USC Price School of Public Policy

U.S. Transportation Policy in a Time of Retrenchment

U.S. Transportation Policy in a Time of Retrenchment

By Sarah Kellogg

Genevieve Giuliano and John Horsley USC Price senior associate dean Genevieve Giuliano and John Horsley, executive director of the American Association of State Highway and Transportation Officials
Photo by David Scavone

At no other point in its history has the United States transportation system faced as many challenges and hurdles as it does today.

A chronic shortage of public funding at the federal, state and local levels has left the system bereft of adequate funding at a time of crumbling infrastructure and increasing congestion.

“It’s remarkable how well we’re doing in increasing capacity and addressing expectations, but you cannot do it without having the infrastructure in place,” John Horsley, executive director of the American Association of State Highway and Transportation Officials, told a forum at the USC Washington, D.C. Center.

The USC Price School of Public Policy hosted the event for alumni and stakeholders, and it was a rare opportunity to hear national experts discuss the future of U.S. transportation policy, as well as its past.

Joining Horsley was Price senior associate dean for research and technology Genevieve Giuliano, an authority on national and regional transportation policy.

“I think people are recognizing we have very serious problems, and some of them are reaching crisis levels,” said Giuliano, who also directs the METRANS Transportation Center, a U.S. Department of Transportation (DOT) University Transportation Center.

Diminishing revenues in the federal Highway Trust Fund and political wrangling in Congress on how best to pay for transportation programs threaten the system’s long-term viability, Horsley said. A failure to act promptly to provide the federal funding necessary to address acute problems in the system could affect the nation’s economic competitiveness.

Moreover, Giuliano noted that current funding questions are obscuring and contributing to the system’s underlying, long-term problems: a reduced commitment to a national transportation policy; a lack of recognition generally of the shared benefits of a robust national transportation system; and the devolution and fragmentation of transportation leadership.

Horsley said that federal action is imperative because states already have adopted reductions in transit services and highway funding to balance their budgets. Horsley predicted that lengthy congressional negotiations on the transportation bill likely would push final approval of the legislation to spring 2012. Current funding expires March 31, 2012.

The U.S. Senate has taken a sympathetic view of transportation aid, with its leaders backing legislation that would peg funding for highways and transit programs at $109 billion for the next two years.

Revenues to finance the bill, known as Moving Ahead for Progress in the 21st Century, are projected to fall $12 billion short of trust-fund collections (fuel and excise tax revenues), and the Senate is looking for a source to offset the difference.

While the U.S. House of Representatives originally had proposed a reduction of 35 percent in transportation funding over 15 years, calmer heads appear to have prevailed, Horsley said. House leaders have said they will back legislation that proposes funding of $286 billion for a six-year transportation bill, which also requires additional revenues due to trust-fund contraction.

“If they did the cut the House passed in the spring, you’d lose 1 million jobs in the economy,” said Horsley, noting that many lawmakers see the transportation bill as a job creation engine as much as a transportation initiative.

In addition, Horsley said states like California would benefit considerably from a Senate proposal to establish a new National Freight Program.

The DOT would be directed to create a primary freight network of some 27,000 miles of freight corridors, and states could reserve a portion of their federal funds for improvements on the network. It also would be required to develop a National Freight Strategic Plan to analyze performance and conditions on the freight network. Forty percent of trade with Asia flows through the adjoining ports of Los Angeles and Long Beach and onto the nation’s freight railroads.

Giuliano deepened the discussion of transportation policy by examining the process commonly followed when devising broad national policies and exploring why some national transportation policies succeeded while others failed.

For example, she said the Interstate Highway System, when it was created in the 1950s, was a model for national policymaking because it distributed benefits broadly, gave states authority over projects and solved a key problem — how to get from here to there swiftly.

“It was a new concept, a new high-speed roadway system,” Giuliano said. “Nowhere in the world had anyone tried it.”

The proposed development of a national high-speed rail (HSR) system has had less success, mostly because the benefits would not be broadly shared (the HSR market is regional corridors connecting major metropolitan areas), and there was no identified source of revenue beyond public subsidies. In addition, power over decision-making was centralized in Washington.

Giuliano said lawmakers face important decisions as they look to design a 21st century transportation system that serves future goals and needs, including demands for “greener” transportation options, more technologically advanced roadways and a reliable transportation funding stream.