The never-ending political churn to legislate a long-term transportation bill, including a stable funding mechanism, has a new deadline of July 31. What will transpire is anyone’s guess, but the ARTBA has, perhaps inadvertently, introduced a new talking point—ROI.
“Return on Investment” is not a new concept, of course. But in discussion of multi-billion-dollar federal funding mechanisms, the need for effectual spending often is overtaken by the impulse to just throw a lot of money out there and call it good.
The American Road and Transportation Builders Association has distributed to lawmakers and others a publication titled, “Economy Driven: Innovations Driving the ROI in U.S. Transportation Infrastructure.” The purpose is to show how the industry is a good steward of tax dollars through innovations that make projects cost-effective. Numerous examples are given.
ARTBA’s implicit message is that the industry needs stable, adequate funding from Congress to continue to be efficient in constructing and repairing the nation’s roads, bridges, waterways, and railways. Efforts by contractors and transportation departments to stretch project dollars is stymied when allocation of federal funds is haphazard and uncertain. Taxpayers and everyone else lose.
ROI is a pretty foreign concept on Capitol Hill, so the message to lawmakers is a welcome one: Whatever long-term funding method you settle on, however much money you put in the pot, allocate it in a way that rewards efficiency and derives full value from each dollar spent. Give taxpayers a healthy return on their investment.
The latest non-governmental example of how this works comes from the oil and gas fracking industry. It is reported that the number of U.S. fracking rigs has shrunk, a development seen as ominous. But a piece in the Wall Street Journal shows that what really happened is that frackers became very efficient. Not only are profits possible from much lower-priced oil and gas, drillers now can set up and operate rigs as the market demands, like just-in-time manufacturers.
Progressive private industries calculate ROI. A progressive, long-term public transportation funding formula will do the same.
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