Oregon lawmakers grapple with transportation policy

Transportation funding is a priority for Oregon lawmakers this legislative session. The Democratic proposal includes a gas tax hike and other new taxes. The Republican plan puts less money toward public transportation, biking and pedestrian infrastructure. Sarah Iannarone is the executive director of The Street Trust. John Charles is the president and CEO of the Cascade Policy Institute. They join us with their perspectives on what approach lawmakers should take.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. We turn now to a conversation, a debate perhaps, about the future of transportation in Oregon. This is one of the biggest issues that Oregon lawmakers are wrestling with this session. We are still waiting for an actual bill, which will have more specifics. But last month, Democrats released a framework of their plan. It includes a major gas tax hike, a new sales tax on vehicles and increases in other fees. For Republicans, a lot of that is a non-starter. Their plan, which they announced last week, rejects those increases and would put less money towards public transportation, biking and pedestrian infrastructure.

We’re going to get two perspectives now on how lawmakers should proceed. Sarah Iannarone is the executive director of The Street Trust, which advocates for multi-modal transportation. John Charles is the president and CEO of the Cascade Policy Institute, a libertarian think tank. It’s great to have both of you on the show.

Sarah Iannarone: Thanks, Dave.

John Charles: Thank you.

Miller: Before we talk about the policies that could enable your respective visions, I thought we could just start with the visions themselves. Your thoughts about what you want Oregon’s overall transportation systems to look like and to do. John, first.

Charles: Well, transportation is a really important infrastructure service. Fundamentally, people want the ability to go from place to place. And Oregon was once a leader in “getting Oregonians out of the mud.” We used to do innovative ways of financing. We were the first state to have a gas tax, we used to build beautiful highways, and I think people still want the ability to go many places at any time of the day or night and by many different modes. I think that’s still a worthy goal and I don’t think we should be creating barriers, as we do now politically, to try and make it difficult to get around. And I think that is what has happened and a lot of people find it frustrating.

Miller: I want to hear more about what you mean by barriers. But Sarah, what’s your overall vision for what transportation should look like, should accomplish in Oregon?

Iannarone: It’s one of our greatest public investments, Dave. For Oregonians, the transportation system is what keeps us connected and what connects our youth to schools. It connects our grandparents to their doctor’s appointment. It connects consumers to local businesses. It connects tourists to destinations. We know that transportation is the circulatory system that keeps our state’s people and goods moving.

Our vision is one that is safe, complete, multimodal, where Oregonians have freedom of choice to move how they would like, to make sure that their prosperity is insured from the choices that we help them access, and to make sure that our government is good, strong, accountable and transparent. So that it can deliver great projects on time, on budget and in the ways that they’ve been promised to the people.

We believe this is possible and we also believe that this is what Oregonians demanded when they turned out all last summer for legislative hearings on the future of transportation in Oregon. They wanted a safe, complete transportation system that could get them where they wanted to go on time, affordably and safely.

Miller: How much of a disagreement do the two of you think there is between the visions that you just outlined? Before we get to how it could be accomplished, I’m asking because I actually heard a fair amount of overlap there. You used slightly different language, but what you talked about was relatively similar. John?

Charles: Well, I think at the level that we just discussed, your conclusion is correct.

Miller: That the devil is in the details?

Charles: Yeah, right.

Miller: OK, well, let’s get the details then.

Iannarone: Well, let me point out, I think there’s a fundamental difference that went unspoken here, which is, I believe that transportation is a core government service, that the private sector cannot fill the gaps. Without great government services on transportation, we don’t have a safe, complete functional transportation system, which is where organizations like ours that depend on government services for things like youth transit, or bicycle lanes, or walking paths, those will never be profit-making undertakings. So the fundamental difference at the core is whether or not we can have trust in government and accountable government, and fully fund government to do these things, as opposed to leaving it to the private market.

Miller: OK, I think this does get to one of what I have understood as a deep policy division between the two of you, which is public transit. John, what role should the government play in transit?

Charles: Well, preferably as little as possible. I mean, roads, bridges, tunnels, turnpikes, transit, vehicles, including things like Lyft and Uber, have been run well by the private sector and can be where there’s a market. But when I look at the history of TriMet coming out of the city of Portland, basically putting private, for-profit bus companies out of business, creating TriMet and seeing what it has become, despite vast amounts of public subsidy, that’s a case of failure. And they just go on and on and on, and complain about money, and they’re no longer in the business of serving customers. Customers actually almost don’t even matter to TriMet anymore, because there are so few of them.

I grew up riding transit and I’m a big transit user, but I think municipal transit has proven to be a big disappointment. It’s become an empire-building kind of scheme and it needs to probably be downsized quite a bit [with] fewer subsidies, and create an environment where private competitors such as Uber and Lyft, which didn’t even exist 20 years ago, can come in. And they are showing that they can make money doing things when they provide services that people value.

Miller: They’re also much more expensive.

Charles: Well, some services are expensive. And if you’re at the point where TriMet is, where users pay only about 7% of operating costs, you have to say, well, then I guess they think your service is literally almost useless. Well, then why are we providing it, if people are barely willing to pay more than 5% of the cost.

Miller: Sarah Iannarone?

Iannarone: Fundamentally, we disagree on this. Ultimately, community mobility can’t be a profit-seeking undertaking if we’re going to administer it in ways that reach all of the people who need it most. About 30% of Oregonians can’t or don’t even drive, which means if we only design a system for the 70% of Oregonians who can drive, we’re leaving a good portion out. If that were a test, that would be a C- or a D+ on how well we’re providing mobility services.

I’m not saying there’s not room for private companies in transportation access and choices. We see great alternatives in things like the transportation wallet, where we’re able to combine public transit, things like Bike Town which is provided by the City of Portland, along with Uber or Lyft, which are the private TNC firms. In a complete mobility as service framework, where each organization, agency or company is providing the service it provides best, most efficiently, as part of a holistic system which serves everybody’s needs.

Think about Paratransit, for example. The difference between an elder on a fixed income being able to get groceries by Paratransit, versus maybe a $20, $30, or $40 Uber or Lyft ride, that’s a make or break for that elder possibly eating or even cuts into their food budget. We have to think about access to mobility as part of the overall framework of how our community lives. Even when we think about transportation being the second highest household cost, after housing, for Oregonians and how for every dollar we are able to save them in their mobility needs, we’re freeing up to deal with the things like the housing affordability crisis that we have in front of us right now.

Miller: John, it seems like the most stripped down version of this disagreement is that Sarah is saying that public transit is a public good that the government should offer to people because it enables so many aspects of their lives. And you’re saying, no, this should be handled by the private sector. What’s your response to her basic argument that this is so basic, so integral to our lives that it should be the government’s job to provide it?

Charles: Well, it’s not really a public good. Anything that the municipal transit entities can do, can also be done in the private sector – and probably better and cheaper. So if you really …

Miller: Not cheaper without … I mean, the reason that a bus trip could cost, I don’t know, $2.50 or so, as opposed to a $12 Uber ride is because of those public subsidies. So when you say cheaper, it’s not cheaper for the user if the public is paying most of the cost. I mean, which is the point you made.

Charles: The users are also paying that cost.

Miller: In the form of taxes?

Charles: The TriMet type subsidies are all back door, but they’re real. It’s real money. And if you look at their budget – and I’ve looked at it pretty much every year for the last 25 years and testified about it many times – the amount of money which is being wasted to feed the bureaucracy is huge. So it is very expensive, it’s just not very expensive at the point of consumption.

But if you have to subsidize everything that way, eventually it doesn’t work; you run out of other people’s money. So I would just say, if you look at something, like what used to be called the Food Stamp program and now it’s SNAP, you have food, a very important thing provided by private vendors, and if you want to help that portion of people who need help, then they have vouchers or, as Sarah mentioned, this innovative program called Transportation Wallet, which I think is is creative and has potential.

Provide the subsidies directly to users and allow them to pick among many competitive services. Don’t make a big monopoly sclerotic entity get all the money, or don’t give them the money, and then have the users standing on some street corner hoping that the bus or train shows up. You can subsidize way more intelligently by a user-based subsidy program rather than a supplier-based subsidy,

Miller: Sarah?

Iannarone: All due respect, tax dollars are a subsidy when they’re going to the government. We pay taxes for government that works for us. That’s the basis of our civil society. It’s a subsidy when our public dollars go to corporations to make a profit. So we have a payroll tax in the STIF where the workers across the state say, you know what, for our workforce, for our access to jobs, for access to training centers, we pay this payroll tax so that we have good transit that works for us.

A great example of this is what they were able to accomplish down in Los Angeles, where they passed a half cent sales tax for transit, not from corporate support or not even local business support, but service workers in the suburbs who knew that that extra halfpenny in sales tax meant getting to their third shift on time, meant Sunday service, meant they could get where they needed and wanted to go without the burden of private automobile ownership – which we know, in Oregon right now, AAA estimates exceeds $12,000 a year. So for subsidizing anything with our highway dollars, we’re subsidizing the auto industry and what Oregon households are paying to own and operate their private vehicles, where they’re giving that money to corporations. Transit is tax dollars for public good.

Miller: We could spend this whole time talking about transit, but I want to turn to the revenue side of this that lawmakers are talking about right now. The Democratic framework would eventually increase the gas tax by 20 cents a gallon. It’s currently at 40 cents a gallon. So this is a 50% increase over time. John, what do you think about that?

Charles: Well, they have about a dozen newer increased taxes and fees. It’s the tax everything and I don’t understand their logic. Why all those things, you could do very simply with just one tax. I mean, I’m in favor of user fees and the gasoline tax is still a great user fee. It’s not perfect, but there’s this myth going around that, oh, the gas tax is running out of steam because we’re all switching to electric vehicles or high MPG vehicles. No, the gas tax last year raised more money than ever, and …

Miller: They do say that this year may be the peak year and that the projections are, as overall fleet efficiency increases, that over time, in the coming decades, it will go down. You’re saying you simply don’t believe that math?

Charles: I was appointed to the Oregon Road User Fee Task Force in 2001 and that same presentation was made to us in 2001. And that’s why our task force was convened. I spent 10 years on that task force. You look at the revenue from the gas tax from 2001 to today and it’s just gone way up. They were just wrong and they’re going to continue to be wrong. The gas tax has a lot of life left in it and there’s no need to have nine taxes when you can just pick one.

Miller: So you’re not opposed to the gas tax increase. You’re saying, instead of having a new tax on car sales or other increases in fees, simply increase the gas tax and keep it at that.

Charles: No, I would say in conjunction with some tax relief for motorists. Right now, there are two very expensive DEQ programs: the ethanol mandate for fuels, and the new one coming out called the Climate Protection Program, which is a cap and trade program. These are all carbon regulation programs. And already, the Clean Fuels Program costs about 10 cents a gallon at the pump. The cap and trade program is going to cost way more in the future. So my suggestion to people in Salem has been, eliminate the carbon regulation programs for fuels in exchange for a very large gas tax, and you’ll get much more money to actually operate the system and motorists can either be held harm neutral or come out ahead by getting rid of these backdoor taxes.

Miller: Sarah, how do you think, broadly, transportation dollars should be raised?

Iannarone: There are many arguments for keeping the gas tax in place. And to John’s point, I don’t think we’ve exhausted the life of the gas tax. I do think emerging tools, like the road user charge, are viable alternatives as we transition off that gas tax.

Miller: A per-mile charge.

Iannarone: A per-mile charge. Also, things like tolling, which we’re using a more traditional model on the Interstate Bridge Replacement Project, ostensibly to help cover the cost of that. There was a conversation underway for quite some time about tolling in the Greater Portland metro area, which would have managed congestion on the roads and helped us right-size projects. There’s a lot of pricing tools you can use to manage demand on the system. There are also …

Miller: The governor said no to that.

Iannarone: The governor listened to communities who had problems with that, how it was currently framed. It’s my understanding that the governor supports making sure that we have innovations to how we pay for transportation over time.

Our greatest concern is that what we come up with will be sustainable, that it won’t disproportionately burden low income or rural Oregonians. But more importantly – and this may be something that my colleague here and I can share – is that the taxpaying public wants to make sure that their tax dollars that they do pay are managed wisely. We hear a lot of talk about oversight and accountability, especially of ODOT of late, where we want to make sure that projects are prioritized in alignment with how the public wants to see them. Making sure that they are delivered on budget and on time, making sure that performance metrics that are in policy are achieved, that the stated goals of the projects are achieved, and making sure that there’s feedback loops, right?

It’s a very complicated project management landscape out there and we want our government, when we do fund it, operating as efficiently and smoothly as possible.

Miller: This is a conversation we’ve had a number of times in recent months. A lot of concern, after looking at ODOT’s practice for decades, of essentially saying the project will cost $100 million and it comes in at $300 million, eventually. John Charles, how much faith do you have in the agency to actually be good stewards of Oregonians money?

Charles: Not a lot, frankly, and it’s not that they’re alone. I mean, the Portland Public School Board right now is planning to build three of the most expensive schools, high schools, ever built in America. And they’ve constantly been wrong in their projections of capital costs. I don’t really understand exactly why ODOT has constantly been misjudging costs. I don’t think there’s an easy solution and I don’t think the Oregon Legislature is set up very well to do serious oversight of any administrative agency. But they are, I think, taking this particular problem more seriously now. They’ve hired some people to work specifically for the legislature to do some oversight. You just have to understand that’s just part of any government program, is that you’re likely to be facing cost overruns.

Miller: We haven’t even talked yet about active transportation, bike and pedestrian infrastructure. We just have about a minute-and-a-half left. Sarah, what are you hoping to see from the legislature about this?

Iannarone: What we want to see is the dollar signs beside program aligning with the talking points and the values. So what we’ve heard from lawmakers, what we’ve heard from leaders around the state, what we’ve heard from the community is that we should fund safety first, make sure that every single Oregonian can get where they need to go and then get home to their families at the end of the day. That includes the ODOT workers who are fixing our roads. That includes the person catching the bus, that includes the person while they’re on the bus. We need to fully fund safety for our communities.

We need to make sure that we pave potholes, keep the roads cleared in the winter time. And we need to make sure, as I stated at the outset, that the 30% of Oregonians who can’t or don’t drive are treated with the same respect, have the same dignity, have the same access to mobility to live their lives freely and prosperously, even without having to own a car and because they don’t drive.

Miller: Sarah Iannarone and John Charles, thanks very much.

Charles: Thank you.

Miller: Sarah Iannarone is executive director of The Street Trust. John Charles is president and CEO of Cascade Policy Institute.

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