CEG Industry Blog

The Sorry State of Spending Money on More New Roads

Evidence mounts that highway spending decisions are predicated on wishful thinking.

📅   Mon April 06, 2015 - Edition
Giles Lambertson



Evidence mounts that highway spending decisions are predicated on wishful thinking. The federal government and states are going deeper in debt, further behind in their maintenance programs, and increasingly irrational in their search for solutions. This has consequences for the construction industry and everyone else.

An example is the proposed budget in Texas that would spend $600 million on new road construction each year—and $800 million a year repaying previously borrowed money for highway improvement. To make matters worse, an estimated $3 billion a year is the true figure needed for road maintenance, five times what is available.

“Yes, it’s a crisis,” says the chairman of the Texas House transportation committee. One can’t argue with that, except to add that it is a crisis of management. Someone has lost sight of the fundamentals of sound highways and sound financial decision-making.

Texas isn’t an outlier, of course. Two watchdog groups are dogging Washington for its highway decisions. The groups point out that, in the years 2009-11, states spent $20.4 billion annually to build new roadways and add lanes to existing roads. The total net gain was the addition of less than 1 percent of total lane miles.

During the same period, states spent $16 .5 billion a year repairing and preserving the other 99 percent of the highway network. In those two years, the percentage of highways in good condition dropped. The conclusion: Spending decisions that deferred new construction would dramatically upgrade the overall condition of our roads.

In 1943, management guru Abraham Maslow conceived of a 5-level pyramid in which human needs were ranked according to hierarchy of need. They ranged from fundamental (physiological, such as sleep and safety) to personally enhancing (aspirational, such as self-esteem and achievement). Were a hierarchy established for highway spending needs, it would start with functional (maintaining critical roadways) and move upward to wishful (building secondary routes and bike paths).

However, we don’t have Maslowian highway funding system. We have a Pavlovian one, in which lobbyists ring a bell and legislators start drooling about finding money to build more new roads. To quote the Texas legislator: Yes, it’s a crisis.