Federal Transpo Policy Entering New Era, Say NYC Officials. Now What?

The shift in driving habits has exposed the inadequacy of the federal gas tax to fund national transportation programs, and the need to shift away from road building. Graph adapted from the ##http://www.fhwa.dot.gov/policyinformation/statistics/2010/vmt421.cfm##FHWA##

It’s a new era for federal transportation policy, say the top New York City Department of Transportation officials tracking action on Capitol Hill. We just don’t know what kind of era it’s going to be.

“If this was 1996 or 1985 it would be pretty clear where we would go with federal transportation policy, with a few tweaks,” said DOT Director of Policy Jon Orcutt during a presentation at NYU’s Wagner School last night. “That’s not true today.”

Two changes are forcing a shift in transportation politics and policy at the federal level. The amount Americans drive has started to stall out. And earmarks have been transformed from political windfalls for powerful Congressmen to untouchable liabilities.

Linda Bailey, the federal programs advisor for NYC DOT, said that working for New York City has given her a new appreciation for the policy drawbacks of transportation earmarks for the localities receiving them. “You typically get $1 million for a $10 million project,” she said. “Somehow now you’re supposed to come up with $9 million to fund the rest of the project.” The city still has earmarked money from the last transportation bill, passed in 2005, sitting on the table, Bailey said.

But at the same time, the lack of a new transportation bill — Congress recently passed its ninth extension of that 2005 law, which expired in 2009 — is in part due to Congress members’ newfound opposition to directing federal dollars back to their districts.

“It’s thrown the whole formula out of the window, in terms of what you do politically,” said Orcutt. In particular, the end of earmarks has forced federal transportation policy to become more sharply ideological, whereas horse trading could paper over divides in the past. This year, for example, suburban Republicans helped kill the House of Representatives’ radical transportation bill, which would have eliminated dedicated funding for transit entirely. With earmarks, argued Orcutt, those same representatives might have been able to bring big projects to their districts even while cutting transit in the rest of their regions, and safely voted yes on the overall bill.

One in ten dollars in the last transportation bill was earmarked for specific projects, said Bailey. No earmarks at all were included in either the House or Senate proposals from this year.

Even as the elimination of earmarks complicates the path to passing a transportation bill, changes to the way Americans get around are challenging the very structure of federal transportation policy. Though federal transportation spending remains heavily focused on building highways, the growth in driving slowed considerably over the last decade, and actually declined in 2008 and 2009.

Adjusted for population growth, the trend is even more striking. According to a report from U.S.PIRG released today, the average American drove six percent less in 2011 than in 2004.

“Transportation is changing in this country,” said Orcutt. “Driving is leveling off. The federal program is really obsolete, in a way.”

The shift away from driving threatens the financial footing of the transportation system. The gas tax hasn’t been raised since 1993, but for many of those years, the continued rise in mileage masked the erosion of the gas tax by inflation. Without that growth, the plummeting value of the gas tax — in constant dollars, the gas tax has fallen from 18.4 cents a gallon to only 11 cents — can’t fund what it used to.

That, the DOT officials argued, is why no one in Washington seems able to pass a significant new transportation bill. The House Republicans, led by Transportation Committee Chair John Mica, tried to cope with declining revenues by ending the funding of transit out of gas tax receipts, as well as trimming road spending by a smaller amount. That plan has gone nowhere in the House; Bailey said she’d heard that the Republicans only managed to find 180 out of the 218 votes they needed for Mica’s bill.

The Senate’s bipartisan transportation bill, which passed 74-22, cobbled together enough unrelated revenues to keep funding levels exactly where they were under the previous law. Those funds were only enough to last 18 months; a more fundamental rewrite of the law would be necessary almost immediately.

Though the Senate bill consolidates a number of federal programs, the DOT officials said the only truly significant change in it is the expansion of TIFIA, a federal loan program. TIFIA loans have been used to great effect in cities like Los Angeles, which are looking to stretch local revenues further, said Orcutt, but financing isn’t a replacement for funding. “At some point, you have to decide to spend more,” said Bailey. Similarly, Orcutt argued that public-private partnerships, sometimes touted as a new paradigm for transportation funding, “don’t really do anything if there’s not real money attached.”

Unfortunately, the political will to raise the gas tax is scarce. Bailey said she doesn’t see the current House Republicans approving an increase in the near future. The Obama administration, added Orcutt, hasn’t been any more receptive to increasing the gas tax, arguing in bad times that it would harm the economy and during the recovery that oil prices are rising too quickly.

In fact, both the Senate and House bills would mark the end of the transportation funding paradigm that has prevailed ever since the interstate system was created. Neither relied exclusively on the gas tax, meaning both abandoned the traditional “user-pays” philosophy that has guided federal transportation spending. It’s clear that the current era of federal transportation policy is coming to a close, but the next era can’t emerge until Washington is willing to find the money for the level of spending it demands.

  • Airlines and freight railways already provide interstate transportation, at little or no cost to taxpayers. Also, the interstate road network is mostly used for local trips, which is evident from the travel peaks morning and afternoon. Maybe the need for federal highway funding is overblown. Mabe greens and fiscal conservatives could find agreement on that.

  • Ian Turner

    Erik,

    You are delusional if you think that passenger air travel comes at little taxpayer expense:
    – 1992 Replacement value of the U.S. commercial airport system (virtually all of it developed with federal grants and tax-free municipal bonds) was $1 trillion.
    – TSA costs taxpayers $3.2 billion per year, at a subsidy of $1133 per flight
    – Operating air traffic control costs taxpayers $3 billion per year.
    – Total USDOT spending on air transportation was $14,000,000,000 in 2002
    – September 11 bailouts to the airlines came to $15 billion.

    – And don’t forget, there are comparable subsidies at the state and local levels.

    –Ian

  • @7c177865bd107a919938355fe93de93a:disqus I didn’t know it was that much. It seems a fifth of US DOT spending goes to aviation. Still, freight rail seems to get almost nothing. I still think air and rail should be allies of the livable streets movement. They are a safe and efficient way of moving traffic over long distances.

  • Larry Littlefield

    Look at that lane miles compared with vehicle miles traveled.  If nothing else, that should debunk the idea that the U.S. hasn’t expanded transit because it has been expanding the road system.  For 40 years, this country hasn’t built much of anything.

    And now the country is getting poorer, and it is in debt with a very entitled group of soon to be seniors to support.  The future is all about whether we can afford the maintenance of what we have, and repurposing the infrastructure we have for more efficient use.

  • Ian Turner

    Erik,

    That’s not really true, either. Amtrak pays the pensions of freight railroad workers, and railroad workers have their own (more generous) forms of social security and unemployment insurance. Obama’s proposed 2012 budget transfers $7 billion to these retirement programs alone.

    In addition, a significant portion of the federal government’s passenger rail budget is spent on projects to improve freight railways — essentially a giveaway to the system owners. The subsidies are smaller — probably under $10 billion annually — but it is not fair to say that freight rail is unsubsidized in the US.

    The reality is that very few forms of transportation in the united states are free of material subsidy. Perhaps commuting by horse or snowmobile? But even then, there are fuel subsidies in place.

    –Ian

  • Larry Littlefield

    Here’s an article on the future from Alex Marshall.  We can’t afford to build roads because we can’t afford to maintain the ones we have.  The same by be true for just about everything.

    http://www.bloomberg.com/news/2012-04-05/why-does-u-s-build-roads-if-it-can-t-pay-to-fix-them-.html

  • marcella

    BIKING in NYC is the way 2 go!! But we need those BIKE lanes pronto –and lots more laws protecting our riders!

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