Guest Column

Robert F. Sharak

A Curious Lapse of Logic

Bob Sharak takes issue with Jim Bacon's recent column on Virginia transportation funding.

Regarding your Jan. 17, 2005 article, “A Curious Lapse of Memory,” I’m not sure I agree with your conclusions regarding Virginia Department of Transportation (VDOT) spending. In the article you write:

“When Chichester wakes up in the morning and squints at himself in the mirror, it would do him good to see these two clues stitched into his chest:

“Ten-year VDOT spending increase -- 60 percent (Bacon response 1)

 

“Ten-year population increase -- 12.8 percent

 

“How would these numbers help Chichester in his quest? They would demonstrate that state spending on highway maintenance and construction has outstripped the increase in Virginia's population by more than a four-to-one margin over a sustained period of time--a period during which traffic congestion has only gotten worse.”

 

AND

 

“…it is utter folly to pour more money into building more roads, or even building new mass transit projects, until state and local governments address the flawed taxation policies, zoning codes, allocation of state transportation dollars and other root causes of traffic congestion.”

If I read the article correctly, your main points are: (1) VDOT funding has increased excessively, particularly in the past 10 years; (Bacon response 2.) (2) even with a large increase in funding congestion has gotten worse; and (3) legislators should explore other ideas before spending more money to fix traffic congestion. Let’s take these issues one at a time.

Point 1: VDOT Funding Has Increased Excessively

You used VDOT budget figures (for non-general fund monies only) from 1997-2006 to arrive at the 60 percent increase ($2,969/$1,856 = 60 percent). You then took population figures from 1994 to 2003 to arrive at population growth (7.39M/6.55M = 12.8 percent). Comparing data from unlike periods can be misleading, it is better to compare budget and population for the same period in an apples-to-apples way if possible. Also, your analysis does not consider economic growth (which increases commerce related traffic), inflation and other factors impacting both the demand for transportation and the cost. If you adjust for these factors, the picture is less clear cut than that which you portray in the article.

First, let’s adjust for the different time periods and inflation. Data for the period 1997-2006 (the period for which you pull VDOT spending) shows VDOT Non-General Fund (NGF) spending increasing by a factor of 2.75 over the corresponding population increase.

However, if you use the period 1994-2003 (the period for which you pull population growth) the data shows VDOT spending increased less than population. (Bacon response 3.)

In addition, it is widely known that road construction inflation has outpaced the CPI in recent years due to many factors including US economic growth, low interest rates fueling real estate construction and the “China effect”. I do not have data covering either of the above periods entirely, however, as an example, according to the American Road & Transportation Builders Association (ARTBA), construction prices (material and labor combined) increased 4.8 percent from 2003-2004 compared with 3.0 percent for CPI. If reflected for this difference, real VDOT funding increases would have been even lower. (Bacon Response 4.)

You also do not consider that road building is not a simple function of population. Economic growth, both state and national, increases commerce and demand for transportation. As shown below, Virginia’s economy, as reflected in inflation adjusted gross state product, grew 36.6 percent over the period versus VDOT spending at 6.3 percent and population at 12.8 percent.

As the above shows, choosing different start and end dates can completely change the conclusion of your analysis. Perhaps a 10-year period of analysis is too short to identify any meaningful trend. If one looks at the numbers for a longer period of time, say 1986-2006, or even 1981-2006, they tell a different story than either of the periods considered in your article. By the way, there’s no magic reason for picking a 1981 or 1986 start date except that the data is available and going back 20 or 25 years is long enough to smooth out some of the timing problems present in the previous analyses, as well as cover several economic cycles and political administrations, which will help identify long term trends. (Bacon response 5.)

In the period 1986-2006, real VDOT expenditures outpaced population by a factor of 1.34 which is, quite likely, more than compensated for by the road construction inflation differential and economic growth. Over the period 1981–2006 population growth alone outstripped real VDOT spending (as it did in the period 1994-2003, above) even before factoring in other drivers of road demand. Picking different time periods for analysis clearly has an impact on the conclusion, however, in the long run, it dies not appear VDOT funding has grown excessively.

Point 2: Congestion Has Gotten Worse

Anyone living in one of Virginia’s metropolitan areas knows first hand that traffic congestion has gotten worse over the past 10 years. There is data supporting this conventional wisdom. The Texas Transportation Institute estimates that from the period 1982-2002 (the best data available to compare with the above analyses) congestion in Hampton Roads, Richmond and the Washington, D.C., metropolitan areas has increased considerably (see below). Moreover, the costs associated with this congestion, principally in terms of lost productivity (time spent in traffic) and extra gasoline consumption, have skyrocketed.

There's no doubt congestion has increased – but why? Your article notes that the number of licensed drivers, as a percentage of population, has flattened out after increasing in the 1970’s and 1980’s. While true, I’m not sure that’s the whole story, or the best metric to use. The change in registered vehicles is recognized as a better predictor of road demand. As the table below shows, licensed drivers flattened out but registered vehicles increased at twice the rate population growth. For purposes of comparison, the time period used below is the same as that in your article but the relationship between the percent increase in population and percent increase in registered vehicles was the same for the period 1981-2003 – that is to say registered vehicles grew at a rate twice that of population. This is one reason for Virginia’s traffic congestion problem – and the increase in miles traveled by licensed motorists referenced in your article – greater access to a vehicle has translated into more miles driven. (Bacon response 6.)

In addition to the increase in population and registered vehicles, there are other possible reasons traffic congestion has gotten worse including economic growth (increased commerce and greater labor force participation), the increase in two-income families (hence, two commuters) and other demand side factors. As your article rightly points out, poor land use, or “sprawl” is also a contributing factor to increased road demand and congestion.

Supply side issues have also contributed to the problem as lane mile[1] growth has not kept up with the increase in vehicles or vehicle miles traveled as this chart, courtesy of the Hampton Roads Planning District Commission, clearly points out.

From Hampton Roads State of Transportation 2004, Courtesy of the Hampton Roads Planning District Commission

Point 3: Legislators Should Explore Other Ideas Before Spending More Money To Fix Traffic Congestion

As you point out, it is not a good idea to simply throw money at a problem – and I think we can agree that traffic congestion is a problem in Virginia’s metropolitan areas. Moreover, there are options, many of which you have outlined in past articles, that should be explored to reduce road demand. Better land use policies comprise one such category of solutions. However, getting back to point, I am not convinced Virginia has thrown money at the problem. In fact, given the previous analyses, one can make an argument the recent increase in VDOT budget is warranted due to past under spending.

Under-spending on maintenance, or sometimes known as “deferring” it, creates a backlog that eventually must be made up – the need doesn’t go away. This is one reason maintenance of existing roads is consuming an ever greater share of the State’s construction budget.  

Additionally, under-spending on new construction creates pent-up demand for new roads. Here is where the sprawl issue is most relevant as are other strategies for easing road congestion without new road construction. However, at least some of the pent-up demand will need to be filled with new construction. This too will not go away and must ultimately be paid for.

I think we agree that alternatives to new road building should be pursued whenever possible. However, given the magnitude of Virginia’s transportation dilemma, particularly in its metropolitan areas, it seems clear that any such demand-side alternatives be implemented in conjunction with increased road and transit spending – not in lieu of it. The needs are too great to be met with demand side strategies alone.

Virginia’s current transportation congestion problem has arisen over a period of many years and has multiple root causes (only some of which have been addressed here). The solution to this problem will require both supply-side solutions (roads, transit, etc.) and demand-side (better land use, telecommuting, etc.). Many of these solutions will require real money be spent – all of the solutions will require the responsible parties come to the table with an open mind and a willingness to address the issue on multiple fronts.

-- February 14, 2005

Footnotes

[1] Lane Miles: The product of centerline miles (the length of a road, in miles) and number of lanes. A four-lane road, two miles long has eight lane miles.

Bacon Responses and Clarifications

Bob, Thank you for your thoughtful response to my column. You make a number of valid points, and my future commentary will be better informed as a result.

(1) In response to your initial correspondence, I adjusted this number for inflation to 33 percent. Now it turns out that I did not follow the proper formula for adjusting spending for inflation! I defer to your expertise and your numbers..

(2). Almost, but not quite. I did not mean to assert that VDOT funding was excessive. My aim was to dispute those who characterized VDOT spending as insufficient to keep up with the growth in population and traffic.

(3). I agree that it is preferable to compare growth in population and VDOT spending over the same period of time. As you rightly noted further down in your column, the particular period of time selected can influence the outcome of the comparison. In this case, I wanted to capture the significant increases in VDOT spending during the current biennial budget because of the context of the current political debate, in which legislators are calling for massive spending increases over and above those already budgeted. Unfortunately, I could find no population estimates for 2006, so I used the most recent years available.

(4). I concede this point. It is reasonable to adjust for construction inflation costs -- for that portion of VDOT's budget devoted to construction and maintenance, but not for its administrative overhead.

(5). I started with 1986 because that's the year that Gov. Gerald Baliles and the General Assembly put into place our current transportation funding formula. I have no doubt that transportation was under-funded before then. The pre-1986 funding formula is not at issue. The post-1986 funding formula is.

(6). You may have a valid point here, I'm not sure. The number of vehicles, both in 1992 and 2003, the years you cite, exceeded the number of licensed drivers. What do we know about those excess vehicles? Do they belong to affluent families and sit idle in garages and driveways? Or are they commercial vehicles that are being used every day? And if they are commercial vehicles, do they add to traffic congestion in the same way that a motorist's personal vehicle does? In other words, do commercial vehicles add to traffic congestion during rush hour, when people are driving back and forth from work, or are they used throughout the day when traffic is lower? It makes a difference, but I don' t know the answer.

Jim Bacon