Phillip A. Washington: What Criteria Should Policymakers Consider When Selecting Infrastructure Projects for Funding?
January 16, 2018
As Congress and the Trump administration continue an active, if uncertain, dialogue on the scale and scope of a possible infrastructure plan, one issue remains elusive for many policymakers. This issue is not tied to the dollar amount to be invested by the federal government in any infrastructure plan, though that is a critical factor. Nor is the issue related to the scope of any future infrastructure plan and whether it will cover transportation projects alone or will cover water and other pressing national infrastructure assets.
The key issue, as I see it, is how Congress and the Trump administration will select the projects to secure infrastructure funding or if they will devolve that decisionmaking process to state and local governments and agencies.
If history is any guide, the federal government will likely adopt an all-of-the-above approach on how projects will be funded. Both the current surface transportation authorization bill (the Fixing America’s Surface Transportation Act) and the most recent infrastructure stimulus legislation (the American Recovery and Reinvestment Act of 2009) funded individual projects—such as major transit projects—and provided formula funding that left major funding decisions to state and local governments.
I believe the federal government can make positive strides in adopting criteria for any new infrastructure plan that would blend key factors to ensure two priorities.
First, it would ensure a maximum return on investment for federal taxpayers. Second, it would deliver more mobility for more Americans.
A blending of criteria used in selecting which projects get funding would encourage a series of best practices around the nation:
- Projects that have a national benefit, such as a highway that serves a major goods movement corridor that would have a demonstrably favorable impact on our national economy
- Projects that require a low federal match, thereby allowing the federal government to extend grants and low-interest Transportation Infrastructure Finance and Innovation Act (TIFIA) loans to a larger number of projects
- Rural set-asides that are key to ensuring rural America benefits from a transportation infrastructure plan where they live, not just urban and suburban areas
- Incentives to infrastructure owners to capture life cycle cost efficiencies and asset management to avoid future deferred maintenance costs
This approach—along with the use of more traditional funding programs—would ensure that any future federal infrastructure plan has a win-win approach and does not pit one part of our nation against another.
To ensure the blended criteria approach is successful, stakeholders from across the United States need to press the House, Senate, and White House to take a fresh and dynamic look at how the federal government disburses transportation dollars.
To forge the consensus needed for the federal government to adopt a new approach for how projects are selected for federal funding, stakeholders should represent a broad array of transportation providers. Large and small states and small, medium, and large transportation providers need to coalesce around guiding principles that support this approach. This will require breaking down the barriers between transit and highway stakeholders and between urban and rural areas, who would need to discard their historical differences to send a message to Capitol Hill and the White House that business as usual is no longer the route the federal government should take when apportioning valuable federal transportation dollars.
The most effective means of making a compelling case for refreshing the criteria the federal government uses for delivering transportation dollars is, in my opinion, local success stories. Thankfully, there are plenty of success stories around the nation where federal funds have been used to great effect on projects small and large.
We have several success stories at the Los Angeles County Metropolitan Transportation Authority (Metro) emblematic of how federal dollars—when smartly deployed—can leverage local funds and have an outsized impact. One example is the Crenshaw/LAX Transit Corridor project, which took a $546 million federal TIFIA loan and used that modest federal commitment (the Congressional Budget Office scored the cost of the loan to the federal government at $7 million) to fast-track construction of a much-needed $2.1 billion rail line. Another example is the $10.2 million in federal Transportation Investment Generating Economic Recovery grant funds that are being used to build a major enhancement to Metro’s Willowbrook/Rosa Parks Station, which connects thousands of transit riders to health services, jobs, and training at the Martin Luther King Jr. Community Hospital medical campus and adjacent areas.
These stories, and many others across the nation, demonstrate the value that federal dollars can bring to localities when projects are chosen effectively. Not only did the Metro projects leverage federal funds for a larger local investment, but these projects will bolster both our local and national economies.
Taking these lessons and applying them to future infrastructure plans will help ensure our federal dollars provide the greatest benefit to all people.