Commentary

The Reasons President Obama’s “Fix-It-FIrst” Program Isn’t Smart Transportation Policy

A national policy of fix-it-first would fail to prioritize and misallocate resources very significantly

“Tonight, I propose a ‘Fix-It-First’ program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country,” President Barack Obama said in his State of the Union address earlier this year.

But there are several reasons why President Obama’s latest call for Congress to spend an extra $50 billion on infrastructure is not a serious contribution to dealing with America’s surface transportation needs.

First, of course, is that the proposal made most recently in the State of the Union address, and three times previously, has no credible funding source. That, alone, has made it dead-on-arrival in Congress.

The second reason is that despite repeated presidential comments about America’s “crumbling” highways-and outgoing Transportation Secretary Ray LaHood’s outrageous remark that “America is one big pothole”- the state of repair of America’s highways and bridges is far better today than it was 20 years ago.

In a new Reason Foundation study, a team headed by David T. Hartgen analyzed 20 years of federal data on the conditions and performance of highways and bridges. All seven indicators showed improved performance trends over his time period on a national basis, as follows:

  • Rural Interstates in poor condition 1.9% (71% reduction from 1989)
  • Urban Interstates in poor condition 5.4% (18% reduction)
  • Rural arterials in poor condition 7.6% (49% reduction)
  • Percent deficient bridges 23.7% (37% reduction)
  • Percent narrow lanes, rural roads 9.6% (25% reduction)
  • Fatality rate (per 100M miles) 1.25 (42% reduction)
  • Percent urban Interstates congested 48.6% (7.6% reduction)

The only indicator that has not significantly improved in 20 years is urban congestion, and better maintenance (a la “fix-it-first”) would do little to reduce congestion. What’s needed for that is significant highway capacity expansion in metro areas, such as the addition of express toll lanes.

The one problem where more maintenance and repair funding seems clearly indicated is deficient bridges. But even here, some qualification is in order. First, the above figures from FHWA combine two bridge categories-“structurally deficient” and “functionally obsolete,” the former considerably more serious. The 2012 Bridge Inventory compiled by Better Roads magazine found only 63,543 structurally deficient bridges (not the 70,000 mentioned by the president in his State of the Union) versus 72,114 functionally obsolete ones. Thus, structurally deficient bridges are only 48% of the total measured in Hartgen’s Reason Foundation study.

But even more important, “deficient bridges” is mostly a state-specific problem, rather than a national problem. Many states made huge improvements in bridge conditions over the past 20 years, notably Alabama, Missouri, Nebraska, North Dakota, and Mississippi. But 10 states actually allowed their bridge conditions to get worse over this time period, including Alaska, Hawaii, Massachusetts, and Rhode Island. And in terms of absolute numbers, the states with outsized numbers of deficient bridges include Rhode Island (53%), Pennsylvania (39%), Hawaii (38%), and New York (37%). It’s states like these that need to step up their game on bridge repair, not the nation’s taxpayers overall.

And the third reason why “fix-it-first” is bad national policy is that it would not maximize the productivity of additional highway investment. As a proposed national policy, fix-it-first assumes that every maintenance and repair project would have a higher benefit/cost ratio than any new-capacity project. That might be mostly true in slow-growth states like New York and New Jersey, with high amounts of badly maintained highways and bridges, but is unlikely to be true of fast-growing states like Florida, Texas, and Virginia where a lot of existing capacity is newer and better-maintained and where more capacity is needed to cope with growth and congestion.

Turning again to the Hartgen study, we find that 21 states have zero miles of rural Interstates in poor condition, but two have double-digit percentages in poor condition: Alaska (10.7%) and California (16.3%). And for urban Interstates, nine states have zero miles in poor condition, but at the other end of the scale, seven have double-digit percentages: Louisiana (10.4%), New York (11.3%), Oklahoma (13.3%), Vermont (17.5%), New Jersey (17.7%), California (24.7%), and Hawaii (25%). These figures very clearly demonstrate that poor condition is not a national problem, but is one limited to a relatively small number of states.

In its biennial Conditions & Performance Report, the Federal Highway Administration runs an array of capital investment strategies through its detailed models to identify investments whose benefits exceed their costs. Were fix-it-first a sensible national policy, these models should identify most or all justified highway and bridge investment as “rehabilitation,” rather than as “capacity expansion and enhancement.” But the actual results of this analysis are strikingly different.

Chapter 8 of the latest (2010) edition of this report describes four different investment strategies, applied to various fractions of the nation’s total inventory of highways and bridges. As an example, let’s look at the results from FHWA’s modeling of investments in all federal-aid highways. The four scenarios, in increasing order of spending level, are (1) sustain current spending level, (2) maintain current conditions and performance, (3) an intermediate improvement strategy, and (4) a full improvement strategy (i.e., all projects whose benefits exceed costs). In all four cases, rehabilitation constitutes no more than 53% of the total, with the rest devoted-cost-effectively-to capacity expansion and enhancement. And the larger the total investment, the higher the fraction that is capacity expansion.

Obviously, some much-needed projects repair/replacement with new capacity. Major bridge replacements, such as the Gerald Desmond Bridge in Long Beach and the Tappan Zee Bridge in New York are good examples. So is the four-state Corridors of the Future plan to rebuild I-70 from Kansas City to eastern Ohio with the addition of heavy-duty truck-only lanes. And there are many pure capacity addition projects that would produce large congestion-relief benefits by adding express toll lanes in highly congested metro areas.

A national policy of fix-it-first would misallocate resources very significantly, even if there were a federal funding source available for it. So we can be just as glad that this proposal will not go anywhere. As we look toward reauthorization of the federal transportation program in 2014, we need to give states the tools they need to make highway and bridge investments tailored to the specifics of their individual circumstances.

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. A version of this column originally appeared in Public Works Financing.

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.

Aviation

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.