The responses to Representative John Mica’s plan to reduce transportation spending to affordable levels are shrill and bombastic. “1.4 million infrastructure jobs lost due to republican transportation budget short sightedness” claims a Florida newspaper. It’s the “road to ruin” says Oregon Representative (and ranking minority member on the Highways and Transit Subcommittee) Peter Defazio. Many others decry Mica’s proposals to cut or merge their favorite
slush funds programs.
Let’s look at that 1.4 million jobs claim. The paper said Mica’s plan would “eliminate one million four hundred thousand jobs with the cuts to be made to our transit funding.” That is laughable. Page 18 of APTA’s Public Transportation Fact Book says the transit industry employes about 402,000 people. Federal funding of about $5.2 billion in 2010 represents less than 10 percent of total transit industry expenses of about 57 billion (page 22 of APTA Fact Book).
Mica’s presentation suggested that transit and highways would each be cut by about the same amount. Cutting federal funding by 30 percent thus represents a 2.7 percent drop in transit funding. If no other funds are found to replace the decline in federal funds and transit agencies find no ways of saving money other than to lay off personnel, a 2.7 percent drop in funds may result in a loss of 11,000 jobs. The Florida paper was off by a mere 1 million 389 thousand jobs, or about 12,600 percent.
How did they get it so wrong? Partly, perhaps, because they counted one job for six years as six different jobs (meaning they would have counted 11,000 jobs as 66,000 jobs). Also, the paper probably counted secondary jobs; for example, if you had a job building a McMansion for a bus driver earning $100,000 a year, but lost it because the driver’s transit agency cut back on his overtime to save money. But secondary jobs are typically two for every primary job, so we have a total of less than 200,000 jobs, meaning the paper still overestimated by more than 500 percent.
Defazio’s view is based on a highly questionable principle (unless you are a super-neo-Keynesian economist like Paul Krugman) that we can and should try to borrow-and-spend our way back out of the recession, especially if you spend on ego projects that few will ever use. Left unsaid by Defazio is whether he thinks we should cut budgets when the recession is over and, if not, where the money is going to come from to pay for his utopian dreams in the long run.
The League of American Bicyclists is appalled that a Republican would say that one his top priorities “is to eliminate ‘frivolous spending for bike trails.’” Let’s get this straight: bike trails are not frivolous. They are just not something that should be funded by the federal government.
One critic made a perceptive point about the plan: The 1950s Called and Want Their Transportation Bill Back. Actually, it would be accurate for the ’60s too: the idea that users should pay for their own transportation began to get lost in the 1970s when Congress allowed cities to spend the cost of cancelled freeways on transit.
The Republican proposal is getting support from some quarters, including the American Highway Users Alliance and the American Trucking Association. Mica’s plan would cut federal funding to highways just as much as transit, but these groups seem to recognize the corrosive effects of long-term subsidies on agencies and the economy as a whole.
While the Republican plan is a step in the right direction (meaning the direction of less federal involvement in state and local transportation), there is plenty of room for improvement. Mica proposed to eliminate most competitive grant funds in favor of formula funds, which is a good thing as competitive grants are much more highly politicized.
But while he would kill the New Starts transit program, which has led many cities into building disastrously expensive rail transit projects, Mica would keep some other competitive grant programs such as the Congestion Mitigation Air Quality (CMAQ) fund. Most CMAQ projects neither relieve congestion nor improve air quality, or if they do they don’t do it cost-effectively.
While Mica’s preference for formula funds is a good thing, many of the formulas in use are arcane and inane. For example (to quote a recent book), “9.32 percent of the Urbanized Area [Transit] Fund is divided among areas that have 50,000 to 199,999 residents based on their populations and population densities. Of the other 90.68 percent, 33.29 percent goes to urban areas of 200,000 people or more with fixed guideway transit based on the route miles and vehicle revenue miles of fixed guideway transit. The remaining 68.71 percent goes to urban areas of 200,000 people or more with bus transit based on their bus vehicle revenue miles, population, and population density.” Each portion of these formulas has some special-interest group behind it demanding that their members get a share of the take.
The Antiplanner humbly suggests that federal transportation spending be reduced to three or four formula funds that heavily depend on the actual user fees collected by state and local governments for transportation facilities. Best of all, short of completely eliminating federal transportation funding, would be one formula fund distributed to the states based heavily on user fees. States could spend their share of the fund any way they wanted but would be constrained by the knowledge that future funding would depend on the user fees they could collect from projects funded today.