Part of a series of “reading memos” that offer a brief summary of interesting academic content along with my personal reflections. This one covers Chapter 6 & 10 (Regional Transportation & Urban Transportation Finance) of Giuliano & Hanson’s The Geography of Urban Transportation.

Regional Transportation

Metropolitan planning organizations (MPOs) in the United States were established for all urbanized areas of over 50,000 population by federal law in response to the need to understand and plan for evolving regional transportation needs in the 1960s and 70s (after the 1956 Highway Act and subsequent “freeway revolts”). Their decision-making boards are usually composed of elected officials from member local governments, and their mandate is to work on a continuing/comprehensive/cooperative process (3-C framework) with state governments to ensure long-term plans and investments feature fiscal constraint, conformity (with federal air quality goals), and public involvement.

MPOs are responsible for developing and continually updating the 20+ year long-range transportation plan (LRTP) as well as the 3-5 year short-term transportation improvement program (TIP) for their region, making use of travel demand forecasting models, air quality conformity analysis, and performance-based planning measures. Projects are prioritized for inclusion in these plans based on criteria that the MPOs choose, which is one of the few ways they have to influence development patterns.

Since MPOs ultimately do not have authority to dictate local land use decisions, it is not too surprising that they seem to have limited effectiveness in realizing their long-range visions and plans. Their dependency on “implementing agencies” as sponsors to execute the actual work also suggests that any project faces many risks between the visioning process and becoming reality. Finally, their inability to raise new revenue outside of the federal funding mechanisms severely limits their ability to dedicate funds to truly regional transportation initiatives, since their locally-elected boards will always be incentivized to promote projects in the LRTP & TIP that primarily serve their local constituents.

This severely handicapped nature of MPOs’ structure explains the poor outcomes seen in places such as the San Francisco Bay Area, such as inexorably increasing VMT and fragmented public transit networks. It also seems this would be near-impossible to change given the fundamental principle of “home rule” or local control baked into federal and state laws. The perfect trifecta of top-down support from the state, bottom-up support from local governments, and internal support (strong leadership) from the MPO itself seems exceedingly challenging to pull off.

Urban Transportation Finance

Expenditures of public funds on transportation result in two distinct categories of economic effects. Expenditure effects are the direct, indirect, and induced stimulation/redistribution of economic activity based on transportation spending (e.g., purchases/payments by agencies and newly created jobs). Transportation effects are the induced and additional (secondary) benefits of improving the transportation system by lowering transportation costs, including stimulation of new economic transactions and social interactions. Both are valuable, but policymakers tend to focus more on expenditure effects due to their more immediately visible benefits. Elected officials also tend to focus on geographic equity (as opposed to group or individual equity) because they are representatives of geographic distributions of voters, which is not always the same as the distributions of transit riders.

Transportation funds come from either user fees (e.g., fuel taxes or tolling) or non-user fees (property taxes, sales taxes, or debt finance). Fuel taxes have been faltering over the years due to automobile fuel efficiency gains, program creep expanding the types of projects eligible for funding from this source, inability to keep up with inflation, and lack of political consensus to raise tax rates. Increasing tolling or the cost of parking would help raise user awareness of the true costs of automobile travel, though this is typically done inefficiently – ideally, charges should match the marginal social/societal cost of travel (i.e., increasing with the level of crowding) but a flat “average” charge is typically assessed instead. Hence, current trends suggest a movement away from user fees and towards general public finance instruments which are more politically popular but less economically efficient and socially equitable.

Research suggests that a transportation tax based on vehicle miles traveled (VMT) would be an excellent replacement for gasoline taxes, especially relevant in the near future as electric vehicle adoption begins to make traditional fuel taxes obsolete. Unfortunately, the challenges of mileage data collection and political opposition seem to stall any progress towards implementing such a tax in the United States, even with a federal administration warm to the idea. Congestion pricing is another concept that technically holds great promise in exposing the true costs of automobile travel to drivers, but continually runs into political challenges whenever it is discussed in American cities.

Tolled express lanes (such as the one run by the Valley Transportation Authority along SR 237) seem to be a novel transportation funding alternative that’s both politically feasible and relatively popular with drivers as well.  The widespread use of electronic transponders makes collecting the toll quite effortless and the dedication of a travel lane explicitly for this purpose seems to be effective at reducing traffic congestion during peak periods as well. Hence, expanding these types of express lanes in more places (and into downtown areas) may be the next best thing to congestion pricing for the time being.