States cp ddi 2012

Charles R. Hulten and Robert M. Schwab, National Bureau of Economic Research, Dept. of Economics, University of Maryland, 9/19/95, Regional Science and Urban Economics, “A fiscal federalism approach to infrastructure policy”

Let us assume that governments always act in the best interests of their citizens¶ and that the distribution of the population is fixed. Oates then argues that in this¶ simple case the optimal form of government would be one in which there exists a¶ level of government for each subset of the population over which the consumption¶ of a class of public capital is defined. That is to say, the jurisdiction that¶ determines the level of provision of each public good includes precisely the set of¶ individuals who consume the good. Oates calls such a structure of government a¶ case of perfect correspondence. 3 Thus, for example, the federal government would¶ provide national defense capital and local governments would provide local¶ streets. In this ideal model, each level of government would maximize the welfare¶ of their constituents. But given the structure of this system of governments, their¶ decisions would lead to efficiency since public goods provided in one community¶ would have no effect on the citizens of any other community.
State infrastructure policies effective—Oregon and California prove

Winston 91 [Clifford Winston, Winter 1991, “Efficient Transportation Infrastructure Policy”, American Economic Association, JSTOR, http://www.jstor.org/stable/10.2307/1942705] aw
The best hope for sensible policy reform may reside with the states. Oregon has recently introduced an axle-weight tax for selected trucks and several locales in California are seriously exploring congestion pricing. There has also been support in California newspapers for congestion pricing (see the editorials cited in Small, Winston, and Evans (1989), p. 92). These states have recognized (and perhaps others will too) that the current federal emphasis on supporting increases in infrastructure spending with such means as higher state gasoline taxes will fail to provide a permanent solution to recurring infrastruc-ture problems. Steps must be taken to stop passing these problems on to future generations.

States Solvency

The STATE Act ensures funding solvency.

Daniel Horowitz, Deputy Political Director at the Madison Project, contributing editor to the Red State, 1/19/12, Red State, http://www.redstate.com/dhorowitz3/2012/01/19/devolve-transportation-spending-to-states/, “Devolve Transportation Spending to the States”

Cooperation

Note that the appearance of this self-preservation inclination and in¬terstate cooperation does not require a high level of shared norms and beliefs among states. Bull points at three complexes of rules that help to sustain international order, each presenting different depths of shared goals:6 First, "constitutional normative principles" identify states as the primary political organization of mankind, bound together by the rules and institutions of a collective society. Second, "rules of coexistence" restrict the use of violence to states, limit the causes for which states can legitimately start a war, and restrict the manner in which wars are con¬ducted. Such rules also emphasize the principle of equality among states and their obligation to respect the sovereignty of other states and not intervene in their domestic affairs. Finally, rules that regulate coopera¬tion among states go beyond what is necessary for mere coexistence and may even extend beyond political and strategic realms to cooperation in economic and social matters. Interstate collaboration for the sake of self-preservation falls within a logic of coexistence." Therefore, a plu¬ralist international society bent on the preservation of political and cul¬tural differences between states and based on the principles of state sov¬ereignty and nonintervention is sufficient to produce self-preservation tendencies. Importantly, a pluralist international society is not merely a sufficient condition for interstate cooperation; the case of the war on the iihadi movement provides additional support for a pluralist view of the current international society. At a time when many English School scholars high¬light solidarism—the promotion of cosmopolitan values that concern the rights of the individual and lead to a more interventionist understanding of international order—this book demonstrates the critical role of adher¬ence to pluralist principles in producing interstate collaboration, and testifies to the pluralist nature of the international society.

Another way in which states may check federal abuses is by using their ordinary affirmative powers when they are not preempted from doing so. Power can be tyrannical not only when it is used affirmatively for tyrannical ends, hut also when it is withheld in circumstances that either perpetuate an unjust status quo or passively permit some individuals to behave unjustly toward others. When national power is invoked affirmatively in abusive ways, it nonetheless preempts contrary exercises of state power. In contrast, when national power is abusively withheld rather than invoked, states are often free to take corrective action.98 For example, slate legislatures may use their affirmative powers to create state-level programs to address wrongs that the national government refuses to redress.99 State legislatures and courts may also create liability rules that allow individuals who are victimized by unjust private behavior to obtain injunctions against such behavior or to recover compensation for the harms it causes. Individual states may even coordinate informally" with one another to create regional coalitions dedicated to correcting national omissions that rise to the level of abuses of national power.

While Washington dithers and delays, metros and their states are embracing the next-economy model and innovating in ways that build on their distinctive competitive assets and advantages: With federal innovation funding at risk, metros like New York and states like Ohio and Tennessee are making sizable commitments to attract innovative research institutions, commercialize research and grow innovative firms. With the future of federal trade policy unclear, metros like Los Angeles and Minneapolis/St. Paul and states like Colorado and New York are reorienting their economic development strategies toward exports, foreign direct investment and skilled immigration.

Interstate Compact

The use of compacts over the years shows an uneven pattern. Although compact growth has varied notably by decade, states have continued to propose, discuss, and enact bi-state, regional, and nationwide compacts. Thus, even on the basis of this preliminary investigation, it is possible to say that interstate compacts continue to be a viable instrument of cooperation and offer a potential tool for problem resolution between states in the federal system today. Many state officials across the country seem to see the compact as a feasible method of taking interstate actions that cover functions from environmental protection to transportation regulation, from provision of services to criminal justice activities, and from the traditional areas of boundary resolution to regulation of rivers and river resources. In addition, continuing cross-state metropolitanization necessitates interstate agreements, especially for transportation in those areas. These findings donot suggest, however, that we will witness "constant discovery of genuinely novel applications" of compacts. 52 All states are members of one or more compacts, and they cover a variety of fields. It is more likely that we will see "Council of State Governments, The Book of States, 1976-77, p. 573. at Dartmouth College Library on July 18, 2012 http://publius.oxfordjournals.org/ Downloaded from

From the time the nation was formed, the scope of interstate compacts has changed significantly. Compacts began as border devices, but since the 1920s, they have been principally regional in scope. After 1920, border compacts outnumbered other types only in the 1970s, while nationwide compacts showed a steady increase until the 1970s. The creation of commissions or agencies by compacts has changed gradually over the years. Until the 1970s, the majority of compacts did not have these agencies. Only in the last two decades have the majority of compacts utilized such agencies. The functions of compacts have also changed since the beginning of the United States. Designed initially to deal with boundary problems, this type of compact has declined from over 70 percent of the earliest enactments to less than 1 percent of the most recent. River-management and river-waters compacts made up from onefourth to one half of those enacted until their use decreased during the last decade. Industrial or business-oriented compacts have hovered around 10 percent of the total in any given year. Because of a change in categorization, comparisons are less distinct for the last two decades; however, compacts designed for transportation and environmental issues are a large share of the recent total. The most compacts enacted were the forty-five passed between 1960 and 1969 (4.5 per year) and twenty-two between 1955 and 1959 (5.5 per year). Certainly, the decades of the 1970s and 1980s do not match those numbers. On the other hand, the fact that fortytwo have been enacted and twenty others proposed since 1970 indicates that state officials continue to regard the interstate compact as a feasible instrument of interstate action. Simply on the basis of numbers, compacts should not be ignored.

Which states are the most frequent users of compacts? The number of memberships by states ranges from a low of eleven to a high of thirty-four. Six states are members in thirty or more compacts: Pennsylvania, Virginia, Colorado, New Mexico, Kentucky, and Maryland. Seven states have joined fifteen or fewer: Hawaii, South Carolina, Michigan, Alaska, Wisconsin, North Dakota, and Iowa. An obvious question is, what are the common characteristics of states that participate in a large number of compacts as compared to those that participate in a smaller number? An attempt to specify the correlates of state compact participation was inconclusive. 46

The most common type of "compact" currently being concluded¶ merely creates a study or advisory commission of representatives¶ from each participating state. The commissioners are instructed to¶ recommend to their respective individual states coordinated programs¶ of legislation designed to deal with whatever problems of¶ conservation, health, safety, or similar matters the "compact" may¶ contemplate. Some of the modem "compacts," however, have a more¶ immediate effect upon individuals; typical are those designed to¶ make more equitable the distribution of taxes to be collected by¶ several states from interstate carriers. Interstate authorities founded upon "compacts" govern some of the nation's major ports and¶ associated facilities; others operate interstate bridges and ferries. The "compact" device has even been used to organize an interstate¶ school district for neighboring communities within different states. Similarly, increasing consideration is being given to the creation of governmental organs founded upon "

Meanwhile, states and local governments are contributing massively to transportation funding already, just as Ms. Schweitzer asks them to. I studied Oregon and Illinois a year and a half ago and found that only about a quarter of Oregon’s Department of Transportation budget comes from Washington; about a third of Illinois’ comes from the national capital. What about those profligate transit agencies that are egged on by the federal government’s wasteful spending? Their operations spending comes from local, state, and fare revenues — not Washington. And expansion projects — especially the big ones — are mostly financed by local revenues, like dedicated sales taxes that voters across the country have approved repeatedly over the past twenty years. The six largest transit expansion projects currently receiving or proposed to receive funding from the Obama Administration this year each rely on the federal government to contribute less than 43% of total costs. Perhaps Detroit would have paid for the People Mover even if it had had to use its own revenues to do so. Now, even if we were to recognize the high level of devolution of power and funds that currently does exist in the U.S., some might still argue that the federal government exercises too much power. Its distribution formula for fuel tax revenues results in certain states getting more money than their drivers contributed (“donor” states) and certain states getting less (“donee” states). Why not simply allow states to collect their own revenues and spend money as they wish? Why should Washington be engaged in this discussion at all?

Airports

States can solve as the federal role in airports

Poole 96 [Robert W. Poole, Jr., director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation, October 1996, “Defederalizing Transportation Funding”, p.1-8, http://reason.org/files/4883e8bd01480c4d96ce788feb1f2e05.pdf] aw

Abundant evidence now exists that federal transit programs have stimulated investment in unviable rail systems and have needlessly boosted transit system operating costs. The flexibility created by repeal of federal transit regulations would permit changes (such as competitive contracting of transit operations) that could save enough to offset much of the loss of federal operating subsidies. It would be up to cities and states to decide whether to continue to Ainvest@ in non-cost-effective rail transit. The only truly federal role in aviation is ensuring safety and facilitating the modernization of the air traffic control system. The latter can best be accomplished by divesting ATC to a user-funded corporation, as 16 other countries have done. Airports should be defederalized; all sizes of commercial airports could make up for the loss of federal grants with modest per-passenger charges. States could decide whether to subsidize unviable general aviation airports.

As prospects for increased federal infrastructure investment have given way to likely decreases (as part of budgetbalancing efforts), the federal government has attempted to encourage innovative financing and the investment of private capital. The 1991 ISTEA measure included provisions for public-private partnerships and innovative financing. In addition, the Bush administration issued Executive Order 12803 (in 1992) on infrastructure privatization, and the Clinton administration followed up with a complementary measure, Executive Order 12893, in 1994. But little real activity has been generated by these measures. Instead, it is the states and cities that have been the principal innovators. By the end of 1995, 12 states and Puerto Rico had enacted public-private partnership measures for surface transportation infrastructure, and three private toll projects had been financed and opened to traffic. A growing number of mayors and governors are proposing to sell or lease airports and other infrastructure facilities, seeking to substitute private capital for increasingly limited public capital (so that the latter can be reserved for more inherently governmental needs). This disparity between federal and state/local governments suggests that greater innovation and new forms of private investment would occur if the federal government devolved the responsibility and funding authority for most infrastructure to the state level.

Public-private partnerships (PPPs) establish a contractual agreement between a public agency and a private sector entity to collaborate on a transportation project. Twenty-six states have some sort of PPP enabling legislation, and 24 states have used some form of public-private partnership for surface transportation, including roads, freight facilities, and transit, for a total of 71 projects. 18 PPP activity is much greater outside the United States, where partnerships have been used to fund more than four times as many projects as have been undertaken here.

5/13/11, “High-Speed Rail and Federalism”, Cato Institute, http://www.downsizinggovernment.org/high-speed-rail-and-federalism] aw

Florida Governor Rick Scott deserves a big round of applause for dealing a major setback to the Obama administration’s costly plan for a national system of high-speed rail. As Randal O’Toole explains, the administration needed Florida to keep the $2.4 billion it was awarded to build a high-speed Orlando-to-Tampa line in order to build “momentum” for its plan. Instead, Scott put the interests of his taxpayers first and told the administration “no thanks.” That’s the good news. The bad news is that the administration is going to dole the money back out to 22 passenger-rail projects in other states. Florida taxpayers were spared their state’s share of maintaining the line, but they’re still going to be forced to help foot the bill for passenger-rail projects in other states. Here’s Randal’s summary: Instead, the Department of Transportation gave nearly $1 billion of the $2.4 billion to Amtrak and states in the Northeast Corridor to replace worn out infrastructure and slightly speed up trains in that corridor, as well as connecting routes such as New Haven to Hartford and New York to Albany. Most of the rest of the money went to Midwestern states—Illinois, Iowa, Minnesota, Michigan, and Missouri—to buy new trains, improve stations, and do engineering studies of a few corridors such as the vital Minneapolis-to-Duluth corridor. Trains going an average of 57 mph instead of 52 mph are not going to inspire the public to spend $53 billion more on high-speed rail. The administration did give California $300 million for its high-speed rail program. But, with that grant, the state still has only about 10 percent of the $65 billion estimated cost of a San Francisco-to-Los Angeles line, and there is no more money in the till. If the $300 million is ever spent, it will be for a 220-mph train to nowhere in California’s Central Valley. Why should Floridians be taxed by the federal government to pay for passenger-rail in the northeast? If the states in the Northeast Corridor want to pick up the subsidy tab from the federal government, go for it. (I argue in a Cato essay on Amtrak that if the Northeast Corridor possesses the population density to support passenger-rail then it should just be privatized.)
NIB
State will cooperate even if there are competitors—interstate banking agreement proves

Skalaban 93 [Andrew Skalaban, University of California, Davis, 1996, “Policy Cooperation among the States: The Case of Interstate Banking Reform”, American Journal of Political Science, http://www.jstor.org/stable/10.2307/3330754] aw

Explanations-the existence of a pattern of previous cooperation and one-shot incentives to cooperate based on the competitive potential of a state's banking industry-may help illuminate why cooperation arose among a number of states to implement the deregulation of interstate banking. Many policy solutions require intergovernmental cooperation for their implementation. In areas ranging from border disputes to the dis- posal of low-level nuclear wastes, interstate compacts and agreements facilitate governance. A majority of these compacts and agreements have come into existence since World War II (Feigenbaum 1986). The rate of increase in interstate agreements fits in nicely with the idea that the expectation of the need for future interaction, based on past experience, drives current cooperation. This suggests that the implementation of re- ciprocal agreements to deregulate interstate banking may be, at least partly, a function of the level of past interaction between any two given states.

State Infrastructure Banks (SIBs) are revolving loan funds to finance highway and transit projects. 15 SIBs are in place in 35 states, although more than 95 percent of the funding is concentrated in eight states, and one state accounts for more than half. They became widespread in 1998 when the federal government expanded eligibility and provided $150 million in seed funding for initial capitalization. 16 To date, SIBs have provided $6.2 billion in loans for 693 different transportation projects.

The Twin Cities Metropolitan Area is using innovative solutions to relieve congestion on major highways in the region, with a particular focus on Interstate 35. The effort, part of a Minnesota Urban Partnership Agreement (UPA), utilizes a suite of intelligent transportation approaches, sometimes known as the 4Ts: Tolling, Transit, Telecommuting/ Travel Demand Management and Technology. The Minnesota UPA involves ITS technologies like real-time traffic and transit information, transit signal priority, and guidance mechanisms for shoulder-running buses. These technologies will significantly reduce travel time for riders. “Trip time will be about half an hour. We’ll offer six trips in the morning and six trips home in the afternoon,” Bob Gibbons, a spokesman for Metro Transit, told Minnesota Public Radio. First, the city is converting existing bus-only shoulder lanes and High Occupancy Vehicle (HOV) lanes along portions of the Interstate into wider lanes with prices that vary based on occupancy. Cars with only one occupant will have to pay a toll to access the lanes during peak hours, with prices set to ensure free-flowing travel. City officials say this will enable bus speeds to increase to 50 mph from the current bus-only shoulder lane speeds of 35 mph or less. Second, a portion of the toll revenues from the new lanes will fund significant fare discounts for transit riders taking trips using the new facilities during peak periods. In and around the I-35W corridor, transit services will increase and a bus rapid transit network will be created, utilizing at least 27 newly purchased transit vehicles. There are also plans for six new park-and-ride lots with more than 1,400 additional spaces. Third, new dynamic message signs and some existing signs will inform travelers about the availability of the lanes for non-bus use, toll rates for when the lanes are available, travel speeds on priced lanes versus on general purpose lanes and transit alternatives. The final element of the Minnesota UPA is telecommuting. This locally funded effort will focus on expanding upon the successful Results-Only Work Environment program, in which employers agree to provide employees the flexibility to telecommute or shift their hours to avoid congested commutes. Approximately 75 percent of Best Buy’s 4,500 corporate office employees participate in ROWE. Officials are targeting large employers, including the 20 Fortune 500 companies in the region, for participation, with the goal of reducing 500 daily peak-period trips throughout the corridor.