Fourth Round of TIGER Grants Have the Same Problems as Previous Rounds

My most recent commentary details the problems with the latest round of TIGER Grants. Last month, the U.S. Department of Transportation awarded a fourth round of Transportation Investment Generating Economic Recovery (TIGER) Grants totaling almost $500 million to 47 projects in 34 states and the District of Columbia. Last week when House Republicans eliminated the program from the U.S. Department of Transportation’s (USDOT) 2013 budget, the White House complained that “politics” was behind the decision. In reality the TIGER Grants have always been political. USDOT made several changes to its grants process to ensure that only projects of the highest quality were awarded grants. Unfortunately, despite the changes the results show that many of the winning projects were the same politically oriented, local boondoggles as in past rounds.

The big winners were ports, multimodal projects, and freight rail projects. Rural areas also did well receiving 24 percent of total funds. Secretary of Transportation Ray LaHood touted the grants ability to put, “people back to work across the country [and provide] a stronger economic future for the nation.” There is little evidence the grants accomplish either of those goals. The entire commentary is available here.

There were four changes between the TIGER III and TIGER IV processes. First, in TIGER IV the USDOT provided a more detailed and streamlined explanation for conducting cost-benefit analysis. From program inception, the USDOT economics team has produced quality, easy-to-understand instructions in cost-benefit analysis. These detailed instructions have been one of the program’s highlights. Unfortunately, they have not improved grant quality. Despite increased guidance between TIGER I and TIGER II, the average score of a project that received funding only increased from 2.2 to 2.3 on a scale of 1-4. The quality of the project applications had little to do with the size or geographic location of the applicant. While exact scores have not been released for TIGER IV, preliminary data indicate that additional guidance did not significantly increase scores. There are two possible reasons for the continual mediocre scores. First, applicants do not bother to conduct quality analysis because they believe politics or other factors are at play. Second, applicants do not have the technical know-how to create quality analysis. Neither reason suggests applicant quality will improve in the future.

Second, in TIGER IV only applicants can contact USDOT to schedule meetings. Previously, lobbyists could meet in an applicant’s place. While lobbyists can be useful; in this situation their role should be reduced. The department deserves credit for making the change.

Third, since this application round had a more compressed schedule, applicants in the preliminary round were required to include a detailed statement of work, project schedule and project budget. While providing more information immediately, is better than providing less, I am concerned that the shorter time frame reduced the application quality. It is not possible to conduct as much detailed analysis in two months as it would be in six. This could increase the political influence in the grant selection process.

The final change was extremely troublesome. The department set aside $100 million for high speed and intercity passenger rail. The administration has bungled high-speed rail from the beginning. From awarding High-Speed Rail (HSR) funding to 39 states to using HSR funds to increase train speeds 10 miles per hour, to ignoring the most appropriate corridor for HSR (the Northeast Corridor), the administration’s high-speed rail program has been an embarrassment even compared to other poorly-run government programs. If TIGER survives for 2013, Congress should eliminate HSR grant funding for the program. The Obama administration uses HSR funding for political purposes only. Future administrations from both sides of the political aisle may very well do the same.

The TIGER IV Grants have other problems. As in previous rounds, the grants fund far more local priorities than national needs. The federal government’s purpose in transportation is to fund and coordinate national projects. Article 1 section 8 of the U.S. Constitution authorizes Congress “to regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes.” However the five non-motorized transportation projects, the six transit projects and the six multimodal projects TIGER Grants have funded serve no national need. Some of the port, passenger rail and highway projects are also local in nature. While these may be excellent projects, if states and localities want them then states and localities should fund these projects.

The full commentary is available here.