Whitehurst, Clinton H., Jr.

Clemson University: TigerPrints

                                           FUNDING AND MANAGING SOUTH CAROLINA’S                           ROADS AND HIGHWAYS       “I trust the engineers to make an unbiased analysis of        what the state’s highest priorities are. I think that is the       way it ought to be determined.” Ted Hooper, DOT Board Chairman as quoted in the Greenville (SC) News, September 20,2007 Assumptions The South Carolina transportation budget has passedthe “opportunity cost” test, that is, the benefit fromappropriated transportation funds is greater than the mostfavorable forgone alternative and that the benefit from thehighway portion of the state transportation budget is greaterthan the most favorable forgone transportation alternative. South Carolina has received its due share of monies from the federal Highway Trust Fund and other federalsources for highway funding,       Proposed South Carolina highway projects have metrequirements set forth in environmental, economic andother mandated impact statements.1                                            Observations *It is well understood that engineering input whenestimating the costs of highway projects is primary andvital. It, however, should not be the deciding factor inprioritizing highway projects. The dictum, “perfection is the enemy of the good,” firstenunciated by Milton Friedman, one of the greateconomists of the past half century, is a valid and provenconcept. A highway example would be traffic controls atintersections. Constructing traffic signals, medians, andright and left turn lanes could fairly be considered “perfectsolutions,” while yield signs, four way stop signs, slowsigns, and flashing red and yellow lights could beconsidered “good solutions.” In trade off terms, how manymore good solutions can be funded from monies spent onperfect solutions and with funds left over? While no published statistics exist in South Carolina as tohow many drivers run stop or fail to yield signs ascontrasted with drivers running red lights, this authorsuspects the numbers are about even. The point is: Gooddrivers will benefit from good solutions while perfectsolutions will hardly deter careless drivers.     *Of the approximately 600,000 bridges in the UnitedStates, about 26 percent are classified as “structurallydeficient” or “functionally obsolete.” Seldom discussed,2                     however, is the definition of a “functionally obsolete”bridge. As a general rule, a “functionally obsolete” bridgeis one that does not meet today’s standards but is otherwisesafe.      Lynsie Breaux in her article “Structurally-deficientbridges are not always unsafe” quotes Richard Kerr, anengineer with excellent credentials on the subject.     “…. a bridge that does not provide 15 feet of clearanceover an interstate highway is obsolete, regardless of thebridge’s strength….a bridge will also be designated asfunctionally obsolete if  crossing the bridge requires amajor reduction in speed due to horizontal or verticalcurvature.” (1)     It is fair to ask the question of how many “functionallyobsolete” bridges in South Carolina might be considered“good” bridge solutions.     Uncontested is that demonstrably “unsafe” bridgesdeserve funding priorities and that this determination is bestleft to highway engineers.             *In prioritizing highway projects the economic conceptof cost-benefit analysis can be a valuable tool. In thisregard, should it come to a choice between a project wherebenefits are more local, when contrasted with a projectwhere benefits are state-wide, most would agree the state-wide project deserves priority. An example of a statewidebenefit project would be roads and highways that make the3                                port of Charleston more efficient, which in turn is apositive location factor for firms that significantly dependon foreign imports and exports and are considering a SouthCarolina location. A local benefit project would be a widened approachroad, traffic signals and turn lanes into a large mall orshopping center. Worth noting with respect to local highway/road benefitsis that if a number of proposed projects within a relativelysmall geographic area, e.g. a county or part of a county orcounties, can be bundled and worked on together, someeconomies of scale should be possible.    *Decision makers charged with prioritizing highwayprojects should give the same, if not more, attention to newsources of revenue as is given to existing revenue sources.It is axiomatic that having funds available for a highwayproject will change the priority of that project.     New sources of revenue for highway projects are wellknown. e.g., tolling new or existing state roads, tolling allor part of interstate systems within South Carolina’sborders, increasing fuel taxes at the state and/or local leveland increasing registration/title fees are examples ofhighway user taxes. These options, however, are onlypossible if legislation is in place that allowsimplementation. In South Carolina, counties andmunicipalities do not have the authority to increase fueltaxes within their jurisdictions. 4                              Recently, the idea of turning the maintenance of somestate roads over to counties was suggested. Without newrevenue sources the concept will die a slow death as localauthorities, the general assembly and local and statetransportation officials argue over how to implement theconcept within the existing highway budget.    *Based on past state and national data, officials thatapprove funding major highway projects should be dutybound to make the taxpayer aware of the high probabilityof cost overruns. The most logical approach is to allow forcost overruns in the proposed project budget, an additionthat would probably change project priorities.      For those taxpayers who have never considered costoverruns in highway projects, a case in point is the CentralArtery Third Harbor Tunnel Project, a project designed torelieve congestion in the city of Boston, MA. The originalcost estimate was $2.5 billion, In 2004, the estimatedcompletion date, the estimated cost was $14.5 billion andclimbing. (2)     *In debating highway priorities, decision makers, oftentimes, in frustration, inject urban mass transportationoptions into the mix. e.g., If a rapid transit system betweenGreenville, Greenville-Spartanburg International Airport,and Spartanburg existed, auto traffic between these pointscould be significantly reduced and tens of thousands ofdollars saved on road maintenance.5                                         Considering non highway transportation options whendeciding on highway priorities is not only irrelevant butwasteful of time. The first assumption of this paper is thathighway transportation funds have already met theopportunity cost test and should be debated in that context.     *Economic theory assumes that individual decisionmakers are rational and will make decisions in their ownbest interest. Assume a highway intersection has been classified asdangerous by highway engineers because of traffic density,road width, and road curvature among other deficiencies.By their evaluation it is “an accident waiting to happen.” Now consider that the rational driver alluded to above alsoperceives that the intersection is dangerous, and in soperceiving, exercises due caution. (3) What criteria should be used in deciding whether aperfect, good, or no solution at all is, an efficient use ofresources in prioritizing the above proposed highwayproject? For discussion purposes, assume that records showthat the intersection in question is no more or lessdangerous than similar intersections. In deciding highwaypriorities, not only should the physical aspects of theproposed project be considered but also that traffic accidentrecords be given equal consideration, equal being theoperative word.      *The management of South Carolina’s highway system,like many of its roads, is in need of repair. We have a6                                   Secretary of Transportation with nominal decision powers,highway commissioners owing allegiance to differentappointing authorities, and “criteria” (written into new statelaw) for approving proposed projects; criteria, however,that can be ignored by a majority of commissioners. Conclusion      In a world of limited resources, economic analysis aswell as input by highway engineers is necessary tomaximize benefits from limited highway budgets. In such aworld, South Carolina may have to accept more goodsolutions rather than perfect ones. A point that should not be overlooked is that there is atradeoff between the number of projects to improve SouthCarolina’s roads and highways and safe drivers. Safedrivers will do well on “good” solutions to highway needs,not necessarily “perfect” solutions. To the extent that SouthCarolina can increase the number of safe drivers throughstricter highway laws and law enforcement, then to thatextent can more good solution highway projects be funded. When funds are limited, cost-benefit analysis canprovide valuable insights in prioritizing proposed highwayprojects.      In the case of bridge replacements, a safe assumption isthat South Carolina, as well as other states, will have toaccept the fact that there always will be some “structurally deficient” and “functionally obsolete” bridges in the7                                                     highway system mix.     If South Carolina’s existing highways are to bemaintained in good condition and demonstrably necessarynew roads funded, then decision makers must look beyondthe traditional funding sources of past budgets andconcentrate on new sources of revenue.     No matter the time and cost, the South Carolina GeneralAssembly must revisit the subject of efficiently managingthe state’s highways and roads. The tax paying public has aright to expect better than the present system. 8                                                                                         NOTES (1) Breaux, Lynsie. Structually-deficient bridges are             not always unsafe. The Standard (Macclenny, FL) August 22, 2007, p. 2. (2) U.S. Congress, House Report 104-631 Department              of Transportation and Related Agencies Appropriation Bill 1997, and Massachusetts Turnpike Authority, Turnpike News,2004. (3) While seldom considered, a fundamental              assumption made by all drivers when getting              behind the wheel of their vehicle is------ their fellow drivers want an accident free trip as much as they do. This is nothing more than an example              of the basic economic assumption that the              individual is rational in making decisions. Yet              thousands of accidents occur each year on the              nation’s highways. The question is: How to deal with the rational but careless driver? One              approach would be to significantly increase,               across the board, penalties for traffic violations. It              then follows that more cautious and responsible              drivers will lessen the need for perfect solutions              with regard to proposed highway projects. And with better drivers good solutions will become              safe solutions and the monies saved used to              correct demonstrably unsafe highway conditions.9 

Funding and managing South Carolina\u27s roads and highways, 2007

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Funding and managing South Carolina\u27s roads and highways, 2007

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