The Oberstar Transportation Bill Is Fatally Flawed

The $500 billion “Blueprint for Investment and Reform” of federal surface transportation policy is a very ambitious proposal that would (if funding can be found, from as yet unknown sources) dramatically increase federal spending on highways, mass transit, inter-city passenger rail, and goods movement. It would also impose unprecedented “performance” requirements on states and metro areas in the name of accountability and complying with new federal goals. It’s an elegant rethinking of what the federal role could be—and it’s one that I think we should resist.

First, the Oberstar-Mica proposal would continue the shift that began with the ISTEA reauthorization back in 1991 of transforming federal fuel taxes from a user fee (i.e., paid by and for the benefit of highway users) into a general-purpose transportation tax, to be used for whatever Congress decides is important. Except for the $50 billion proposed for high-speed rail (which the bill implies would be general-fund money), and $12 billion of the transit program (also general fund), the remaining $438 billion seems intended to come from an expanded Highway Trust Fund. While nominally promising $350 billion for highways, only about $100 billion of that is dedicated exclusively to highways. Much of the rest would be “flexible,” and the language indicates there will be all kinds of requirements and incentives for states and metropolitan planning organizations (MPOs) to spend it in “mode-neutral” ways.

Second, the proposal is determined to impose what amounts to federal land-use planning, by mandating that metropolitan transportation plans be based on “smart growth” principles aimed at reducing trips in “single-occupant vehicles,” protecting “valuable farmland” in urban regions, reducing greenhouse gas emissions, and increasing “livable communities.” This is the California smart-growth model writ large, to be imposed on every urban area of at least 100,000 people. The bill even creates an “Office of Livability” within the Federal Highway Administration.

Third, despite claiming to drastically streamline and consolidate the more than 100 current federal surface transportation programs, the bill keeps many of the anti-highway community’s favorite ones, simply bundled under larger headings. The FHWA’s new Office of Livability would be charged with continuing the diversion of highway user revenues to non-highway purposes as it oversees Transportation Enhancements, Safe Routes to School, Recreational Trails, Scenic Byways, Bicycle Route System, and others. It would also work with the Federal Transit Administration to continue New Starts, Small Starts, Transit in Parks, and Metropolitan Planning. So much for shifting from numerous programs to competitive, performance-based funding.

Finally (given the space I have today), there is the glaring contradiction of the bill claiming to favor sensible use of tolling and public-private partnerships (PPPs) but creating new federal regulation of same. I have written previously that there is some justification for federal oversight of the Interstate highway system, on grounds of the federal government’s constitutional mandate to ensure the free flow of commerce among the states. But the proposed powers of the new Office of Public Benefit, Tolling Requirements, and Public-Private Partnership Requirements goes far beyond that.

In a sharp departure from every transportation reauthorization measure since 1991, all of which have liberalized federal barriers to tolling and public-private partnerships on federal-aid highways, leaving only the Interstates with some degree of restriction, the new Office of Public Benefit (OPB) would restrict tolling and public-private partnerships on all federal-aid highways. No such proposal by states (which in fact, own and operate all the federal-aid highways) could be implemented without OPB approval. An explicit aim of this part of the bill is to “keep Interstates toll-free except under narrowly-defined circumstances.” When you get down into the details of what provisions would apply to those tolling or PPP projects that do get approved, the provisions are mostly things states would incorporate into their long-term agreements anyway. But some, such as the “buy-back” requirement, could be real deal-killers, depending on how they were actually defined. It would be far better for the bill to adopt the recommendation of the Infrastructure Finance Commission and have the FHWA recommend best practices to the states on dealing with tolling and PPPs.

In proposing a bill that intends to spend some $200 billion more than current funding sources would provide over the next six years, you would think its drafters would be doing everything possible to encourage states to maximize their use of tolling and public private partnerships to help close the funding gap and pay for the bill. Instead, Reps. Oberstar and Mica are proposing an “Office of Public Benefit” that could actually stop such investment in its tracks. And that’s the last thing the nation’s infrastructure system needs.

Leonard Gilroy: Congress Will Just Figure Out How to Pay for $500 Billion Transportation Bill Later

Reason Foundation’s Transportation Research