Can America improve the cost and quality of its transportation system? The NYU Marron Institute’s Transit Costs Database finds that the average cost per mile for U.S. transit projects is more than three times the global average (Glaeser and Poterba, 2021), and Brooks and Liscow (2023) find that the cost per highway mile “increased more than threefold from the 1960s to the 1980s.” America’s buses are extremely expensive, and our local roads can be remarkably rough.
Over the last year, a joint project between the American Enterprise Institute and the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution brought together a series of scholars to write policy idea papers aimed at improving transportation in the United States. These were not meant to present new research or to survey literatures, but rather to present actionable ideas that could improve the quality or cost of mobility in America. Four of these papers are directly aimed at federal policy and may be relevant for future transportation legislation. The fifth paper relates to state policy and the recharging of electric vehicles.
Zachary Liscow proposes to improve the permitting environment for infrastructure projects by reforming the National Environmental Policy Act (NEPA) of 1970. Environmentally based opposition, expressed often through the courts, has frequently stymied infrastructure projects and boosted the costs of others, including Boston’s infamous “Big Dig.” The Liscow paper proposes four types of reform: “1) selectively shifting legal power away from project opponents; 2) facilitating popular decision-making or effective negotiation between the project builders and the community; 3) improving state capacity and streamlining processes; and 4) improving and standardizing public participation.” These reforms are not the sound-bite extremism sought by some (“Kill NEPA”), but they represent serious reforms that can speed the construction process but still keep environmental protections intact.
David Schleicher proposes establishing a “Priority List” of infrastructure projects. These projects “would be exempt from certain regulations, and states and cities funding these projects would be allowed to use preferential financing tools.” Moreover, “the federal government would detail a team of experts to help project sponsors with both planning and management.” The projects on the list would be chosen by Congress, the secretary of transportation, and local leaders. Schleicher argues that the Priority List “would allow reformers to take advantage of the prominence of the biggest projects … to change the politics of infrastructure delivery.” While many might wish for wide-ranging reforms that would reduce costs and delays for all projects, Schleicher embraces a pragmatic realism that recognizes that cost-saving reform for a modest number of big projects is better than no reform at all.
Read the “Priority List” proposal
Robert Poole’s essay argues for making it easier to privatize airports in the U.S. Outside the U.S., private airports are ubiquitous. Moreover, Howell et al. (2022) find that airport “volume, efficiency, and quality improve substantially under private equity (PE) ownership—both following privatization and in subsequent transactions—but there is little evidence of improvement under non-PE private ownership.” These facts do not imply that all or even most U.S. airports should be private, but they do suggest that there may be benefits to levelling the playing field between municipally owned airports, which have access to tax-preferred debt, and privately-owned airports, which do not. Poole discusses two methods of reducing the borrowing advantages of public airports: (1) removing “the requirement that tax-exempt airport bonds must be paid off before there is a change in control, such as a long-term lease; and (2) expanding “the scope of successful surface transportation tax-exempt private activity bonds (PABs) to include airports and other transportation infrastructure.” Even a modest experiment with either reform would provide some evidence on whether privately run airports can improve performance on American soil.
Read the airport privatization proposal
The paper by Lea Bou Sleiman, Edward L. Glaeser, Julia Shephard, and Samantha Silverberg proposes reforms meant to reduce the costs of buses within the U.S. The paper begins by noting the cost of diesel buses has remained constant for forty years, despite vest improvement in automobile technology, and that “outside the U.S., a 36-foot Hyundai electric bus can be bought for $350,000,” but a data set assembled by Bou Sleiman, Glaeser, and Shephard finds that “the median price of an electric bus bought by a U.S. transit agency in 2024 was $1.1 million.” The paper proposes three types of reforms. First, they suggest “improving incentives for cost containment” by “following the Clean School Bus Program and scaling the amount per bus that Federal grants will contribute to the 25th percentile of similar buses.” Transit agencies can spend more than the cost of the 25th percentile bus, but they will receive no federal support for that extra spending. Second, they argue for working towards bus standardization by “encouraging small agencies to purchase essentially standardized buses together with larger agencies” and “establishing a ‘bus formulary,’ or a list of bus models that are standard, with set prices that fall over time.” Third, they propose “modifying or waiving certain Buy America requirements in order to create a glide path for new entrants to manufacture buses in the United States.” All of these proposals are meant to enhance competition and standardization with the ultimate goal of reducing bus costs.
Read the bus procurement proposal
Finally, the paper by Omar Isaac Asensio, Elaine Buckberg, Cassandra Cole, Luke Heeney, Christopher R. Knittel and James H. Stock aims at improving the charging experience for electric car owners. Charging stations are frequently out of order or busy, which makes information about the availability of open spots particularly valuable for long range electric drivers. Yet the paper reports that “across six of the busiest interstates, traversing 40 states, only 34% of EV charging stations make real-time data available to PlugShare (a major charge-finding app), creating gaps of up to 1,308 miles with no charger status data,” and that PlugShare has “more real-time data on chargers than Google Maps or Apple Maps.” Their “simple and cheap” proposition is for “all fast chargers on highways” to “post their chargers’ real-time data to an application programming interface (API), where software developers could access it.” They argue that this would make long range electric vehicle trips much more attractive, by “effectively eliminating … range anxiety,” which would in turn make electric vehicle ownership much more appealing. States could ensure that data is posted either by law for all charging stations, or to make posting such data a requirement in order to receive public subsidy. If enough charging stations post, this may “tip the market outcome to the information-sharing equilibrium,” which would offer far more information to consumers.
While America has long produced transportation marvels, such as the Erie Canal, the Intercontinental Railroad, and the Ford Model T, we seem to have become a nation of high costs and often middling infrastructure quality. There is little chance that this will change if we accept the status quo. The five ideas collected by this project are hardly the only possible proposals, but they are five ideas that are worth of consideration. We hope to see more such proposals in the future.
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