A History Lesson Preceding the RTP

As part of the introduction to last week’s workshop scoping out the process or updating the Regional Transportation Plan, Metro President David Bragdon gave a history lesson, recounting how the way in which the nation has paid for its transportation infrastructure has varied greatly over history, going through phases roughly every fifty years. The suggestion of course is that they era of the federal gas tax and highway trust fund, started in the 50’s by Eisenhower to build the Interstate Highway System is getting long in the tooth.

While Bragdon did not have a formal printed verison of his remarks, he was kind enough to share his speaking notes, reproduced here:

David Bragdon
Opening Remarks
Regional Transportation Workshop
April 20, 2006

This is an historic morning – and to prove the validity of that cliché in this instance, let’s start with a little history.

Government investment in transportation has been shaping our economy and our communities for centuries, but the form, paradigms and assumptions of that investment changes every 50 years or so.

It is rare that one paradigm of investment lasts longer than 50 years, and there’s lots of evidence that we are at the end of such a cycle right now.

Some generations have risen to these transitions and some have not. Some places have adapted to these transitions and thrived and some places have not. This morning is the beginning of the test of whether we recognize change and adapt to it or not.

Start with the post-revolutionary period: Alexander Hamilton (look at the $10 bill): “internal improvements” like canals and national roads and harbors, to be funded by the tariff. Or the Gallatin Plan of 1808 to open the Midwest, and make the U.S. an international economy. These were visionary plans, and were partly implemented. But time passed and that funding source, the tariff, ran its course. By the 1820s there was a void left by federal inaction, only partly filled by some selective state action like Dewitt Clinton’s Erie Canal. There was also significant technological change in the wings in the form of the railway.

After decades of slumber, federal financing took another quantum leap in the mid 19th Century — again after a major political realignment (the Civil War) — with the introduction of land grants to subsidize railway expansion. Again, a new idea and a new technology – one with profound consequences for our economy; things that had not been thought of before.

But that paradigm (land grants), after shaping our nation, also ran its course and died.

Move to 20th Century, especially with the political realignments under Theodore Roosevelt and Franklin Roosevelt: more totally new paradigms of public finance and new technology, unlike what went before, both caused by, and causing major changes in our society. This led to a quantum leap, especially after World War II: creation of the interstate system and the federal gas tax highway trust fund, somewhere around 1956 (hmm, exactly fifty years ago . . .are we sensing a pattern….?).

Here’s the point for us this morning: that paradigm shift in the 1950s created the world we live in today, particularly the dispersal of suburbanization. I cannot stress this point too much: what we are living in today is the product of those investment tools, and assumptions and objectives of that last major shift – one that occurred when Dwight Eisenhower was President.

Let me be more direct: until this morning, every Regional Transportation Plan has been implicitly conditioned by the fundamental assumptions of 50 years ago.

What were some of those assumptions and conditions?

  • Oil at that time was around $13 per barrel. (Did anyone happen to hear on the radio what it is this morning? $72);
  • Most of our oil came from places like Oklahoma and Texas – only perhaps a quarter of our supply came from overseas, from docile sources largely under American and western European control;
  • The United States had a growing heavy manufacturing base, pent up demand and expanding industry in the post-depression, post-war period. We needed new stuff;
  • The federal government had just appropriated $25 billion (in 1956 dollars) to build 40,000 miles of new roads;
  • Most importantly to shaping metropolitan transportation planning, the new paradigm offered states 90 cents of federal money for every 10 cents a state spent on interstate highways. Actually, for Oregon, for various reasons related to timber lands, it was 8 state cents for 92 federal cents.

Look at it this way: for eight cents on the dollar, Oregon could buy Interstate 5 from the California border to the Columbia River and Interstate 84 from Portland to Idaho! Who could resist at prices like that? Roads for less than one-tenth their construction cost, and oil at $13 a barrel!

And until this morning, that’s still an ingrained assumption that has underlain much of our transportation decision-making in this country.

In our region, somewhat ironically, our decision-making today is further distorted by the habits created by what was actually a great decision in 1974 — the cancellation of the so-called “Mt. Hood Freeway,” which freed up $550 million (in 1974 dollars) for other projects. The misconception is that the money that would have built the Mt Hood Freeway (which, actually, was just a link between the Marquam Bridge and Lents), instead was used to build light rail to Gresham. I say this is a misconception because in fact, less than half of the money was used on light rail. There was enough left over to completely rebuild the Banfield Highway and 220 other road projects regionwide (the Highway 26 and 217 Interchanges done in the 1980s, for example, were done with Mt. Hood Freeway money, as were overpasses as far away as eastern and southern Oregon).

The cancellation of those monstrous urban freeways created a huge pot of federal “trade-in” money – remember, it was $550 million in 1974 dollars! – that the region lived off of for nearly two decades. The City of Portland, controlling most of those funds, bought peace around the JPACT table for years by passing out more funds (largely to the suburbs) than could have been used within the city limits of Portland.

That was a wise choice: cancel two huge, disastrous projects and instead do hundreds of better, smaller (and not so small) ones that made more sense for our region. Unfortunately, that pot also conditioned us to a revenue stream that was thought to be typical when in fact it was an aberration. All our engineering, planning, decision-making, and expectations were built on an expectation that this aberration was actually normal.

It would be as if for 30 years I continued to calculate my annual, regular household budget – my food budget, my clothing budget, my rent or mortgage – based on the income from one big inheritance I had received from my uncle back in 1974 – an inheritance that he had accumulated as a result of an investment he had made in Washington, DC in 1956. The problem is we have now spent that inheritance and they are not making any new deals in Washington.

It has now been 50 years since 1956. More than 30 since 1974. Yet we are still doing regional transportation plans with essentially the expectations we used back then.

Until this morning.

Signs would say we are on the verge of another shift, judging by all the usual indicators that marked prior shifts:

  • As with the tariff and the land grants in their day, there is evidence that our major national tool has run its course: financial prospects for the Federal Trust Fund are dire. When JPACT members met with Senator Gordon Smith in February, he predicted the Federal Highway Trust Fund will be broke by 2010 – though in fact the non-partisan Congressional Budget Office says it may be 2009.
  • As happened in the late 19th Century and again in the mid-20th Century, our society and economy are changing — post-industrialization, etc. The United States is now a mature economy, with existing assets to maintain, not a 1950s economy trying to catch up with pent-up demand from the war years. Rather than tens of thousands of miles of highways that need to be built, we have hundreds of thousands of miles that need to be maintained – and aren’t being.
  • As happened in the late 19th Century and again in the mid-20th Century, the world is changing around us.
  • As happened between Hamilton and Lincoln, and as happened between the two Roosevelts, we have a brain-dead federal government, disengaged from any investment strategy at all.

History shows us that every 50 years or so, when all those factors converge, we have:

  • Exhaustion of existing funding paradigms;
  • Rapid technological change;
  • Economic upheaval based on global factors;
  • Social transformation domestically;
  • Federal detachment.

And when all those factors converge, then an entirely new way of thinking about (and investing in) transportation emerges. Some generations rise to the occasion and are part of that emergence, but some do not. Alexander Hamilton did; Franklin Pierce did not. Abraham Lincoln did; Herbert Hoover did not.

Often the response has to occur not in Washington, DC, but at the local or state or regional level – New York State stepped up and built the Erie Canal in the 1820s when the federal government would not. And partly as a result, New York State outperformed most of the rest of the nation for the ensuing decades; California stepped up and built highways in the 1950s, ahead of the federal curve, and it outperformed the rest of the nation for the following decades. That is not to say we should build canals today the way New Yorkers did in the 1820s, or highways today the way Californians did in the 1950s – rather, it is to say that those places had a vision and invested and thrived; while other states which did not invest during those eras lagged.

That is what today is about: whether or not our region is going to be in the forefront of recognizing new realities and investing accordingly, or whether we are going to live in the past and be left behind.

If we adapt to new fiscal and social and economic realities – and develop a new approach to transportation that is consistent with the tools and aspirations of the 21st Century – then our region is positioned to prosper.

To get us started with that challenge and explain what we are going to do this morning, we have an excellent chair of JPACT — I am proud to introduce my colleague Councilor Rex Burkholder.

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