The Next Four Years: Transportation

Here in Massachusetts, the news this morning was of Gov. Deval Patrick announcing a new plan to improve the state’s transportation system.  Just about every imaginable form of taxation – from higher gasoline taxes to sales taxes to fees on vehicle travel – is on the table to pay for it.

No politician likes to propose new taxes, so things have to be pretty bad for a governor to come forward with a plan like this. And, sure enough, a quick flip through the document (PDF) describes just how bad things are. New revenue is needed just to enable the Commonwealth to stop doing colossally stupid things, like borrowing to pay short-term operating expenses, let alone address decades of deferred maintenance of highway and transit infrastructure, or build key projects that have sat on drawing boards, unrealized, for years.

You may be asking yourself why I am talking about a transportation plan in our dinky little northeastern state in a blog series on the challenges of President Obama’s second term. It’s because Massachusetts is far from alone in facing a transportation policy crisis, and sooner or later – definitely within the next four years – the federal government will have to come to grips with that crisis as well.

Here’s the problem in a nutshell: Transportation policy at the federal level (and in many states) does one thing very well: build new highways. Highway backers in the early part of the 20th century developed a brilliant funding mechanism to pay for an expensive program of road-building: a gasoline tax dedicated (in many states entirely) to roads and bridges.

For decades, gasoline tax revenues paid for new roads, which facilitated new development on the suburban fringe, which attracted new drivers to the roads, which drove up the consumption of gasoline, which created more gas tax revenue, which could then be used to build more new roads. It was the very definition of a “virtuous circle” – at least if you are a fan of highways and sprawl.

But then, about a decade ago, the virtuous circle started spinning backwards. The demographic boom that fueled part of the increase in driving slowed down. Gas prices skyrocketed. Highways built during the Interstate highway boom began to require expensive repairs. People actually started driving less. And revenue from the gasoline tax – which had been eroding in value for years due to inflation – began to dry up even faster.

Yet, all throughout this period, like the assembly line in “I Love Lucy,” the system has continued to churn out shiny new highways, even as overall driving declined. As late as 2008, even after a five decade-long highway building binge, more than one-third of all highway capital spending went toward new capacity.

In recent years, federal decision-makers have avoided grappling with the crisis by funneling increasing amounts of general tax dollars into the Highway Trust Fund. Not only does that make a mockery of the tired and inaccurate argument that “roads pay for themselves,” but it also fails to acknowledge the need for reform in how we spend transportation funds, not just raise them.

The Obama administration, in the president’s first term, showed clear signs of understanding that the nation faces new transportation priorities in the 21st century. Transportation Secretary Ray LaHood emerged as a champion of “livability” as a guiding consideration in transportation policy decisions. The administration’s early focus on high-speed rail – backed up with billions of dollars in stimulus funding – promised reinvigoration of the nation’s passenger rail system, which is now experiencing record ridership amid Amtrak’s smallest operating loss since 1975. The criteria for awarding funding for new transit projects was recently revamped to account for the full range of benefits that transit can deliver to communities.

All good news. But these small shifts have yet to address the fundamental challenge of setting a new direction for U.S. transportation policy.

Let’s hope that the Massachusetts experience is instructive. There are some highway projects in Gov. Patrick’s new plan, but most of those projects focus on addressing pressing problems with existing roads – reconfiguring interchanges, rebuilding overpasses and the like. The real action, when it comes to new capacity, is in transit and rail, which are scheduled to receive a major infusion of resources.

The most rational choice for the federal government would be to shift resources away from new highway projects toward initiatives to repair existing highways, expand access to transit and passenger rail, and create new transportation choices for Americans who increasingly hunger for them.

Can America make such a dramatic shift in federal policy in the next four years? I’m honestly not sure. The one thing I am sure of, though, is that our current transportation policy is both fiscally untenable and clearly out of step with the needs of the nation in the 21st century. Something has got to give – and with crumbling highways, new demands for new transportation choices, and a shrinking base of funding – you can bet it will give sometime between now and 2016.