Transportation Infrastructure_Yours or Theirs?

Transportations’ original connection was a citizen given the ability to direct the funds taken from his labor.  Before the 1960s, the national transportation network obtained funds from user fees, e.g. gas taxes, tolls paid for roads, fares paid for airplanes, intercity trains, and urban transit; ticket fees paid for airports. The nation’s infrastructure was in pretty good shape.   But, Congress in all its wisdom (keeping aligned to Johnson Administration mentality) in 1964 Congress decided federal taxpayers should provide subsidies to transit systems. Bring us forward to 1982; the Congress specifically determined it is more effective for motorists to subsidize transit out of a share of the gas taxes that previously had been dedicated to highways.  The outcome:  states also began subsidizing transit, often out of gas taxes.

These decisions weakened incentives which produced in the America which had produced the greatest transportation system in the world. Highway congestion grew rapidly because money, ordinarily aimed at keeping up with vehicular/transportation system requirements, now was diverted to transit instead. Desperate for funds, highway agencies sought revenues from sales, property, and other taxes, making highway improvements more responsive to politics than user needs.

Thus, in the United States, we do not face an infrastructure crisis in transportation – that is a ‘fairy tale’ told by politicians who wish to increase taxes, enriching themselves in the process.  The reality:  “We the People”, instead, face an incentives crisis, in which some people have incentives to build new infrastructure we don’t need (making them rich) while neglecting the infrastructure we have.   The obvious solution:  transportation improves not through tax increases, but by recognizing and utilizing  incentives managed by tax payers out of their own discretion.

Adding insult to injury, tax increase supporters rail on about crumbling highways and collapsing bridges, when, if facts were provided, our highways and bridges are better than ever. The number of bridges considered “structurally deficient” has fallen by more than 50 percent since 1990 and by actual measurement; our roads are smoother than ever.   One could raise the ‘buggy-boo’ about the bridges that fell in Minnesota and Washington?  Studies from the National Transportation Safety Board found that the Minnesota I-35W Bridge had a construction design plate flaws on center plates so egregious that no amount of maintenance could have detected or prevented. The Washington State I-5 Skagit Bridge fell when it was struck by an oversized truck that was not in the proper lane, pilot vehicle failed to act, complicated by a lack of traffic control laws regarding procession and follow-on pilot vehicles; given the same circumstances, it would have fallen if the truck load had crossed the day it opened.

Thus, the real crisis isn’t bridges that collapse from to poor maintenance but deficiencies resulting from perverse incentives wherein tax payer funds are taken from the tax payer and spent in the wrong places. The best incentives are created by user fees; those fees tell users what it costs to provide them with a good or service and subsequently inform producers/suppliers where users are willing to pay for more services.

As a more recent example, Congress-1991, created transit funds aimed at helping cities build rail as the ‘people mover’. Local Transit Officials soon realized that the cities that planned the most expensive transit projects got the most money and, as a consequence, the light rail building cost jumped from $17 million per mile (in today’s dollars) in 1981 to well over $100 million per mile today.   Transit borders on being completely dependent on taxes instead of user fees.   The planning factors are misapplied as transit agencies run transit services to suburbs that pay lots of taxes but rarely utilize transit; conversely, they cut low-income neighborhood transit services who cannot pay the taxes at similar levels but where people are more transit dependent.  Isn’t greed wonderful when applied by self-interested bodies?

It is noteworthy that since 1970, governments at the state, local and federal level have spent taxpayer’s moneys to the tune of about a trillion dollars (in today’s money) for transit subsidization; yet, ridership, per capita, has declined.   The outcome - all this spending and our transit system is in disorder, expensive and inefficient.

As a result, the Federal Transit Administration found in 2010 that the nation’s transit systems suffered from a $78 billion maintenance backlog, most of it due to deteriorating rail transit lines. The backlog has grown since then as transit agencies haven’t spent enough to sustain the systems in their current poor state of repair.   Then there are the Politicians:  they love to spend money on capital improvements, such as new rail projects, because they get publicity from ribbon cutting ceremonies. They are less interested in funding maintenance, a source of less publicity election.   To restate the problem:  this is not an infrastructure crisis but a crisis of poor incentives. If transit were funded out of user fees instead of taxes, transit agencies would run buses (which have low capital and maintenance costs) instead of building expensive rail lines that are costly to maintain.  Think about San Jose Light Rail; then think about Governor Brown’s High-Speed Rail.  Whom does it serve?  Where does it serve?  Isn’t Amtrak adequate?  If not, why not?

A common solution proposed to the infrastructure crisis is to double federal gas taxes, giving 20 percent to transit. The natural outcome would be transit agency spending sprees to construct additional rail lines that they cannot afford to maintain.

The real solution is to return to a system of funding transportation out of user fees. Consumers, by spending according to their needs, would decide where transport dollars should go by spending their own dollars while transport managers would be inclined to maintain facilities to attract consumer dollars. Unlike taxes, which create winners and losers, user fees turn everyone into winners.