The new totally GOP-controlled Congress appears poised to continue the course for infrastructure policy set by the House during the last two sessions— in the politest terms that amounts to benign neglect. In fairness, most Democrats have been reluctant to raise the federal gas tax too or find other funding sources for the nation's rapidly deteriorating roads, bridges and tunnels, not to mention rusting water lines and overtaxed sewage treatment systems as well as crumbling dams. Forget about major infusions to provide for mass transit to relieve congested roads and for airports, which still operate using 1940s era radar technologies. Politicians of all stripes seem to really believe their palaver about how the U.S. is exceptional and the greatest country on earth… Well ladies and gentlemen not when it comes to infrastructure.

According to Ken Orski, who follows transportation policy in Innovation News Briefs, “A six-year (federal) surface transportation measure would require roughly $330 billion to maintain current (FY 2014) spending levels. But (Highway) Trust Fund revenue and interest (from the gas tax) over the same period are projected by the Congressional Budget Office to bring in only $230 billion—leaving a truly staggering funding gap of $100 billion.”

A country which once built the Erie Canal and the Interstate system to power economic growth, now takes a pass—the gas tax was last increased more than 20 years ago. Without finding more dollars, there is no chance to construct regional high speed rail lines and states are increasingly on their own when it comes to replacing bridges or building tunnels. Light rail, subway and bus rapid transit projects become heavily dependent on local budgets, which are already stretched.

There is also no chance of a second generation Clean Water Bill to help upgrade or build new sewage treatment plants. Municipalities and towns cannot count on much federal help either for upgrading their water mains, many of which were originally subsidized by large federal outlays.

This significant transfer of fiscal responsibility to the states and locals either means higher sales and property taxes as well as new tolls and hidden fees (which amount to higher taxes) or more delays in necessary improvements, because of taxpayer resistance or politician fear of voter retribution at the next election.

Some states necessarily rely more on private public partnership schemes—selling off franchises in various infrastructure systems and projects to attract investors and operators with the idea of private sector management making these systems more efficient and building new projects with fewer cost overruns. Instead of the state DOT, a private company manages a one-off toll road or bridge, and secures a major share of toll revenues or payments from bond issues. But private operators are in the game for profit and investors may rely on leverage or complex financial structures to fund their participation. What happens if they cut corners or toll revenues do not meet forecasts? Ask the State of Indiana—their once highly touted private operator for the east-west toll road connecting the Chicago suburbs to the Ohio state line, just filed for bankruptcy. (http://online.wsj.com/articles/indiana-toll-road-operator-files-for-bankruptcy-1411395866)

But the real problem with PPPs and the abrogation of greater federal involvement is in a failure to come up with integrated cross-state infrastructure plans that can benefit regions and tie together cities for national economic benefit. Piecemeal funding of local one-off projects can waste un-tolled dollars as states and localities compete against one another for precious funding instead of collaborating. PPP operators will lobby against competing road or transit systems that could reduce their volumes; while governors will concentrate funding to shore up their budgets rather than support plans with interstate impact.

In New Jersey, Gov. Chris Christie blocked plans with New York to collaborate in building a transit/rail tunnel into Manhattan to relieve pressure on congested bridge and tunnel crossings in order to redirect monies into shoring up in-state repair programs. That way he could delay raising his state's paltry gasoline tax and avoid taking heat from voters. Meanwhile, existing tunnels under the Hudson require multi-billion overhauling from Hurricane Sandy damage. But where's the money?

At some point, the nation's leaders will come to realize scrimping on infrastructure is a zero sum game. The Feds, the states, and all of us will need to spend more.

Instant Insights /

Infrastructure Spending Post Mid-terms: More of Less

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