Level the Playing Field

The following is an abstract of a recent Brookings Institution study about federal policy on transportation funding that was posted the New Urbanism listserv today. The short of it is that highway projects have a totally unfair advantage over transit-related projects. From General Motors buying streetcar lines in the ’20s and ’30s, FEMA assistance policies, to incongruous transportation funding, I am often reminded of how sprawl and the state of our cities has been shaped and guided by different forces–many of them having little to do with the market.

Highways and Transit: Leveling the Playing Field in Federal Transportation
Policy

by Edward Beimborn and Robert Puentes
December 2003

Automobile trips dominate the way we travel. Conventional wisdom assumes that this is the result of a fair competition between all transportation modes operating under the same federal policies and rules.

However, the conventional wisdom is wrong. Federal policies that govern highway and transit projects are not the same. In fact, these two modes, which federal law specifically expects to work together in the development of a balanced multi-modal system, are treated differently. This unlevel playing field has profound impacts on metropolitan America and on how
cities, older suburbs, and newer suburbs grow and develop.

Imagine that the urban, or metropolitan, portion of the interstate highway system was built according to the same procedures as those used or proposed to build major transit systems. The result would be:

Only 50 percent of the capital costs for major highways would be paid from federal sources rather than 80 or 90 percent. Cities would have to aggressively compete among one another for their highway funds based on the quality and justification of the proposed project. The rules for the competition would be subject to change without any input. Some states,
cities, and metropolitan areas would never be able to build any highways even if there was a pervasive desire by the public and the local officials to do so. Only a few highway segments could begin construction in any year.

If major highways projects were built by the same rules as transit, highways would need a congressional “sponsor” who would secure an earmark by competing with other members for scarce funds. Cities unable to get an earmark would have fewer freeways. Local governments would have to demonstrate that they have sufficient funds to pay for their share of the costs of building the highways. They would also have to demonstrate that they would be able to operate and maintain these highways, as well as their existing highways, into the future.
A substantial portion of highway funding would likely have to come from local property taxes, local sales taxes, or local income taxes. Often there would be limited state contribution to the costs. In many instances, public referenda would have to be approved to get local authorization for project funding.

Also, highway projects would have to compete with police, fire, education, and other programs for funding. In times of budget shortages, highways could be closed completely or eliminated.

The highway would need to be justified on an explicit measure of cost effectiveness. Agencies would have to specifically state how they would manage the land use impacts of their highways. Finally, intensive mandated studies would have to precede the project and would be subject to an independent review by the federal government and an open comparison to other projects.

In short, if the rules that apply to new transit projects were applied to highways, highway construction would be very difficult and subject to intense political scrutiny and debate. There would be fewer urban and suburban highways and the shape of metropolitan areas in the United States would be radically different. Lifestyles of Americans, their mobility, and the health of the economy would be different from what we now have.

A common theme in transportation is that transportation decisions are best made by local elected officials at the metropolitan level. Decisions on the future form and nature of the transportation system are best made by those who are most affected and by those who have the best understanding of day-to-day transportation problems.

Good local decisions require that various transportation options be compared equally and consistently on their merits. Local and metropolitan decision-makers should then be able to choose the best set or combination of transportation strategies that meet local views, values, and directions. Thus, local leaders should be able to pursue the best transportation
alternatives for their communities, rather than the most easily funded and approved alternative.

Unfortunately, this has not been the case in national transportation policy. Transit and highway systems are treated differently in federal policy, law, and regulations. Local governments are faced with major difficulties in obtaining funds for new transit systems. At the same time, highway funding can be obtained with relative ease. This unlevel playing field can distort decisions at the local level.

This brief will discuss the policy and regulatory barriers to considering and implementing new transit projects, and the relative ease of highway development. Additionally, it will highlight the differences in the way new transit and highway programs are treated in federal legislation. Finally, it will suggest reforms to level the playing field between highways and transit
as Congress debates reauthorization of the federal transportation laws.

December 16th, 2003