By now it's become a cliche to say that America's infrastructure is in disrepair. Cue that famous stat about how 24 percent of bridges are either structurally deficient or obsolete.
With that in mind, many politicians argue that the US needs to spend a lot more money on transportation. President Obama has proposed $478 billion over six years to upgrade the nation's roads, bridges, transit, and freight — a big bump from current levels. The American Society of Civil Engineers wants to go further, asking for $1.6 trillion between now and 2020.
But in many ways, calls for more money misdiagnose the problem. One reason America's transportation infrastructure is faltering is that the considerable amount of money we do spend is often misdirected — leading to bloated costs and excessive sprawl while doing little to alleviate traffic congestion or deterioration.
Over at Streetsblog, Angie Schmitt recently wrote an excellent piece on this theme titled "More Money Won’t Fix U.S. Infrastructure If We Don’t Change How It’s Spent." Her basic, crucial point is that we don't pay nearly enough attention to where all this transportation money actually goes.
We spend too much on new roads and too little on repairs
Take those "crumbling" roads and bridges we hear so much about. Right now, the federal government kicks about $50 billion a year to state transportation agencies — with roughly 80 percent going toward roads and highways (another fifth goes to public transit). Surely that should fix the problem?
Except that, historically, states have used the majority of their money to build brand-new roads and highways rather than fix their existing ones.
Between 2009 and 2011, Smart Growth America found, states spent 55 percent of road funds on new construction — even though this represents just 1 percent of the overall system. (The amounts vary by state: North Dakota tilts heavily toward repairs, whereas Mississippi mostly focused on new building.) The remaining 45 percent of funds went to fix the other 99 percent of roadways.
If all these new roads were beneficial, that might make sense. But, as Schmitt points out, that's not always the case. One study by the Center for American Progress found that 50 percent of US roads don't even generate enough traffic to pay for themselves in gas taxes. With driving on the decline and the National Highway System reaching the end of its natural lifespan, there's a good argument for devoting more scarce resources to repairing the expensive and dilapidated system we already have.
Back in 2011, UCLA economist Matthew Kahn and the University of Minnesota's David Levinson made the case that Congress should devote most or even all federal gas-tax revenue toward repairs (and set up a separate infrastructure bank for new projects). For starters, they note that the productivity gains from expanding the road system were huge back in the 1950s, but those returns have diminished over time.
Meanwhile, there's a good economic case for focusing on repairs. Poor road conditions are a "significant factor" in one-third of all traffic fatalities and cause extra wear-and-tear on cars. What's more, because of how pavement deteriorates, it’s much cheaper to fix a road early on, when it’s still in "fair" condition, than when it drops down to "serious" condition:
Despite all this, Kahn and Levinson note, state and local officials tend to under-invest in repairs and over-invest in new construction. There are rarely cost-benefit analyses of federal transportation projects. And politicians prefer shiny new roads: they get to enjoy a good ribbon-cutting, and they don’t have to hassle drivers with orange cones and repair crews.
Similarly, when a highway gets clogged, it's more palatable for state agencies to expand lanes rather than put in place congestion fees — even though research has shown time and time again that building new lanes or roads doesn't actually alleviate traffic jams. (More people simply decide to drive during rush hours.)
If that's true, then shoveling even more federal money at state agencies won't fix things. "Pumping billions of additional dollars into state DOTs without reforming the current system could actually make it worse," Schmitt writes, "[by] giving agencies license to spend lavishly on new projects that serve only to increase their massive maintenance backlogs."
Can transportation policy be reformed?
In theory, sure. Policymakers on all sides of the spectrum have made suggestions to rejigger transportation spending in recent years. It's just difficult to change the current system too dramatically.
Back in 2012, the Senate passed a two-year transportation bill that would have required states to spend at least 60 percent of federal funds on repairs. That bill also would have asked the Department of Transportation to establish "minimum-condition" standards for infrastructure, with states facing penalties if their roads fell into decrepitude. The problem? These provisions got cut from the final bill in negotiations with the House.
Obama's newest budget proposal — which would boost transportation funding from about $55 billion per year to about $80 billion per year — also suggests some reforms along these lines. He would set aside about $5 billion per year to fix roads and bridges that are "deficient" and "pose a safety risk." His proposal also includes about $1 billion per year in incentives for states to try different approaches to reducing congestion.
At the same time, Obama's budget would also increase the amount of money given to state highway agencies by about 25 percent. As Angie Schmitt pointed out in a separate earlier post, this "will mean more money for agencies that still haven’t figured out how to kick the highway expansion habit."
Reshuffling how much money goes toward repairs is far from the only transportation reform being talked about. There are good arguments that the US over-invests in highways and under-invests in freight (say). Environmentalists, for their part, often argue that we should focus more on building public transportation networks and less on promoting car-centric sprawl.
In recent years, there have been a few moves along these lines. The TIGER grant program, first introduced in 2009, has spent about $3 billion getting states to compete for funding by submitting projects that have been shown to have clear benefits. (Chicago got funding for an un-sexy but worthwhile program to alleviate freight bottlenecks.) This is an attempt to impose some sort of cost-benefit analysis on transportation projects. But it's also a tiny slice of overall funding.
Some conservatives, meanwhile, have pushed the other way and argued that the federal government should actually reduce its interference with transportation funding. In a recent Detroit News op-ed, Emily Goff of the Heritage Foundation argued that the feds now divert too much highway money toward things like mass transit projects. Instead, she argued, states should be free to decide their own needs, without strings attached.
Whatever the favorite solution, the basic point is the same: If you're worried about upgrading America's infrastructure, paying attention to where the money goes is just as important as the actual level of money — and maybe more.
Obama's big budget idea: Tax corporations to fund our roads
I linked to it above, but Angie Schmitt's piece on transportation spending is very much worth reading (as is her coverage more generally).
The Department of Transportation recently put out a 300-page report on America's likely transportation needs over the next 30 years. Deron Lovaas has a shorter breakdown here.