Funding America’s most critical transportation infrastructure projects will be difficult, if not impossible, because of a conundrum: Not enough money is available to pay for all projects in the next few years, yet no system exists to rank the projects.
Some decision-makers in and out of government are pushing reforms to resolve the funding dilemma, with the U.S. Chamber of Commerce taking the lead. In the absence of such reforms — or of a substantial shift in public spending priorities — federal and state appropriators will keep spending money on less critical projects that have the virtue of being affordable.
The pressure to fix the infrastructure is building year by year as half-century-old pieces of the transportation system — highways and ports, waterways and runways, rail systems and transit lines — show their age. Think of the interstate bridge in Minneapolis. (Constituting a whole other body of critical needs are non-transportation projects — dams and levees and power plants. Think of New Orleans.)
The scope of need has been cataloged repeatedly. A sampling of the transportation repairs facing the country includes these observations:
• The American Society of Civil Engineers gives a D grade to the nation’s infrastructure and estimates that $1.6 trillion is needed over the next five years to fix it. One trillion dollars has been set aside, tentatively, leaving $600 million to be secured.
• 150,000 bridges in the United States are labeled structurally deficient and functionally obsolete. Many of the structures have been labeled thus for decades.
• Half of the 250 locks on inland waterways in the United States operated by the U.S. Corps of Engineers have been declared functionally obsolete and deteriorating. Shipping is slowed as a result.
House Democratic and Republican leaders of transportation committees are conceding that a new approach to funding is required.
John W. Olver, chairman of the House Appropriations Subcommittee on Transportation, Housing and Urban Development, noted in April that the old way of doing things must change.
“How we fund and think about transportation is clearly at a crossroads,” the Massachusetts Democrat said in prepared remarks at a transportation hearing. “The needs of the system are rising … yet our ability to adequately fund transportation is in doubt.”
Rep. John L. Mica, the ranking Republican on the House Committee on Transportation and Infrastructure, in a speech last October assailed the piecemeal way money is scattered among constituencies. Said the Florida representative: “Consider a house that is decades old. The roof is collapsing, the plumbing is leaking, the heating system is failing, and the foundation is sinking. With these problems, would you conclude that it’s time to repair the driveway?”
The two obvious ways to fully fund critical infrastructure needs are to (A) raise sufficient revenue to fund projects simultaneously and completely or (B) rank projects and fund each project fully, starting with the highest ranked job, until the money runs out and the process can be repeated.
The first choice — simultaneous funding of projects — is preferred by federal lawmakers because it doesn’t require them to place one set of constituents ahead of another. Their choice is to raise the necessary revenue.
“When it comes down to specific projects, does a bridge in Seattle count more than an interchange in New Jersey? That we don’t get into,” said Jim Berard, communications director of the House Transportation and Infrastructure Committee. Rather, committee funding is disbursed among states using a complex formula of miles of highway, amount of revenue collected, vehicle-miles traveled and so on, letting states prioritize their share of the spending.
“We try to have a fair distribution of the funds. That is a fact of life,” Berard said during a call to his Capitol Hill office. However, he added, “what might happen in terms of priorities on our level would be to set categories of priorities. For instance, bridges would be designated more important than pavement, or subways more important than buses, or vice versa, with an extra amount of revenue given one category over another.”
Berard was asked if a priority-setting body along the lines of the Defense Department’s Base Realignment and Closure Commission (BRAC) has been considered on the Hill.
“That’s been suggested,” he said. “I don’t know where that idea is going.”
The most recent highway funding authorization bill, dubbed SAFETEA-LU, established a National Transportation Infrastructure Financing Commission. Its purpose is to analyze future highway and transit needs and the Highway Trust Fund and recommend alternative approaches to financing infrastructure. The commission was pointed toward strengthening the beleaguered Trust Fund, but it was given leeway to range further into the funding issue — including establishing a priorities-setting mechanism. The commission will report in 2009.
At the state level, disbursal of funds is similarly hampered by the reluctance of lawmakers to offend constituencies by declaring one project more important than another. To a significant extent, the political process determines distribution of money right on down the pipeline.
Nor do national transportation-related associations get into priority-setting. Their constituents are association members who agree on national issues but frequently differ with one another over local and regional priorities.
For that reason, for example, the American Association of State Highway and Transportation Officials declines to take sides on projects, according to Executive Director John Horsley.
“We work for all 50 states. We try to get increased amounts of money for all 50 states,” Horsley said. He added that the association is working with Congress to make the funding process work better, but AASHTO does not want Washington to end up with tighter control of federal dollars.
“We feel the people at the grassroots level know which projects are most vital.”
Horsley’s association has proposed a structure similar to Defense’s BRAC commission, or the U.S. Postal Service’s rate commission. His “transportation rate commission” would determine when federal revenues for transportation need to rise and by how much.
“Congress on its own really doesn’t have enough information to make those decisions and it is politically reluctant to do so,” Horsley explained. “But we do not believe a national commission like that should determine the highest priority projects. That should be determined by the states in consultation with each other and the federal government.”
The American Society of Civil Engineers periodically issues a report card in which it looks at infrastructure categories — bridges, waterways and so on — rather than individual projects and grades the overall condition of structures within a category. Its latest updated report gives America’s waterways a D minus, rail systems a C minus and transit lines a D plus.
“The biggest thing we have pushed for is a more comprehensive national plan,” said Joan Berman, the organization’s external media chief.
The hesitation to rank infrastructure projects stems from the subjective nature of such rankings. After pertinent data has been assembled to support the physical need for a project, its human factor — the political dimension, if you will — then is calculated: the number of people affected by a project, the number of times a project has been bumped from appropriations, the commercial impact of a piece of infrastructure.
In the end, after all the calculations are in, “need” often looks different to different observers. Consider Illinois’ transportation infrastructure needs.
Popular Mechanics published in May an article naming “The 10 Pieces of U.S. Infrastructure We Must Fix Now.” One of the projects is Chicago’s Circle Interchange, where three major expressways and a parkway funnel together 300,000 vehicles a day producing “an estimated 25 million hours of delays per year.”
Yet while that sounds like an unparalleled crunch and an absolute must-fix, Gov. Rod Blagojevich’s $10.9 billion multi-year highway improvement program unveiled in May does not single it out for fixing.
Nor did AASHTO’s John Horsley. Volunteering examples of local project priorities in Illinois, Horsley cited a $1.5 billion joint project by the city of Chicago, the state of Illinois and some railway companies to get railroad freight moving. His argument was that freight moves from the West Coast to Chicago in three days but then must spend three days getting through Chicago.
The bottom line: Three critical observers of Illinois’ infrastructure needs reached three different conclusions about project priorities.
In October of last year, Janet Kavinoky addressed the House Budget Committee on behalf of the U.S. Chamber of Commerce. Kavinoky is the chamber’s director of transportation infrastructure. She combined a call for an increase in the federal gasoline user fee with an unvarnished appeal for some priority-setting, as well as hand-slapping of officials who divert transportation funds to other uses.
Some of Kavinoky’s comments were startlingly direct.
“Decision-makers have refused to make tough choices or set common-sense priorities. We have failed to plan, failed to innovate, and failed to invest. We’ve allowed money to be wasted and have permitted federal and state lawmakers to divert infrastructure dollars to other purposes …
“We must put an end to the intramural squabbles that have divided stakeholders — mode versus mode, shipper versus carrier, urban versus rural, and region versus region.”
One of the Chamber’s goals “is to foster an honest national dialogue on how and where we are going to find the public money to meet critical infrastructure needs. There is no single answer to that question — and that’s good. It means we have options, but all the options must be on the table.
“First, we must do more to ensure that public dollars are spent wisely. That means ending waste and targeting the highest priority projects. It means a sensible mix of projects based on actual needs and not on politics or ideologies.”
Kavinoky told the congressional leaders that the chamber was prepared to cultivate a national dialogue on the issue, spending millions of dollars on a “Let’s Rebuild America” campaign. The campaign would combine grassroots organization, research and political advocacy, all in a bid to prepare the nation for future economic growth keyed to modernized infrastructure.
Called in May about her speech, Kavinoky sounded as committed as she did eight months earlier.
“The chamber has for a long time been supportive of investment in highways and transit,” she said, “but in the last couple of years we really have launched an effort to take the lead about infrastructure being the foundation of economic progress. If it is a departure for us, it is our willingness to say all the funding options need to be on the table.”
Though setting priorities is one piece of the solution, Kavinoky believes, developing a dependable and larger revenue stream is necessary, too.
“We do need more money, but I don’t think you can convince the American people to take more money out of their pockets unless they know it is being spent wisely and being prioritized.”
Added Kavinoky: “We still have an uphill battle to convince Congress that we can’t resolve America’s infrastructure problems without reforms.”
In June, the chamber and some other organizations are going to launch a Transportation Mobility Coalition to promote the need for both more revenue and reform of the process. The coalition will ask presidential candidates to articulate their transportation plans and then push the candidates to move beyond rhetoric.
“When the next president is elected, we will be following up in short order, talking to the transition team saying this is what we need,” Kavinoky said. “I think we’ll know next year if the next president is ready when he takes office and can articulate a plan to modernize and expand national infrastructure. Not since the Eisenhower era have the political parties had any recognizable platform on transportation.”
Kavinoky noted that Chamber President Thomas J. Donohue is a former American Trucking Association official and that she started her career at the U.S. Department of Transportation before moving to AASHTO. In noting that background, she suggested the chamber is committed to this national discussion.
“This time next year, if there is serious attention being paid to transportation, you will know that we have succeeded,” she said.
There will be plenty of transportation issues to talk about next year. Possibly coming to a head in Congress will be another highway reauthorization bill, a Federal Aviation Administration airport construction and runway bill, and a U.S. Army Corps of Engineers water resources act. With the national infrastructure commission report due and the chamber’s reform initiative added to the mix, 2009 could be a significant year in the nation’s transportation history.
Or it might just be another year.
Jim Berard, the House Transportation Committee communications director, noted that having a full plate of difficult issues is not always a good harbinger.
“As the decisions become harder to make, they become harder to make,” he said, in a realistic revisiting of the situation, “and that can simply slow down the process.” CEG
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