The Highway Bill Debate Sheds Light on the Future of Transportation Funding

National Journal’s Transportation Blog asks about the status of the highway bill and whether the debate in Congress over surface transportation has changed substantially. I’m not surprised that crafting a reauthorization bill in 2012 is more contentious than usual. Given the out-of-control growth in annual budget deficits and the national debt, the size and cost of the federal government will likely be cut back in coming decades—and transportation will be no exception.

This context explains why there is more similarity between the House and Senate bills than you would imagine based on most pundits’ commentaries. Here is a short list of similarities, drawn from my recent article in Public Works Financing:

  • Program consolidation—both bills would dramatically reduce the number of separate programs, letting states make more choices in how to spend federal funds;
  • Optional “Enhancements”—both bills would no longer require a set percentage of the major highway program to be spent on things like bike paths, scenic trails, and other “transportation enhancements”;
  • Environmental streamlining—both make further attempts to reduce the convoluted and time-consuming process of getting large projects through the review process;
  • No high-speed rail funding—neither bill provides funding for the Administration’s signature HSR program;
  • No infrastructure bank—neither would create a new grants and loan entity for transportation projects;
  • TIFIA expansion—both would greatly expand TIFIA, a remarkable shift from grants to loans, so as to make limited federal dollars go further.

And perhaps most significant of all, neither bill would increase real annual funding beyond the levels of the last several years—the first time this has been the case since the program was created in 1956. These similarities all reflect the federal government’s dire fiscal situation and the need to start limiting—rather than endlessly expanding—the federal government’s role in transportation.

That context also explains the most radical element of all: the House proposal to shift transit funding out of the Highway Trust Fund. There are several reasons for this proposal.

First, given the miniscule growth in highway user-tax revenue, House budgeteers are seeking to make those limited funds do as much as possible for our under-resourced highway system. (This also explains their emphasis on the National Highway System, rather than scenic byways and bike paths.)

Second, with the Federal Transit Administration’s increased emphasis on justifying projects in terms of sustainability, smart growth, and economic development, the idea that transit investment helps motorists by reducing traffic congestion is less and less credible.

Third, in order to insulate the Highway Trust Fund from future across-the-board spending cuts, the Budget Control Act requires that at least 90% of a trust fund’s revenue come from user taxes. Going back to the original concept of a highway trust fund makes it easier to meet that test.

While that shift may end up being too radical this time around, it’s a sign of the times, indicating that business-as-usual in federal transportation funding is no longer an option. However the current bills turn out, the process of creating them offers us a preview of the transportation future that’s staring us in the face. It’s a future in which state and local governments will be taking on more of the burden, with non-federal user taxes and user fees (tolls and other mileage-based user fees) becoming a far more important part of the funding picture.

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.

Surface Transportation

In the field of surface transportation, Poole has advised the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, National Economic Council, Government Accountability Office, and state DOTs in numerous states.

Poole's 1988 policy paper proposing privately financed toll lanes to relieve congestion directly inspired California's landmark private tollway law (AB 680), which authorized four pilot toll projects including the successful 91 Express Lanes in Orange County. More than 20 other states and the federal government have since enacted similar public-private partnership legislation. In 1993, Poole oversaw a study that coined the term HOT (high-occupancy toll) Lanes, a term which has become widely accepted since.

California Gov. Pete Wilson appointed Poole to the California's Commission on Transportation Investment and he also served on the Caltrans Privatization Advisory Steering Committee, where he helped oversee the implementation of AB 680.

From 2003 to 2005, he was a member of the Transportation Research Board's special committee on the long-term viability of the fuel tax for highway finance. In 2008 he served as a member of the Texas Study Committee on Private Participation in Toll Roads, appointed by Gov. Rick Perry. In 2009, he was a member of an Expert Review Panel for Washington State DOT, advising on a $1.5 billion toll mega-project. In 2010, he was a member of the transportation transition team for Florida's Governor-elect Rick Scott. He is a member of two TRB standing committees: Congestion Pricing and Managed Lanes.


Poole is a member of the Government Accountability Office's National Aviation Studies Advisory Panel and he has testified before the House and Senate's aviation subcommittees on numerous occasions. Following the terrorist attacks of Sept. 11, 2001, Poole consulted the White House Domestic Policy Council and the leadership of the House Transportation & Infrastructure Committee.

He has also advised the Federal Aviation Administration, Office of the Secretary of Transportation, White House Office of Policy Development, National Performance Review, National Economic Council, and the National Civil Aviation Review Commission on aviation issues. Poole is a member of the Critical Infrastructure Council of the Los Angeles Economic Development Corporation and of the Air Traffic Control Association.

Poole was among the first to propose the commercialization of the U.S. air traffic control system, and his work in this field has helped shape proposals for a U.S. air traffic control corporation. A version of his corporation concept was implemented in Canada in 1996 and was more recently endorsed by several former top FAA administrators.

Poole's studies also launched a national debate on airport privatization in the United States. He advised both the FAA and local officials during the 1989-90 controversy over the proposed privatization of Albany (NY) Airport. His policy research on this issue helped inspire Congress' 1996 enactment of the Airport Privatization Pilot Program and the privatization of Indianapolis' airport management under Mayor Steve Goldsmith.

General Background

Robert Poole co-founded the Reason Foundation with Manny Klausner and Tibor Machan in 1978, and served as its president and CEO from then until the end of 2000. He was a member of the Bush-Cheney transition team in 2000. Over the years, he has advised the Reagan, George H.W. Bush, Clinton, and George W. Bush administrations on privatization and transportation policy.

Poole is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on privatization, Cutting Back City Hall, published by Universe Books in 1980. He is also editor of the books Instead of Regulation: Alternatives to Federal Regulatory Agencies (Lexington Books, 1981), Defending a Free Society (Lexington Books, 1984), and Unnatural Monopolies (Lexington Books, 1985). He also co-edited the book Free Minds & Free Markets: 25 Years of Reason (Pacific Research Institute, 1993).

Poole has written hundreds of articles, papers, and policy studies on privatization and transportation issues. His popular writings have appeared in national newspapers, including The New York Times, The Wall Street Journal, USA Today, Forbes, and numerous other publications. He has also been a guest on network television programs such as Good Morning America, NBC's Nightly News, ABC's World News Tonight, and the CBS Evening News. Poole writes a monthly column on transportation issues for Public Works Financing.

Poole earned his B.S. and M.S. in mechanical engineering at Massachusetts Institute of Technology (MIT) and did graduate work in operations research at New York University.