Green Resolution

The “Green New Deal” resolution introduced last week by Representative Alexandria Ocasio-Cortez (D-NY) and Senator Edward Markey (D-MA) was a good idea. The Democrats needed to reestablish climate action as a governmental concern and inject it into the 2020 election. With her high visibility, appeal to young voters, and ability to get under the skin of conservatives, AOC could have been an ideal messenger. Like a football team throwing a bomb to its flashy rookie receiver on the first down of the first game, if executed successfully it could have rattled defenses throughout the season. Unfortunately, the pass was dropped and the Dems might now find themselves wishing they had called a more conventional play.

Sticking with the football analogy just a bit, Nancy Pelosi’s Democrats have been steadily grinding out the yardage but run the risk of being sucked into playing Trump’s game. Since possession of the House shifted to the Democrats, the political agenda and news has been entirely dominated by Trump’s boorish calls for his idiotic wall and his reckless government shutdown. Yes, Pelosi has outmaneuvered him at every step, but the Dems are not going to take back the Senate and White House in 2020 just by playing good defense. Meanwhile, their investigative committees have tread cautiously, partly for fear of interfering with the secretive Mueller investigation and partly for fear of appearing mere hecklers. With each passing week the presidential primary roster expands and, especially if Bernie Sanders enters the race, the risk grows that Medicare-for-All crowds out all other progressive issues. So the idea of AOC streaking down the sideline for a big gain on climate change made some sense.

One reason the play didn’t work as planned was that it wasn’t actually planned. Pelosi was forced to distance herself from it and did so in terms that were a little too dismissive for my taste. But who knows what really went on? Pelosi claimed that she hadn’t even seen the resolution before AOC’s press conference. If true, that’s a serious discourtesy. How is the Speaker supposed to support a resolution she hasn’t seen or apparently had any input into?

Continue reading “Green Resolution”

Austin Debates Density

One of the most interesting urban planning debates going on in the country right now is happening in Austin, Texas. In 2012, the Austin City Council adopted the Imagine Austin Comprehensive Plan, a three-year effort that established priorities for the city’s growth and development for the next 30 years. Among the priority actions the plan identified were to invest in a compact and connected Austin, to grow and invest in the creative economy, and to develop and maintain household affordability. The next step in implementing the plan is to revise and modernize its zoning regulations. The city is now in the midst of that process, which it has dubbed CodeNEXT.

Austin, of course, is one of the fastest growing cities in the U.S.  From 2000 to 2017 the city’s population increased from 657,000 to 950,000, an annual rate of growth of 2.2%. It’s also gained a reputation as a fun place to live and has become a migration magnet for millennials; a Brookings Institution study found that Austin has the second-highest proportion of millennials in its population (27.2%) of the top 100 metro areas. With about 48% of its adult population holding a bachelor’s degree or higher, it also ranks among the nation’s most educated cities, comparable to Boston and Minneapolis.

Not surprisingly, Austin’s economic prosperity has entailed some costs. In particular, during this century it has had one of the fastest rates of housing price increase in the country. According to the Freddie Mac House Price Index, home prices in Austin have increased at about a 5.0% average annual rate since 2000, which is on a par with the Fresno, Salt Lake City and Washington D.C. metro areas. Since much of the city and the surrounding areas are zoned for single-family homes, growth has mostly taken the form of low-density sprawl. The developed land area of the metro area increased from just 53 square miles in 1970 to 372 square miles in 2016.

Continue reading “Austin Debates Density”

Transparency in Trumpland

A little juxaposition of news items reveals how the Trump administration views transparency in government.

First comes Scott Pruitt’s announcement that EPA will seek to implement a regulation that will require all EPA rulemaking to be based only on scientific evidence for which the underlying data is publicly available. That will prevent the EPA from formulating regulations based on medical data that is confidential.

According to Pruitt, “The science that we use is going to be transparent, it’s going to be reproducible.” Junk science purveyor and member of Trump’s transition team Stephen J. Milloy added, “This will really open up EPA science to public scrutiny.”

Meanwhile, over at the American Bankers Association conference, Mick Mulvaney, interim director of the Consumer Financial Protection Bureau, announced that the CFPB would cut public access to the bureau’s database of consumer complaints.  Mulvaney explained: “I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government.”

Evidently, transparency is good when it hinders regulations to protect the public health, but bad when it helps to protect consumers.

Time for an SUV Tax

There is no question that New York City is not viable as we know it without its mass transit system, so the snowballing problems of the Metropolitan Transportation Authority should be of concern to everyone who lives or works in the city, whether or not they are regular users of the system.

Increased funding for NYC Transit (the subsidiary of the MTA that operates the subways and buses within NYC) may not be a sufficient step for improving the system but it is certainly a necessary one. Finding additional funding in an already heavily taxed city will not be easy, however, and already the Governor and Mayor are at war over whose responsibility it is. In addition to each arguing that the other already has money in their budget that can be used to help, Mayor de Blasio has proposed an income tax surcharge on tax filers earning in excess of $500,000, while Governor Cuomo is considering some version of the congestion pricing system originally proposed by Mayor Bloomberg.

When Bloomberg made his push for congestion pricing in 2007, I was working as the Chief Economist for New York City Comptroller William C. Thompson.  The Comptroller is an independently elected citywide official who frequently serves as the chief antagonist of the Mayor, and at that time Bloomberg was maneuvering to have the city’s term limits waived so he could run for a third term. Thompson, who was planning to run for Mayor in 2009 all along and now faced the prospect of opposing Bloomberg, was casting about for an alternative to Bloomberg’s proposal. As it happened, I already had drawn up an alternative as a think piece and Thompson was intrigued.  He eventually adopted it as the position of the Comptroller and as a plank in his 2009 and 2013 Mayoral campaigns.

Before describing my proposal I should note that residents of New York’s “outer boroughs” have a deep-seated suspicion of schemes to restrict access to Midtown Manhattan, whether they be in the form of tolls on the East River bridges or the more high-tech congestion pricing plan Bloomberg sought. I share their suspicion. There is, of course, a distributional effect, as a congestion pricing regime would disproportionately charge residents of the outer boroughs in order to improve a subway system that disproportionately serves Manhattan residents. But I think outer borough residents have a more visceral objection as well. Many of them work in Manhattan, study in Manhattan, play in Manhattan, and have family roots in Manhattan. They see Manhattan as the city’s commons, not as a separate borough to which its increasingly wealthy residents should have privileged access. It’s that possessiveness that all New York residents feel toward Manhattan that underlies their hostility to bridge tolls and congestion pricing. It was ultimately outer borough opposition that sunk Bloomberg’s congestion pricing proposal, and that Thompson was seeking to appease.

The proposal I devised for Thompson would impose a registration tax on motor vehicles registered in the five boroughs according to the curb weight of the vehicle. Thompson modified the proposal only by expanding it to all 12 counties of New York’s metropolitan commuter transportation district. Passenger vehicle registration fees in New York State average only about $20 per year and neither the State nor City imposes a personal property tax on vehicles as many states do. As proposed, a vehicle weighing up to 2,300 pounds (think Toyota Yaris) would pay an annual registration fee of $100, and the fee would increase by $.09 per pound above that weight, bringing the annual registration fee for, say, a Lincoln Navigator SUV to about $430.  The registration tax could generate about $350 million annually just from the 2 million automobiles and trucks registered in the city.  The revenue generated could be adjusted, of course, by adjusting the weight formula.  More precise estimates of the revenue could be made beforehand using data on the makes and models of vehicles registered, which we did not have access to at the time.

Continue reading “Time for an SUV Tax”

The Perils of Private Infrastructure

It is becoming increasingly obvious that the Trump Administration is incapable of pursuing any coherent, sustained legislative strategy. The Administration was unable to play any useful role in fashioning a viable “repeal and replace” health care bill, and it seems equally clueless on the other big agenda item, tax reform. Seeing the Republican legislative machine stall out on those two priority items does not auger well for a third Trump initiative that was once thought to hold some bipartisan appeal: infrastructure spending. That is probably just as well, since any wide-ranging infrastructure bill coming from this Administration and Republican congress would likely be an ideological monstrosity that would entice little Democratic support.

An infrastructure program is, however, more suitable to a piecemeal approach than is health care or tax reform, so it is likely that some sort of  new infrastructure policy emerges over the next eighteen months. Trump’s first budget programmed $200 billion over ten years to implement his infrastructure program (while cutting the Department of Transportation’s budget for the coming year by 13 percent). A fact sheet outlined some of the principles that will guide infrastructure policy.

The Trump infrastructure program will invariably seek to maximize the private-sector role, although the Administration’s fact sheet only hints at that direction with proposals such as removing the cap on private activity bonds. Administration officials are also touting the concept of “asset recycling,” whereby government agencies sell existing public infrastructure to private operators and use the proceeds to invest in new infrastructure projects.

The notion of private firms providing public infrastructure is polarizing, with conservatives portraying public agencies as inherently corrupt and inefficient and the left portraying private operators as inevitably predatory. In reality, the economic infrastructure of the United States has always been a patchwork of private and public operations and whatever prevails in a particular region tends to be taken by its residents as the natural state of affairs. Most passenger rail transportation, for example, was originally developed by private firms but virtually all of it was eventually taken over by government entities. Similarly for water supply systems, although about one-quarter of the U.S. population is still served by private water. Conversely, about 70 percent of American households buy their electricity from private, investor-owned firms. Roads and highways, and commercial airports, have always been developed and operated primarily by governments.

In recent years governments have explored privatizing, or re-privatizing, some infrastructure or contracting with private firms to operate it. Encouraging privatization appears to be a key part of the Republican infrastructure agenda, and that will be controversial enough. Even more problematic, though, will be efforts to incentivize the private creation of new economic infrastructure. In that regard the development of Florida’s long-distance passenger rail network is instructive, highlighting both the opportunities and perils of relying on private firms to develop new infrastructure.

The Florida High Speed Rail Project

Efforts to reestablish intercity passenger rail links in Florida have a  checkered history reaching back decades. In 2000, Florida voters approved a constitutional amendment mandating the establishment of a high-speed intercity rail system. In order to implement that mandate, the Florida legislature established the Florida High Speed Rail Authority (HSRA) in 2001. However, Florida Governor Jeb Bush was opposed to the idea of a constitutional mandate for transportation infrastructure and was skeptical of the endeavor’s cost. He managed to get the rail mandate repealed in 2004, although the HRSA remained in existence and oversaw the completion in 2005 of an EIS for the Tampa-Orlando segment of a proposed system that was envisioned to eventually run from Tampa to Miami.

Continue reading “The Perils of Private Infrastructure”