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Alfidi Capital at 8th Annual Mineta National Transportation Finance Summit

I showed up at the Commonwealth Club in June 2017 for the Mineta Transportation Institute's annual National Transportation Finance Summit. It's the eighth annual event but I lost count a couple of years back. Mr. Norman Mineta himself was absent this year so there must have been something more important on his calendar that day. Transportation addicts can get their fix of public policy downloads on the MTI website. You folks did not come to the Alfidi Capital Blog for any verbatim recaps of speaker comments. No way, you came here for my original free-form genius. Brace yourselves.

MTI 8th Annual finance summit 2017 in San Francisco.

The federal gasoline tax has not been raised since the Clinton Administration, so it has not kept up with inflation. The tax's funding for repair of federally-owned roadways has thus not kept pace with road repair needs. The coming onslaught of zero-emission vehicles (like that new model Tesla is rolling out so it can actually make a profit) will further strain roads with their heavier drive trains while their owners avoid paying the gas tax, so California is preparing to assess its own annual fee on these vehicles.

I agree with one of the summit's speakers that municipal bond issues should fund initial road construction (capex) and not regular repair (opex). The Federal Highway Administration has a helpful life-cycle cost analysis (LCCA) guide for road repair. States that spend public money wisely will do the math before asking voters to approve now bond issues. California's DOT has its own LCCA because we are the best state ever.

I wonder what the California state transportation sector thinks of Sacramento's cap-and-trade carbon control regime. It matters because the California EPA Air Resources Board has a slew of programs covering emissions from transportation activities. The transportation sector needs to check out the state's low carbon fuel standards.

One speaker mentioned some Harvard study supporting his idea that spending on transportation connectivity provides access to jobs. I'll guess that he meant this 2015 Harvard study "The Impacts of Neighborhoods on Intergenerational Mobility" because I couldn't find anything else in public sources that fit the description. The larger point is that public spending to promote employment also requires spending to enable people to get to their jobs.

The Federal Transit Administration has committed capital investment grants to help mass transit projects. It's a boon for Bay Area programs like BART that want to extend line service. We still don't know the full details of this Administration's infrastructure plan. If it remains focused on tax incentives for developers, it may change the scope of the federal government's grant programs or bypass them altogether. It will also force local funding programs like the Metropolitan Transportation Commission's (MTC) One Bay Area Grant (OBAG) to align with local developers' interests. Aligning public and private interests can be a good thing if transit spending is linked to development planning and job creation.

I went to this summit for the free snacks and stayed for the talks. You all know that I never let free food get in the way of acquiring financial knowledge. The free brochures go into my archives and the free thinking goes into my brain. The bottom line for the financial services sector is that demand for infrastructure, including public transportation linked to private development, is slated for multi-year growth. Bonds and other instruments funding infrastructure are coming down the road.