Problems with the Government’s Transportation Investment Generating Economic Recovery Grants

How TIGER grants fail to prioritize national needs

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 winning projects were the same politically oriented, local boondoggles as in past rounds. The big winners were ports, multimodal projects, and freight rail projects in Democratic districts. 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.

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.

As before, many extremely questionable projects were funded. Using a strict cost-benefit analysis model, the department would not have awarded $5,000,000 to Concord, N.H. (population 40,000) to improve livability and construct a snow-melting system. The transportation benefits of awarding $18,000,000 to a 1.4 mile Fort Lauderdale, Fla. streetcar that will serve a maximum of 2,800 daily passengers and be located several miles from a commuter-rail line and BRT line are non-existent. While Native Americans from the Turtle Mountain Band of Chippewa have a distressing 69 percent unemployment rate, a $4,000,000 grant that repaves a highway and adds bike/pedestrian lanes will neither improve transportation nor stimulate economic development for them. Finally, House Minority Leader Nancy Pelosi received $10,000,000 to fill gaps in the transportation network of the University of San Francisco’s new medical center. This local project should be funded with local resources. Since school leaders have successfully secured millions of dollars in donations to build the complex, they should be able to find another $10,000,000 for transportation network gaps. The only reason these gaps needed to be filled is because of the new hospital. This project likely would not have been funded if Nancy Pelosi – representing California’s 8th Congressional district – were not minority leader.

Clearly, the process remains political. Of the 47 projects, 29 or 62 percent are in House districts represented entirely by Democrats; 16 or 34 percent are in House districts represented entirely by Republicans; and two or 4 percent are in a House districts represented by both Democrats and Republicans. Democrats control 44 percent of the seats in the House, yet their districts receive 62 percent of the grants. In the Senate, of the 46 state projects (D.C. does not have senators), 20 or 43 percent are in states with two Democratic Senators; 33 percent are in states with a Democratic and a Republican senator; and 24 percent are in states with two Republican senators. Democrats control 51 percent of the Senate; Republicans 47 percent; and Independents 2 percent. Democrats do not make out as well in the Senate as in the House, but their districts still receive 60 percent of the funding.

Similar to previous rounds USDOT continues to evaluate projects with vague metrics. While some concepts such as “livability” are difficult to rank, quantitative metrics have been developed and reviewed by subject experts. USDOT could have included two quantitative metrics for each ranked criterion. For example, in the “livability” section statement USDOT could have revised its first metric from “Will significantly enhance user mobility through the creation of more convenient transportation options for travelers” to “Will provide missing links in the network providing connectivity.” This will reduce travel times by an average of five minutes per trip.” The second livability metric could be changed from “Will improve existing transportation choices by enhancing points of modal connectivity on existing modal assets” to “Will enhance the highway mode resulting in increased throughput.” These would be more specific and would be more helpful in evaluations.

USDOT continues to rely on very little documentation. The administration cannot produce any written statements to demonstrate the reasons for its award selections. Since USDOT did not provide documentation, some experts believe it may not be choosing the projects with the highest scores. USDOT acknowledges that documentation of activities is vital for the accountability of its decision-making. Yet in regards to the TIGER Grants it did not provide any substantial written record of decision-making. While USDOT explains the grants process and criteria satisfactorily, it does not publish the reasons for its review team’s decisions, including any explanation as to why some applicants with similar scores are selected and others are denied. In the New Starts program, USDOT publishes all scores for each application and uses these scores exclusively as the determination for distributing awards. It could use this process for the TIGER grants.

Creating a successful discretionary grant process is very challenging. Getting applicants to conduct cost-benefit analysis, creating a fair review process, and dealing with the political hurdles are difficult. Despite criticisms from the Office of Inspector General and others, USDOT has failed to make major changes to its program. Republican members of the House should kill this program in the 2013 budget. Further, Congress should ensure that no money is appropriated to an executive branch discretionary grant program unless the program prioritizes national needs, includes real cost-benefit numbers and has discretionary not political goals.

Tiger IV Projects Funded by Mode

Baruch Feigenbaum is a policy analyst at Reason Foundation.