Eno Paper Examines Potential Transportation Funding Option

Earlier this month the Eno Center for Transportation released the inaugural William P. Eno paper written by Nicolas Norbage an assistant Transportation Researcher at Texas A&M University. The paper is available on the Eno website. The paper, “Better Use of Public Dollars: Economic Impact Analysis in Transportation Decision Making” uses a case study approach to examine four states that use Economic Analysis to choose future infrastructure improvements. The in-depth study examines how the federal government and these states have been successful in using more analytical approaches. The study consists of three time periods: Pre-1990, the TEA bills, and the period after SAFETEA-LU passed.

Several previous federal programs including New Starts and TIFIA have used economic analysis. However the federal program as a whole still lacks quantitative metrics. Most states also lack such metrics.

By using economic analysis these states have taken one major step forward in developing an analytic transportation policy. Kansas used a TREDIS model to determine economic impact considerations over a 30-year period for regions and the state as a whole. Indiana used cost-benefit analysis and the REMI economic model to inform public information and decision-making at both the corridor and regional level for the next 30 years. Michigan used the MI best travel model and REMI for public information purposes at both the regional and statewide level for 20 years. Finally, North Carolina uses TREDIS software to inform decision-making at the Metropolitan Planning Organization (MPO) and Rural Public Organization (RPO) level for the next 20 years.

The paper makes several policy recommendations. The first is to develop a transparent, standardized economic determination process for existing discretionary programs. The second is to expand discretionary programs. The third is to enable USDOT to guide states in developing a transparent determination process. The final recommendation is to improve state decision-making.

While these goals would improve the process, the trick is in their implementation. My version of a transparent economic process is not Ray LaHood’s version. While he touts the discretionary nature of the TIGER Grants, I see a political patronage system. Norbage accurately documents some of the problems with the TIGER program. Expanding discretionary programs only works if the project has solid metrics. Many policymakers would not favor expansion of the TIGER program. Many state DOT’s may have problems with the third recommendation. Some states will be suspicious of a program where the federal government is the lead agency coordinating decisions. Some states may have better analytical processes than the federal government. Would these states be allowed to keep their processes or become subservient to a federal viewpoint? Finally, how will states improve the decision making process? It could be through suggested metrics; most states would support that approach. It could also be through mandates. Will it require federal resources and will there be firm guidelines for spending those resources?

Another issue is whether these states accurately represent the country as a whole. Indiana, Kansas, and North Carolina lack large metro areas with more than 3,000,000 people. Michigan, which has been particularly hard hit by economic challenges over the past ten years, is desperate to find a sustainable funding source and approach decision making differently from other big states. In states such as California, Georgia, and New York with one or more large population centers, arguments occur between urban and rural constituents concerning the best method for dispersing transportation monies throughout the state. Divvying up funds between Indianapolis and other smaller Indiana cities may not be as challenging as divvying up money in California between L.A., S.F., S.D. and the rural areas.

There have been numerous studies suggesting how to develop a better quantitative approach towards transportation. This study raises excellent points and examines four of the most innovative state DOTs in the country. These DOTs provide good templates for other states. Policymakers now need to take the next steps in determining whether these results are transferrable to other state DOTs, how to overcome politics in implementing these recommendations, and the details in any metrics process.

Baruch Feigenbaum is Assistant Director of Transportation Policy at Reason Foundation a non-profit think tank advancing free minds and free markets. Feigenbaum has a diverse background researching and implementing transportation issues including revenue and finance, public-private partnerships, highways, transit, high-speed rail, ports, intelligent transportation systems, land use, and local policymaking.

Feigenbaum is involved with various transportation organizations. He is a member of the Transportation Research Board Bus Transit Systems and Intelligent Transportation Systems Committees. He is Vice President of Programming for the Transportation and Research Forum Washington Chapter, a reviewer for the Journal of the American Planning Association (JAPA) and a contributor to Planetizen. He has appeared on NBC Nightly News and CNBC. His work has been featured in the Washington Post and Wall Street Journal.

Prior to joining Reason, Feigenbaum handled transportation issues on Capitol Hill for Representative Lynn Westmoreland. He earned his Master's degree in Transportation Planning with a focus in Engineering from the Georgia Institute of Technology.