rural areas Archives - Transportation For America

Safety and mobility choice through rural California

Juxtaposed by a well-supported bike ride from San Francisco to Los Angeles, there are many people in rural communities, particularly agricultural workers, along the route that are in critical need of vital, reliable, affordable transportation options, and suffer dire health and economic consequences as a result.

Agricultural workers harvesting lettuce in Salinas, CA. Photo from Flickr/yaxchibonam.

The 2022 AIDS/Lifecycle bike ride (June 5-11, 2022), a seven-day, 545-mile ride from San Francisco to Los Angeles raising awareness, advocacy, and financial support for community services for those afflicted with HIV, passes through many rural agricultural communities. Through Marina, Salinas, Gonzalez, King City, Bradley, Paso Robles, Santa Maria, or Lompoc, community members bike or walk along the side of the road in dangerous conditions like non-existent shoulders and roadways in need of maintenance or repair. I recently had the honor, privilege, and ability to participate in this bike ride, and along the way, I observed what is so often observed on U.S. streets: when our transportation system prioritizes vehicle speed over all else, other road users fall through the cracks.

*T4America Policy Director Benito Pérez, stopped by agricultural fields near Salinas, CA.*

It is quite the experience and privilege to ride through the beautiful California countryside, supported by medical and bike tech teams. If I got tired or felt sick from riding, I could stop and get a ride to the next rest stop or hop on a chartered bus to the next overnight camp stop. This unfortunately is not an option for residents and workers alike in these rural communities. Along our route, biking infrastructure was scarce, and other convenient modes of transportation like public transit are often hard to come by. Those of us participating in the bike ride could easily spot rural residents and workers biking for long distances on unprotected paths.

Add the additional pain of high gas prices and scarce and infrequent public transportation options, and many people are left with little option but to walk or bike on hazardous roads with high speed or very large freight vehicles and tractors. For undocumented workers or people living paycheck-to-paycheck who have to show up in-person for work, high gas prices become even more of a barrier and can force people to other modes of travel, even when safe infrastructure is lacking. I observed one woman biking with a shopping cart tied to her bike to carry her goods home.

Dangerous rural roadways aren’t specific to California. Over 1 million rural households across the nation have limited mobility options. Leaders in many rural communities are standing up and looking to make changes to improve transportation choices and safety. In California, the city of Salinas has an active Vision Zero program, enacted in 2020, looking to stem the tide on roadway fatalities. Communities like Lompoc are actively looking at policy and funding opportunities to expand their complete streets program. However, as the bulk of their busiest and most dangerous roads are state-owned, these places will have to rely on the state to make sure rural communities receive the investments they need. That will involve emphasizing a better state of repair on roadways, investing in rural transit solutions (including microtransit), not to mention supporting transportation investments, policies, standards, and strategies advancing safety and mobility choice for all roadway users.

Despite the support that cyclists on the AIDS/Lifecycle ride received and the increased safety that often comes while biking in larger numbers, a person was still killed on the final day. Roadway fatalities for pedestrians and cyclists continue to rise, and without making an effort to address the dangerous conditions on our roadways (mainly, the lack of safe infrastructure for road users outside of vehicles), this trend can only be expected to continue. (The 2022 edition of Dangerous by Design, produced by Smart Growth America and the National Complete Streets Coalition, addresses how our streets are designed for vehicles at the expense of all other road users.)

This ride was an experience for the impact it has to its mission, but it also was an experience to “ride in the shoes” of the many residents in these rural communities in Central California, only a sliver of many rural communities in America clamoring for safe, reliable transportation choices for their socioeconomic and health well-being. Often, political leaders assume that all rural residents drive, or only drive, and any investments in other modes of transportation are somehow out of touch with rural needs. But the fight for safer streets and more convenient methods of transportation can’t stop at city limits. That mindset leaves far too many behind.

Fix-it-first would be a win for rural communities

The lack of repair requirements in the infrastructure bill will shortchange rural areas, costing them potential jobs and leaving them with crumbling roads and bridges that won’t get repaired. Our report highlights why using highway funds to fix roads and bridges would bring numerous benefits to rural America.

The infrastructure deal that passed the Senate in August and is currently waiting on a House vote after budget reconciliation will fail to make meaningful progress on the maintenance backlog on our nation’s streets, roads, and highways. That’s because there is no requirement for state DOTs to prioritize repair before building expensive new roads they will struggle to maintain. Historically, when given new funds with this kind of flexibility, they’ve chosen to expand their roadways (with dubious results), with no real plan for maintaining their highway system.

Cover of Rural Transportation Policy report

Read our latest report on the transportation needs in rural areas
Rural Americans need and deserve reliable and convenient transportation options, but current policies are failing them. This short report we released last week has six recommendations and stories of success from rural America that show a better approach.

What’s the impact on rural areas?

Despite what you may have heard from scores of Senators from rural states, failing to prioritize repair first is a big loss for rural America.

Instead of fixing potholed roads and preventing key farm-to-market bridges from being weight-limited or closed outright, a large portion of the infrastructure funding will go to costly expansion projects in big growing metropolitan areas. State DOTs will burn through the funding buying expensive right-of-way to widen roads for metro commuters. Oftentimes, these highway projects will worsen neighborhood connectivity by creating new barriers and will just end up inducing more driving, which means widened roads fill up with traffic in a few years, failing to deliver on the (expensive) promise of reducing congestion.

Meanwhile, rural areas, which aren’t growing as quickly as their urban counterparts, don’t have much rationale for road expansion, but they absolutely do need their roadways repaired. In fact, a report from TRIP (a national transportation research nonprofit) estimates the rural road maintenance backlog at $211 billion. With metro areas sucking up a majority of the funding for wasteful roadway expansion projects, there will be little left for the vital but unglamourous job of fixing rural highways, county roads, and small-town main streets.

What’s worse, the jobs that come with road repair—good-paying blue-collar jobs that rural communities need—won’t be as abundant. Maintenance work produces more jobs per dollar than roadway expansion since a greater share is spent on labor thanks to the lack of costly right-of-way acquisition. And since maintenance is the big need in rural areas, instituting requiring that existing roads are fixed before new ones are created would ensure that not only is the money spent better, but it actually goes to the greatest needs, creating more jobs along the way.

We don’t have to keep wasting highway funds on endlessly expanding highways. While the bipartisan infrastructure bill failed to include fix-it-first accountability, we can still hold our leaders accountable to actually use funds to repair roads and bridges before constructing new ones. Doing so would help preserve the rural roads that are vital for connectivity and bringing goods to market, all while creating the most jobs.

Rural areas desperately need a transportation overhaul, too

People disparage rural areas with the term “flyover country,” but our federal transportation program currently treats rural areas even worse—as “driveover” country. If Congress adopts Transportation for America’s three new policy principles, transportation investments could truly help rural areas prosper.

A focus on speed rather than safety and access would result in telling Erwin, TN that they need to widen this road and get rid of the crosswalks. Federal transportation policy doesn’t work for rural America.

This week, we released our three guiding principles and three outcomes we expect from any new investment in transportation. These ideas will start to fix our broken system and improve safety and access to opportunity for all—including rural areas.

When I was a small town mayor in Mississippi, I fought transportation policy that treated our town like it was “driveover” or “drive-through” country. Our transportation program makes it far easier for rural communities to build highways—which residents can use to drive far away for jobs, schools, education, and other services—than it does to help rural places invest in their vital town centers.

What the federal government doesn’t realize about rural areas is that they are not comprised of empty towns and open fields that need to be driven through as fast as possible. In reality, rural areas are dotted with countless walkable town and community centers.

In some rural areas, these walkable places are the center of commerce and activity for that town. But unfortunately, in too many rural areas, thanks to federal transportation policy that prioritizes new highway construction and roads designed primarily for speed—no matter their context—these once-thriving walkable places have been hollowed out, with jobs and services now located far away.

Our three principles would improve life in rural areas by finally treating rural areas as places to be, not places to drive away from.

Maintenance

When I was mayor of Meridian, Mississippi, the state had 12,000 bridges that were structurally deficient. This hammers rural places especially hard. If a bridge needs to be shut down—or even worse, collapses—some areas might lose their only quick connection, and then people can’t get to their doctors, produce can’t get to market, and students can’t get to the community college. Without these bridges, rural areas are isolated.

Unfortunately, the current federal transportation law allows states to kick the proverbial maintenance can down the crumbling road. Many times, states use this money to build new infrastructure while letting their existing assets crumble. (Something Mississippi did for many years, though their state DOT has recently made a drastic about-face, a story Mississippi DOT Commissioner Dick Hall outlined in our press briefing for Repair Priorities.)

That’s why our third principle, “prioritize maintenance,” would require states to fix these structurally deficient bridges before building new roads or bridges they can’t afford to maintain. It would ensure that rural places will not be stranded.

Speed

Oftentimes, the main street of a rural community is a state highway that passes right through the heart of downtown. Because of federal design standards and a focus on the speed of travel above all other priorities, the main street is unsafe and unattractive for people to bike and walk in a very small urban grid, and it’s terrible for the local economy.

Main streets shouldn’t be highways that get people through communities. They should be arteries that bring people in. Walkable main streets in rural areas can and should be a huge driver of economic development for a small town, generating a large, prosperous tax base in a very small area.

In West Jefferson, NC, by prioritizing safety and access over speed, 10 new businesses opened along Jefferson Avenue—adding 55 new jobs— and the number of visitors to downtown increased by 14 percent. Four-way stop signs, crosswalks, and upgraded sidewalks were added—anathema to our broken system where speed is the top priority.

That’s why our second principle, “design for safety over speed,” would prioritize designing main streets to serve their intended functions, not as unsafe highways for speeding traffic right through a town center. Any road embedded in an urban grid where people walk and bike, where businesses or homes are located, and where an outside portion of the county’s economic base is located—like in countless rural downtowns—should never be designed for deadly highway speeds.

Access

When state DOTs build new transportation infrastructure, they might share how wide the shoulders are going to be or brag about how much a new road will speed traffic up, but they never tell the public how transportation projects will make their lives better. That’s because improving people’s access to destinations is not how we measure success. We “measure” success by how fast vehicles are traveling, with no measurement of what destinations you can actually reach.

Bentonville, AR’s downtown is a place to bring people to and connect to nearby neighborhoods, not to speed cars through on their way somewhere else.

Put another way, traveling for 15 minutes at 40 mph and going 10 miles is preferred to traveling for 15 minutes at 20 mph and only going five miles, for absolutely no good reason at all. If every daily need in a small town is a 15-minute drive at 20 mph, what’s the point of building a brand new road on the edge of town that can speed you along at 40 or 50 mph?

This focus on speed results in orienting every transportation project—whether in a big city or a small town—around the goal of moving cars as fast as possible, telling everyone who wants to live in vibrant small towns that the needs of their automobiles come first.

Rural areas also have higher percentages of elderly, low income, and disabled people, presenting greater challenges to connectivity and transportation infrastructure. But when access is truly prioritized—meaning that transportation projects are chosen by how they improve people’s lives by improving their access to daily destinations, no matter how they travel—everybody benefits.

That’s why our third principle is “connect people to jobs and services.” Improving access means that instead of making a road wider for cars to drive just a little bit faster, a jurisdiction might instead build a crosswalk in a rural downtown, or add a new road to the street grid, because those investments would do far more to better connect more people to more destinations.

The goal of connecting people to the things they need—which is fundamental to the purpose of transportation—is currently missing from the federal transportation program, and this affects rural areas just like it does any big coastal city

By making access the goal, designing local streets for safer, slower speeds, and ensuring that maintenance is more than just talking point politicians use to get more money to spend, we can improve the lives of people all across the country.

America’s rural areas are filled with wonderful small towns and vibrant communities. It’s time for our federal transportation policy to build them up rather than pave them over.

Click on any image below to learn more about our brand new principles or download a sharable card

The TIGER program is no more….in name

A rendering of the Multimodal Corridor Enhancement Project (MCORE) in Urbana and Champagne, Illinois is a complex street safety enhancement project that involved two city governments, the local transit agency, the University of Illinois, and the state. It wouldn’t have been possible without a TIGER grant.

Today, the U.S. Department of Transportation (USDOT) released the FY 2018 Notice of Funding Opportunity (NOFO) for the program formerly known as Transportation Investment Generating Economic Recovery (TIGER). The NOFO declares that USDOT has rebranded TIGER as the Better Utilizing Investments to Leverage Development or “BUILD” program. The criteria for funding under BUILD and TIGER are essentially the same—with one big caveat. Under BUILD, USDOT is putting a new emphasis on securing and committing new, non-federal revenue for projects requesting funding.

USDOT defines new revenue as “revenue that is not included in current and projected funding levels and results from specific actions taken to increase transportation infrastructure investment.” And any local or state revenue authorized before January 1, 2015 is not considered new revenue and cannot be applied as matching funding for BUILD projects.

Examples of “new revenue” according to USDOT are asset recycling, tolling, tax-increment financing, or sales or gas tax increases. Under this definition, bonds do not qualify as a new revenue source.

If this sounds familiar that is because it is! The criteria for funding consideration under BUILD is a lot like the requirement that the Trump administration included in their proposed infrastructure package earlier this year. As T4America’s analysis of the infrastructure package revealed, this criteria penalizes states and localities who have already raised more local revenue for transportation projects. Why are we penalizing states and cities who acted first?

Since 2012, 31 states have raised new transportation revenues and 12 of those states raised revenue before 2015—mostly by raising or otherwise modifying their gas taxes. Beyond states, many localities like Clayton County, GA and Alameda County, CA raised local funding before 2015 through ballot measures. Even if the taxes or other funding tools are producing new revenue today, if it happened before 2015, the Trump administration doesn’t care. Many of those cities (and the 12 states) would have to raise even more new funding to meet this criteria.

Asking localities to simply kick in more money would do little to guarantee better projects—it’ll just occupy more of the local funding that states or cities could invest elsewhere or spend on long-term maintenance. And the feds shouldn’t be pointing fingers about raising more money. Unlike these states and cities, the federal government hasn’t raised the gas tax (the largest source of federal transportation dollars) since 1993.

Rural communities get shortchanged by BUILD

This is especially problematic for rural communities who already have a difficult time raising new revenue. Many of the sources of new revenue suggested by U.S. DOT—asset recycling, tolling, tax-increment financing—are not feasible in rural areas because there is little to no private demand to finance infrastructure in rural areas because it’s not profitable.

The administration has talked a big game about the need to improve infrastructure in rural areas and this NOFO is on message, saying that’s a priority for this year’s BUILD program. But this new criteria actively makes it harder for rural areas to be competitive for funding because they will struggle to raise new revenue.

With this big change, the BUILD program has already built something: another obstacle to rural communities getting the transportation funding they need.

Background on TIGER

The FY 18 omnibus package enacted into law last month tripled the size of the Transportation Investment Generating Economic Recovery (TIGER) program from $500 million to $1.5 billion. The omnibus rejected the president’s proposal to eliminate the TIGER program. This NOFO makes available the $1.5 billion from the omnibus and requires applications to be submitted to USDOT by July 19, 2018.

The TIGER program was one of the only ways that local communities could apply for and directly receive federal dollars for their most needed transportation projects. TIGER enabled the development of complete streets and walkable communities, expanded intermodal access to our nation’s ports, improved our public transit network, made our highway and railway systems more efficient, and helped to strengthen our passenger ferry network. TIGER routinely had requests for three to four times more in funding than was available—making it a very competitive program—and raised $3.6 in additional funding for every dollar appropriated through TIGER. In short, TIGER has been a widely successful and popular program.

T4America members recently got the inside scoop on this next round of TIGER/BUILD via an exclusive webinar with USDOT.

Not yet a member? T4America regularly offers members more in-depth summaries of USDOT actions like this NOFO. In the days ahead, we will be helping members to make their applications more competitive.

Learn more about T4America membership here.

TIGER grants focus on rural areas, recognize the value of complete streets, and ignore transit

Just a month after the Trump administration proposed a budget that would eliminate the competitive TIGER grant program entirely next year, the US Department of Transportation announced the winners of this year’s awards. This year’s winners show a clear shift in priorities — this round is decidedly rural or small town in nature and nearly devoid of transit projects. However, the winners also show that this administration recognizes how smaller-scale complete streets projects bring tremendous value to local communities.

The fiercely competitive but notably small TIGER grant program is one of the few ways that local communities of almost any size can directly receive federal dollars for their priority transportation projects. The federal government has found a smart way to use a small amount of money to incentivize the best projects possible and encourage local investment: TIGER projects brought 3.5 other dollars to the table for each federal dollar awarded through the first five rounds. They’re overwhelmingly multimodal and multi-jurisdictional projects—like rail connections to ports, complete streets, passenger rail, and freight improvements—that are often challenging to fund through the traditional, narrow transportation formula programs.

This intense competition for funds stands in stark contrast to the majority of all federal transportation dollars that are awarded via formulas to ensure that all states or metro areas get a share, regardless of how they’re going to spend those dollars. And unlike the old system of congressional earmarks, the projects vying for funding compete against each other on their merits to ensure that each dollar is spent in the most effective way possible.

As we look through this year’s list of awardees—the ninth group of winners since the program was created in the stimulus package of 2009—five clear themes rise to the top. Here’s what you need to know about this year’s TIGER winners and the status of this valuable program.

#1 Reminder: this could be the last of the TIGER program

Though it’s one of the most fiscally responsible transportation programs administered by USDOT and incredibly small when compared to the overall transportation program, the administration’s budget request for next year completely eliminates TIGER. While the Senate has stepped in to save this program numerous times, they’ll only continue to act if the local leaders who depend on it continue to speak up.

Whatever the pros and cons of the winners, as outlined below, local officials across the country depend on this program to invest in ways that traditional state or federal programs either don’t allow or make too difficult. Once again, this round is full of projects that would have been unlikely to receive funding under the traditional program either due to the project type or project sponsor.

#2 The administration rewards the growing local support for complete streets and main street revitalization

If there’s a clear winner in this round of awardees, it’s for projects that are focused on revitalizing main streets, improving pedestrian safety and access to transportation options, and building a better street framework for creating and capturing value. Projects in Carson City, NV; Immokalee, FL (pictured in graphic above); Burlington, IA, Akron, OH; Frankfort, KY; and Mill City, OR, among a few others, all have a strong complete streets or bicycle and pedestrian component. The administration is to be commended for seeing the connection between investing in traditional, people-focused streets and downtowns as not only a viable economic development strategy, but a vital one.

But the administration can’t choose these projects if they’re not in the applicant pool. And the proliferation of these projects is a testament to the growing movement of local officials who understand that improving safety through low-cost interventions, building a sense of place, investing (or reinvesting) in downtown, and focusing on moving people rather than just vehicles brings a strong economic payoff to their communities. Because of that, they’re investing their own dollars heavily in these projects and the administration is making a wise investment by partnering with them.

#3 More funding for rural projects, but with a loose definition of “rural”

While USDOT says that over 60 percent of the awards go toward rural projects—a stated goal of the Trump administration—it’s probably more accurate to say that most of this funding goes to midsized cities. (They count places like Lincoln, NE—pop. 280,000—as rural.) There was also a clear bias in favor of awarding funds to projects in states that are in the middle of the pack in population, and the most populated states that produce an outsize share of the country’s GDP mostly received very low dollar awards—states like California, New York, Texas, and Illinois.

While funding more “rural” projects is a stated goal of the administration, it’s hard to square with the administration’s current plans to make towns and cities and states pick up more of the funding burden. Rural projects usually bring less local or state money to the table, by DOT’s own admission: “Since 2009, the TIGER program has awarded nearly $1.4 billion in federal funding to 171 rural projects across the nation, leveraging an estimated $2.5 billion in non-TIGER funding,” lower than the 3.5 non-federal dollars per TIGER dollar for all projects through the first five rounds. In an ironic twist, these smaller places (and midsized cities, as noted) will be the ones most intensely feeling the squeeze if the administration gets their way on federal transportation funding.

#4 Awards for transit projects were few, keeping with the administration’s overall views on transit

The underlying law’s language (found in the 2017 appropriations bill) requires some level of parity between various modes of transportation:

“…the Secretary shall take such measures so as to ensure an equitable geographic distribution of funds, an appropriate balance in addressing the needs of urban and rural areas, and the investment in a variety of transportation modes”

Contrary to that language in the law, this batch of TIGER grants only includes a few smaller transit projects, leaving out both the quantity and size of larger transit investments we’ve seen in many past rounds. Though it’s not in step with the intention of the program as crafted by lawmakers, it’s certainly hand-in-glove with the administration’s stated belief that localities should fund transit investments all by themselves. The administration has already pledged to end the capital program for building new transit lines or stations, and these awardees largely reflect that view.

#5 The tradeoff for a project in almost every state is the lack of nationally significant projects

It’s nearly impossible to make an award in almost every state while also funding a handful of larger, transformative, nationally significant projects—projects like the CREATE program (rounds I and IV) to address huge national freight rail bottlenecks in Chicago or the Crenshaw/LAX Light Rail project. This has been a struggle for the TIGER program dating back well into the Obama administration, but this is the tradeoff that comes with trying to get an award for nearly everyone: more smaller awards, and less capacity to invest in big nationally significant projects that have benefits for people far outside of a single city, region or state.

TIGER should represent a way forward

The majority of all federal transportation dollars today are awarded to states and metro areas in a way to ensure everyone gets a share, regardless of how they’re going to spend those dollars or how well-conceived their projects are. TIGER operates differently, forcing projects to compete against each other on the merits. Rather than being slated for elimination, this should be a model for the future of transportation funding: formula dollars awarded for repair and maintenance, and then money for any new capacity (of any type) awarded competitively.

Will Congress acquiesce to the administration’s demands to eliminate TIGER? In spite of the administration’s stated opposition to this program, they just funded 41 important projects that would have been difficult to build under the regular program. As stated above, Congress will only continue defending this program as long as local leaders and advocates continue pressing for its survival. Get in touch with your representatives today and urge them to continue supporting this small but vital program.

Catch up and learn about what’s at stake for small and rural transit providers in the budget

Smaller cities and rural areas are facing potential funding reductions, phase-outs or the total elimination of vital federal programs they depend upon to provide transit service — whether as a lifeline or a powerful economic development tool.

A few weeks ago we released a new detailed memo (pdf) to explain these specific threats facing rural areas, and detail the efforts by the administration and Congress to cut or eliminate vital funding programs for public transportation.

Earlier this week, we held a short webinar with our federal policy experts and some sharp local leaders that have experience in providing transit service in rural areas to explain that memo in more detail. We talked through the status of the current appropriations process, what you can do today, the impact on formula transit grants and the Small Starts capital program, and the overall outlook for the transit program.

If you missed the session, you can catch up with the full recording here:

Transit providers of all sizes, in all parts of the country, should band together and start making the strongest possible case for preserving the federal transit program. Read our full summary and learn how you can take action.

What’s at stake for small and rural transit providers?

Federal transit funding is still on the chopping block. Those who operate or depend on transit — whether in small, rural areas or large, urban ones — must band together to convince both Congress and the President of the vital nature of public transportation services.

While we’ve frequently highlighted the ongoing, existential threats to the main source of federal funds for helping cities expand or create new public transportation lines or service, smaller cities and rural areas are also at risk of funding reductions, phase-outs or the total elimination of vital programs they depend upon.

In this new detailed memo (pdf), T4America lays out the specific threats facing rural areas and explains Congress’ and the administration’s efforts to cut or eliminate vital funding programs for public transportation. Get the full summary on:

What the president has proposed and the status of the current appropriations process
What you can do today
Formula transit programs, Small Starts, the TIGER competitive grant program, and
The outlook for the transit program

Join us on October 23 for a live webinar discussion

Our team of experts will discuss rural transit providers, the projects that are at risk from these cuts, and what you can do to defend transit in your region. Join the live discussion on Monday, October 23, 2017 from 3:00-4:00 p.m. EDT. Register today.

Asset Recycling – an Alternative Approach to P3s

This memo provides background on asset recycling, including its strengths, weaknesses and potential pitfalls. To learn more join us on Wednesday, August 16, 2017 at 2pm EDT for a discussion on asset recycling. Register here.

What Is Asset Recycling?

Asset recycling is selling or leasing public assets and using proceeds to pay for other infrastructure. This type of public private partnership (P3) is different from other P3s, which typically engage the private sector in building and operating new infrastructure. Asset recycling instead involves two pieces of infrastructure, the asset being sold or leased to the private sector, and a second piece of infrastructure – unrelated to the first – built with the proceeds of that sale or lease. The name “asset recycling” comes from the idea that the value of the old asset is recycled to pay for the new asset.

The new infrastructure being funded by asset recycling may not be a revenue generator – whereas most other P3 approaches would require the new infrastructure to be revenue generating. The asset being sold or leased must generate revenue to be of value to private sector purchaser.

What Asset Recycling Isn’t

Asset recycling does not recycle the asset itself, only the value of that asset. Unless unused excess public property is being sold off, the fundamental underlying principle of asset recycling is that a public entity privatizes a public asset to gain access to capital in the short term at the expense of longer-term revenue. This process creates a one-time funding infusion, generally at the expense of longer-term revenue. This is not a source of long-term funding and would be better described as a form of financing, not funding.

Case Studies

Australia’s Asset Recycling Initiative

Australian Prime Minister Malcolm Turnbull launched a 2-year Asset Recycling Initiative in 2014 offering $5 billion in federal funds to incentivize privatization of infrastructure like ports, power stations and transmission lines. As long as the state or territory invested the sale or lease proceeds in infrastructure, the federal government provided a 15 percent match. The program addressed state and territory-owned infrastructure, not municipal infrastructure. The Australian Senate conducted an inquiry into the process and found major risks to this approach. The report found that the program distorted the market through incentivizing the sale of assets that would not have been sold without the Australian government’s subsidy. Also, the Senate found that linking asset sales to new infrastructure investments could in fact have a negative fiscal impact by selling income-generating assets to fund infrastructure that does not generate any income. In the end, the report recommended, “the link between privatization and infrastructure funding under the Asset Recycling Initiative should be removed.” P.M. Turnbull ended the Asset Recycling Initiative in May 2016, redirecting remaining funds to other infrastructure programs.

Virginia’s I-66 Outside the Beltway

Virginia Department of Transportation entered into a P3 with Express Mobility Partners to build express lanes on a segment of I-66 outside the beltway. In one sense, this was a traditional P3 in which the private sector entity builds the express lanes and collects the tolls. However, VDOT negotiated a deal which requires Express Mobility Partners – in exchange for the rights to this project – to pay $500 million upfront for improvements to the corridor. The State also required the concessionaire to pay $800 million for transit service and $350 million for other improvements to the corridor over the next 50 years. These additional resources secured from the private entity can be viewed as recycling the value of the expressway asset into additional infrastructure and services, and they were made possible because of the McAuliffe administration’s investment in P3 expertise and development of reforms to Virginia’s approach to P3s after some past failures.

Chicago’s Parking Meter Deal

In 2008 Chicago mayor Richard Daley leased the city’s parking meters to Chicago Parking Meters LLC for 75 years in exchange for $1.16 billion. The private entity increased meter rates, added metering in areas that had not yet had it, and charged the city for lost revenue whenever parking spaces were unavailable – for example, during repaving. The deal also prevented the city from opening new off-street lots that could compete with the on-street metered spaces. In addition, rather than reinvesting the funding in new infrastructure, the city used it to fill budget holes. By 2010, only $180 million of the original sum was left.

Concerns And limitations

There are many elements to privatizing a public asset that impact whether that asset can serve its function effectively, such as determining:

whether the agreement requires the asset to be properly maintained before being passed back to the public ownership at the end of the lease;
how much local control to surrender;
the price the public pays for the service change;
whether the asset will be managed in a way that is consistent with public goals.

Without expertise in P3 agreements, governments risk negotiating problematic deals for themselves. P3 offices established in Virginia and District of Columbia have helped them to cultivate expertise to support P3 agreements.

Unlike other P3 arrangements, asset recycling couples two separate decisions – selling or leasing a publicly owned asset, and investing in new infrastructure. Each of these has its risks, but when they are combined in a single action with the federal government incenting the deal, the risks multiply. As with other P3s, asset recycling are better viewed as a form of financing rather than a source of long term funding. Selling or leasing a revenue-generating public asset means a government loses ongoing revenue in exchange for a one-time payment.

One concern with evaluating P3s and asset recycling is that both public and private debt should be considered in order to leverage financing. Optionality is key to a good deal. By comparing the private sector funding source against public or municipal debt, communities will be able to negotiate the best deal for taxpayers.

Limitations in Rural Communities

Asset recycling is of limited utility for smaller jurisdictions, who are less likely to own public infrastructure that can be effectively privatized. Aside from some toll roads, most revenue generating infrastructure assets – such as airports, parking garages, ports, or transit systems – are in dense urban areas, not rural or mid-size communities. The assets that small communities do have may not generate significant enough funding to address local infrastructure needs.

Smaller jurisdictions also have more limited resources to invest in P3 expertise. For example, moving forward on projects that involve the private sector without having capacity to calculate the net present value (the difference between the present value of cash inflows and the present value of cash outflows) can open communities to unwanted risk.

An analysis published by APM Reports in May shows that of 520 projects submitted to the Trump Administration for possible inclusion in an infrastructure package, 46 projects have sponsors considering private financing and of those only 2 projects are located in rural communities.[1] This analysis clearly shows that private investment primarily focuses in larger population centers.

Some have suggested that using asset recycling to finance project in urban areas would make more resources available for rural areas, or that states might consider urban assets to fund rural infrastructure needs. However, if the income from the asset being sold had previously gone to the urban area, this could be a highly controversial diversion of funds from one portion of the state to another. Existing funding sources already raise a disproportionate amount of funding from metropolitan regions, but do not meet the full needs in rural communities.

[1] http://wuwm.com/post/trumps-desire-private-infrastructure-money-will-narrow-his-choices-mostly-urban-projects#stream/0

White House launches advisory group on rural issues that includes transportation officials

President Obama signed an executive order today creating an advisory group for rural issues. The group will be tasked with developing recommendations for boosting economic growth, job opportunities and quality of life in rural communities.

The Executive Order notes that sixteen percent of the population lives in rural counties and that these areas are essential to future economic competitiveness.

“Though rural communities face numerous challenges, they also present enormous economic potential,” according to the order. “The Federal Government has an important role to play in order to expand access to the capital necessary for economic growth, promote innovation, improve access to health care and education, and expand outdoor recreational activities on public lands

Tom Vilsack, the Secretary of Agriculture, will serve as chairman and will be joined Transportation Secretary Ray LaHood, Housing and Urban Development Secretary Shaun Donovan, Environmental Protection Agency Administrator Lisa Jackson and dozens of other Cabinet and administration officials. Including these voices will ensure cross-jurisdiction solutions are considered.

The transportation challenges of rural areas are well-known, yet cannot be overstated.

More than 1.6 million rural households in America lack access to a personal vehicle, and rural areas and small towns tend to have higher concentrations of older adults and low-income families, precisely the groups that are less likely to drive or be able to afford a car. The need for increased travel options in these communities was outlined in our Dangerous by Design 2011 report, which found that while only 24 percent of Americans live in rural areas, the areas account for more than 27 percent of pedestrian fatalities.

As Congress continues its deliberations over the next transportation bill, rural transit needs have finally begun to receive more of the attention they deserve. Senator Tim Johnson, a South Dakota Democrat who chairs the Banking Committee that oversees transit, has called for additional resources to help small providers maintain service levels. And, Representative Shelley Moore Capito, a Republican member of the House Transportation and Infrastructure Committee whose West Virginia district contains a number of rural counties, has said she will “certainly remain a strong voice for making roads safer for pedestrians” as the next bill is crafted.

Rural transportation needs were also the subject of recent report from the Rural Policy Research Institute, or RUPRI. You can read their full report, which includes a number of recommendations for the next transportation bill, here.

Photo courtesy of Huron County Transit.

South Dakota Senator Tim Johnson stresses rural transit needs as gas prices continue to escalate

Gas prices in the U.S. continue to escalate and could hit $4.25 by Memorial Day, according to some projections. These spikes tend to hit smaller communities and rural areas particularly hard, as residents and businesses must travel farther and use more energy during daily activities.

While too much of the talk in Washington emphasizes gimmicks like grand jury investigations and “drill, baby, drill,” some leaders have engaged with constituents on increasing transportation options, one of the most important steps we can take to relieve pain at the pump.

Senator Tim Johnson, a Democrat from South Dakota, recently conferred with the Brookings Area Transit Authority, which seeks additional funding and capacity to operate its 21 vehicles. Brookings has a population of 22,000 and is home to South Dakota State University.

Senator Johnson, who is currently serving as chairman of the Senate Banking Committee, noted that investment in transit systems is a vital economic development tool for many South Dakota communities. The system in Brookings faces the dual challenge of an aging population demanding more services and rising prices due to the spike in energy costs.

Brenda Schweitzer, the authority director, “noted that rising gas prices have increased BATA fuel bills by $2,000 just within the past month,” according to the Brookings Register. The Register also reported that “the organization’s out-of-pocket match for fuel is at $5,000 per month right now.”

Johnson assured Schweitzer and other participants in a recent panel that he would use his clout in the Senate to push for a transportation bill that meets the needs of South Dakotans and sparse communities across the country.

“With reliable transit systems, we can strengthen our economic development by connecting people to medical services, schools, family and jobs,” Johnson said on his website. “Meeting with people on the ground who deal with rural transit issues every day helps me as I work to ensure that the needs of rural communities are met.”

The Banking Committee has particular jurisdiction over the transit elements of the next bill, which has been overdue for renewal since late 2009.

Photo: Roll Call

“I don’t know what this talk around DC is about livability not having anything to do with rural areas…”

Earlier this week, we hosted 15 of our partners from rural areas across America for a two day “fly-in” focusing on the transportation needs of rural areas and small towns. We hosted a briefing at the Capitol in the morning and then these partners from all over the country, from Virginia to California, took the message up to their leaders in Congress through dozens of meetings with legislative staff or Senators and Representatives themselves.

Kathy Moxon, the director of Redwood Coast Rural Action in (extreme) northern California, a participant and speaker at the briefing, took a few moments in between meetings at the Capitol to talk to T4 America about this idea of “livability” in rural areas that some in Congress have been questioning.

We wanted to know more about the view from rural northern California — is livability a rural value?

We’d like to thank Kathy for coming to D.C and participating in the fly-in and giving us a few minutes of her time.

T4 America’s rural and small town partners take their transportation message to Capitol Hill

Arkansas Square Originally uploaded by whiteknuckled

Tuesday’s Congressional lobby day hosted by Transportation for America on the needs of rural and small-town America displayed a growing urgency for transportation options, livable communities and good access to jobs and opportunity — as great as one would find in any of our nation’s urban and metropolitan centers.

Though the specifics may take a different form compared to big coastal cities, the values these participants described in a morning briefing and then in dozens of meetings with members of Congress didn’t sound all that different from residents of anywhere else in America, small or large.

Americans from big urban areas all the way down to rural communities and small towns want good access to job opportunities. We want roads that aren’t cracked and crumbling and bridges that don’t fall down. We want our town or city centers to be vital places to live, work and shop. We want safe places to walk and bicycle. We want options other than long car trips for absolutely everything. Call it “livability,” or call it something else.

The dozen-plus participants who came to Washington, D.C. from small communities in Virginia to Arkansas to Northern California and places in between expressed their hope that a new federal transportation bill can help address these needs in rural communities across America.

The “fly-in” kicked off with a Hill briefing, followed by dozens of meetings on Capitol Hill with the participants and their Senators and Representatives about how transportation policy impacts smaller communities.

Participants came from all corners of America and hit many of the same notes when discussing the challenges facing their friends and neighbors. Billy Altom hails from North Little Rock, Arkansas, where he serves as executive director of the Association of Programs for Rural Independent Living (APRIL). Terry Suphahn runs his own consulting firm in rural Northern California, working closely with Native Americans. Barbara Bayes splits time between urban Charleston and her farm, helping low-income West Virginians with access to transportation. Carol Miller heads an organization focused on heavily rural frontier communities — her own New Mexico county is so sparse, she must travel to the neighboring county just to vote and use the post office.

All participants talked about helping their neighbors back home access the basics — groceries, health services and jobs. They also talked of spurring economic opportunity so people can find a job in the same place they grew up. Many felt their towns, tribes or counties were ready to move on innovative projects that improve access and quality of life, if only federal policy would give them a little nudge. Far from asking Washington to tell them what to do, they were asking for resources to make change for themselves possible.

Kathy Moxon (left) and Terry Supahan from Northern California Originally uploaded by Transportation for America

Kathy Moxon and Terry Supahan from Northern California posed behind the Capitol for a picture after a day of meetings with members of Congress. Kathy shared a powerful story of a rural community in Northern California that took matters into its own hands. The town transformed a wide highway through the middle of the community into a more suitable main street to help preserve the area as an enjoyable place to walk and live.

Carol Miller of New Mexico, a panelist during the morning briefing, put it well: “We believe good ideas come from the community, that there’s creativity there, but there hasn’t been a channel to bring those ideas up through the system.”

Washington needs to “make doing the right thing easy,” added Kathy Moxon, another panelist.

Billy Altom, the rural independent living director from Arkansas, rounded out the panel by discussing the transportation challenges facing older Americans and people with disabilities. He called on audience members to no longer see those with unique transportation needs – whether due to reliance on a wheelchair, inability to afford a car or age-related limitations– as an “us versus them” situation. Getting transportation right is not just about changing public policy, Altom said, but “changing public perception.”

John Robert Smith, the former mayor of Meridian, Mississippi and co-chair of the Transportation for America campaign, served as moderator for the panel.

Rural fly-in briefing panel 2 Originally uploaded by Transportation for America

Billy Altom, left, Carol Miller, John Robert Smith, and Kathy Moxon all spoke at the briefing at the Capitol Visitors’ Center.

Participants visited the offices of Senators Blanche Lincoln of Arkansas, Barbara Boxer of California, Max Baucus of Montana, Robert Byrd of West Virgnia and Mark Warner of Virginia, to name a few. Congressman Mike Thompson of California and Senator Jim Webb, along with a handful of others met personally with their constituents to hear their concerns.

Although connecting constituents with their representatives is critical, what happens next matters too – making sure Congress follows-through on a transportation bill that helps Americans from smaller communities get where they need to go and connect to a better life.