A real win for metropolitan areas in 2017 transportation budget

While the President Obama’s 2017 budget was a political non-starter even before its release, analysts nonetheless attempted to divine the future of federal policy from its contents.

That was certainly the case for the transportation portion. A new $10-per-barrel oil tax garnered significant media attention, especially since it would effectively more than double the federal gas tax. Other stories noted the significant commitment to electric vehicle innovation, heightened transit investment, and commitment to clean transportation. All massive policy changes, to be sure.

What received far less attention, however, was a new program that—beyond just the money—promised to actually change how the federal government does business. The 21st Century Regions Grant Program is the most important proposal you may not have heard about, and it finally represents a commitment to metropolitan areas consistent with their economic importance.

For perspective on the scale of this program’s innovation, compare it to how the current surface transportation program operates. The vast majority of total federal spending gets directed to states through formula programs: 73 percent of total roadway and transit spending in 2015.* States also maintain near sole authority on where to invest formula funds within their borders, and the selected projects don’t require economic, social, or environmental justification. For the relatively small amount of funding delivered via competitive grants—notably, transit capital and TIGER—only single projects receive awards. Finally, outside relatively small metropolitan planning grants, spending is mode specific.

The 21st Century Regions Grant Program is a major departure from this setup. First, it sends grants directly to metropolitan governments, giving them control over spending decisions. Second, it’s a competitive program that will base awards on demonstrated metropolitan need and offer simultaneous support for related projects. Third, the program explicitly looks to fund integrated transportation solutions and break down modal silos.

The proposed funding would immediately make it a major component of the federal portfolio. Funding ramps up from $1 billion in 2017 to $6.5 billion in 2018, and then annually averages $8.8 billion between 2019 and 2023. That average is larger than all but two highway formula programs and only $3 billion less than the entire Federal Transit Administration budget in 2016. This isn’t a token program—it could have real effect on the ground.

Combined, these features will incentivize all metropolitan areas to plan collaboratively, use rigorous performance benchmarking, and think about how transportation interrelates to broader outcomes. It should have far-ranging impacts on how metro areas prioritize specific projects, ideally leading to more multi-project efforts like Chicago’s CREATE program.

Secretary Foxx and his team deserve credit for proposing this kind of policy approach. And they couldn’t be more explicit about the pressing need. Tucked deep within a Budget Estimates document, the department states: “Metropolitan regions receive insufficient funding, despite having the majority of the population, producing the majority of national GDP, and being best positioned to make investment decisions to optimize existing assets and expand multimodal travel choices.”

The 21st Century Regions Grant Program may not receive consideration on Capitol Hill this year, but the policy signal is clear. It’s time to recognize we live in a metropolitan nation.

*This includes all apportioned programs from FY 2015 ($37.8 billion), divided by total Federal Highway Administration and Federal Transit Administration enacted spending ($51.9 billion) in the same year.