In This Issue

	Governors call for New Bureaucracy to Boost Efficiency
	Rent A Toll and Thrifty Car Rental bring Electronic Tolls to Bay Area
	France Abandons Plans for Carbon Fuel Tax
	Gov. Schwarzenegger OKs Jobs, Gas Tax Bills
	Toll Road Builder files for Chapter 11
	Dallas Transit Officials Warn of Service Cuts, New Project in Trouble
	Gas Stations Sue to Overturn Tax

Governors call for New Bureaucracy to Boost Efficiency

WASHINGTON – Many states’ transportation systems do not meets citizen’s needs because they are out of date, stressed beyond capacity, financially unsustainable or inefficient. To work at solving these substantial problems, the National Governor’s Association Center for Best Practices (NGA Center) has selected five states – Colorado, Maryland, Tennessee, Washington and West Virginia – to develop and implement innovative solutions to serve as ideas and best practices for all states.

The selected states will work over a 10-month period to:

• Establish new governance models, such as a cabinet-level office or a new regulatory body, that will work to align infrastructure development and state goals;

• Create a new planning framework that addresses the state's unique needs and concerns for mobility, accessibility, emissions, financial stability, demographics, climate and topography;

• Adapt new funding and financing approaches, that better reflect user costs and benefits, manage demand and help pay for transportation system management and maintenance; and

• Develop enhanced goals and metrics that best reflect the state's transportation goals.

John Thomasian, director of the NGA Center state, "States that begin to adjust their approach to transportation and land use planning have the opportunity to increase mobility and transportation choices, enhance economic growth and competitiveness, lower emissions, improve quality of life and make smart investment decisions."

Rent A Toll and Thrifty Car Rental bring Electronic Tolls to Bay Area

Carrollton, Texas – Rent A Toll, a popular electronic toll collection company, is expanding service in the San Francisco and Oakland markets in conjunction with Dollar Thrifty Automotive Group .

Pass24 allows drivers to use the express toll lanes on the San Francisco Bay Area bridges and bypass the cash lanes. Car renters no longer need to carry exact change or wait in the cash lane to pay tolls. Drivers can enjoy unlimited toll access to all the bridges for one low daily or weekly rate, which varies by market. The San Francisco/Oakland price is $9.95 per day or $39.95 per week and includes unlimited use of all tolls.

Collection of tolls is tied to vehicle license plates, so no transponder is required. Video technology captures and processes toll payment as the car passes through the toll facility. Pass24 is available on the Antioch, Benicia Martinez, Carquinez Dumbarton, Golden Gate, Richmond-San Rafael, San Mateo-Hayward and San Francisco-Oakland Bay bridges.

Similar systems are available in other markets for rental car users. As someone who rents many cars each month I have found that this nice feature allows me the advantage of electronic tolling without being an actual resident. The more these systems become available to users and interchangeable in application the deeper market penetration will be. TW

France Abandons Plans for Carbon Fuel Tax

The Prime Minister of France has announced the country is abandoning plans to introduce a carbon fuel tax designed to fight global warming. Environmentalists around the world are expected to view the policy change as a major setback, as many hoped other major economies would follow France’s lead in taxing harmful emissions.

In his announcement to drop the tax plan, Prime Minister Francois Fillon said it only could have been implemented across Europe in order to “avoid harming the competitiveness of French companies.” He added that the country’s priority was to get its stagnate economy recovering from the international financial crisis.

The tax plan announced last year met strong opposition among politicians and in polls; two-thirds of French voters said they were opposed to the levy which they feared they could not afford. President Nicolas Sarkozy said at the time that the tax on the use of oil, gas and coal would make France one of the greenest countries in the world, and the equivalent of five-billion-dollars in annual revenue would be spent on green initiatives. The government was forced to revise its proposals in December after a high court ruled they contained too many exemptions and created inequalities and unfairly placed the burden of cuts on a minority of citizens.

Gov. Schwarzenegger OKs Jobs, Gas Tax Bills

SACRAMENTO – Gov. Arnold Schwarzenegger signed three bills Monday night, shortly after the Legislature approved them that afternoon, including a change in the gas tax the governor threatened to veto last week. Transit agencies are now scheduled to receive $450 million in 2010-2011, which is hundreds of millions more than under the existing fuel tax system.

The two bills will provide a one-time allocation of $400 million in fuel tax revenue to struggling transit operators in California within 90 days, and an additional $350 million for the fiscal year beginning July 1, 2011. Schwarzenegger said he approved the bill to alter the gas tax because lawmakers fixed what were called technical flaws in the measure, ensuring transit agencies and commuter rail did not face sharply increased diesel prices.

"This improves the stability of the funding picture for public transit," said John Goodwin, a spokesman for the Metropolitan Transportation Commission, a regional financing and planning agency. "But it does not solve the problems facing our transit operators."

Toll Road Builder files for Chapter 11

California – The builder of the 10-mile South Bay Expressway in San Diego has filed for bankruptcy because toll hikes failed to make up for daily traffic volumes at one-third of company official’s projections. The toll road was built in 2007 by California Transportation Ventures, which became South Bay Expressway Ltd., a subsidiary of Australian toll operator Macquarie Infrastructure Group. Macquarie is also known in the U.S. as a stakeholder in the Chicago Skyway, Indiana Toll Road and Dulles Greenway.

South Bay Expressway Ltd. has nearly 32 years left in its 35-year contract to operate the tollway, after which Caltrans is scheduled to begin operations in 2042. The company reportedly filed for Chapter 11 bankruptcy reorganization recently, with daily traffic averaging 22,600 vehicles per day in 2009, compared to 60,000 vehicles per day projected by company officials.

“Apart from the toll increases, traffic volumes on South Bay Expressway continue to be impacted by the weak regional housing market and a slowdown in economic activity which has also led to a decline in Mexican border crossings,” company officials stated in a 2009 financial report. The $635 million expressway was among the first toll roads in the nation to use federal tax funding under the Federal Highway Administration’s Transportation Infrastructure Finance and Innovation Act (TIFIA).

Dallas Transit Officials Warn of Service Cuts, New Project in Trouble

Texas - Lagging sales tax receipts have prompted Dallas Area Rapid Transit (DART) to announce that sharp reductions in bus and rail services are likely imminent, and plans for a second downtown Dallas rail line and the completion of the Orange Line to the airport may not be possible.

"Large capital projects that are not currently under construction simply do not fit within your revised financial plan unless you make significant cuts in service levels," said David Leininger, DART's chief financial officer. "Meaning, that one comes at the expense of the other. And it's important to note that even if we didn't do any capital expansion, then existing service levels will still have to be reduced."

Leininger said the board will have to cut nearly $3 billion from its financial plan that was previously projected to spend a total of $14.6 billion over the next 20 years. DART officials said current projects would not be affected, and no decisions will be made on what cuts will take place for at least two months.

We included this story today because this is the situation with many transit agencies across the country. Faced with sharp reductions in revenues due to the economy they are compelled to curtail their capital programs in deference to operating their basic systems. TW

Gas Stations Sue to Overturn Tax

OLYMPIA – Environmentalists’ campaign to more than double the state’s hazardous-substances tax has provoked a group of gas station owners to sue the state of Washington, saying the tax is unconstitutional. The tax on oil and other chemicals was approved in 1988 by voter initiative, primarily to fund cleanup of toxic-waste sites. Last year, lawmakers used $180 million from the tax revenue to balance the state budget. Environmentalists and the oil industry have engaged in a furious battle in Olympia over a proposal to raise the tax, which would generate about $100 million annually to help localities fund pay for cleanup and control of polluted stormwater.

The Automotive United Trades Organization (AUTO) and the owners of a Tukwila gas station filed the lawsuit this week in King County Superior Court, arguing that since the tax is technically a gas tax; the revenue can only be used for roads, according to the 18th Amendment to the state constitution. Environmentalists call the lawsuit an attempt to persuade lawmakers on the clean-water tax bill, which has not yet been brought to the floor for a vote.

Tim Hamilton, executive director of AUTO, said the tax places an unfair burden on the oil and gasoline industry. “They’ve categorized us like a sin tax,” he said. “I didn’t know that filling up your tank and going to work was a sin, but I guess it is.” Hamilton said his group plans to proceed with the lawsuit, regardless of the Legislature’s decision on the bill. The gas stations are represented by former State Supreme Court Justice Phil Talmadge.

The tax is currently 0.7 percent of the wholesale value of chemicals, fertilizers and other toxic compounds, with nearly 80 percent of the tax revenue coming from the oil industry, according to the state.

This is an interesting public policy discussion. Taxing fuel sales to pay for stormwater clean up raises the purists’ ire. Diverting it to other than transportation purposes is contrary to the position taken by the transportation industry for many years. That said, California has diverted funding from fuel sales for years. Purists, however, should show caution since most state DOTs are quick to take general fund money which has none of the normal constitutional protections that fuel taxes typically do in the states. TW