The Federal Role in Institutional Change

In the run-up to the last authorization bill, Moving Ahead for Progress in the 21st Century (MAP-21), metropolitan regions had their sights set high. In 2009 the Democrats controlled both the legislative and executive branches, and the chairs of the House and Senate committees authorizing the highways and transit legislation were, unlike during the previous reauthorization, sympathetic to metropolitan transportation issues. With over 80 percent of Americans living in metropolitan regions and climate change at the forefront of the national agenda, there was a potential opportunity to create more specific programs focused on dealing with metropolitan transportation issues. Goals included a large multimodal metropolitan discretionary grant program, a reformed transportation planning and capital programming process, and more targeted formula funding for urban regions. Unfortunately, due to a lack of available revenues and challenging political circumstances, these goals fell by the wayside. The final product, MAP-21, contained significant reforms but an improved focus on metropolitan regions was not one of them.

The good news is that the political winds have shifted again, and there is an opportunity to restart this effort. The House Republican caucus still faces substantial internal dissent on virtually all legislation, but after the last election Republicans may have some greater awareness about the need to attend to Americans living in metropolitan regions. Both the House and Senate Committees have shown an interest and willingness is moving ahead with new legislation.


As advocates for metropolitan regions consider their next move, with reauthorization approaching again in 2014, they might consider a focus on incentivizing institutional change. While a multimodal discretionary grant program for metropolitan regions remains a worthwhile goal, continued Congressional resistance to discretionary programs coupled with a continued lack of available funding makes it a challenging one to achieve. But most metropolitan regions need more than funding – they first must spend their existing funds more effectively. This is a concept that should appeal across party and regional lines. Most regions lack any kind of regional planning body that can optimize investment decisions and implement operational changes on the network, and most Metropolitan Planning Organizations (MPOs) compose Transportation Improvement Plans (TIPs) that are lists of projects rather than strategic investment programs. Beginning to address the need for institutional change in metropolitan regions could be an effective and achievable goal. Accomplishing it requires answering three questions: 

What kind of institutional change is desired?

Metropolitan regions face complex transportation challenges with limited resources. In such a scenario, it is essential to make wise investment decisions based on potential returns on investment. Ideally these potential returns should be based on the transportation-related goals the region has devised, and investments should be made on a programmatic rather than project-specific basis. Unfortunately, most large metropolitan areas in the U.S. are characterized by a large array of transportation agencies with divided responsibilities. One agency might be focused on mass transit, another on local streets, another on highways, and yet another on planning for all of these things. Moreover, these agencies proliferate with the multiple jurisdictions within regions. Most urban areas encompass multiple cities, counties, and often states. It is incredibly challenging to make wise investment decisions on a regional basis within such a framework.

Consolidating all of these transportation agencies into one for each region is not realistic or even desirable, and mergers have sometimes failed to produce the expected improvements. But there must be a better approach than the current one. At a minimum, each metropolitan statistical area should be limited to one MPO. Even better is if the MPO or other agency can encompass the entire region, and transportation agencies could be consolidated across modes, enabling better investment tradeoffs and operational decisions within today’s multimodal networks. For example, the Metropolitan Transportation Authority in New York, the Metropolitan Transportation Commission in the Bay Area have jurisdiction over multiple modes and exercise authority over large swaths of their region. 

Why is this a federal responsibility?

The federal role in metropolitan transportation is well established, even if some still try to argue that it should be abolished. Once the decision was made that the Interstate System should run through rather than around metropolitan regions, the federal role in those regions was tied to the maintenance of those facilities at a minimum. But beyond that there is a long-established federal role in public transit, metropolitan transportation planning, and congestion mitigation. With the national economic importance of metropolitan regions only increasing, along with their environmental and energy impacts, the federal role in dealing with metropolitan transportation problems should be a given. But what might not be a given is the federal role in fostering metropolitan institutional change. If metropolitan regions do not have effective regional planning bodies, some might argue that this is not the concern of the federal government. One could make the case for letting those regions that fail to plan effectively lose out to those who succeed, and over time competition will sort things out.

The problem with this approach is that federal money is involved, and is growing scarce, so the federal government should be focused on making sure this money is invested wisely. A second problem is that overcoming institutional challenges is very difficult and virtually no one had succeeded in actually doing it. The regions one might point to where there is some effective regional planning – several areas in California often receive this distinction – have not spurred any imitators. Institutions become more entrenched over time, making change more difficult and time-consuming. Elected officials typically have more pressing issues to deal with and cannot spend their limited political capital trying to consolidate or eliminate transportation agencies. For example, former Mayor Antonio Villaraigosa made transportation a priority, but focused his efforts on raising revenues and speeding project delivery. Understandably, he did not attempt the enormous challenge of consolidating the multiple planning and transportation bodies in the Los Angeles region. The only way such change is likely to come about is if it is driven, at least in part, by the federal government.


How can the federal government foster such institutional change?

Only the federal government can foster such institutional change. While the federal role in transportation may be diminishing, it still accounts for about 40 percent of all capital funding. Despite the fact that 92 percent of federal funding is distributed to the states based on a politically devised formula, the provisions that accompany that funding can and do have a dramatic impact. Fostering institutional change does not require a new program. It requires the federal government to specify the kind of institutional change desired and then reward those who are able to achieve it. Rewards should take the form of greater flexibility in spending, or ideally, more available funding (attempts to use mandates or withhold funds to achieve similar objectives have often proven fruitless).

Congress could also direct USDOT to develop objective measures for evaluating regional consolidation. Similar to other measures being developed under MAP-21, it makes sense to start by collecting the measures and evaluating how well regions are doing. Then when regions are comfortable with incentives based on those metrics, those can be introduced. Even before we get there, one way to start consolidating might be to focus on MPOs, which are directly funded by the federal government but defined by the states. Regions could be promised the same amount of overall funding if they consolidate MPOs within the region in a manner consistent with federal objectives. If such a program were to prove successful, perhaps it could be extended to rewarding regions when they consolidate different modes within one agency.


Fostering institutional change within metropolitan regions may not be sexy or immediately rewarding, but it is a necessary and vital effort that can foster tangible improvements, and that only the federal government can effectively take on. Perhaps the new Secretary of Transportation, former Charlotte Mayor Anthony Foxx, could see this as an area of opportunity. Coming from a large metropolitan region himself, he may very well see the value of such change. This effort is consistent with past administration efforts to foster planning and decision-making across agencies both at the federal and local levels, and is a logical next step for this White House. However, this change is unlikely to occur through executive action alone. Congressional legislation will be needed to articulate the goal and develop the performance measures that could make such change a reality. Now is the time to begin talking to Congress about possible ideas.

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