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Hemphill's January column - Government dole

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[quote]QUOTE: Originally posted by oltmannd Dave- I think you are falling victim to the thinking that is causing the problem. That is, that each mode of transport is it's own end. That is the transportation provider's point of view, not the transportation consumer's point of view. If the point is to move people or goods and the government's proper roll is to facilitate such movement, then investment or other government support would be decoupled from revenue source and directed to provide greatest good. Fuel taxes and airport ticket taxes are certainly not fair and equally applied "user fees". For example, trucks cause 95x the wear and tear on the interstate highways but don't pay 95x more toll and fuel tax. My property tax pays for local police that patrol the interstate highway in my county that is at least 1/2 thru traffic. My property taxes pay for my local schools but my house doesn't go to school. If a 5% increase in fuel tax would be required to build additional highway capacity to relieve congestion by building new highways, but a 2% increase would produce the same reduction in congestion if invested in rail capacity (to remove trucks and commuters) which would be the wise choice? [/quote] I am all in favor of local jurisdictions having a local option tax, including additional fuel taxes, if there is a direct benefit to freighters and commuters, e.g. a reduction in the costs of maintaining local roads and highways. Of course, this is something that is out of the hands of the federal government. What I would strongly oppose is additional fuel taxes on gasoline and diesel nationwide to be parlayed to railroads in their current monopolistic form. We cannot use tax money to feed corporations. The only way you can justify giving tax dollars to railroads is if infrastructure is separated from operating companies, and that assumes some form or degree of the infrastructure entity being comprised of a public private consortium. Also, don't forget that if you increase the amount of cargo moving by rail, that cargo is still going to need to access highways to get it to and from the points of origin/destination, therefore you will still need to improve urban highways. Most highway congestion is taking place in urban areas, while most railroad capacity needs are out on the mainlines, so taking part of the fuel tax revenues to aid in railroad capacity improvements will not do anything for the urban congestion problems. Slightly off topic, with regards to the British experience with open access, you have to go back to the tried but true axiom of "freight makes money, passengers lose money". The British rail system is predicated on the movement of passengers, while the U.S. rail system is predicated on the movement of freight. If we designed an open access system in which the infrastructure is entirely privately owned, you would have to design a fee system that first covers the costs of the infrastructure including overhead, then secondly entitles the infrastructure company to a percentage of the profits of the operationg companies. The RailTrack entity that ran the British open access network was seriously constrained by a mass of passenger services using the rails. Passenger trains were mandated to have priority over these lines, while freights took a back seat. It was nearly impossible for RailTrak to make more than marginal revenue, and consequently they had to cut costs somewhere to stay in the black. Since British law basically forbade them from laying off employees or cutting back their hours (the Achilles Heal of the European Union which will eventually spell doom for the EU), the only other way they could cut costs was to defer maintenance, with predictably disasterous results. If we have a private open access system in the U.S. it would probably run on a cost covering fee basis (which would include a minimum profit margin) and then additional revenue from garnering a percentage of the operators revenues from using the system. This will work with a primarily freight based rail system, but absolutely will not work on a passenger based rail system. I would further advocate certain federal incentives to ensure the economic health of the infrastructure companies, including property tax exemption, accelerated depreciation, and transferable tax credits similar to the shortline bill recently passed. It might also make sense to base the fee system on a railroad fuel tax, but I think a ton/mile-weight per axle charge system is more feasible.
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