Renewing the National Commitment to the Interstate Highway System: A Foundation for the Future
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Commentary

Renewing the National Commitment to the Interstate Highway System: A Foundation for the Future

The report makes several good recommendations but falls short of truly providing a realistic, financially sustainable path forward for Interstates. 

Earlier this month the National Academy of Sciences held the launch event for a new report, “Renewing the National Commitment to the Interstate Highway System: A Foundation for the Future.” The study, excellent in some ways and disappointing in others, will be officially released next year.

In the 649-page report and appendices, the 14-member committee examined the history of the Interstate system and its effects on the U.S. transportation system.  The committee detailed the emerging challenges, uncertain future,  system needs, and examined a litany of funding and financing options. It provides several recommendations.

As part of the Fixing America’s Surface Transportation (FAST) Act passed in 2015, Congress asked the Transportation Research Board (TRB) to conduct a study on the future of the Interstate Highway System. Many parts of the Interstate system are more than 50 years old and the concrete or pavement from the roadbed up needs to be replaced. Many sections need to be widened; some Interstates would benefit from the elimination of curves or the relocation of on- and off-ramps.

Let’s start with the positives—there is a lot to like about the report. The study provides a comprehensive history detailing the system’s creation from President Roosevelt’s sketch to President Eisenhower’s detailed map to the subsequent system’s completion under the late President George H.W. Bush. It explains the different pavement levels of a highway cross-section and provides a basic understanding of the roadbed, critical to understanding the system’s biggest problem. The report details the troubling number of structurally deficient bridges and also reveals the influence of federal policy on states’ decisionmaking.

While the Interstate system was being built, government policy incentivized new construction, which often prompted needed maintenance to be deferred. Since 1991, however, policy has incentivized maintenance. Relatedly, pavement quality has improved over the last 25 years. However, there has been new capacity added.

The report also addresses the uncertainty in any long-range planning process and includes detailed sections on population growth, economic changes and automated vehicle development. Projecting growth in vehicle-miles traveled (VMT) is tricky. For 50 years VMT increased faster than population but during the Great Recession VMT declined. It has subsequently resumed growing. The report examines VMT growth rates of 0.75 percent, 1.5 percent and 2.0 percent per year. Given the long-term nature of rebuilding the Interstate System growth of 1.0 to 2.0 percent seems reasonable. Future projections using the National Bridge Investment Analysis System (NBIAS) and the Highway Economic Requirements System (HERS) models seem as realistic as is possible for a long-term estimation. The funding chapter includes almost every funding method possible. Most impressive were the detailed sections on user fees, truck fees and tolling.

If the report does not provide enough detail for some readers, the 10 appendices do. While every appendix is thorough and informative, the Demographic Forecasting, Connected and Automated Vehicle Impacts, and the Funding and Financing Options are especially relevant. It is clear that everybody involved in the process including the committee members, consultants, government officials, subject area contributors and reviewers spent considerable time and effort preparing this report. This is one of the most complete reports that I have ever seen from the National Academies.

However, the report has some serious weaknesses. The largest is the failure to recommend one or even several innovative funding and financing solutions. State departments of transportation (DOTs) know the Interstate system needs to be rebuilt. The problem is a lack of funds to do so. Yet, the report’s short-term recommendation of substantially increasing federal fuel taxes and indexing them to inflation and fuel economy is basically the same old approach—including 90 percent federal funding. Congress has not increased fuel taxes in 26 years. It would take tremendous political will to increase the tax and to index it to inflation and fuel economy.

Further, due to the increasing number of hybrids and electric vehicles on the road, the gas tax is becoming inequitable and increasingly complex to administer. The gas tax is like a rockstar on his farewell tour. It’s on borrowed time and not a long-term mechanism for paying for roadways. A gas tax increase might be considered acceptable short-term policy if the revenue is dedicated solely to improving the Interstate system. But political realities suggest that if the gas tax is raised, state and local governments would want to shift some of those funds to local priorities including county bridges, transit and cycling trails.

Given the unlikelihood of Congress increasing the federal gas tax, the federal government cannot afford to pay 90 percent of the costs needed for the Interstate system. But even if it could, the Interstates are owned by the states. Therefore, states should provide a much larger percentage of the funding. Federal policy has encouraged states and local governments to create their own transportation revenue sources. Requiring a 90 percent federal share ignores the pioneering work states have conducted in raising their own revenue.

A better approach would be allow the tolling of Interstates for reconstruction and to finance these projects via per-mile tolls charged to all drivers on those Interstates. That would support revenue bonds and other financing tools. Tolling would not be allowed until the Interstate was completely rebuilt (and widened if necessary). Tolls would be collected electronically using gantries and, unlike the gas tax, would be dedicated solely to that Interstate’s maintenance and upgrades, not to politicians’ pet projects.

This type of financing can stretch limited funding farther. For example, the Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides loans to qualified projects, allowing repayment over the lifetime of the loan; Private Activity Bonds (PABs) encourage private sector capital to be used for transportation projects.

Per-mile tolling is one form of mileage-based user fees. Two nationwide transportation commissions have already recommended switching from the gas tax to a mileage-based fee system. Both the incoming chairman and the ranking member of the House Transportation and Infrastructure (T&I) committee, Reps. Peter DeFazio and Sam Graves, support transitioning to a mileage-based user fee.

To its credit, the report recommends lifting the ban on Interstate tolling. Yet its recommendation that “Congress should prepare for the need to employ new federal and state funding mechanisms,” is hardly a full-throated embrace of road user-fees.

Another minor concern with the report is its focus on climate change. Climate change is a real, partially man-made phenomenon that causes serious problems. State DOTs have been planning for the effects of climate change—more serious storms, instability in the weather, sea-level rise—for years under the term “hazard and disaster planning.”  Elevating bridges, hardening roadways and adding evacuation routes are increasingly commonplace efforts at the state level. Automobiles are also changing rapidly. Tesla’s new, fully-electric Model 3 is a game changer in producing a mass market, attractive electric vehicle. The emergence of electric vehicles, coupled with the reduction in coal-fired power plants, could significantly reduce greenhouse gas emissions that lead to global warming. The report’s best practices chapter is a great addition and the climate change appendix is thorough and well written, but this is not a new issue and state and local governments are already working on it.

The report also includes several mentions of “right-sizing” highway infrastructure, which is often code for tearing down highways. There may be excess road capacity in some places across the country, but it is not usually on Interstate highways. This recommendation may prompt local NIMBY (Not In My Backyard) activists to disrupt the nationwide movement of people and goods and be especially harmful to large urban areas.

Overall, the report makes several good recommendations but falls short of truly providing a realistic, financially sustainable path forward for Interstates.

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