Kirk Landers: The Peters principles

| September 1, 2008

The Peters principles

By Kirk Landers

Transportation Secretary Mary Peters’ reform proposal hit the streets in August and has been a major topic among road interests ever since.

            The Transportation Infrastructure Reform Act fleshes out the concepts Secretary Peters has been advocating for the federal road program for the past year. It has received rave reviews from small-government advocacy groups such as the Reason Foundation, and has drawn mostly silence from advocates for a traditional highway program.

            You can count us among the traditionalists, but the principles in Peters’ Reform Act will be part of the national debate on roads, and several should be part of the solution.

            For openers, Peters proposes that while the next federal program will still be based in large part on federal fuel tax funds, it must begin the transition away from that single source of revenue because the fuel tax will be an increasingly uncertain source of revenue as time goes on. We agree.

            Peters proposes that road funds be spent more rationally than they are now. Investments should be tied to performance goals and measurements of progress in meeting those goals. Projects would be subject to a benefit-cost analysis before receiving funding. This all makes good sense to us.

            Perhaps the most profound and controversial part of Peters’ proposal is whittling the federal program back to cover only areas of the greatest federal interest — basically, interstate highways, municipal congestion, and road safety. Peters proposes that focus because it’s clearer than the current program, which addresses a broad swath of “federal-aid highways” with dozens of different spending accounts. Indeed, Peters would reduce those dozens of programs to just a few, and give states far more flexibility in how to invest their federal dollars.

            This is the concept that needs a rigorous debate, especially among state road professionals. Narrowing the focus of the federal program has some tantalizing benefits — among them, the clarity Secretary Peters mentions, and the prospect that the existing fuel tax could cover the cost of a robust program for several years. What isn’t clear is what happens to the vast inventory of roads and bridges that receive federal funds now but wouldn’t in the new program.

            Secretary Peters does not specifically address funding in this proposal, but she advocates giving state and local government bodies license to use tolling, congestion pricing, public-private partnership, and bonds to supplement financing from state and local tax revenues for this purpose. The Secretary also favors allowing states to privatize publicly owned interstates for the purpose of creating revenues for the state road system.

            The concept of using a few heavily used roadways to raise revenues for a broader system of roadways needs to be carefully considered. Why should the users of a state’s most congested major thoroughfares and bridges pay for all the state’s thoroughfares and bridges?

            Make no mistake, Secretary Peters makes an interesting case — for tolls, for congestion pricing, and for all her other proposals. But her reasoning needs to be tested. For example, if it’s okay to regulate traffic density by charging high tolls at peak hours, why is it punitive to charge an extra dime a gallon for fuel to pay for road maintenance and expansion?

            Secretary Peters’ Transportation Infrastructure Reform Act deserves a spirited debate among informed people. Make it your mission to be a part of it.

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