Cities and towns need more power over federal funds.
The U.S. transportation system, vital to our economic success, has some big problems. The most immediate is that by this summer it will run out of money to reimburse the states for projects they have taken on with the promise of federal funds.
Meanwhile, Congress is due to renew the program this fall, allocating dollars for transportation infrastructure for the next several years. But with gas tax receipts slowing and coffers emptying faster than they can be filled, it's not clear how lawmakers will pull this off.
The biggest problem, I would contend, is that this huge program, which provides one of the most critical and influential functions of federal government, is almost invisible to the people upon whom it depends — its customers, the taxpayers. This came home to me in unexpected ways over the last five years, when I served as one of the leaders at the U.S. Department of Transportation.
The good news, though, is that Congress can begin to fix this issue with some key changes in the upcoming revision of the program.
One key shift: Stop treating the program as only an entitlement for state departments of transportation to allocate for their own priorities, and put more resources in the hands of local communities that are closest to taxpayers. Over the last 50 years, the old federal transportation program helped us build an incredible national highway system, connecting cities and towns to one another beautifully. We did not, however, focus on making transportation networks work once you got into those cities and towns, where most Americans spend their time.
They say all politics is local, and that goes double for transportation. We tend to view transportation through the prism of our daily commute or trips to the store or school. Local businesses worry over whether employees can get to work, whether transportation issues will hurt their ability to recruit and retain workers and whether goods can be delivered cheaply and on time.
Locally felt though they may be, these challenges have national implications. Solving them is a precondition to a functioning economy. Last month, the Census Bureau reported that over 85 percent of Americans live in the cities, towns, and suburbs that make up our metropolitan areas large and small. Those regions generate more than 90 percent of the nation’s gross domestic product, according to the Brookings Institution.
At the moment, though, these centers of our economy have access to only a fraction of the money they pay into the nation's transportation program. What would they do with the money if they had access to more of it? We have had a chance to see over the last five years with the TIGER program, which I helped oversee during my time at U.S. DOT.
TIGER — short for Transportation Investments Generating Economic Recovery — was launched in the 2009 economic stimulus bill, and has continued through the current, sixth round of funding. The concept was to help communities move projects that do not fit neatly into the highways or transit funding silos. The emphasis is on competition, innovation and bang for the buck.
The response has been overwhelming, in the numbers and in the breadth and range of projects. The first round alone, 1,400 communities came looking for a total $60 billion, and 51 ended up splitting the $1.5 billion available. In my time there, I would estimate that about 20 percent of each round's submissions were strong, well-conceived projects with matching funds and were worthy of a grant, but only 5 percent could be funded.
Many excellent projects made the cut, and made a big difference. In Chicago, the nation's busiest rail hub, applicants from the public sector joined with freight rail companies to develop CREATE, a systematic effort to reduce bottlenecks that hamper freight and commuters alike. In post-Katrina New Orleans, the Loyola Avenue Streetcar line extended transit service to the French Quarter, Superdome and downtown jobs and spawned nearly $3 billion in private sector development. The first recipient, Normal, Illinois, used a grant to build a multimodal station that became the busy center of what had been a moribund downtown. Others rebuilt crumbling bridges that made better connections, including first-ever safe crossings for bicyclists and pedestrians; and others still improved access to ports and freight terminals.
All solved multiple problems at once, and almost none would have been funded under existing silos. The big lesson: Competition spurs innovation that formula funds never ever will. Competition generates incredible excitement and a desire to outdo your neighbor. As a result, federal dollars are made to go farther, more non-federal funds are brought in from both public and private sources, and every penny is targeted to accomplish multiple goals.
By opening a door for local elected officials, civic groups, institutions, and employers to engage for the economic benefit of their community, competitive grants have connected the federal program to paying customers like never before. The next transportation bill should build on this success, and shift some of the emphasis to funding projects that local communities have determined are most economically beneficial. In doing so, Congress will build an enduring constituency for a program that can deliver far more effective results — now and far into the future.