Abstract
For more than 50 years, the U,S. Congress appropriated revenues from fuel and other excise taxes in a reasonably efficient way to construct the most extensive highway network the world has ever seen. The U.S. Interstate Highway System realized the dream of several generations of planners and politicians to knit together the vast geography of the U.S. with a network of high-speed, limited access roadways. Unfortunately, the Interstate Highway System was a tough act to follow and we’ve fumbled around for the past two decades with what a national transportation policy should look like and how and who should pay for it. This is also not the partisan issue it’s been painted as—both parties have controlled the White House and/or Congress during this time.
The facts are relatively straightforward. The U.S. economy and American way of life are intimately linked with what is still the most extensive highway network in the world. However, much of that network needs major repair and we never developed the kind of capital replacement strategy for the highway system we would expect from any well-run business enterprise. The asset management needed to keep the Interstate System in a reasonable state of serviceability will cost tens of billions of dollars annually, and the Highway Trust Fund, for many well-documented reasons 1 , will yield only a fraction of the funds to pay for all that needs to be done. What’s worse: while rational people would normally be expected to respond vigorously to what amounts to an existential threat to their economic well-being and basic quality of life, we’ve pretended the issue doesn’t exist.
Rather, instead of responding to calls to increase revenue by raising the gas tax or some other means, or to set more stringent priorities for project eligibility, or to change the cost-sharing and allocation formulas, Congresses led by both sides have frittered away much of what money was available on projects with little or no connection to the national highway infrastructure. In the truest spirit of the pork barrel, the Trust Fund has supported paving parking lots and local streets, and building museums, sidewalks, bicycle paths, and equestrian trails. There is no need to waste time here analyzing such projects; regardless of their merit, they are simply not part of what the Trust Fund was designed to support. Rather than a source of long-term investment capital, the Trust Fund became a pot of money for local interests to tap, through their Congressional delegation, for local projects they could not or would not pay for themselves.
Now that the states have the liability of maintaining and rebuilding the parts of the Interstate System that lie within their boundaries, it’s reasonable for the federal government to provide the funds to do so. However, this doesn’t require the hundreds of pages of legislation and thousands of earmarks that have typified recent reauthorization bills. The FHWA can predict with a great degree of accuracy how much will be available to the Trust Fund and could, from data on highway and bridge condition, usage, and a host of other metrics, develop objective statewide allocations for these funds. Congress would only need to approve the methodology and vote up or down on the final appropriation; much like the Base Realignment and Closure (BRAC) process which has proven remarkably resistant to Congressional tinkering. This would go a long way towards beginning to address the accumulated maintenance and repair shortfall and also help transform state DOTs from primarily road builders into to long-term asset managers.
Although a well-capitalized Highway Trust Fund could address most of the long-term maintenance and repair issues, expansion and new construction will require additional revenue. Because of political aversion to increasing the gas tax at the federal level, the most likely way to fund new construction should be directly through user fees in the form of tolls, or less directly from other locally generated revenues such as state and local fuel, sales, or other taxes. California, through its network of “self-help counties” has made extensive use of local sales taxes to fund highway and other transportation improvements These projects could be implemented through the wide range of emerging public private partnership arrangements or through public institutions—which agency leads matters less than the deliberate separation of new local projects from the federal Highway Trust Fund. The more widespread use of tolls as a revenue source would, no doubt, inspire pitched political debates but several states are already experimenting with tolling parts of the system.
Transportation improvements outside the scope of the Trust Fund such as urban transit, sidewalks and trails, and major investments for landside goods movement or high-speed rail, for example should be funded the old-fashioned way, via separate authorization and appropriations through the deliberative budgetary process. If such projects are of true national importance, then Congress should fund them and identify a revenue source to pay for them, whether through general funds or a more targeted tax or user fee.
Merely focusing on the next multiyear transportation reauthorization bill only guarantees that we will never address the real question. That is, what does U.S. transportation policy look like in the 21st Century, how will we fund it, and who will pay for it.
As the Congress continues to sidestep these issues, they segue nicely into several of the papers presented in this issue. “Peering Inside the Pork Barrel: Congressional Earmarking in Transportation,” by Gian-Claudia Sciara describes how the transportation funding process has been redirected through the process of earmarking. “Policy Making, Incrementalism, and News Discourse: Gasoline Tax Debates in Eight U.S. States” by Watts, Frick, and Maddison describes this most political aspect of transportation funding and Crane, Burger, Wachs discuss an entirely new funding model in “Putting a Tax On Oil.” Keeping with the transportation theme, Siemiatycki and Friedman discuss “The Trade-Offs of Transferring Demand Risk on Urban Transit Public-Private Partnerships.” The final paper in this issue, “Governing Technical Information Systems in Local Crisis Management” by Ransell and Wihlborg describes the friction between local and national governments in designing an information system. Finally, Paul Rabe reviews Urban Green: Innovative Parks for Resurgent Cities, a new book by Peter Harnik and New York City Mayor Michael Bloomberg.