Since the conversation on SAFETEA-LU’s successor began a few years ago, there has been a near unanimous focus on the need to transition to a more performance-based method to fund the nation’s roads, bridges and transit systems. AAA supports this shift. The challenge going forward does not seem to be internal division within the transportation community, or political problems associated with the shift, but rather the complexity of the reform itself. It will take time – and money – to implement this new approach. Time will be needed to achieve consensus on common standards and to identify data needs and inconsistencies. Money will be needed to improve data collection in every state. Data isn’t sexy and doesn’t lend itself to a ribbon-cutting, but it is vital to the success of a future performance-based system.

A lot of good work has been done to begin identifying potential performance measures and help policymakers evaluate various metrics. Most recently, the National Transportation Policy Project in association with the Bipartisan Policy Center has made a contribution, but previously the US Chamber of Commerce, GHSA and NHTSA, TRB, GAO, as well as state and local DOTs have all contributed to the breadth of work.

Much is being made of the process by which we do “more with less” transportation dollars. Regardless of one’s view on that notion, it is clear that the value of dollars we invest will be stretched under a performance based system. The time to act is now while the House and Senate are poised to introduce legislation that will set the nation’s transportation course for the future. Recognizing that it is unlikely that more funding will be available for infrastructure needs, our ability to ensure the wise use of these limited resources, not only from the project selection standpoint, but throughout the entire project development process, demands critical attention.

Going forward, we need to ensure that a new program will indeed deliver measurable results in terms of safety, system reliability and efficiency. A performance-based program will help us get there.

There are two things that contributors to this blog consistently support. First, that we should obtain bigger returns (however calculated) on our transportation investments. Widespread support exists for “merit-based assessments” using tools such as benefit-cost analyses, inclusive planning and performance measurements. All appear to have their place in local, state and national programs. Second, most of us bemoan the fact that policymakers do not appear to have the courage to raise additional revenues at a time when the need for transportation infrastructure investments is all too clear. We hold this view even though we do not yet have a consensus (or even near a consensus) on how these funds should actually be used. Attentive readers of this blog will note that most of the disagreements and debate are over (1) who is going to decide; (2) what type of discretion the decision-makers will have; (3) who will be charged to pay for the investments; and (4) what types of projects will be built from their decisions. However, at a time when the federal government is contributing fewer dollars to transportation investments (a trend that in all likelihood will continue), it is perhaps the time to move away from a Washington-centric strategy and pare down prescriptive regulatory schemes, eliminate unfunded mandates, and open up overly specified program criteria. Combined, such measures would support a strategy that would turn our focus to enabling all levels of government and the private sector to make contributions to upgrading our infrastructure. The outlines of such a transport policy strategy would prioritize policymakers’ attentions to (1) focusing on a core set of clearly national projects; (2) enabling states and regions to make decisions which meet their goals; and (3) incentivizing more private capital to come into the sector through public-private partnerships (PPPs) that put a premium on revenue streams created by users. These three steps would recognize our near-term financial limitations, would work within a federal structure, and would better target the needs of users. They may also give us a fighting chance to enact solutions, instead of perpetuating the political puppet shows which characterize our politics today.

The nation’s severe fiscal crisis – persistent annual budget deficits and a ballooning national debt – means that resources will be tight for many years in all sectors, including surface transportation. For the first time in decades, federal funding for highways, transit, and highway safety will not grow and is likely to decline. Public investment capital is constrained and will remain so.

Historically, reform has happened in the transportation sector only when funding has grown and state and local grantees have been incentivized by the lure of more money to make changes in the way that they plan and invest. However, for the last fifteen or twenty years, while funding has grown, there have been few incentives for state and metropolitan regions to reform. As a result, today most transportation capital programs lack strategic purpose, and investments are neither targeted nor prioritized. The federal surface transportation effort has largely become a public works program with a focus on levels of funding, rather than on national purposes.

Scarce resources create an urgency to shape a performance-based federal surface transportation program that targets constrained funds on those state and metropolitan programs and projects that promise the greatest returns, in terms of clearly defined national goals. Benefit-cost analysis and strategic capital programming should become essential elements of federal transportation policies, and performance incentives, like the Administration’s transportation leadership grants and the performance bonuses, recommended by the Bipartisan Policy Center’s National Transportation Policy Project (NTPP), take on greater importance.

In a paper released by NTPP earlier this year, two of the Project’s Members, Douglas Holtz-Eakin and Martin Wachs, stated, “We need to do a better job of systematically evaluating alternative investments so as to better distinguish among different outcomes and to improve the returns to public investment in an era of unprecedented budget pressures and increasingly constrained resources.” In 2006 Sir Rod Eddington, in a report to the government of the United Kingdom, wrote, “To meet its economic goals for transport, Government should prioritize action on those parts of the system where networks are critical in supporting economic growth . . .” and late last year the U.S. Department of the Treasury and the President’s Council of Economic Advisors emphasized the importance of targeting infrastructure investments to optimize long-term economic returns.

The future of the nation’s surface transportation program could well-depend on our capacity to invest scarce resources wisely. Such an investment strategy could become the basis of convincing the American public that infrastructure investment resources should be expanded and that such investments are critical to the nation’s economic recovery and fiscal well-being.

More accountability is a good thing. More bang for our buck is a good thing. That’s part of the reason TEN wants to maximize federal transit funding (the top job-creator among types of transportation spending), followed by a fix-it-first approach to roads and bridges (the next best job-creator).

But let’s be careful here. Scales of "merit" are not handed down from the heavens. They're reflections of our current values and priorities. This is why they change over time, why they provoke disagreements just as sharp as any other, and why they can fall prey to the political whim of the moment. And as we all know, the political whim of the moment is to slash every investment that gives poor people and people of color a fighting chance.

Our priority at TEN is ensuring that our national transportation policy and funding create a more just, prosperous, and connected America. Anything that calls itself "performance-driven" but deepens existing inequities only deserves one name: a mistake.

So while we strongly support accountability and cost efficiency, no one who believes in racial and economic equity can support an end to all formula-based support and discretionary programs. The Job Access and Reverse Commute Program creates economic opportunity for low-income urban residents who were cut off from jobs by decades of destructive suburban sprawl. Non-Urbanized Areas Formula Program make sure that transportation works for rural communities as well as our cities. Safe Routes to School not only protects our children’s lives, it improves their health by expanding walking and biking routes to schools. Other programs such as the Equity Bonus Program or Elderly and Disabled are deserving too. If we were to lose all these programs to narrow calculations of cost-effectiveness, it would set our national transportation system back by decades.

At its best, our national transportation system has always been about expanding access to jobs, education, health care, and opportunity. The policy that has the most merit in our eyes is the one that fulfills the American promise of opportunity for all.

It is clear from public opinion polls and focus groups that the American public’s faith in the federal government’s ability to deliver transportation solutions is waning. Surface transportation authorization legislation must clearly define the federal role and responsibilities, and from that definition, the framework for a performance-based and fully accountable system can emerge. By introducing a new authorization bill that establishes a set of specific performance standards in areas such as congestion relief, asset protection, safety and financial stewardship and then imposing tangible enforcement mechanisms, these standards can be achieved. Congress would therefore be responsible for incorporating reliable units of measurement, in order to ensure that the best projects are selected by the Department of Transportation.

In ASCE’s 2009 Report Card for America’s Infrastructure the nation’s roads received a D-, bridges a C, and transit systems a D. To bring just these three categories of the nation’s infrastructure into a state of good repair would require a five year investment of $1.2 trillion from all levels of government. While such a large investment over the next five years seems unlikely, including performance based measures could renew the focus on some of the nation’s largest surface transportation challenges. By reforming the federal surface transportation program to emphasize performance management and cost benefit analysis, some progress can be made.

An additional way to produce a more accountable transportation infrastructure system is the use of life-cycle cost analysis principles in the design and project development process. As infrastructure is built or rehabilitated, life-cycle cost analysis should be performed account for initial construction, operation, maintenance, environmental, safety and other costs reasonably anticipated during the life of the project, such as recovery after disruption from natural or manmade hazards. Owners of the infrastructure should also be required to perform ongoing evaluations and maintenance to keep the system functioning at a safe and satisfactory level. Life-cycle cost analysis, ongoing maintenance, and the incorporation of performance measures will result in more resilient infrastructure systems and can ensure that these systems can meet the needs of future users.

Airports take very seriously their critical role as an economic engine for their community. What we need is for the federal government to give control over infrastructure back to the local community by providing airports with the flexibility to collect the revenue necessary to improve their facilities. U.S. airports are increasingly at a distinct competitive disadvantage when it comes to infrastructure investment compared with facilities in other countries. The fact is that governments all over the world are working to create conditions for meaningful investment in infrastructure, with airlines working in partnership with the airports because they know that investment in airport infrastructure is critical to their being able to profitably perform in a global economy. Unfortunately, this is not the case in the United States.

Congress created the Passenger Facility Charge, which is a local fee, paid by passengers who use the airport. The money raised is plowed back into the system to make critical safety and security improvements at the local airport, thereby not only addressing our infrastructure needs, but also creating local jobs. Congress has not raised the cap on the PFC user fee, currently at $4.50, in over a decade and the $2 billion it raises a year is dedicated to paying for already completed projects or those currently underway. Unfortunately, the pending FAA Reauthorization legislation fails to give airports any flexibility when it comes to the PFC. If Congress would lift the ceiling, thereby allowing airports to work with their local community to set the PFC at a figure that ensures they are able to meet their outstanding airside infrastructure needs as well as to plan for future needs, airports’ need for federal assistance, particularly for those classified as large or medium hubs, would lessen significantly.

The PFC user fee allows airports the flexibility to collect the revenue necessary to improve our facilities, which will increase the efficiency of our air transportation system, reduce delays, and improve safety. The PFC is set locally and used exclusively for local airport projects. It involves no federal spending or taxes, pays no bureaucrats, it is the most effective and efficient means of financing infrastructure in the United States and the federal government so limits its use as to undercut it.

Who better to determine the merits of a project than the local community? If we truly want to move to a performance based means of determining which projects will be funded, granting communities full control over their PFC would produce the magna cum laude such an approach.