The National Corridors Initiative, Inc.

A Weekly North American Transportation Update

For transportation advocates and professionals, journalists,
and elected or appointed officials at all levels of government

Publisher: James P. RePass      E-Zine Editor: Molly McKay
Foreign Editor: David Beale      Webmaster: Dennis Kirkpatrick

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June 14, 2010
Vol. 11 No. 25

Copyright © 2010
NCI Inc., All Rights Reserved
Our 11th Newsletter Year

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IN THIS EDITION...   In This Edition...

  News Items…
Almost Done With Wall Street, Chris Dodd To Tackle
  Financial Lines…
The Age Of General-Fund Financing --- Already Here,
   But May Not Matter
  Business Lines…
VRE, Amtrak Crafting Service Plan If Keolis Not Ready
   For Switch
  Selected Rail Stocks…
  New Start Lines…
D. C. Council Does About-Face And Approves
   Streetcar Funding
  Commuter Lines…
Public Transportation Ridership Weathers Slow Economy,
   Tight Budgets
  Political Lines…
Support Needed For Emergency Transit Funding
  Across The Pond…
China Plans Beijing – London High-Speed Trains
Proposed Airline Tax in Germany Infuriates Aviation Industry
The Livability Debate Isn’t About ‘Either/Or’
  Publication Notes …

NEWS OF THE WEEK... News Items...

Almost Done With Wall Street,
Chris Dodd To Tackle ‘Livability’

From The Environment And Energy Daily
By Gabriel Nelson, E&E Reporter

WASHINGTON, DC ---With conference negotiations about to begin for the Senate and House financial reform bills, retiring Sen. Chris Dodd (D-Conn.) is close to crossing the biggest item off his congressional bucket list.

Dodd, the chairman of the Senate Banking, Housing, and Urban Affairs Committee, will now shift the panel’s focus from Wall Street to his other personal priority -- legislation to institutionalize President Obama’s “livability” initiative and provide billions of dollars in funding for sustainable development projects.

Urban planners from regional and national development organizations are scheduled to testify before the committee this week to provide “local perspectives” on Dodd’s bill (S. 1619), according to the committee.

The five-term senator will need to move quickly if he hopes to make the legislation part of his legacy. “I only have about eight to 10 months,” Dodd said in Connecticut this March before an audience of housing and transit experts, The Hartford Courant reported. “My goal is to see the ‘Livable Communities Act’ become law before I retire.”

The bill would authorize more than $4 billion in spending through fiscal 2013 for sustainable projects and grants for the development of local and regional smart growth plans. It would also formally establish the Interagency Council on Sustainable Communities, a year-old partnership between U.S. EPA, the Department of Transportation and the Department of Housing and Urban Development.

Rep. Ed Perlmutter (D-Colo.) has introduced a companion bill in the House H.R. 4690.

Because transportation and housing patterns are a key driver of energy usage and greenhouse gas emissions, Dodd could try to ride his bill on the coattails of broader energy and climate legislation. He has stressed that connection in his support of Obama’s initiative.

“The choice is clear,” Dodd wrote in a February 2009 letter to the White House. “America can continue policies that encourage unchecked sprawl, leading to increased congestion and energy usage, the further loss of open space, and a less competitive economy. Or we can develop our communities and our country in a sustainable way that increases the availability of public transportation, improves efficiency, and reduces oil consumption and carbon emissions, to help us meet the challenges of the 21st Century.”

Urban planners, mass-transit supporters and environmental advocacy groups support the legislation, saying it would curb urban sprawl and other forms of resource-hungry development. Critics have described Obama’s livability push as poorly defined, overreaching and expensive.

Sen. Kit Bond (R-Mo.) said last month that cities would reap most of the program’s benefits and that it requires federal agencies “to decide what makes a community livable.” His concerns have been echoed by Sen. Patrick Leahy (D-Vt.) and others representing rural areas.

“As I look at the budget, I’m afraid there’s this shift of priorities from rural America to urban areas,” Leahy said earlier this year. “That’s what I’m going to be most concerned about, because there is no way I can support appropriations that did that.”

HUD Secretary Shaun Donovan responded to Bond’s concerns last month by saying that livability is not about “dictating” development from Washington. Rural areas can benefit as much as cities can by taking a new approach to planning, he said (E&E Daily, May 7).

Dodd’s bill would allocate $100 million per year for the grants through 2013 with metropolitan areas eligible for grants of up to $5 million apiece. Grants for sustainable development projects would receive $750 million for fiscal 2010, increasing to $1.25 billion in 2012 and $1.75 billion in 2013.

In remarks prepared for the hearing June 9, Dodd said, in part:

“This legislation provides funding for regions to plan future growth in a coordinated way that reduces congestion, generates good-paying jobs, creates and preserves affordable housing, meets our environmental and energy goals, protects rural areas and green space, revitalizes our Main Streets and urban centers, and makes our communities better places to live, work, and raise families.

“Creating livable communities is about giving our cities and towns the tools to plan their future, giving people more transportation and housing choices, and encouraging sustainable development to ensure a better future for the country.

“If we are going to address some of the long-term problems facing our nation, we are going to have to break down our policy silos and approach these issues in a more coordinated fashion

“For many years, federal housing and transportation policies incentivized development further and further away from existing communities and small town main streets.

“Today, as a result, we have worsening traffic congestion costing tens of billions in lost time and fuel, not to mention reduced productivity, lost time with families, and reduced quality of life.

“Traffic is the not the only problem. Dispersed development patterns require billions of dollars in new infrastructure at the same time that existing infrastructure is deteriorating from lack of attention and funding.

“And over a million acres of open space and farmland are lost each year to development on our metropolitan and rural fringes.

“One can argue that this has been true for years, so why should we act now?

“Our nation is facing a number of significant problems including a struggling economy, an explosion in home foreclosures, the looming threat of climate change, an increasingly worrisome dependence on foreign oil, deteriorating infrastructure, and, yes, worsening traffic congestion.

“Future demographic trends make our current patterns unsustainable. Our population is expected to grow by another 100 million people between now and 2050 and the first of the baby boomers are reaching retirement age, portending a huge demographic shift in the coming years.

“We must address these challenges in a coordinated way. As Chairman of this Committee, I have sought to make this happen.

“Soon after he took office last year, I wrote to President Obama urging him to improve the coordination between our housing, community development, transportation, energy, and environmental policies.

“Last March, the Banking Committee hosted a symposium titled, ‘Creating Livable Communities: Housing and Transit Policy in the 21st Century.’ A dozen housing, transit, planning, and real estate experts from around the nation participated.

“And last June, this Committee held a hearing with Transportation Secretary Ray LaHood, HUD Secretary Shaun Donovan, and Environmental Protection Agency Administrator Lisa Jackson. It was at this hearing that these three agencies announced their Partnership for Sustainable Communities, which recognizes the importance of working across traditional boundaries to create more cohesive, collaborative policy.

“In August, I, along with a number of members of this Committee, introduced the Livable Communities Act.

“This legislation will provide resources for comprehensive planning. The design of our communities is often seen as primarily a local issue, but the enduring consequences of how we lay out our communities are national in scope. New studies show that “location-efficient” homes are less likely to risk foreclosure. Less compact communities that force residents to rely solely on their cars increase the cost burden of transportation on households, and transportation is already the second largest expense for American households, ahead of food, clothing and healthcare. The American Public Transportation Association estimates that families with access to good public transportation can save an average of $9,000 per year in transportation costs compared to households with no transit access.

“The Livable Communities Act will also provide capital grants so that regions can compete to implement their plans. The grants can be tailored to meet the needs of diverse regions - one community can use the grants to redevelop brownfields in a post-industrial area, another region can use the funds to develop or preserve mixed income housing near transit, and another might create a walkable, pedestrian-friendly Main Street or town center.

“By creating these livable communities, cities and town can attract and retain young people, recruit new workers, put existing residents back to work, and accommodate the baby boomer generation as they enter retirement.”

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FINANCIAL LINES... Financial Lines...  

The Age Of General-Fund Financing
--- Already Here, But May Not Matter

From Transport Politic By Yonah Freemark

A long tradition of using the Highway Trust Fund to sponsor transportation infrastructure in the United States was thrown out the window in 2008. But has anyone in Washington noticed?

About a year ago, House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) introduced a $450 billion proposal for a six-year transportation bill, hoping to get it out of the Congress and into the President’s hands by the end of the year. Unfortunately, Mr. Oberstar’s bill hasn’t even made it out of committee — primarily because no one in Washington has taken the steps necessary to fund it.

The biggest problem for the U.S. government is that its traditional source of revenues used to build highways and transit — fuel taxes — are drying up; not only has the fixed rate not been increased since 1993, but Americans are on average driving less and are using more fuel efficient cars.

As gas prices increase and the switch to hybrids and electrics continues apace, this difficulty will only intensify. Meanwhile, because of political resistance to raising the gas tax during a recession, there’s little hope of that happening anytime soon. Other conceivable funding options, such as infrastructure banks, public-private partnerships, and extensive tolling, will only cover a small portion of the growing gap.

But the future of American transportation depends on finding the money to keep the infrastructure in good shape: this is a debate that will, for instance, determine how many of the hundreds of planned transit projects across the country listed on this site actually get built. And that’s why everyone in both the executive and legislative branches spent the last year scratching their heads, as if suddenly a politically acceptable answer to their monetary woes would pop out of thin air. There’s been a collective case of naiveté floating around Washington for the last year when it comes to transportation, when the fact of the matter is that the money to fund improvements is not going to magically appear.

In fact, Congress has developed a solution to this fiscal hole — it’s just one that it claims to be unacceptable: the use of the general fund. As Ken Orski — an Associate Administrator of the Urban Mass Transportation Administration (now FTA) between 1974 and 1978 — pointed out to readers of his Innovation Briefs last week, Congress has allocated a total of $79.2 billion of income tax-sourced funds to pay for ground transportation projects over the past two years. That’s almost twice what the Highway Trust Fund is supposed to devote to highway and transit projects every year.

Orski notes that $43.2 billion went directly to make up for shortfalls in Trust Fund revenues. The rest of the money went to the Stimulus’ roughly $45 billion in one-time only project funds, including the Administration’s $8 billion commitment to high-speed rail.

Indeed, despite the fact that most influential members of Congress have claimed to be completely committed to the user fee-based Highway Trust Fund model — in which roads users pay for the completion of more roads, in addition to public transportation — the fact is that the body has spent massive sums using a different funding model, in which everyone pays for transportation investments though the general fund.

This brings the transportation world into unfamiliar territory. Whereas the distribution of funds has been relatively stable since the beginning of the Interstate era, with Congress setting in stone spending levels over five to six-year periods, an increasing reliance on congressional allocations, voted on every year, could mean uncertainty and a loss of security on the part of local transit agencies, state departments of transportation, and private contractors.

The underlying concern with this situation: If fuel tax revenues aren’t determining how much is spent on new infrastructure, Congress will be deciding how much to spend, each and every year. And members will have to weigh infrastructure spending against other priorities also funded by the general account, leaving highway and transit projects in the potential lurch. There would be no assurance of continuity across presidential administrations or political control over the legislature. For lobbying groups, this is a petrifying possibility.

But it may be the future, as Orski suggested about a month ago. He quotes former Secretary of Transportation James Burnley, who told Orski “What worries me is that the whole concept of the trust fund is breaking down… By 2013, we could find the whole notion of the trust fund obsolete.”

This situation, however, is not nearly as scary as it sounds. Even if Congress decides not to increase the gas tax and determines as unacceptable another form of user fee (such as a vehicle-miles-traveled (VMT) tax), it has the technical ability to make general fund-sourced expenditures more stable than have been the current emergency shortfall allocations. The legislature could commit a certain percentage of income tax revenues directly to transportation, essentially filling the Trust Fund with standard, predictable infusions, just from a different revenue source.

From the standpoint of increasing social equity, there are strong arguments to be made in favor of this approach. And decision fund transportation with non-highway revenues would discourage what is now the politically necessary massive funding advantage for road infrastructure creation over public transportation, a consequence of the fact that drivers are the people who pay. Everyone contributes to the general fund.

Moreover, transportation infrastructure is popular: That’s why communities across the country have endorsed transit sales tax increases by a two-to-one margin over the past ten years. This means that even if Washington isn’t able to get its act together to dedicate adequate dollars for transportation, other levels of government can step in; the public sector, after all, doesn’t begin and end on the National Mall. And America, despite suffering the effects of a recession, remains a wealthy country that can find the money to pay for things — if its leadership demonstrates an interest in doing so.

There are plenty of ways states, metropolitan areas, and cities could develop new and more effective funding sources without relying on the federal government. Regional compacts could dedicate a certain percentage of a fuel tax surcharge to a high-speed rail line, for instance. Big cities with already adequate public transit systems could implement congestion pricing. States could implement VMT systems of their own (as Oregon already has). By increasing reliance on local sources of funding, states and cities may find themselves better able to get what they want done.

Indeed, though there may be negative consequences for poorer jurisdictions to reducing their reliance on Washington for the funding of local roads and transit, many regions may find themselves suddenly able to do things they hadn’t done before. If New York had more control over its local transportation spending, couldn’t it build the Second Avenue Subway more quickly? Couldn’t many of the smaller cities planning bus rapid transit lines simply construct them, without waiting on Washington to allocate them the funds?

Of course, that may be unreasonably optimistic thinking. States already have the ability to shift most of the “highway” revenues they get from Washington to other projects, like transit or pedestrian facilities — but they very rarely do they do so. Yet if states and municipalities are to take an increasing role in the transportation funding process, they may become the ground floor of discussions about where to direct limited funds for transportation investments. They must be pressured into responding appropriately to their new role.

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BUSINESS LINES... Business Lines...  

VRE, Amtrak Crafting Service Plan
If Keolis Not Ready For Switch

Washington Examiner On The Internet
Staff Writer: Kytia Weir And DF Staff

VIRGINIA, JUNE 7 --- A rival company, the French-owned Keolis Rail Services, is slated to take over operations of the Virginia Railway Express commuter service on June 28 of this year, but signs are…they won’t be ready by the due date. Keolis, in its first foray into the U.S. commuter train market, has run into delays hiring train crews and getting them approved.

In late May, VRE CEO Dale Zehner said in a meeting with Amtrak President and CEO Joseph Boardman that Keolis will not be ready.

Amtrak has been running the service, and is being blamed by VRE for “running interference to avenge its loss of the commuter train contract.” A lawsuit against Amtrak is being considered but there are no plans yet to sue, according to VRE spokesman Mark Roeber.

In April, Amtrak and Keolis had disagreements about workers’ contracts which caused some tensions. It appeared that Keolis was offering Amtrak employees better conditions if they stayed on to work on the VRE trains, but Amtrak’s president, Joseph Boardman, was concerned that Keolis and VRE would not be ready for a smooth transition by the deadline. He communicated that concern to VA Transportation Secretary Sean T. Connaughton instead of talking directly to VRE officials. “If [Amtrak] thought VRE would not be ready, they should have come to us. Instead they went to the state in an attempt to create confusion and distortion.”

Meanwhile, VRE is crafting contingency plans for continuing service in case Keolis is not ready by June 28 and was planning to submit last week to the Federal Railroad Administration an outline ensuring that its Northern Virginia riders will have trains to get to their Washington jobs.

Passengers should be able to ride trains in some manner on June 28, according to the warring train services. Several options remain on the table:

It appears now that Amtrak and Keolis are negotiating since the FRA required that the agencies sit down to work out the switch.

“We’ve always wanted to be helpful to VRE in this transition,” said Amtrak spokesman Steve Kulm.

If Amtrak continues to provide service after June 28, costs will go up. Two weeks of Amtrak running the trains typically costs VRE no more than about $340,000 currently, Roeber said, but Amtrak told them it could cost from $450,000 to $550,000 to run past the contract. That’s significantly more than the approximately $300,000 that Roeber said Keolis service would cost. Keolis would likely need to contribute to any extra costs if Amtrak’s help is needed, Roeber added.

A final plan needs to be decided well before the transition date so crews can be in place. “We’re going to need to know in advance if they’re going to make use of us,” Kulm said.

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STOCKS...  Selected Rail Stocks...


Week (*)
Burlington Northern & Santa Fe (BNI)



Canadian National (CNI)60.3656.58
Canadian Pacific (CP) 57.7354.79
CSX (CSX)52.1550.02
Genessee & Wyoming (GWR)38.9933.95
Kansas City Southern (KSU)39.2236.75
Norfolk Southern (NSC)56.8053.40
Providence & Worcester(PWX)12.3212.00
Union Pacific (UNP)73.5569.33

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NEW START LINES... New Start Lines...  

D. C. Council Does About-Face
And Approves Streetcar Funding

Advocates Credit The Internet

By David Peter Alan

Streetcars may come to Washington, D.C. after all, but it did not look promising for the new start at 2:00 on the morning of Wednesday May 26th. That was when Council Chair Vincent Gray announced that he would eliminate most of the funding for the streetcar project, even though construction had already begun on a line in Anacostia and one on H Street and Benning Road downtown.

When lunchtime was over, $47 million in funding for the streetcar project had miraculously been restored. The Washington Post quoted Councilman and former Mayor Marion Barry as saying: “I’m amazed that in less than half an hour, $47 million can be identified.”

Transit advocates give much of the credit for the turn of events to the Internet; including e-mail blasts and sites such as Twitter and Facebook.

David Alpert headlined his report in the Post’s web site later that day: “You did it! Streetcars restored... mostly,” and then said: “This would not have happened without the immediate and powerful groundswell from residents including readers from Greater Washington, We Love DC, DCist, and other blogs that covered the news.” Katja Weir of the Washington Examiner reported that Councilman Tommy Wells received about 400 e-mails, plus phone calls and Twitter messages, even though he opposed the funding cut.

Rail advocate Malcolm Kenton said on the NARP (National Association of Railroad Passengers) blog that the successful hours-long campaign is “a great example of the power of grassroots action.” Jason Broehm, Chair of the Transportation Committee of the D.C. chapter of the Sierra Club, said that 1000 messages had been sent to Gray’s office in the space of a few hours. Later that day, the funding seemed to appear “almost out of thin air.” Broehm admitted that he felt “a roller coaster of emotion” during that fateful Wednesday.

As often happens in controversies over transit projects, there appears to be a political drama unfolding behind the scenes. Gray is challenging Mayor Adrian Fente in the Democratic primary on September 14th. Victory in that election essentially guarantees the office. Fente supports funding for the streetcar project.

When Gray changed his position and offered $47 million for the streetcar project, the step took the Nation’s Capital in the direction of becoming yet another city that has embraced rails in the streets, although it is not clear how the vehicles will be powered. Congress banned overhead wires for streetcars in the capital city, and the former D.C. Transit streetcars were powered by an underground system.

Still, transit planners hope to cure this and other problems and have cars running by sometime in 2012.

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COMMUTER LINES... Commuter Lines...  

Public Transportation Ridership Weathers
Slow Economy, Tight Budgets

From SmartPlanet on the Internet

By Joe McKendrick, author and independent analyst who tracks the impact of information technology on management and markets.

JUNE 7 -- In times of economic distress, public transportation systems suffer in two ways — ridership declines because fewer people are commuting to work, and subsidies from cash-strapped municipalities and transit agencies shrink.

However, despite the difficult economy, ridership on the nation’s mass transit systems remained relatively steady, with some cities even seeing significant jumps in ridership, according to a report released by the American Public Transportation Association (APTA). Growth was especially strong in the western United States.

Nationally, nearly 2.5 billion trips were taken on public transportation in the first quarter of 2010, APTA estimates. Even with continued high unemployment, an economic downturn, lower state and local revenue for public transportation, and historic snowfalls in the mid-Atlantic region and Texas, public transportation use in the first quarter declined by only 2.7 percent, compared to the same period a year ago.

Heavy rail usage was down by about a percent, while light rail ridership was up by a percent. Commuter rail was down three percent.

The leading city in terms of transit system passenger trips taken during the first quarter of 2010 was New York City MTA, with 572.6 million trips. By contrast, in car-crazy Los Angeles, the count was 11.7 million passenger trips. However, the LA area saw a 2.5% increase in trips over the past year, making it the second-ranked growth market. Chicago Transit Authority saw the most gains from last year to this year, rising three percent to 48.4 million trips taken.

Ten out of twenty-nine light rail systems reported an increase in ridership for the first quarter of 2010.  Cities seeing double-digit increases in ridership include Portland, OR (16.7%); Phoenix (14.7%); and Seattle (14.3%).

Three out of 15 heavy rail systems (subways and elevated trains) experienced ridership increases in the first three months of 2010, including Chicago (3.0%); Los Angeles (2.5%); and New York (1.6%).

Seven out of 27 commuter rail systems reported ridership increases, including Portland, OR (55.9%), Nashville (32.4%), and Salt Lake City (15.6%).

For APTA report:

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POLITICAL LINES... Political Lines...  

Support Needed For Emergency Transit Funding

From Transportation For America

Stephen Lee Davis
Online Coordinator
Transportation for America

An alert request to contact your senators
and urge them to pass this crucial bill

WASHINGTON, DC ----- The newly introduced Public Transportation Preservation Act of 2010 (S. 3412) authorizes $2 billion in grants for transit agencies across the United States for preserving service – and it couldn’t come at a better time.

This bill will help stave off fare increases and service cuts to the buses and trains that millions of commuters depend on every day.

Many Americans are under the false perception that only people in big cities like New York, Washington, D.C., San Francisco or Chicago care about public transportation. In communities of all sizes nationwide, hundreds are facing dire job losses, service cuts and fare hikes because their local transit agencies are in a fiscal crisis. It’s not just people in big coastal cities that depend on transit - millions of Americans in cities and communities large and small across the country depend on buses and trains to make it to work, school, the doctor and the store each and every day.

Tell you senators that the transit crisis affects us all and ask them to pass the emergency transit funding package quickly.

Some of the direst situations:

Transportation for America continued: “The problem clearly goes beyond any one single agency - it’s bloomed into a national crisis that requires national action. Even if you’ve already emailed or called your senators - please do so again now. Even if you’ve already emailed or called your senators - please do so again now.”

The U.S. Capitol Switchboard number is, 202-224-3121

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ACROSSTHEPOND... Across The Pond...  

By David Beale
NCI Foreign Editor

China Plans Beijing – London
High Speed Trains

The New Silk . . . Expressway?

Via Travel Inside and Hannoversche Allgemeine Zeitung

Beijing – The Chinese Rail Authority announced an ambitious plan to build direct rail links to Europe, one from Beijing to London, the other from Beijing to Berlin, via a super high-speed train service that would also connect with parts of the Middle East and Central Asia. Chinese planners state that the trains could make the trip in about 48 hours. Currently available flights with British Airways, Air China and other airlines take approximately 11 hours to fly between the capitol cities of China and Great Britain on a great circle route that crosses Mongolia, north central and northwestern Russia and Scandinavia. Trans Siberian Express passenger trains from Beijing to Moscow take seven days en-route, while existing overnight trains from Moscow to Berlin take almost two days for the trip.

The Chinese Government, already in serious negotiations with 17 countries, also wants to build a third rail link through Burma, Thailand, and Malaysia to Singapore. It claims the immense task could be completed in as little as a decade and has offered to provide the money for the infrastructure – in return for cut-price raw materials, which it can transport cheaply back to its manufacturing centers.

In January, China opened what it billed as the fastest rail service in the world – a bullet train traveling at a top speed of 350km/h between the cities of Guangzhou and Wuhan, slicing the previous journey time from 10 hours to just three. Within three years China will have 800 high-speed trains cross-crossing its territory, and it is already involved in building high-speed rail lines in Turkey, Saudi Arabia and Venezuela.

Like the lucrative silk and spice trade that opened up a link between Asia and Europe more than 2000 years ago, optimists argue that the new railways will herald a new era of inter-connectedness between Europe and China. A new silk road may be paving the way for 21st-century Chinese dominance.

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Proposed Airline Tax in Germany Infuriates Aviation Industry

New levy on flying may help level the playing field for passenger rail

From Internet Sources

Berlin – a proposed new tax on airliners, based on their fuel consumption per passenger and per flight for flights departing from Germany, has enraged airline executives and the aviation press, prompting unprecedented harsh language and fighting words from various industry spokesperson and editorial writers of various aviation news magazines. The new levy, estimated to bring in about EUR 1.2 billion (US $1.5 billion) annually has been proposed by Chancellor Angela Merkel’s government as part of a massive austerity package of spending cuts and new or increased taxes to reduce the annual federal budget to about 4 percent of German GDP. The austerity package has been proposed in order to keep the budget deficit from growing further and thus undermining the strength of the euro single currency and damaging various government pension and social security funds.

Train number IC 146 passes through Haste, Germany enroute from Berlin to Amsterdam Schiphol Airport

Photo: NCI / David Beale

Tax Dodge on rails? Train number IC 146 passes through Haste, Germany enroute from Berlin to Amsterdam Schiphol Airport on June 13, 2010. The new proposed airliner tax in Germany may benefit railroads in and near to Germany in two ways: the new tax will decrease some of the massive tax advantage which airlines currenty enjoy over railroads, and if German travelers actually try to escape the new airline tax by starting and finishing their air trips in airports in neighboring countries, then certainly a large number of them will travel to non-German airports such as Schiphol via trains. The 101 series electric locomotive, seen here on the front of IC 146 was the base for the design of the ALP-46 locomotive in operation with NJ Transit between Philadelphia, northern New Jersey and New York City on various NJ Transit commuter rail routes. IC 146 is seen here on track 4, which is a passing track, because an S-Bahn commuter train from Hannover to Minden is stopped on mainline track 3 (beyond camera view) to pick-up and discharge passengers in the Haste station.

The proposed airline tax is not a direct tax on jet fuel, but rather an indirect tax on what a particular airliner will consume on a given flight. The costs will, of course, be passed on for the most part to the airline passengers and customers. A straight levy on jet fuel of “xx” cents per liter, as is done with all other fuels such as gasoline, diesel, heavy fuel oil, ethanol, and natural gas, is not legal due to several international air treaties signed by Germany and most other countries some fifty years ago. The proposed levy would have to pass the German lower house of parliament and survive and up/down vote in the upper house to become law. It would also most certainly face legal challenges in the European court system, if passed into law. In order to drum-up support for the proposed airliner tax, Chancellor Merkel’s government has touted the tax as a necessary “green” tax to place more downward pressure on carbon emissions. Unlike in the USA, government efforts in Germany to curb greenhouse gas emissions generally enjoy support of the majority of the population.

One of the principal international lobbying associations for the airline industry, the IATA, joined a number of airline CEOs and aviation press editors in harsh criticism of the proposed tax. Critics ranged from the CEO of Lufthansa, a full-service airline and the second largest air carrier in Europe (after Air France / KLM) to the CEOs of Air Berlin, a large no-frills budget airline based in Germany, to spokesperson from Ryanair, easyJet, and a wide variety of foreign airlines. Many critics argued that in many areas of Germany relatively close to an airport across the border in neighboring country, passengers would simply drive or take a train to that airport to begin the air journey. That is perhaps possible in places such as Bonn, Cologne, Stuttgart or Munich, where airports in Belgium Holland, Switzerland or Austria are within a couple hours drive or train ride from such cities, but for most of Germany, this would not be a readily available alternative for most travelers.

From the chief of the IATA: “The worst kind of short-sighted policy”. “It’s a cash-grab by a cash-strapped government. Painting it green adds insult to injury. There will be no environmental benefit from the economic damage caused,” said Giovanni Bisignani, IATA’s director general and CEO at IATA’s annual general meeting and World Air Transport Summit in Berlin. Bisignani called for a global approach and for support of the European aviation community rather than further “burden”. He added: “The Dutch government tried to raise  € 300 million with a similar tax. It cost the Dutch economy  € 1.2 billion in lost business. It also failed as an environmental measure, sending travelers across the border to start their journey from more tax-sensible regimes. The Dutch had the good sense to repeal their tax. Why repeat past mistakes?”

The proposed German aviation levy comes less than a month after the newly elected Conservative government in Great Britain proposed a similar tax increase on air travel and abandoned plans to build a new third runway at London’s Heathrow airport, saying instead that the funds for the new runway would be better spent on adding high-speed trains in the U.K. In Germany, the proposed new aviation tax may help close a long existing tax disadvantage that railroads suffer under compared to airlines. Diesel powered trains in Germany run on fuel, which is taxed at the same relatively costly rate as diesel fuel for trucks and cars. Electrically powered trains in Germany pay some of the highest prices per kW-hour of electricity in Europe, again due to a wide variety of consumption and ecology taxes piled onto electric bills, while jet fuel has remained tax-free due to the above-mentioned international treaties. The same austerity plan, which contains the new tax on airline travel from and within Germany, also proposes increased taxes and tolls on highway trucks, which may benefit rail freight operators in Germany.

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EDITORIAL... Editorial...  

The Livability Debate
Isn’t About ‘Either/Or’

Senator Chris Dodd’s (D-CT) hearings this past week on his and the President’s Livability Initiative (Senate Bill 1619), which goes to the center of the Obama Administration’s overall thrust to help America become a more environmentally sustainable and prosperous place, also drew some comments from some fellow Senators from rural areas (Republican Kit Bond of Missouri and Democrat Patrick Leahy of Vermont) that legislation “favoring” urban development over rural appropriations would be problematic.

While it’s nice to see a bi-partisan reaction to anything in Washington these days, that concern is not only groundless, it is also wildly off the mark.

The Livability Initiative as embodied in S.1619 and grows out of the realization that America has for nearly a century been gutting its cities of their upper and middle classes by building a mono-modal ground transportation system --- endless and often over-sized interstates, later [inevitably] widened again and again.

This highway-only approach, coupled with the truly aggressive destruction of the urban transit systems that used to serve every American city, even smaller ones, and connected them via interurban lines. The remnants of those lines can still be seen even today in the hidden greenways of the long-abandoned roadbeds that once provided an alternative to the automobile, such as in New Britain, CT, where a two-mile long greensward urban path along an old rail right of way is threatened by a proposed “busway”.

While it is true that urban transit has seen resurgence over the past 30 years, we have much damage to undo. The Livability Initiative, which seeks to promote renewed transit systems and the transit-oriented development which inevitably follows such rail-based systems, will not harm rural areas. On the contrary, by providing an alternative to the suburban sprawl which eaten up so many thousands of square miles of rural and semi-rural land over the past century, this legislation will do much to defend rural lifestyles and the environment/habitat upon which they are so dependent, and which suburbanization destroys wholesale.

No, Senators Bond and Senator Leahy, the Livability Initiative isn’t the enemy of rural America. It is and will be your greatest ally.

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