Infrastructure: What's It Going to Take?
It seems like there's a lot of talk about the importance of infrastructure investment in Washington, but not a lot of action. The administration and key transportation leaders in Congress both say they want a highway bill before August, but the chances of meeting that goal shrink with each passing day that a bill isn't circulated. The natives (i.e., industry) are getting restless. Transportation for America put out a report last week titled "The Fix We're In For," saying 1 in 9 bridges and overpasses is in poor enough condition to be dangerous. AECOM Technology put out a white paper last week titled "U.S. Infrastructure: Ignore the Need or Retake the Lead?" arguing that highways, bridges, and public works require "urgent attention."
When lawmakers aren't fully engaged in staving off a government shutdown, the infrastructure conversation endlessly revolves around money. If you want investment, you have to come up with a way to pay for it, says Congress. Thus far, the Obama administration and congressional Republicans are dancing around the pay-for question, daring the other to come up with an answer first. (As in most negotiations, they know that the first one to offer a number loses the battle.)
Meanwhile, infrastructure continues to erode. What's it going to take to move beyond a simple pay-for question among lawmakers? Who needs to make the first move, Congress or the White House? Is it possible to have a conversation about the details of highway, rail, or transit plans when the top-level debate is dominated by spending concerns? What can industry groups do to convince policymakers that they need to do more than just talk?

April 8, 2011 11:09 AM
Moving Forward on Infrastructure
By Steve Van Beek
Chief of Policy and Strategy and Director, LeighFisher
My colleagues have posted a collection of serious and pointed thoughts. Kurt Nagle as well as the contributors to last week's post remind us that transportation infrastructure goes beyond the surface transportation bill and includes aviation, intercity railways, inland waterways, and ports.
As a nation we continue to neglect one of the principal foundations of our economy; a reality that is exacting needless costs on travelers and shippers each day. These costs are reflected in time lost, poorer air quality, additional GHG emissions, and energy insecurity. In their own ways, each of these costs endangers us as well as our children and grandchildren. The longer we neglect them, the greater the burden to fix these problems will be.
Meanwhile our economic competitors, some of which are experiencing sovereign debt concerns at least as serious as ours, are investing public dollars and incentivizing private capital in order to upgrade their infrastructures. The sad fact is that one only needs to ride on a German toll road, make a seamless connection at a European air...
My colleagues have posted a collection of serious and pointed thoughts. Kurt Nagle as well as the contributors to last week's post remind us that transportation infrastructure goes beyond the surface transportation bill and includes aviation, intercity railways, inland waterways, and ports.
As a nation we continue to neglect one of the principal foundations of our economy; a reality that is exacting needless costs on travelers and shippers each day. These costs are reflected in time lost, poorer air quality, additional GHG emissions, and energy insecurity. In their own ways, each of these costs endangers us as well as our children and grandchildren. The longer we neglect them, the greater the burden to fix these problems will be.
Meanwhile our economic competitors, some of which are experiencing sovereign debt concerns at least as serious as ours, are investing public dollars and incentivizing private capital in order to upgrade their infrastructures. The sad fact is that one only needs to ride on a German toll road, make a seamless connection at a European airport, or be carried from city center to city center on a Japanese high speed rail train to understand that the U.S. is increasingly deciding it desires a second-rate transportation system, one that delivers comparatively fewer benefits and erodes our current and future competitive position.
Assuming we want to reverse this reality, we should take at least five aggressive steps:
1. Raise user fees/fuel taxes to provide new revenues
2. Spend the trust fund money we collect on its intended purpose
3. Reform our transportation policies to simplify programs and better balance national, state and local priorities
4. Free up the states and localities on programs such as tolling and passenger facility charges
5. Encourage our state and local policymakers to exert leadership take up more of the burden.
While the first step looks challenging in the face of what seems to be insurmountable political opposition, I give the Chamber of Commerce and organized labor credit for trying to lead on the issue. In the long run, this type of leadership will make a difference. Eventually, policymakers will begin to be more discriminating about the origin and purpose of federal spending and will support those programs and policies that are potentially self-supporting through the use of user fees. In the “drive-by” politics of today, such discrimination seems a bit Pollyannaish, but eventually logic and national interest will again rule the day.
The good news is that steps four and five, and even to some degree steps two and three, do not require additional spending and provide policymakers with options if they choose to accept them. As Pat Jones suggests our strategy as transportation advocates should be (1) keep pressuring the national government to fulfill its constitutional responsibilities and (2) work with our states, local governments and private sector partners to get on with the task.
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April 7, 2011 7:24 PM
Don't Wait for a Miracle, Work for It
By Laura Barrett
What will it take to end the political volleyball and make a real reauthorization bill possible? It will take members of Congress opening their ears to the sorts of stories they heard when over 100 TEN community leaders from around the country hit Capitol Hill on Tuesday.
They heard from a TEN member in Oakland, CA, who wakes at 4 a.m. to walk her granddaughter to the bus stop in the dark for the start of 2-hour, 3-bus commute to a decent high school. They heard how hardworking people are being forced to turn down job offers because of a lack of reliable transit. They heard of the health crises that result when people are cut off from transportation access to health care and healthy food.
It will take them opening their ears to people like Federal Transit Administrator Peter Rogoff, who told attendees of TEN’s “One Nation, Indivisible” conference on Monday:
For some people, a re...
What will it take to end the political volleyball and make a real reauthorization bill possible? It will take members of Congress opening their ears to the sorts of stories they heard when over 100 TEN community leaders from around the country hit Capitol Hill on Tuesday.
They heard from a TEN member in Oakland, CA, who wakes at 4 a.m. to walk her granddaughter to the bus stop in the dark for the start of 2-hour, 3-bus commute to a decent high school. They heard how hardworking people are being forced to turn down job offers because of a lack of reliable transit. They heard of the health crises that result when people are cut off from transportation access to health care and healthy food.
It will take them opening their ears to people like Federal Transit Administrator Peter Rogoff, who told attendees of TEN’s “One Nation, Indivisible” conference on Monday:
For some people, a reliable transit system is the difference between seeing their kids at night or not. It’s the difference between having dinner as a family or not. The difference between being able to supervise homework or not. These are the passengers that have no choice of whether to endure whatever service we serve up—clean or dirty, convenient or inconvenient, reliable or unreliable.
It will take them realizing that infrastructure investment may be the greatest source of political accord in the nation at the moment—one with the power to unite Sen. Barbara Boxer, Rep. John Mica, U.S Chamber of Commerce President Tom Donohue, and AFL-CIO President Richard Trumka.
It will take them looking further than the next fundraiser on their schedule and understanding that an entire generation of economic prosperity is at stake. As USDOT Deputy Secretary John Porcari said at TEN’s conference this week:
We face a choice going forward. There’s a kind of false dichotomy, a false choice that we’re being presented between policies on the left or policies on the right. It’s not left or right, it’s forward or backward. It’s a choice between investing in the future, leaving a better future for the next generation just like parents and grandparents did for us, or ignoring these hard choices and sentencing the next generation to a lower standard of living, to fewer opportunities, and a future that we could do better by. We’re here with your help to do big things.
You can say all this means that it will take a miracle. But those of us who are steeped in centuries of grassroots struggles to realize the promise of democracy—the dream of America as “one nation, indivisible”—aren’t used to waiting for miracles. We’re used to working for them.
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April 6, 2011 2:29 PM
Ports and Waterways Are Critical
By Kurt J. Nagle
President and CEO, American Association of Port Authorities (AAPA)
There has been much discussion of late, without a consensus, about reauthorizing America’s surface transportation legislation. Determining how much and where the money will come from continues to dog the debate.
While determining the appropriate sources to maintain and improve the nation’s surface transportation system remains unsettled, the Harbor Maintenance Tax (HMT) ought to be the ideal solution to ensuring that our deep-draft navigation channels are dredged to their authorized depths and widths. The 0.125 percent tax, which is levied on the value of imports and domestic cargo moved between U.S. ports, raises about $1.5 billion annually, while the yearly cost to maintain America’s deep-draft channels is between $1.3 billion and $1.6 billion, depending on which channels are in cycle to be dredged according to the U.S. Army Corps of Engineers.
From a practical standpoint, the tax collections are just about perfectly aligned with the amount that is needed each year to ensure the nation’s harbors and channels are properly d...
There has been much discussion of late, without a consensus, about reauthorizing America’s surface transportation legislation. Determining how much and where the money will come from continues to dog the debate.
While determining the appropriate sources to maintain and improve the nation’s surface transportation system remains unsettled, the Harbor Maintenance Tax (HMT) ought to be the ideal solution to ensuring that our deep-draft navigation channels are dredged to their authorized depths and widths. The 0.125 percent tax, which is levied on the value of imports and domestic cargo moved between U.S. ports, raises about $1.5 billion annually, while the yearly cost to maintain America’s deep-draft channels is between $1.3 billion and $1.6 billion, depending on which channels are in cycle to be dredged according to the U.S. Army Corps of Engineers.
From a practical standpoint, the tax collections are just about perfectly aligned with the amount that is needed each year to ensure the nation’s harbors and channels are properly dredged of sediment. However, the President’s budget requests and Congressional appropriations have only been allotting about half of the amount collected from the tax for maintenance dredging, leaving many waterways that are critical to sustaining America’s economy to fall into disrepair.
Inadequately maintained shipping channels impede America’s effort to recover from the global economic downturn, resulting in navigational safety concerns, an economic disadvantage for the nation’s businesses and consumers, and job losses.
More than a quarter of the U.S. GDP is accounted for by international trade. From a jobs standpoint, America’s seaports support the employment of 13.3 million U.S. workers, and seaport-related jobs account for $649 billion in annual personal income. For every $1 billion in exports shipped though seaports, 15,000 U.S. jobs are created. Yet, for every inch of draft that a typical ship loses when navigation channels aren’t maintained, it must leave behind hundreds of thousands or even millions of dollars worth of cargo, increasing the cost of our exports to overseas buyers and the cost of our imports to American consumers.
Fighting to protect American jobs and ports while restoring public trust in the tax code – Congressman Jeff Landry (R, LA-03) this past week led a bi-partisan coalition of 34 House members (26 Republicans and eight Democrats) in sending a letter to the Budget Committee requesting the Harbor Maintenance Trust Fund (HMTF) be lawfully utilized only for its intended purpose.
Cong. Landry, whose district has the most domestic maritime industry jobs in the nation and transports much of the nation’s energy-based resources and agricultural exports, said properly utilizing the HTMF is critical in creating jobs and protecting America’s commercial waterways. “Most ports and harbors require annual maintenance dredging to combat sediment, which naturally accumulates in most waterways. If left unchecked – this sediment increases shipping costs, lessens our ability to export products, and prevents employers from creating new U.S. jobs.”
In 1986, Congress established the HMTF to fund up to 100 percent of dredging costs at domestic ports and waterways. However, recent administrations have ignored the law –spending as much as half of what was collected on programs that have nothing to do with maintenance dredging.
Cong. Landry’s letter, which notes “it is fundamentally wrong for the government to impose a tax for one purpose, only to utilize the proceeds from this tax to fund an entirely different program,” urges the Budget Committee to apportion all proceeds of the HMTF to sustain and dredge America’s harbors.
We couldn’t agree more. When you have a tax that collects the amount necessary for a particular purpose, then use it for that purpose until the need is met, not on other programs. While this may be common sense, the unfortunate state of America’s budgetary crisis seems to have turned common sense on its head.
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April 5, 2011 1:33 PM
It’s Going to Take Political Will
By Bill Lind
Director, American Conservative Center for Public Transportation
Conservatives understand that the country is broke at the national, state and local levels. We understand the need to bring spending under control, especially at the national level. That said, conservatives also understand that maintaining the nation’s infrastructure in an acceptable state of repair is absolutely essential to the country’s economic health and vitality. Thoughtful, fact-filled reports tell us the nation’s infrastructure is old, crumbling, dangerous. Besides the Transportation for America report on the increasingly perilous state of our nation’s bridges and overpasses, a recent report from the Federal Transit Administration placed a price tag of $77 billion just to bring the nation’s existing transit infrastructure to an acceptable state of repair. It’s not that we don’t know what’s happening or what’s required. The evidence is clear and compelling and we ignore these palpable warning signs at our peril. And ignoring them we are. It is becoming more and more likely that Congress will only be capable of passin...
Conservatives understand that the country is broke at the national, state and local levels. We understand the need to bring spending under control, especially at the national level. That said, conservatives also understand that maintaining the nation’s infrastructure in an acceptable state of repair is absolutely essential to the country’s economic health and vitality. Thoughtful, fact-filled reports tell us the nation’s infrastructure is old, crumbling, dangerous. Besides the Transportation for America report on the increasingly perilous state of our nation’s bridges and overpasses, a recent report from the Federal Transit Administration placed a price tag of $77 billion just to bring the nation’s existing transit infrastructure to an acceptable state of repair. It’s not that we don’t know what’s happening or what’s required. The evidence is clear and compelling and we ignore these palpable warning signs at our peril. And ignoring them we are. It is becoming more and more likely that Congress will only be capable of passing a two-year extension for federal transportation programs aligned with revenues projected from the national gas tax and associated levies. This will result in a significant real reduction in available federal transportation dollars. Unfortunately, these programs were conceived when highways were in overwhelming ascendancy and gas was cheap. There have been some modifications along the way but essentially the priorities adopted in the 1960’s will continue to guide our (increasingly bumpy) passage through the early 21st Century.
Other countries around the world are spending billions to insure that their economies are undergirded by first-rate infrastructure. Take Great Britain, a country burdened by long term deficit spending and crushing debt. The Brits have attacked their nation’s budget deficit in a painful, teeth-grinding exercise that has and will bring great pain to large segments of population. However, the Cameron administration is maintaining spending on the nation’s infrastructure. We can do the same thing, if we can just summon the political will.
However, reality based thinking is in short supply at both ends of Pennsylvania Avenue. The Obama Administration has sent a new transportation authorization bill to the Hill that calls for new revenues but does not identify their sources. Congress cannot pass a 2011 budget, settling for short term extensions that will, yes, eventually reach the end of the fiscal year.
As conservatives, we don’t like to see taxes raised. However, neither do we want to see this country sink to Third World status on our watch. Gas prices have risen over 50¢ since the latest Middle East crisis began and the economy is still standing. Had we raised the gas tax by a similar amount earlier, this increase would have stayed in this country to benefit this country’s infrastructure.
A tax on VMT is not technologically ready so an increase in the gas tax is part of the answer (either by converting to a percentage of the price of oil, increasing the tax by a set amount each year – as we’ve advocated, or simply raising the amount of the tax). Public Private Partnerships haven’t been fully explored. The infrastructure bank approach also has potential to provide a secure borrowing source for those local and state governments that have a stable source of revenue for debt service. A panoply of options will be needed to resource the next transportation authorization bill.
Maybe we should think of that old advertising slogan, “Pay me now or pay me [more] later.” We would save a bundle by attacking the problem today.
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April 4, 2011 10:58 AM
Congress Back Off; States Step Up
By Patrick D. Jones
Executive Director & CEO, International Bridge, Tunnel and Turnpike Association
Fawn, you’ve done it again. You’ve posed a series of questions that are impossible to answer and nearly as hard to resist. But not too hard. “What’s it going to take to move beyond a simple pay-for question among lawmakers?” A miracle, a disaster, or both.
You say the chances of passing a highway bill before August shrink every day. I agree. I don’t think it will happen at all. Congress and the administration are absorbed by so many other issues that – like it or not in the “industry” – they won’t have the bandwidth to focus on a highway bill. The New York Times reported on Sunday that the battle in Congress to cut current year spending will be overtaken by an even bigger battle to impose huge budget cuts in fiscal 2012. Combine that fight with entitlement reform, our overseas wars, crises in the Middle East, escalating fuel costs, and the onset of the presidential campaign – and the highway bill w...
Fawn, you’ve done it again. You’ve posed a series of questions that are impossible to answer and nearly as hard to resist. But not too hard. “What’s it going to take to move beyond a simple pay-for question among lawmakers?” A miracle, a disaster, or both.
You say the chances of passing a highway bill before August shrink every day. I agree. I don’t think it will happen at all. Congress and the administration are absorbed by so many other issues that – like it or not in the “industry” – they won’t have the bandwidth to focus on a highway bill. The New York Times reported on Sunday that the battle in Congress to cut current year spending will be overtaken by an even bigger battle to impose huge budget cuts in fiscal 2012. Combine that fight with entitlement reform, our overseas wars, crises in the Middle East, escalating fuel costs, and the onset of the presidential campaign – and the highway bill will recede deeper and deeper into the dark forest.
Who can pick up the slack? States and localities. The “federal program” – the process of collecting $30 billion a year in federal fuel taxes and divvying it up among the 50 states – is praised by some, reviled by others, and inadequate to all. The federal program that paid states 90 percent of the cost to build the interstate highway system in the 1950s, 60s, and 70s has become little more than a maintenance drip of morphine in the federal palliative care we are giving states to keep their highway programs alive.
Meanwhile, IBTTA President Frank McCartney testified before Congress last week that the 60-plus toll agencies in the U.S. collect about $10 billion in tolls annually, which is equal to about one-third of annual federal gas tax revenues. These agencies operate about 5,200 miles of highways, bridges and tunnels and most receive NO federal or state funds.
That is reason enough to consider tolling and road pricing as alternative funding solutions. And, it highlights several of the recommendations we made to Congress to improve and reform the nation’s surface transportation programs:
First, we have to remove the barriers to tolling and pricing of interstate highways. Giving states the flexibility to consider tolling – and I stress “flexibility” – is even more critical now when federal and state revenues are constrained, funding needs are huge, and most public officials will not consider raising the gas tax.
Many lawmakers have said they support tolling for new capacity but not for existing capacity. The fact is, reconstructing the interstate highway system will cost far more than what it cost to build it in the first place. Removing barriers to tolling would encourage states to begin the massive effort of reinvesting in our system. That investment, in turn, would create jobs and improve the economy.
Second, we need to give states, localities and agencies maximum flexibility to choose from the financing tools that best align with local needs, including the use of public-private partnerships and long-term concession agreements.
Third, we need to begin the transition to mileage-based user fees. As we come to rely more and more on renewable energy and less and less on petroleum-based fuels, we must develop a transportation funding mechanism that matches our usage patterns. Many of the other organizations that testified before the Highways and Transit Subcommittee of the House Transportation and Infrastructure Committee also urged Congress to stimulate the transition to mileage based user fees.
None of these recommendations would require Congress to raise taxes, increase the deficit, or increase the debt. However, these recommendations do ask Congress to do one thing that seems very hard for Congress to do: get out of the way of states by giving up some control over how states manage their own affairs.
It can happen. The U.S. Congress is composed of men and woman of incredible courage and patriotism. Getting out of the way of states’ efforts to improve the nation’s infrastructure by giving them more control over their own money and affairs could be the most courageous thing Congress can do.
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April 4, 2011 9:55 AM
Unblock infrastructure investment!
By Gabriel Roth
Research Fellow, The Independent Institute
The best thing that "industry groups [could] do to convince policy makers that they need to do more than just talk" would be to lobby the federal congress to withdraw from infrastructure funding. Why should Congress determine spending on, say, roads, when it is not even prepared to impose the charges needed to finance the investments that proponents claim are necessary?
If, after an appropriate interim period, road funding were "turned back" to the states, the federal Highway Trust Fund would be wound up and so would the fuel taxes dedicated to it. It would then be up to the states to raise revenues to meet the demands of their voters. Some states would invite the private sector to provide infrastructure funding, which it successfully did before the 20th century, under conditions much more difficult than those prevailing today.
Members of congress have neither the money, nor the time, to invest in transport infrastructure. Is this not the moment to give funding responsibility to entities able to provide transport users at least the facilities they are prepared to pay for?