Latest Round of TIGER Grants Continues Funding of Questionable Projects

Who doesn’t love the mall? One can shop in a wide variety of stores featuring clothing, electronics or toys. However, development patterns can change over time. Sometimes a once popular mall closes down after its clientele has moved away.

The city of Fresno, CA has decided to try to revive Fulton Mall, an old development in its downtown. Thus it is turning to a federal Transportation Investments Generating Economic Recovery (TIGER) program. While most transportation programs would not support economic development, the TIGER grants are not most programs.

The TIGER Grants are supposed to support “transportation projects of national significance.” Yet, during the 5th round of the TIGER grants, a large number of grants went to projects that were neither transportation related nor of national importance. A grant of $15.9 million went towards reconstruction of the Fulton Mall.

The Fulton Mall is located on a local street in Fresno. And while the city is opening the pedestrian-oriented mall to vehicular traffic, the main goal of the problem is not mobility but economic development. Furthermore, transforming one street leads to a very limited amount of economic development. What is the real reason that Fulton Mall received its funding?

The Fulton Mall will be located near the proposed site of Fresno’s high speed rail station; its proponents believe that this will enable the mall, and Fresno as a whole, to enjoy an economic boom in the near future. As has been discussed several times before, it is extremely unlikely that California will ever complete the high speed rail line which has failed to attract private investors. The California High Speed Rail (CA HSR) authority is unable to use any funds raised from state bonds unless it can prove that it has the ability to build the initial operating line between Merced and the San Fernando Valley. The only funds that the high speed rail line has received are $3.5 billion from federal grants. The initial operating section alone requires $31 billion.

We have written several times about ways to improve the TIGER Grants process. We do not want to cause federal officials undue heartburn but we believe that the administration could make real improvements if it wanted. And so far there is little evidence that it wants to make these improvements. The administration could have used the recent notice of grant making, in January, to implement revisions to ensure that grants support the program’s goal of providing funding for transportation projects of national importance. The administration did not. The only notable change is that applicants may now apply for slightly longer-term projects.

Applicants still do not have enough time to prepare their applications. USDOT is providing only two months to prepare their application. This window does not provide enough time to gather the necessary information to submit a full application.

The awarding of grants is still hamstrung by geographical restrictions. Worthwhile projects may go unfunded in favor of less worthwhile projects simply because a project is located in Georgia instead of Ohio. While this may be a political necessity due to the large expanse of the US, it would have been possible to minimize this by ensuring that a number of the grants would be elected on the merits of the project alone and not on whether it was located in a rural or urban region.

Applicants still cannot determine why their application fails. Since USDOT provides very little info to losing applicants. While the administration does not want applicants to game the system, we do not understand which projects applicants are supposed to undertake if USDOT will not explain its standards.

The Transportation Department should also consider adding a new rule barring duplication in funding. Regions that have recently received federal transportation grants should not, in the near future, qualify for funds for the same or a related project. For example, Kansas City which received $20 million last year to build a 2.2-mile streetcar, is considering applying for federal funds to expand the project an additional eight to ten miles. Even with a proposed tax increase, Kansas City does not have the funding to build the expansion. The Department of Transportation should reward other worthwhile projects before it gives a second grant to the same project. Likewise Fulton Mall should not have received federal funding as the California High Speed Rail has already received billions in federal funding. Implementing this rule would discourage regions from becoming reliant on federal funding for local transportation projects.

We understand that The Obama Administration loves the TIGER grants process. And we admit that discretionary merit-based programs can fund needed projects. But until significant changes are made, the program still has the appearance of using needed funding on pointless projects.

Baruch Feigenbaum is assistant director of transportation Policy at Reason Foundation a non-profit think tank advancing free minds and free markets.