Reason Foundation

http://www.reason.org
http://www.reason.org/news/show/leaders-discuss-future-federal-role

Reason Foundation

Leaders Discuss Future Federal Role in Transportation

Baruch Feigenbaum
August 28, 2012, 5:00pm

One session at The Institute of Transportation Engineers Annual Meeting and Exhibit in Atlanta focused on the new federal role in transportation under the Moving Ahead for Progress in the 21st Century (MAP-21) transportation bill. Mark Norman, Director of Technical Activities for the Transportation Research Board, moderated the panel that included Emil Frankel of the Bipartisan Policy Center, Susan Binder of Cambridge Systematics, Dr. Gena Evans of the Georgia State Road and Toll Authority, and David Gehr of Parsons Brinckerhoff. There was wide agreement that current transportation funding is insufficient, federal funding requires too many strings, and politicians need to be more open to innovative funding and financing options. 

All panel members agreed that the new MAP-21 bill kicks the funding problem down the road. The panelists were disappointed with the gimmick of borrowing against the future to pay for the current bill. All believed transportation policy makers must engage politicians on the economic role of transportation. In a time of fiscal restraint, panel members felt it was crucial for state agencies to manage funds more effectively. 

Emil Frankel suggests we view transportation as a utility. If a utility is operating efficiently and shows a need for more transportation funding, the utility is able to increase funding. Similar to utilities, transportation agencies could decrease customer costs if their costs decrease. The problem in current transportation funding is that the rate is fixed at a certain amount and changes only if politicians or citizens approve a tax increase. However, this has no relationship to the market. Additionally, transportation funds are often spent on non-transportation purposes. A utility does not have to worry about its funds being spent on prisons or museums. 

Frankel also thinks that we need more innovative financing options. He praised the expansion of the federal TIFIA program but thinks local and state leaders need to consider such options as well. He was disappointed with Mica’s provision that eliminated the prospect of tolling new interstates. If the federal government is going to limit federal funding it should allow states the maximum freedom. Limits on how to use funds that taxpayers support are more of an issue than not providing any funding at all.

Susan Binder believes federal user fees are a great funding mechanism. But she thinks maybe we should consider them minimums instead of maximums. She was disappointed with federal opposition particularly from the administration to a mileage-based user fee (MBUF). While she realizes there are privacy issues, such issues are ultimately solvable. It is disappointing that some groups that have a lot to gain with MBUF are some of the biggest opponents. She also believes mileage-based user fees should be implemented in a bottom-up not a top-down manner. 

Dr. Evans recommends that states make use of different types of financing tools including the federal TIFIA program, state infrastructure banks and loans. States should also consider different funding options including state and local grants as well as dedicated transportation funds. Politics is one of the largest challenges. Policy makers need to form a coalition that includes as many different constituency groups as possible. It is crucial to ensure state and local leaders feel comfortable with transportation plans and are involved in such plans. 

David Gehr suggests that transportation shareholders do a better job of messaging. Transportation professionals need to do a better job of explaining the transportation system and its importance to commerce. Most of the public considers infrastructure only when encountering a pothole, or seeing a highway that needs to be widened. Transportation types have poorly communicated the importance of transportation. For the public to accept changes to the transportation system, they have to understand a little more about how it works.


Baruch Feigenbaum is Transportation Policy Analyst


Print This