Should federal transportation funds be distributed to states and cities based on fixed criteria, such as population and land area, or should they be handed out based on the political whims of whoever is in power at the moment? While Republicans in Congress are moving in the former direction, the Obama administration is moving towards the latter approach.
Last week, the House Transportation and Infrastructure Committee passed a surface transportation reauthorization bill that would use formulas to distributed almost all federal gas taxes. Among other things, this would eliminate the New Starts transit fund, a multi-billion-dollar annual fund that gives cities incentives to plan high-cost rail transit projects, so they can get “their share” of federal dollars, when low-cost buses would work just as well.
Meanwhile, the Obama administration has published draft rules revising the New Starts planning process by making the criteria for transit funding more vague (and therefore more political) than ever before. Where House Republicans would take the politics out of transit funding by turning transit grants into formula funds, the administration’s new rules make transit funding more political than ever by creating vague new criteria that cities can use to justify rail transit projects.
The debate over the New Starts rules goes back to 2005, when the Bush administration–disturbed by ridiculously costly rail projects that cities were proposing–introduced a firm limit on the cost-effectiveness of those projects. Transit agencies were required to estimate how many hours of time a project would save travelers (including both transit and auto travelers), and divide that into the total annualized cost of the project. Any projects that cost more than about $24 per hour would be rejected.
Also in 2005, Congress (at the behest of Portland Representative Earl Blumenauer) created the “Small Starts” transit project aimed at funding streetcars. But streetcars would never be cost effective when compared with buses, so the Bush administration’s rules effectively prevented the Federal Transit Administration from funding any streetcar projects.
The 2005 law carried over language from previous reauthorization laws saying that New Starts funds can be granted only for projects that have been justified by an alternatives analysis based on “mobility improvements, environmental benefits, cost effectiveness, operating efficiencies, economic development effects, and public transportation supportive land use policies” (49 USC 5309(D)(2)). The Bush rule was an effort to implement this law.
After the Obama administration took office, the FTA started giving out money for streetcars, but most of that money came from “TIGER” stimulus funds, not New Starts or Small Starts. In early 2010, however, Secretary of Immobility Ray LaHood announced that the administration would eliminate the Bush cost-efficiency rules so the FTA could give cities money for streetcars based on their contributions to “livability,” whatever that means.
But it takes years to rewrite federal regulations, so here we are two years after LaHood’s original announcement and we only have draft rules. Those rules define “cost effectiveness” as “the annualized cost per trip” including capital, operating, and maintenance costs compared to the existing transit system and/or the no-build transit system in the “horizon year,” which is usually about 10 years after the rail transit project has been completed. The problem with this is that it allows transit agencies to ignore any alternatives, such as express bus, bus-rapid transit, or HOT lanes, other than the existing system or no-build.
The rules also add several criteria that can be used to justify rail projects on top of those included in the law (which, as listed above, were “mobility improvements, environmental benefits, cost effectiveness, operating efficiencies, economic development effects, and public transportation supportive land use policies”). The new criteria include “multimodal connectivity,” “environmental justice,” “livable communities,” plans to locate major public facilities near the rail line, and “innovative procurement and construction techniques.”
The Antiplanner is not a lawyer, but I question whether the administration can add new factors that are not in the law. While locating public facilities near rail lines might fit under “transit supportive land use,” the others do not. Nothing in the law allows the FTA to fund a rail line based on its contribution to multimodal connectivity, environmental justice, livability, or the use of innovative procurement and construction techniques.
Legal or not, many of these factors are so vague as to be meaningless. Does “multimodal connectivity” mean that a project that forces travelers to connect from bus to rail will be considered superior to one that allows travelers to make their entire journey on one bus? Does “environmental justice” mean that a city that has built a rail line to a white neighborhood is obligated to build more rail lines to minority neighborhoods? What does “livable communities” mean anyway? None of these terms are defined in the new rules.
The Obama administration has a clear history of playing politics with transportation dollars.
- It awarded a large high-speed rail grant to California just weeks before the 2010 election on the condition that the funds be spent in the districts of two Democratic congressmen who were waging close campaigns, a decision that has put California in the embarrassing position of building a train to nowhere.
- When Ohio and Wisconsin elected Republican governors, the administration yanked high-speed rail funds from those states before the governors even took office as punishment for questioning Obama’s rail vision.
- But when Florida’s governor cancelled that state’s high-speed rail project, which was a showcase project for the administration, LaHood gave the governor several chances to change his mind before withdrawing the funds.
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The weakening of the cost-effectiveness rule and the addition of vague livability and multimodal criteria give the administration the opportunity to play even more politics with the funds. The House Republican plan to eliminate such funds will make transportation funds much less political.
Few people think that the House plan will survive the Senate, which makes it likely that Congress will remain in gridlock over transportation for another year. If Tea Party Republicans capture more Senate seats in November, however, the House plan is likely to be enacted into law in 2013.
One could argue a better proposal is to go after federal taxes. The Antiplanner commented on a proposal by Senators in New Jersey to allow the states to opt out. Where federal gas taxes are eliminated for the states choosing to opt out (federal gas tax is 18.6 cents roughly) and raise the state gas tax by that much. By doing that the feds can never earmark revenues or play with it or tamper with it by diverting vast sums of state money to another state. Hopefully if enough states opt out, no more federally funded nightmares like Boston’s Big Dig or bridges to nowhere in the middle of Alaska (Alaska gets more pork per capita than any other state in the country nearly $766 per resident). A bridge to serve a town of only 50+ people. Politicians claim “But we still have communities that are not tied in to sewer and water. There are certain basic things that you’ve got to have.” If people want to live in remote areas of Alaska, why can’t they pay for their own sewers and water, through state or local taxes, or better yet, through private businesses? Why should all Americans pay to run sewer lines through the vast, frozen spaces of Alaska? Because Alaska has no money? That’s absurd Alaska has tons of money. Alaska has so much money, it has no state income tax or sales tax. Instead, it gives its citizens money from something called the Alaska Permanent Fund.
An interesting point:
If people want to live in remote areas … why can’t they pay for their own sewers and water, through state or local taxes, or better yet, through private businesses?
Careful now, the American Dream Foundation will be on you like whites on large-lot single-fam…erm, rice. You will end the American Dream with thinking like that.
DS
The “high per-capita federal spending” in Alaska is just a function of a low population, huge military bases, and by far the largest proportion of American Indians/Alaska Natives of any other state. Alaska is also the only state without an interstate highway (even Hawaii has an interstate highway that is solely intrastate).
It also has more than half the Park Service land, a huge majority of the BLM land, and almost half the US coastline.
So sell of federal land, cut the Defense budget and reduce spending on American Indians/Alaska Natives if you want to equalize Alaska.
Per-capita spending ignores a lot of important context. If the alternative is handing out money based on political whims, I suppose I’ll take the former. However, I’m sure there is a more nuanced way of distributing funds based on need not politics or population.
RE: “Careful now, the American Dream Foundation will be on you like whites on large-lot single-fam…”
I just shot coffee out my nose. I’m sure this will draw out the ire of the usual suspects as it’s a tad risque and insensitive, but it made me laugh.
Antiplanner wrote:
“Should federal transportation funds be distributed to states and cities based on fixed criteria, such as population and land area, or should they be handed out based on the political whims of whoever is in power at the moment?”
Or, option 3, let the states spend their own money on their own rail and roads. It can’t happen both ways – that the state does not have a high density, but all roads must be wider than 1+1 lanes. If the density is low, there won’t be many people to pay for these things, but the roads will be narrow and inexpensive to provide and maintain. If the density is high, the roads will be wider and more expensive, but will have more people to pay for it.
The EU is trying desperately to be more like the USA, with a strong, centralised federal government. But I don’t see the point. Gathering large amounts of money at the federal rather than state level produces inefficiency, waste, and pork barrel, none of which is going to make the federal government more popular. The EU budget repeatedly cannot be signed off by the auditors, because money has gone missing, and no-one knows where.
Does anybody else find “environmental justice” to be one of the most Orwellian words ever invented?
To me it brings up concepts like deer suing wolves, bacteria suing doctors, birds suing cats, and gold deposits seeking protection orders against miners.
“The problem with this is that it allows transit agencies to ignore any alternatives, such as express bus, bus-rapid transit…”
Don’t think for a second that the house proposals doesn’t significantly cut funding for bus services. It’s one thing to oppose expensive rail projects like many here, while also seeing the advantages offered by some subsidized transit modes that are more cost effective.
The house proposal is about politics too, it’s just a different form of politics than Obama and LaHood. Yes LaHood and the HSR advocates are desperately trying to make a case that can’t be made, but house republicans just want to starve the beast. The plan is to cut all sorts of funding for transit (not just rail), then when other transit modes start to fail they can point to them and say “See, we told you government doesn’t work.” Plus, transit (mostly bus) users are overwhelmingly poor, disabled, teens (12-17), elderly and autoless. With the exception of the elderly, none of these cohorts tend to vote for/concern republicans. It’s politics all around. Plenty of fingers can be pointed and plenty of blame can be doled out.
@4: I’m not sure I agree with your description of my line – I was shooting for funny + exaggerated stereotype… ;o) nonetheless, interesting story today on the work going on down there in Atlantic Cities…
DS
However, I’m sure there is a more nuanced way of distributing funds based on need not politics or population.
There probably is, but Congress has proven over the past several decades that such strategies do not align with the incentives they face. I am not at all hopeful that things will somehow be different this time around. That is why I argue for less of a federal role.
I didn’t know Hawaii had an interstate, that seems contradictory to our basic understanding of geography.
MJ,
That’s a trap. I agree with your assessment of congress, but refuse that choosing between the lesser of 2 evils is the only choice we’ll ever have. Maybe the nexus of OWS and the Tea Party will get us somewhere?
Maybe the nexus of OWS and the Tea Party will get us somewhere?
That would be nice, but the GOP wants the exact opposite of OWS.
DS
Oh thank you massah Dan for fur speak’n like us poor uned’cated colored folk. Many of us poor hard working colored folks be want’n to move to homes with yards, but ya ed’cated planner honkeys know we bett’r stay in the ghettos and beg fur … “high speed urban rail that decreases our carbon footprint according to the Kyoto Treaty.”