The gas-tax-funded Highway Trust Fund is broke, with the Transit Trust Fund not far behind. Only with large infusions of funds from general revenues is the existing formula-based federal transportation funding framework able to continue at essentially flat levels. It’s time to tie new funding to performance. Are the proposed spending plans likely to achieve improved access to jobs and housing with less pollution and dependence on oil in both the short and long run? Is there a sustainable revenue stream from user fees, taxes, and real-estate value capture sufficient to pay back the needed up front investment? If so, then by all means let’s put the full faith and credit of the federal government behind making these investments happen.

Both the past and current Administrations have wisely sought to focus their modest discretionary transportation spending authority on competitive programs. The Bush Administration’s Urban Partnerships Agreements and Congestion Reduction Pilots conditioned federal funds on increased local efforts to spur innovative finance through congestion pricing or parking pricing, with a focus on improving system performance. The Obama Administration’s TIGER grants and the proposed infrastructure bank or fund offer potential for broader performance-based discretionary funding.

Congress should authorize an infrastructure bank or fund enabling state and local governments to borrow for projects up front and to pay them back over time. But this should include criteria to ensure that investment programs are designed and operated to reduce carbon emissions, support smarter growth, and improve public health. A bank or fund should encourage use of value capture strategies near public transport and smart tolling and traffic management strategies, both to raise revenues and to enhance system effectiveness.

The selection process for an infrastructure bank or fund should have clear evaluation criteria and be open and transparent. The selection process for projects should be based at least in part on a holistic-benefit-cost analysis that seeks to consider externalities, such as induced traffic, climate, pollution, and public health and safety impacts. It should include consideration of reasonable alternatives to proposed actions, including operational and management strategies that might minimize adverse environmental impacts.

While the Los Angeles 30-in-10 program could be a good place to start with such an initiative, there are other cities around America that also have good plans that could benefit from a new infrastructure bank or fund. With America’s economy still in a precarious place, it’s time for Congress to act by spurring a new fiscally responsible approach to long-term infrastructure investment, tying money to performance and to sustainable revenue streams at the local level.

The federal government should encourage local investment in transportation infrastructure by helping cities and counties leverage local investments and revenue streams. This basic concept is embodied in one existing and several major planned projects for the future of the LA area. First we have the Alameda Corridor: The federal government advanced funding for a nationally important trade gateway. The loan is now successfully being paid off by container trade revenue passing through the region to the rest of the nation, relieving truck traffic on local roads and highways, and helping America’s #1 import/export container gateway become a livable community as well.

Today, this is also the strategy of Los Angeles Mayor Antonio Villaraigosa’s 30/10 proposal – to build 30 years of transit projects in 10 years using an advance of federal funds. Under 30/10, Los Angeles County can pay back bonds and loans using the half-penny Measure R sales tax collected over 30 years. Measure R is projected to provide $40 billion over the life of the measure for both the transit projects of 30/10 as well as regional goods movement infrastructure along the I-710 corridor, a nationally important trade corridor. So not only would our commissioners and staff waste less time in traffic, our goods would also move more efficiently.

Looking ahead, as President Obama seeks to increase the nation’s exports, we need to look at our trade infrastructure and address bottlenecks now. Building on the Alameda Corridor model, this may involve leveraging a program like the proposed National Infrastructure Innovation and Finance Fund to build and repair infrastructure like the Gerald Desmond Bridge, the I-710 corridor, and various rail projects throughout the San Pedro Bay Port complex, which can be paid off over time through shipping revenue.

Using federal funds up front, and paying them back over time, won't break the federal bank. It would jump-start infrastructure construction and job creation. By building faster in today’s dollars, we can cut costs by taking advantage of market conditions.

Given that Los Angeles taxpayers have already voted to tax themselves to improve transit, it makes perfect sense to get projects moving as quick as possible while costs for material and labor are lower, knowing that a revenue stream is already in place to pay back the loan. It’s a smart and accountable way to get more while spending less — something all governments should be looking to do.

Los Angeles’ 30/10 plan is a forward-looking transportation blueprint that would increase travel options while cleaning up the air and putting Californians to work. During testimony before the House Ways and Means Committee earlier this year, Los Angeles Mayor Antonio Villaraigosa noted this his city is “the car capital in the world, with the traffic congestion and air quality to prove it.” Enacting 30/10 would help alleviate congestion and result in 166,000 construction jobs and thousands of permanent jobs to operate and maintain the new transit systems — turning a plan that voters approved into reality faster than expected, for once.

I was encouraged to hear President Obama cite the 30/10 plan as a “template for the nation,” especially in the context of a potential push for a National Infrastructure Bank. Under the status quo, long-range transportation projects that increase options and grow the economy are graded on their costs, but rarely on their expected benefits. A national infrastructure bank would encourage precisely the kind of forward-looking approach embraced in Los Angeles. Building America’s Future, a coalition that includes Democratic Governor Ed Rendell, Republican Governor Arnold Schwarzenegger and Independent Mayor Michael Bloomberg endorsed the infrastructure bank, and right-leaning New York Times columnist David Brooks says the bank fits the mold of an innovation agenda that prioritizes smart spending on merit over misspending in a broken transportation system.

To be sure, growing concerns about debt makes an innovative loan program like this a harder sell. But as Los Angeles has demonstrated, we can structure the infrastructure bank so that communities with realistic revenue projections are able to secure loans, ensuring taxpayers get their money’s worth — or even a better deal than building the system over a long period of time. With a network of roads and bridges receiving failing grades from the American Society of Civil Engineers and demand for greater transit options throughout the country, it is failure to invest in the infrastructure of tomorrow that would constitute the real generational theft.

As Ken Orski has pointed out, this initiative of Mayor Villaraigosa and the City of Los Angeles may suggest how we should proceed in the future with regard to major transportation investments. Not only will there be greater local and/or state contributions, but also these investments should occur as parts of comprehensive strategic programs.

While I am not in a position to comment about the specific elements of the Los Angeles program, the City's efforts demonstrate what states, metropolitan regions, and localities, working in a collaborative way, should be able to accomplish through imaginative and cooperative transportation planning and capital programming processes. Unfortunately, except in a few states and metropolitan regions, such successes are not currently easily or frequently achieved. For that reason, if for no other, this Los Angeles initiative should be supported by the federal government and, to the extent possible under existing laws and programs, incentivized.

The Bipartisan Policy Center's National Transportation Policy Project (NTPP), in calling for the reform of national surface transportation policy, has recommended that the framework for federal programs should be shaped around national goals, outcomes, performance, and accountability. The approach should be "bottom up," with states, metropolitan regions, and localities allowed to develop comprehensive and strategic programs across jurisdictions, modes, and agencies that are a mix or bundle of investments, operational improvements, pricing, and administrative actions. The mix of projects and initiatives within these programs should fit the particular and unique circumstances of each area, but the total progams should demonstrate progress toward the achievement of a full suite of national economic, energy, environmental, and safety goals. What The particular bundle of projects should be left to state and local discretion, as long as progress is made toward national goals.

Federal financial support should exist for such state and local programs, if there offer the promise that national goals will be met. Some of that support can and should take the form of competitive grants, as was the case in the Bush Administration's Urban Partnership Program and currently is true under the Obama Administration's TIGER program initiative. Other federal support should be available under various innovative financing tools, like TIFIA. To that end, the TIFIA credit assistance program should be restructured in a way that allows for investment in more comprehensive programs that meet national goals, rather than just as financial support for specific projects.

Carefully structured, federal support for comprehensive state, regional, or local programs will create the incentives to put in place user-based funding for transportation systems. Federal financing requires the establishment of state or local revenue streams to service and discharge such debts (in the case of the Los Angeles program, a dedicated portion of local sales tax revenues). Appropriately designed, federal "front money" will be, not a substitute, but an incentive, for a sustainable, well-designed user-based fee system at the state or local level. Along with the implementation of a comprehensive and strategic transportation improvement program, federal support for this Los Angeles initiative can be an important step toward improved state and local financing for such efforts.

With the multi-year transportation authorization simply not a high priority with either the Congress or the President (see our NewsBrief of July 16, "New Political Realities May Sidetrack the Transportation Reauthorization," www.infrastructureUSA.org/category/blog ) and with the future of the Highway Trust Fund increasingly uncertain and vulnerable, the possibility of the states taking control of their own transportation destiny and asserting responsibility over transportation funding is assuming increasing plausibility. The Los Angeles County Measure R, and the 30/10 plan advocated by LA Mayor Villaraigosa may indeed be the harbinger of a major revolution in the way states and local governments should approach the funding and financing of transportation infrastructure. Already today, 60 percent of spending on transportation comes from state, county and local governments. The question before the states is whether they should continue to rely for the remaining 40 percent on increasingly uncertain federal largesse or whether they should free themselves from federal dependence and embark on a more independent course. Measure R, a dedicated half-cent sales tax, is expected to generate up to $40 billion for local transportation projects over 30-years. By using the sales tax revenue as collateral for long-term bonds and a federal loan, Los Angeles could accelerate completion of 12 key transportation projects in just 10 years rather than the projected 30. Local authorities would repay the federal loan over 20 years with a portion of the proceeds from the sales tax. The 30/10 plan is not just a short-term job-creation initiative and an antidote to the current recession, as some advocates have portrayed it. It's a cutting edge new approach to making states more independent of the increasingly unreliable and unpredictable federal aid and to reducing the problematic reliance on the gas tax. As such, LA County's Measure R and the 30/10 initiative are a potential model for other states and local jurisdictions that are looking for ways to jump start local transportation infrastructure programs. It is also a fiscal policy innovation that U.S. DOT officials and the Congress should seriously consider as part of the next authorization bill.

This is a guest post by Joel Epstein, a member of the leadership board of Move LA, a transportation advocacy group that supports the 30/10 plan.

Thank you for posing this important question for your readers. 30/10 presents a model opportunity for Los Angeles as well as the nation to help itself out of its economic malaise while bringing online, critical and overdue public transportation infrastructure. 30/10 will build practical, cost-effective and much needed public transportation, not pie-in-the-sky unproven and costly transportation technology.

30/10 is also not a handout, as LA will largely pay back the government with revenue from a half-cent transportation sales tax that County voters approved in November 2008 when, by a two-thirds majority, they passed Measure R.

The LA economy is so large that as LA goes, so goes the nation. The currently dire economic situation has not been helped any by the meltdown on Wall Street, but the crippling of the LA economy has been decades in the making. The tendency of the city to sprawl uncontrollably has meant ever worsening traffic congestion, which voters recognized is no longer sustainable. Business and capital flight has been a local reality that has to stop. In enabling Los Angeles to build out its transportation infrastructure now, rather than later, by (largely) lending LA the interest it would need to pay on enough private capital to start building many projects at once, Congress will be using its vast resources in a manner that will pay large dividends on the federal taxpayer’s investment. The monies advanced, secured by tax revenue from Measure R, will bring subways, light rail, bus rapid transit and other transportation public works projects that start giving once they are completed and keep on giving.

What will be built will serve the region, and thereby, country, for years to come. 30/10 may not end traffic but it will give millions of Angelenos wise enough to ride the fast, efficient public transportation, or with no alternative, the opportunity to do so.

Like the dams, highways and bridges of earlier eras, 30/10 will employ thousands in construction and many more in the industries that will spring up or survive as a result of the purchasing power of these newly employed workers. The look of LA will change as developers build more wisely looking to transit-oriented development opportunities on infill properties adjacent to public transportation.

The benefits are literally immeasurable as 30/10, supported by a coalition of business civic, environmental, public health religious and labor groups, will reshape Los Angeles the way the damming of the west’s rivers enabled the region to become the agricultural horn of plenty it has become.

(From CALPIRG's Erin Steva, who is working in L.A. in support of the 30/10 proposal.)

L.A. enjoys a famously diverse cast of characters from musicians, to entrepreneurs, manufacturers to the ubiquitous waiter-actors. Despite their diversity and differences, Angelenos are coalescing around the 30/10 initiative, which would deliver 12 new public transit projects in 10 years, rather than the currently planned 30 years.

In 2008, faced with endless gridlock and smog, two-thirds of voters in Los Angeles County approved Measure R, a 30-year half-cent sales tax expected to generate up to $40 billion, mostly for public transportation projects. Measure R will build out an approved blueprint to transform Los Angeles by dramatically expanding the region’s subways, light rail lines, and busways. Right now, it the will take 30 years for the revenue to be available from the tax to build these projects. Since the revenues and projects are already approved by voters, Los Angeles wants to realize the project benefits right away with loans from Congress secured by the expected sales tax revenue.

Doing so will take advantage of important costs savings while jumpstarting the economy and laying the groundwork for the future. Building now will save money because capital and construction bids have become cheaper in the depressed economy. According to the Los Angeles Deputy Mayor Jaime de la Vega, construction bids submitted in anticipation of 30/10’s accelerated timeline are 15 to 30 percent lower than the projected costs without acceleration. Southern California’s depressed construction industry is holding back the economy and 30/10 would create a whopping 166,000 additional jobs. Once completed, the projects will also give the City of Los Angeles a 21st-century transportation system, replacing 191 million miles of annual auto driving and thus dramatically reducing traffic and pollution.

Long known as the country’s driving capital, LA is now proposing a model for the rest of the country which Congress should embrace. Existing federal transportation rules are heavily biased against public transportation due to onerous rules and lower federal matches for local funds. We can level the playing field by allowing regions that are willing to generate their own transit revenues to realize the benefits of these investments sooner. As the country searches for ways out of the economic downturn, Congress needs to think out-of-the-box and reward regions that self-finance projects.

It’s not enough to rely on existing programs or a future Transportation Reauthorization Act. Current transportation programs, such as the Transportation Infrastructure Finance and Innovation Act (TIFIA), are too small for a program like 30/10. Congress could introduce stand-alone legislation for unique and innovative opportunities such as this one, or include financial backing as a special appropriation. Waiting for SAFETEA-LU reauthorization or an infrastructure bank is not a real solution because, in practice, it could mean squandering the opportunity.

It’s rare to have such a clear case of good policy as reflected by the list of endorsers, including Senator Boxer (CA) and Secretary of Transportation Ray LaHood. Their praise is a laudable first step. We now need action. Doing so will require innovative thinking and continued leadership on the part of LaHood and the Congress, including Senator Boxer, who sits in an influential spot as head of the Senate Environment and Public Works Committee. In these tough times, it’s the road map to the future our leaders should take.