Without policy reform to increase the use of revenue-generating programs like congestion pricing, the new federal Highway Bill is bound to hurt America's highways, in part due to a failure of federal spending prioritization, writes Ryan Prince in this week's Planetizen Op-Ed.
On Tuesday, May 17th, the U.S. Senate passed an incredibly expansive transportation spending package (Highway Bill), committing $295 billion for highway programs, transit investments and transportation research programs. The new spending level equates to a 35-percent increase over the previous Highway Bill (TEA-21), which authorized $218 billion in federal spending over six years. Surprisingly, the Senate failed to confront the looming fiscal gap in the Highway Trust Fund by committing to spend more money than the Trust Fund is anticipated to receive in tax receipts. In previous spending bills, Congress has explicitly linked anticipated tax receipts in the Highway Trust Fund to transportation spending. Proposed spending levels in this legislative cycle, however, dramatically exceed non-partisan forecasts of Highway Trust Fund revenues from the federal gas tax and other user fees.
Without policy reform to increase the use of revenue-generating programs like congestion pricing, the new Highway Bill is bound to hurt America's highways, in part due to a failure of federal spending prioritization. Congestion pricing, a tolling mechanism that levies a variable fee to drivers entering congested highway networks, is the most substantive and anticipated improvement to federal transportation policy. Yet the Senate attached an amendment to the Highway Bill that would prohibit congestion pricing on existing Interstates. Because the federal interstate program has been so successful -- a seamless and efficient national transportation network connects the lower 48-states, enhancing security and economic productivity on a local, regional, and national level -- it appears that Congress has abandoned the possibility of improving the interstate system on a national scale.
Realizing a bit of mission-creep, in recent years federal highway spending has begun to finance projects that no longer fulfill the original intent of the federal highway system. Instead, federally-funded local highway projects now serve more to alter regional travel patterns than to improve inter-state connectivity. Major investments increasingly fill local funding gaps for infrastructure "wish-lists" or finance "trophy-projects" for the local congressional district, evidenced by the ever-increasing size of federal earmarking. Two "trophies" picked at random from the House version that are difficult to square with the goals of the federal transportation policy include:
- $7 million for completion of a performing arts center in Rochester, N.Y.
- $2.5 million in improvements for the Blue Ridge Music Center in Galax, VA
Given the contemporary fiscal climate and changing priorities of highway investments, Congress should protect the innovations initiated in ISTEA (the first comprehensive federal surface transportation spending package) and extended in TEA-21. These innovations include programmatic flexibility for spending and investment decision-making at the state and local levels. For rapidly growing metropolitan regions with limited room (or public support) for capacity increases, congestion pricing should be an available policy tool for optimizing existing highways.
Yet the Senate has banned congestion pricing on existing Interstates in all states save Virginia. This policy is retrogressive and reduces the flexibility afforded to local and regional transportation authorities. Proponents of the policy deride congestion pricing as double taxation. But although the gas tax financed the fixed-costs of road construction, it is not an optimal means of accounting for the marginal cost imposed by drivers on congested roadways. Congestion pricing, to the contrary, does provide a means for internalizing the social costs of congestion.
In previous bills, Congress had authorized congestion pricing pilot programs, but included stringent guidelines that hampered implementation. At the state and regional levels -- the laboratories of transportation innovation -- congestion pricing schemes have shown that tolling improves the operational efficiency of existing facilities. For example, in New York, the Port Authority has employed variable toll rates to create incentives for off-peak truck trips on Hudson River crossings between New York and New Jersey. In California, SR-91 and I-15 have demonstrated that tolling can dramatically reduce travel times for commuters in the peak period under both public and private ownership. Moreover, in both New York and California, variable toll rates have effectively spread out demand in the peak period.
TEA re-authorization is the time to enact bold reforms and promote innovative policies for the next six years. Programmatic flexibility and the pilot programs, including the congestion pricing program, in the two previous Highway Bills were steps in the right direction. Congress should strengthen these initiatives and allow metropolitan regions to determine the optimal mix of transportation investments given local circumstances. By prohibiting congestion pricing on existing Interstates, Congress will unduly hamper local transportation officials and undermine the most significant opportunity for policy innovation and revenue enhancement. In the current bill, Congress confuses a dramatic spending increase with policy reform. Throwing money at the problem will not fix urban congestion; we've traveled that road before, and the results are uninspiring.
Ryan Prince is a transportation and economic development consultant based in New York City. Previously, he served as a research assistant in Washington, DC working on federal and state transportation policy.
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