Government Shutdown Impacting Transportation Projects; Recent Reports Highlight Performance Measurement, Transportation Funding

With the government shutdown continuing into a second week, there may be a whole lot less bureaucracy in Washington these days. But that actually may be throwing up some roadblocks for the completion of transportation projects around the country. I also have links to some recent reports on performance measurement, transportation funding and why some public-private partnerships fail.

Environmental Streamlining Stymied by Shutdown

The road construction industry has complained for years about how the environmental impact statement requirements under the National Environmental Policy Act of 1969 can cause lengthy delays in the completion of transportation projects. With the passage of MAP-21, the federal surface transportation authorization legislation of 2012, efforts were made to streamline and improve the efficiency of the environmental review and approval process.

So it was perhaps somewhat ironic this week when the President and CEO of the American Road & Transportation Builders Association Pete Ruane joined a Capitol Hill news conference to lament one of the many unintended consequences of the government shutdown.

“Due to furloughs in the environmental and resource agencies,” Ruane said, “the approval process for transportation projects is encountering more obstacles. This outcome is the exact opposite of the goals of MAP-21’s streamlining provisions. … The fact remains that if environmental regulators can’t do their job, we can’t do ours.”

Recent Reports

  • Performance measurement was another key focus of MAP-21 and many state officials believe measuring congestion will be one of the biggest challenges as national performance goals ramp up in the years ahead. As Mara Campbell of the Missouri Department of Transportation said at our recent National Conference in Kansas City: “(The Texas Transportation Institute) puts out a report every year and tells us where congestion is and has defined that. Congress doesn’t necessarily like that definition. So again, here we are halfway through the period of MAP-21. It’s going to be over in (12) months and we haven’t even defined it.” Well there is a new report just out from the Eno Center for Transportation, Bipartisan Policy Center and State Smart Transportation Initiative that offers some recommendations for ways to measure congestion and system performance. The report, “Evaluating Potential Performance Measures for Congestion and System Performance,” shares the results of a day-long workshop convened this summer to discuss the pending federal rulemaking on performance measures with Senate staffers, U.S. DOT officials and representatives of state DOTs, MPOs, and other public and private groups with an interest in MAP-21 implementation.
  • The Congressional Research Service has a new report on “Funding and Financing Highways and Public Transportation.” Authors Robert Kirk and William Mallett examine the problems with current financing of the Highway Trust Fund and possible options for the future financing of surface transportation infrastructure. Among their findings:
  1. Raising motor fuel taxes could provide the highway trust fund with sufficient revenue to fully fund the program in the near term, but it may not be a viable long-term solution due to expected future declines in fuel consumption.
  2. Replacing current motor fuel taxes with a fuel sales tax or a fee based on vehicle miles traveled (VMT) raise a variety of financial and administrative concerns.
  3. The political difficulty of adequately financing the highway trust fund could lead Congress to consider the desirability of changes to maintain the trust fund system or eliminating it altogether. Such changes might involve a reallocation of responsibilities and obligations among federal, state and local governments.
  4. Interest in improving transportation infrastructure with private and non-grant funding sources, such as tolls, public-private partnerships (PPPs), and federal loan programs is increasing, but many projects may not be well suited to alternative financing.
  • The funding of the nation’s freight transportation system was the focus of a hearing this week on Capitol Hill. Members of the House Transportation and Infrastructure Committee’s Panel on 21st Century Freight Transportation heard testimony from Virginia Transportation Secretary Sean Connaughton and Maryland Deputy Transportation Secretary Leif Dormsjo, among others. According to AASHTO’s account of the hearing “Connaughton and Dormsjo both discussed their state's success in passing a comprehensive transportation revenue package, which included various innovative financing methods. Both witnesses also touched on public-private partnerships and the role they have played in advancing Virginia and Maryland's freight transportation. Connaughton also said one area to improve would be to expand the National Freight Network and also to continue to work toward implementing MAP-21's performance measures, leaving them unchanged until states have the opportunity to gauge their effectiveness.”   
  • A new report from Fitch Ratings (for which a subscription is required) looks at lessons learned from public-private partnerships around the world and finds that the major causes of P3 failures are the overestimation of traffic and revenue and higher than expected costs. “The probability of over-estimation remains high despite decades of experience with forecasting demand on transport projects,” the report said. Tollroadsnews took a look at the report in this piece. Now comes word that when Virginia transportation officials went to the capital markets in 2010 with plans for the 495 Express Lanes, they relied on traffic and revenue forecasting done four and five years earlier, before the economic downturn. The Express Lanes could see a shortfall of $37 million to $38 million for the year, TollroadsNews reported in a separate article. “Of course it is early days but financially the 495 Express Lanes are off to a dismal start,” the website publication said.
  • The Center for Transportation Research at the University of Texas at Austin has issued a report on “Texas Highway Funding Options.” Among the options the report considers based on case studies from other states: energy sector infrastructure financing, availability payment public-private partnerships, weight distance charges, and electric vehicle fees.    
  • An independent review of the Washington State Department of Transportation’s management of some pricey transportation mega-projects is now complete. Washington Transportation Secretary Lynn Peterson commissioned the report in March seeking recommendations on how the agency can learn from recent miscues, engineering mistakes, project delays and other problems that some say have damaged the credibility of the agency and prompted some state lawmakers to call for reforms before consideration of a fuel tax increase to fund more projects.

State Transportation Funding Updates

  • Pennsylvania: Transportation Secretary Barry Schoch and others reported progress this week in talks between Republicans and Democrats on a transportation funding bill, according to the Associated Press. Among the issues negotiators must navigate: the total amount of the funding package, how much will go to mass transit, where the money will come from and potential changes to the state’s prevailing wage law on public construction projects. A transportation funding bill that relied on gas tax and fee increases passed the state Senate in early June but hit opposition in the House.
  • Utah: A recent study by the Economic Development Research Group of Boston said the state could nearly double its return on investment by implementing Utah’s Unified Transportation Plan 2011-2040. Such an investment could create nearly 183,000 new jobs and a $183.6 billion increase in the state’s GDP, the study indicated.