Chuck and Rachel discuss this week's #NoNewRoads campaign. They touch on the new federal transportation funding bill, issues in Texas, Minnesota and Washington state, as well as a fascinating new tool you can use to look at transportation funding priorities in your own state.

Transcript of this podcast

Rachel Quednau (RQ):         Hi everyone, welcome to the Strong Towns Podcast. This week is No New Roads week and we are focusing on transportation funding. Specifically, we are advocating that we spend far less money on building new road. I have Chuck here to talk a little bit about that. Chuck, I’m curious since I’m still a little bit new to Strong Towns, I know that we’ve been talking about no new roads for quite a long time and we’ve been using this hashtag for a while. When did this campaign start in your mind? 

Chuck Marohn (CM):         Actually way back in, I want to say it was 2011. I was at a Next Gen Summit which is a collection of, like, younger CNU [Congress for New Urbanism] people. This was in South Beach, Miami, and everybody, kind of the price of admission to go, everybody had to give a presentation about something they were passionate about. One of the Pecha Kucha kind of style, so 20 slides, 20 seconds each. Ian Rasmussen got up, he was actually right before me and he got up and he did his, and the title of his was No New Roads.

And he started off, and I remember the place just exploded when he was done because it was such a fantastic presentation. He got up and the first thing he said is look at Google Earth right now, look at all the roads that are there. That’s all there’s ever going to be! And, and then he went to make the case why, you know, basically we’re out of money, we can’t maintain all this stuff. Yes, there might be some tweaking here and there, and you know a lot of the, the uproar as the discussion went on was about kind of the, uh, yeah absolutely no new roads versus hey, we’re done building this system and let’s, let’s move on.

And so he laid out a really good case that not only could America grow from 300 million people to multiple billions of people without adding a single new road, but that we would be far better off doing so. And ever since that point the notion No New Roads has kind of melded with a lot of my thinking and been just a very natural fit for us here. 

RQ:         What would you say the goal of this week is, Chuck?

CM:         Really, just to raise a certain level of awareness. You know we, we all go about our day and those of us that are really actively involved or really passionate about these kind of issues, there’s a natural I think intellectual progression towards -- I’m going to use the word compromise but compromise is probably not it -- just a pragmatic, “okay, we’re not going to get everything we want but we’ve gotta make this system work and make it better” and whatever your idea of making it work is, there’s a notion that we may have to absorb or accept a little bit of really bad, but we’ll do that in order to make things better. And our point is that no, we really can’t accept a lot more bad. In fact the way we go about doing things, in a bipartisan way, is pretty bad and pretty destructive.  We don’t have a lot of resources left to fix this system and we are kind of wasting the last bit that we have propping it up.  

And in a sense trying to, in the most optimistic way, transition to something else. And what we really need to be doing is spending those resources on the transition, on doing something different. And if we envision an America where we’re no longer building new roads, in other words, if we declare victory and say, yep, the interstate system as it was envisioned was done 30 plus years ago, it’s now ready to move on to something else, we can start to ask a whole bunch of more sophisticated questions that will get us to a much better place as a country. 

RQ:         Yeah, I’m glad you brought up that trade off because that’s something that we’re going to talk more about this week and have a discussion on our discussion forum -- kind of the fact that when there’s a transportation bill on the table, whether it’s statewide or national or local, it’s usually got a whole bunch of new road funding and then a couple bones thrown to the bike/walk people, a new walking trail here or this one street is going to have a bike lane on it. So you should support this bill because it has this one great thing for you. Well, 90 percent of the funding or more is for new roads.

 CM:         And I get that trade off, I mean I get how seductive that is. The problem is though that not only are we funding this on a broad scale so we’re spending all this money on adding you know a 10th and a 12th lane to highways to try to alleviate congestion where we clearly have decades of research showing us that that doesn’t do anything about congestion.

But by continuing the mentality that we have, the mentality that essentially every street, every neighborhood, every radius, everything needs to be designed around the very quick movement of automobiles and that somehow that equals our prosperity is doing a disservice to people that no amount or recreational trail funding or complete streets funding is ever going to make up for.

So [comparing Strong Towns to] the advocates for bike-ped and the advocates for transit, we have our hearts in the same place, but we just have radically different visions for how to go about accomplishing some of those things. 

RQ:         Definitely. In Wisconsin, I’m not going to talk about this too much because I’ll get too angry and worked up about it, but we’re funding this huge highway extension project right in the middle of Milwaukee and it’s just, I mean from everything I can see, it literally looks like they’re just moving the highway a couple feet to the left and maybe adding a lane. I just don’t understand how this is going to do anything good for anyone.

CM:         It’s amazing because one of the things that I want to make that gets through this week and that I’m highlighting in a post I wrote for today, is the way we finance this stuff and the fact that a lot of the equations and things that came out of the early automobile era is stuff that’s still with us today.

 So if you look at Milwaukee and Minneapolis, when we built a highway, Highway 94 between Milwaukee and Minneapolis, it made both cities really, really, a lot wealthier. Now all of a sudden goods can flow back and forth, commerce can happen back and forth, a lot of things happened that changed our economy to the positive when we did that. The problem is that you know running that highway through the middle of the city adding you know an extra lane on each side, these are marginal improvements but marginal improvements at just enormous cost and we’ve kind of enshrined the original improvements. It’s almost like, let me use an analogy. Let’s say you go on a weight loss program and, and the first week you lose three or four pounds because you do all the easy stuff, you stop drinking pop, you get a little bit more active, maybe you get a little bit dehydrated and lose some water. And then you project out, you know, at this pace I’m going to lose 100 pounds in half a year, right?  Even though we know it doesn’t work that way. Right, your body reacts and everything starts to change. 

From a highway building standpoint we essentially did the same thing. We said look, we’re going to connect Milwaukee and Minneapolis and we’re going to see all this growth and then wow, if we just continue to spend that much on transportation we’ll continue to see that much growth and economic expansion every time we do a project. And that is enshrined in the way we actually go about funding these things even though, not only are we past diminishing returns, but we’re far, far into negative returns on a lot of this stuff. And the way we go about prioritizing things just hasn’t caught up.

RQ:         And so many people don’t realize that, so I hope this week is good education for a lot of people and a good way to get the conversation going. So let’s talk about the new federal funding transportation bill. What happened there and what are the repercussions going to be?

CM:         Repercussions, probably none for a while, in the sense that this is a five-year bill and it’s a five-year bill with a completely bizarre and uncorrelated spending approach. We, we at Strong Towns advocate for as many market forces as we can bring to bear to help us make good spending decisions. So when it comes to transportation the principle of user pays, and user pays as close to the actual demand as possible, really brings sound economics into transportation funding. The, the new transportation bill that was approved December 1st of last year goes in the exact opposite direction. We replaced pension smoothing, which is the way we funding the transportation bill the year prior, pension smoothing being the ability or corporations to defer funding pensions -- so you have pension funds that only 80 percent funded at the corporate level -- to be able to underfund those even more that lets you book additional profits and then those additional profits you pay taxes on. Those taxes go to fund transportation. That was the way we closed the gap in 2014. In 2015 and now for the next five years we’ve done things like, “let’s sell some oil from the strategic petroleum reserve and use that money to pay for transportation.” Let’s not allow banks to keep money at the Federal Reserve at an inflated rate of interest; let’s have them pay a market rate of interest and we’ll take that difference and use that for transportation. Let’s take some of the false profits that the Federal Reserve is able to book on all of those toxic assets they have, because they don’t have to mark to market, let’s take those kind of illusionary profits and transfer those over to the U.S. Treasury to pay for transportation. This is the approach that we’ve taken now. So we have taken a system that is completely non-responsive to the actual demand that people have and funded it in a way that is so opaque and obscure that it essentially seems like free money, right? 

Like we’re just getting money out of nowhere and we can just continue to build transportation and there’s no cost to it. We’ve entered what is in my mind a toxic crazyland, and I would be shocked if we get five years through this funding bill and not have major, major shortfalls just because of the fact that we’ve tied this funding system now to some of the craziest and most volatile ways of finance that we could possibly imagine. This is stuff, even in my craziest dreams I never would have considered a few years back.

RQ:         Were there any changes to gas tax in this bill?

CM:         (Laughs.) Well changes in gas tax would involve a handful of things. First it would involve us, actually, you know, having some notion that people who use transportation should pay for it or that there should be, you know, some rough correlation, as rough as the gas tax is between what you’re using and what you’re paying for. And of course we, we don’t want anything like that. And so, no. There’s no change to the gas tax.

RQ:         Right.

CM:         There’s no real talk of changing the gas tax. The gas tax, from the White House standpoint, from the congressional standpoint, is a political non-starter. Both the leaders in Congress and the President have come out and said, years and years ago, that the gas tax is a non-starter, it’s not going to be changed, there’s no support for doing it, we’re against it. And so things like a mileage tax, increased use of toll roads, things where you would actually pay for what you use, those are so far away that we can’t even talk about a modest increase to the gas tax. So yeah, we’re, like I said, we’re in crazyland in terms of the ways we’re choosing to finance this stuff and there’s not, there won’t be, any talk for years now of doing anything different. 

RQ:         This is frustrating. Good thing we’re focusing on this topic! So this week we have chosen to focus on three different states that have different transportation issues going on, both some good and some bad.

Tuesday we’re talking about Texas, which of course, is a classic example and the one that gets pointed to a lot when discussion of highway expansion and overbuilding of roads comes up. We have a very strong Strong Towns contingent in Texas, so I did an interview of Kevin Shepherd of Verdunity, we have Patrick Kennedy, Hayden Walker, James Lamas, so we’ve a great group of people who’ve written a lot about highway expansion in Texas and how that’s not really benefitting anyone. I think James is going to talk about, uh, some transportation, public transportation funding. So there’s, there’s some good in Texas but, uh, mostly some pretty depressing road funding projects going on there.

CM:         Yeah, the fact that we’re going to take three days here and focus on states I think is really important because I think that’s where the action has shifted, right? The federal government has in a sense punted. There’s no major shift in policy. I mean we’re not funding things directly. We’ve just said we’re going to find crazy ways to fund the current system. So the action and really the stress kind of shifts to the states, and Texas is a really good example of a state struggling to make that shift. Because on one hand they are doing the most egregious things imaginable in terms of funding an auto-only, auto-centric, just fight congestion in the craziest ways you can imagine type of approach. Yet there’s a lot of innovation happening in Texas and there’s a lot of people talking about doing things differently, so amidst some of the worst stuff you’re going to see in the country there’s also some of the best, and that’s why I think Texas is kind of a fun place to delve into a little bit.

RQ:         Yeah, and Kevin Shepard made the point when I talked to him that, from his perspective at least, Texas is still in the growth phase potentially, or at least it’s not quite in the decline phase yet as a state, and so if they were able to figure out all this stuff and make a big shift now they could prevent some of the decline that will happen later. Whether they can actually do that is very questionable, but we’ll keep an eye on that one.

CM:         Well a couple, a couple years ago Texas actually crossed over into the kind of point of no return in my mind where more than half their budget now goes to debt service, more than half their transportation budget, their gas tax.

RQ:         Wow.

 CM:         So you got a state like New Jersey where every penny of gas tax they collect goes to pay debt on old projects. So it’s not funding any new maintenance, it’s not funding anything new, it’s just paying for old projects and there’s no way to recover from that. I mean, you’re done, you’re done.

 And Texas -- I want to say three years ago -- crossed over the 50 percent mark so you, you’re now finding a majority of what you’re doing with debt, and there’s no way to really pay off that debt except to take on more debt because you have so many miles of road to maintain.

I think Kevin is right in a sense. I mean, Texas is very much in the illusion of wealth phase of the Ponzi scheme. So there would be a chance for them to put some of that illusion into stuff that is really going to make them better off. On a grand scale that doesn’t seem likely to happen in Texas. My biggest hope for Texas is that some cities, Austin, Dallas, Houston, have some really good stuff going on. There’re some suburbs of Dallas that I’ve been in, like Garland, that are trying to do so really good things. But some of these places are able to shift their approach and really be an example so that when things start to go bad, other places can start to copy.

RQ:         So Wednesday, we’re focusing on Minnesota. Do you want to talk a little bit about that? We have some, some other people who have written pieces for Wednesday but what do you see as the state of transportation funding in Minnesota? 

CM:         Well, in Minnesota we’re still trying to make the grand compromise. We’re still trying to figure out how we do what so many states have done, which is get the road building people in the same room with the bike/ped/transit people and say “we can give you guys all of what you want if we just work together.” And that essentially has been the approach the last couple of legislative sessions and we’ve gotten really, really close to getting that done.

I wrote a big piece last year about how I opposed the bill and that approach in specific. And you know it’s going to come back up again this year. We’ve got a big budget surplus now. Minnesota has one of the most volatile systems of finance in the country just in terms of statewide so we tend to, when times are good, have a lot of surplus, and when times are bad, have big deficits. We’ve got a lot of volatility in the way we fund the state. So right now we’ve got a big surplus and everybody says “well, let’s spend that surplus, and we should spend it largely on transportation.” And so it’s likely that this session we’re going to see some money thrown that way. Whether it’s part of a big grand compromise or not is yet to be seen. But, you know everybody’s probably going to get a little bit of what they want. 

RQ:         Okay. On Thursday we’re going to focus on Washington State. We tried to get some good variety here geographically. So Washington was especially interesting to me because I went to school in Washington State. I happened to be on the eastern side of the state, a pretty rural area. But I visited Seattle a fair amount, and it always seemed to me, this transit and walkability heaven, for me at least, you could take the light rail and the bus a lot of places. There’s a lot of very walkable areas in downtown Seattle. It has this reputation of being very hippy, green, environmental, lots of people out biking. 

But the posts that you guys will read on Thursday paint a pretty different picture. We’ve talked to some people who are really active in this area for advocacy groups and things like that, and they are very skeptical about the funding going on in Washington for roads right now. They just passed a huge transportation bill, and the bulk of it is going to new roads, unfortunately. Only a fraction is dedicated to the maintenance or transit or anything like that. So that’s an interesting one for me.

There’s also, of course, whenever you talk about Washington you have to mention the tunnel boring machine that got stuck under Seattle. I think it’s made a tiny bit of progress since we last talked about it on our web site but that’s a pretty laughable example of failed transportation projects. Chuck, do you want to talk a little bit about that?

 CM:         Yeah, you know as we talked about this week, we wanted to take the opportunity to point out some of the boondoggles, because there are plenty -- the bridges to nowhere. You know, and this rendition, this stuck Bertha, this huge boring machine stuck under the ground, trying to fight congestion in a beautiful city that really should embrace congestion in many ways.

So, you know, there’s those boondoggles, but I think we wanted to make sure and get beyond that because that’s kind of . . . we’re going to do a little bit of that but this issue is more than just kind of the cheap pointing out of boondoggles.

A place, like Seattle and like Washington State in general, which is doing a lot of the right things and having a lot of the right conversations. I interviewed their DOT head a while back [Oregon’s Lynn Peterson, who was just terminated as WashDOT head by the state senate’s refusal to confirm her – ed.] and she’s a brilliant person and has a lot of great visions for how to do things differently.

I think people in Washington State like to think of themselves as progressive, like to think of themselves as kind of cutting edge and unique. Yet when you step back and you look at it, not only are they very, very ordinary, not only are they doing pretty much the same thing that everybody else is in the same way with the same results, but they seem unable to really make a big shift, any kind of substantive, noticeable change.

I know we asked Mayor Mike McGinn to come on and talk a little bit. He’s a bike advocate from the trenches, I mean someone who is not an advocate from a political standpoint as much as he is “this is what I do, I bike, I walk, I’ve always done it this way, here’s why” and it makes sense. You know have someone like that give us a perspective on these compromises that are being made and what some of the tradeoffs actually are for people living in a city and how we can do things so much better with a lot less money and a lot different focus.

 RQ:         Yeah, I’m glad you brought up kind of the city issue because I think that road funding can be polarizing for urban areas versus rural areas because roads are often seen as this thing that connects the rural communities to everything else. And so they really need the new roads, right? Do you have any thoughts on that, that tension?

 CM:         Yeah, I do and I actually, I live in a small town. Two and a half hours north of Minneapolis-St. Paul, and I’m just keenly aware that the economy here would not function without the highway between here and Minneapolis. It just wouldn’t.

Yet when I step back and look at where we’re spending our money it’s not on that highway, it’s on all the junk around it. It’s on the frontage roads, the interchanges, so we get the new big box store. It’s on the highway through the middle of the city, which not only destroys our tax base but does nothing to change the travel time between here and major urban centers.

I think rural areas have been sold a huge bill of goods over the years, which is this: your prosperity is not necessarily tied to your ability to get to the next city but your ability to get to the McDonald’s or the Wal-Mart in 30 seconds less time. And you know that is an incredibly distorted trade off. Because, while the one is critical to the economy, the other one is way more expensive and has literally destroyed the economy of rural areas. So, I’m just keenly aware that the more money we waste in our cities, changing -- basically forcing people to drive -- changing the local economies, the less money we’re ultimately going to have to connect our places. And the connection between places, the roads that we’re building, that’s the critical infrastructure. For rural areas, when we get to triage -- what we see in states that have actually gotten to this point -- the rural areas are the ones that don’t get the road projects. You know the urban areas do, the suburbs do and the far, remote rural areas don’t, and I think that that is a really bad tradeoff that rural areas should be more keenly aware of.

RQ:         Definitely. That’s a good point too, that often when we look at highways that go through like the heart of a city we talk about urban renewal and how highways really ruined urban centers by dividing cities, but they have also torn apart and ruined the downtowns in small towns just as much as they have in cities.

CM:         Devastating. I mean there’s no more destructive force for small town America then the state departments of transportation. I mean they literally have destroyed rural economies nationwide and we become so accustomed to it. I’m here in this small town, we’re looking right now at a $9 million highway replacement project to put back this massive wide stroad through the middle of the city even though there isn’t the traffic, and we have 9,000 cars a day. It hardly justifies two lane and we’re putting back five lanes!

 We’ve done the analysis and shown how this highway has destroyed the economy, not only displaced jobs to neighboring cities but also destroyed the tax base along it. Yet the city and the DOT and the county are all completely paralyzed and feel an absolute necessity from a traffic congestion standpoint to put back exactly what’s there, five lanes.

You know, the more we do those things in rural areas, the less money there is to actually connect our city to the next important city, and at the end of the day that’s where the cuts are going to come. Because no one’s going to show up to that public hearing, because there isn’t going to be one; the roads are just going to deteriorate and we’re just going to be told there’s no money to fix it. So there’s an urban component to this and we’re going to focus on that and talk about it. There’s also a big rural component to this, and a lot of the tradeoffs that rural areas are given is “hey, support our suburban roads and we’ll give you your rural road.” When you actually run the math we’re talking about a tiny fraction of what is needed, and I don’t see a way for rural areas to fix this in the current paradigm.

RQ:         Okay. So in addition to our three days focused on different states we’ve also got some different things happening this week. I shared a really cool mapping tool Monday morning and I really encourage everyone to check it out. This is awesome, um, Josh McCarty from Urban 3 showed it to us. Basically you can go on this really easy to use web site and just look up what the funding breakdown is for your state in terms of how much are they spending on new road, how much are they spending on maintenance of roads, how much are they spending on transit?  You can also look at every state in the United States and kind of compare these things. It’s really cool. I don’t know, have you had a chance to look at it Chuck? 

CM:         Yeah, it’s mind blowing, really.

RQ:         Yeah, definitely everyone should check that out. We are also sharing an excerpt from a new report that was put out by US PIRG and Frontier Group about some big highway projects that they kind of use as examples to illustrate how ridiculous our transportation funding situation is in the U.S.  

And we’ll have a webinar to go along with this “No New Roads” topic that will be going on next week. So those are some of the things to look forward to this week. Chuck, do you have anything else to add about this topic?

 CM:         No, I just, I want to make sure that people are helping us out with this one a little bit too. I mean we’ve got a discussion that we’re trying to get started and have people take part in that. The no new roads thing is one of these kind of black and white hashtags, yet I’m going to freely acknowledge that these are not black and white issues. And because of that I really encourage people to take part in the conversation, to take the stuff that we are sharing with you and share it with others to you know use this as a way to have a more sophisticated conversation in your community about the tradeoffs between funding the current system in the current way we’re doing it and what you would actually like your community to look like. These are not black and white issues and if there’s one thing about Strong Towns it’s that we do kind of embrace the messy nuance and complexity that is building a successful, strong place. So I encourage people to share all this and get involved and do what you can to build a strong town and share this message with others.

Special thanks to John Gear for obtaining this transcript.

(Top photo by Kyle May)


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