Ask the Experts – Next Surface Transportation Authorization

What are some of the key challenge in the upcoming surface transportation authorization?

Federal surface transportation legislation is set to expire September 30, 2009, pre­senting an opportunity for forging some new directions.  Many industry leaders have voiced strong support not only for increased Federal funding to address emerging national transportation needs, but also to develop a performance-driven, outcome-based Federal surface transportation program.  These two key issues are discussed in turn below.

1. Funding

One of the biggest challenges facing all levels of government across the country right now is finding sufficient and reliable sources of funds to not only adequately operate and maintain existing systems, but also to add new capacity.  The most dramatic challenge toward next authorization is the precarious situation with the Highway Trust Fund (HTF).  An infusion of $8 billion was needed last year to get us through FY 2008 and another infusion of funds may be needed to get us through FY 2009 and the situation beyond 2009 looks very bleak without an infusion of new revenues.  Both the National Transportation Policy and Revenue Commission and the National Surface Transportation Infrastructure Financing Commission recommended increases in fuel taxes and heavy vehicle fees into the HTF, movement toward vehicle miles traveled (VMT) fees, and various other potential passenger and freight fees.  Both Congress and the Administration are reviewing options but it appears that the most logical choice, increasing the fuel tax, may not be politically possible in the current economic situation.  All other solutions are second best in terms of their potential to generate sufficient revenue for this authorization cycle.  This could be such a huge obstacle that Congress may do a short term fix to the HTF and punt the authorization ball down the road another year or more, as with the last legislation, the Safe, Accountable, Flexible, Efficient Transportation Equity Act – A Legacy for Users (SAFETEA-LU).  Secretary of Transportation Ray LaHood recently proposed such an extension for 18 months.  Concurrently, House Transportation and Infrastructure (T&I) released a blueprint proposal for a full six year authorization.  The proposal includes significant program consolidation, adopts performance management approaches, and reestablishes the Office of Intermodalism in U.S.DOT with responsibility for new intermodal discretionary programs.  However, the T&I proposal does not address how the six year authorization of half a trillion dollars would be funded.

Cambridge Systematics has been examining future financing needs and options to meet the nation’s transportation challenges and has assessed alternative sources of short- and long-term transportation revenue.  Cambridge Systematics is at the cutting edge of transportation funding and financing and has done national revenue options analysis for the U.S. Chamber, the National Cooperative Highway Research Program (NCHRP), and the Federal Highway Administration (FHWA), and similar analyses for a number of states, including Alaska, Washington, Massachusetts, Pennsylvania, and New Mexico, as well as the metro Atlanta area.   Our work has ranged from the consideration of new revenue measures, to innovative finance opportunities that can leverage available Federal, state, local, and private funds and increase the financial feasibility of proposed investments.  The revenue options are pretty clear; there are not yet any unfound silver bullets.  The benefits of infrastructure must be sold to constituents and paid for through ongoing user fees.  Innovative finance plays a key role but it is no substitute for new revenue sources.

2. Measuring Performance

There are many justifications for a performance-based Federal-aid pro­gram.  Instituting a performance management process at the national level can help Congress and the Department better define a national transportation vision and mission, narrow the scope of Federal roles and responsibilities to emphasize transportation needs of national significance, and serve as a tool to address new public policy priorities (greenhouse gas emissions, energy supply, livability, and freight).  Furthermore, increased accountability for apportionments, grants, and earmarks is one way to assure the public and Congress that Federal transportation funds are being used efficiently and effectively.

The Policy Commission mentioned above and other entities have suggested the need for establishment of a clear set of national goals reflecting the broad issues or concerns that the Federal government hopes to shape through the next surface transportation authorization.  Based on a review of recent stakeholder authorization positions, at least five potential goal areas have been identified for surface transportation: 

• Safety – Measures the quality of transportation service in terms of crashes or incidents that are harmful to people, goods, and property.  Performance con­siders asset conditions and behavioral policies that contribute to or detract from safety.
• System Preservation – Measures the condition of the transportation system and actions to keep the system in a state of good repair.  The performance focus in this area encompasses the physical condition of pavements, bridges, and transit systems as well as the process (e.g., asset management) for developing cost effective strategies to deliver a desired condition and performance.
• Mobility/‌Congestion – Measures the efficient movement of people and goods.  Performance focuses on the time and cost of making a trip and the relative ease or difficulty and predictability with which a trip is made. 
• Freight/‌Economic Growth – This national goal area focuses on freight transportation and its contribution to national economic productivity and competitiveness.  Direct impacts are typically related to the time and cost of transportation experienced by users and shippers. 
• Environment and Community – Measures transportation program and pro­ject effects on the environment and quality of life, including concerns related to emissions, energy consumption, ecosystems, and livability.

Each goal area then requires performance measures and targets for assessing the impact of national transportation investments over the next authorization.  Transportation planning agencies then typically would define strategies within each goal area to improve performance.  These strategies likely will be a combination of pro­gram-level investments, specific projects, and policies. 

Implementation of a performance-based Federal-aid program is by necessity going to be evolutionary over the next authoriza­tion period and beyond.  The initial focus of the Federal-aid performance framework in the next authorization cycle should be focused on a collaborative learning process to improve performance management.  Nevertheless, there will be a need for clear national goals, milestones, and documentation of achievement of results during the upcoming authorization cycle.  

Cambridge Systematics has been a leader in this field for many years and has assisted the American Association of State Highway and Transportation Officials (AASHTO), many states, metropolitan planning organizations (MPO), and the FHWA in advancing performance management concepts.