The federal transportation finance system is broken and will be short on cash for the foreseeable future.

Some regions—like the growing Phoenix, Salt Lake, Las Vegas, and Denver metropolitan areas—have meanwhile achieved system viability through unusual self-help yet even so face massive outstanding maintenance and capacity needs.

Is there a deal to be done? Perhaps there is. 

Check out, for example, the intriguing concept for a new federal-metro partnership in transportation finance being shopped around by the Maricopa Association of Governments (MAG) in Arizona.

Challenged by needs yet pessimistic about the likelihood of new national funding, MAG would have the federal government and large metropolitan areas work a trade in which Washington would provide new incentives in the form of increased and direct funding to metropolitan planning organizations (MPOs), new flexibilities, and streamlined processes in exchange for those regions’ continued contribution of substantial regional funding to the creation of the national transportation system. Along those lines, what MAG calls a “new partnership” between Washington and its most creative regions might at once improve the relationship between the federal government and its large metros and enable new progress in addressing the nation’s gargantuan transportation infrastructure challenges. 

In short, MAG is suggesting that the federal government help those who are helping themselves and so help them to address the nation’s pressing infrastructure needs.

At minimum, it’s an idea worth considering at a time when the nation needs to get more investment into the system despite brutal fiscal constraints.

Increasingly, after all, metropolitan areas around the country are acting on their own in the absence of federal leadership in envisioning, designing, and financing a true 21st century transportation system in America  (the current federal law has been “extended through the end of the year delaying reauthorization by at least a year-and-a-half).

Most dramatically, as MAG writes in its recent concept paper, large western metropolitan areas are taxing themselves and dedicating substantial local money to what is in effect the nation’s transportation system, effectively contributing to the construction of the nation’s critical infrastructure grid and adding capacity to the national system that allows freight to move from the Western ports and gateways to eastern destinations.

Recently we noted the boldness of Mountain region metros’ investments in rail transit systems such as FasTracks in Denver, RailRunner in New Mexico, Valley Metro in Phoenix, and FrontLines and Trax in the Salt Lake area. Most of these have been substantially financed by voter-authorized payroll or sales tax increases and so epitomize the new spirit of bottom-up initiative.

But conceivably these regional transit investments could be deemed “local” in character which is why it is worth looking also at the dramatic investments Western metros are also making in major freeway maintenance, upgrades, and new capacity on routes of national significance. 

In metropolitan Phoenix, for example, voters in Maricopa County approved Proposition 400 in 2004 which extended a half-cent sales tax for regional transportation for another 20 years. That bit of local effort will generate over $ 11 billion over time to expand regional transit service (including the expansion of the region’s new light rail system), but it will also dedicate billions for freeway upgrades, additional lanes, and improved interchanges, including substantial improvements to the interstates including I-10 and I-17.

In the Las Vegas area, Clark County taxpayers have poured some $1.3 billion into construction of the Bruce Woodbury Beltway, a 53-mile freeway that will be added to the interstate system.

Other major metro areas like Denver, Salt Lake, and Los Angeles have gone to their voters for approval of ballot initiatives to fund a mix of light rail lines, highway projects, commuter rail and corridor preservation. A coalition of business and civic leaders in the Dallas Metroplex, for that matter, is pushing state legislature to give metros in Texas the authority to do the same.

In short, the big metros of the West and Intermountain West—like others across the country—are laboring hard to keep up with system maintenance, enhancement, and expansion needs even along clearly “national” corridors on which they are investing substantial local resources. Moreover, they are doing this with little hope of relief or recompense given congressional gridlock, the nation’s ballooning deficit, and the current lack of political will to increase the gas tax whether at the state level or nationally.

The bottom line: Something has to give. Metros need some sort of recognition from Washington that it takes local as well as federal funding to co-produce a sound national transportation system. 

Which is where MAG’s “new partnership” idea comes in.

Through the “new partnership” MAG would have the federal government reward large metropolitan areas that have secured long-term and substantial regional funding sources approved for a minimum of 20 years and that equal at least 50 percent of the annual federal transportation funding received by the region. As to the incentives, a possible menu of options might include: increased federal funding commensurate with the regional funding; more direct funding to MPOs; more flexible “mode neutral funding;” more streamlined planning processes; more direct reporting to federal agencies; and reduced bureaucracy.

Can it work? Clearly there are many details to work out and vet in the MAG scheme.

Legitimate questions can be raised, for one thing, about whether the “new partnership” would lead to new reliance on sales tax funding sources that are at once regressive and susceptible to volatility. Likewise, some metros will quibble with the specifics of the eligible local funding and the 20-year and 50-percent thresholds. However, the sales tax is but one potential source of funding and all funding options should be on the table for discussion. 

Beyond the particulars of the funding source, a critical element of any new federal-metro partnership should be enhanced accountability and adherence to national performance goals. To that end, the federal government could supplement its funding to MPOs (and states, for that matter) that demonstrate progress toward meeting such goals. In other words, the primary measure of MPO quality should not just be how well it raises money, but how well they optimize returns on their investments.

And as part of the proposed “vertical” partnership between the federal and metro level, MPOs should also strive to build on the “horizontal” partnerships between related policy areas of housing, transportation, and environment. The metropolitan transportation plans already mandated by federal law should be explicitly coordinated with requirements for Consolidated Housing Plans, for example. Such a multi-dimensional approach would help spend scarce resources better.

But surely MAG’s creative thinking is a smart attempt to work out a new and cooperative way forward that would reward those metros that are already dedicating scarce local resources to national priorities while enticing more to do the same.

As we keep saying, while federal and state governments need to “lead where they must” with adequate investment and reform on critical priorities, metropolitan leaders should not wait for the federal and state governments to act—and they should be rewarded when they do.

So we say: Let the pilot experiments begin!