Georgia’s Infrastructure Bank: Time for a New Deposit

As reported on Southeast Green, the Georgia Infrastructure Bank awarded $8 million in funding for 12 infrastructure projects around the region. The press release from SRTA (which administers the Georgia Infrastructure Bank) is here.

State infrastructure banks are revolving funds that allow states to offer loans and credit enhancements to public and/or private sponsors of transportation projects. After being initially capitalized by the General Assembly, the GIB lends that money out to various projects.  As the money is repaid it becomes available for the next round of investment.  Thus, a one time contribution to capitalizes the bank can fund projects on a recurring basis.  

The state infrastructure bank program was created under the 1995 National Highway System Designation Act as a pilot program in ten states, but was subsequently expanded by TEA-21 and later SAFETEA-LU.  There is now a state infrastructure bank program in every state.  (State infrastructure banks are an example of the policy changes made in the transportation reauthorization bills… more on that to come.)  State infrastructure banks have been widely used in some states, like South Carolina, but the program is still in its infancy in Georgia.

SRTA’s list includes a number of good projects including bridge improvements in downtown and Midtown, and a multi-use trail along Georgia 400.  Mass transit is listed as an “eligible project” under the Georgia Transportation Infrastructure Bank Act  and the law sets up two distinct pots of money for non-road projects.  So why aren’t there any transit projects on SRTA’s list? 

Because the only “account” in Georgia’s infrastructure bank has only been capitalized to date is the pot of money for state funded roadway projects.  And this account was funded with state motor fuel tax dollars.   Therefore, SRTA will currently only fund projects “that satisfy the requirements of being ‘motor-fuel tax eligible’ as set forth in O.C.G.A. §32-1-1 et seq. ”  Until Georgia puts money in the non-roadway accounts, SRTA can’t make loans for transit or other non-roadway projects. 

It is time for the General Assembly to utilize the Georgia Infrastructure Bank as an innovative tool for funding transit projects.  Other states around the country, including North Carolina, have been using their state infrastructure banks to fund transit projects for years.  A one time contribution of eligible funds to capitalize the non-roadway accounts in the Georgia Infrastructure Bank would create an on-going source of funding for transit across the state.   

Yet another way Georgia needs to catch up on transit and transit funding.

 

What Would You Pay for Intercity Rail?

As widely reported, GDOT released the results of a Feasibilty Study of intercity rail lines from Atlanta to Birmingham, Jacksonville, FL, and Louisville, KY.  (Briefing for the State Transportation Board is here).  Based on ridership, revenue, and cost figures the study concluded that the three lines examined  were all feasible.  (A similar line to Charlotte was examined and also found feasible in a prior study).

GDOT’s Feasibility Study essentially examined whether the lines would operate in the black, which required the agency to estimate the fares to these destinations.  As shown below, GDOT’s fare estimates suggest that the cost of traveling by intercity rail would be competitive with other options.

Roundtrip from Atlanta to… By Train By Car By Plane
Macon   — 94 268
Savannah  — 274 273
Jacksonville 239-304 349 154
Birmingham 109-131 160 448
Nashville  — 275 399
Louisville 281-353 463 343

If you read the AJC’s blog this discussion may seem familiar. Kyle Wingfield undertook the same kind of analysis but reached a less sanguine opinion regarding rail’s competitiveness. Why are his numbers different?

  • GDOT’s fare estimates were given in a range.  Wingfield used the middle of this range for his rail fares.
  • His air fares were based on the “the lowest nonstop, round-trip airfares I could find for each city pairing, for a long weekend two months from now.”  The numbers here reflect a Monday to Wednesday trip with four weeks’ advance notice.   Due to the vagaries of air fare pricing (the amount of advance notice, the availability of sales, the days of the week), all of the air fares differed from Wingfield’s by more than $100.  Some were lower and some were higher, but the consistently large differences reflect the wild variability in the price of flying. 
  • His driving costs are based on $4 gas, a 25 mpg vehicle, and do not include any of the other costs of operating a car (insurance, maintenance, depreciation, etc) .   The IRS set 55 ¢ per mile as the cost of operating a vehicle so that price was used here.  By only considering the cost of gas, Wingfield’s driving costs were 1/3 of the driving cost as estimated by the IRS.  As gas prices have hovered in the neighborhood of $4 for the past several years and the rail fare estimates are for the 2020-2040 time frame, the assumption that gasoline prices will remain effectively unchanged for the next three decades seems unrealistic.

Wingfield’s analysis and the chart above agree in that GDOT’s estimated fares would be cheaper than air travel for some markets but not others.  Where costs are competitive, travel decisions may turn on considerations like personal preferences, scheduling, luggage, the purpose of the trip, and the comfort of the experience. 

These tables also demonstrates how the two modes are complimentary.  The train to Jacksonville would stop in Macon, Savannah, and Brunswick, perhaps even Griffin and Dublin.  To the extent it exists, air service to these destinations is pricey and infrequent.  But rail would not only serve these destinations, but would do so faster and cheaper than driving.  For long trips between major markets, like Atlanta to Chicago, air travel would be faster and likely cheaper.  For major regional markets, like Atlanta to Nashville, the two modes would be comparable options.  And for smaller markets, like Atlanta to Brunswick, rail would fill an important void.

Rail will not be the cheapest way to travel in all circumstances.   But GDOT’s Feasibility Study underscores that rail travel in the Southeast is not only a viable option, but an important and necessary addition to the transportation mix.

 

 

 

ABC on the TIA

The TIA project list includes 7 bicycle/pedestrian projects and would be in the low single digits as a percentage of the total money spent.    So why has the Atlanta Bicycle Coalition come out in support of the July 31 TIA referendum?   In their own words:

  • 52% of the regional project list is transit. Transit makes biking to get places much, much more feasible in our sprawled region, and we wholeheartedly support the (overdue) investments in transit expansion;
  • 45-60% of the roadway projects will be Complete Streets – projects that provide additional access for modes beyond just the car, and facilitate safer biking and walking;
  • In Metro Atlanta, local governments keep 15% of the funds to spend on local projects. In the city of Atlanta, our primary coverage area, that list is shaping up nicely. The draft list for the city of Atlanta would add 29 miles of city streets with bicycle facilities, more than doubling our city’s current mileage.

We call that good news.

 The 45-60% Complete Streets statistic is particularly interesting.  As discussed here before, assigning TIA road projects to a single category (maintenance, expansion, or operational improvement, etc…) can be problematic because the same project may serve a variety of different purposes.  The fact half of the road projects would also include Complete Street retrofits only complicates things further.

 Turning to the 15% set aside, ABC has an interactive map showing the City of Atlanta’s 15% projects.  (Click here).  The City’s transportation officials stated in the AJC that the 15% would fund at least one project within a half mile of 93% of Atlantans.  So if you live or work in the City limits, check out the map to see what is planned for near you.

 

 

Infrastructure Investment Infographic

As the transportation funding debate drags on in Congress, the Council on Foreign Relations released a report on the state of federal transportation infrastructure called “Road to Nowhere.”  Their infographic succinctly summarizes the findings.   

According to the Report, the United State’s infrastructure has been exceeded by that of world powers like Barbados, Oman, and Malaysia.   Under investment in transportation isn’t just an Atlanta problem, it is a national problem.

 

Death of the Exurbs Part 3

 Maria Saporta at the Saporta Report covered a recent presentation by Chris Nelson, director of the Metropolitan Research Center at the University of Utah, at the Atlanta Regional Housing Forum.  Saporta reports:

From 2007 to 2011, the average value of homes inside the perimeter declined by about 30 percent — and the intown markets are already recovering. There has been a 40 percent decline of housing values in the inner tier outside the perimeter, and they are experiencing a slow recovery.

But in the outer tier outside the perimeter — mainly in the exurban counties — housing values have dropped by 50 percent. “Homes in the outer tier counties probably will never come back in terms of value,” Nelson said.

 The Atlantic Cities blogs on a housing market report released by the Demand Institute called “The Shifting Nature of US Housing Demand.”  Analyzing the status and prospects for the housing market, the study finds that:

[T]the strongest segment of the market comprises populous urban or semi-urban communities well served by local amenities….  the weakest segment of the market, by contrast, are in outer and smaller suburbs or outlying areas that “are sparsely populated, and have low walkability.” 

USA Today has also writes  on the changing location and form of development, and likewise concludes that exurban development is in decline.  Among various opinions and anecdotes the article quotes Gregory Vilkin, a former executive with Forest City Enterprises:

I reject the premise that (the shift away from exurban development) is just because of the recession. It’s no longer the American dream to own a plot of land with a house on it and two cars in the driveway.

As developer of Atlanta’s MMPT, Forest City isn’t just saying that exurban development is in decline.; it is their investment strategy.

Maria Saporta puts it best:

The bottom line — metro Atlanta’s housing market has forever changed.  If we’re smart, we will be forward-looking about how we develop in the future. 

Transportation Sales Tax Polling

Recent polling shows that 60% of voters support a sales tax referendum to fund light rail, commuter rail, and increase bus service in the region.  An even greater percentage want to see the ½ cent sales tax put on the ballot this November.  Wait….  the November ballot? A half cent sales tax?  

Apparently Atlanta is not the only Southeastern metro area considering a local sales tax to fund transit.  Three counties in the Research Triangle of North Carolina are considering a ½ cent sales tax to support a slate of transit projects.  The Research Triangle proposal is moving forward under the same law that Charlotte used to fund its enormously successful light rail line. (Charlotte’s most recent vote on their transit sales tax saw residents reject an attempt to repeal the tax by a two to one margin.)

Polling by the advocacy group Wake Up Wake County shows strong support both for transit in Wake County, NC and for a sales tax as the mechanism to fund it.  Complete poll results, questions, and cross tabs are here.

There are obvious parallels between the sales tax proposals in Atlanta and North Carolina.  The Research Triangle proposal would levy a ½ cent sales tax for transit; half of Atlanta’s one cent proposal would be used for transit projects.  Both packages would fund a mix of new projects and existing service.  Perhaps the biggest difference is that metro Atlantans  can vote for this transit investment on July 31st, whereas Wake County residents are still hoping for that opportunity.

Game Changer or More of the Same? A TIA Infographic

Citizens for Progressive Transit released this infographic showing how the mix of projects in the TIA compares to the balance of road to rail in the existing system.  Click on the image for a full sized PDF.