$12 billion in Tax Breaks for Auto Purchases I need a drink, photo by Roberto Arias The Senate has approved a completely ridiculous amendment to the stimulus bill that provides tax breaks to people who make auto purchases. This passed 71-26. All I can say is that we have a low-quality government. How the Stimulus Will WorkIn the last ST Board meeting video, Sound Transit CEO Joni Earl described how stimulus funds could be given to Sound Transit. I learned some interesting facts on how the stimulus package will work in our region. Obviously, these could change as amendments come around, and as the conference committee meets after the Senate passes their bill. Inside TransportationKing County DOT has a program entitled “Inside Transportation” on the King County TV station (Channel 22 on my cable). It airs Tuesday at 5 p.m., and on Thursdays at 7:30 p.m., Saturdays at 2 p.m. and 9:30 p.m., and Sundays at 6 p.m. You know that I’m a serious transportation nerd because I’m planning to watch this on the Seattle Channel. (Gimme a break, the baby won’t sleep) H/T to Gordon Werner.
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Senate Stimulus UpdateThe Murray-Feinstein amendment to the Senate Stimulus bill failed 58-39. Because of Senate rules, the Amendment needed 60 votes to pass without a “budget point of order”. Two Republicans voted yes, Kit Bond (R-MO) and Arlen Specter (R-PA), and one Democrat voted no, Mary Landrieu (D-LA). Senators Judd Gregg (R-NH) and Edward Kennedy (D-MA) didn’t vote because they were not present. The next chance to beef up the transit portion of the bill is a Chuck Schumer (D-NY) sponsored-amendment that increases transit funding to close to the House amount. Infrastructure Investment Bank The European Investment Bank HQ in Luxembourg, by flickr user Cédric Puisney Zach in the comments linked to this article from the Independent that mentioned the Obama Administration was looking into creating an EU-style bank for infrastructure development. I mentioned the idea briefly in this news round-up. The bank the idea is being modeled off of, the European Investment Bank, borrows money from capital markets and lends that money to development projects that further the EU’s long-term goals. The bank the Obama administration is investigating creating would have $60 billion to lend to infrastructure building projects. The more I think about this, the better an idea it seems. The value in this system for agencies building infrastructure projects is that the Federal Government can borrow money much more cheaply than the agencies can. Even with a AAA rating, the interest rate Sound Transit can issue bonds at is usually 1% higher than the rate the US Treasury issues T-Bills at. Data for AAA municipal bonds from here, and for T-Bills from here. The lower interest rate means lower payments, and it’s basically free money. Outside of the money it costs to operate the bank, lending money to agencies at the rate the Treasury borrows money won’t cost the Federal Government anything. In this $435 million worth of bonds issued in 2005, Sound Transit could have saved over $100 million in interest over the life of the bonds. This would basically be free money for the transit agencies, with one small exception. The Treasury borrows money more cheaply because they are essentially guaranteed not to default on their debt, and while rare, other public agencies can default. A famous local example is the Washington Public Power Supply System which defaulted on $2.25 billion in 1982. The capital markets know this, and because of this they charge these agencies more interest. If the Federal Government became the lender to these agencies, when they default, it’d be the US tax payers stuck footing the bill. I don’t think this would be a huge problem, since the US tax payer is on the hook every time a bank or automaker runs into financial trouble, though politically this could be trouble for such a program. Other snag in the implementation is that the European Investment Bank borrows money like a AAA rated government agency, which happens to be the same rate Sound Transit borrows at today. For Sound Transit to save money on a bank program like this, the program would have to be implemented so that the bank would borrow money at the same rate as the Treasury does. Even at the AAA rate, the program would still be very helpful for agencies that don’t have such a high credit rating, like Sound Transit before 2007. It’s an interesting idea, and it could be a way that the Federal Government can provide a lot of financial help to agencies building infrastructure with very little cost to the taxpayer. Oregon Ironworks Streetcar production, by Portland Transport Portland Transport has some great shots of the new Oregon Ironworks facility where they are assembling streetcars. The cars are designed by Skoda, the Czech company that produced the SLU streetcar, and are assembled from some parts produced abroad. The FTA has a “Buy American” rule that requires at least half of the price of transit equipment funded by FTA money to be spent in America. The Oregon Ironworks satisfies the “Buy America” rule. Sound Transit’s Link EMUs have similar construction arrangement. Most of the parts are produced in Japan and brought to a Boeing-owned building in Everett and assembled by Kinkisharyo. I’ve got a suggestion for Congress. We know that the global auto industry produces far more cars than there is demand, and especially need. This was true before the recession started, and is even more true now. Congress has approved $50 billion in bailouts for the Big Three automakers in just the last six months. Rather than spend ever more money on bailouts for automakers, why not spend that money on creating a home-grown train car construction industry? Obviously it won’t provide a job for every GM employee, but it has better long-term prospects than dumping more money into the Big Three money pit. Especially if the Federal Government wants to invest in mass transit systems. News Round Up Patty Murray, by Ben Schiendelman
The Week in Dave Reichert Dave Reichert (wikipedia) I’ve never paid much attention to Dave Reichert and his battles with Darcy Burner, mostly because I’ve never lived in the 8th District, but also because in my state of partial attention I’ve always thought of him as a basically harmless moderate Republican. Now that serious transit initiatives are afoot in Congress, however, we’re getting to see who the retrograde thinkers are. Let the record show that in the past week Mr. Reichert voted in favor of a Republican amendment to the stimulus that would have cut virtually every spending category, while authorizing an 120% increase in highway spending. Worse yet, he voted to strip Amtrak of $800 million in funding. The rest of the Puget Sound delegation, all Democrats, helped to defeat these measures. Chris Vance on our Urban Highways photo by whizchickenonabun Former Washington State Republican Party Chair Chris Vance has a surprisingly reasonable argument (for Crosscut, Mr Vance is usually reasonable) about the state for a plan to complete the urban highway projects that were in the RTID package that voters rejected in 2007. He sums up the debate on highways and points out that light rail has won, and rail-haters need to get over it. Personally, I don’t agree that we need to complete those projects but it’s good stuff, worth a read. Rainier Valley Meeting on TOD Columbia City Library, by flickr user SlightlyNorth According to the Rainier Valley Post, the Columbia City Community Council meets tonight at 6 pm in the Columbia Library. Today’s meeting is a briefing about the process of updating that area’s Neighborhood Plan, which the city uses to inform development and density goals, and will also have a discussion of the Futurewise/TCC “Transit Oriented Communities” bill we’ve been following (also here, here and here). From this quote, I don’t think the folks at the meeting are in favor of HB 1490:
That’s a pretty dramatic exaggeration, the bill isn’t prescribing even the sort of densities that are currently in place on Capitol Hill, much less First Hill or Belltown’s highrises. If you live in that neighborhood and that’s your sort of fun, according to the RVP, the CCCC is looking for volunteers to work on the neighborhood plan. The long-term effectiveness of our light rail system is going to hinge quite a bit on the amount of development it’s able to spur. It’d be a shame if these meetings were attended only by NIMBYs and our whole region loses out because of it. Big ST Express Changes in 2009Remember those 100,000 extra hours of immediate bus service promised with Proposition 1? Sound Transit has finally released a draft proposal (pdf), and it’s significant. They haven’t even started collecting the additional taxes yet, but here’s the schedule of the service rollout:
After Seatac station opens in December, we see the real bus action in February 2010. Vintage Amtrak CommercialsI think this is pretty interesting, some old Amtrak commercials from the 1970s through the early 1990s. |
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