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DRIVE Act Drives in Right Direction; Yet Intelligent Transportation Systems Still Underfunded

transportation

The U.S. Senate Environment and Public Works Committee introduced a new bipartisan surface transportation reauthorization bill this week: the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act. And as ITIF called for in a May 2015 report, From Concrete to Chips: Bringing the Surface Transportation Reauthorization Act Into the Digital Age, the six-year reauthorization proposal does place increased policy emphasis on intelligent transportation systems (ITS)—particularly through a ground-breaking “Transportation Innovation” title which includes numerous provisions incentivizing the use of innovative transportation technologies.

That said, and despite this progress, the proposed bill continues to significantly underfund ITS research, development, and deployment over the next six-year period. This despite the fact that intelligent transportation systems—the application of information and communications technologies (ICTs) to bring actionable, real-time intelligence to every actor and asset in a transportation network—have a cost-benefit ratio at least 9 to 1 over investments in traditional highway infrastructure.

With regard to research and development (R&D), the DRIVE Act keeps ITS research funding constant at $100 million annually. While the Act does provide an additional $72.5 million annually for the University Transportation Centers (UTC) program to fund transportation research, only a fraction of these funds go to ITS research activities.

With regard to ITS deployment, the Act designates a Systems Operations and ITS Deployment Grant Program (though within the ITS research budget) funded at $30 million annually to accelerate the deployment, operation, systems management, intermodal integration, and interoperability of ITS and operational strategies. This could be a vehicle through which the Department of Transportation (DoT) could assess competitive bids and make grants to cities/communities for model ITS deployments. Unfortunately, this amount is frankly a pittance, equal to the cost of building a mere three miles of urban freeway. As such, it falls far short of ITIF’s proposal that Congress create a new competition program called Race to the Digital Top that awards a total of $870 million in funding (over six years) to a select group of six U.S. communities—two small, two mid-size, and two large—to build a comprehensive “smart communities” ITS deployment approach.

It’s possible additional ITS deployment funding could come from the $62.5 million annually the DRIVE Act directs to the Federal Highway Administration’s Technology and Innovation Deployment (TID) program, of which at least half that amount must be invested in competitive Innovation Grants that fund demonstration programs accelerating the deployment and adoption of transportation research initiatives. However, those funds will cover a broad range of activities, from human factors research, to innovative materials, to ITS.

ITIF argued in its May report that Congress should tie a share of federal surface transportation funding to states’ actual improvements in transportation system performance. And Congress responded with a novel and needed initiative that’s also quite promising for ITS deployments called the Achievement in Transportation for Performance and Innovation competitive grant program. Funded by the DRIVE Act at $150 million annually, the grants are intended to reward the implementation of policies and procedures that support performance-based management and the use of innovative technologies and practices that improve the efficiency and performance of the transportation system. As intelligent transportation systems represent technologies that are likely to have some of the greatest impact in terms of improving transportation systems performance, it’s likely this grant will fund multiple ITS deployments over the next six years; although, again, the funds are not dedicated specifically to ITS implementations (and the grants are capped at $15 million per recipient).

Other notable provisions of the DRIVE Act which ITIF called for in its From Concrete to Chips report pertain to tolling and eligibility of ITS funding. The Act provides additional tolling flexibility by allowing states to toll new Interstate lane construction and consider the use of tolls for the reconstruction and rehabilitation of the Interstate System. The Act also permits funding eligibility for Vehicle-to-Infrastructure (V2I) communication equipment within key highway formula programs. Finally, the Act commissions a “Future Interstate Study” to assess the actions needed to upgrade and restore the U.S. Interstate Highway System to a world-leading position. As ITIF has argued that policymakers should consider ITS as the 21st-century, digital equivalent of the Interstate Highway System, we’re confident the study will further articulate the potential of ITS to the nation’s transportation system and the need to invest a commensurate amount.

Overall, the six-year bill would increase highway investment by almost 13 percent over current levels, increasing expenditures by roughly $2 billion each year, thus raising highway spending from $37.8 billion in FY 2015 to $45.5 billion in FY 2021. Yet at best it looks like ITS will receive less than 2 percent of this expanded funding, continuing the long pattern of underfunding digital technologies in U.S. transportation policy. To be clear, this is not about the overall budget. After all, the legislation authorized $45.5 billion. This is about priorities: chips vs concrete, and concrete continues to win.

In short, the Senate-produced DRIVE Act does contain several important provisions and programs toward greater deployment of intelligent transportation systems in the United States; however, the funding levels—for both ITS R&D and deployment—fall substantially short of what’s needed. ITIF calls upon the House of Representatives to recognize that investments in ITS have an outsize impact on the performance and efficiency of the U.S. transportation system—and to increase investments in ITS in the companion House legislation accordingly.

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About the author

Stephen Ezell is vice president, global innovation policy, at ITIF. He focuses on innovation policy as well as international competitiveness and trade policy issues. He is coauthor of Innovating in a Service-Driven Economy: Insights, Application, and Practice (Palgrave MacMillan, 2015) and Innovation Economics: The Race for Global Advantage (Yale, 2012). Ezell holds a B.S. from the School of Foreign Service at Georgetown University.