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Transportation and the Debt: Big Decisions to be Made

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Policy Focus Transportation and the Debt: Big Decisions to be Made

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The political theater around the debt-ceiling issue and the FAA shutdown that unfolded at the beginning of this month revealed some stark truths about the future of national transportation policy. The outcomes resolved very little, pleased almost no one, and left Americans and the world with reduced faith in the ability of the United States government to tackle policy problems. But they also teed up two long-term transportation policy issues that Congress could be forced to address directly or passively. How these issues are addressed will likely determine the future of U.S. transportation policy.

Issue #1: Trust Funds The first issue is whether transportation funds will be protected or unprotected. Transportation funding at the federal level has been structured around the “trust fund” model for decades. The Airport and Airway Trust Fund (AATF) collects jet fuel taxes and other charges for the aviation system, the Highway Trust Fund (HTF) collects gas taxes and other charges for the surface transportation system, and the Harbor Maintenance Trust Fund (HMTF) provides funds for dredging channels serving our ports. Although these trust funds may not be the famous “lockbox” often used in reference to Social Security funding, they have effectively protected transportation funding from budget cuts during times of fiscal distress. But now some of these funds are showing vulnerability. Both the AATF and HTF have depended on general fund bailouts for some time, due to a deterioration of revenues combined with increases in spending (the HMTF continues to show a surplus, but also lacks firewalls). This means that as general fund

revenues become scarcer, overall spending on transportation becomes increasingly vulnerable. However, the problems may extend beyond the lack of general fund supplements if the new Joint Committee created by the debt deal proposes to breach the firewalls that have traditionally protected the AATF and HTF. Given how desperate the federal government is for revenues across the board, this becomes a distinct possibility. They will have to make a decision in November about where to find cuts, thus ensuring some resolution on the issue of whether transportation funds are to be protected in the near future.

Issue #2: The Federal Role The second issue is the size and scope of the federal role. While most government transportation funding comes from state or local sources, the federal government provides a substantial portion of available public funds and almost half of all capital funding. Proposals to cut federal transportation funding imply a policy of a smaller national role and greater local role, as a combination of states, localities or the private sector would be presumed to pick up the slack. Of course we know that this would not be so simple. States are not exactly flush with transportation funds, and would find it very challenging to replace the lost federal money. But if more of that responsibility

is going to be shifted to the state and local level, one would think this would mean that the federal government would want to give states, localities, and the private sector every opportunity to raise revenues for transportation investments. And yet, this is not what has happened so far. The proposed FAA bills in both the House and Senate provide inadequate federal funding for NextGen but also fail to give airlines the incentives or assurances they need to make investments in equipage. The House Transportation and Infrastructure Committee has proposed a reduced surface transportation bill funding

level but kept in place federal restrictions on tolling. The federal government is pursuing two incompatible policies simultaneously – reducing federal funding for transportation while maintaining barriers to investment from other sources. Reasonable people can disagree about the extent of the federal role

in transportation, but the link between this debate and the barriers to state, local, and private investment is often overlooked. This issue is going to be forced by the continuing standoff over FAA reauthorization and the dwindling of funds in the HTF. While it is possible that the FAA bill will not be resolved in this Congress, thus dooming the industry and the nation to even more extensions of existing law, House Transportation and Infrastructure Committee Chair John Mica (R-Fla.) certainly seems prepared to force the issue. Meanwhile, the HTF will run out of funds sometime next year without a cut in funding, gas tax increase or general revenue bailout. Congress will have to

Decisions continued on next page

The federal government is pursuing two incompatible policies simultaneously -- reducing federal funding for transportation while maintaining barriers to investment from other sources.

Deb Miller: Surface Transportation Needs Federal Attention Now

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make a decision about how to fix that, one way or the other, and that decision will have a substantial impact on the future federal role.

Long-Term Implications Much of the transportation community is focused on funding levels with respect to both of these issues. We tend to argue in favor of trust fund protection and a larger federal role. But would these short-term “wins” produce long-term gains? Trust funds have served us well. For example, the HTF was a very effective mechanism for constructing a federally planned, state-owned interstate highway system. Similarly, a trust fund (perhaps the AATF) could, with proper leadership, be an effective means of building NextGen, another national system. But the trust fund model also presents challenges for transportation. The HTF is partially responsible for the lack of coordination between surface modes, such as highways and transit, which should be working together towards the same national purposes. The HTF is also partially responsible for the ongoing “donor-donee” battles that have shifted the focus of legislative discussions away from important policy issues such as purpose and strategy and towards the parochial issue of rate of return. Before concluding that we want to preserve this model, we might consider whether there are preferable alternatives. The U.S. model of user fees and trust funds for transportation is the exception, rather than the rule, among our peers. Then there is the issue of the size and scope of both the federal role and the level of federal funding. At the moment all signs point to a reduced federal role in transportation. This will be true in aviation, where airline opposition to any kind of tax increases will continue to diminish the federal role in real-time. It also appears

likely in surface transportation, with Congressman Mica pushing a bill that represents a substantial cut from existing spending. A smaller federal role requires a program more focused on specific national goals. It also requires the elimination of the barriers that currently prevent more state, local, and private investment.

The Role of the President The wild card here is the President. President Obama is on record as being in favor of a major expansion of the federal

role in transportation. He has given several speeches in favor of increased infrastructure investment, and he just gave another this morning. What he has yet to do is propose a specific source of funding for that investment. But now the President is coming off of a debt-ceiling negotiation in which he insisted on new revenues and lost. He is facing a Congress that was willing to shut down much of the FAA and under which there is no certainty that surface transportation programs will be allowed to continue past September 30. If he doesn’t come out with a strong proposal – including a revenue mechanism to support whatever investments he suggests – his cause will be lost. What would a strong proposal look like? Here are some essential elements:

l A specific revenue mechanism. The President should have little to fear from proposing a gas tax increase or another mechanism (such as an oil import fee) at this

point. He is already on record supporting new revenues, and a gas tax increase to support transportation is one of the most conservative revenue increases possible, with evidence of past support from Ronald Reagan and George H.W. Bush. Plus he could propose that some of the new revenues go towards deficit reduction.

l A legislative proposal. Without specific legislation it will be challenging for the President to move his ideas forward. The administration has not come up with a

long-term solution to the FAA impasse; they should draft a legislative concept. The administration has already drafted a surface transportation bill; they need to release it and try to push it through Congress.

l A set of performance measures by which t r a n s p o r t a t i o n investments will be evaluated. While these measures should be in the bill, the President should also take them to the people. Explain the economic benefits from the investments. He has

already indicated that he wants to make transportation investments driven by performance rather than politics, but he needs to explain how that will be done in a way that resonates with the public. Tell us how much safer the roads and skies will be, how much congestion will be reduced, and how much energy will be saved. Then show how you, Congress, and the States will be held accountable for those goals.

l Realistic funding levels and familiar investments. The funding levels proposed in the President’s budget, even with a new revenue mechanism, are probably not realistic. Brand new transportation systems, such as High-Speed Rail, are easily characterized as boondoggles. The proposal needs to be big enough to make a real impact, but conservative enough to allow Republicans to come to the table.

Joshua Schank is President and CEO of the Eno Transportation Foundation

Continued from the cover

If (the President) doesn’t come out with a strong proposal -- including a revenue mechanism to support whatever investments he suggests -- his cause will be lost.

You know that feeling you get when you are miles from home and your Check En-gine Light comes on? It is not good. One of the main frustrations with the Check Engine Light is that there is so much am-biguity to it. It could be something as sim-ple as needing to tighten the gas cap or it could mean a serious engine problem. That is a big difference and it makes it tough to know how to react. Welcome to the world of leading a State Department of Transportation (DOT). With important deadlines for the federal surface transporta-tion program fast approaching, DOT leaders are feeling anx-ious. In my 25 years working in transportation, I have been through a lot of reauthoriza-tions and they all created anxi-ety; some more than others. For example when SAFETEA-LU passed in 2005, Kansas received less money than anticipated (in fact, we re-ceived less money in the final bill than was estimated for us in either the House or Senate version). At the time, we were mid-way through our 10-year state trans-portation program and the surprise loss of federal funding increased the threat that we would not be able to complete all of our projects as promised. We did complete them thanks to an infusion of state funds, good bid prices, and the Recovery Act. But in 2005, we had serious doubts and we were glad when those days of anxiety were behind us. However, with the recent bond downgrade, the protracted debt ceil-ing debate, and the partial shutdown of the Federal Aviation Administration—it may be that 2005 could begin to look like the “good old days.” Here is why. SAFTETEA-LU, the cur-rent federal transportation authorization act, expired September 30, 2009. The nation is currently operating under the seventh extension of the act and it expires

September 30, 2011. Also expiring on that day is the authority for the motor fuels tax. In the current political environment, that is cause for concern. If SAFETEA-LU is not extended or a new act authorized by September 30, potentially devastating job losses will occur as the federal program grinds to

a halt and money stops flowing into the Federal Highway Trust Fund. In Kansas, we would be looking at suspending over 90 current projects and we would have to stop new construction lettings all to-gether. And, even if we get passed Sep-tember 30, 2011, successfully we are still not in the clear. The next reauthorization is likely to break with the past and rather than providing more transportation dol-lars, provide less. Under the current proposal from House Transportation and Infrastructure Chair-man John Mica (R-Fla.), Kansas would receive an estimated 37% funding re-duction (about $135 million less) for the next six years. In our state, federal funds make up about 40% of our overall con-struction budget. In May 2010, the Kan-sas Legislature passed a 10-year, $8 bil-lion dollar state transportation program, T-WORKS. And this spring Kansas Gov-ernor Sam Brownback (R) announced 37 major highway projects totaling over $1.8 billion. A reduction of this size will put these projects in jeopardy. The reduction

in funding will also impact cities, coun-ties, and public transit. In Kansas, public transit is often used as means to access medical services and the proposed reduc-tion could have devastating effects on our rural citizens. In the current economic climate, with many citizens struggling, the loss of

transportation projects may not seem important. Fewer orange barrels, right? But these projects do more than just improve a road; they create jobs. In this econo-my, the jobs created by roadway construction are welcome, but of course any type of construction will create jobs. The real benefit of transporta-tion projects is the long-term jobs they generate. We did extensive case studies on five Kansas trans-portation projects built in the last

20 years. The total cost for these projects was $231 million but they contributed over $6 billion in economic value and cre-ated over 50,000 long-term jobs. For a na-tion struggling to find its economic foot-ing, these are the types of investments we should be making—not cutting. The recent call for a four-month exten-sion by Senator Barbara Boxer (D-Calif.) to give Congress more time to come up with a long-term solution to our funding issues is a step in the right direction. Transportation has always been one of the few bipartisan congressional issues. And we really hope that does not change come the end of September because we need everyone working together on this. If our transportation system were a car, its check engine light would be on—and on to signal a serious issue that needs im-mediate attention.

Deb Miller a member of the Eno Board of Advisors and is the Secretary of Trans-portation for the State of Kansas

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Surface Transportation Needs Federal Attention NowBoard of Advisor Corner

We did extensive case studies on five Kansas transportation projects built in the last 20 years. The total cost for those projects was $231 million but they contributed over $6 billion in economic value and created over 50,000 long-term jobs.

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EnoBrief AUGUST 2011

Since the Federal Aviation Administra-tion (FAA) authorization bill expired in late 2007, Congress has enacted 21 short-term extensions—each ranging from one week to six months—to the FAA’s trust fund ex-penditure authority. The latest of these ex-tensions is set to expire on September 16. These short-term extensions have been used to buy time while Congress works toward resolving their differences in the long-term reauthorization bills (H.R 658 and S. 223), the most controversial of which concern recent changes in the Na-tional Mediation Board (NMB), a federal entity which oversees labor union elec-tions for airlines and railroads. In July 2010, the NMB issued a new rule allowing air or rail employees to unionize without a majority vote. This redefines “majority” to only those employees who show up to vote yes/no, but the resulting changes then affect all employees in that airline or railway company. The House of Representatives reacted to this change by introducing the Restor-ing Democracy in the Workplace Act in January, and requiring a provision in the longer-term FAA reauthorization bill that overturns the new rule. The Senate is un-willing to reverse the rule. This rule change has strong implica-tions for Delta Airlines, which merged with Northwest Airlines and began joint opera-tions last year. Northwest’s 17,000 employ-ees are unionized, while Delta is the only legacy carrier in the U.S. without a large proportion of unionized labor. Should a combined election form a union with rules skewed in favor of union operatives, it could have a serious impact on Delta’s la-bor costs. Efforts are being made in the Senate to form some kind of common ground with the House regarding the NMB rule change. On July 21, Sen. Johnny Isakson (R-Ga.) mentioned a possible provision to give airlines judicial reviews of NMB decisions in order to balance the playing field (Hartsfield–Jackson Atlanta Interna-tional Airport serves as Delta’s chief hub).

Essential Air Service Meanwhile, the House introduced Es-

sential Air Service (EAS) reform four days before the 20th extension of the FAA’s ex-penditure authority. The resulting impasse led to the furlough of about 4,000 FAA em-ployees while the trust fund was deprived of about $200 million in tax revenues. On August 5, the Senate agreed to the House version of the extension but only after U.S Transportation Secretary Ray LaHood in-voked his authority to waive air-subsidy cuts to rural airports.

The EAS debate is another potential impasse facing long-term reauthorization. EAS provides subsidies to air carriers serv-ing certain rural communities. The House version of the bill plans to phase out EAS with $98 million in 2011, $60 million in 2012, $30 million in 2013, followed by ces-sation of the program in subsequent years. The Senate version of the bill aims to fund the EAS program at $200 million annually. While cutting EAS funding would save the FAA $77 million annually, it might have consequences for rural airports and communities that rely on EAS to continue service. Even with the EAS program, Del-ta Airlines has announced they will drop flights in 24 small markets across the coun-try due to low load factors and low profit-ability.

NextGen As policymakers debate NMB and EAS, another important program has been the victim of collateral damage. The Next Gen-eration Air Transportation Modernization

(NextGen) move from radar-surveillance to Global Positioning System (GPS) relies on funds from the FAA’s trust fund. The re-cent furlough included employees involved in NextGen implementation and research. The foregone tax revenues could have been invested in accelerating this much-needed transformation. Most importantly, all stakeholders in NextGen require fund-ing certainty which can only be acquired through a long-term bill. Prospects of a timely agreement on a long-term bill look bleak. The FAA shut-down demonstrated that even future short-term extensions might be challenging if policymakers fail to resolve their differ-ences. In response to the Senate’s decision to pass the FAA bill, Transportation and Infrastructure Chairman John Mica (R-Fla.) released a statement: “If the Senate refuses to negotiate on the few remaining issues, they can be assured that every tool at our disposal will be utilized to ensure a long-term bill is signed into law.”

Length of Extension It will be difficult to sort out remain-ing policy issues on a long-term bill using short weeklong extensions, the final days

of which are usually used to formulate the next extension bill. A longer extension, on the other hand, lacks the urgency to get is-sues resolved that a deadline in a short-term extension provides. Other differences between the House and Senate versions of the reauthorization bill concern the amount of funds authorized for different FAA programs and the duration of the bill. The Senate bill covers two years between 2010-2011, generally authoriz-ing more annual funds for each FAA pro-gram (including the Airport Improvement Program) than the House version of the bill, which would last for four years. Even though previous versions of the House bill called for higher passenger facility charges, the latest bill includes no increase in avia-tion taxes or fees. The Senate version raises jet fuel taxes for general aviation from cur-rent levels of 21.9 cents/gallon to 35.9 cents/gallon.

Sakib bin Salam is a Policy Intern for the Eno Transportation Foundation

FAA Reauthorization: The Need for a Long-Term Bill

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EnoBrief Cultivating Creative Leadership, Framing Emerging Issues

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On June 30, 1956, a United Airlines DC-7 collided in mid-air with a Trans World Air-lines Constellation flying over the Grand Can-yon, killing all 128 passengers and crew on board. This was the most devastating accident in commercial aviation among a rising num-ber of incidents and casualties at that time. The Grand Canyon crash became the catalyst for change in an outdated aviation system struggling to handle the increasing demand for flying in the post-WWII era. More than half a century has elapsed since then and the need to modernize the U.S. avia-tion system has once again resurfaced. Ac-cording to the Federal Aviation Administra-tion (FAA), commercial aviation will serve one billion passengers annually by 2021, a 25% increase in traffic from today; conges-tion and delays will only escalate as air travel demand rises.

Eno Research on NextGen Enter Next Generation Air Transportation System (NextGen), the technology to reduce congestion, enhance flight safety, and ensure continued growth and global competitiveness of the US airline industry. The Eno Transpor-tation Foundation is conducting research for a policy paper on NextGen to provide policy-makers and airline industry leaders with ob-jective, nonpartisan policy recommendations in the hopes of reigniting the spark plug driv-ing NextGen. Benefits The current aviation system uses radar to scan through an area periodically and report any nearby operating aircraft to air traffic control (ATC). The lack of continuous precise detection means that planes must maintain a minimum distance of at least three miles be-tween each other for safety. Moreover, due to limited radar coverage, airplanes are required to fly through predetermined air corridors like imaginary highways in the air. The precision of Global Position Systems (GPS) would al-low reduction in the aircraft separating stan-dard, which would greatly enhance air traffic management and flow, and NextGen’s Area Navigation would allow pilots to choose more direct and shorter routes to their destination. Airline pilots today have to rely on ATC for semi-precise information on their location and navigation of other planes in their vicin-ity. NextGen on-board display would give pi-

lots a picture of the precise location of every aircraft around them and direct access to the information that was only available to ATC. This improves the pilot’s situational aware-ness and flexibility during bad weather and emergency situations. NextGen digital data communication between pilots and ATC re-duces the chance of verbal miscommunica-tion. NextGen would also use Optimal Profile Descent (OPD), which allows aircraft to glide prior to landing instead of using additional engine power during the current stepped de-scending approach.

Eno’s NextGen analysis begins with an estimate of benefits to all its users and benefi-ciaries. These benefits are then used to help develop an adequate and equitable funding mechanism such that the burden of funding NextGen is allocated based on who profit from it. Revenue sources are analyzed and compared based on four main criteria: equi-tability, transparency, political feasibility and minimal tax burden on users. Eno’s forthcom-ing policy recommendations are intended to be practical and feasible and that impose min-imal burden on passengers and airlines.

Politcal Hurdles Modernization efforts today are faced with political stagnancy. Despite congressional acknowledgment regarding the importance of NextGen, there has so far been a lack of political leadership to guide NextGen from the initial stages of policy infancy to a full-fledged funding plan. The failure to extend the FAA authorization this July caused 4,000 FAA employees to be furloughed, many of whom were directly involved with NextGen research and implementation. The Airport and Airway Trust Fund (AATF) that pays for NextGen received no tax revenues during the shutdown. As Congressional leaders bickered over an annual $16 million Essential Air Ser-

vices Program, the trust fund lost $30 million daily for two weeks. Those are funds that could have been used towards NextGen. Recent reports by the Congressional Budget Office and the Government Accountability Office show that current AATF revenues are inadequate to fund NextGen. Furthermore, NextGen is not immune to recent budget cuts and fiscal austerity. Without a clear funding strategy for both continued infrastructural improvements as well as equipage, there is no guarantee that NextGen can be imple-mented in a timely and cost-effective manner.

Costs and Implementation Airlines have been hesitant to bear the costs of equipping their aircraft with NextGen avionics due to financial distress and a lack of clear incentives to justify investing in Next-Gen. Airlines are not ready to make invest-ments until the FAA is ready to deliver. Implementation of NextGen is of such fun-damental importance to the economic com-petitiveness of the nation, and the safety of our citizens that any delay is costly. NextGen was originally projected in the early 1980s to cost $12 billion and be ready in 10 years. Now it is estimated to cost about $40 billion with no set completion date. Every additional day that congestion is left untended costs airlines millions in additional fuel and operating cost and passengers in time lost in delays. Without strong political leadership, a trans-parent source of funds, and incentives for airlines to equip, it is unlikely that NextGen benefits will be delivered in a timely manner. Politicians need to make sacrifices and forge bipartisanship towards implementing Next-Gen now.

Sakib bin Salam is a Policy Intern for the Eno Transportation Foundation. He will graduate with a Master’s degree in Applied Economics with a concentration in the airline industry from Oregon State in June 2012. His research paper on NextGen will be published by Eno in early 2012. Send an email to sbinsalam@enotrans.com.

Eno to Publish NextGen Paper Analyzing Costs, Benefits and Political Leadership

Without a clear funding strategy... there is no guarantee that NextGen can be implemented in a timely and cost-effective manner.

Eno Chair Lillian Borrone and Eno Board of Director Mort Downey have been appointed to the MTA Search Advisory Committee by New York Governor Andrew Cuomo where they will find a replacement for outgoing Metropolitan T r a n s p o r t a t i o n Authority (MTA) chairman and former

Eno Board of Advisor member Jay Walder.

“This committee will help conduct a national and international search to find and recommend the most talented candidates for the next chairman of the MTA,” Governor Cuomo said in a statement. “I am committed to appointing a new chairman who

will put straphangers first and who will continue to reform the MTA by reducing

costs and waste, while improving efficiency and service.” Borrone and Downey join 18 others from leading public transportation experts and management professionals in the public and private sectors who will assist in recommending and evaluating candidates.

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From the Boardroom

Eno Newsmakers Recent news features on Eno staff and board members.

Eno to Hold Three New Policy Events; Register Today

Borrone, Downey Serve on MTA Search Committee

Discussion Panel & Book Launch On Wednesday, Sept. 7, Eno will host a discussion panel to address intermodal transportation and the global economy. The event will feature commentary from chapter authors from Eno’s latest publication Inermodal Transportation: Moving Freight in a Global Economy. Participating authors include Michael D. Meyer, David Seltzer, and Stephen Van Beek. The event will be held from 2 to 4 pm at the City Club of Washington, Columbia Square. Click here to register for this free event.

Luncheon Debate Eno continues its luncheon debate series on Wednesday, Sept. 14, at Clyde’s in Washington, DC. The debate will focus on Stability or Sustenance? Resolved: Long-term stability in federal transportation funding must be the priority, even if it results in overall funding cuts. Ken Orski, Editor and Publisher of Innovation NewsBriefs, will argue the PRO position while Bill Millar, President of the American Public Transportation Association, will represent the CON opinion. To register, click here.

Policy Forum Eno’s annual Policy Forum, to be held Wednesday, Nov. 17, will address Transportation Investment as Part of a Deficit-Reduction Package. George Mason University’s School of Public Policy in Arlington, Va., will co-host the event. Online registration will be available next month.

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For details on all three events, contact Pamela Shepherd, Senior Director of Communications, at pshepherd@enotrans.com.

Joshua Schank, Eno President/CEONewsworks.org: August 1Panel Presents Corbett With Funding Options for Pennsylvania Transportation

Phil Washington, Eno Board of Advisors Denver Post: August 15New Light-Rail Platform Debuts in Denver

Janet Kavinoky, Eno Board of Advisors Wall Street Journal: August 15Plan for Highway Bank Faces Uphill Battle

Joshua Schank, Eno President/CEOGoverning: August 16Transpo Officials Await Gas Tax’s Fate

Rosemarie Andolino, Eno Board of Advisors WBEZ 91.5: August 24A Bird’s-Eye View of Airports in Chicago

Phil Washington, Eno Board of Advisors Denver Post: August 25RTD Staff Gets Specific in Proposing $12 Million in Bus and Light-Rail Service Cuts

Aaron Gellman, Eno Board of AdvisorsMorris Daily Herald: August 25Airlines Avoid City Sales Tax

Joshua Schank, Eno President/CEOStreetsblog Capitol Hill: August 31President Obama Pushes Congress For a Clean Extension of Transpo Bill

Last month U.S. Labor Secretary Labor Hilda L. Solis met with Santa Clara Valley Transportation Authority (VTA) employees to witness green technology and green jobs at work thanks in part to a $53.4 million grant through the American Recovery and Reinvestment Act. Michael Burns, a mem-ber of Eno’s Board of Directors, is the Gen-eral Manager of VTA Last November 90 locally manufac-tured, low-emission diesel electric hy-brid buses were put into service allowing VTA to retire old buses that had exceeded their useful lifespan (see Eno Brief Feb-ruary 2011) The new hybrid technol-ogy is reducing greenhouse gas emis-sions by an estimated 15% while VTA is experiencing over 25% in fuel economy.

Solis’ visit included a tour of VTA’s Chaboya Bus Division in San Jose that

houses the hybrid buses and a maintenance career-ladder training program committed to advancing skill levels of VTA transit me-chanics to work with the new technology. Secretary Solis learned firsthand about the Joint Workforce Investment (JWI) Pro-gram, the successful working partnership between VTA and the Amalgamated Transit Union Local 265 that is focused on the pro-fessional development and career advance-ment of VTA’s operations and maintenance employees. The Secretary also met with mentors and graduates from the JWI program and discussed hybrid engine technology that is contributing to better air quality and a thriv-ing local workforce.

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$1.03 Billion FTA Award to Help Build RTD’s Eagle P3 Project August 31, 2011, is a big day for Den-ver’s Regional Transportation District (RTD) – a day the agency has anticipated and worked toward for several years. This is the day RTD will receive the Federal Transit Administration’s (FTA) $1.03 billion Full Funding Grant Agreement (FFGA) award. This award marks the largest FFGA award thus far by the Obama administration. The grant will help build RTD’s innova-tive Eagle P3 project, a public-private part-nership that includes the East Rail Line to Denver International Airport, the Gold Line to the western suburbs of Arvada and Wheat Ridge, a commuter rail maintenance facility and a small segment of the Northwest Rail Line. The Eagle project is part of RTD’s FasTracks transit expansion program which will build out six new rail lines, a bus rapid transit corridor, short extensions of three ex-isting light rail lines, 21,000 parking spaces and the redevelopment of Denver Union Station as the transit hub of the Denver met-ro area. “This coveted award represents our con-tinued partnership with FTA in our united mission to provide safe, quality, reliable transit to the Denver metro region,” said RTD General Manager and Eno Board of Advisor member Phil Washington. “We are humbled and proud of the confidence that

the federal government has in RTD as good stewards of taxpayer dollars.” The $1.03 billion grant is the transit agency’s fourth FFGA award by FTA. The agency was awarded $120 million in 1996 for its Southwest Light Rail Line, $525 mil-lion in 2000 for the Southeast Rail Line and $308 million in 2009 for the West Rail Line, also part of RTD’s FasTracks program. Even with the new grant, RTD continues to explore funding alternatives to complete the FasTracks program as intended. Since FasTracks was approved by voters of the Denver metro area in 2004, the program has been hit hard by unprecedented increases in the cost of construction materials like steel, copper, concrete and diesel fuel. In addition, sales tax revenues have come in far below projections due to the recession. One of the strategies RTD has pursued to keep the program on track is the unique pub-lic-private partnership – Eagle P3 – where a team of private partners, or concessionaire team, contracts with the agency to design, build, finance, operate and maintain parts of the program in one project. Denver Transit Partners, the Eagle P3 concessionaire team, invested nearly $500 million upfront allow-ing RTD to preserve cash in the early years of the project and to spread out these costs over a long-term period. RTD’s Eagle P3 is

the largest transit public-private partnership in the country and has become a model for other public entities looking to build major infrastructure projects in a timely and effi-cient manner. With the recent federal grant and the P3 project, RTD is closer to completing its FasTracks program and expanding its tran-sit system for the Denver metro region.

Monitoring Green Transportation ProgressUS Labor Secretary Visits VTA Bus Division in San Jose, Calif.

U.S. Labor Secretary Hilda Solis meets with VTA employees in San Jose, Calif.

RTD’s light rail is part of its FasTracks transit expansion program.

Earlier today President Obama chal-lenged Congress to get serious about jobs and warned against “gamesmanship” that he said could delay transportation bills on which millions of jobs may depend. “At a time when a lot of people are talking about creating jobs, it is time to stop the political gamesmanship that can actually costs us hundreds of thousands

of jobs,” he said. At issue is the renewal of a transporta-tion bill that expires Sept. 30. A Senate proposal would last only two years and cost $109 billion, while the House is considering a longer, six-year bill that could cut spending from current levels. Obama warned that if Congress

did not extend a transportation bill due to expire at the end of September, thousands of jobs could be at risk in highway and bridge repair and mass transit projects. “It is inexcusable to put more jobs at risk in an industry that has already been one of the hardest hit in the last decade,” the president said in com-ments at the White House. “All of them will be out of

a job just because of politics in Washing-ton.”

The President is scheduled to give a broader economic policy speech before a joint session of Congress on September 7 in which he is being urged to set out pro-posals including extending a payroll tax cut for middle- and low-income workers, boosting infrastructure and green energy spending and tackling the persistent fore-closures crisis.

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Cultivating Creative Leadership, Framing Emerging Issues

AUGUST 2011 EnoBriefObama: Failure to Extend Transportation Bills Is Inexcusable

On August 17, the U.S. Department of Transportation announced $417.3 million in FY2011 discretionary grants from the Federal Highway Administra-tion (FHWA) for state highway projects. In previous years the funding for these grants was subject to Congressional ear-marks designated for specific projects. The lack of any new authorization legislation has left a larger pot of fund-ing available for discretionary grants. In June FHWA received more than 1,800 applications for this funding. Applica-tions were evaluated based on program-specific eligibility and criteria. Each state received a portion of the awards and in some cases the percentages were similar to the FY2011 FHWA formula apportionments. For example, the State of Arkansas

received 1.335% of the FY2011 FHWA formula apportionments, while its share of total discretionary grants was 1.37%. There were 20 other instances of states where the discretionary grant share was within .3 percentage points of what they would have otherwise received under the FHWA state formula apportionments. Powerful positions of key legislators may also have influenced allocations, which some could argue undermines the intent of banning earmarks and employing a competitive process. According to Transportation Weekly, Senate Transportation-HUD Appropria-tions Subcommittee Chair Patty Mur-ray’s (D) home state of Washington re-ceived 357% more than what it would have under formula funding. Also note-worthy is the 231% increase in funding

for Maine, home state of Ranking Mem-ber Susan Collins (R). Many recent research and policy pa-pers have argued that available federal resources for transportation ought to be spent in areas that generate the high-est returns in terms of national goals. Though the new grant awarding process was intended to be competitive by adher-ing to cost-benefit analysis, the outcome does not appear to be markedly different from that achieved by Congressional ear-marks. This lends credence to claims of “executive earmarking” that have been made by members of Congress.

Sakib bin Salam is a Policy Intern for the Eno Transportation Foundation

Eno Analysis of Recent FHWA Grants

Eno President and CEO Joshua Schank (right) and APTA President Bill Millar attended today’s Presidential speech at the White House.

President Obama called on Congress to pass the highway when they returned to Washington next month.

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Cultivating Creative Leadership, Framing Emerging Issues

AUGUST 2011 EnoBriefEno Fellow Nicholas Norboge Chosen to Author First William P. Eno Paper

Shain Eversly, a 2011 Eno Transpor-tation Fellow, recently attended COM-TO’s 40th National Meeting and Training

Conference where he not only listened to Eno Exec-utive Direc-tor Barbara Gannon ad-dress leader-ship models, but he also had the op-

portunity to use the training he received at Eno’ Leadership Development Con-ference (LDC)—which exposes gradu-ate students to transportation policy—by helping to mentor COMTO’s 15 interns and 10 scholarship recipients. “I got the opportunity to meet a lot of people. I learned skills from relationship building to leadership,” Eversly said. COMTO President and Eno Advisory Board Member Julie Cunningham spon-sored Eversly’s attendance to the confer-ence, having met him at Eno’s LDC fun-draising dinner in June. “I learned how bright he is and as part of the next generation coming along, knew how important it was for him to come to the conference and keep making connections,” she said. Following the conference, Eversly spoke at the COMTO intern’s closing ceremony in Washington, DC where he urged the interns to set goals for them-selves and to make the best of the op-portunities presented to them. Eversly turned down a job offer he received at the COMTO meeting in order to complete his Master’s degree in Transportation Planning and Management from Texas Southern University. He will graduate in December.

Reconnect With Eno Colleagues at Reception During APTA Annual Meeting

Nicholas Norboge was recently selected by the Eno Board of Directors as author of the first annual William P. Eno paper. Norboge’s research for the Eno paper will focus on establishing a methodology that will develop the process for determining the economic impacts associated with transportation. “A rigorous analysis of the economics of transportation investment is sorely needed at the Federal level and Nick’s paper will go a long way in moving this effort forward,” said Eno President and CEO Joshua Schank. The paper, which provides young scholars the opportunity to publish their work on issues that are relevant to transportation policy, is open to all attendees of Eno’s

yearly Leadership Development Conference (LDC). This conference exposes graduate students to transportation policy. “I wanted to keep my research as broad

as possible and this paper is a way to showcase the results on a national scale. This methodology will have the most application because it could serve as a good guide for other states to pursue,” Norboge said. Norboge, who attended LDC in June and graduated in May with a Master’s degree in Public Administration from Texas A&M, now works as an assistant

transportation researcher with the Texas Transportation Institute (TTI). He will be awarded a $1,000 stipend and participate in a Washington, DC event next spring that will release the paper to the public.

Eno Fellow Mentors Interns

Inspiring the Next Transportation Generation High school students from the New Orleans area will be encouraged to think about careers in transporta-tion as they attend learning sessions at the American Public Transportation As-sociation’s (APTA) annual meeting and EXPO in Oc-tober. APTA, AECOM and Ve-olia Transportation joined with the Junior Achieve-ment Careers with a Pur-pose to make the event—which introduces students to the importance of seeking careers—pos-sible. Students will tour the EXPO exhibits and listen to professionals share their work experiences and discuss career opportuni-ties in public transportation.

“This is a great opportunity for high school students to see, touch and feel the

real things that go on in the indus-try as well as talk with the peo-ple whose livelihood depends on transportation,” said Jason Schie-del, Associate Vice President at AECOM and coordinator for the student event. Schiedel hopes students will see a different side of transporta-tion that will translate into a new generation for the industry. “Conference attendees should keep an eye out for these students,

greet them and and encourage them to think about careers in public transportation,” he said. For details contact Jason Schiedel at jason.schiedel@aecom.com.

Executive Leadership

Students will wear the above t-shirts to make them recognizable.

Join Eno Board members, staff, faculty and CTL alumni at a reception during the American Public Transportation

Association’s annual meeting in New Orleans, La. The reception will be held from 6:30 to 7:30 pm on Monday, Oct.3.

For details contact Lindsey Robertson, Director of the Center for Transportation Leadership, at lrobertson@enotrans.com.

Cultivating Creative Leadership, Framing Emerging IssuesEnoBriefEno CALENDAR

About Eno Eno to Debut New Website Next Month

www.enotrans.com AUGUST 2011 EnoBrief 10

STAFFEDITORPamela A. Shepherd Senior Director, Communications pshepherd@enotrans.com

AUGUST 2011

OCTOBERSEPTEMBER NOVEMBER7 Eno Intermodal Dicussion Panel & Book Launch Washington, DC

7-9Future Travel Experience 2011Vancouver, Canada

10-14 IBTTA 79th Annual Meeting and Exhibition Berlin, Germany

14Eno Luncheon DebateWashington, DC

19-23 Eno Transit Mid-Manager Seminar Pittsburgh, PA

ENO BRIEF CONTRIBUTORSJoshua L. Schank Barbara K. Gannon President and CEO Executive Vice President jschank@enotrans.com bgannon@enotrans.com

Lindsey Robertson Melissa ParadisDirector, Center for Transportation Leadership Program Coordinatorlindsey@enotrans.com mparadis@enotrans.com

Paul Lewis Sakib bin SalamAnalyst, Policy and Strategic Finance Policy Internplewis@enotrans.com sbinsalam@enotrans.com

Thank you for your interest in Eno Brief, a publication of the Eno Transportation

Foundation. Eno Brief is published monthly and distributed electronically (past

editions can be accessed at: www.enotrans.com/enobrief).

To subscribe, send your name, contact details and your email address with the

subject “request to subscribe to Eno Brief” to publicaffairs@enotrans.com. To be

removed from our distribution list, include “request for removal from Eno Brief”

in the subject field. For comments or to include content, contact Pamela Shep-

herd at pshepherd@enotrans.com.

2-5APTA Annual Meeting & EXPONew Orleans, LA

3Eno CTL Reception at APTA Annual MeetingNew Orleans, LA

11-15AAPA 100th Annual ConventionSeattle, WA

13-17AASHTO Annual MeetingDetroit, MI

16-19Eno Texas Transit Leadership InstituteSan Antonio, TX

7-10 ACI-NA Airports Concessions Conference Atlanta, GA

8-10 Intelligent Cities Expo Hamburg, Germany

8-10 Smart Stations & Terminals World Europe 2011 Netherlands, Amsterdam

13-15 I011 IANA Intermodal Expo & Annual Membership Meeting Atlanta, GA

16-17 Eno Joint Board Conference & Policy Forum Arlington, VA

Visitors to the Eno Transportation Foun-dation website will notice a dramatic change next month as the organization launches a new and more interactive site. The revamped site will feature a new transportation blog and Center for Transportation Leadership discussion forums. Eno Brief readers will no longer have to download a PDF version of the monthly newsletter; rather the all-electronic searchable format will be easier to access on laptops and desktops as well as smart phones and tablets. In the future the site will have the ability

to live stream and house videos of our pol-icy luncheon debates, as well as other Eno events. Also among the changes includes the ability to donate and sponsor Eno events. Additionally, meeting and event attendees will not only be able to register online, but pay as well. Eno will continue introduce new features and improved navigation on the site. Comments and suggestions are encour-aged. For details contact Pamela Shepherd, Senior Director of Communications, at pshepherd@enotrans.com.

Cultivating Creative Leadership, Framing Emerging Issues

AUGUST 2011EnoBriefENO BOARDS

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BOARD OF DIRECTORS

Lillian C. Borrone, Chairman

Michael T. BurnsGeneral ManagerSanta Clara Valley Transportation Authority

Mortimer L. DowneySenior AdvisorParsons Brinckerhoff

Norman Y. MinetaVice ChairmanHill & Knowlton

Eugene K. PentimontiMaersk (retired)

David Z. PlavinPresidentdzp Consult Inc.

Jerry PremoExecutive Vice PresidentAECOM

BOARD OF ADVISORS

Thomas AlbrechtManaging DirectorBB&T Capital Markets

Rosemarie S. Andolino Commissioner Chicago Department of Aviation

Charles BanksPresidentRL Banks & Associates

Cynthia J. BurbankVice President and National Planning andEnvironment Practice LeaderParsons Brinckerhoff

Kevin CarneyManaging Partner Infrastructure Capital Advisors LLC

Julie A. CunninghamPresident and CEOConference Of Minority Transportation Officials

Elaine DezenskiSenior Director and Head of Risk InitiativesWorld Economic Forum

Tyler DuvallSenior AdvisorMcKinsey & Company

Aaron GellmanProfessor of Transportation and EngineeringKellogg School of ManagementNorthwestern University

John Gray Senior Vice President, Policy and EconomicsAssociation of American Railroads

Janet KavinokyDirector, Transportation InfrastructureChamber of Commerce

John G. LarkinManaging DirectorStifel, Nicolaus & Company

Craig LentzschConsultantNational Surface Transportation Infrastructure Financing Commission

John E. LewisManaging DirectorBank of America

Ken MeadSpecial Council, CorporateBaker Botts

Eric MensingVice PresidentAPL Maritime Ltd.

Ray MelleadyVice President, Corporate DevelopmentNeopart, LLC

Deborah MillerSecretaryKansas Department of Transportation

Petra TodorovichDirector, America 2050 Regional Plan Association

Phil WashingtonGeneral ManagerDenver’s Regional Transport District

BOARD OF REGENTS

Dr. Michael D. Meyer (Chairman)ProfessorSchool of Civil and Environmental EngineeringGeorgia Institute of Technology

Dr. Maria BoileAssistant ProfessorCivil and Environmental EngineeringRutgers University

Stephen LockwoodSenior Vice PresidentPB Consult

Dr. Peter HaasEducation DirectorMineta Transportation Institute

Jennifer Mitchell Manager, Transportation Project Development and Finance - EastParsons Brinckerhoff, Strategic Consulting

Joe TooleFederal Highway Administration (Retired)

Dr. Melissa S. TooleyDirector, University Transportation CenterTexas Transportation Institute

Michael TownesNational Transit Services LeaderWilbur Smith Associates

CTL ADVISORY BOARD

Michael BurnsGeneral ManagerSanta Clara Valley Transportation Authority

Nathaniel P. Ford, Sr.Principal The Ford Management Group

Stephen KingsberryExecutive DirectorDelaware Transit

William MillarPresidentAmerican Public Transportation Association

Jerry PremoExecutive Vice PresidentAECOM

Stephanie PinsonPresident & Chief Operating OfficerGilbert Tweed Associates, Inc.

Linda WatsonCEOCaptial Metro

Susan Borinsky (ex-officio member) Federal Transit Administration (retired)