When I first moved back to Ohio in 2017, I got reacquainted with Ohio’s state government. As a high school student, I had an internship in a state senator’s office where I learned about constituent relations and how legislators interacted with the public. Now, with a public policy degree in hand, I took a hand at being a budget analyst for the legislature then working for a think tank.
I recall early on seeing the work that was done on the state’s transportation budget. Like many states, Ohio passes a transportation budget separate from its general spending budget. This is because transportation budgets usually come from a different source of funding than general revenues, which in large part are raised through sales and income taxes.
Transportation budgets are focused on long-scale projects: spending that is generally debt-financed. The state has this budget to build things like roads, bridges, and other infrastructure that helps the state economy function.
Transportation budgeting seems like the perfect place for expert input. Unlike social issues or political issues, transportation budgeting is squarely an economic issue. As a matter of fact, cost-benefit analysis was first deployed in the United States by the Army Corps of Engineers to evaluate dam projects during the Works Progress Administration. For nearly a century, policymakers have deployed cost-benefit analysis to aid decision making around infrastructure policy.
And this makes sense. Transportation budgets are ultimately provision of public goods. We don’t have to pay tolls on (most) roads in Ohio because they are built and maintained with public dollars. This allows us to operate them as public goods most of the time.
It also means that our transportation system can be made more efficient by prioritizing construction and maintenance of transportation projects based on economic efficiency. By evaluating the economic value of different transportation projects, we can maximize the use of public dollars, reduce costs of damage to vehicles, and even save lives by making our roads safer.
Unfortunately, cost-benefit analysis, or any analysis at all, has little place in the process for transportation budgeting in Ohio. While members of agencies get to make recommendations for transportation budgeting, no one is conducting cost-benefit analysis to estimate the economic benefit of different transportation projects.
Democracy takes compromises. Having politicians involved with transportation budgeting is an inevitability in a democracy: this is a chance for them to make a concrete (no pun intended) case for what they are doing for their constituents.
But shouldn’t these policymakers have some information about the economic benefit of one project over another?
Since 1990, the Virginia Department of Transportation has employed a “value engineering” framework for designing highway projects. This approach has analysts evaluate value, quality improvements, energy savings, and other benefits of a given project and improve the project while it is being designed.
I don’t know much about value engineering, but the benefit of any kind of process is that it opens policymakers and analysts up to alternatives. Cost-benefit analysis is valuable for federal regulatory decision making not only because it helps policymakers figure out dollar value for the project, but also because it helps policymakers think like economists. It helps policymakers conceptualize tradeoffs that will ultimately be borne by regular people in their everyday lives.\
Economics is where the rubber hits the road for policy. So it should be deployed whenever rubber will hit road.