by James A. Bacon

The Commonwealth of Virginia has spent way more effort in recent years figuring out how to raise taxes to build more transportation projects than it has ensuring that those tax dollars are well spent. That’s not for a lack of opportunities. In its new publication, “The Innovative DOT: a handbook of policy and practice,” Smart Growth America (SGA) argues that there are many techniques for stretching our tax dollars.

In the second of eight focus areas, the report explores three big ideas relevant to Virginia:

• One funding pot. Put all transportation dollars for roads, rail and other transportation infrastructure in one big pot and allocate dollars based on Return on Investment. The project that provides the greatest benefit gets funded first, regardless of transportation mode.
• Asset management. Adopt an Asset Management program for inventorying transportation assets, appraising their condition, and prioritizing maintenance expenditures. Timely preservation of assets can prevent the accelerating degradation of assets once they have begun deteriorating.
• Performance metrics. Identify goals — congestion relief, facilitation of commerce, economic development, energy savings, pollution mitigation, coordination with local land use — and grade proposed transportation projects on the degree to which they improve those metrics. Base investment decisions on those metrics.

Bacon’s bottom line: By pigeonholing our transportation dollars between roads and rail, Virginia may be under-investing in some areas and over-investing in other areas. The idea of throwing all transportation dollars into a single pot has a certain appeal. In theory, it would facilitate financing of projects, regardless of mode, that offered the greatest public benefit.

Here’s my reservation: This idea conflicts with the goal of nudging transportation toward a user-pays system. If we emphasized a Value Capture approach (special tax districts on property owners benefiting from an interchange or Metro station) to project financing, it would be manifestly self-defeating to put those dollars into a Big Pot. The same logic applies to a Mileage Based User Fee (MBUF), especially if, as I advocate, those dollars are dedicated exclusively to maintenance. However, insofar as the Big Pot is filled with tax dollars derived from the sales tax or other general taxes, and insofar as a rigorous methodology exists to calculate ROI, the idea has merit.

Maintenance accounts for about 40% of all dollars by the Virginia Department of Transportation (VDOT) this year. VDOT began to build an asset management system about a decade ago. Today, the Virginia Department of Transportation sends out vans equipped with special sensors to measure road conditions and publishes an annual “State of the Pavement” report every year that summarizes road quality and driving conditions across the state.

Deficient lane miles in VDOT transportation districts (from left): Bristol, Salem, Richmond, Hampton Roads, Fredericksburg, Culpeper, Staunton, Northern VA.

That’s a big step forward compared to the ad hoc practice of the past, in which district engineers drove around and tried to figure out what needed to be done. But there still is a long way to go. According to a December 2012 Federal Highway Administration document, VDOT still was in the pilot-project phase to test the validity of the system before rolling it out statewide. VDOT had adopted a philosophy of incremental roll-out to gain staff buy-in and minimize risks. Although VDOT has moved at a turtle’s pace, it is far advanced in the process.

The idea of performance metrics is making inroads in Virginia as well. The Office of the Secretary of Transportation is devising a set of metrics for purposes of long-term planning, and a task force including VDOT and the Department of Rail and Public Transit is hip-deep into a three-year process to calculate congestion ratings. The goal is to have 25 to 30 major highway, transit and technology projects rated by December 2014 to guide the distribution of construction dollars in 2015.

Asset management systems and performance measures will never capture the public’s imagination. There are no ribbons to cut, no ceremonial spades of dirt to overturn, no photo ops. But they hold out the potential to ensure that tax dollars are more effectively spent. Beats higher taxes any day.

(Cross-posted from Bacon’s Rebellion.)