Last week I attended a presentation by Rob Puentes of the Brookings Institute that was part of the economic development series sponsored by PSU and Metro.
Puentes’ topic was national policy on infrastructure investment and his message was pretty stark: we’re wasting our transportation dollars. Puentes has analyzed the return on investment for our transportation investments. In the era of the initial construction of the Interstate Highway System, the returns were excellent. Since then, the payback has continually declined.
Puentes makes the point that transportation dollars are now essentially allocated as pork with each Congressional District getting their share of the pot. There is no prioritization.
In particular, Puentes points out that metropolitan regions are the economic drivers of our economy, but transportation investments are often concentrated outside of metro areas. This is true in Oregon as well. Only about half of the gas tax dollars generated in the Portland Metro area come back to the region. The rest are spent elsewhere in the state.
Libby Tucker of the Daily Journal of Commerce has an interview with Puentes.
8 responses to “A Low Return on Investment”
Portland does not deserve a proportionate share of the highway loot for only local use…. does not matter if a portlander spends his day driving around the block or around the state, his share and all contributions to the highway funding should pay for all highways around the state and used by all..
So Puentes’s complaint about the federal gas tax is that it just comes back to the states based on how much they put in, but the complaint about the state gas taxes is that they don’t come back to the local area based on how much they put in? (I get his central idea, that we should invest money where it will generate the most benefit, but that complaint just seems a little inconsistent…)
And while I do agree that we could probably get more benefit out of spending the money in Portland vs elsewhere, I have a hard time arguing that other places don’t need the money: The money isn’t being spent on white elephants, it is being spent to replace bridges that are in danger of collapse… (Yes, I know, we’ve got some of those in Portland too.)
While I certainly agree that the health of the whole state is hugely important to Portland, isn’t subsidizing rural infrastructure ultimately a bad thing? It makes it cheaper (ie non reflective of the real costs) to live out way out there, which in turn contributes to an auto-centric development environment (because rural areas can hardly support or pay for public transportation).
People have all the right to live where they want…but shouldn’t the true costs be reflected?
If a dollar of transportation investment made in Portland returns $1.50 to the state economy, and another dollar invested in rural Oregon returns $0.85, should we export transportation dollars from Portland to rural Oregon?
“If a dollar of transportation investment made in Portland returns $1.50 to the state economy, and another dollar invested in rural Oregon returns $0.85, should we export transportation dollars from Portland to rural Oregon?”
No, not at all. However, if a dollar invested in the Texas economy returns $2, and invested in Portland returns $1.50, we’d probably wouldn’t see very much of the federal money… (Especially if the return is calculated via the TSUB formula, so that the FTA only thinks that we got $.20 in return…) My point is, we can’t have it both ways, either the money should be returned to those who paid for it in the first place, or it should be given to the place where it can do the most good… (I do agree that right now in this state, we are doing neither…)
If a dollar of transportation investment made in Portland returns $1.50 to the state economy, and another dollar invested in rural Oregon returns $0.85, should we export transportation dollars from Portland to rural Oregon?
Every dollar spent via Government means generally returns about .85 cents per buck, where as every dollar spent in private enterprise returns more around the range of $1.25. So why do we keep using Government as a supposed investment tool when we get better returns from private enterprise? All it would take is some logical good structure to organize transit as a private etnerprise again and setup rules as private enterprise and we’d be moving forward as fast as we have in the past. Instead of this snails pace of mediocrity?
But I digress, I know your viewpoint doesn’t line up with those facts as many in Portland don’t.
I for one though, including the 3.6 million for the streetcar, don’t understand the “pork barrel” spending process and how we citizens allow that to continue. The Republicans and Democrats are a disgrace to the nation for allowing it to continue. But I guess they are smart in not biting the hand that feeds.
Intercity transportation links are vitally important, as they connect city to city… but dumping money into rural highways to people can drive to the casinos and workers can commute 150 miles or more into work are going to have completely different impacts on the economy. In the first case, it will allow trade; in the second case, it’ll allow people to drive their car farther… and that’s about it.
Since there are more than just one city in the state of Oregon, perhaps we should focus on investing money on these towns/cities, and the connections between them?
Gee, what a novel idea…
Actually, part of Puentes argument was that intercity links were now less important than good mobility within metro areas.
I think that’s a debatable point, but it’s an interesting assertion.