Mixed Signals on the American Superhighway: Devolve, Evolve, or Prod Ahead?

Congress finally did something! It appears poised to pass a “six-year” transportation bill. In truth, the bill contains money for only three years and doesn’t address the looming issue of rising construction costs and dwindling gas tax revenues due to increasingly fuel efficient cars. The highway funding bill is headed to conference to hash out differences in the Senate and House versions. Actually the differences are pretty big. The New York Times reports congressional negotiators must choose between getting funds at the expense of the nation’s largest banks or the Federal Reserve’s rainy day fund:

The Senate, scrounging for road-building money, voted earlier this year to reduce the Federal Reserve’s annual dividend payments to large commercial banks, saving about $17.1 billion over the next decade. The House was to follow suit, but after loud protests from the big banks, its final version of the highway bill preserves those dividends and instead requires the Fed to provide $59.5 billion over 10 years instead of putting the money into an account intended to cover potential losses.

Joe Cortright at City Observatory called pumping the trust fund full of Fed money “asphalt socialism” and poked fun at the House’s hypocrisy. Nonetheless, it seems the House, as the crazier of the two legislative branches, might largely get its way (or should I say the way of the big banks that bought them out?) Either way, the Highway Trust Fund is getting more of a reprieve than a long-term fix. Our country’s monstrous highway network actually needs a major infusion of cash should it want to keep up with “business as usual,” and holding spending levels flat for a few years will not do that. It’s just a band-aid, and not a good one at that.

Enter America’s political brain trust.

GOP wunderkind and insider favorite for the presidential nomination Marco Rubio dropped a plan titled “Letting States Pave the Way” with an enormous freeway interchange on the cover. Ever the visionary, Rubio calls the federal gas tax outdated and proposes slashing it by 80% and turning over highway funding to the states, a maneuver called “transportation devolution.” Essentially he just endorsed the Transportation Empowerment Act written by conservative ideologue extraordinaire Sen. Mike Lee of Utah and Sen. Mike Graves of Georgia (and one has to imagine largely ghostwritten by the Heritage Foundation).

The federal gas tax hasn’t been raised since 1993 and is falling woefully short of maintenance needs; Congress has resorted to using billions of dollars of general or Federal Reserve funds to prop up the Highway Trust Fund. Cutting the 18.4 cent federal gas tax will exacerbate the problem and then foist it on the states. To think states would immediately pick up the slack and cover transportation costs with augmented state gas taxes or other revenue sources is wishful thinking. State politicians might be just as tax-averse and let their state’s highway system crumble and deteriorate.

On the other hand, transportation blogger Kenneth Orski reported that 23 states, many of them GOP controlled, considered measures to raise transportation revenue as federal funds lagged and threatened to disappear. A few unlikely states even passed measures: “Georgia, no bastion of free-spending fiscal policy, raised its fuel tax to 21.7 cents and indexed it to inflation. Maine Gov. Paul LePage, as cranky an antitax zealot as there is in the country, has proposed a new $2 billion plan to rehabilitate state infrastructure.” Perhaps America’s love of highways is even stronger than its loathing for taxes.

Most presidential candidates aren’t embracing the issue of the dwindling highway trust fund. It seems to be a bit of political hot potato. Democrats Hillary Clinton and Bernie Sanders don’t include transportation funding on their campaign issues pages, likely because progressives are split on the direction to take. Clinton did endorse an infrastructure bank last month — a plan in which the federal government would put up something like 10 to 50 billion dollars to kick start a private-public partnership for infrastructure projects with corporations or states selecting the projects and put up the money to get the loan from the infrastructure bank — although it’s not clear to what extent this could replace the federal highway trust fund’s role, if at all.

The Urbanist Case

Surprisingly, Rubio’s plan is similar to what some urbanists such as Strongtown‘s Chuck Marohn have suggested. Governing summed up Marohn’s unconventional message thusly:

At a time when half of Washington is batting around numbers that purport to reveal how much money Congress should spend to save the nation’s troubled transportation system, Marohn is suggesting the simplest number of all: zero. What the system needs, Marohn says, isn’t a big infusion of cash, but a thorough examination of what it ought to be doing in the first place. Barring such an examination, he wouldn’t give the transportation system a dime.

Marohn has described our transportation system as a Ponzi scheme for years, and wrote earlier this year:

This is our system: one big Ponzi scheme attempting to prop up a rolling development extravaganza of strip malls, big box stores, fast food and cheap residential housing. You want to spend more on this? … I’m going to aggressively oppose any increase in transportation funding in Minnesota, any other state or at the federal level, until there is aggressive reform of this system. At this point, communal funds must be for maintenance only with any system expansion being paid by some form of user charge.

Getting rid of the federal Highway Trust Fund and turning over responsibility for the highway system to the states would give states more autonomy notwithstanding the giant new budgetary obligation. Rubio would have states focus on freeway capacity and slash transit funding. Marohn and his ilk would likely do the opposite. Either way there is some unlikely consensus from folks on the political far right and certain urbanist thinkers that transportation devolution is the way to go.

If devolution did happen, it seems possible that urban states with popular mass transit systems such as New York, Illinois, California, Massachusetts and Washington would use their greater autonomy to devise ways to boost transit funding. However, predominantly rural states would keep the focus on highway expansion, and I don’t see our country’s many Republican-controlled state governments boosting the state gas tax enough to maintain their colossally overbuilt systems. The fear then is that poor states would shirk on their responsibility and let their highways fall into disrepair. Eventually we would see the interstate highway network develop gaps, perhaps most of all in the Deep South, Appalachia, and the sparsely populated West. There are also reasonably wealthy cities that massively overbuilt their highway networks such as Kansas City, St. Louis, and Houston (the top three cities in highway lane miles per capita according to this study) that might struggle mightily to keep up with maintenance without the federal government to bail them out.

The Climate Change Argument

Another argument for devolution is that cutting the federal purse strings would shock state DoT’s into fiscal restraint or starve them out of their consumptive practices, pulling us out of our spiraling cycle of induced demand via endless highway expansion. The status quo is steadily paving over our exurbia, choking our skies with greenhouse gases, and allowing us to lead the world in carbon emissions per capita. That’s not the leadership Obama et al are referring to when they talk about American leadership on climate change, and, as we approach Paris Climate Talks, America’s emission heavy ways frankly undermine its message and self-proclaimed leadership role.

Concrete is a large and often overlooked contributor to carbon emissions. In her article Cement Industry Is At The Center of Climate Change Debate, Elisabeth Rosenthal said, “Cement plants account for 5 percent of global emissions of carbon dioxide, the main cause of global warming. Cement has no viable recycling potential; each new road, each new building needs new cement.” Much of the emissions result from the chemical reaction that produces cement; thus, it’s difficult to make an environmentally friendly concrete. (Using fly ash, a by-product from coal power plants helps but coal is hardly a fuel of the future.) Generally, a ton of concrete produces nearly a ton of carbon emissions.

Asphalt has its own problems, and it’s used to surface 90 percent of highways (although it typically rests atop concrete base.) In a National Geographic News article, Marianne LaVelle reported, “Conventional hot mix asphalt must be heated to 300°F (150°C) or more so that it is workable during mixing, laying, and compacting. But by introducing water into the asphalt mix through foaming agents, or with the help of additives such as waxes, asphalt makers have found they can reduce the temperature of the mix by 50°F to 100°F (30°C to 60°C), while still providing a road-surface medium with the same properties as hot mix.” The industry is also moving toward recycling old asphalt. “The U.S. industry, which is now producing about 400 million tons of new asphalt paving annually, reclaimed about 73 million tons in 2010,” LaVelle said. That reclaimed asphalt is used instead of virgin rock, which is a scarce resource in itself. Rock makes up more than 90 percent of both asphalt and concrete and mining, crushing and hauling it consumes a colossal amount of energy.

Another important factor to consider is how road smoothness effects the fuel efficiency of cars using the roads. Rough roads can decrease fuel efficiency by as much as 5 percent compared to smooth roads, which is a big deal in the grand scheme of cutting carbon emissions. This would suggest highways, particularly busy ones, should be assiduously maintained for optimal smoothness to boost the fuel efficiency of cars passing over them. It’s precisely what we are not doing now as Seattlites motoring across the many washboard sections of I-5 can attest. This focus on maintenance dovetails nicely with Marohn’s no new roads mantra.

I don’t know if devolution is the answer. I certainly agree with Marohn that our highway network is overbuilt and building new roads should not be the goal. Returning DoT’s focus to maintenance would spare us the added costs and Paul Bunyan sized carbon footprints of new highways while maximizing the efficiency of highways we already have. Alas, new roads are seen as a sexy investment with an easy political constituency while maintenance is seen as boring and an easy thing to put off and pay for later. Delaying maintenance exacerbates the problem as repairs get more and more expensive the longer you wait and DoT’s meanwhile pile on new highways that will also get thrown on their massive maintenance backlog. It’s a vicious cycle seemingly headed to bankruptcy and ruin. Devolution would grant states the opportunity to re-calibrate their budget priorities and perhaps get themselves on a more sustainable course. If the states would really take the opportunity to change their ways is another question entirely.