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What the New Federal Highway Act Means for U.S. Cities

There’s a little good, a little bad, and a whole lot of the same.

AP Photo/Kiichiro Sato

It’s official—America’s new five-year, $305-billion transportation bill, dubbed the FAST act, became law on Friday with President Obama’s signature. The passage of long-term legislation amid the general gridlock of the current Congress is certainly a form of progress in its own right. But far less clear, as experts and advocates wade through the 1,300-page tome, is whether or not U.S. cities made out well in the deal.

The good news is there are some bright points for local governments. The brightest involves new flexibility on city street design. In the past, metro area planners had to follow the design standards used by state planners, particularly for projects that involved federal funding. If a city wanted to narrow the lanes of a particular road from 12 to 10 feet, for instance, it often could only do so with the state’s blessing.

The FAST bill flips that design script. Moving forward, for federally funded projects where city officials are taking the lead, planners will be able to use a street manual that differs from the state’s official road design publication, provided that manual is approved by the Federal Highway Administration. This theoretically frees cities from the conventions of car-first street standards and lets them design streets more friendly to bikes, pedestrians, and transit users—such as the celebrated Urban Street Design Guide put out by the National Association of City Transportation Officials.

“The City of New York could use their design manual and, with this code, be less at the mercy for the state DOT to turn around and say, no you can’t,” says Joe McAndrew, policy director for Transportation for America, an advocacy group that pushed for the change alongside the National Complete Streets Coalition.

Changes to the federal TIFIA financing program represent another win for U.S. metros. The TIFIA program offers local governments credits or loans for transportation projects at favorable interest rates. Under the old rules, the project threshold for accessing a TIFIA loan was $50 million—a figure that more or less limited the program to major public works efforts in large metros. The FAST act reduces that threshold to $10 million, bringing projects from smaller cities into play. Projects that involve transit-oriented development are now eligible for TIFIA financing, too.

The bad news here is those developments are tempered by a steep loss in overall TIFIA loan availability. FAST cuts the program from $1 billion down to about a quarter of that size, according to some initial estimates. And that also means the program is likely to remain biased toward larger metros that can get applications in more quickly.

A much more modest victory, if it can be called one at all, comes in the way that surface transportation funding is allocated to local leaders. Previously, states got half of this flexible funding, which covers certain highway or transit projects, and cities with populations over 200,000 got another half to use as their metropolitan planning organization deemed fit. The FAST act does advance the city’s share of this split by 1 percent a year, up to 55 percent in 2020, amounting to an extra $3 billion in funding all told.

That might seem like a nice gain when lumped together. But spread out across five years and the hundreds of metropolitan planning organizations in the U.S., and it’s “not going to amount to too much,” says McAndrew. Plus smaller metros—those under 200,000—remain beholden to states for this money. Some states distribute this money in ways that help cities, and some most certainly don’t. Still, taxpayers in these smaller communities won’t get to hold their mayor or council members accountable for transportation decisions, a failure that can result in a general lack of faith in planning operations.

The biggest failure of FAST, in McAndrew’s eyes, is its failure to authorize the popular TIGER program that provides so much transit funding to local officials. That keeps city and regional leaders guessing about appropriations each year, he says, and leaves the program generally more vulnerable to elimination. Lawmakers also cut the federal match for the New Starts program, which also funds transit, to 60 percent from 80 percent. (The Small Starts match, typically reserved for bus projects, does remain at 80 percent.)

On balance, then, the FAST law more or less keeps federal policy toward urban transportation right where past legislation left it. Which is to say it remains centered on the sort of highway spending and road expansion that has historically worsened traffic and sprawl for U.S. metro areas—even as federal funding relies less on the gas tax paid by drivers and more on general taxpayer funding that further weakens the traditional “user pay” system. Cities hoping to see more money go toward public transportation, or other forms of shared mobility, or preparation for autonomous cars may find themselves locked into a familiar frustration.

“It’s a couple small nods in improvement for cities,” says Transportation for America’s Stephen Lee Davis, who’s tracked the new bill’s minutia as closely as anyone. “But on the whole the bill will continue to do the same things done for the last 5 or 10 years. It really doubles down on the status quo.”

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