December 19, 2016

How might US transit fare under Trump?

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WHILE Republicans across the United States were popping champagne corks in jubilation as their party won the presidential election and secured majorities in both houses of Congress on the night of November 8, the election also proved a major boon for proposed transit projects across the country.

Nearly 70%, or 33 of the 49 measures voted on were approved, with the total ballot measures proposing nearly $US 200bn in support for public transport schemes, the largest in history.

Los Angeles was the big winner, with the Measure M sales tax increase passing with 69% approval. The measure is now expected to raise $US 120bn over 40 years to support transport improvement projects. Voters in San Francisco bay area, Seattle, Atlanta, Indianapolis and Raleigh also gave their seal of approval for tax hikes that will fund a variety of projects and improvements.

The election showed the strong appetite among the people living in US cities to support improved public transport. It also sent a clear message to president-elect Mr Donald Trump that his proposed $US 1 trillion infrastructure investment plan should include a significant appropriation to public transport, a sentiment that the American Public Transportation Association was keen to echo in the aftermath of the election.

“Public transportation is critical for a community’s economic prosperity and competitiveness,” said Apta chair Mr Doran Barnes and acting president and CEO Mr Richard White in a statement. “As nearly 60% of the trips taken on public transportation are for work commutes, we believe that a significant portion of his infrastructure proposal should be dedicated to public transportation.”

Details of exactly what will be prioritised in this plan are limited. According to the president-elect’s transition team website, the new administration is seeking to invest $US 550bn to “build the roads, highways, bridges, tunnels, airports, and railways of tomorrow,” all of which will be the “envy of the world.” No specifics are offered.

The cynics among us may immediately assume that a Republican president would always favour road over passenger rail. Trump though regularly spoke of his admiration for China’s high-speed rail network during the campaign, and as a life-long New Yorker, he should be familiar with the importance of public transport to that particular city and others of similar size and status. There is hope.

The biggest clue to how the infrastructure spending might be structured is available in a 10-page document issued by two senior Trump policy advisors during the campaign, which compared the respective infrastructure plans of Trump and Hillary Clinton. The overarching feature is the reliance on the private sector to fund and ultimately take ownership of the new infrastructure projects that will result.

Specifically, Trump’s plan offers $US 137bn in tax credits to private companies. In exchange, they would be expected to raise $US 167bn in total equity, which would support $US 1 trillion of new construction over 10 years. Projects would also have to raise user fees to pay back initial loans and corporate equity contributions.

The document praises the plan’s capability to deliver projects on time and on budget, and cut wasteful spending all without creating further government bureaucracy. However, critiques of what it will offer in reality have been extensive. From recognising its failure to support projects that do not make money, and not identifying a source to pay for the tax credits, which may mean cuts to other government-funded programmes, to effectively handing the keys to America’s infrastructure to private companies, and the continued suburban sprawl that will result from more road projects, which will increase air pollution and congestion.

Whether the plan becomes the foundation of the final legislation remains to be seen - it will have to secure approval from Congress before it reaches president Trump’s desk. However, by encouraging private investment, there might be a major winner: High-speed inter-city rail.

Offering incentives to private consortia may finally provide the leg-up that the numerous proposed privately-funded schemes require: from the Texas Central’s Dallas/Fort Worth - Houston project to XpressWest’s Los Angeles - Las Vegas line, and others. In addition, if Florida’s Brightline project, which is set to begin operations on its first phase from Miami to West Palm Beach in mid-2017, proves a success, it may also convince other prospective private investors that supporting a passenger rail project is a sound bet.

The prospects for urban projects look more bleak, particularly given the likely end of the Transportation Investment Generating Economic Recovery (Tiger) grant programme. Established in 2009, it has provided more than $US 2.3bn in federal funds to rail and transit projects including light rail lines in Atlanta, Cincinnati, Detroit, Denver, and Minneapolis.

Republicans have attacked Tiger ever since it was adopted and there is now little to stop them from shutting it down. If this scheme does fall by the wayside, and the new infrastructure investment programme fails to deliver, to retain the momentum, it might be left up to the states to take on greater responsibility.

In the aftermath of the vote more progressive states such as California have indicated that in order to counter Trump, they will look to shape the agenda through greater intervention - from protecting the environment, to investing in infrastructure. This then could translate into reforms of state budgets and perhaps more ballot measures to appropriate further funds for public transport.

As the world awaits president Trump, a lot of questions clearly remain to be answered. Everything will become clearer in the weeks and months after January 20.

This article will appear in the The Railway in 2017, IRJ’s January issue, which looks ahead to the major issue impacting the global rail industry in the next 12 months, available from January 1.

Kevin Smith

Kevin Smith joined IRJ in 2009 as features editor and since then has travelled the world reporting on developments in the world's railways. Before joining IRJ, Kevin worked for several local newspapers in the United States and as a freelance technical writer for a university engineering magazine. Kevin graduated with a first class honours degree in American Studies from Lancaster University, Britain, in 2006, and with a Master's degree in American Studies from Purdue University, United States, in 2008.

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