The Agenda

Quick Note on Transportation Spending

Ben Adler, writing in The American Prospect, argues that a new transportation proposal from the House Republicans is inadequate to the scale of our transportation needs. He makes a number of points, some of them more convincing than others. I’ll focus on two things.

First, Adler writes the following on congestion pricing:

[F]or supposed advocates of local control and the magic of the market, House Republicans have failed to promote either adequately when it comes transportation. Take congestion pricing: Currently, states are not allowed to put tolls on their section of an Interstate highway. But the best way to unclog highways would be with tolling at high-volume times or for single-occupancy vehicles. Some states would do this if given the freedom. Yet Republicans have not proposed letting local governments harness the market’s ability to price a good more effectively.

This is a sound criticism. Donald Marron, drawing on the work of Joseph Kile of the CBO, has written on how congestion pricing and taxes based on miles traveled might allow us to get more out of existing transportation infrastructure:

The federal government spent about $43 billion on highway investment in 2010. To maintain the same quality of highway performance would require an average of $57 billion in annual federal spending in coming years, according to the FHWA. That price tag drops to only $38 billion, however, if we make good use of congestion pricing. Congestion pricing would thus save federal taxpayers almost $20 billion per year; state and local governments would save even more, since they pay for more than half the costs of these projects.

Tyler Duvall, a veteran of the Bush White House, wrote an excellent essay for National Affairs on how more effective use of congestion pricing can improve the efficiency of our transportation system:

What might such reform look like? To have any chance at improving our transportation system, it would first need to involve a marked change in our approach to transportation funding. Money should no longer be handed out through simple grants, with a focus on preserving some sacrosanct funding “process.” Rather, the focus should be on performance and results. Money should be allocated based on whether projects will achieve specific, useful goals — such as relieving congestion, improving safety, upgrading the quality of pavement, and so on. And of course the allocation of funding should rely on earmarks and other highly politicized approaches as little as possible.

Second, the federal government’s role should shift — to more clearly support “national” projects of broad significance to our transportation system, rather than a series of small, local projects important to individual members of Congress. Third, there should be a systematic means of quantifying costs and benefits, modeled on private-sector project funding. We simply cannot persist in channeling money through rigid sub-categories, formulas, and policy silos that bear little relation to the real needs of our transportation system (and the people who use it).

In an era of constrained budgets and a stagnant economy, Duvall’s approach takes on much greater significance as it holds out the hope of reducing the need for public funding while making the U.S. transportation system more conducive to economic growth.  

Second, Josh Barro brought an innovative new project from MassDOT, funded primarily by federal dollars, to my attention:

MassDOT is replacing the bridges with modular superstructure units that have been fabricated off-site, eliminating years of work in the roadway.

One wonders if this kind of modular approach can be applied more broadly. Innovation of this kind is the goal of Barry LePatner’s continuing activism concerning cost overruns and inefficiency in the building trade. You can find a brief precis of LePatner’s approach in a recent essay he wrote for Bloomberg Government:  

Using appropriate technology in our nation’s transportation infrastructure will produce enough savings to offset thestaggering costs resulting from the past few decades of deferred maintenance.

For example, new assessment technologies exist to anticipate bridge remediation years before rust, corrosion andcracks in the structure appear. The federal government needs to provide states with funds to purchase this equipment and train their inspectors to use it.

Enabling bridge inspectors to ensure precision and objectivity in their evaluation process, which in turn allows us tocatch problems earlier when they are easier and less costly to fix, can save state governments millions of dollars a yearin unnecessary remediation costs.

From an economic standpoint, keeping transportation infrastructure in a state of good repair makes good sense. A recent study by the American Association of State Highway and Transportation Officials shows that a poorly maintainedroad with 25 years of maintenance neglect costs three times as much to repair as a road that has been regularlymaintained over the same period.

I have no problem with shrinking transportation budgets over the longer term. In the initial phases, however, we need to embrace true fixed-price contracts, hire forensic monitors, and take other measures designed to contain cost growth and drive consolidation and productivity growth in the construction industry.  

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