As Rep. John Mica (R-FL) gets set to focus the House Transportation & Infrastructure Committee on drafting a new federal highway reauthorization bill, a new report from the National Transportation Policy Project warns against short-term thinking in favor of a more comprehensive long-term outlook for the bill.
“A sense of urgency remains regarding the need to provide direction for both short-term
spending and longer-term transportation policy reform,” the report’s authors write.
Douglas Holtz-Eakin, president of American Action Forum, and Martin Wachs, senior principal researcher, Rand Corp., argue in the report titled “Strengthening Connections Between Transportation Investments and Economic Growth,” that the bill, formally known as the Safe, Accountable, and Flexible Transportation Equity Act—A Legacy for Users (SAFETEA-LU), needs to take into consideration both funding mechanisms and long-term job growth rather than a short-term solution engaged to help to propel the economy out of its slow recovery from the Great Recession.
“The United States must advance an approach to federal transportation policy that both promotes long-term economic growth and supports high-quality jobs,” the report notes. “Wise and well-targeted expenditures on transportation infrastructure can generate lasting productivity gains, while also providing a more immediate stimulus to accelerate the nation’s ongoing recovery from a devastating recession.
“Simply put, the nation can no longer afford to support poorly targeted investments when the needs are so great and public resources are so constrained,” the authors add. “Further, a more rigorous method for setting transportation priorities will support an investment strategy that maximizes the transportation sector’s contribution to sustained economic growth and recovery.”
By the time SAFETEA-LU expired in 2009, funds in the Highway Trust Fund (HTF), which relies on the federal gas tax, had run out. Since there was no new funding source revealed, Congress had to plug the HTF with stop-gap measures to keep road projects continuing. It did that with two infusions of cash totaling $35 billion, the authors point out.
In any new highway bill, funding will be just one of the priorities. In his State of the Union address, President Obama stated he wants to “redouble” efforts to rebuild the infrastructure in the U.S. Mica, as the GOP chair of the Transportation & Infrastructure Committee, will play a large role in determining the types of projects, as well as funding mechanisms for those projects, that go forward--all while meeting calls to improve the job market.
“High-productivity transportation investments can generate improvements in economic well-being by increasing connectivity and reducing congestion,” the report states. “This represents a critical dimension of improving long-term employment, allowing labor to enhance its productivity at lower cost, and encouraging private capital investments in structures, equipment, and technologies to reap higher returns from American industry.”
The report also seems to criticize projects such as the infamous “bridge to nowhere” that were part of the previous highway bill. While that bridge might have generated short-term employment, the authors argue that this next bill needs to include what they call “high-productivity public investments.”
“The test for a high-productivity public investment is that it should generate a rate of return to society that exceeds the market return in the private sector,” they write. “The resources for any public transportation investment are ultimately drawn from the private sector through taxes and fees, or in some cases by borrowing from the private sector. In each case, the dollars used to make these investments constitute foregone opportunities to make other market investments.
“That is precisely why building a ‘bridge to nowhere’ will always represent a poor national investment even though it may, at least in the short run, benefit construction workers and others in the state where it is built,” the authors point out.
The report concludes that “short-term job creation is certainly an important and legitimate goal of public policy, especially at a time of high unemployment, but … an overly narrow focus on immediate job impacts is likely to be shortsighted and produce sub-optimal results, especially if it detracts from efforts to implement more fundamental programmatic reforms.”
Instead, “well-targeted transportation investments can deliver long-term benefits in terms of improved efficiency and productivity by reducing costs associated with congestion, environmental damage, and accidents,” the authors write.