Assessing the need for highways

Behind all debates over the adequacy of highway revenues lies the tricky is sue of how much money states and the federal government ought to spend on h ighways. States and the federal government have historically tried to deter mine revenue needs with technical reports known as "needs assessments." The se studies usually conclude with a dollar figure that represents the revenu e required to bring all roads up to some set of maintenance and performance standards. Even though a great deal of careful technical analysis can go i nto needs analyses, most do not actually address the question of what total level of spending would be best. Needs assessments typically identify how much money would be required to meet certain standards or to build desired lists of projects, but generally do not address whether or not such standar ds or lists are optimal. Drawing on examples from California, this paper re views the evolution of both highway needs studies and fluctuations in highw ay funding over the past half century. We find, despite efforts to increase the rigor of highway needs analyses, needs studies are often simply "wish lists" of locally popular projects. In particular, cost-benefit analyses ha ve long been proposed to improve the quality and rigor of needs assessments , but have been very slow to be adopted. While a cost-benefit approach to a ssessing highway needs would inevitably create winners and losers relative to current, engineering and ad hoc-oriented methods of assessing needs, suc h analyses would provide invaluable information to decision-makers in deter mining how to spend Limited transportation resources most effectively and e fficiently.