What now, Chuck?


People are always looking for simple solutions. I'm routinely asked at Curbside Chats to give the one or two things that should be done to fix our current economic problems. Those things don't exist, because if there were a painless, simple way to solve our problems, we certainly would have done it. In fact, part of the reason we are here today is that we've done the simple and painless thing for so long (see Growth Ponzi Scheme series). Today I present a couple of more difficult, but long-term more effective, options.

One of the comments from last Tuesday expressed the common frustration with my analysis of the Springfield, MO, diverging diamond investment and the surrounding land use pattern:

I agree 100% that this area is poorly designed, pedestrian-hostile, and dangerous; that Walmart is a cancer on the economy and on society; and that were we to start from scratch this outcome ought to be considered a monstrous failure. But here in the real world, we have a busy and dangerous street, a bottleneck overpass to an area where a lot of commuters live, hundreds of millions of dollars worth of existing infrastructure in place. Do you leave the area to rot? If not, how do you improve it?

Ah, the "real world". I respect the point, of course, but also get frustrated by the limitations we put on ourselves. So much of our dysfunction is simple inertia. Changing our approach is so difficult. We know, for instance, that something like Medicare spending is unsustainable, but we also realize that collectively we are unlikely to do anything substantive to deal with the problem until we're actually in a crisis. Some of that is human nature. Some of it is the variant of democracy that we have evolved into. Either way, I'm going to go back to the original post in this series and remind our readers today of the three critical insights.

  1. We don't have anywhere near the money necessary to maintain our current surface transportation system.
  2. The system we've built is financially inefficient and unproductive.
  3. Americans do not understand the difference between a road and a street.

On the first point specifically, the crisis is coming. It is actually already here, but we've been using debt to avoid facing it. We don't have nearly enough money to maintain all of the systems we've built. (Note that you can argue that we do have the money, and technically you would be right, but it is the same as arguing that someone should be able to pay their $2,000 monthly mortgage on an annual salary of $30,000. Technically they could, but in the real world, they can't.) Because we don't have the money, and because each increment of investment in the current system makes us financially weaker over the long-term, our approach is going to force a crisis. In short, at some point very soon we're going to look at the "real world" in a very different way (and, if you keep reading this blog, you might actually see the "real world" -- that is, the world as it really is -- much sooner).

Here are two simple ideas of mine that would effectively deal with the STROAD (street/road hybrid) problem within a generation. While these may seem politically impossible today (and that is why I emphasize that they are solely my ideas), I offer two points of support up front. First, we are nowhere near being able to afford to maintain our transportation system and thus we are ultimately going to be forced to make choices that, as viewed today, seem politically impossible.

Second, when you view our current transportation system with clear eyes, you can see that it is an incoherent approach. Dabbling around the edges, like so many of our transportation initiatives do, is simply conversing with incoherence. The result: incoherence.

Idea #1: End the State Aid System

Each state has their own version of a state aid program. I'll focus on Minnesota's with the informed belief that other states are similar in their approach. 

The Minnesota non-profit Fresh Energy explains how money is allocated between the highway system and the local state aid system.

Dedicated state funding (the money that comes from the gas tax, tab fees, and the motor vehicle sales tax) is allocated by formula through something called the Highway User Tax Distribution Fund. The State Trunk Highway Fund receives 62 percent to build and maintain Mn/DOT highways, the County State Aid Fund receives 29 percent to pay for county roads, the Municipal State Aid Fund gets 9 percent to take care of roads in cities, and 5 percent is set aside for purposes determined by the Legislature. Most of the federal money comes through formulas as well, while it is predominately targeted toward the state highway system. Between 2004 and 2008, an average of 84 percent of federal money went to the state highways while cities, counties, and towns received 16 percent.

In short, large sums of money are collected at the state and federal levels for transportation and then a portion of that money is transferred back to local governments for transportation. Along with the money comes requirements that dictate how that money is to be used. These include engineering requirements for things such as lane width, degree of road curvature and design speed and planning requirements for things like maintaining a hierarchical road network. (Knowing this can actually make you a touch sympathetic, on a personal level, to the ridiculous engineer bear.)

In the "real world", the state aid system is the primary funding mechanism for the worst design practices at the local level. Most STROADS are built using this funding. Financially, these are the least productive of all transportation investments, spending enormous sums of money to speed up purely local trips by nominal amounts of time, often right through the middle of neighborhoods, lowering the value of the place in the process.

Let me provide three local examples so you can start to see these places in your community (they are everywhere). 

(1) When I was a kid riding the bus we used to travel down Knollwood Drive in Baxter. It was a local street that ran through a post-WW II subdivision, with lake-fronting properties on one side and off-lake on the other, curving streets and a lot of cul-de-sacs. This was an early suburban-era design -- I would guess 1960's -- and so, even in my youth, the infrastructure was showing its age. It was a bumpy bus ride.

Sometime in the mid-1990's, the city of Baxter reached population levels where they qualified for state aid. State aid rules require the designation of state aid routes, corridors that begin and end on state highways or other state-funded corridors. Knollwood fit the bill, and so a convenient remedy to repair the failing infrastructure along Knollwood was to designate it a state aid route.

Of course the residents did not like this one bit. This was a small neighborhood, not a major transportation corridor. But as the project proceeded and was combined with sewer and water extensions as well as other "improvements", the price tag climbed to levels where accepting the state aid designation, along with the significant money, was the lesser of two evils. 

In the photo below I've highlighted Knollwood in red. You can clearly see that it serves no significant purpose in terms of regional transportation. At best it is a shortcut through a otherwise-sleepy neighborhood, allowing someone to save a few seconds or a minute on getting from one place to another.

(2) The city of East Gull Lake has a small dam that serves as the crossing of the Gull River. It is a single lane crossing and so you have to stop on each end and then yield to oncoming traffic. It is actually kind of charming and, particularly in the middle of a campground/recreation area, does a lot to calm traffic.

Unfortunately, the approach to the damn from the west is a county state aid road (CSAH 70) while the approach from the east is a simple county road (CR 125), a road not supported with state aid money. The catch here is that CR 125 was decrepit and in need of maintenance. The cost was (and the exact figures allude me so I'm going on memory) somewhere around $1.2 million. Because CR 125 was not a state aid route, it would be entirely the county's bill.

So they could access state aid money -- along with some other federal grant money -- for this project, the county came up with a plan to connect CSAH 70 with CR 125 with a new bridge across the Gull River. The cost for this project would have been in the many millions of dollars for a new bridge, the widening and realignment of CR 125, the condemnation of a couple of homes, etc... The catch is that the local portion of the project -- the county's share -- would have been only around $600,000 and they could have used state aid money for it.

In retrospect this looks even more ridiculous because, while the bridge project didn't happen and nothing remotely calamitous has transpired from a traffic standpoint since, the public was told at the time that tremendous traffic projections along with safety enhancements made this project a necessity. That was utterly ridiculous. It was simply the ability to access outside funds that pushed the design of the project, not local traffic concerns.

(3) Our local heartbreak project in Brainerd is our Last Great Old Economy project, College Drive. I've written extensively about this project in the past because it is a perfect example of the destruction wrought by the state aid system. Poor neighborhood in decline on one side, local community college on the other side. Instead of building a sensible project that would connect the two and strengthen each (local cost around $1.2 million), we instead leverage our next four years' worth of state aid dollars, along with other federal "stimulus" money, to build a $9 million, 4-lane STROAD. (Ahh, but it's a "complete street" says the engineer). Local cost for the STROAD is less than $1 million.

The state aid system actually makes it cheaper for the city to build a destructive corridor -- one whose central outcome will be to allow the people of South Brainerd to reach the Walmart in Baxer 45 seconds more quickly -- than to build a neighborhood-affirming corridor, one that would capitalize on all of the existing investments made by the city and its residents in this area. 

Ending the state aid system -- eliminating the funding of local auto-based transportation along with the planning and design mandates that accompany it -- would effectively end the destructive practice of building terrible local transportation corridors, and it would end it within a generation. As soon as these corridors became decrepit, local values and sensibilities would demand that their replacement respond to the community, not outside design criteria.

Note that I am not arguing that the there should be no role for the state in funding local transportation. That is a completely different discussion. All I'm arguing is that the state aid system is broken, should not be "reformed" but should simply go away.

Idea #2: Institute an Accessibility Tax

There is talk about funding transportation improvements through an increase in the gas tax, a mileage tax, tolls roads, increased allocations of general fund revenues, etc... Each of these has upsides and downsides, but all of them do nothing to address the fundamental lack of productivity inherent in the current system. They would all simply be new revenue streams that would reinforce the unsustainable status quo for a little while longer.

As I discussed Tuesday, one of the problems we run up against in building roads is that it is really difficult to close accesses. There are all kinds of constitutional issues around takings that make it very difficult and costly. I don't want to have that argument -- heads you win, tails I lose -- regarding the cost and benefits of improving a transportation corridor when you don't have any control over the access. Let's allow as much access as property owners desire, but let's charge for it.

There are no constitutional issues for a state when it comes to taxing or tolling on roads. We should institute an access tax (or toll) that would be designed to, in a sense, compensate the public for the decrease in capacity caused by the access. It would work something like this.

On a rural country road where you have 1,000 cars a day, putting in an access is no big deal. You have a driveway that goes out to the highway and it is no problem to wait for the car that may be happening to drive by when you pull out. Your driveway, and the turning movements it creates, does not inhibit the flow of traffic on that corridor in any way. Your tax would be very low, perhaps $20 per year.

On a very busy highway, something with say 20,000 cars per day, Walmart would like to build a new store. They want a traffic signal and a 3/4 interchange on the north and south ends of their property, respectively. Okay, we know from the math used to justify highway projects how much cost adding those accesses would create for the public. It is the opposite of the "benefit" improved mobility would create. Here's how the math would work.

Let's say the new signal and intersection delayed the average car by one minute. At 20,000 cars per day, one minute each, in a year you have a total delay of 122,000 hours. If we hold to the belief expressed in so many reports justifying highway expansions that this time should be valued at (on the low end) $13.40 per hour, then that signal has a cost to society of $1.6 million per year.

If Walmart wants that signal -- if the local unit of government wants that access -- than there should be a tax/toll/charge of $1.6 million per year to compensate the public for the time lost and the reduction in capacity. That money could be used to enhance the system and restore a comparable amount of mobility elsewhere. I'm not sure who pays it -- the businesses, the drivers or the local unit of government -- but there should be some mechanism for compensation.

(Note that I am proposing this for highways only, not for local streets, the latter of which we need to encourage more access to.)

Such an access tax would not only raise revenue that could be used to improve mobility, it would have two other immediate impacts. First, property owners eager to avoid the access tax would immediately and voluntarily start closing accesses along major highway corridors. Not only would this improve traffic flow and mobility, it would dramatical improve safety.

Second, and most important, it would actually restore the local property market to something based on place and not something based on government transportation decisions. Decisions on land use would again be local. With local decision-making, where the financial costs and benefits are also local, there would be strong incentives to, once again, start building places of value. We would immediately get away from the too-big-to-fail mega subdivisions on the edge of town and again start incrementally wringing value out of our places, block by block, neighborhood by neighborhood.

Where an additional access to the highway was needed, there would be every incentive to maximize the value capture from that access. You wouldn't have a traffic signal that you have to sit at where there is simply a gas station, a donut shop and some storage sheds. That type of land use would not be viable (not because of the tax but because it actually is not viable without the enormous transportation subsidy). Our highways could not only function as highways again (fast, efficient connections between places), but our places would start to redefine themselves along a financially-sustainable pattern. They would have to or they would fail.

Now there's the catch, and so I'm not pretending this proposal would be easy to get passed or easy to implement. It would, by ending the perverse transportation subsidy we've created, expose all of the poorly- and inefficiently- configured spaces that we have made in the post-WW II era. That would be extremely painful for many communities. Some would be able, over a generation, to reconfigure themselves in a more viable way. Others would not. Some community triage and support would certainly need to take place. I'm not pretending that I've either the answer for that or have even thought it through enough to suggest how it would happen. A later post, perhaps.

I'll go back to where I started: we don't have the money to maintain everything we've built. Continuing with the status quo approach will only make that problem worse in the long run. We can tinker around the edges with new state aid standards, new federal and state mandates, new taxes and fees, but unless we do something to deal with the core problem -- the financially unproductive nature of the post- WW II land development pattern -- it will not solve the problem. 

These two proposals, as difficult as they are to imagine enacting today, would address the real problems we have and do so in a substantive way. While they would certainly create other problems and harships, doing so is a necessity for getting our places healthy. We need to think in terms of generations, not months. Phasing in these two approaches over the next few years would set the stage for a renewed Strong Towns discussion in each and every community in America.

And that is something that desperately needs to happen.

 

Don't forget to sign up for our Virtual Curbside Chat, to be held this Tuesday at 1:00 PM CST. If you have not already registered, please sign up to reserve a spot and to receive instructions for connecting to the Chat. Our Curbside Chat program has been immensely popular and this "virtual" chat is a fantastic opportunity to take part if we've not been to your community.