On the ‘need’ for road funding.

Lots of numbers are thrown around about “need” for road funding.

For instance, in Fix It First, (2011)   we said a “National Cooperative Highway Research Program [“NCHRP Project 20-24(49): Future financing options to meet highway and transit needs.” Table A1] report finds an annual need of $188.4 billion in 2007 dollars to maintain existing highway infrastructure, of which $109.8 billion is capital and the remainder ($78.6 billion ) is operations and maintenance costs (National Cooperative Highway Research Program [NCHRP] 2006).”

The National Surface Transportation Policy and Revenue Study Commission also has estimates which are higher, and the ASCE Report Card says about surface transportation (roads, bridges, and transit) “We are facing a funding gap of about $94 billion a year with our current spending levels.” These numbers are of course different, but all very similar, especially given the large span of years over which they have been reported. There is a reason they are similar, they derive from the same source.

Minetta Lane, New York.
Minetta Lane, New York.

Now where do the numbers come from? The root source of most of these “need” numbers are various runs of the Federal Highway Administrations HERS (HERS-ST) system (described here), which has been evaluated by GAO (here and here). HERS  is probably the best available system for building up an “engineering” estimate of needs, based on the condition of individual links in their database. While it is the best available, HERS is far from perfect. Nothing is perfect. As the description says

The program is noteworthy for its ability to conveniently perform sensitivity analyses in order to test whether the solution of recommended investments is robust to changing system goals and underlying parameters. Note that HERS does not reallocate traffic to reflect highway improvements. However, traffic growth induced by improved capacity and operating conditions is included, with half the estimated user benefits counted for induced traffic, consistent with consumer surplus principles. (FHWA, 2002d).

As with anything, the output depends on the inputs. If traffic is expected to grow, the need for additional capacity resulting from this kind of comparative statics analysis will be higher than if traffic is expected to be flat. The forecasts are exogenous, this is not a transportation planning model.  And while “induced demand” is sort of included, unless it is analyzing network flows, it can’t really be. If a link upstream of the link in question is improved, it will induce additional traffic both upstream and downstream (and reduce traffic on competing links). This induced traffic is due to rerouting, switching time of day or day of week, switching modes, making longer trips, and making trips that would not otherwise have been made, among other sources, and over the long term by encouraging new development. A network analysis is required to assess how much this is.

HERS is far better for assessing pavement  quality issues (for which links are separable) than level of service issues (for which they are not). To be fair, the more recent analysis conducted for ASCE  tries to address (p.34) this question in part by looking at a national Freight Analysis Framework network, and assigning (and reassigning traffic) to that, but that is a really crude sketch network, and the equilibration assumptions are not clearly laid out, and that only looks at choice of route which will be used, not the level of demand itself, and how those interact.

So using the HERS estimates for preservation is sounder than using the estimate for ensuring the same Level of Service. These two numbers are often combined and conflated. They should not be.

There isalso  undoubtedly some arbitrariness in pavement performance standards, bridge conditions, and other infrastructures as well, though I doubt it rises to the level of arbitrariness of highway LOS.

When being a responsible consumer of such numbers, ensure they are presented clearly. Estimates of need are likely overstated, both for reasons of methodology and due to motivated reasoning.

There are “needs” to make sure the highway system does not eventually crumble into dust, and there are “needs” to ensure it maintains the same level of service. One of these needs is not like the other.