Fiddling Away on Infrastructure

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 Welcome to budget week in DC and the President has proposed $476 billion over the next six years in spending on arguably desperately-needed transportation infrastructure projects----like mass transit, rail improvements, and repairs for ageing bridges and deteriorating interstates. Meanwhile, House Republican deficit hawks, most of whom from non-urban districts, want to cut into infrastructure spending and focus expenditures on roads, forget  about mass transit. We’re told by the political cognoscenti that neither proposal will go anywhere in the ongoing Washington gridlock promised through the November election. 

But really the tread-water approach to transportation infrastructure has been a feature of federal politics for more than two decades—even when fiscal times looked a lot better. Cowed by the idea of raising taxes, Congress has not hiked the federal gas tax in nearly 20 years, and the gas tax is the primary federal source for funding both roads and mass transit. While the gas tax hasn't increased fuel efficiency standards have—so that means the gas tax has suffered a double whammy, losing punch in funding to cover costs. And no wonder—as a result of this stewardship the Federal Highway Trust Fund, which doles out dollars to state and local governments for transportation infrastructure needs, has gone into the red. It’s not exactly a way to run a railroad or subway system is it?

At this point, state and local governments actually front the costs for 80% of transportation infrastructure spending, but the federal outlays can make or break major projects and be the difference between band aid patching of roadbeds at the end of their lifecycles or undertaking necessary repaving or rebuilding. So have you noticed higher tolls and more tolled roads, and have you noticed that 11 states recently have raised their own gas taxes? One way or another, the locals must find a way to keep us all moving. Or put another way, one way or another we all have to pay unless we want to deal with another form of gridlock. 

Have you also noticed that the President’s grand vision for a national network of high speed rail trains has evaporated like the mirage it was. When presented two years ago, the idea was to front $60 billion in costs over five years and then the project numbers came out. A single line between San Francisco and Los Angeles would cost $100 billion and probably take 15 years to build. A Northeast corridor line would cost $120 billion all by itself. Aside from Jerry Brown in California, most governors realized they needed to concentrate what funds they had on existing fix-it-first repairs and smaller scale projects like maybe a new light rail or bus rapid transit line. No sense making contributions to HSR under their dire budget circumstances.

Where the Feds and the President probably do not get enough credit is on stimulus for infrastructure. First off let’s remember that half the $750 billion in stimulus funding went to tax cuts and only about a quarter of it went into infrastructure. Yes, there were not enough “shovel ready projects” so we didn’t see new airports or suspension bridges suddenly constructed. But the funding helped repave a lot of damaged roads and employ tens of thousands of work crews and engineers—by some estimates the unemployment rate would still be in double digits without it. And many of our roads would just be older and more dilapidated.

But stimulus has a bad name and bridges haven’t been falling down like the wolf-criers were warning several years ago after the incident in Minneapolis.

Are we’re getting by not paying enough? I guess we can keep fooling ourselves until the wolf-criers turn out to be right.

(To search across all ALM blogs, go to www.Lexis.com.)