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Policy Analysis of MAP-21 Highway Reauthorization Bill, Part 2

This is the second and here is the first in a two-part Policy Update on MAP-21.

CMAP's Overall Position on MAP-21

The remainder of this document analyzes MAP-21 according to each of the established CMAP policy objectives for federal surface transportation reauthorization.

1. Provide transportation investments based on regional priorities using performance-driven criteria that lead to decisions that are transparent, outcome-based, and mode-agnostic.

MAP-21 works toward implementing this CMAP recommendation but falls short, as highlighted above. The bill places a strong emphasis on performance measures, incorporating their use in core highway programs and by state departments of transportation and MPOs. However, a disconnect exists between a region's plans and priorities and its state's discretion to select performance measures and allocate funding.

The bill does contain a number of performance-driven criteria with which states and MPOs must comply. For example, in the new National Highway Performance Program (NHPP), states must develop targets for the condition and performance of the National Highway System (NHS) and develop asset management plans to make progress towards these targets. The asset management plan must include, at a minimum, an inventory of a state's assets on the NHS, the state's objectives and measures for the NHS, identification of performance gaps, an analysis of lifecycle costs and risk management, a financial plan, and investment strategies.

Within the Transportation Mobility Program (TMP), MAP-21 creates penalties if the total deck area of deficient off-system bridges increases over two years, requiring states to devote additional funds to this program area. The Highway Safety Improvement Program (HSIP) requires states to develop and regularly update strategic highway safety plans based on empirical data, safety audits, analysis of risk factors, and other factors. Additionally, the HSIP requires states to develop performance targets that reflect the total number of serious injuries and fatalities, the number per capita, and the number per vehicle-miles traveled. Similar to the TMP, MAP-21 imposes penalties on states in which the fatality rate for high-risk rural road safety and rail-highway grade crossing safety increases over a two-year period. In these cases, MAP-21 requires states to devote additional resources to these program areas.

Under CMAQ, large MPOs are required to develop and regularly update performance plans that (1) include baseline data on traffic congestion and emissions, (2) identify air quality and traffic congestion reduction targets, and (3) describe how projects selected for funding will contribute to meeting those air quality and congestion goals. Under the new NFP, states will develop and update performance targets for freight movement on their share of the primary freight network; the U.S. Secretary of Transportation will define the primary freight networks and performance measures. Every two years, the states will report on their progress toward meeting these performance targets for freight. MAP-21 ensures compliance by requiring these performance targets before states can obligate their National Freight Program allocations.

In addition to the core highway programs described above, MAP-21 provides $1 billion from the General Fund in FY 2013 to the PNRS program. This competitive program provides funding to projects that meet robust criteria, including their impact on performance of the surface transportation system.

The bill's emphasis on performance targets and measurement continues into the state and metropolitan planning processes. It requires Tier I MPOs, i.e., those with more than 1,000,000 residents, to develop metropolitan transportation plans and transportation improvement programs (TIPs) through a performance-driven approach. The MPO will establish targets to track the attainment of critical performance goals identified in the core highway programs (NHPP, HSIP, CMAQ, and NFP). Tier I MPOs will use these targets, as well as the statewide transportation plan, as the basis of their metropolitan transportation plans and TIPs. In their transportation plans, Tier I MPOs will describe their performance targets and measurements for both existing and future conditions, document progress made toward these targets since previous plans, and recommend strategies for improving performance. Additionally, Tier I MPOs are authorized to use scenario-based planning, such as CMAP's scenario-based GO TO 2040 plan. Tier II MPOs with 200,000 to 1,000,000 residents may incorporate the above performance-based planning, but are no required to do so.

Like Tier I MPOs, states are required to establish performance targets to address the various performance measures established through the core highway programs. Again, these targets are to be used as the basis for statewide transportation plans and statewide transportation improvement programs.

MAP-21 makes strides toward implementing a transparent performance-based funding system, but it falls short in ensuring that investment decisions are made based on regional priorities. It requires states and MPOs to create performance targets, build plans and policies around these targets, and measure progress based on the state's performance measures—all without input from MPOs. Additionally, because MAP-21 currently focuses on highway projects, the processes described here are not explicitly mode-agnostic. Nevertheless, MAP-21's emphasis on performance measurement among MPOs, state departments of transportation, and the U.S. Department of Transportation will improve accountability to the public and promote the overall cost-effectiveness of federal programs.

2. Evaluate and prioritize infrastructure investments in a comprehensive way that looks beyond transportation benefits to include land use, economy, environment, and other quality-of-life factors.

MAP-21 partially implements this CMAP recommendation. The performance measures referenced throughout the bill are largely unidentified; only safety metrics are referred to in any detail. While transportation benefits will likely comprise the bulk of any measures identified by the Secretary, broader factors are likely to be included for certain programs. For example, CMAQ will likely contain performance measures related to air quality for various pollutants. Additionally, the PNRS program's stated purpose is to "generate national and regional economic benefits and increase global economic competitiveness." As such, MAP-21 defines basic selection criteria for the PNRS program, including a project's ability to generate national economic benefits, achieve a favorable benefit-cost ratio, and increase access to critical economic inputs.

Similar to PNRS, the TIFIA supports large, complex projects of regional and national significance. The TIFIA Joint Program Office selects projects using a variety of criteria, including measures of environmental impact, use of new technology, and innovative project organization and delivery. In addition to meeting these criteria, proposed TIFIA projects must repay loans using dedicated revenue sources, they must be included in their state's TIP and long-term transportation plans, and their debt must have the potential to achieve investment-grade rating. MAP-21 seeks to expand TIFIA funding to $1 billion annually.

Additionally, MAP-21 greatly consolidates federal surface transportation programs from about 90 to less than 30; core programs are reduced from seven to five. The reduced number of programs in MAP-21 should provide states and metropolitan areas with greater flexibility in programming federal funds. To the extent that greater flexibility allows states to choose projects in a more comprehensive manner, MAP-21 could further implement this CMAP recommendation.

In sum, MAP-21 somewhat promotes a broader project evaluation process. Despite its strong emphasis on performance measures, MAP-21 fails to identify specific metrics to be used by the federal government, states, and MPOs. Given the purpose and goals of some core programs, some of these performance criteria are likely to involve economic and environmental topics. Additionally, MAP-21 promotes a more comprehensive review process through its support of discretionary grant and loan programs.

3. Provide adequate federal investments in the nation's transportation systems.

MAP-21 fails to meet this CMAP recommendation. The bill would continue the federal highway program for two years at current funding levels plus inflation. Early reports peg the total funding level at $85.3 billion, with some $12 billion to $13 billion in funds not yet identified. When combined with anticipated transit, rail, and safety funds, the full two-year reauthorization bill would total some $109 billion. However, maintaining funding at current levels is insufficient to meet the transportation system's needs. According to 2009 estimates from the National Surface Transportation Infrastructure Financing Commission, the nation's highways and transit face a $400 billion funding gap between 2010 and 2015, and a $2.3 trillion gap between 2010 and 2035. This gap is the difference between total investment needs and anticipated revenues using current funding sources and tax rates. Assuming the $400 billion gap for 2010-2015 is distributed equally, the shortfall corresponds to $80 billion a year. Applying this annual figure to the two-year period, MAP-21 would need to be increased by $160 billion, or 47 percent, to meet federal investment needs.

4. Reform the transportation funding system by placing a new emphasis on sustainable revenue sources.

MAP-21 fails to meet this CMAP recommendation. MAP-21 mostly relies on traditional revenue sources that are deposited into the Highway Trust Fund, including gasoline taxes. A notable exception is the PNRS program, which MAP-21 proposes to fund with $1 billion in general revenues. Traditional revenues are user fees related to consumers' and businesses' use of the transportation system. These user fees directly connect costs with benefits and have been the centerpiece of federal and state transportation finance for decades. However, traditional user fees are not sustainable in the long term—they are not indexed to inflation and have failed to keep pace with the costs. Additionally, they have been further eroded by the increasing fuel efficiency of vehicles.

MAP-21 does nothing to address either the immediate or long-term fiscal crises facing transportation. The bill does not increase funding to fully maintain, modernize, and judiciously expand the transportation system over the next two years. In fact, MAP-21 is not fully funded at its current level, with some $12 billion to $13 billion in revenues not yet determined. It seems likely that efforts to fill this gap will stray from the user-fee principle. The discussion has largely centered on the Senate Finance Committee identifying cost offsets elsewhere in the federal budget, while in the House of Representatives expanded oil and gas drilling has been raised as a potential revenue source of that body's transportation reauthorization bill. MAP-21 contains no discussion of long-term strategies to fund transportation.

As described in GO TO 2040, CMAP strongly supports continuing the user-fees tradition in transportation finance. Our region's comprehensive plan recommends expanding revenue sources through more-efficient mechanisms, which would be better structured to reflect actual maintenance and operations needs as well as the costs of congestion. Such mechanisms could include congestion pricing, vehicle-miles traveled fees, or variable parking fees. GO TO 2040 recommends increasing traditional revenue sources, principally the gasoline tax, in the near term to meet immediate investment needs. In the long term, the gas tax will need to be replaced as vehicles become more fuel-efficient or switch to other fuels entirely.

Tolling is a key tool for implementing sustainable transportation funding. By levying a toll for travel at a specific time and location, tolling is a pure user fee. Technological advances such as open-road tolling have substantially reduced the costs of tolling and also allow for more sophisticated applications. Toll rates can vary by time of day and location in response to specific congestion levels. Called congestion pricing, this policy encourages motorists to choose other routes, travel times, or modes, reducing congestion and leading to more efficient use of the transportation system.

However, MAP-21 does not discuss tolling, except to say that HOV-HOT conversions are permitted, that tolls can be used to pay back TIFIA loans, and that congestion pricing projects are eligible for CMAQ and TMP funding. Past authorization bills created pilot programs to promote further implementation of congestion pricing projects and of tolling more generally. MAP-21 fails to build on this momentum and does not expand opportunities for tolling on the federal-aid highway system.

In conclusion, MAP-21 fails to provide sustainable transportation revenues. It does not fully fund its authorized spending levels and attempts to fill this gap will likely depart from the traditional user-fees principle in transportation finance. MAP-21 does not discuss long-term solutions to the transportation system's funding crisis and does not expand tolling authority.

5. Establish a national transportation vision that includes the movement of goods and the development of a national high-speed rail network.

MAP-21 largely fulfills this CMAP recommendation. The bill creates NFP as a new core program area with dedicated funding (estimated at about $2 billion annually). It directs the Secretary to designate 27,000 miles of key freight corridors and 3,000 miles of anticipated future corridors. States may use their NFP funds for projects on the national freight network, with a focus on the primary network. States may use up to 5 percent of their NFP funds for rail and maritime projects. MAP-21 also directs the Secretary to develop a National Freight Strategic Plan which would document current conditions, including bottlenecks, predict future freight volumes, and identify best practices for reducing the impact of goods movement on adjacent communities. The National Freight Strategic Plan would be updated every 5 years. Given this national vision for freight, the expansion of TIFIA and the PNRS programs could provide further opportunities to leverage resources for freight projects.

MAP-21 does not include provisions for high-speed rail. The Senate Environment and Public Works Committee has jurisdiction over the highway component of the national surface transportation network, and so it was not included in this bill.