U.S. Governors: Next President Must Increase Mass Transit Funding

WASHINGTON — For state infrastructure investments to be successful, there must be effective federal, state and local partnerships where historically there have been tensions over how to fund transportation and other public works improvements. 

That was one of the messages on Thursday at the Governors Forum on Presidential Transition in the nation's capital, hosted by the National Academy of Public Administration, National Governors Association and the American University School of Public Affairs. 

While it's at this point still unclear how a President Hillary Clinton or Donald Trump would exactly shape their infrastructure agendas if elected, even in today's polarized political environment, supporting infrastructure investments is still something that bridges partisan divisions.

“There is bipartisan support around actions around infrastructure,” said Sue Gander, Environment, Energy and Transportation Division director at the NGA's Center for Best Practices. "2017, I think, is going to be a huge year for transportation infrastructure legislation.”

But that legislation will be largely put forward by states, particularly those with incoming governors, Gander and fellow panelists added during the discussion, held at American University’s Katzen Center.

The idea of states as the “laboratories of democracy” isn’t new, but they’re also more likely to keep the money they raise by maintaining the integrity of their transportation trust funds, said former Virginia Gov. George Allen. That, in turn, allows them to invest in everything from toll roads to the use of emergency lanes during rush hour to intermodal transportation to smart cars and smart roads.

Protecting transportation money is critical though, the Republican ex-governor said, as he had to fend off Democrats and his own party attempting to raid the funds for other agencies like the Virginia State Police, during his time in office.

Delaware was recently able to fill its Transportation Trust Fund with increased tax revenues by essentially establishing a lockbox, said the state’s Democratic Gov. Jack Markell. Republicans and Democrats alike should be willing to do that and later show constituents the money went toward the proper projects, engendering public trust.

“You have to prove to people you understand it’s their money and you’re spending it wisely,” Markell said.

Governors can increase taxes and survive politically if they clearly identify the transportation benefits. A study of 470 U.S. communities found 71 percent generally supported increased taxes for transit, including Tulsa, Oklahoma; Kalamazoo, Michigan and Wake County, North Carolina, said former Maryland Gov. Parris Glendening.

“The basic philosophy these days is: No new taxes under any circumstances,” he lamented.

Instead, governors must be open-minded and work with the next president to create a sustainable revenue stream for transportation at the federal level.

States currently fund projects months at a time because federal funding is unpredictable and governors lack the "certainty to plan multi-year projects with confidence the funding is going to be there to finish it,” Markell said.

He is agnostic to what tools governors use but pointed out governments have seen success experimenting with dynamic gas pricing and HOV- and vehicle-miles-traveled fees.

“At some point the constituents need to say, ‘This is ridiculous and our roads are a disgrace,’” Markell added.

Most Americans are unaware of infrastructure problems until things stop working, but before 2020 $3.9 trillion must be invested in infrastructure improvements—the size of the entire federal budget, said Richard Keevey, senior policy fellow at Rutgers University’s School of Planning and Policy.

Federal transportation funding has remained stable since the 1980s, despite the mounting gap between infrastructure needs and the money available, necessitating an increase in gas taxes indexed to inflation. An added benefit of raising the gas tax is some people will explore more efficient modes of transportation like hybrid and electric cars or bike sharing.

“Two months after you do it, the people won’t even remember it,” Keevey said.

With only 3 percent of interstates in poor condition, Keevey recommends states recycle their toll money and move it to local roads. He also suggests pressuring the next president to increase federal support for mass transit.

This is a sticking point for some governors because the Republican presidential platform calls for the removal of mass transit programs from transportation trust funds, said Glendening, a Democrat. That could put programs like bike shares in jeopardy.

“I believe this would be a major mistake and an annual funding battle for something that requires a long-term commitment,” Glendening said.

By contrast, the Democratic platform addresses the backlog of deferred maintenance and other resilience issues like climate change mitigation and modernizing schools—promising $275 billion in new spending on infrastructure to start.

Allen argued that the party platforms are only indicative of the party members who show up to their national conventions and that, while he didn’t personally support the inclusion of things like bike shares in transportation trust funds, they might need to be included for bipartisan support.

The U.S. could create 1.3 million jobs through 2020 with proper infrastructure investments, Allen said, particularly if manufacturers and businesses are involved.

But the likelihood of that happening is slim to none.

Proponents of transportation funding are competing with those in favor of greater health care and national security spending, as well as the U.S. structural imbalance in finances, said Robert Shea, a principal with Grant Thornton’s global public sector practice.

“You’ll never get a government source of funding that will address all of our needs,” Shea said.

And that’s why it’s so important states continue to lead public sector transportation innovation.

Massachusetts recently partnered with community-based traffic and navigation app Waze to share information on road closures and state Department of Transportation maintenance, and Utah's DOT is exploring ways to time broadband installation with road work so infrastructure doesn’t need to be pulled up twice. Then Florida cities are experimenting with funding Uber rides covering the last leg of residents’ commute to and from work.

In the past year, seven states passed legislation on autonomous vehicles.

For states to be at their most effective, they should run cost-benefit analyses of transportation programs and projects looking at performance metrics in real time, Gander said.

The use of analytics is crucial to ensuring shared prosperity in underserved communities and continued competitiveness globally—holding state governments accountable to their goals.

D.C.’s Metrorail system has seen “massive disruptions because of critical, delayed maintenance,” Glendening said, whereas if you go to other nation’s capitals like Bogotá, Columbia, you’ll find extensive rail systems. As the U.S. lags behind most other industrial nations when it comes to high-speed rail development, China boasts about 100 separate high-speed rail lines, not to deal with pollution, but to encourage economic development.

“China is spending more on infrastructure each year than North America and Western Europe combined,” Allen said.

International competition is affecting states in other areas as well.

Since Markell took office in 2009, credit card company Capital One and other businesses have moved to or expanded operations in Delaware. These employers often have dozens of choices worldwide in terms of hiring people, and they need fewer workers on the whole thanks to automation.

“There’s never been a worse time to be someone without the right skills,” Markell said.

Governors must work with the next president to improve the U.S. economic climate by establishing coding schools—an initiative that sees peoples’ average salaries go from $25,000 to $65,000 in 12 weeks in Delaware—and other certificate programs. Employing people with disabilities is another avenue states should explore, Markell said.

As for the current state health care climate, most state exchanges have proven successful when insurers are protected from overwhelming numbers of unhealthy registrants signing up, he added.

The real trend is state efforts to move away from the fee-for-service model of health care, where patients are paying for services with little to no idea of how their pocketbook will be affected.

“The way we pay for health care is absolutely not sustainable,” Markell said. “This is by far the most complicated public policy challenge that we face … because you’re talking about changing the way an entire industry gets paid.”