Infrastructure Funding, Policy Innovations Highlight D.C. Policy Academy

While there may be a long-term federal surface transportation bill in place and while many states have been addressing their own transportation needs in recent years, there is still much work left to do and a variety of key questions on the horizon.

That was the message from speakers at the 6th annual CSG Transportation Leaders Policy Academy held May 18-20 in Washington, D.C. Ten state legislators from across the country, chosen in consultation with CSG regional staff and Associates, attended the event, which took place against the backdrop of Infrastructure Week, a week of infrastructure-themed events in the nation’s capital and elsewhere.

“We’ve only been paying a little more than half of the investment needs that we need to start addressing in this country,” said Brian Pallasch of the American Society of Civil Engineers, or  ASCE, at a May 19 policy roundtable. “This has a cascading effect on the U.S. economy, businesses, workers and, more importantly, families.” 

ASCE’s recently released report “Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future” details the economic impact of a lack of investment in infrastructure. Pallasch said while the amount of funding needed from all levels of government to improve infrastructure—$3.6 trillion in investment needed by 2020, according to ASCE—can be daunting, there’s a much simpler number to keep in mind.

“We’re talking about having each family invest $3 a day,” Pallasch said. “That’s a cup of Starbucks coffee around the corner. … Would you pay $3 for better infrastructure?”  

Policy academy speakers said last year’s passage of the Fixing America’s Surface Transportation, or FAST, Act by Congress finally allowed states the certainty to move ahead with addressing significant backlogs of transportation projects, but it only delayed a conversation that will need to take place in the not-too-distant future.

“It does provide us a little bit more breathing room to make the kinds of really hard decisions that we have to make by 2020 (when the bill expires) because … the money really will run out by then,” said Joung Lee of the American Association of State Highway and Transportation Officials.

Ed Mortimer of the U.S. Chamber of Commerce said his organization is committed to helping state and local governments get the word out about projects moving forward across the country thanks to the federal bill, something he thinks could help when it is time to consider the next bill. 

“We constantly need to harp on the projects that are moving forward, the quality of life it provides, the jobs that are created both directly through construction and indirectly through businesses that locate near new infrastructure,” Mortimer said.

States, too, have been moving forward to address the infrastructure investment gap on their own, noted Alison Black of the American Road and Transportation Builders Association.

“We’ve had 17 gas tax increases just over the last three years,” she said. “The fact that we’ve seen this much activity really points to the fact that I think states are facing the same thing the federal government is: decreasing purchasing power.”

Black said 2016 has seen fewer transportation funding bills introduced—89 bills overall compared to 179 in 2015, perhaps owing to factors such as shorter legislative sessions and election-year politics.

But some also believe there are actions Congress could take to encourage more transportation funding activity in the future at the state level.

“One of the important things we should do at the federal government … is to create incentives and bonuses for those states that do more on their own in creating revenue streams and investing more,” said Emil Frankel, a former state and federal transportation official who now serves as a senior fellow at the Eno Center for Transportation. 

Frankel and others note, however, that it’s unlikely that even a commitment to investment at the state and federal levels would be enough to produce the kind of revenue needed to close the infrastructure investment gap entirely. He said that makes it increasingly important that states choose the right projects in the years ahead.

“We have to make better decisions about how we invest public funds in infrastructure,” Frankel said. “We need to target those projects and programs that will bring the greatest economic or environmental and social benefits and we need to make a business case for the investments that we make with scarce resources.”

Joe McAndrew of Transportation for America described it as finding the projects and policies that will “get the biggest bang for your buck.”

“We are big supporters of using discretionary grants—competition—to drive better project selection, especially for capacity expansion projects,” McAndrew said.  

He cited the federal TIGER—Transportation Investment Generating Economic Recovery—grant program, which since 2009 has provided nearly $4.6 billion for 381 innovative projects around the country that competed for funding, and Connect Oregon, a competitive grant program created by the Oregon legislature in 2005 to provide funding for air, marine, rail and public transit projects in that state. 

McAndrew said another way to ensure better projects is to reform state project selection processes. 

“Virginia just completely reformed their whole program last year and drove their capital construction budget towards a transparent, performance-driven, criteria-driven project selection process, where each project is going to be ranked against a core set of goals—environmental, economic development, safety, land use and accessibility,” he said. 

Speaking on the benefits of the new process, Virginia Secretary of Transportation Aubrey Layne said every project must now be funded through construction, which allows everyone to know what’s coming into the construction pipeline over a six-year period. 

“I can now stand up in front of the legislature and say ‘here is what we have left on the table.’ It’s no longer ‘we need more money’ and the response is ‘you’ve got to be more efficient,’” said Layne, who serves as vice chairman of the CSG Transportation Public Policy Committee.

Under the new process, 45 percent of all revenues in the commonwealth’s construction program must go toward keeping existing transportation assets from deteriorating further.

Attendees also heard that preparing for the future of transportation will require new transportation infrastructure systems as well to accommodate a rapidly growing population and increasingly dense urban centers.

“As a country we are still investing in a system based on a past model,” said Dana Gresham, assistant secretary of transportation for governmental affairs at the U.S. Department of Transportation. “We haven’t built a new model of transportation infrastructure and that’s going to be something we’re going to have to grapple with sooner rather than later.”

Autonomous and connected vehicles are likely to be a part of that new model. During a luncheon briefing at the Association of Global Automakers—one of the policy academy sponsors along with Toyota and Nissan—attendees got a glimpse of what the future may hold on that front. But Tracy Woodard of Nissan sounded a cautionary note for states that may be looking to get a jump on the future. 

“States are … either trying to define autonomous vehicles or they’re trying to do test pilots to allow manufacturers to come and do testing in their states,” Woodard said. “There is a role for the states in licensing and in different things but we think we need to have a federal overlay of regulation to know what we’re doing. … Let’s not put anything that prohibits innovation out there.”

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