Eno Recommendations Reflected in INVEST Act

Eno Recommendations Reflected in INVEST Act

June 26, 2020  | Robert Puentes

On June 18, 2020, the House Transportation and Infrastructure Committee completed an epic markup session of the surface transportation reauthorization bill. The INVEST in America Act is a policy-heavy piece of legislation and pays particular attention to roadway maintenance, safety, access, climate, and equity. It also includes several provisions that reflect recent work by Eno:

Funding freight. Eno’s Freight Working Group issued a report in May 2016 exploring dedicated funding mechanisms that could be used for supporting a federal program for surface freight transportation infrastructure. Delivering the Goods: Recommendations for Funding a Federal Freight Program suggested that policymakers explore the possibility of a “cost of freight shipment” (COFS) fee. The report found that levying such a fee on truck, rail and barge transportation in as small an amount as 0.3 percent of the cost of freight shipment would raise an estimated $2 billion per year towards a program to expand intermodal transportation facilities and relive freight bottlenecks.

Section 6006 of the House bill goes a step further and directs the Transportation Department, the Treasury Department, and the IRS to study how much revenue a fee of up to 1 percent on freight transportation services would raise, analyze how would have to pay such a fee, and determine how much of an administrative burden such a fee would be for the private industry payers and the federal agency collectors and auditors.

Transparency in grant selection. In a 2013 report on the TIGER discretionary grant program (since renamed BUILD) and a 2017 report on the FASTLANE discretionary grant program (since renamed INFRA), Eno recommended that Congress “be specific in authorizing legislation about how much information USDOT must disclose about its decision-making process to Congress and the public” and that the department “needs to exercise greater transparency and explicitly describe its evaluation process, assign weights to criteria, and publish the final results.”

The House bill requires that, starting in fiscal 2021, the INFRA grant program “evaluate, through a methodology that is discernible and transparent to the public, how each application addresses the merit criteria established by the Secretary” and that the rating methodology and merit criteria be spelled out in detail in a notice of funding opportunity.

Those requirements take effect for the Projects of National and Regional Significance program that replaces INFRA starting in 2022, and for each new discretionary highway grant program created by the bill, similar transparency requirements are included.

Highway funding formulas. Eno also released a detailed paper in October 2019 on how the current formula that distributes over $40 billion per year of federal-aid highway funding to states is badly outdated. Refreshing the Status Quo: Federal Highway Programs and Funding Distribution explained the century-old origins of the current formula and how it slowly mutated starting in the 1980s into a more political algorithm to keep states at their accustomed funding levels after construction of the Interstate Highway System ended.

Taking lessons from other federal and local grant programs, both in and out of the transportation field, this paper evaluates eight scenarios for alternative federal highway funding distribution. Two were based on the formulas in the original 1916 highway act and the 2005 SAFETEA-LU law, while four more how states would fare under various needs-based and incentive-based apportionments. The final two scenarios examined restructuring of the federal program structure and matching metrics to goals.

Both the Senate highway bill and the broader House transportation bill maintain the existing formula (which uses real-world factors like state road lane-miles, VMT, population, bridge upgrade costs, and clean air attainment as they existed in 2007) through the end of 2025.

However, the House bill does admit that the formula needs fixing. Section 1607 of the House bill would require the Department of Transportation, in consultation with state and metropolitan governments, to conduct a study to come up with recommendations on how to improve the formula factors used so that the formula reflects both an equitable distribution of funds to states based on estimated user tax payments and achievement of the national highway performance goals established by MAP-21.

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