This section presents several recommendations that go beyond the direct issue of how money is raised to include how it is spent. The Commission includes these recommendations in part because sometimes the two issues are inseparable (such as dedicated charges raised from particular user groups for particular purposes) and in part because of the importance of boosting public trust in the system so that users and other beneficiaries are more willing to pay for their demands on the system and also to make the transition to a more sustainable funding approach.
The following resource allocation recommendations have some bearing on the likely effectiveness of the Commission's funding and finance-related recommendations. They do not, however, represent a comprehensive set of recommendations regarding how resources are used. Rather, these recommendations address a few key issues related to the funding and finance recommendations presented in this report. Regardless of the manner in which Congress ultimately chooses to generate funding for the national surface transportation system in both the short term and long term, incorporating these and other principles into decisions about how funds are allocated and spent will help ensure that critical and limited resources are used effectively.
IV-1. Investments should focus on safety as a high priority.
In the past, highway and transit safety performance has improved steadily and significantly over time, but achieving further improvements-the most important of which is reductions in fatality rates-will require additional effort and investment. Assessments of proposed capital investments' impact on safety performance should be part of every evaluation process.
IV-2. Decisions on the allocation of federal dollars to states should be based more directly on performance outcomes.
The current funding allocation construct does not place adequate emphasis on directing funds to improve system performance or on holding funding recipients accountable for real outcomes (e.g., improvements in safety, mobility, system quality, etc.). In turn, these shortcomings may contribute to overall system underfunding because voters do not perceive that good decisions are being made and cannot see clear-cut connections between revenues raised and transportation improvements. While the Commission views greater emphasis on moving to a more performance-based system as critical, it also believes that the immediate funding demands cannot wait. The investment needs are too great and the funding gap too severe. Key steps to increase federal resources for surface transportation and to move to a more performance-based approach must proceed in tandem in order to prevent further deterioration of the system.
IV-3. As a new federal funding system is implemented, Congress should ensure that funding allocations under the federal program continue to support the investments needed on a national basis to ensure a comprehensive and cohesive surface transportation system.
The purpose of the federal surface transportation program is to ensure that critical investments are made across the country, regardless of how or where revenues are generated. As a result, to ensure a cohesive and comprehensive national system, there will continue to be the need for cross-subsidization between and among states. It is important to note that transitioning the current federal funding mechanism to a VMT based system will not alleviate the need for such targeted funding. Congress therefore should ensure that the allocation of federal revenues continues to support a cohesive and comprehensive national transportation system that supports mobility for all purposes and citizens of this country.
IV-4. Congress should have a transparent system for making earmarks and explicitly limit such activity to a specified percentage of the federal transportation program (e.g., to less than 3 percent of available authorizations).
This is consistent with the Commission's strong belief that funding decisions need to be based more directly and explicitly on meeting specified performance objectives. The Commission also is concerned about the perceptions that such earmarks create among taxpayers and the resulting impact on the general trust in the funding system. Finally, on more technical grounds, the Commission recognizes that, if not carefully managed, such earmarks can tie up money in projects that are not ready to be implemented or that do not have the rest of their funding in place.
IV-5. Federal policies should be designed to encourage state and local policy makers to further use contracting methods targeted at achieving lifecycle cost efficiencies and optimal asset management-thus addressing the funding gap from both sides of the ledger.
This could potentially include demonstration or incentive grant programs for performance based contracting as well as technical training and peer exchange programs.