Bringing an Old Voice to the Debate

The Bipartisan Policy Project, a supposedly centrist organization, claims to be “bringing new voices to the transportation debate to create a dynamic and enduring vision for the future of federal surface transportation policy.” So what “new voice” did it hire to write a review of the Federal Transit Administration’s New Starts program, which gives away billions of dollars to transit agencies for rail projects each year? Answer: Parsons Brinckerhoff, known as PB for short.

PB is hardly a new voice. It proudly advertises that it built New York City’s first subway line in 1904. More recently, it has arguably benefitted from New Starts more than any other single entity. When transit agencies need to hire a consultant to “decide” whether to apply for New Starts funds, they turn to PB. When they need someone to do the analyses required to be eligible for FTA New Starts funding, they turn to PB. When they need someone to engineer and design a New-Starts-funded rail line, they turn to PB. In many cases, they hire PB to be the general contractor when they finally get around to building the line. PB isn’t the only firm that does this kind of work, but it has almost certainly worked on more New Starts projects than any other consulting firm.

From the Antiplanner’s view, the most important feature of New Starts is that it is an open bucket: instead of being distributed to regions based on population or transit ridership, the funds are given out on a first-come, first-served basis. This has sent transit agencies in dozens of cities where rails make no sense at all into a frenzy of rail planning and building so they can get “their share” of the pork.

Not surprisingly, PB’s review never mentions the open-bucket aspect of New Starts. Instead, PB writes that “New Starts projects are subject to more scrutiny and accountability than other federally funded surface transportation projects.”

Give me a break! New Starts applications certainly include a lot of red tape. But scrutiny? Not hardly, especially since Transportation Secretary Ray LaHood eliminated cost-effectiveness requirements that themselves were very weak. The remaining evaluation process is subjective in many ways.

For example, look at the project ratings in the 2011 New Starts report. Note first that many of the projects are rated “exempt,” probably because some member of Congress didn’t want to have subject these projects to any scrutiny at all. But even the ones that are not exempt are rated on such vague grounds as “environmental benefits,” “mobility improvement,” “economic development,” and “land use” (short for transit-supportive land use).

While each of these factors are theoretically quantifiable, they require impossibly accurate predictions of the future and are easily gamed by the transit agencies. For example, the FTA gives two Denver light-rail projects a “high” environmental rating even though Denver’s existing light-rail lines use more energy and emit more CO₂ and other pollutants than the cars they take off the road.
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PB’s report implicitly endorses LaHood’s decision to eliminate cost-effectiveness criteria. “A relative comparison of projects with multiple criteria may offer a more suitable evaluation framework than a strict cost-benefit analysis,” says PB. Translation: Don’t bother comparing benefits with costs because that would reveal that all these projects are worthless. Instead, use subjective criteria, and when those don’t work, feel free to throw in “other factors” determined on a project-by-project basis. In other words, make it up as you go along.

Accountability? Hardly. Transit agencies routinely lowball cost estimates. Supposedly, agencies have to cover any cost overruns themselves, but in fact when actual costs rise, they usually persuade their congressional delegations to pressure the FTA to cover the costs. When Portland projected the Westside light-rail line would cost about $250 million, it expected the FTA to pick up 75 percent of the tab. When costs ballooned to nearly $1 billion, the FTA still picked up 73 percent of the tab.

Nor are transit agencies accountable for overestimated ridership numbers. Ridership shortfalls may mean less fare revenues, but transit agencies get such a small proportion of their budgets from fares that they really don’t care.

Supposedly the FTA won’t fund a rail project if the high cost of that project threatens the agency’s other transit services. But the agencies can just hire PB or another consultant to predict low operating costs or high ridership and the FTA will sign off on the project.

The next time the Bipartisan Policy Project wants to bring a “new voice” to the transportation debate, it should not hire someone who is, in fact, a prime beneficiary of federal transportation funding. Yet there is a good reason why the Bipartisan Policy Project picked PB to do this work. The BPP wants federal transportation funding to be “performance driven,” meaning that much of the money will be given out in competitive grants (like New Starts) rather than based on population or other funding formulas (like most highway money).

From BPP’s inside-the-beltway view, performance-driven funding makes sense because it insures that money is spent as effectively as possible. But a serious look at New Starts reveals the flaw in this logic: when the performance criteria are weak and the pork-barrel politics is strong, the pork prevails.

In contrast, the Antiplanner’s outside-the-beltway view focuses on the incentives that Congress gives to state and local transportation agencies when it hands out federal funds. That’s why the Antiplanner proposes that federal funds be distributed based on the user fees that state and local governments collect from transit users. The Antiplanner also suggests that Congress require the Secretary of Transportation to create a citizen-enforcement process so that people can challenge state and local governments if they believe they are not effectively using federal funds. These changes will insure that funds are well spent and do not merely end up in the hands of high paid consultants such as PB.