Formula for Success?

Here’s an article from the Chicago Tribune in which Transportation Secretary Ray LaHood is quoted as saying “there is no favoritism” involved in the disbursement of the transportation stimulus funding to the states. The reason given was that the disbursements are “based on a long-standing formula for allocating highway funds to the states.”

Apparently, if there is a formula involved we are getting an outcome that is impartial, effective, and fair. After all, a formula involves fancy math, and anything involving fancy math must be true. Right?
In this case the answer is “yes” – but only to a degree. The use of formulas has taken some of the arbitrariness and the worst forms of politicking out of the transportation spending process. Moreover, the application of existing formulas was certainly the only politically feasible way to push such a large and complex spending program through Congress with the lightning speed that was required of a stimulus measure.
But on the other hand, the formula was not handed to us on stone tablets: humans, with all their imperfections, devised it. Using their system eliminates some forms of bias, but there is no reason bias can’t be built into the system itself.
Here’s one of the two formulas that determine the way most of the highway funds are being distributed:
* 25 percent based on total lane miles of federal-aid highways.
* 40 percent based on vehicle miles traveled on lanes of federal-aid highways.
* 35 percent based on estimated tax payments (e.g. from fuel taxes) attributable to highway users in the states into the Highway Account of the Highway Trust Fund (often referred to as “contributions” to the Highway Account).
* No state can receive less than one half of one percent of the spending.
No doubt this descent into the minutiae of transportation finance allocation has sent many of you scurrying off to read about Marijuana Pepsi, electric cars, or Mike Zarren‘s take on basketball statistics by now. But for those hearty souls who remain, can you spot the (at least) five ways that ineffectiveness, inefficiency, and (depending on one’s values) inequity are built into the process?
My answers next time. Yours?