I love the New York Post headlines.  One of my favorites was in the Sunday, December 11, 2011, issue.  The headline was “E-Z CASH: Change he can believe in: Toll collector makes $100K.” On page 5, the story to which headline refers is entitled “High-Pay PA Crew Taking Their Toll.”  It describes what we have learned is an all-too-common rip-off of taxpayers, the use of what is called “pension spiking” to give people making a certain level of income the chance to get an even larger pension by awarding them a huge amount of overtime pay opportunity in their last year of employment, the only year that counts for pension calculations in many public-sector collective bargaining agreements.

In this case, the employer is the Port Authority of New York and New Jersey, an entity created by a contract between New York and New Jersey and jointly owned by the two states.  This entity is not accountable to elected officers or voters, except for the indirect influence that elected officials from the two states sitting on its board of directors have on the entity’s operations.  Oddly enough, entities like the Port Authority were created over several decades in the 20^th century because elected officials believed that they would operate in a more business-like fashion and not be subject to the corrupting influences of elected officials trying to “buy” votes by bestowing favors on constituents. However, the lack of public accountability means that the customers of the Port Authority, namely those who travel in the New York Metropolitan area, will bear the brunt of the abuses of the pension system.

In one sense, it should be easy to solve this problem: abolish this “pension spiking” scheme in the next collective bargaining session.  However, we get a hint of why these kinds of schemes are so hard to uproot. A toll collector named Princesella Smith is quoted as saying: “I’m blessed. I have a great job, and, in this economy, it’s great that I can cover everything with my eight hours a day and overs.”

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Not surprisingly, there has been a great deal of debate about raising personal income taxes on people who earn more than $250,000 per year.  The support and opposition have broken on political party lines. As a person who clearly would be subject to higher tax rates, were a tax reform law to pass, I wanted to weigh in on this subject.

I do not believe we can solve the deficit problem without raising taxes.  I also do not think that all tax increases on wealthier people are inherently bad.  I do not think the proposed tax rates are inherently bad relative to their effect on economic growth.  Furthermore, although I think we have a certain amount of “crony capitalism” in our country at all levels, money that gets redirected from the general public to a few favored corporate and union welfare systems, I think a certain amount of that will happen in any democract.

However, I have three fundamental issues with our tax system:

• Everyone should pay income taxes, except for the very poorest members of our society, and, for them, only for the period of time in which they remain below the federal poverty level.  Today, over 50% of Americans pay no income taxes.  That is wrong.  It disconnects over half of Americans from any economic stake in how income tax dollars are spent.  It has the psychological effect of deluding those not paying taxes that money will always be available from “the rich.”  Everyone should pay something.
• We need far tighter controls on how our tax dollars are spent.  I understand that, in a democracy, some uses of our tax dollars will go to causes that I would not personally support.  The majority of the voting public should help guide elected officials on the allocation of tax revenues.
• We need much more common sense in the way governments account for what they are spending, and what the long-term costs of that spending might be.  The whole issue of excessive retirement benefits has arisen because governments have hidden the long-term costs of these retirement obligations by using accounting rules that were prohibited for private businesses over two decades ago.  The Congressional Budget Office “scoring” of legislation is fundamentally flawed in two respects: first, it limits its evaluation to the ten-year period after the law is passed; and, second, it does not take into account the highly likely behavioral responses to a piece of legislation.  For example, any tax increase on businesses headquartered in the United States will cause some businesses to shut down U.S. operations and move investments and jobs abroad.  That kind of highly likely reaction to a tax increase is not factored into the CBO scoring model at all, even though any common sense evaluation of a tax law would take it into account.

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Our family was fortunate this past weekend in not experiencing any property damage or loss of power from Hurricane Irene.  700,000 other residents of Connecticut were not so lucky.  However, as I have thought about this disaster and others through which I lived during my lifetime, I have increasingly realized that much of the devastation of natural disasters is not “natural.”

Sometimes, the influence of bad human decision making on the scope of a disaster is obvious: Hurricane Katrina would not have been anything more than just another bad Gulf Coast hurricane, had the levees protecting big portions of New Orleans not failed to protect the city against water damage.  The levees were not built to protect against Category 4 or 5 hurricanes, so a disaster of the type that happened was inevitable and experts were not surprised when it happened.  Experts warned of this kind of problem, but were ignored year after year. Nevertheless, most of the time, we forget the degree to which we can anticipate disasters and minimize their impact.

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President Obama has proposed billions of dollars for rebuilding America’s transportation infrastructure.  Many others, including the America 2050 project, have very thoughtful plans for more intelligent transportation networks that will enable America to be globally competitive.  As a person who has been a strong advocate for transforming our transportation infrastructure, I could not agree more with the goals of better use of our transportation infrastructure and more public transportation in place of single-occupant vehicles.  The one place in which I might take a different view from those who advocate building new transportation systems is that I believe we need to repair, maintain and getter better yield from what we have.

However, I also believe that we could reduce the stress on our transportation systems with three non-transportation initiatives, all of which are far less expensive to implement than building a lot of new transportation infrastructure.

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Bob Herbert published an Op-Ed piece in the Saturday, July 11 New York Times entitled “The Human Equation,” in which he takes the Obama administration to task for not being more aggressive in addressing the unemployment crisis in this country.  He says:

“I’d like to see the president go on television and, in a dramatic demonstration of real leadership, announce a plan geared toward increasing employment that is both big and visionary – something on the scale of the Manhattan Project, or the interstate highway program, or the Apollo spaceflight initiative.”

He goes to propose a “Rebuild America” campaign to put people to work rebuilding infrastructure, including roads, schools, electric power grids, and mass transportation. 

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I welcome the opportunity to present testimony on transportation finance and funding issues.  Although I have served on this Board, and am chairing the Governor’s Reform Commission on the Reform of the Connecticut Department of Transportation, and am the Executive Chairman of Pitney Bowes, I am not speaking today on behalf of the Reform Commission or Pitney Bowes.

Before I provide my views and financing and funding strategies, I want to make several preliminary observations: (more…)

On Saturday, September 13, I was listening to a commentary by Geoff Colvin of Fortune magazine.  His topic was the increase in the number of items for which U.S. domestic commercial airlines are charging extra fees.  He particularly noted that U.S. Airways is now charging extra for water, except if it is needed for medication.

Having run businesses that had many different kinds of fees, particularly financial services businesses, and having been a consumer for many decades, I have some observations about what makes fees acceptable, and what causes them to be annoyances to consumers. (more…)

As a person who has been involved in providing advocacy and advisory services as a volunteer for over two decades, I find that public and political decision making relative to transportation shows our elected officials and the public in their least flattering light.

Clearly, we have a crisis in terms of traffic congestion, overburdened existing transportation infrastructure, too many bridges that are structurally deficient and functionally obsolete, and too many preventable safety-related problems.  In the July 28, 2008, USA Today, a federal transportation official was quoted as saying that we need an additional $225 billion in transportation spending to address this crisis.  Moreover, in the July 29 New York Times, an articled reported that the Federal Highway Trust Fund, the main source of federal dollars for road and bridge projects is in such dire financial straits that money may need to be borrowed from a federal mass transit fund. (more…)

Although I sometimes think that the focus on global warming risks focusing too much on one environmental issue, reducing carbon emissions, to the exclusion of others with an extremely high urgency, like environmental pollution that contributes to water-borne diseases in third world countries, or toxic chemicals in soils around the world, there are many opportunities to deal with both environmental pollution and global warming issues.

The biggest opportunity to address both in one strategy is the reduction of carbon from vehicle emissions into the air. Better fuel economy, reduced driving, and reduced emissions improve air quality, reduce traffic congestion, reduce asthma from bad air, and reduce the carbon footprint of driving.

That is one of the reasons we have advocated substituting remote commerce for face-to-face commerce relative to citizen interactions with government and other private sector transactional activity that reduces unnecessary vehicle trips. What are some of the “no-brainers” here?

• Why not eliminate all toll plazas and substitute either E-Z-Pass-type solutions or photos that capture a driver’s license plate number and result in a bill being sent to the driver? The highest emissions come from car engines running at low or idling speeds, as opposed to 55-mile-an-hour travel. Why do we keep toll plazas in place? For example, Ireland, which I visited this past week, is on the way to eliminating them. (more…)

This past week, I spent a lot of time driving in various parts of the Northeast and Mid-Atlantic states. I hit horrific traffic problems, which is not surprising to anyone who has spent time in areas like Boston, New York, or Philadelphia.

Two things are worth noting, one of which is a broader point about our society today:

• Traffic congestion is popping up in areas in which we have never experienced it before. For the past 15 years, my family and I have been going down to South Bethany Beach, Delaware for a week’s vacation. This year, for the first time, we experienced horrific traffic delays at odd times at places like the Delaware Memorial Bridge going into Delaware, State Route 113 south of Dover, and even some of the county roads between Route 113 and Bethany Beach. Much of this is a result of continuous over-building of new housing in areas in which the infrastructure is not there to support traffic.
• The bigger issue is that our infrastructure in many places has no flexible capacity. Driving from Peabody, Massachusetts, into Cambridge, Mass. last week, we experienced a horrific delay getting across the Tobin Bridge because of a problem on Storrow Drive that had an effect that radiated across a good part of Boston. (more…)