By Dave Gatton and Adrienne Jones
June 29, 2009

The nation's top 85 metropolitan areas have been short-changed by state governments in the allocation of transportation funds as a part of the federal economic stimulus package, according to a report released by the U.S. Conference of Mayors on June 12 for their annual meeting in Providence (RI).

The report examines the distribution of infrastructure and surface transportation spending under American Recovery and Reinvestment Act of 2009 — $18.62 billion in surface transportation funds appropriated to the states under program categories by the Federal Highway Administration.

"Our cities and their metro areas are the drivers of our national economy," said Dallas Mayor Thomas Leppert. To optimize the national recovery, state and federal decision makers should increase funding to metro areas due to their high levels of economic output, traffic congestion, and volume of freight transport.

The report finds that states governments have certified surface transportation projects totaling $18.26 billion as of June 3, 2009. While the nation's largest 85 metro areas account for 73 percent of the nation's gross domestic product, they garnered only 48.3 percent, or $8.8 billion, of these funds. These same metros contain 63 percent of the nation's population. By these measures (share of economy and population), metros areas received significantly less funds than they deserve given their dominant role in the national economy and in their respective state economies.

The report also finds that state governments do not allocate funds effectively to reduce congestion costs in the economy. The largest 85 metro areas account for 86.6 percent of traffic congestion costs, but receive again only 48.3 percent of state-approved funding. This gap results in a $7.1 billion shortfall that could be used to fund metro projects that relieve traffic congestion and reduce costs to travelers and local economies.

In an article by the L.A. Times, Los Angeles Mayor Antonio Villaraigosa said, "The money should have been distributed more proportionately based on population and congestion."

In addition, underinvestment in metro transportation minimizes efficiency of freight transportation and increases per ton costs of metro area exports. Metropolitan areas almost exclusively handle goods in and out of the country; however, the current stimulus allocation invests an average of $1.15 cents per freight ton across the country, while the top 85 metros receive an average of just $0.75 per ton. The report finds that average transportation allocations for the top 85 metros equal $10.32 per thousand dollars of metro-based exports, while for the entire U.S. the allocation averages $26.56 per thousand dollars of exports.

The report projects 94 percent of the nation's future economic growth will come from these and other metro areas. To optimize the investment of transportation spending, funds should be directed towards these metro economies that serve as the workhorse for economic output.