The Future of the Federal Role in Transportation | Council of State Governments

Sean Slone at Council of State Governments writes about The Future of the Federal Role in Transportation

When the current federal surface transportation authorization bill, known as MAP-21, expires at the end of September, it likely will be replaced with a status quo plan.
Both the Obama administration and the Senate Environment and Public Works Committee recently have opted for a status quo approach to the role the federal government traditionally has played in sustaining the nation’s transportation system.
But a chorus of voices is once again advocating for a radical rethinking of those traditional federal and state roles in the transportation arena. Some see 2014 as a turning point since the federal Highway Trust Fund, which finances more than $50 billion a year in highway, bridge and transit projects, also appears past due for restructuring.
“The problem is the gas tax,” Rohit Aggarwala, an adviser to former New York City Mayor Michael Bloomberg and professor at Columbia University, wrote in a piece for Bloomberg View last year.
“(The gas tax) has declined in value drastically since it was last increased in 1993—even as the price of gas itself has tripled. As a result, both the main Highway Trust Fund and its transit account (often called the transit trust fund) are bankrupt.”

David Levinson, a professor at the University of Minnesota, also believes Congress should rethink and reprioritize what the Highway Trust Fund is used for. Levinson, another participant on this month’s webinar, co-authored a brief for the Brookings Institution’s Hamilton Project in 2011 with a title that gives a good idea of his position: “Fix It First, Expand it Second, Reward It Third: A New Strategy for America’s Highways.”
Levinson and co-author Matthew Kahn of UCLA propose that all revenues from the existing federal gas tax and tolls be redirected away from construction of new transportation projects and go “primarily to repair, maintain, rehabilitate, reconstruct and enhance existing roads and bridges.”
But new projects wouldn’t be left entirely high and dry under their proposal. They proposed a Federal Highway Bank to provide state funding to build new and expand existing roads. Funding would be contingent on strict performance criteria, such as a cost-benefit analysis.
“States would be required to demonstrate an ability to repay the loan through direct user charges and by capturing some of the increase in land values near transportation improvements,” they wrote.
The third prong of the duo’s proposal would involve rewarding states and local governments that exceed performance standards and achieve socially desirable outcomes on transportation projects in such areas as capacity, safety, equity and environmental improvement. A newly created Highway Performance Fund would reward states with subsidized loans and performance bonuses.

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