U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
Status of the Nation's Highways, Bridges, and Transit:
2002 Conditions and Performance Report
|Chapter 9: Comparison of Spending and Investment Requirements|
Part I: Description of Current System
Part II: Investment Performance Analyses
Part III: Bridges
Part IV: Special Topics
Part V: Supplemental Analyses of System Components
The first part of this section compares recent trends in highway and bridge investments with the changes in conditions and operational performance described in Chapters 3 and 4. This includes an analysis of whether the gap identified in Chapter 8 between current funding and the Cost to Maintain Highways and Bridges is consistent with recent condition and operational performance trends.
The subsequent parts explore some of the impacts that future levels of investment would be expected to have on highway conditions and performance, highway user costs, and future travel growth (derived solely from the Highway Economic Requirements System [HERS]), and the bridge preservation backlog (derived from the National Bridge Investment Analysis System [NBIAS]). Impacts are presented for a variety of future investment levels, including the two key investment scenarios in Chapters 7 and 8 and other levels corresponding to certain condition and performance benchmarks. Total investment at the different levels was derived using the external adjustment procedures described in Chapter 7 for non-modeled capital expenditures. Bridge preservation investments from NBIAS were interpolated from the two NBIAS investment scenarios and current bridge preservation spending levels.
Linkage Between Recent Condition and Performance Trends and Recent Spending Trends
As discussed in Chapter 6, capital spending by all levels of government has increased from 1997 to 2000 by 33.7 percent, from $48.4 billion to $64.6 billion. This equates to a 19.9 percent increase in constant dollar terms, as spending grew much faster than the rate of inflation. Over the same period, the percentage of total capital outlay used for system preservation rose from 47.6 percent in 1997 to 52.0 percent in 2000. The combined result of this increase in total capital investment and the shift in the types of investments being made was a 45.7 percent increase in spending on system preservation, from $23.0 billion to $33.6 billion. As indicated in Chapter 6, the term system preservation is used in this report to describe capital improvement on existing roads and bridges intended to preserve the existing pavement and bridge infrastructure.
The percentage of capital outlay used for system expansion fell from 44.4 percent in 1997 to 40.2 percent in 2000. Spending for system expansion grew more slowly than that for system preservation over this period, rising 20.8 percent from $21.5 billion dollars in 1997 to $25.9 billion in 2000.
The improved highway and bridge conditions reported in Chapter 3 reflect the effects of the increased investment in system preservation noted above. The share of miles on the National Highway System with “acceptable” ride quality increased from 89.5 percent to 93.5 percent from 1997 to 2000. Acceptable miles on Interstate highways in urbanized areas rose from 90.0 percent to 93.0 percent, over this period. The percent of urbanized Interstates meeting the stricter criteria for “good” ride quality increased from 39.3 percent to 48.2 percent over this same period. While pavement conditions declined on some of the lower ordered functional systems, the percentage of road miles with good ride quality rose from 43.2 percent to 43.5 percent between 1997 and 2000. The percent of deficient bridges decreased from 1998 to 2000, falling from 29.6 percent to 28.6 percent.
While investment in system expansion has increased since 1997, it has declined as a share of total capital spending, as noted above. Based on the new performance measures adopted by the Federal Highway Administration (FHWA) and described in Chapter 4, congestion has continued to increase between 1997 and 2000. The Percent of Travel Under Congested Conditions increased from 31.7 percent to 33.1 percent from 1997 to 2000, while the Percent Additional Travel Time increased from 45.0 percent to 51.0 percent. The annual change in Percent Additional Travel Time has remained constant since 1997, increasing at approximately two percentage points per year. The yearly increase for Percent of Travel Under Congested Conditions has remained fairly constant at one-half percentage point per year.
The Average Annual Hours of Traveler Delay in urbanized areas increased from 28.1 hours to 31.2 hours between 1997 and 2000. However, the rate of change for Annual Hours of Traveler Delay has decreased. Prior to 1997, the increase in the Average Annual Hours of Traveler Delay was over 1 hour per year. This has reduced to a rate of approximately 0.6 hours per year between 1997 and 2000. This decline may be the result of increased investment in system expansion and traffic operational improvements, over this period. However, this level of investment has not stopped the overall growth in congestion.
Impact of Future Investment on Highway Conditions and Performance
The HERS model has recently been modified to provide output measures that are consistent with the condition and performance measures discussed in Chapters 3 and 4. As a result, the model can now forecast future values of these metrics under different funding scenarios.
Impact on Physical Conditions
Exhibit 9-1 shows how future measures of pavement conditions would vary at different investment levels. The second column shows the portion of the total investment at each level that is derived directly from HERS. The third column, Average IRI, is a measure of average pavement conditions (the International Roughness Index [IRI] is discussed in Chapter 3). The other two measures show the percentage of vehicle miles on pavement having an IRI value below 95 and an IRI value below 170. These two IRI values were defined in Chapter 3 as the thresholds for rating pavement ride quality as good and acceptable, respectively.
At the funding level estimated in Chapter 7 as the Cost to Improve Highways and Bridges ($106.9 billion annually), the average pavement quality would improve by 14 percent, while the percentage of miles traveled on pavement rated as adequate or better would rise from 85 percent to 94 percent. At the Cost to Maintain level, average IRI would increase by 7.8 percent, and the travel percentage on good pavement would decrease from 44 percent to 38 percent.
Exhibit 9-1 also shows projections of pavement quality at other funding levels, of which two deserve special attention. The HERS model predicts that an average annual overall funding level of $82.6 billion (which includes $52.9 billion in directly modeled expenditures) would be necessary to maintain average IRI. This was the indicator used to define the Maintain Physical Conditions benchmark in the 1999 C&P, which in turn was used to define the Cost to Maintain Highways and Bridges in that report. It shows the level of investment such that the average pavement condition at the end of the 20-year analysis period would match that observed in 2000. Under this investment strategy, existing and accruing system deficiencies would be selectively corrected; some highway sections would improve, some would deteriorate. Note that this scenario assumes that investment in system enhancements will continue to occur and that system expansion will continue where economically justified, so it does not represent the absolute minimum amount required to preserve the existing system. At this level of investment, the percentages of travel on good and/or adequate roads would increase slightly.
The Maintain Current Spending benchmark noted in Exhibit 9-1 relates directly to highway funding levels, rather than to measures of conditions and performance. At this point, highway spending would be held at 2000 funding levels (in constant dollars), increasing only with inflation. At this level of funding, average IRI would increase by 26 percent, while the percentage of travel on roads with good and adequate pavement would fall to 26 percent and 73 percent, respectively. Note, however, that these values from HERS assume the shift from preservation improvement spending toward capacity improvements that was discussed in Chapter 8.
Impact on Performance
Exhibit 9-2 shows how several indicators of highway operational performance would be affected at various levels of spending. The first of these is average speed of highway vehicles, a simple measure of average traffic flow, which also corresponds to one of the two transit performance measures used in TERM (See Chapter 7). The table indicates that an average annual investment of $73.8 billion would be sufficient to maintain average highway speeds at their 2000 level of 42.3 miles per hour. This dollar amount is slightly lower than the amount identified as the Cost to Maintain Highways and Bridges. At the Cost to Improve level of spending, average speeds would increase to 44.8 miles per hour, whereas they would drop by 2.0 miles per hour if highway expenditures were maintained at their 2000 levels.
The next two indicators show the estimated percentage of vehicle miles traveled (VMT) occurring on roads with peak volume-to-service flow (capacity) ratios above 0.80 and above 0.95. As indicated in Chapter 4, these levels are generally used to describe congested and severely congested operating conditions on highways, respectively. If 2000 highway funding levels were maintained through 2020, the percentage of VMT on congested and severely congested roads to 15.4 percent and 6.2 percent, respectively.
At the Cost to Maintain level of investment, the percentage of VMT on congested roads would also increase, to 26.2 percent. In order for capacity improvements to be “implemented” by HERS, the improvement must meet the minimum BCR test. As a result, there may be some road segments in a given time period that meet or exceed the threshold for being considered congested, but which do not merit capacity expansion in HERS.
Impact of Investment on Different Types of Highway User Costs
The HERS model defines benefits as reductions in highway user costs, agency costs, and societal costs. Highway user costs are composed of travel time costs, vehicle operating costs, and crash costs. The HERSderived portion of the Cost to Maintain Highways and Bridges scenario in Chapter 7 was based on a Maintain User Costs benchmark. The analysis presented there estimates that an average annual investment of $75.9 billion would be required to maintain highway user costs at their baseline 2000 levels.
Exhibit 9-4 describes how travel time costs, vehicle operating costs, and total user costs are influenced by the total amount invested in highways. The overall average crash costs calculated by HERS do not vary significantly at different investment levels.
While an average annual highway investment of $75.9 billion would maintain overall user costs, the effect on individual user cost components would vary. Travel time costs would fall by 1.0 percent, whereas average vehicle operating costs would rise by 1.8 percent. A slightly lower investment of between $70.6 and $73.8 billion would be sufficient to maintain travel time costs. Vehicle operating costs would be maintained or decreased only if average annual investment exceeded $90.6 billion for highways and bridges.
Estimates of total user costs vary at different levels of future investment, rising 3.9 percent at the current spending level and falling 3.6 percent at the maximum economic level of investment. Travel time costs show slightly greater variation, ranging from a 5.0 percent increase at current funding levels to a 6.3 percent decrease at the Cost to Improve level.
The percent change in user costs shown in Exhibit 9-4 is tempered by the operation of the elasticity features in HERS. The model assumes that if user costs are reduced on a section, additional travel will shift to that section. This additional traffic volume tends to offset some of the initial reduction in user costs. Conversely, if user costs increase on a highway segment, drivers will be diverted away to other routes, other modes, or will eliminate some trips entirely. When some vehicles abandon a given highway segment, the remaining drivers benefit in terms of reduced congestion delay, which offsets part of the initial increase in user costs. The impact of different investment levels on highway travel is discussed in the next section.
Impact of Investment Levels on Future Travel Growth
As discussed in Chapter 7, HERS predicts that the level of investment in highways will affect future VMT growth. The travel demand elasticity features in HERS assume that highway users will respond to increases in the cost of traveling a highway facility by shifting to other routes, switching to other modes of transportation, or forgoing some trips entirely. The model also assumes that reducing user costs (see above) on a facility will induce additional traffic on that route that would not otherwise have occurred. Future pavement and widening improvements would tend to reduce highway user costs, and induce additional travel. If a highway section is not improved, highway user costs on that section would tend to rise over time due to pavement deterioration and/or increased congestion, thereby suppressing some travel.
One implication of travel demand elasticity is that each different scenario and benchmark developed using HERS results in a different projection of future VMT. The higher the overall investment level, the higher the projected travel will be. Another implication is that any external projection of future VMT growth will only be valid for a single level of investment in HERS. Thus, the State-supplied 20-year growth forecasts in HPMS would only be valid under a specific set of conditions. HERS assumes the HPMS forecasts represent the level of travel that would occur if a constant level of service were maintained. As indicated in Chapter 7, this implies that travel will occur at this level only if pavement and capacity improvements made on the segment during the next 20 years are sufficient to maintain highway user costs at current levels.
The assumption that the HPMS travel forecasts implicitly represent a constant price is supported by recent research done on behalf of the FHWA, which created a year-by-year forecast for future VMT at the national level based on forecasts of demographic and economic variables. The forecasts made by this model, which does not incorporate any information on future levels of service, imply an average annual VMT growth rate which is very similar to the baseline growth rate implicit in the HPMS data.
Historic Travel Growth
Exhibit 9-5 shows annual VMT growth rates for the 20-year period from 1980 to 2000. The average annual VMT growth rate over this period was 2.99 percent. Travel growth has varied somewhat in individual years, ranging from 1.29 percent in 1991 to an increase of 5.45 percent in 1988. Highway travel growth is typically lower during periods of slow economic growth and/or higher fuel prices, and higher during periods of economic expansion. VMT growth was below average during the 1981-1982 and 1990-1991 recessions, while annual VMT growth was higher than 3 percent every year from 1983 through 1989. Exhibit 9-2 shows that travel grew more slowly during the economic expansion of the 1990s than in the 1980s, reflecting a long term trend toward lower VMT growth rates.
Projected Average Annual Travel Growth
Exhibit 9-6 shows how the effective VMT growth rates in HERS are influenced by the total amount invested in highways, and the location of highway improvements in urban and rural areas.
Based on the baseline future travel forecasts in HPMS, the weighted average annual growth rate for all sample sections is 2.08 percent. Projected growth in rural areas (2.26 percent average annual) is somewhat larger than in urban areas (1.96 percent).
If average annual highway and bridge capital outlay rose to $75.9 billion in constant 2000 dollars, HERS predicts that overall highway user costs would remain at 2000 levels. The Maintain User Costs scenario derived from HERS attempts to maintain the average user costs for the entire highway system, but user costs can vary on individual functional classes and on individual highway sections. In this particular analysis, however, the resulting average annual VMT growth rates in urban areas and in the Nation as a whole at this level of investment match those derived from the baseline HPMS data. Rural VMT growth rates would be just slightly higher than the baseline.
Implementing all of the cost-beneficial highway investments in the $106.9 billion Cost to Improve scenario would reduce user costs, resulting in higher travel growth rates than currently projected in HPMS, due to the travel demand elasticity features in HERS. Total VMT would grow at an average annual rate of 2.26 percent, while rural and urban VMT would grow at 2.37 and 2.19 percent, respectively. Note, however, that these elevated levels are well below the average annual growth rates experienced over the last 20 years.
In 2000, all levels of government spent $64.6 billion for highway capital outlay, corresponding to the Maintain Current Spending row in Exhibit 9-6. If average annual investment remains at this level in constant dollar terms over the next 20 years, HERS projects that the increase in user costs would limit average annual urban VMT growth to 1.72 percent and average annual rural VMT growth to 2.21 percent, both of which are below the baseline forecasts in HPMS.
As indicated in Chapter 8, average annual capital investment on highways and bridges by all levels of government from 2000-2003 is expected to grow to $67.9 billion in constant 2000 dollars. This amount is approximately equal to the $68.0 billion shown in the next-to last row in Exhibit 9-6. The table indicates that if this level of investment were sustained for 20 years, and used in the manner recommended by HERS, the model projects that urban VMT growth would rise at an average annual rate of approximately 1.79 percent, and overall VMT would grow at an average of 1.96 percent.
Overall Projected Travel, Year by Year
The future travel growth projections in HPMS indicate future levels of VMT, but don’t provide any information as to how travel will grow year by year within the 20-year forecast period. The 2.08 percent overall average annual projected travel growth derived from HPMS is below the 2000 growth rate of 2.19 percent and well below the 2.99 percent average annual VMT growth rate from 1980 to 2000. Rather than assuming that VMT growth will suddenly drop to 2.08 percent in 1998 and remain constant for the next 20 years, the HERS model assumes that VMT growth rates will gradually decline over the 2000 to 2020 period. As discussed in Chapter 7, the model accomplishes this by assuming that VMT growth will be linear, growing by a constant amount annually rather than at a constant rate. For example, if travel grows at an average annual rate of 2.08 percent, this would result in an increase in travel between 2000 and 2020 of 1.41 trillion vehicle miles. The baseline forecasts used in the HERS model would assume that VMT will increase by 1/20 of this amount, 70.3 billion vehicle miles, during each of the 20 years. As VMT grows each year, the fixed annual increase will represent a smaller percentage of the existing VMT base. This assumption is also consistent with the FHWA’s year-by-year national VMT forecasts referred to above.
Exhibit 9-7 shows projected year-by-year VMT derived from HERS for three different funding levels. If average annual investment were to reach the Cost to Improve Highways and Bridges level, VMT would be expected to grow to 4.32 trillion in 2020. If average annual investment remains at 2000 levels in constant dollar terms, VMT would grow to only 4.04 trillion, while VMT growth at the Cost to Maintain level of investment would reach 4.18 trillion. Note that projected travel growth for each of these funding levels is well below the historic growth rate over the last 20 years.
Annual VMT Growth Rates, 1980 to 2000
Source: Highway Economic Requirements System.
Impact of Investment on the Bridge Preservation Backlog
Chapter 7 notes that funding bridge investments at $9.4 billion annually over a 20-year period would eliminate the existing backlog and correct other deficiencies by 2020. This is the Eliminate Deficiencies Scenario. Chapter 7 notes that funding bridge investments at $7.3 billion annually would ensure that the existing bridge investment backlog does not increase above its current level. This is the Maintain Backlog scenario.
Exhibit 9-8 describes projected changes in the bridge backlog for different funding levels. The existing backlog is estimated at $54.7 billion. If investment over the 20-year period were limited to $4.0 billion per year, the backlog would rise to $130.2 billion. If bridge investment were maintained at the 2000 funding level in constant dollars ($7.6 billion), the bridge backlog would be projected to decrease by 13.7 percent, to $47.2 billion.