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1ESG

The document outlines the principles of sustainability in urban transportation planning, emphasizing the need for environmental, economic, and equity benefits. It discusses the roles of government, taxation, and institutional problems in managing transportation infrastructure and services. Additionally, it highlights the historical context and evolution of transportation policies and funding mechanisms in the United States.

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9 views38 pages

1ESG

The document outlines the principles of sustainability in urban transportation planning, emphasizing the need for environmental, economic, and equity benefits. It discusses the roles of government, taxation, and institutional problems in managing transportation infrastructure and services. Additionally, it highlights the historical context and evolution of transportation policies and funding mechanisms in the United States.

Uploaded by

tecnoprev2
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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You are on page 1/ 38

Spending Other People’s

Money: What are the Rules…


(it depends)
Urban Transportation Planning
MIT Course 1.252j/11.540j
Fall 2016

Frederick Salvucci, MIT Senior Lecturer


What is sustainability?
• Brundtland Commission (1983) sustainability triangle
• Achieve Environmental, Economic, and Equity benefits
simultaneously
• Both ethical and pragmatic
Environment

Equity
Economic
2
• Prevent pain, future gain
associated with investment
– Machiavelli
"And it ought to be remembered that there is nothing more difficult
to take in hand, more perilous to conduct, or more uncertain in its
success, than to take the lead in the introduction of a new order of
things. Because the innovator has for enemies all those who have
done well under the old conditions, and lukewarm defenders in
those who may do well under the new.” (The Prince)

– Obama and surrogate customers

"Portrait of Niccolo Machiavelli" by Santi di Tito. Photograph by Pete Souza. CC BY.


3
This image is in the public domain.
Economics
• What?
• How?
• For Whom?
Capitalism allows complex system of
production and consumption
• Accommodates different individual taste with at least
some choice
• Decentralized decision making allows multiple
experiments with differentiated products, production
methods, and quality mixes
• Applies discipline regarding quality and cost through
destructive competition
• Accommodates investment, technology, and change
over time
The theory that Capitalism leads to
Reasonable Outcomes Assumes
• Selfish behavior
• Rule of law, reliable enforcement
• Distribution of wealth and income acceptable
• Reasonably full employment
• Reasonable freedom of speech; press
• Reasonable international context
• No Monopoly or monopoly competitive producer
What does market NOT deal with?
• Public goods (difficult to exclude free riders)
• External costs and benefits
• Adequate Infrastructure
– Water, sewer, transportation
• Equity
• Structural unemployment
• Large economies of scale, monopoly power
Roles of Government
• Tax and spend
• Regulate
• Redistribute wealth and income
• Provide universal opportunity
• Protect the environment
• Provide for equity (minimum wage, access for elderly and disabled)
• Provide for infrastructure and services
• Produce some infrastructure and services
• Deficit spending (stimulus)
Taxes
• 51/49 vs. Civic enterprise • Political will
government
• Louisiana Purchase
• .95 < .5
• Seward’s Icebox
• Aesop’s fable of the body
• Vision vs. White Elephant
• Joseph and the
Pharaoh's Dream • Dedicated fund

• US Revolution/Shay’s • User Fee


Rebellion; Whiskey • Referendum
Rebellion
• Externality vs. distrust
Taxes continued
• Progressive tax
– Progressive
– Regressive
– Proportional
– Sales tax
– Loaf of bread
• Business improvement district
• Museums
• Fare recovery ratio
• Galbraith; the affluent society
Institutional Problems
• Blunt periodic destructive competition (elections)
• Balance of executive, legislative, and judicial power
• Lobby groups
• Polls
• Information; press
• Is Government the consumer or provider?
– Who are the real customers; surrogate customers?

11
Institutional Problems
• Annual appropriation vs. multi-year
• Optimistic bias; pessimistic bias
• Tax rate vs Tax yield
• Tax cuts and the Byzantine Empire
• Willie Sutton principle
• Tax exemptions, Tax expenditures

12
Transportation
• Infrastructure investment, operation, and maintence
• Regulation
– Safety
– Worker welfare
– Environment
– Prices

13
Transportation
• Gasoline tax: national vs. state
• VMT tax
• ‘Mitigation” as a source of funding
• CO2 Tax
• Petroleum windfall profits tax
• Who really pays?
• Yield vs. Policy Incentive

14
Institutional Structure
• National (federal)
• Regional (state)
• Local (city, town, county)
Annual Appropriation
• Administration and finance; OMB / Ways and Means
• Same as last year plus inflation
Capital Investment
• Bond authorization; legislative and referendum
• Theory
• Practical politics
Need for Competency
• Agency structure
• Legislative committee
Changing Need for Resources
• Increase revenue within budget vs. increase tax
• Introduce technology; reduce cost; reduce labor
• Contract out; lower labor cost
• No destructive competition; low innovation; low
investment
• Constituency building process – costs are benefits;
surrogate customers = producers
Program Development
• Political will
– Short term benefits
– Long term benefits
– Discount rate
• New has few supporters
• Requires different look at silos
• Generate new structure
Program Implementation
• Maintain political will
• Use mix of technical and distributive criteria
Silos
• Highway categories
• Highway vs. transit (public $)
• Capital vs. operating
• Private payments - good and bad
• Highway transit – apples/oranges
• Public / private (auto cost)
• Highway transit
• Airports
• Rail inter-city passenger; freight
• Bus inter-city
Rules within silos; Rules across silos
Financial Evaluation
• Ways and means
• Bonding
• Federal grants
• Loans
• User finance
• Land use contributions
• EIR and infrastructure adequacy
Federal Role
• Philosophical, trade, etc.
• Job policy, constituencies
• Peanut butter (Nutella, Marmite, Dulce de leche)
• Peanut butter avoidance
• Categories
• Flexibility
Project Purposes and Origins
• Capacity for service quality
• Capacity for quantity, growth
• Access to intermodal facilities, ports
• Access to land use
• Investments to reduce operations costs
• Patronage (municipal, other)
Operations & Maintenance
vs. Capital
• Reasons to fund capital differently
• Distortions from funding capital differently
Use of Models; evaluation
• CTPS
• Conservation Law Foundation
Programming
• Bridges across the Nile
• Interstate highway system
• MPO and flexibility
– long-range plan
– transportation improvement plan
– annual element
• Fiscal constraint
– over-programming
– Batching
– Instructions
• NEPA and lead time
Project Purposes and Origins
Local match: who decides?
• metropolitan planning organization: who really decides?
• surrogate customers
• Municipalities
• land owners, developers, builders
• Jack Sprat & wife
• CTPS: model doesn’t matter
• CLF: model does matter
• Referendum
Timeline and Degradation of the
Environmental Process into a Way of
Delaying Environmentally Beneficial Projects
a) Boston Transportation Planning Review: $1.5 Million, 18
months
b) Red Line extension: 6 years to begin construction
c) Big Dig: 20 years to begin construction

31
Design-Bid-Build vs. Design-Build
• Manage inputs vs. Manage outputs
• Agency Power, Engineering Firm, Optimism bias,
Pipeline
• Discount rate
• Baumol
• Tip of the Iceberg

32
“Cities and CO2: Two Views of Greenhouse Gas Emissions” has been
removed due to copyright restrictions.
Courtesy of Mikel Murga. Used with permission.
Courtesy of Mikel Murga. Used with permission.
Remember, from perspective of 1875,
both transit and autos are “new”.
1900 • Transit as a regulated utility
1916 • Federal highway funding
1920’s • Gasoline taxes dedication
• Turnpikes
1956 • Interstate highway process
– not local streets
– not maintenance
– not transit
36
Remember … (con’t)

1960 • Commuter Rail - UMTA


1962 • Transport planning
1966 • Section 4f
1970 • N.E.P.A. Clean Air Act
1973 • Transit operating subsidy; flexibility
1991 • ISTEA – post interstate
• IVHS

37
MIT OpenCourseWare
https://ocw.mit.edu

1.252J/11.540J Urban Transportation Planning


Fall 2016

For information about citing these materials or our Terms of Use, visit: https://ocw.mit.edu/terms.

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