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Fixing the Transportation Program: What the DOT Can Do Right Now

Deron Lovaas

Posted August 10, 2011 in Moving Beyond Oil

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If recent events are any indicator, it might take Congress a while to agree on a policy that will put our underfunded, inefficient, oil-dependent transportation program on the right track. But the Department of Transportation (DOT) still has a few cards to play under its existing authority, according to a new study by NRDC and High Street Consulting.

Most federal funding is distributed to state and local agencies, and the government doesn't have much say in how it gets spent. But there are ways, under current law, that the DOT can influence where and how federal dollars are invested, shifting investments toward a cleaner, greener, transportation network that provides the American public with more travel options.

One of the most effective long-term strategies to manage congestion and save fuel is to use pricing measures that accurately reflect the cost of travel, such as pay-as-you-drive insurance and congestion pricing. Fifteen states are participating in the DOTs Value Pilot Pricing Program, which allows states more flexibility in levying tolls and other pricing measures, as well as in how they use those funds. For example, thanks to support from this program San Francisco is implementing an innovating parking pricing system. One-third of the city's traffic congestion - and therefore a great deal of fuel waste -- can be attributed to drivers hunting for parking, and this system aims to keep at least one spot available per street by pricing this amenity appropriately and making communications between driver and spaces seamless by deploying modern technology such as parking sensors, data transmission to cell phones, and meters that take credit cards as well as specialized parking cards. More information can be found here and here.

Many states in the program have begun more widespread use of the most well-known pricing tool, tolling - today only 2,900 of the 46,730 miles in the interstate highway system are tolled -- but few have attempted any sort of variable pricing, which would go a long way toward reducing fuel use and pollution. The pilot program is one way to broach what can be a politically difficult topic, getting people used to the idea that their travel decisions have cost implications. And in fact those who have actually experienced variable, or "dynamic," tolling say they support it. Securing America's Future Energy recently commissioned polls of users in Minneapolis and San Diego; support levels were at 83 percent in the former and 69 percent in the latter. Support among those familiar with it, but who don't use it, was high as well - 73 percent in Minneapolis and 65 percent in San Diego.

The DOT should continue to encourage states to implement pricing measures including, and moving beyond, tolling. The states in the pilot program are among the most heavily populated in the country, and successes here can be a showcase for these energy-efficient, revenue-producing measures.

The DOT can also use its authority to enforce fiscal constraints on long-range transportation plans produced by states and cities. Planners must show that they can fund all the projects proposed based on projected revenues. Being up front about fiscal constraints in the first place will give the public and elected officials a realistic expectation of what minimal investment will provide, and what likely trade-offs will need to be made. The DOT could also allow states and planning agencies to assume a reasonable amount of funding from variable pricing measures when they create their long-term plans. This could have a large effect on fuel consumption in two ways - by encouraging greater use of pricing tools, and by reconsidering costly highway projects that have been on the books forever.

This last is a pet peeve of mine. Plans get cobbled together and often include wish lists of projects that are not realistic in the foreseeable future, especially given the current squeeze on budgets at all levels. Taking some of these projects off the books makes a lot of sense.

DOT could also help expand and promote the transit benefit program, which allows companies to give employees $240 per month in tax-free transit and vanpool benefits. The program is currently run by the IRS without any DOT involvement, and is vastly undersubscribed.  DOT could also give transit agencies a boost by defining fuel as a capital expense when submitting reports. This would allow transit agencies to use federal money for operating costs as state revenues dry up, helping them maintain service as they struggle to accommodate more passengers.  Ironically, using federal dollars for fuel could help free up additional resources to fund fuel efficiency.

These and other recommendations in the paper deserve serious consideration by Transportation Secretary LaHood and his team, since they will save money and fuel at a time when we can't afford to waste either.

In the end, providing more and better transportation choices for the American people will take many years and an aggressive shift in priorities. Today, people at least have the option to buy a fuel-efficient car - and the new fuel economy standards will provide even more options -- but many still don't have a choice when it comes to other fuel-saving measures, such as taking public transportation, working from home, or traveling in less congestion. But with a little creative thinking to influence how federal dollars are spent, the DOT can start to nudge our ailing transportation program toward a cleaner, greener future, today.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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