Expand the State s Transportation Intermodal Planning Process for Long-Term State Economic Development

The Texas Department of Transportation s intermodal planning process should be expanded and should include more involvement by the Legislature, the Governor, and the private sector.

According to transportation experts, the Texas Department of Transportation (TxDOT) has perhaps the best highway d epartment in the United States and is renowned worldwide by international highway groups. Now, however, new demands are being placed on TxDOT to change and to respond to a series of major issues. TxDOT will need the assistance of the Legislature and the Go vernor in setting long-term policy directions and in redefining its mission for the next ten to twenty years.

Driven by federal mandates, the growth of trade with Mexico, and increased traffic and congestion, Texas will be investing untold billions of do llars in transportation during the next 10 to 20 years. But there is no overall vision of true intermodal planning; nor is there a clear legislative mandate or mechanism to ensure visionary planning to guide future transportation expenditures.

TxDOT is suddenly being challenged to explore a full range of intermodal transportation options. There are six basic modes of transportation: highways and roads, rail, air, water, pipelines, and telecommunications. TxDOT is no longer just a highways agency but a transportation agency. The various modes of transportation can no longer be looked at as separate, discrete functions.

The expanded mission of TxDOT could provide a clear link between long-term transportation policy and economic development in the state. TxDOT cannot be the total infrastructure agency for the state, but TxDOT should stay in touch with all levels of private and governmental transportation groups. State transportation plans will not be taken seriously by the private sector unless ideas and innovations from the private sector are included in the intermodal planning process.

I mpact of Federal Policy Changes
The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) has rapidly changed decades-old federal high-way policies. With the national interstate highway system basically complete, ISTEA gives cities and states much more control over projects an d funding priorities as well as allowing much more money to be spent on research, on smart highways or intelligent vehicle highway system s (IVHS), on toll roads, and more types of mass transit. ISTEA is also mandating state and local transportation agencies to link transportation systems to new traffic management technologies, air pollution control, and regional economic development plannin g.

ISTEA works with other federal legislation such as the 1990 revisions to the federal Clean Air Act and the Energy Control Act. The 1990 federal Clean Air Act has enormous impact on several of Texas larger cities that are at or near the federal non-compliance air quality level. 1 For example, by the end of the decade Houston will be mandated to use cleaner fuels and will have to reduce its vehicle miles traveled by 3 percent a year for 17 years. 2

Under ISTEA, highway contractors and real estate developers are now being pitted against other industries and groups who want a bigger share of governmental transportation dollars. Hard political decisions will be made between investing more funds into ext ending highways, allowing for greater suburban growth, versus spending more funds within cities for more efficient super arterial roads, which would not only relieve city traffic congestion but create pockets of economic growth within the cities. 3

Another serious issue facing TxDOT is how to assist all levels of government in cooperating. ISTEA requires a much greater level of federal-state-local cooperation than in the past. Metropolitan transportation planning organizations (MPOs) are major player s now, but many MPOs do not have the expertise to make lo ng-term visionary plans. Prior to ISTEA, TxDOT had total authority over final project selection and how and where the state and federal highways dollars would be spent. Now, any MPO with over 200,000 population selects surface transportation projects; TxDO T is merely consulted and the MPO is not bound by TxDOT s opinion. 4 TxDOT believes this will fragment central planning in the state and open the door for conflicting local policies that hinder the state s transportation planning process. 5

ISTEA provides over three times as much federal funding for states planning efforts. Planning for ISTEA will be expensive at the state and local levels. But as one troubling indicator, TxDOT recently failed to secure a federal $500,000 grant to explore innovative ways f or preparing intermodal plans. Instead, Arizona, New Mexico and Louisiana won grant funding.

According to TxDOT, the enactment of ISTEA helped Texas receive a somewhat more equitable federal funding allocation, but Texas is still not receiving nearly its fair share of federal transportation dollars. The 1991 ISTEA act has only a six-year life span, which means that the congressional reauthorization process will begin in only a few years. Texas will face a tough battle just to maintain its share of federal dollars dollars which are paid by Texas taxpayers and then held in a federal trust account for redistribution among states. Also of concern: if MPOs do not spend their federal funds, the funds will lapse, be returned to Washington and then reallocated to other states.

Impact of Free Trade with Mexico
The Mexico factor makes Texas remarkable in the U.S. both in terms of opportunities and complexities of planning. The pending North American Free Trade Agreement (NAFTA) will eliminate trade barriers in North America, and a projected 70 percent of Americ an trade with Mexico will come by way of Texas. In Texas, this means linking a developed nation with a developing nation. TxDOT will have to consider issues such as customs, seamless borders, internationa l ports, and the interaction of rail, truck, and air freight. Free trade will be chaotic and wasteful without comprehensive planning. As an example of incomplete planning, a $30 million international bridge built in Laredo, but not tied to existing Mexican infrastructure is turning out to be a poor investment. Nor was it linked with support infrastructure on the American side, such as customs processing and warehousing. 6

Both Texas university researchers and TxDOT management concur that trade with Mexico w ill greatly increase the volume of freight trucks on Texas roads and that Mexican trucks will be much heavier than American trucks causing enormous damage to the Texas highway system. The American limit is 80,000 pounds, while Mexican trucks commonly excee d 110,000 pounds. Moreover, Mexican truck-weight enforcement is extremely weak. To build Texas highways capable of handling Mexican freight traffic could be enormously expensive; the increased weight and the repetition will literally rip up state highways.

Tackling this kind of international problem will require both state and federal cooperation. When it comes to international issues, neither TxDOT nor DPS will have the necessary authority to address these problems and provide the necessary enforcement. Ano ther issue is whether Texas will receive significant additional federal funding to address the expenses the state will incur by this sudden influx of heavy international freight traffic.

Competitive, Multi-Modal Transportation
Until 1991, the U.S. Department of Transportation (DOT) has provided little leadership in building intermodal planning into the interstate highway system. As a result, Texas, along with other states, has a good deal of duplicative instead of compatible transportation systems. Texas will not be able to afford duplication in the future. Texas transportation plans and investments will have an economic and social impact 50 years from now. 7

The traditional governmental transportation approach is a project-oriented approach which, by i ts nature, is concerned mainly with the viability of singular projects and not intermodal impact. Yet no one in state government is informing or asking the railroad industry for input concerning pending transportation and border-crossing projects in South Texas. NAFTA will impact more than just the border regions of Texas, yet individual projects are not being evaluated or incorporated into any kind of intermeshing system plans. 8

More freight will be carried by rail, particularly with the pending Mexico fr ee trade agreement. The railroad industry, in decline ten years ago, has modernized and now uses sophisticated technologies for tracking and scheduling trains, as well as individual containers on each train. Also, there will be much more linking of rail, t rucking and water transportation as freight containers are moved between transportation modes for the most cost-effective route. According to the Wall Street Journal, this is transforming so-called intermodal shipping, once a laggard in freight transport, into the hottest growth area for railroads. 9 In response to this trend, the Pennsylvania Department of Transportation will be spending $34 million to increase railroad tunnel and bridge clearances to better accommodate trains carrying stacked truck containers.

The state has taken only a modest role in Texas coastal ports. No state agency oversees or keeps up with this area. According to Houston transportation officials, Texas state agencies do not keep up with port operations and the issues of concern of Texas ports; therefore, the state has not been in a position to offer meaningful assistance. While Texas has a number of large ports, the leaders in efficient container management are ports in other states: Seattle, Los Angeles, Baltimore and the Oaklan d-Bay area. 10

Likewise, air transport needs to be monitored more closely and included in a statewide transportation plan. There will be an increase in air freight hubs in Texas; this raises planning considerations such as co-location with rail yards and f reight sorting facilities.

It is vital for TxDOT to keep up with the best practices in the private sector. Out of economic necessity, many major transportation companies have developed new techniques, forged relations with Mexico, and have implemented methods and actions with a pr oven track record. For example, there are indications that some large transport companies are becoming multi-modal on their own to stay competitive. Companies such as J.B. Hunt Transport Services in Arkansas and Union Pacific have strategic goals of seamless transportation. J.B. Hunt, for example, has forged agreements with several trucking firms, railroads and maritime transport firms. Some private firms have considerable intermodal research and planning expertise that may be much more sophisticated than the state s. The state s planning process should incorporate any lessons that can be learned from the private sector s best practices.

Initiatives from Other States
No one state can as yet be considered the model as far as comprehensive transportation planning, but there are some interesting initiatives coming from other states.

As one example, a New Mexico consortium is working closely on a model project to use laser light detection and ranging (LIDAR) technology to measure real-time air pollution in congested areas. The project will create an integrated air quality and traffic m onitoring system in Albuquerque by the end of the decade. The ultimate goal of the effort is to link economic development, air monitoring and traffic management into one planned project. New Mexico has established an alliance of the state s transportation department, Los Alamos and Sandia National Laboratories, and two New Mexican universities to redirect technology resources to rebuild the state s infrastructure. 11 To solve the transportation and air pollution problems in cities like Houston and El Paso, Texas will also have to aggressively pursue ISTEA demonstration project funding and form similar alliances and consortia.

As another example, Washington State has established an ongoing transportation planning process. The key to the Washington plan is not to prepare a massive, static master plan but to formalize a flexible process to ensure continual study and research, constant issue identification and prioritizations, and public input throughout the process.

Florida has prepared a comprehensive issue-driven plan that links intermodal planning to factors such as economic development and the environment. The Florida plan was also designed t o be a dynamic process, with shifting priorities and issues directing research and planning. A key part of the planning process was in forming a vision from the top that was shared and well-publicized. Other states such as Oregon, New York and Wisconsin ar e trying similar approaches.

There are some common themes among innovative plans from other states. The most important is statewide leadership the governor or other top state official pushing a plan that is policy driven. Second, the planning process must involve coordination among a wide range of groups. Third, the plan should be geared towards heads of agencies and other top-level managers and policymakers. Fourth, the planning process should not be limited to transportation technical experts; a broad range of policy, economic, urban planning and private sector experts should be involved. Fifth, research and planning should be geared around issues, with an annual issue-action plan driving the research. The state transportation planning document should also be continually changing.

A. The Legislature should formulate and articulate a new and expanded mission for Texas Department of Transportation (TxDOT).

TxDOT s mission needs to be explicitly expanded to be a multi-modal framework that includes economic development as a top priority. An expansion of TxDOT s mission should be done with policy direction of the Legislature. In light of changing forces, TxDOT s mission needs to be formally expanded, rewritten, and publicly communicated. TxDOT s management indicates that they welcome more legislative involvement, particularly now when outside forces are requiring major policy decisions to be made.

B. State law should require TxDOT to create a permanently staffed Statewide Intermodal Planning Group (SIPG) within TxDOT.

SIPG should be a core team of experts who would study and interact with the myriad of governmental and industry players. The core group should be a full-time, permanently staffed function of TxDOT in order to develop and maintain a deep understanding of al l forms of transportation and their associated issues. In February 1992, TxDOT formed a multi-modal planning team of 11 top TxDOT managers, along with staff support, to work with a consultant in the development of the ISTEA-mandated Statewide Transportatio n Plan. 12 However, this recommendation would ensure that SIPG would be a statutorily established core unit within TxDOT that would be a continuing function long after the immediate planning requirements of ISTEA have passed. TxDOT is in the process of using consult ants to prepare a business plan which in turn will assist TxDOT in preparing the statewide intermodal plan, due under federal law by January 1995. The TxDOT SIPG should be formed now to support ISTEA mandated planning efforts and to provide staff support to the steering committee recommended below.

C. TxDOT, in conjunction with the Legislature, should develop an annual action plan to ensure legislative involvement at the beginning of each planning cycle and to jointly decide on changes in policy direction.

Legislative involvement will be critical in the early years of implementing ISTEA, not just for policy direction but also to monitor federal transportation funding issues. The annual action plan could be as simple as a published list of the top ten priorities for each year.

D. The Legislature should establish a permanent 21 member State Transportation Policy Plan Steering Committee with legislative and gubernatorial representation.

TxDOT has recently established a 16 member external advisory panel to assist in the development of the ISTEA mandated statewide transportation plan. However, this group has not yet convened. In addition, the group does not have representation from the Leg islature, the Governor s office, Texas universities, or federal transportation and environmental agencies. Finally, this steering committee should continue beyond the preparation of the first ISTEA mandated state transportation plan.

Using the Washington State model, steering committee meetings should be public, with annual policy and action recommendations routinely and widely distributed for review by private and public groups. 13 The key to the effectiveness of this steering group will be persistence and cooperation. In the case of the Washington State stee ring group, the first few meetings were marked by dissention between competing interests; later, as participants became familiar with the other s issues, the meetings became cooperative and productive. The steering committee should meet at least quarterly and could include regional public forums as well.

The Legislature should authorize TxDOT to reimburse steering committee participants for the costs of travel and lodging in attending meetings, using the same state travel guidelines that apply to state employees.

E. The Legislature should require TxDOT, working in consortium with the University of Texas, Texas A&M and the Office of State-Federal Relations, to develop one or more proposals soliciting federal discretionary funding to conduct innovative planning and d emonstration projects.

ISTEA encourages innovative planning projects and provides federal funding. In addition, these four groups should be required to begin working on developing Texas strategy for addressing any forthcoming changes to the federal ISTEA legislation.

F. State law should require a state interagency transportation planning coordinating group, with TxDOT taking the lead role.

Agencies involved would include, but not be limited to the Railroad Commission, the Air Control Board and the Water Commission (both soon to be merged into the Texas Natural Resources Commission), the University of Texas, Texas A&M University, the Texas D epartment of Commerce, the Department of Information Resources, the Parks and Wildlife Department, t he Texas Historical Commission, the Department of Public Safety, the Water Development Board, the Public Utility Commission, and the Office of State-Federal Relations. Representatives of the Governor s Office, the Lieutenant Governor, and the Speaker of the House should also attend meetings of the interagency coordinating group.

G. State law should require TxDOT to seek a stronger bond with Mexico to better plan and leverage opportunities resulting from free trade agreements.

TxDOT is already involved in planning for free trade with Mexico, including preparing an annual NAFTA report and the creation of an international relations office. 14 However, TxDOT should expand and strengthen these activities. Clear policy direction from the Legislature would assist this effort. The goal should be the seamless flow of international transportation across a variety of modes of transportation.

H. State law should direct TxDOT to include more comprehensively representatives of railroads, waterways and sea ports in preparing the state s overall transportation plan.

About 75 percent of Texas export tonnage to other states is transported via waterways. 15 Historically, no Texas state agency has maintained any planning, monitoring, or assistance functions regarding the state s waterways. Railroad and waterway representatives have expressed interest in being involved in the planning process in a purely advisory capacity.

Fiscal Impact
According to TxDOT, ISTEA is providing about three and a half times more federal fu nds for transportation planning. It is expected that the recommended planning expenses would be paid for by existing federal ISTEA funds and state matching highway funds. There would be no fiscal impact on the General Revenue Fund.

The state and local benefits derived from the recommendations cannot be estimated at this time, but the potential exists for large benefits: by reducing duplicative and unnecessary transportation expenditures; by helping to guide Texas transportation infrastructure for maximum economic development; and, by assisting the state in complying with federal and state environmental quality standards.

1 Comptroller of Public Accounts, Texas Performance Review Division, Texas Air Control Board Performance Review (Austin, Texas, March 1992), pp. 1-10.
2 Interview with Arnold Oliver, Executive Director, Marcus Yancey, Associate Executive Director of Planning and Policy, and Tom Greibel, Director of the Planning and Policy Division, Texas Department of Transportation, Austin, Texa s, December 7, 1992.
3 Elaine Adams, Shaping the Roads of the Future; Huge Sum of Money Powers Local Debate, Kansas City Star (November 26, 1992).
4 Letter from David Bernsen, Texas Transportation Commission, to Jim Greenwood, Council member, City of Houston, Texas, October 2, 1992.
5 Interview with Arnold Oliver, Marcus Yancey and Tom Greibel, December 7, 1992.
6 Notes from conferences held November 16 and 20, 1992, with the University of Texas, Center for Transportation Research and Texas A&M University, Texas Transportation Institute.
7 Ibid.
8 Ibid.
9 Daniel Machalaba, Shippers Prepare to Jump on Rail-Truck Combinations-Intermodal Volume Keeps Growing as Industry s Efficiency Improves, Wall Street Journal (December 29, 1992), p. B4.
10 Interview with Arnold Oliver, Marcus Yancey and Tom Greibel, December 7, 1992.
11 Industry, Government, and National Laboratory Team to Develop and Demonstrate a Real-Time Air Quality Monitoring System, PR Newswire, December 2, 1992
12 Texas Department of Transportation, Request for Proposal: Business Plan for a Statewide Transportation Plan, Austin, Texas, August 4, 1992.
13 Washington State Department of Transportation, 1991 Report to the Washington State Legislature: Transportation Policy Plan for Washington State (Olympia, Washington, 1991), pp. 8, 9 and 37.
14 Letter from Arnold Oliver, Executive Director, Texas Department of Transportation, to the Honorable Tim Von Dohlen, Texas House of Representatives, December 8, 1992.
15 University of Texas, Center for Transportation Research, and Texas A&M University, Texas Transportation Institute, Improving Services for Texas Transportation: A Report of Conferences Held November 16 and 20, 1992 (Draft, December 7, 1992).