Surface Transportation News: Big news on environmental permitting

In this issue:

• Big news on environmental permitting
• Addressing transit productivity
• California High-Speed Rail: the saga continues
• Time to repeal the Jones Act
• For access to jobs, driving remains king
• Donald Shoup, RIP
• News Notes
• Quotable Quotes

Big News on Environmental Permitting

When I researched and wrote the Reason Foundation policy paper “Reforming Environmental Litigation” last year, I included a fairly long list of potential reforms. One of these was that a future president could rescind President Jimmy Carter’s Executive Order 11991 enabling the White House Council on Environmental Quality (CEQ) to issue regulations (as opposed to policy guidance to the White House). That was not among what I included among a set of pragmatic, near-term reforms that I thought might receive bipartisan support in Congress.

Consequently, I was pleasantly surprised that on his first day in office, President Donald Trump issued a new Executive Order 14154 rescinding E.O. 11991. The new executive order also instructed CEQ to rescind existing National Environmental Policy Act (NEPA) regulations and instead issue guidance that would significantly accelerate the permitting process. Trump’s action was preceded by an unexpected appeals court decision last November. In its Marin Audubon decision, the Court of Appeals for the DC Circuit ruled that CEQ has no authority to issue binding NEPA regulations. Shortly thereafter, the District Court for the District of North Dakota issued an order in Iowa v. CEQ vacating the Biden administration’s expansive Phase 2 revisions of CEQ NEPA regulations.

On Feb. 19, 2025, CEQ issued “Implementation of the National Environmental Policy Act” (Guidance). That is intended to be a framework for agencies to develop their own procedures for environmental review, focused on simplifying the NEPA process. This guidance gives agencies 12 months to develop their revised regulations and procedures.

That same day the Senate Environment & Public Works (EPW) Committee held a hearing on “Improving the Federal Environmental Permitting Processes.” Chair Shelly Moore Capito (R-WV) and Ranking Minority Member Sheldon Whitehouse (D-RI) said they “shared a common goal of demonstrating strong bipartisan interest in broad permitting reform.” 

The Eno Center for Transportation’s Rebecca Higgins reported that “witnesses uniformly agreed to the premise posed by Sen. Capito that there is a need for bipartisan legislation,” and that “members and witnesses shared a range of complaints on the permitting process, including not only transportation and renewable energy but also broadband, water lines, housing, wildfire mitigation, manufacturing, and other sectors.”

I was also pleased to know that “proposals for permitting reform suggested by witnesses centered mostly on constraining litigation through reducing the statute of limitations for judicial review of permit decisions.” Litigation was the main focus of last year’s Reason policy paper, but it has not been meaningfully addressed in previous legislation. Let’s hope Congress gets serious on litigation reform this year.

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Addressing the Transit Productivity Crisis
By Marc Scribner

Reason Foundation recently released my report aimed at “Addressing the Transit Productivity Crisis.” It is no secret that the COVID-19 pandemic upended the transportation sector, with public transit in particular getting hit hard by changes in travel behavior. One result has been a collapse in transit productivity, which has translated into spending more to provide less transportation.

As I detail in the report, while the pandemic exacerbated existing trends, the decline in transit productivity long predates COVID-19. Some of this decline was inevitable given the inherent limitations of transit relative to alternatives and the growing affluence that drove Americans to those alternatives. But the situation could be much better—if not for an outdated federal law that has frozen transit system labor relations in place since the 1960s.

Transit’s sharp productivity decline following the onset of the COVID-19 pandemic has understandably alarmed policymakers. But while conditions have substantially worsened in recent years, public transit productivity has trended downward since the end of World War II, largely due to increasing household incomes, growing private automobile ownership, and the dispersal of households and then workplaces into the suburbs. Between 1945 and 1960, transit systems lost 60% of their riders. From 1960 to 2019, nationwide transit ridership was basically flat while the U.S. population grew by 46%. By 2017, just 2.5% of U.S. personal trips were made by transit, compared to 82.6% by private automobile. Despite this sea change in consumer demand for transit, the level of transit service provided (measured in vehicle revenue miles) has more than doubled since 1960. As a result, inflation-adjusted operating costs per transit trip increased by more than five-fold during this period.

Following the onset of the COVID-19 pandemic, public transit ridership collapsed. As of 2023, nationwide ridership had only recovered to approximately 71% of 2019 levels. More recent estimates from Dec. 2024 show transit ridership at 77% of 2019 levels. Much of this ridership decline can be explained by changes in work travel. Many transit systems were designed to facilitate journeys to and from work in central business districts, and working from home remains two to five times its pre-pandemic share of “commuting”—and four to eight times the share of mass transit commuting—depending on how it is measured.

Depressed ridership led Congress to authorize unprecedented federal subsidies for transit agencies. Supplemental COVID-19 appropriations during FYs 2020 and 2021 provided $69.5 billion in emergency support for transit agencies, equivalent to nearly five years of pre-pandemic federal transit funding. The Infrastructure Investment and Jobs Act enacted in FY 2022 increased federal transit funding by 67% over the levels previously authorized by the Fixing America’s Surface Transportation (FAST) Act of 2015 in nominal dollars.

This large increase in federal funding allowed transit agencies to continue to provide service close to pre-pandemic levels, with transit service provided between 2019 and 2023 falling by only 10.3% (in vehicle revenue miles) despite ridership declines of 29.3%. These dynamics had predictable effects on transit labor productivity, with productivity declines almost entirely driven by decreased ridership.

Two strategies show the most promise for improving transit productivity. First, competitive contracting—whereby transit agencies select from competing private companies to operate transit systems—is commonly used abroad to provide large urban transit networks and is used today in the United States, primarily for commuter rail, paratransit, and demand-response service. Under this model, the transit agency would serve as the coordinating and oversight entity, developing performance requirements and ensuring private partners adhere to them. A 2017 study published in the Journal of Public Economics estimated that contracting out bus service in the United States could reduce operating costs by 30%.

The second strategy is vehicle automation. Around the world, urban rail transit is increasingly automated. A 2023 report from the C2SMARTER university transportation center compared fully automated rail transit lines abroad with U.S. rail lines. It found automation has the potential to reduce U.S. rail transit operating costs by up to 46%. In addition to rail transit automation, numerous companies are developing automated road vehicles. Glydways, a rubber-tire automated transit company that is developing two projects in California, claims it can reduce operating costs by approximately 80% compared to average costs faced by conventional transit systems.

Unfortunately, both competitive contracting and automation face substantial deployment barriers in the United States. Section 13(c) of the Urban Mass Transportation Act of 1964 established transit worker labor protections. This provision was included to ensure collective bargaining agreements continued to be honored during the period when transit systems and their workforces were transitioning from heavily unionized private ownership to—at the time—sparsely unionized government ownership.

Section 13(c) requires transit agencies that receive federal funding to certify employee “protective arrangements” with the Department of Labor. As a consequence, transit agencies are greatly constrained in enacting any operational change involving employees. Section 13(c) generally requires transit agencies to either incur substantial upfront costs to buy out affected employees or delay the realization of labor-saving benefits. Transit agencies largely dependent on annual government appropriations face a strong financial disincentive to adopt practices and technologies that would improve service and reduce growing operating subsidies.

Transit employee labor protections included as part of the Urban Mass Transportation Act of 1964 were designed to address the particular circumstances of the time, when just 2% of state and local government employees were authorized to collectively bargain. But this transition period has passed, and all affected employees have long since retired. Further, most states have authorized public-employee collective bargaining since the 1960s, with 63% of state and local employees being authorized to collectively bargain as of 2010.

Section 13(c) exists alongside federal, state, and local labor laws that apply to public-sector workers. Importantly, federal transit labor protections supplement rather than substitute for other general labor protections. As a result, Section 13(c) provides transit workers—and only transit workers—with special protections beyond those enjoyed by other government employees.

Following the 1994 Northridge earthquake in Los Angeles, the Clinton administration ran into trouble disbursing emergency grants to affected transit agencies. The culprit was Section 13(c) certifications at the Department of Labor, which were delaying relief funding. In a 2004 article, Martin Manley, an assistant secretary of labor in the Clinton administration, recounts how he proposed repealing Section 13(c). He suggested this idea first to Vice President Al Gore, who was leading his Reinventing Government efficiency initiative. Vice President Gore told Manley to “make sure Norm Mineta is on board,” referring to the powerful chairman of the House Transportation Committee. To Manley’s surprise, Chairman Mineta expressed support for repealing Section 13(c) and told Manley to communicate as much to the Department of Labor and the White House.

Unfortunately, despite the federal government principals being supportive of Section 13(c) repeal, Congress never acted. And it turned out this was the last serious effort to take on the special transit labor protections. There was lingering interest throughout the 1990s about the negative impact of Section 13(c), especially within the Senate Banking Committee, but it gradually faded from political discussions. Yet the harms of Section 13(c) persist.

The new Congress and administration have expressed support for eliminating wasteful federal programs. Section 13(c) is not only wasteful from a federal perspective, but its continued existence also acts as a barrier to transit agency self-help and condemns transit to its present status in the United States as a dysfunctional mode of last resort. Low-income Americans dependent on transit deserve better, and the surface transportation reauthorization due in 2026 is the perfect opportunity for Congress to prioritize the interests of transit riders over those of providers.

My full report, “Addressing the Transit Productivity Crisis,” is available on Reason Foundation’s website.

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California High-Speed Rail: The Saga Continues

The last two months brought new problems for the beleaguered California high-speed rail (HSR) program. To get voters to approve a $10 billion bond issue in 2008, the system was promoted as costing $45 billion and was supposed to launch high-speed service between Los Angeles and San Francisco by 2020. Today, the California high-speed rail system is estimated to require about $130 billion and is way behind schedule. Its starter segment, 171 miles between Bakersfield and Merced in the Central Valley, is now estimated to cost $33 billion (much of which has not been raised). And that starter line is unlikely to meet its latest targeted opening date of 2033.

Nevertheless, Gov. Gavin Newsom held a news conference in Kern County in January touting a proposed addition to the system—a 54-mile link between Palmdale and Victor Valley (where Brightline West is supposed to have a station stop as it builds high-speed rail between Las Vegas and Southern California). The High Desert Corridor Joint Powers Authority is promoting that project.

As to where California can get the missing $100 billion needed to complete the original LA-SF corridor promised to voters, Gov. Newsom’s new idea is public-private partnerships (P3s). The California High-Speed Rail Authority hosted an industry forum on HSR P3s Jan. 30-31, with about 400 attendees, according to Infralogic (Feb. 6). California High-Speed Rail Authority (CHSRA) CEO Ian Choudri told attendees that P3s, along with federal and state funding, have the potential to provide stable funding for the program. What Choudri appears to have in mind are real-estate developments on state-owned land adjacent to yet-to-be-built stations along the HSR’s route. It’s hard to see how such projects could provide a return on investment to the P3 investors and also help fund the high-speed rail system’s construction.

Meanwhile, bad news for the project continues. On Feb. 21, the California High-Speed Rail Authority Inspector General released a report on further delays for the Central Valley corridor. It turns out that 52 miles of that corridor have not yet begun construction, meaning the project will likely not meet its timeline of opening by 2033. CHSRA did not meet the deadline for having the final configuration footprint completed by the end of 2024. The main reason is that the agency still needs to reach agreements with 12 of the 38 local agencies and utilities on utility relocations.

Simultaneously, the rail authority received a letter from Kyle Fields, chief counsel of the Federal Railroad Administration (FRA) informing it that FRA is about to initiate a review of the CHSRA’s compliance with FRA-administered grants to the project. Per the letter, FRA completed its annual monitoring review in October. It identified six areas of interest and said that “FRA intends to seek additional information to evaluate CHSRA’s performance and ability to perform under FRA-administered funding agreements.” The letter also noted that “the compliance review and resulting findings may result in remedial action up to and including withholding of reimbursement and termination of cooperative agreements.” And finally it warned that “any work completed from the date of this notice forward is at the risk of CHSRA.”

This implicit threat to the project’s future aroused the U.S. High-Speed Rail Coalition, which announced that it is “going to war to protect the Calif. project.” Specifically, the coalition plans to lobby in favor of CHSRA continuing to receive 25% of the proceeds from California’s cap-and-trade system, which has been providing about $1 billion per year to CHSRA. Politico’s Feb. 25 article on the subject noted that HSRA has received about $7 billion in proceeds from the greenhouse gas permits since 2012. That’s more than the two FRA grants that totaled $4.1 billion for the Bakersfield to Merced segment.

It’s still unclear where the California High-Speed Rail Authority expects to get enough money to finish the one segment on which it has actually begun construction, let alone the remainder of the promised Los Angeles to San Francisco corridor.

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Time to Repeal the Jones Act

America’s shipbuilding has declined precipitously over the past hundred years, thanks to the enactment of the Merchant Marine Act of 1920 (the Jones Act). Intended to incentivize robust U.S. shipbuilding and commercial fleet, this law has done just the opposite. By requiring all ships built in the United States and operated between U.S. ports to be U.S.-built, operated by U.S. companies, and crewed by U.S. crews, it has led to an aging fleet (fewer than 100 now, compared with more than 250 in 1980).

Besides decimating U.S. shipping, the Jones Act has needlessly increased the cost of goods needed by residents of Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, and other overseas U.S. territories because of the Act’s requirement for all goods transported between U.S. ports to be Jones Act compliant. With only a handful of very costly ships available, residents there pay much higher prices for everything they “import” from the mainland. Beyond that, the Jones Act also penalizes residents of the New England states who cannot receive natural gas shipments from Texas or Louisiana because there are no Jones Act-compliant LNG tankers.

With previous attempts to repeal the Jones Act having failed in Congress, a new front was opened last month, when the Pacific Legal Foundation (PLF) filed a lawsuit in federal district court arguing that the Act violates a provision of the U.S. Constitution. Article 1, Section 9 forbids any federal law that gives preference to one port over another. PLF argues that from its outset the Jones Act has served a “discretionary” purpose. PLF attorney Joshua Thompson told Reason’s Eric Boehm that “The Port Preference Clause was designed to prevent this exact type of economic discrimination.” Sam Heavenrich, in a 2023 Wall Street Journal op-ed, wrote that “A case arguing that the Jones Act violates the Port Preference Clause would hew to Founding Era understandings of the Constitution—an important consideration for an increasingly originalist Supreme Court.”

As I’ve often pointed out, I have no legal training beyond one business law course decades ago. But I’m glad to see this constitutional point being raised. Perhaps the Supreme Court will do what Congress has been unable or unwilling to do.

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For Access to Jobs, Driving Remains King
By Baruch Feigenbaum

In Oct. 2024, the Access Observatory at the University of Minnesota released the 2022 version of the Access Across America report. The Observatory has been tracking accessibility using a longitudinal method for the last 15 years. While the number of jobs that can be reached in 30 and 60 minutes changed slightly compared with 2019 data, the takeaway remains the same: commuters choosing automobiles can reach far more jobs than those choosing transit, bicycling, or walking.

To better illustrate the differences, I chose to examine in more detail the largest metro area (New York City), a very large metro area (Atlanta), a large metro area (Milwaukee), and a medium-sized metro area (Salt Lake City). (The study uses the same Metropolitan Statistical Area (MSA) boundaries as the Census Bureau). These metro areas also represent different areas of the country with different average ages, and different majority/minority groups. I compared the 2022 data with 2019 data that my colleague Marc Scribner sorted for a different project.

The study looked at four modes: driving, transit, bicycling, and walking. For driving, the study also examined the percentage of trips impacted by congestion. For cycling, the study measures trips on low-stress and medium-stress roads. (Low-stress trips are more suitable for bicycling based on factors including traffic volume, prevailing speed, and curb lane width). Finally, walking data is limited to 2022.

Let’s start with the auto mode. Commuters in most MSAs can reach about 30% of jobs within 30 minutes and 80% of jobs within 60 minutes. Table 1 provides more details.

Table 1: Job Access by Automobile
	2019				2022
Region	Jobs Accessible With 30 Minutes	Jobs Accessible With 60 Minutes	Congestion Impact 30 Minute Trip	Congestion Impact 60 Minute Trip	Jobs Accessible With 30 Minutes	Jobs Accessible With 60 Minutes	Congestion Impact 30 Minute Trip	Congestion Impact 60 Minute Trip
Atlanta	18%	70%	57%	27%	26%	86%	46%	16%
Milwaukee	63%	129%	13%	11%	90%	182%	7%	10%
New York City	13%	56%	64%	36%	16%	67%	61%	28%
Salt Lake City	96%	156%	12%	1%	129%	192%	9%	>1%

 
Comparing 30-minute-trips and 60-minute trips, more jobs are accessible in every MSA. Between 2019 and 2022, the percentage of jobs accessible increased in all MSAs. Decreasing congestion, likely due to working from home, was a major factor. All MSAs saw statistically significant decreases in congestion, led by Atlanta, where congestion as a significant factor in trips declined from 27% to 16%.

Table 2 shows that accessibility by transit is much lower.

Table 2: Job Access by Transit
	2019		2022
Region	Jobs Accessible With 30 Minutes	Jobs Accessible With 60 Minutes	Jobs Accessible With 30 Minutes	Jobs Accessible With 60 Minutes
Atlanta	>1%	3%	>1%	2%
Milwaukee	2%	16%	3%	19%
New York City	2%	14%	2%	13%
Salt Lake City	2%	21%	2%	21%

For trips under 30 minutes, transit’s share of access was 2% or less in all MSAs in both years. For trips up to 60 minutes, the highest number was 21% in Salt Lake City due to a single entity (the State of Utah) providing well-designed service. In 2022, in the transit capital of the U.S., New York City, only 13% of people could reach jobs via transit in less than 60 minutes. Five times as many New Yorkers, 10 times as many Milwaukee residents, 12 times as many Salt Lake residents, and 43 times as many Atlantans, could reach their jobs by autos compared with transit.

And the numbers aren’t much better for the active transportation modes.

Table 3: Job Access by Bicycling
	2019				2022
Region	Jobs Accessible With 30 Minutes (Low Stress)	Jobs Accessible With 60 Minutes (Low Stress)	Jobs Accessible With 30 Minutes (Medium Stress)	Jobs Accessible With 60 Minutes (Medium Stress)	Jobs Accessible With 30 Minutes (Low Stress)	Jobs Accessible With 60 Minutes (Low Stress)	Jobs Accessible With 30 Minutes (Medium) Stress)	Jobs Accessible With 60 Minutes (Medium Stress)
Atlanta	<1%	<1%	<1%	2%	<1%	2%	<1%	3%
Milwaukee	<1%	<1%	3%	10%	4%	14%	5%	14%
New York City	2%	4%	3%	9%	2%	7%	2%	7%
Salt Lake City	2%	4%	6%	18%	4%	16%	6%	24%

For trips less than 30 minutes, bicycling’s share of access was 6% or less for all MSAs. Atlanta had fewer than 1% of commuters who could reach jobs on either the low or medium-stress roadways. In 60 minutes, the numbers increased to 3%, 7%, 14%, and 24% in Atlanta, New York, Milwaukee, and Salt Lake, respectively. Also, noteworthy is that bicycle accessibility increased in three of the four metro areas between 2019 and 2022. But comparing 60-minute auto and bike accessibility, auto was still 8 times better in Salt Lake, 10 times better in New York, 13 times better in Milwaukee, and 29 times better in Atlanta.

Table 4 shows that walking performs the worst.

Table 4: Job Access by Walking
	2022
Region	Jobs Accessible With 30 Minutes	Jobs Accessible With 60 Minutes
Atlanta	<1%	<1%
Milwaukee	<1%	2%
New York City	<1%	1%
Salt Lake City	<1%	3%

Walking’s share of accessibility was less than 1% in all regions and only 3% at best for any region in 30 and 60 minutes respectively. Walking is the slowest mode, so it’s not surprising that it lags. But comparing 60-minute auto and walking accessibility, auto was 64 times better in Salt Lake City, 67 times better in New York, 86 times better in Atlanta, and 91 times better in Milwaukee. In other words, in all metro areas, walking is not competitive in most situations.

The study does have some limitations. It measures jobs in percentages, not absolute numbers. Even though a higher percentage of jobs are reachable in Salt Lake, New York City has a much higher absolute number. When it comes to matching employers and employees, New York or even Atlanta have significant advantages. For 60-minute trips, it is easier to drive or take transit than it is to bicycle or walk. Few Americans are going to bicycle for two hours, five days a week, and fewer will walk. And that’s not taking into account extreme heat, cold, rain, or snow.

Driving is significantly better than any other mode in both time buckets that I examined. While each mode is competitive for some types of trips, driving is the best mode for all of them. Many detractors of the status quo will point out that changing land uses and development patterns could make other modes more competitive with driving. While this is certainly true, one type of development pattern change, mixed-use communities, tend to be more expensive, limiting options to wealthier residents. More importantly, we’re not going to tear up existing developments to change travel patterns. The 2022 data reaffirm that for the development patterns that we have, driving will remain king. 

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Donald Shoup, R.I.P

It’s not often that an academic, especially one whose specialty is a mundane topic like parking, gets major obituaries in both The Economist and The Wall Street Journal. But Donald Shoup became known for his encyclopedic knowledge of how and where cars should be parked, and an array of related topics.

I got to know Don during the 17 years my wife and I lived in Los Angeles, Lou in the Chancellor’s Office at UCLA and me at Reason Foundation in West Los Angeles. Lou remembers Don as one of several outstanding UCLA scholars, including for his commitment to his students and his financial honesty in managing grants. I got to know him at the annual UCLA transportation conferences at Lake Arrowhead—and at least once, giving him a ride home from a conference in Orange County or San Diego because Don didn’t drive. He rode his bicycle from his Westwood home to the UCLA campus.

Don did pioneering work on all aspects of urban parking, including variably priced parking meters  (which appealed to me), building-code parking space minimums (in my view over-done, but not wrong in principle), and parking benefit districts. His ideas reformed parking in Old Town Pasadena, where Lou and I loved to spend evenings, going to a restaurant and then perusing galleries and bookstores. We never had trouble finding a parking space in the new parking structure behind the commercial real estate along Colorado Blvd.

When Don’s magnum opus (The High Cost of Free Parking) came out in 2005, I eagerly bought a copy and would have had him autograph it, but we’d moved to Florida in 2003, and I seldom flew back for the annual Lake Arrowhead conference.

One thing I learned from The Economist’s piece was that Don was a fan of Henry George’s single tax (on land, not buildings), which I would love to see implemented somewhere to see how it would actually work.

Thanks for all you taught us, Don. R.I.P.

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News Notes

Georgia DOT Finalists for I-285 East P3
Late last month the Georgia Department of Transportation announced that four teams have been selected as finalists for the $3.2 billion first phase of the I-285 Eastside Express Lanes project. The RFP will be released in March, with proposals due in the second quarter of 2026, and the preferred bidder announced in the third quarter. The project will add express toll lanes to the northeastern portion of the I-285 ring road around Atlanta. The four teams are led by (1) ACS Infrastructure/Meridiam/Acciona, (2) Plenary/Sacyr/Shikun & Binui, (3) Vinci Highways International, and (4) Cintra/Transurban/Tikehau Star Infra. The project, like the ongoing SR 400 project, will be a revenue-risk design-build-finance-operate-maintain P3.

North Carolina DOT Planning I-77 South Express Lanes P3
After the Charlotte Regional Transportation Planning Organization agreed with NCDOT that a P3 was the best way forward for this $3.2 billion project, the department of transportation (DOT) has begun work to define how this will be carried out via a working group with CRTPO. They plan to have defined the terms of a Request for Qualifications by June, with the release of it tentatively in August. Because most of the corridor between downtown and the South Carolina border will have to be elevated, this will be the most costly transportation project in North Carolina’s history.

Some Progress on Truck Bottlenecks
The trucking industry think tank, ATRI, has released its annual report on this country’s 100 top truck bottlenecks. Most occur at major intersections where capacity is overwhelmed at busier times of day. In this year’s study, one of the long-term top 10 bottlenecks has been removed from the top 10: the interchange where I-290 and I-90/I-94 intersect in the Chicago area has been rebuilt and is now only #14 after years as #1. The current top 10 includes perennial “winner” I-95 at SR 4 in Fort Lee, NJ, with #2 this year being I-294 at I-290/I-88 in the southern portion of Illinois’ Tri-State Toll Road. Perennial bottlenecks 3, 4, and 5 are old friends in Houston, Atlanta, and Nashville.

Major Italian Toll Road Concession Up for Bids
The A22 Brennero-Modena motorway P3 concession is nearing its end, so the incumbent and others are preparing to bid later this year for the new concession to begin next January. The new concession will be for 50 years and the existing company (Autobrennero) will have a right to match offers from other bidders. Autobrennero is proposing to add a third lane each way along the 314 km motorway, bringing planned investment under a new concession to €9.2 billion.

Congressional Budget Office on Highway Trust Fund Deficit
In a report released in January, the CBO calculated that under current highway user tax rates and spending policies, a five-year renewal of the Highway Trust Fund would require at least $150 billion in new general-fund bailouts. That sum would add to federal government budget deficits and would increase the national debt by that amount. In order not to make those problems worse, Congress would need some combination of user-tax increases and reduced surface transportation spending. The problem will get worse each year, due to continued replacement of older vehicles by those with higher mpg or some form of electric propulsion. Congress needs to bite the bullet on this as it crafts the 2026 reauthorization bill.

Florida I-4 Express Lanes Switch to Variable Rates
Unlike nearly all express toll lanes across the country, the relatively new ones on I-4 in and near Orlando have charged flat rates since they opened in 2022. On Feb. 24, dynamic pricing was introduced on these lanes. Toll rates will now vary in real time, based on traffic levels in the lanes. FDOT’s decision was based on reviewing the performance of variably priced express lanes in metro areas including Miami and the Virginia suburbs of Washington, D.C.

Nikola Bankruptcy Raises Questions About Hydrogen Trucks
On Feb. 19, Nikola Corporation filed for Chapter 11 bankruptcy protection, planning to auction off its meager assets. Nikola went public in 2020 with a market valuation of $30 billion. Upon filing, it had only $47 million in cash on hand and has proposed to auction off its remaining assets. Another hydrogen truck company, Hyzon, in December warned of mass layoffs, according to an article in the Wall Street Journal headlined “Hydrogen-Powered Big Rigs Face Reckoning After Nikola Bankruptcy.” Reporter Paul Berger noted that only Hyundai retains any sizeable profile in producing hydrogen fuel cell big rigs.

India Plans to “Monetize” 24 Highway Assets
Infralogic (Feb. 25) reported that India’s National Highway Authority plans to monetize 1,4721 km of highways, with annual revenues of $213.6 million in 2023-24. These motorways will be monetized by highway companies under the established Toll-Operate-Transfer policy. Would-be operators would pay an up-front concession fee and propose a toll rate schedule over the life of the concession period. The Highway Authority would use the proceeds to upgrade other categories of roads.

Inglewood’s $2.2 Billion Transit Connector Cancelled
A planned 1.6-mile transit connector project in Inglewood, CA was recently canceled after several former supporters turned against it. The concept was to connect an existing light rail line to the new SoFi Stadium, the Intuit Dome, and an existing venue called The Forum. The project had federal and state grant commitments for $1.4 billion plus funds from two Los Angeles transportation sales taxes ($108 million from Measure M and $250 million from Measure R), but that still didn’t cover the projected $2.2 billion cost. According to Public Works Financing (Jan. 2025), a key factor in the cancellation was a former booster, Rep. Maxine Waters (D-CA) turning against the project as simply too costly.

Dulles Greenway Sues Virginia
Infralogic reported (Feb. 24) that Toll Road Investors Partnership II (TRIP II) has filed suit objecting to the state having taken some of its property for public use, without compensation. This suit is separate from a previous appeal by TRIP II of the State Corporation Commission’s 2024 toll rate decision. The Dulles Greenway was approved prior to the enactment of Virginia’s P3 legislation, so it was set up as a new category of public utility. That means its toll rates are regulated by the Corporation Commission just like it regulates electric utilities. Trip II is owned by P3 company Atlas Arteria.

A $10 Billion Bus Terminal
The long-planned replacement of the Port Authority Bus Terminal in Manhattan recently won a federal TIFIA loan of $1.89 billion toward its $10 billion cost. The 1950 terminal is aging and under-capacity for a large number of buses, primarily bringing New Jersey commuters into Manhattan via the adjacent Lincoln Tunnel. The first phase of construction is due to start this year, with a completion date of 2029. The main terminal schedule calls for completion by 2032.

Rivian Starts Producing Its Commercial Van
Electric vehicle company Rivian, having delivered some 20,000 electric delivery trucks to Amazon, announced the launch of its Rivian Commercial Van in partnership with J.B. Poindexter and Co., a work truck and van body producer. The new Commercial Van is built on the same platform as the vans produced for Amazon.

Good Reading on Intercity Bus Service
Greg Cohen recently authored a commentary on the role of intercity bus service as a cost-effective alternative and supplement to Amtrak and other rail transportation services. The piece points out that intercity bus service for some routes is eligible for very small federal subsidies, compared with Amtrak and other rail services. The report was released by the Eno Center for Transportation last month.

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Quotable Quotes

“The Bipartisan Infrastructure Law did little to address the root causes of the United States’ long-standing infrastructure unaffordability problem—excessive environmental reviews, labyrinthine permitting processes, and laws requiring that workers are paid prevailing wages—and in some respects worsened the crisis by adding new requirements. The permitting reform that was supposed to pass in parallel with the climate bill never became law. . . . Spending such a huge amount all at once without any steps to increase construction capacity led to even higher cost increases for building materials than was reflected in the overall inflation rate.”
Jason Furman, “The Post-Neoliberalism Delusion and the Tragedy of Bidenomics,” Foreign Affairs, March/April 2025

“None of these projects [Erie Canal, Transcontinental Railroad, Interstate Highways] could be built today. Would environmentalists, if given a time machine, insist on canceling them? Some could certainly have been done better—for example avoiding Interstate highways through the heart of cities. But even knowing these harms, would it have been smart to delay the Interstate Highway System for a few decades while the impacts of the first 20,000 miles were studied? America’s economy today consists of millions of moving parts that come together on the spine of our nation’s infrastructure. Most of that infrastructure was built by our ancestors without the wisdom imparted by environmental review. Roads, rail, ports, power, electric lines, water, waste disposal, and other shared resources allow markets to hum, entrepreneurs to innovate, defense to mobilize, and citizens to be safe and comfortable. Those demanding a ‘hard look’ at details of projects are doing so from the comfort of a society that never could exist on the terms they demand.”
—Philip K. Howard, “Escape from Quicksand: A New Framework for Modernizing America,” The Manhattan Institute, Feb. 2025

“Even the Biden Energy Department, in a 2023 report, estimates that power from new onshore wind farms costs more than from gas-fired plants on a per-megawatt basis if you exclude subsidies. On the other hand, offshore wind costs two to three times more than gas power even with subsidies. These estimates notably don’t account for the cost of backing up wind generation. Power from so-called peaker plants and batteries costs three to four times more than from baseload generators. It’s far cheaper to run gas, coal, and nuclear plants around the clock than to use wind (and solar) some of the time and have to back them up with other forms of energy.”
—Editorial, “Trump Speaks Truth to Wind Power,” The Wall Street Journal, Jan. 13, 2025

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