Eno’s Refreshing the Status Quo Investigates New Ways to Distribute Transportation Dollars

As the expiration of the federal surface transportation programs approaches, we at Eno decided to bust out the spreadsheets. Given that the factors that decide how more than $40 billion in annual highway funding have not been updated since 2009, we were curious as to how much had changed and what we could learn from creating factors that might be more relevant to today’s transportation needs. Our newest paper, Refreshing the Status Quo, was the result.

Formulas have been part of distributing federal transportation dollars since 1916, allocating funding mostly based on needs (for example, lane miles, population, or air quality non-attainment) or cost-to-complete funding for the Interstate Highways. But for the highway programs, the largest of any in transportation, factors based on real-world conditions are now moot. The process was enlightening and provided a few takeaways for Congress and the transportation industry to consider when working on reauthorization.

First, in an era where data is claiming to be the next oil, the transportation sector has dry wells. Most factors used in the analysis were several years old (and incomplete), and other factors that had traditionally been part of funding distribution had not been updated since 2009. Other factors that could have benefited the analysis, such as ways to measure transportation accessibility, congestion, or nonfatal crashes were lacking in quality or did not exist. Any real change to the distribution factors will need to be fair, and fairness requires good data.

Second, using performance-based factors demonstrated the fallacy of modal silos. If a state is going to be rewarded for reducing roadway fatalities, they could build safer roads. Or they could also cut speed limits, invest in transit, or build better bike infrastructure. But eligibility for a highway safety program is typically limited only for highway projects. If the programs are going to move toward a performance-based system of achieving national goals in safety and economic efficiency, which was an objective in both MAP-21 and the FAST Act, a future program might benefit from allowing states and localities flexibility to spend on whatever mode they think best to achieve it.

Finally, political realities mean new funding will be necessary to enable change. In each scenario, many states lost significant amounts of the funding on which they have come to rely. Meanwhile it makes little sense to twist formula factors solely for the purpose of making states happy, rather than targeting them to the needs Congress wants to fund and the performance they want to encourage. Perhaps reintroducing earmarks will overcome some of these challenges, but past experience shows that members of Congress are mostly concerned about how much their state is receiving. That might change if the program gets more direction, states are given more opportunities to compete for funding, and more flexibility to invest in the kinds of infrastructure that makes sense for them.

A presentation of the paper and the eight distribution scenarios can be viewed here. An article summarizing how states currently receive highway formula dollars is here.

The views expressed above are those of the author and do not necessarily reflect the views of the Eno Center for Transportation. 

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