Conditions and Performance Report

Conditions and Performance Report
Chapter 8—Comparison of Spending and Investment Requirements

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Introduction

Summary

Highway and Bridge Spending Versus Investment Requirements

Transit Capital Spending Versus Investment Requirements

Average Annual Investment Requirements Versus 1997 Spending

Exhibit 8-2 compares the average annual investment requirements to maintain highways and bridges with 1997 capital expenditures. Chapter 7 identifies the Cost to Maintain Highways and Bridges as the combination of the Highway Maintain Conditions scenario and the Bridge Maintain Backlog scenario. As indicated in Chapter 7, investment requirements for bridge expansion are included in the highway investment requirement scenarios. Therefore, the $1.0 billion expended for new bridges in 1997 is included as part of the $42.6 billion of "highway" expenditures, rather than as part of the $6.1 billion of "bridge" expenditures.

Exhibit 8-2. Average Annual Investment Required to Maintain Highways and Bridges Versus 1997 Capital Outlay

The average annual Cost to Maintain Highways and Bridges for the 1998-2017 period is $7.9 billion (16.3 percent) higher than 1997 capital expenditures. The gap is larger for highways ($8.2 billion), because 1997 bridge preservation expenditures were $0.3 billion higher than the average annual investment required under the Bridge Maintain Backlog scenario.

Exhibit 8-3 compares the average annual investment requirements to improve highways and bridges with 1997 capital expenditures. Chapter 7 identifies the Cost to Improve Highways and Bridges as the combination of the Highway Maximum Economic Investment scenario and the Bridge Eliminate Deficiencies scenario.

Exhibit 8-3. Average Annual Investment Required to Improve Highways and Bridges Versus 1997 Capital Outlay

The average annual Cost to Improve Highways and Bridges for the 1998-2017 period is $45.3 billion (92.9 percent) higher than 1997 capital expenditures. The relative difference is larger for highways (95.6 percent), and smaller for bridges (73.8 percent).


Q To what extent is the "gap" between current funding levels and the investment requirement scenarios the result of assumptions made about future VMT growth?
A The specific impacts that changing the VMT growth projections would have on the investment requirement projections is discussed in Chapter 10. In general terms, the projections in the HPMS database assume that VMT will grow more slowly in the future than in the past. The travel demand elasticity features in HERS serve to channel growth away from urbanized areas with rising highway user costs, diverting traffic to other areas or to other modes of transportation. (To some extent, the HERS elasticity features mimic the effect that transportation demand management programs would be expected to have on the level and location of future travel growth. Elasticity is discussed in more detail in Appendix G.) If VMT growth is higher than predicted in HPMS as modified by the HERS elasticity features, then the investment requirements would be higher, and the gap between current funding and the investment requirement scenarios would be larger. Conversely, the rate of VMT growth has declined in recent years. If VMT increases more slowly than expected due to demographic changes, or if TDM programs are more successful in affecting future travel growth than the travel demand elasticity values in HERS assume, then future highway investment requirements would be lower. In this case, the gap between current funding and the investment requirements would be smaller (and could close entirely). Note that HERS assumes the future VMT projections for individual highway segments in HPMS are accurate only at the level of investment required to maintain a constant level of service. At lower levels of investment, HERS assumes future VMT will be lower than the projections in the HPMS database.

Types of Improvements

Exhibit 8-4 compares the distribution of highway and bridge capital outlay by improvement type for the Cost to Improve Highways and Bridges and the Cost to Maintain Highways and Bridges with the actual pattern of capital expenditures in 1997. In 1997, 47.6 percent of highway capital outlays went for highway and bridge preservation. The investment requirement scenarios developed using the Highway Economic Requirements System (HERS), and the Bridge Needs and Investment Process (BNIP) suggest that a greater percentage of capital investment should be devoted to system preservation in the future. For the Cost to Maintain Highways and Bridges, 56.1 percent of the projected 20year investment requirements are for system preservation. If funding increases above this level, the models recommend increasing system expansion expenditures more quickly, so that for the Cost to Improve Highways and Bridges, 51.2 percent of the total investment requirements are for system preservation.

Exhibit 8-4. Highway and Bridge Investment Requirements and 1997 Capital Outlay, Percentage by Improvement Type

As discussed in Chapter 7, investment requirements for non-modeled items were determined by assuming that future increasing in this type of investment would be proportional to increases in total capital spending. For system enhancements, the percentage for the Cost to Improve Highways and Bridges and for the Cost to Maintain Highways and Bridges was set at 8.0 percent, to match the percentage of expenditures in 1997.

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Page last modified on November 7, 2014