Introduction

Our nation's surface transportation system is broken and there are few signs it will soon be fixed. Traffic congestion has reached crisis proportions in most of the nation's large metropolitan areas. As drivers sit in traffic, they are losing patience and demanding solutions.

Yet most governments, starting with the Bush administration, are capitulating to congestion. One might expect that cutting congestion would be a top priority of the U.S. Department of Transportation (DOT). Yet DOT's strategic management goal is not to cut congestion, nor even to keep it from getting worse; it is to keep it from growing faster than one percent per year. It is not surprising that DOT has such modest goals given that the Bush administration actually cut highway funding this year (even though the spending would help boost a sagging economy) and opposes increasing the gas tax to pay for more roads.

Even though DOT estimates it will take an additional $45 billion per year to cut congestion one percent per year, the federal government and most states have been unwilling to either raise gas taxes or advocate toll lanes to finance needed system expansion. Moreover, state DOTs seldom challenge what Montgomery County (Md.) Executive Doug Duncan calls the "congestion coalition" of environmentalists and other anti-road advocates who believe that the solution to congestion is to get Americans to drive less and that roads only make congestion worse. As a result, instead of building or expanding roads to keep up with an expanding economy, state DOTs all too often focus on "system maintenance" -- resurfacing existing roads, replacing bridges, and straightening out problematic interchanges. At least one prominent transportation expert counsels us to just get used to congestion, as it can only get worse.

In short, the general view in Washington and state capitals is that congestion cannot be reduced and that commuters should all just buy car CD players and cell phones and learn to "make it part of your leisure life."

Both the analysis of the causes of congestion and the prevailing wisdom on solutions are wrong. With the right policies and incentives we can reduce traffic congestion. But doing so will first require rejecting defeatism and correctly analyzing what is causing congestion. The objective evidence is clear: Our transportation infrastructure has not expanded enough to meet our growing driving population, and a major part of the solution to congestion will be to invest more to expand road capacity. But reducing congestion will also require fundamentally rethinking surface transportation policy to bring significantly more accountability and market forces to bear. As Congress reauthorizes federal highway and transit legislation (Transportation Equity Act or TEA-21) in 2003, the time is ripe to reevaluate. This policy brief offers three big ideas for fixing our surface transportation system:

Invest More in Mobility

• To stimulate the lagging economy, immediately draw down the highway trust fund;
• Significantly increase federal funding on surface transportation;
• Encourage states to invest more by lowering the federal share of highway and transit programs from 80 percent to 70 percent; and
• Require state and regional Metropolitan Planning Organizations to develop contrasting "Transportation Improvement Plans," one that is "fiscally constrained" and the other based on need.

Pay for Performance

• Allocate federal highway funds to states partly on the basis of relative performance in three areas: reducing congestion, improving safety, and cutting vehicle emissions;
• Consolidate DOT's 70-plus categorical grant programs into just three programs: transit, road and highway, and transportation enhancement; and
• Fund the development of a national highway "info-structure" network capable of collecting and sharing transportation system performance covering the national and state highway system.

Harness Market Forces To Cut Congestion and Manage Roads

• Lower the required state match on road projects involving pricing (e.g., high-occupancy toll (HOT) lanes, congestion pricing, toll truckways) by at least 10 percent;
• Repeal the limitation on tolls for interstate highways as long as automated electronic toll collection systems and their revenues fund expansion;
• Change the tax code to allow private corporations to issue tax-exempt bonds for toll road projects;
• Make receipt of federal highway funding contingent upon states developing a national toll transponder standard and providing free toll transponders to all drivers;
• Create a pilot program to provide states with incentives to adopt public-private models for transportation infrastructure;
• Equalize commuting tax benefits between all modes of transit; and
• Encourage state and local governments to stop subsidizing sprawl.

Taken together, these proposals will go a long way toward reducing traffic congestion and giving time back to Americans that they now waste in traffic. Even adopted separately, many of these individual proposals, particularly those to increase accountability of state DOTs, will make a significant contribution to transportation performance. But make no mistake, special interests will fight these proposals. The anti-highway and anti-car coalition will oppose more investment in roads. Anti-tax conservatives will oppose raising taxes to pay for more roads and transit. Some liberal groups will oppose road pricing as unfair. State highway departments are likely to resist increased accountability measures. Yet, just as passing education reform required Washington to challenge special interests and entrenched education bureaucracies, real surface transportation reform will require similar hard work and leadership. If we are serious about reducing traffic congestion, it is time to face the fact that investing more money, holding states accountable for real results, and implementing market-based approaches are the only viable answers.