Op-Ed: Better Infrastructure Spending Needs Better Institutions
Like so many deeply involved in transportation issues, I greeted the Infrastructure Investment and Jobs Act with great enthusiasm. The law continues to be lauded for its $1.2 trillion injection across the infrastructure space with $550 billion in new transportation spending. The nation’s highway and transit programs will see more than 30 percent boosts over 2022’s formulas while intercity freight and passenger rail increases five-fold. By any measure, the amounts are historic.
However, all this new money still leaves us short of what is needed to bring our transportation infrastructure to a state of good repair, let alone undertake major new projects. Recent analysis from the American Society of Civil Engineers puts the funding gap over the next ten years at over $1.2 trillion. Moreover, natural disasters associated with climate change means other fixes are needed to protect transportation systems from rising sea levels, floods, and storm surges. Choices will have to be made and priorities established.
As the late UCLA transportation scholar, Martin Wachs, and I wrote, it will take more than money to bring the nation’s transportation system to the level of productivity that a competitive and growing economy requires. It will take “wise” investment decisions and strong institutions. It is critical that the new federal infrastructure money be accompanied by institutional reform and improvements in governance and investment decision-making.
The questions that Dr. Wachs and I asked five years ago must still be asked. Do we have in place adequate analytical and decision-making institutions and processes to make the most beneficial decisions among competing projects? Can these new, and greatly expanded, federal funds be invested smartly? Based on my experience, as well as a recent convening of transportation experts, analysts, and practitioners, in many cases the answer, unfortunately, is no.
Much of the burden of wise decision-making will fall on state transportation agencies, metropolitan planning organizations (MPOs), and transit authorities. Many of which are not well structured to do the jobs we ask of them.
While there has been a greater emphasis on performance measurement and asset management in recent years, strategic planning and investment analysis remain less important parts of federal legislation than the amount of funds that are made available and how federal dollars are divided among states and regions. True to form, strengthening governance and investment decision-making processes was not part of the bipartisan infrastructure act.
So what should we do? For one, state departments of transportation (DOTs) and regional transit agencies should be required to build and maintain the strategic planning and analytical skills that will allow them to use these enhanced federal funding on the most necessary and beneficial projects.
Of the more than 400 MPOs in the nation, most are too small both in their geographic reach and in their financial and human resources to undertake these analyses. They should be sized and resourced to meet the requirements and capital investment needs of the metropolitan regions that they are supposed to serve.
The December guidance memo from the Federal Highway Administration (FHWA) about the scope of state and MPO discretion in the use of formula highway funds raises important issues of federalism and flexibility. As a former state transportation CEO myself, I am sympathetic to state and regional decision-making about which projects to undertake and how to prioritize them. What gets prioritized should be a state and local matter.
But it is appropriate for FHWA and other federal transportation grant-making agencies to insist that state DOTs and MPOs have in place strong analytical processes and the capacity to establish priorities, consistent with strategic objectives. It is these requirements—the how—that should be an element of federal law.
Analyzing and modeling projected state and regional transportation demand are difficult tasks in the best of times. Today, transportation planning is infinitely more challenging by the changing characteristics of land use and development, of work and living patterns, and of travel demands that appear likely to emerge from the Covid-19 pandemic.
These uncertainties suggest that this is hardly the time to invest in new transportation facilities and services. But what parts of existing systems are likely to be most heavily used in the future? What assets are most in need of restoration and efficiency improvements, in light of changing cultures of work and living? Add to these planning, investment, and operational issues the need to use constrained resources to mitigate greenhouse gas emissions and to adapt transportation facilities to a changing climate, and one can fully appreciate the challenges to investment and operational decision-making.
It should be noted that the strengthening of analytical skills and establishing credible and transparent selection processes are necessary at the federal level as well. The bipartisan infrastructure act greatly expands the number and the size of discretionary programs under the purview of the U.S. Department of Transportation. It is critically important that the agency’s selection of projects be soundly based, transparent, and broadly supported.
Bringing the nation’s infrastructure to a state of good repair takes more than money. It takes informed and responsive institutions at the federal, state, and local levels, and it requires reforms to our governance and decision-making processes. That need has not changed in the wake of the bipartisan infrastructure act. Indeed, meeting that requirement has only become more essential.
Emil Frankel is a Senior Fellow at the Eno Center for Transportation and former Assistant Secretary for Transportation Policy, U.S. DOT, 2002-2005.
The views expressed above are those of the author.