As memories of "Yes We Can," "Drill Baby Drill," and even "Joe the Plumber" fade into the annals of electioneering history, Washington quickly moves forward to the job of governing. The following memorandum offers a brief recap of the election's results, specifically focusing on how the many changes in Washington, and in various states, are expected to impact the transportation industry. While the economic downturn leaves few businesses unscathed, we find that the anticipated policies resulting from the election should provide a much needed boom for the industry. With this shift in mind, we are confident that Capital Partnerships can assist you in navigating the new alignment of power to take advantage of new opportunities, both in the nation's capitol and throughout the country.

The President-elect and Policies of a New Administration:

Certainly, no single event will impact Washington more than Senator Barack Obama's victory. President-elect Obama and his transition team will now focus on laying the groundwork for his new administration and implementing the many policy changes proposed during the election.

One of Obama's proposals includes the creation of a National Infrastructure Reinvestment Bank ("NIRB") — an independent entity to be charged with the responsibility of investing in the "nation's most challenging transportation infrastructure needs." Obama's plan calls for the infusion of federal funds into the NIRB, totaling $60 billion over 10 years, to provide financing for transportation infrastructure projects throughout the nation. The projects funded through this Bank are anticipated to create up to two million direct and indirect jobs and should stimulate nearly $35 billion per year in economic activity.

Some reports also indicate that Senator Obama's campaign welcomed a proposal to create and finance a dedicated freight trust fund, likely modeled after the Federal Highway Trust Fund. This idea was first offered by the Coalition of America's Gateways and Trade Corridors ("CAGTC") and later embraced by the National Surface Transportation Policy and Revenue Study Commission. Capital Partnerships serves as a strategic advisor to CAGTC.

Revenue shortfalls and deficit concerns will likely delay federal implementation of Obama's more costly policy proposals such as health care reform, but these shortfalls, combined with the need to kick-start the economy, should also propel infrastructure development to the forefront. Even in the last few days congressional leaders have expounded on the NIRB idea, discussing the possibility of incorporating up to $150 billion of infrastructure spending into the stimulus package likely to be enacted late this year or early next year. A senior Obama advisor, former Treasury Secretary Robert E. Rubin, has noted that this type of stimulus would have more long-term positive effects than simply handing out checks to taxpayers. Certainly, it will be easier for the new administration and Congress to convince the voting public that infrastructure development is a better and more sustainable use of federal funds than bailouts for failing banks.

Congress, Chairpersons, and Cabinet Positions:

Post-election attention has also shifted towards congressional committees and leadership reorganizations after the Democrats' expansion of their hold on power in both the House and Senate. In the Senate, 93-year-old Senator Byrd's announced his intention to step down as Chair of the Senate Appropriations Committee. This move led to some jockeying among the Democratic leadership, with Hawaii's Senator Daniel Inouye relinquishing his Commerce Committee chairmanship to assume Byrd's position. Following Inouye, Senator Jay Rockefeller is expected to step down as Chair of the Intelligence Committee to head the Commerce Committee.

On the House side, committee chairmanship camps continue to line up, but we predict Transportation and Infrastructure Committee Chair Oberstar will keep his post. In part, his expertise is necessary to guide the 2009 reauthorization of SAFETEA-LU. After the election, Congressman Oberstar noted that the "Obama presidency dramatically changes the landscape" in opening the door for a sustained commitment to infrastructure financing.

We anticipate cabinet secretary nominations will be made public soon, but for now, the Obama transition team announced that no decisions will be forthcoming this week. Mort Downey, the current Chairman of PB Consult and former Deputy Secretary of Transportation under Clinton, was named to fill a key spot in the transition team. He heads the team's planning regarding the Department of Transportation, and whether he will join the Obama administration is not yet known. Capital Partnerships is privileged to have worked with Downey for close to 20 years.

State and Local Ballot Issues:

On Election Day, voters decided key ballot issues relating to transportation funding and infrastructure. Eight of the ten more prominent initiatives passed, reflecting increased voter support for public funding of clean and efficient transportation solutions. Even the two ballot measures that failed were rather close. Below are brief descriptions and results for the top ten issues. We would be happy to provide more information regarding specific ballot initiatives at your request.

• California High Speed Rail: $10 billion bond to provide funds for a $42 billion high-speed train between San Francisco and L.A. — Approved 52-48%
  
  
• Los Angeles Measure R: 1/2 cent sales tax increase to fund roads and mass transit projects throughout L.A. County — Approved 67-33%
  
  
• Santa Barbra County Measure A, CA: second attempt to renew a 1/2 cent "train and lane" sales tax, originally passed in 1989, to fund roads and mass transit — Approved 79-21%
  
  
• Sonoma Marin Area Rail Transit District (SMART), CA: 1/4 cent sales tax measure to fund a 70 mile SMART passenger "trail and rail" project — Approved 68-32%
  
  
• Honolulu Elevated Light Rail: uses pre-existing and federal funds to create a 20-mile elevated commuter rail line — Approved 53-47%
  
  
• Kansas City Light Rail: 3/8 cent sales tax increase after voters had originally approved of the plan but city council found it under-funded — Failed 44-56%
  
  
• St. Louis Proposition M: 1/2 cent sales tax increase, with 1/4 going to existing systems and the other 1/4 towards expanding the MetroLink system — Failed 48-52%
  
  
• Rio Metro Express Commuter Train, NM: 1/8 cent gross receipts tax with 1/2 for a new commuter train and the other 1/2 for surface transportation projects in 3 counties — Approved (percentages not available)
  
  
• North Central Regional Transit, NM: 1/8 cent gross receipts tax for 4 counties, with Santa Fe County contributing half to Rail Runner and the remaining counties contributing their shares to bus and van projects — Approved (percentages not available)
  
  
• Seattle Rail Transit: 1/2 cent sales tax increase to fund light rail and extended bus services — Approved 59-41%