also a wide gap between between transit advocacy and current transit market share in most locales.

Suppose transit use in the four counties grew five-fold from the PSRC's 2006 survey levels, due to high gas prices and growing concerns about man-made greenhouse gas emissions? That would still leave at least four-fifths of trips occurring via non-transit travel modes.

Q: How do we approach this broad segment of intra-regional non-transit using travelers, while easing traffic congestion and carbon-bearing vehicle emissions? A: In a wide variety of ways, including more robust promotion of ride-sharing and telecommuting; plus regional expansion of variable pricing on highway lanes; and encouraging automaker success in developing affordable, reliable green vehicles such as PHEVs. (A PHEV-centric discussion of clean-source electricity versus fossil fuel-derived electricity is found toward the end of this post).

In the meantime, take this to the bank: Beware the man with the silver bullet.

Q: As a former mayor of Bogotá, Colombia, who won wide praise for making the city a model of enlightened planning, you have lately been hired by officials intent on building world-class cities, especially in Asia and the developing world. What is the first thing you tell them? In developing-world cities, the majority of people don’t have cars, so I will say, when you construct a good sidewalk, you are constructing democracy. A sidewalk is a symbol of equality.

When the former Bogotá, Columbia, mayor and Bus Rapid Transit proponent spoke in Seattle, he focused on his city's implementation of the TransMilenio Bus Rapid Transit system. King County voted to implement a Bus Rapid Transit program not long after our event in 2006.

If you have the time, Deborah Solomon's brief one-page interview is interesting and certainly worth a few minutes. Whether you agree with him or not, Peñalosa is always thought-provoking. And it's good to see that The New York Times Magazine's editorial team sees value, as we did nearly two years ago, in hearing (and sharing) what Peñalosa has to say.

Running through these initiatives is a common thread: the nation needs a new transportation vision. The current transportation program lacks a compelling national purpose and has become nothing more than a vehicle for revenue sharing, with a growing portion of the Highway Trust Fund revenue devoted to earmarks for projects of purely local interest. Lacking a well-defined national mission, the program is buffeted by lawmakers’ demands for a "fair share" of the revenue, rather than guided by the need to direct resources to where they are most needed. This would be toward preservation, renewal and replacement of aging transportation facilities of critical national importance.

Merely reauthorizing the existing surface transportation program, runs the argument, is not enough. That would simply perpetuate the status quo and encourage continued bickering between "donor" and "donee" states. What is needed is a fundamental rethinking, a transformation, of the national transportation program into a policy instrument that would help preserve and rebuild the nation’s aging infrastructure, reduce metropolitan congestion and ensure increased mobility and economic competitiveness for the nation as a whole.

The Transportation Transformation Group

The latest entrant to espouse this philosophy is the Transportation Transformation Group, or "T2" Group, an initiative announced at a standing room only press conference which we attended on June 5 at the National Press Club. The T2 Group is an alliance of state government, finance, academic and private industry leaders "who wish to add a fresh set of ideas to the transportation policy debate," said former House Majority Leader Richard Gephardt, representing Goldman Sachs, one of the founding principals of the coalition. As its name implies, the coalition supports the transformation of American transportation policy not just a reauthorization of current policies, pointed out Gen. Barry McCaffrey, member of the Board of HNTB Corporation and another coalition spokesman. In this respect, the new coalition is echoing and reinforcing what appears to be a growing consensus within the political, business and transportation communities, that perpetuating a programmatic status quo is not a solution.

Rather, Congress must establish a new long-range vision for the national surface transportation program — a vision that will enable states to employ new strategies and innovative finance techniques such as tolling, congestion pricing, and public-private ventures that would bring additional private capital to supplement the resources of the federal and state governments. A gas tax increase, as recommended by the congressionally-chartered Transportation Policy Commission, is not going to happen, said Gephardt, so "we might as well put it off the table" and think in terms of a new paradigm. The new paradigm should be shaped by customer-oriented, performance-driven objectives, and provide states with incentives to be entrepreneurial, added Dr. Joseph Giglio, another coalition spokesman.

T2 Group's State Members Highlight Expanded PPP Opportunities

The coalition’s members include several states, notably Indiana, Florida, Texas and Utah. Their presence and influence is reflected in the coalition’s espousal of policies that would allow states full latitude to employ entrepreneurial strategies and enter into partnerships with the private sector to finance, construct and operate transportation facilities. In the coming decade, the solution to the nation’s transportation problems will not lie in an increased federal aid program but in greater reliance on state and regional-level approaches, noted Texas Transportation Commission member Ned Holmes, another Coalition spokesman.

In a Q&A session, attention turned to how the Coalition could "make a difference." Competition for attention will be intense, with Congress and the next Administration buffeted by competing and often conflicting proposals from various interests on how to address the challenges ahead.  A specific suggestion was made from the floor to urge the presidential candidates to include the subject of transportation infrastructure on the agenda of the proposed town hall meetings proposed by Republican presidential candidate Sen. John McCain (R-AZ), pictured at right, above, and accepted in principle by his Democratic opponent Sen. Barack Obama (D-IL), pictured above at left.

This would give both candidates an opportunity to discuss and take a position on a number of innovative ideas that are currently being debated on Capitol Hill and in the transportation community— such as a national infrastructure bank, federal capital budget for infrastructure, tolling, congestion pricing, public-private partnership financing strategies and long-term alternatives to the gas tax.

Let's Have A Presidential Debate On Transportation Challenges

The idea of a debate by the presidential candidates on the problems of traffic congestion and the aging transportation infrastructure is most relevant and timely. How the next Administration intends to face the challenge of repairing and modernizing the nation’s highways, bridges and transit systems, what policies it ought to pursue to combat traffic congestion that increasingly paralyzes metropolitan areas, and how it intends to accommodate the growing demands for the transport of freight to preserve the nation’s global competitiveness, are three issues that should rank high in importance on the agenda of any future president. They certainly deserve a place on one of the ten proposed town hall debates.

That price point is apparently the aim for GM's Chevy Volt, a PHEV to watch.

So with gas now pushing past $4 a gallon, what does Dodge-Chrysler-Jeep do? Accent their plans for future-facing vehicles? No. They unveil a promotional campaign to try to sell more of their energy hogs with a three-year subsidy to buyers to keep their gas costs at $2.99 a gallon. New York Times syndicated columnist and energy inquisitor Thomas Friedman has a pointed take.

....reckless initiatives like the Chrysler-Dodge-Jeep offer to subsidize gasoline for three years for people who buy its gas guzzlers are the moral equivalent of tobacco companies offering discounted cigarettes to teenagers.

I can’t say it better than my friend Tim Shriver, the chairman of Special Olympics, did in a Memorial Day essay in The Washington Post: “So Dodge wants to sell you a car you don’t really want to buy, that is not fuel-efficient, will further damage our environment, and will further subsidize oil states, some of which are on the other side of the wars we’re currently fighting. ... The planet be damned, the troops be forgotten, the economy be ignored: buy a Dodge.”

Friedman goes on to approvingly cite an economist's suggestion there actually be a price floor for unleaded regular gas of $4 per gallon, supported by mandatory increases in the federal gas tax if the market price goes lower, and with compensatory payroll tax deductions for those earning under $80K per annum. Whatever one thinks of the proposal, Friedman's central point is that the government needs to send a clear message the days of cheap oil and cheap gas are long gone and that consumers and fleet owners need to look ahead, to new technologies and fuels, not behind. He writes:

We need to make a structural shift in our energy economy. Ultimately, we need to move our entire fleet to plug-in electric cars. The only way to get from here to there is to start now with a price signal that will force the change.

Author Paul Roberts and the World Wildlife Fund report that the environmental benefits of plug-in electric cars accrue even if the electricity comes from fossil fuels. But as they both add, the cleaner the electricity, the greater the benefits of PHEVs and all-electric vehicles. That's why the Pacific Northwest is an ideal proving ground for a consumer-focused PHEV pilot project. Here's where clean hydro-power already reigns, where renewable energy sources are beginning to ramp up, and - deep breath, please - where nuclear power is slowly gaining traction, which Seattle Times editorial page editor James Vesely discussed last weekend, and his colleague Kate Riley detailed last spring. Even those fusty authoritarians at Wired are singing the praises of nuclear, both last week, and in greater detail as far back as 2005.

There's something happening here. Writing in the Wall Street Journal, R. James Woolsey, director of the CIA for president Bill Clinton, and Paula Dobriansky, current Undersecretary of State for Democracy and Global Affairs (pictured at right), herald the coming clean technology revolution in transportation. They stress the need for broad adoption of PHEVs running on clean electricity, and advanced second-generation biofuels made from sources including forestry and farming waste, and grasses. Also key, they write, are amped-up support from the feds and leading U.S. corporations for more production of electricity from nuclear technologies and from coal-fired power plants that sequester carbon. That last approach is something at the heart of a Washington-state based research project that should be allowed to continue, over misguided objections, as the Times' Riley recently opined.

Green-powered plug-in hybrids mesh with congestion pricing to ration peak hour highway capacity and carefully crafted public-private partnerships to fund necessary transportation infrastructure improvements. Public transit that can truly compete on travel times and convenience is part of the equation, as are expanded corporate transit, para-transit, and telecommuting. All are strategies to help manage growth, ease mobility and maintain environmental quality in burgeoning metro regions. Nobody said this would be easy.

Advanced navigational systems will help reduce congestion and pollution, too. That topic, along with congestion pricing and PPPs, will be covered at the June 26 West Coast Tolling And Traffic Management Workshop that our Cascadia Center will sponsor at Bell Harbor Conference Center on Seattle's waterfront. And save the date for our Sept. 4 and 5 conference, "Beyond Oil: Transforming Transportation."

As the Times’ piece indicates, there is a special deck-top area for free wireless Internet connection. Other amenities include comfortable seats (with cupholders!), quiet areas on the first passenger deck, and a well-stocked snack area that handled the packed crowds quickly with dual stations. Unlike Washington State Ferries policy, leashed dogs were surprisingly allowed throughout most of the passenger areas. And while there were many canines, there were no problems.

Unlike the older boat which has to back out of the dock, the Island Home has twin helms like WSF's, which allows for quicker turnarounds. The 60-car boat carries 1,200 passengers (which seems a lot for the Port Townsend-Keystone run) and some of the crew I interviewed said the skippers complain about the height of the vessel catching more wind, making it more difficult to maneuver in tight quarters. The wind was blowing a steady 20 knots when we rode it but the skipper did not seem to have a problem. The vessel is noted for its sturdiness and smooth sailing in rough weather. This will be a strength when crossing often-turbulent Admiralty Inlet. The route provides an important connection for business and tourism. A major road and another car ferry connect mainland Western Washington to scenic Whidbey Island. The car ferry from Keystone, on Whidbey's southwest side, connects at Port Townsend with a destination Victorian town which also serves as eastern gateway to the Olympic Peninsula.

The Island Home is designed by Elliott Bay Design Group of Seattle. New boats had to be selected after WSF's aging Steel Electric-class ferries were taken out of service last fall for safety reasons. The state decided on the Island Home boats last month, and hopes to have two of the ferries in service on the Port Townsend-Keystone route by 2010. This is instead of initial plans for a new car ferry modeled after a more weather-sensitive boat now being leased from Pierce County. Riding the Island Home is a great experience. All in all, the Island Home ferries should be a welcome addition to Puget Sound.

We're not talking about your grandfather's municipal bonds either. Operating costs and necessary maintenance and improvements are something every homeowner understands - all too well. You may be able to meet all these needs without assuming debt beyond your mortgage. Or you might just have to endure an avocado-hued fridge, pastel yellow formica counter, midget sink, pinched shower stall and shaky deck for far longer than you'd like. Cue the violins. Life is hard. But suppose you owned a worn-down state ferry fleet or highway system and were responsible to millions of people?

As a government rather than a household, you've got way more income, but it's spread thinner and there's major pushback on "revenue enhancement." An aging upper rear deck attached to a private home can be prudently roped-off until money is available for repair. No one will suffer as a result. But an elderly, disaster-prone bridge or elevated roadway, or a chronically dangerous maldesigned highway, or ancient car ferries with rusting hulls cannot easily be decommissioned at a moment's notice. Yet, neither should the risks of continued operation be borne for long.

Squeezed by rising costs, constricted cashflow and often, gobs of existing debt, owners can't keep borrowing to operate, maintain, improve or build public infrastructure. Nor, as they are reminded by the period stick in the eye from voters, can they count on raising taxes whenever they'd like. So to keep pace with the infrastructure challenges stemming from wear and tear, vibrant states and regions with real leaders are increasingly turning to private investors in carefully-structured, project-specific partnerships.

Public employee union pension funds are a fast-growing part of the mix within private infrastructure investment groups. The focus is on steady, long-term returns, not "grab and go" profit-taking. Scrutinizing their courtiers carefully are the governments which own the assets, rights of way or greenfield properties around which the public-private deals are struck. They have to steer a deliberate course to ensure the public interest is served. But doing it all the old way isn't an option anymore. Not with the growing gap between basic needs and public resources. There's an estimated $400 billion in private resources to be tapped for U.S. infrastructure, and capital formation is accelerating.

Here are a few signposts on the road to the future.

Forbes pronounces "Infrastructure Is Sexy," highlighting the formation of two more new funds that have raised more than $10 billion for first-round investments in the sector. Morgan Stanley has secured $4 billion for a new infrastructure fund that will invest in transportation, energy, utilities and communications; and a similar General Electric/Credit Suisse-led group has marshalled $5.6 billion.

Infrastructure assets such as utilities, toll roads and airports are attractive to financial bidders like banks and pension funds because of their stable cash flow despite having lower growth rates than other private equity opportunities...“The successful fund-raising underscores the particular demand for infrastructure investment, and broadly, for alternative assets that generate long-term stable cash flows,” said James Gorman, co-president of Morgan Stanley (pictured above, right). The company said it raised capital in North America, Europe, Australia, the Middle East and Asia in to reach the $4 billion mark, which far exceeds the fund's initial target of $2.5 billion.

Investors ran the gamut from pension funds, insurance companies and high-net-worth individuals to Morgan Stanley employees. Morgan Stanley infrastructure's investment team will operate out of New York, London, Hong Kong and Beijing. Morgan Stanley had a total of $577 billion in assets under management as of February 29, 2008.

Across the pond, The Guardian explains "How Infrastructure Got Sexy In The City."

With more esoteric investments becoming unfashionable, it is easy to understand why longer-term funding of real, if prosaic assets has become more appealing. They are often quasi-monopolies with virtually guaranteed inflation-linked returns. They are also pretty much recession-proof - people still use bridges and electricity even in hard times.

The market is also ripe for investment. In the developed world, money is needed to replace ageing infrastructure, and there are growing demands for roads, water and electricity. Meanwhile, public finances are under increasing strain because of ageing populations. In emerging economies, the need is even greater to build huge infrastructure projects from scratch. Then there are the broader global trends: the world's population is expected to add another one billion people over the next decade, there is increasing urbanisation and the challenge of climate change. In a lengthy recent report, the Organisation for Economic Cooperation and Development said $53 trillion of investment is needed in infrastructure by 2030.

In "Why U.S. Highways Are Falling Into Private Equity Hands," Mayer Brown partner John Schmidt explains to The Wall Street Journal's "Deal Journal" blog:

Every day you pick up the paper and you find that a major fund has raised more money than it expected to, or is raising a new fund. Capital is being raised in an almost amazing way, with funds that raised $2 billion before now pulling in $4 billion. The infrastructure of one of the strongest economies in the world has to be one of the best long-term investments in the world. Most of the money for the private equity investments is coming from big pension funds. There’s a lot of competition and the gestation period for the sector has been long.

For more than a year, Cascadia Center has continued to recommend that public employee and union pension funds be tapped as partners to help fund pressing regional transportation infrastructure needs in Puget Sound. That does not mean that every sort of infrastructure investment is equally attractive to a pension fund. As Robert Poole of the Reason Foundation observes (second article from top here), because pension funds are already tax exempt, they are unlikely to buy the lower-interest tax-exempt bonds issued by a public tolling authority. However, as Poole emphasizes, pension funds are getting in the transportation infrastructure game by buying direct equity stakes in revenue-producing facilities or by joining with private infrastructure investment groups in equity or lease deals. That's something for policy-makers here to consider, going forward.

Washington state must confront a big whammy. There are tight limits on available public funds. This is a permanent, not temporary condition, even with the odd transportation tax measure passing now and then. Yet according to the state there is $2 billion of needed work on I-5 in Seattle plus $1.84 billion more required for fixes to deadly State Route 2 in Snohomish County. And while studies grind on, the effort to raise money for replacement of the badly aging fleet of state car ferries is far from complete. Funds for crucial improvements to car ferry terminals also remain unsecured. The state car ferry fleet is the nation's largest and the boats and facilities - by an act of the legislature - are part of our state highway system. In Pierce County, unfunded major road projects include completion of the Cross-Base Highway, and extension of SR 167 to the Port of Tacoma.

Seattle Times editorial page editor James Vesely suggested last weekend that the region may have already resigned itself to playing small ball for a while on transportation infrastructure. He's right to raise the point. Maybe, following the defeat of last fall's controversial roads and transit ballot measure, some more stasis has to precede bold action. But what's being contemplated is a transit-only measure, centered on modest improvements - over the course of more than a decade - to a starter light rail system that won't begin operating until next year. That's hardly all the doctor ordered. We've got a 52 percent increase in the four-county population due by 2040 (up by 1.7 million from 3.2. million in 2000), and as many as four million newcomers expected by the turn of the century. The ultimate costs of wearily muddling through will be far higher than doing things a new way. That new way must include private capital for roads and transit; transit that truly competes on travel time and reliability; congestion pricing to ration limited peak-hour highway capacity; and a federal carbon tax to drive broad adoption of clean vehicle technology.

Roberts argues that energy security is a far more achievable and strategic goal for the United States than energy independence, and the goal should be "massive increases in energy efficiency," particularly in the transportation sector. With that in mind, he details some of the reasons why plug-in hybrid electric vehicles (PHEVs) hold such great promise.

....saving energy is almost always cheaper than making it: There is far more oil to be "found" in Detroit by designing more fuel-efficient cars than could ever be pumped out of (the Alaskan National Wildlife Refuge). And because transportation is the biggest user of oil—accounting for 7 of every 10 barrels we burn—any significant reduction in the sector's appetite has massive ramifications....if we persuaded carmakers to switch to plug-in hybrids, we could cut our oil demand by a staggering 9 million barrels a day, about 70 percent of our current imports.

Such a shift would impose massive new demand on an electric grid already struggling to meet need, but plug-in hybrids actually stretch the grid's existing capacity. Charged up at night, when power demand (and thus prices) are low, plug-in hybrids exploit the grid's large volume of unused (and, until now, unusable) capacity. Such "load balancing" would let power companies run their plants around the clock (vastly more cost-effective than idling plants at night and revving them up at dawn); as important, it would substantially boost the grid's overall output.

According to the Department of Energy, with such load balancing, America's existing power system could meet current power demands and generate enough additional electricity to run almost three-quarters of its car and light-truck fleet. That alone would be enough to drop oil consumption by 6.5 million barrels a day, or nearly a third of America's current demand.

Roberts also explains that environmental benefits will accrue from broader adoption of PHEVs even before much of the nation's electricity is produced from renewables rather than fossil fuels.

.....kilowatt for kilowatt, turning fossil fuels into electricity in massive centralized power plants and then putting that juice into car batteries is more efficient than burning fossil fuels directly in internal combustion engines, and thus generates fewer CO2 emissions per mile traveled. (Our existing fleet generates a third of America's CO2 emissions.) The DOE found that replacing three-quarters of the U.S. fleet with plug-in hybrids would cut vehicle CO2 emissions by 27 percent nationwide - 40 percent or more if the country's power system were upgraded to match California's low-carbon grid. And once the new fleet is in place, there is nothing stopping us from upgrading our power sources to truly renewable systems.

In a major report released last month titled "Plugged In: The End Of The Oil Age", the World Wildlife Fund also zeroes in on why broader adoption of PHEVs should be an urgent priority. Here's the full report, and an executive summary.

SAVE THE DATE - Sept. 4th & 5th: Make sure to save the dates September 4th and 5th of this year for Cascadia Center's 5th Annual TransTech Conference at Microsoft's Redmond campus. It's titled, "Beyond Oil: Transforming Transportation." A top-drawer cast of policy-makers and experts will speak on PHEVs, alternative fuels, and more. Event and registration information here.

RELATED:

Cascadia Center's "Beyond Oil" resource page.

Off, Then On Again

The speedy passenger-only state ferry running between Bremerton and Seattle several years ago was a great ride but the heavy wake impact on shoreline properties led Rich Passage homeowners to sue, successfully ending the route. The ferry used then and a companion model are now being sold because the cash-starved state system is getting out of passenger-only ferry operations. Washington State Ferries is still operating a troubled, and badly aging fleet of car ferries.

Opportunities abound for local and regional operators of passenger-only ferries. The Port of Kingston will be launching a route to and from Seattle with a $3.5 million federal grant tied to variable-rate tolling SR 520, and possibly another $900,000 from the state. One-way fares will be about $13 and the Port predicts the route could be profitable as soon as four years out. King County's new passenger-only ferry district relies on a small hike in the property tax. They'll operate two current routes (between downtown and West Seattle and Vashon Island) and test out several more. Meanwhile, the Puget Sound Regional Council is deep into a study of how best to organize and fund a regional passenger-only ferry system, and Kitsap County will take delivery next year of a new low-wake high-speed foot ferry to be tested on the Bremerton-Seattle run. All eyes will be on Rich Passage.

Staggering Growth = New Marine Highway Plan

To top it all off, it's becoming clearer every week, that with 1.7 million newcomers expected by 2040 and as many as four million more by 2100 according to the Seattle Times, our region's approach to marine transportation needs to focus at least as much on vehicle-free passenger vessels as car ferries. So the idea of a regional passenger-only ferry network run by a consortium on cities, counties, ports, tribes and private operators is gradually moving from the "what if?" stage to the "how to."

A Regional Approach

In early December, at a summit on the state's underfunded and decaying car ferry system, Cascadia Center presented a draft interlocal agreement for regional passenger-only ferries. Bremerton Mayor Cary Bozeman (below, left) also then floated the idea of developing a joint funding vehicle for Puget Sound cleanup and passenger ferries. Little more than a week later, one of the state's mothballed 350-seat passenger ferries was pressed into service between Port Townsend and Seattle, after Port Townsend's economy reeled from the sudden forced retirement of the aged car ferry connecting it with Keystone, on Whidbey Island. The temporary holiday season run between Port Townsend and Seattle proved wildly popular though economically unsustainable due to fuel costs of the big boat, and heavily subsidized fares.

"Salish Sea Express"

Cascadia Center Director Bruce Agnew stoked the buzz in February with a Seattle Post-Intelligencer Sunday op-ed titled, "Imagine A Network of Foot Ferries."

In it, he outlined a proposed regional compact to share resources and best practices to run foot ferries on the Salish Sea, the Native name for Puget Sound. Following Bozeman's lead, he also proposed this be coupled with more resources for preserving the Sound's water quality as growth and development take their toll.

Would You Leave Your Car Behind?

All this was the focus of a special gathering last week in Seattle, replete with a demonstration ride on a hot rod foot ferry. The sleek, 70-seat low wake River Gorge Explorer was manufactured by All American Marine of Bellingham as an eco-tour boat for the Tennesee Aquarium. A 149-seat version with a lower wake will be delivered by All American to Kitsap Transit next year for test runs between Bremerton and Seattle, through Rich Passage. The half-hour excursion on Elliot Bay last week left many riders convinced that demonstration runs across Puget Sound for commuters and leisure travellers would be a phenomenal sales tool. All American Marine CEO Matt Mullet agreed, saying special lease arrangements could make that possible.

In addition to Vashon to Seattle and West Seattle to Seattle, it's not hard to envision low wake fast foot ferries winning large riderships on other routes. Such as Southworth-Seattle, Kingston-Seattle, Everett-Seattle, Bremerton-Seattle, Kirkland-UW (on Lake Washington), Bainbridge-Des Moines (Sea-Tac Airport), and Vancouver-Seattle. For commuters especially, last mile connections would be key.

At the passenger-only ferry forum hosted last Thursday May 8 by Port of Seattle Commissioner Bill Bryant in the Port's meeting chambers, and organized by Cascadia Center, Bremerton Mayor Bozeman made the case for Puget Sound clean-up and more regional foot ferries, together:

Our ferry system should look a lot different. Should we be transporting people across Puget Sound, not cars? I think the proportion should be at least equal. At the same time, the environmental quality of this body of water is crucial. These two issues can come together, and they should.

Dan O'Neal, a board member of the Washington State Transportation Commission, said to the gathering:

There's a lot of enthusiasm for passenger-only ferries. We have an auto-centric ferry system, and you have to wonder if that's sustainable, given the costs of construction and operations of car ferries. But we don't want a range of different passenger-only ferry jurisdictions. We need a regional overlay.

Regional MVET: A Starting Point For Discussions

In a memo prepared for the event, Cascadia's Agnew states that a good starting point for the funding conversation is a voter-approved regional motor vehicle excise tax of $50 with a healthy percentage going for:

As a non-profit, Cascadia Center does not advocate specific legislation. We traffic in ideas. As such, we'll be conducting interviews of key stakeholders on regional funding options and governance framework for passenger-only ferries so that city, county and port elected officials bring forth their own unified proposal to the legislature in 2009.

You can get a good sense of the possibilities for routes and funding from this April 2008 consultant report prepared for the Puget Sound Regional Council's passenger-only ferry study. Pages 5-1 to 5-9 discuss federal, state, private and farebox funding options. Skeptics should take a close look. This is hardly a pipe dream. Like all our region's other transportation funding challenges, it's not a matter of scant resources; but rather vision, and leadership.

Here's a pretty safe bet. As the teeming hordes continue to descend upon the Seattle region, we'll be seeing more passenger-only ferries on Puget Sound in coming years, not less. One way or another.

RELATED:

Cascadia Prospectus Marine Transportation archive.

With the state's broader transportation needs in mind, officials say the $3 billion California Transportation Commission allocation is a step in the right direction but that there remain another 121 high-priority projects identified in the state's Goods Movement Action Plan, requiring another $47 billion. That's more than double the Prop 1B kitty, and the Goods Movement Action Plan only represents a portion of needed infrastructure projects. In their announcement (second link, above) officials say private capital will need to be part of the transportation funding mix.

California's transportation network is indeed vast. But the state's need for private partners to finance, fix and build roads, bridges and transit isn't unique. Many others are in the same situation. The federal gas tax trust fund is expected to go bankrupt next year. Political impetus for hiking federal or state gas taxes is nearly zero, thanks to rising gas prices and the economic slowdown. Gas tax revenues are levelling off anyway, as cars get better and better mileage. In many metro regions, tax fatigue is widespread. Yet the squeeze comes from the other end, too. Officeholders know they can't shirk responsibility for worn-out, overburdened roadways and in metro regions, for major transit improvements. It's all going to cost billions upon billions. New variable-rate tolling strategies are key to mananging traffic congestion, and the revenues will help fund roads, bridges, and transit. But there'll still be big funding gaps. Simply going hat in hand to the feds, the statehouse and the voters won't cut it anymore.

Fortunately, private resources for transportation investment are vast. U.S. Department of Transportation Sec. Mary Peters estimates there's $400 billion in private investment to be tapped by states and regions for road, bridge and transit projects. But to do so will require that states lay out the welcome mat. That's beginning to happen around the U.S., including the West Coast, where from Baja to British Columbia a slew of mobility improvements are urgently needed to support the economy and maintain quality of life. These should be paired with "Green Highways" improvements that Cascadia Center and others have championed.

Democratic California Assembly Member Anna Caballero (pictured, right) writes in the San Jose Mercury News that private partners can provide $100 billion of the state's $500 billion in overall infrastructure needs (transportation, utilities, public facilities) in the next 20 years.

As Gov. Arnold Schwarzenegger has recognized, California should be building bridges, roads, rail transit - or schools, libraries and fire stations - the way they are built in many places around the world. Using public-private partnerships, governments join with businesses to finance, design, construct, and sometimes operate and maintain, public facilities. It pays off in lower costs, better design, faster construction and better performance.....(officials) could employ partnerships on a (grand) scale: the proposed $4.7 billion extension of BART to San Jose; the realignment of the treacherous Highway 152 east of Gilroy; or making Caltrain an electric railway.

Los Angeles Mayor Antonio Villaraigosa, who also serves on the Metropolitan Transportation Authority (MTA) of Los Angeles County board, details in this recent press release the gathering impetus for private partners on LA transit projects. The backdrop: The MTA board has identified 23 transit projects that would increase ridership by 122,000 each year and cost up to $30 billion. The city council has adopted a motion commissioning a report on potential private finance options for the incomplete Purple Line Subway to the Sea, and other light rail and bus rapid transit projects. The MTA recently approved a motion of its own, sponsored by its vice-chair, Villaraigosa, requesting preliminary proposals for private finance plans on specific transit projects. This will lead to an MTA board decision this July on proceeding with formal requests for proposals (RFPs). More here from KNBC-TV. Under the plan, the MTA and its labor unions would continue to handle maintenance and operations of transit, while private partners would be eligible to head finance, design, construction and construction management of transit extenstions and additions.

How it will all shake out in LA remains to be seen, but it's significant that the mayor, city council and Metro board acknowledge private capital can help meet the region's bracing transportation needs. There's ample precedent, according to the mayor's office.

The Mayor’s motion is partially based on successful private efforts to revamp public transit throughout the United States and around the world. In London, a public-private partnership increased the capacity of the city’s transportation system by 20 percent and reduced costs by 17 percent. A similar model in Vancouver boosted rapid transit capacity by 33 percent – the equivalent of ten 11-mile lanes on city streets. In the US, public-private partnerships are being explored as a potential way to fund and build a new three-mile connection between Oakland International Airport to the Bay Area Rapid Transit system; a 5.4-mile extension of Houston’s rail service; and operational improvements to Denver’s commuter rail and bus stations.

In Metro's draft long-range transportation plan, agency CEO Roger Snoble (right) neatly ties together growth, mobility challenges, and private investment in transportation.

...The job of Metro is to make sure that mobility is maintained and improved in the face of growth in population and in the number of cars and trucks in the County. Population is expected to increase by another 2.4 million by 2030, while the number of vehicles has surpassed 7 million a day....No single solution works. It is a multi-pronged approach that includes the Metro Freeway Service Patrol, traffc signalization, freeway ramp metering, carpool lanes, intersection improvements and expanding public transit and other rideshare options that have staved off gridlock.

It is the right approach, but we have to do more. A lot more. We are falling short of the resources necessary to fund many of the critical projects needed for congestion relief and air quality improvements. And neither Sacramento nor Washington can be counted on to plug the shortfall.....we need to look to new ways of increasing transportation revenues. Public-private partnerships can stretch limited public funds. Joint development in transit corridors, congestion pricing, and developer mitigation fees are just some of the other options Metro is exploring with a renewed sense of urgency.

The new breed of private funding partners are a varied cast with which state and regional governments are becoming more familiar. Each state and region can pick and choose which players to deal with. Governments can and should retain ownership and fee/fare authority over their roads, bridges and transit systems. But those tolls and fares are a steady source of revenue with which to pay back private investors - who, unlike taxpayers these days - are ready to ante up, again and again.

There are a few different types of dance partners. Sovereign investment funds? Ah....thanks but no thanks. Privately held infrastructure funds, like, say, Macquarie, or Goldman Sachs? Yeah, maybe. Especially if on transportation projects they can partner with public employee union and construction trade union pension funds. This last group is attracting growing attention for investments made in transportation projects around the world, either directly, or through private infrastructure funds.

We'll have more on that in coming posts.

RELATED:

"Report On The Transportation Innovative Partnership Program," Washington State Transportation Commission, 1/07;

“Strategic Growth Plan: Performance-Based Infrastructure,” Office of Gov. Arnold Schwarzenegger, CA, 1/9/08;

“Residents Agree – Public Infrastructure Projects Need Boost From Public Private Partnerships, Bay Area Council Poll Shows,” PublicWorks.com, 4/16/08;

“Train Builders Meet To Seek Private Investment For California Groundbreaking Plan For High-Speed Trains,” Business Wire, 3/26/08;

“High Speed Rail Bonds Heading For Ballot,” SF Chronicle, 4/20/08.

Or consider the Environmental Defense Fund's Transportation Director Michael Replogle, who writes in the Washington Post:

Congestion pricing may be controversial to some people, but it's inevitable. Using tolls simply to build more roads is a costly way to end up with even more traffic and pollution....Done right, congestion pricing can boost the efficiency of our existing roads, raise revenue to invest in transit, and reduce pollution that causes asthma, cancer, heart disease, impaired lung development and global warming....In the long run, congestion pricing is the only effective and economically and politically viable solution to the chronic and growing gridlock in our nation's largest cities.

Support for road pricing isn't isolated. At all. A "survey of surveys" published by Johanna Zmud in the scholarly journal Tolling finds broad support for congestion pricing. (See especially the summary chart on p. 33).

Now the place that gave birth to road rage is getting in on the act. The L.A. Times reports the Metropolitan Transportation Authority will turn carpool lanes on the 10 and 210 freeways in the San Gabriel Valley into electronically-tolled High Occupancy and Toll (HOT) lanes by year-end 2010, with tolls varying according to time of day and traffic levels. This is one example of so-called "congestion pricing," also known as variable tolling, or time-variable tolling.

LA's commitment comes in return for $200 million-plus from the U.S. Department of Transportation for 60 high-capacity buses and improvements to light rail.

It's part of the department's Urban Partnerships Program to encourage expanded transit and "congestion pricing," together.

NYC's Loss Is LA's Gain

LA's access to the federal funds came after the New York General Assembly sank a cordon pricing proposal from New York City Mayor Michael Bloomberg.

That would have garnered an Urban Partnerships grant of more than $300 million.

More from The Times:

"This is a great opportunity to think outside the box and to try something that has been tested around the world and has worked," said Los Angeles Mayor Antonio Villaraigosa (ed.-pictured at right), a member of the MTA board.

"Part of the reason that Los Angeles has not been able to grapple with gridlock is because we've been unable to make the tough decisions."

More SoCal, Oregon, Washington State

LA's decision to move ahead with its first attempt at pricing some of its highways comes only weeks after Oregon Governor Ted Kulongoski announced he'd be pushing for congestion pricing in metro Portland as part of a comprehensive transportation package he'll present to the state legislature in January, 2009. A spokesperson for the Governor indicates the I-5 crossing of the Columbia River exemplifies where he'd like to see congestion pricing.

Congestion pricing is already in place on I-15 and the South Bay Expressway in San Diego, plus State Route 91 in Orange County. Further north in the West Coast corridor, a four-year congestion pricing pilot project begins on a nine-mile stretch of State Route 167 in south suburban Seattle this week. The Seattle Times reports this morning that officials are also considering the possibility of eventually adding HOT lanes to I-90, I-405 and the I-5 express lanes. With the special lanes on 167 to open in six days, more than 9,000 motorists have already signed up for electronic tolling accounts. Tolls will range from 50 cents to $9 depending on real-time congestions levels. Buses will use the lanes free of charge, as will cars with two or more passengers (drivers will cover their transponders). The Times:

Washington state's latest highway experiment can't begin soon enough for John Mastandrea, a real-estate developer who takes Highway 167 on his commute to Seattle. "When I leave in the morning, it's before 5 a.m., so it's about 25 minutes," the Auburn resident says. "But going home in the afternoon, it's an hour to an hour and a half. You can imagine the brain damage, sitting in traffic."

...As for the future, Paula Hammond, state transportation secretary, said she doesn't foresee another gas-tax increase, so more tolling will be needed to maintain or expand highways. A logical next HOT-lane extension would be I-405, according to Bruce Agnew, of the Seattle-based Cascadia Center think tank. Those lanes could connect to Highway 167 and generate funds that in turn could help pay for widening I-405, he said. "I suspect that people would be willing to pay top dollar to get through that choke point," he said.

The SR 167 HOT lane tolling system will be de-activated between 7 p.m. and 5 a.m., so solo drivers can use them free then without even worrying about covering their transponders. The Washington State Department of Transportation notes at its blog that it will be providing running updates at its SR 167 web site on average HOT lane speeds, usage and toll levels.

There's more congestion pricing coming to Puget Sound. Pending expected state legislative authorization by September 30, 2009 of specific time variable tolls on the State Route 520 floating bridge across Lake Washington, between Seattle and the Eastside business centers of Bellevue and Redmond, another USDOT Urban Partnerships grant will be dispensed. It will total $138 million for the new SR 520 tolling project and will spring loose another $3.5 million in U.S. DOT transit funds for the region. The SR 520 tolling project will not only tame jammed rush-hour traffic on the bridge, it is hoped, but also help fund a vital replacement of the aged and unsafe bridge, the true costs of which will likely exceed $4 billion. As SR 520 congestion pricing begins, it is likely the legislature will also authorize it on the parallel I-90 floating bridge.

Fred Hiatt's Take

The approach is rapidly becoming part of the national conversation on regional growth, traffic congestion and the environment. Washington Post editorial page editor Fred Hiatt, though also supporting federal gas tax hikes which others regard as low-yield and politically bedeviled, nonetheless highlights the viability of congestion pricing. Hiatt writes:

The reality is that road pricing is inevitable. It won't be a panacea, and the administration has unfairly burdened a good idea by supporting it while refusing to increase other revenue sources for transportation. The D.C. study showed that road pricing doesn't necessarily solve the revenue problem. Tolls on Maryland's intercounty connector (ICC), for example, should keep traffic flowing, but they won't come close to covering construction costs.

But congestion pricing is working in London, Stockholm and Singapore, and variable-rate tolls are coming to Washington on three projects already: new lanes on part of the Beltway in Virginia, new and converted lanes on Interstates 95 and 395 in Virginia and the entirely new ICC in Maryland. Tyler Duvall, acting U.S. undersecretary for transportation policy, says...global experience shows that road pricing is far more popular once it's implemented than in anticipation, when many people just don't believe it can work. "This is not an easy idea to sell," he admits. "But it's so much better than the alternative." Something to think about while you're sitting, at no charge, on the Beltway tonight.

Tolling, Regional Taxes & Pension Funds

Hiatt is right that tolling and specifically congestion pricing will not alone address transportation funding needs. But federal and state gas taxes are increasingly ineffective sources, as related revenues flat-line and then drop due to increased fuel efficiency. And political prospects for higher gas taxes continue to shrink with the record run-up in U.S. gas prices. To supplement tolling revenue and get needed road, bridge and transit projects built, will require increases in state and especially regional taxes and fees, plus tolling and innovative financial partnerships. That could include coinvestment from union pension funds, now being eyed by legislators and Governor Rick Perry as potential backers of more toll roads to cut Texas-sized congestion in the economically-vibrant Lone Star State.

Tolling & Transit

Tolling revenues should never be used, even partially, to try to diminish a deficit in a state's general fund budget, as was proposed in New Jersey. Money raised via tolling must go back into transportation and transportation only. Road users expect no less, and they're right. But that doesn't have to mean roads and bridges only. In growing metro regions such as Puget Sound, some share of tolling revenues should definitely go to transit - in each case, within the same corridor where those tolls are collected. That's especially appropriate where new variable tolling strategies are being implemented, which allow transit and carpools to use priced lanes for no charge.

Avoiding Pitfalls

One other thing. Every now and then the idea surfaces - as in a recently completed, Puget Sound-focused study - that not only could major state and federal highways be tolled, but so too could major arterial streets in a metro region; or even every mile travelled by passenger vehicles, on any road or street. Cars would be tracked with dashboard-mounted devices, Global Positioning Systems and cellular technology. Some routes would cost more than others. This is a provocative idea worthy of discussion, but in the end it's simply too draconian to toll every mile driven, or arterial streets. Not because of privacy concerns, which can be overhyped, but because of the sheer overreach. Nothing like this is going to happen in Puget Sound for the next several decades, at least. Wherever officials advance what I'll call saturation tolling, they'd undercut public support for the more judicious approach now gaining traction - variable pricing on highways.

But things aren't working out as planned. MacDonald comprehensively reviewed 2000-2007 population growth data for the region on a city-by-city basis, and found far more newcomers than hoped for are moving to our region's edges rather than its core, and that compared to the 1990s, the first- and second-ring target cities are now drawing a smaller percentage of population growth. If the trend continues, so will pressure on our natural lands, habitat, water and air quality. And traffic, already a huge concern, will worsen.

MacDonald reports that while Vision 2040 calls for 32 percent of Puget Sound newcomers to reside in the first-ring "metropolitan cities," only 13 percent complied from 2000 to 2007. The second-ring "core cities" were supposed to draw 21 percent of the newbies but again, only 13 percent complied. In the 90s, the same 19 cities drew 18 percent of the newcomers, so the 13 percent figure infers we're backsliding on density, according to MacDonald.

Where exactly are people settling in now, in greater numbers than planners would like? Mostly at the edges of the region, where housing prices are decidedly lower; places like Monroe, Arlington, Marysville, Dupont and Bonney Lake. (Those last two are respectively south and southeast off the regional map above, left). And in towns such as Sammamish, Duvall and Mill Creek, which while not cheap by any means, are at least more affordable than pricey Seattle and Bellevue.

As a metropolitan and regional transportation planning agency the PSRC by federal mandate must try to lay out goals and suggest strategies for managing growth. Vision 2040 is an ambitious plan with a bar set appropriately high. But the PSRC has never had decision-making authority. That's left to state, county and local lawmakers, and the swirling profusion of councils, boards and agencies overseeing transportation, growth management and economic development.

To abate the worrisome trend he sees, MacDonald prescribes development of beefier policies for affordable housing, better public schools and better bus transit in popular corridors. He also highlights the PSRC's own suggestion for unfied regional governance on Puget Sound water quality improvements, thus unavoidably also calling the obervant reader's attention to his own vocal role in advocating regional governance for roads and transit.

But no matter what exhortations and incentives are offered, high costs for single-family homes and the proliferation of family-unfriendly apartments and condominiums in first-ring Puget Sound cities - plus rapid urbanization in the second ring - will continue to drive many newcomers to the region's outskirts. Right now, that means longer commutes, more greenhouse gas emissions from vehicles and more traffic congestion. Not exactly a recipe for environmental quality and sustainability.

Regional governance on transportation remains a hot-button issue in Puget Sound. Some zealous commentators see the idea as a nefarious plot by business and Republican interests to torpedo light rail. This is as foolish as the belief that any one transit mode provides the silver bullet to slay traffic congestion. Regional transportation governance has been recommended by two successive state blue-ribbon panels under two Democratic governors (most recently here) and all but endorsed in a recent state performance audit under a Democratic state auditor. Democratic-sponsored legislation for regional transportation governance passed the Democratic-majority state senate last year before stalling in the state house.

True, regional transportation decision-making doesn't by itself guarantee enactment of the right solutions to traffic congestion. But an elected regional transportation decision-making board would provide a crucial framework for coordinated, decisive actions to ration our limited peak-hour road capacity, to fully fund crucial road safety projects, to pay for operations and maintenance, to grow transit, and to incent other alternatives to single-occupant vehicles. These are just the kind of on-the-ground approaches needed to tame snarled traffic as newcomers keep arriving, and the outward expansion of the region documented by MacDonald continues.

Whether regional transportation governance flies or not, elected officials will need to muster a lot of political courage to address growth's effects on mobility. Puget Sound needs to expand time-variable highway tolling, plus form financial partnerships with union pension funds and developers, deploy more new commuter rail service, and create more robust incentives for paratransit and telecommuting. Suburban park-and-ride lots need to be developed into future-facing hubs with robust intermodal connections and re-charging stations for plug-in hybrid electric vehicles.

As in all other regions our size or larger, the tab for must-have transportation capital projects runs well into the billions, to which must be added ongoing operations and maintenance costs. Just as the solutions are multiple, so are the ways we'll pay: time, money, and adaptation. We're seeing that many newcomers to the region would rather adapt their travel habits and costs to less central, less clustered and less expensive homes. Policy-makers, while still encouraging density, need to understand that countervailing tendency, and more fully address its implications for regional mobility.

TECHNORATI TAGS: PUGET SOUND REGIONAL COUNCIL, VISION 2040, DOUG MACDONALD, URBAN DENSITY, SPRAWL, HOUSING COSTS, TRAFFIC CONGESTION, TRANSPORTATION PLANNING, TOLLING, CONGESTION PRICING, REGIONAL GOVERNANCE, BUS TRANSIT, COMMUTER RAIL, TELECOMMUTING, PLUG-IN ELECTRIC HYBRID VEHICLES