This week is Infrastructure Week #InfrastructureMatters
ASCE Report Estimates Failure to Act on Infrastructure Costs Families $3,400 a Year
“For the price of a cup of Starbucks coffee, about three dollars per day per household, we can prevent the loss of jobs, lower incomes, and costs to businesses,” DiLoreto said. “The cost of investment offers a good return, as it protects the GDP, jobs, family’s disposable income, and our overall competitiveness.”
America’s infrastructure investment gap is hitting families where it hurts most – the wallet.
ASCE’s Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future 2016 report, released May 10, estimates that continued underinvestment in infrastructure will cost each U.S. family $3,400 a year over the next decade.
“Poor infrastructure means more congestion on our roadways, broken water lines and power outages, and an inability to get our goods to market,” said Greg DiLoreto, P.E., P.L.S., D.WRE, Pres.13.ASCE, chair of ASCE’s Committee for America’s Infrastructure.
“From lost time, to inconvenience, to spending money to fix our cars or a flooded basement, it’s a very real cost that we’re paying.”
The report is the latest in a series of Failure to Act studies, launched in 2011, that assesses how the nation’s failure to improve its infrastructure systems affects economic performance. Read on…
Download Complete Report
Economic Highlights from ASCE Report
- Increased costs of goods in stores will lead to a decline in retail demand, and further layoffs.
- The decline in personal income will also affect industries that attract households’ discretionary income, such as restaurants, entertainment and the purchase of high-end retail goods, as fewer purchases are made, and those that are made are for lower-value goods than would otherwise be bought.
- The spiral is that the domestic markets for electronics, medical devices and (perhaps) pharmaceuticals will decline, and with it the employment base of these industries.
- Travel time will increase due to poor roadway conditions, bridges that are not usable or are partially restricted, and transit services out of good repair.
- Repair and maintenance costs will also increase due to deteriorating roadway conditions.
- Higher costs (time and out-of-pocket costs) for shipping and receiving, drives up the cost of products.
- Increased travel time for service providers will lead to increased costs of services (and increased costs of products increases business supplies purchased by service providers).
- Products and services will be more expensive, reducing sales and rendering U.S. products less competitive with foreign imports (imports will also be more expensive due to U.S. transportation costs, but less expensive in the framework of overseas production).
- The higher costs are expected to reduce business demand, which in turn will lead to reductions in business income, profits and layoffs, and lower personal income for people who remain working.
- People will work more hours at lower pay
- Industries that will be most affected are those that produce and sell high-end goods (e.g., electronics and medical devices) to domestic customers, who increasingly will be unable to afford them, and in international markets due to a price disadvantage with foreign competitors
- Jobs in auto and truck repair sectors will significantly increase due to poorly maintained roadways and increased demand for repairs, but overall business income and wages will be suppressed
- With high-end industries not competitive to international competition, the U.S. economy will evolve away from sectors rooted in research and development and an expanding knowledge sector
Colorado Legislature Starts Strong… Fails in the End on Transportation
The Colorado legislature began the 2016 session in January amid strong bi-partisan statements that this was the year that Colorado was going to address it transportation funding needs. Yet the legislature waited until the last week of the session to attempt to support transportation funding. The situation is clear:
- Colorado’s population has grown by more than 2 million people since 1991, the last time Colorado’s gas tax was increased
- Colorado’s 5.4 million residents are now driving 50 billion miles per year in total on Colorado’s roads, bridges and highways
- According to an Inside Energy analysis, after adjusting for inflation, Colorado’s highway department is taking in 30 percent less money from gas taxes now than it did in 2000
- Colorado has dozens of critical transportation projects waiting for funding along the Front Range, Eastern Plains, Western Slope and San Luis Valley
- Colorado depends on a strong highway and transportation network to safely deliver goods to market and workers to their jobs and to attract economic investment
- A well-functioning, modern transportation network allows Colorado to maintain a regional, national and global competitive economic position
- Colorado’s transportation network provides important economic and access benefits to individuals, small and large businesses, schools, emergency and safety providers, and tourists and travelers—while improved reliability, quality and access benefits every region across Colorado, including urban, suburban, rural and mountain communities
Facing that set of facts, the Colorado House leadership introduced two bills which together would have produced $50 million for Colorado transportation needs in FY 2016-17 and perhaps additional funding in FY 2020-21. Even that funding was tied to a politically charged effort to reduce TABOR refunds. Transportation needs were a blip on the radar during the debate on this bill which was killed.
In the Senate, a bill co-sponsored by Sen. Randy Baumgartner, chair of the Senate Transportation Committee and Rep. Brian DelGrosso, the House Minority Leader, was far more significant. The bill would have committed 5% of the current state sales tax for the next twenty years with the bulk of that funding to be used as debt payment for $3.5 billion in bonds for significant transportation projects across the state, including two projects on the Ports-to-Plains corridors. Under the bill, the legislature would have referred the bonding to be considered by voters in the November 2016 General Election.
While encouraging the sponsors to look for a new revenue source and not opposing the bill, Ports-to-Plains Alliance testified about its concern that while the significant debt would be guaranteed by the state of Colorado, the sales tax revenues identified by the bill could be repealed at any time by future legislatures leaving the Colorado Department of Transportation (CDOT) responsible to pay that annual debt out of its existing fuel tax revenues. Historically that had happened when bonding was approved by Colorado’s voters in 1997 with a similar sales tax revenue approved by the legislature. In 2008 the recession began and in 2009 the legislature repealed the sales tax commitment and CDOT has paid the annual debt service ever since resulting in even less fuel taxes funding available to maintain existing transportation assets. Those 1997 bonds will be paid off this year with the opportunity to return those funds to CDOT’s use to maintain existing transportation assets. This bill passed the Senate.
Over the weekend, discussion continued about amending the bill to remove the sales tax from the bill and replace it with a new revenue. The Colorado Motor Carriers Association, a Ports-to-Plains Alliance member, provided the sponsors with polling and Legislative Council’s revenue estimates for a new revenue source. House Minority Leader DelGrosso introduced the amendment in the House State, Veterans and Military Affairs Committee. The amendment simply allowed the legislature to refer the new revenue source to the voters along with the bonding in November. Ports-to-Plains Alliance spoke in favor of the amendment. In the end the committee voted against the amendment and the original bill, killing any hope for a legislative solution to Colorado’s transportation needs.
The Ports-to-Plains Alliance was disappointed at the legislative outcome, but will continue to work with MoveColorado and Colorado Contractor Association to petition an initiative asking the voters to approve a new revenue source at the November election. Polling indicates that the citizens of Colorado recognize that the current situation with Colorado’s transportation system is bad for the economy and their personal lives. It is time for all parts, interests and parties of Colorado to come together for a solution. Will there ever be a perfect solution? Of course not, but doing nothing is not a solution. As Ports-to-Plains Alliance points out, states north and south of Colorado have acted… Wyoming, Nebraska, South Dakota, North Dakota and Texas have all acted to provide additional revenue to address transportation needs. Population growth plus more vehicle miles traveled increasing will simply result in more congestion and reduced quality for Colorado’s statewide transportation system.
How politics are getting in the way of better roads and bridges
Last year’s five-year surface transportation bill neither raised the gas tax nor came up with a sustainable funding solution. Instead, Congress financed the measure with a series of accounting gimmicks, such as shifting funds from the Federal Reserve.
It’s the problem that no one has been able to solve.
For years, there has been widespread agreement in Washington that the nation is facing an infrastructure crisis, with dangerously congested roads and deficient bridges threatening public safety and trade.
Time and time again, lawmakers in both parties have expressed agreement that something should be done.
Yet congressional attempts to revitalize the country’s transportation infrastructure — which now ranks 11th in the world after slipping from no. 1, according to the World Economic Forum — have gone nowhere.
Members of Congress, local legislators, former Cabinet members and experts alike say the impasse largely boils down to one thing.
“It’s politics,” said Rep. Peter A. DeFazio (D-Ore.), ranking member of the House Transportation and Infrastructure Committee. Read on…
Opinion: Sustaining our national transportation system
Frederick “Bud” Wright is executive director of the American Association of State Highway and Transportation Officials (AASHTO).
We call on the nation to use this major election year to help set the United States on a path to building a truly strong and sustainable transportation system, one that makes visible and steady progress to improving our mobility and quality of life.
This year, as candidates vie for political offices across the nation and voters consider policies they want those candidates to pursue, there is one fundamental policy we hope they will keep in mind – how to sustain our multilayered national transportation system.
There simply is no way to keep our economy healthy and build more economic muscle if we continue to let our highways and bridges, transit systems, barge routes, seaports and airports fall further behind population levels and strains on those systems.
These are aging networks that need significant updating just to deal with today’s unacceptable congestion levels. The recent midweek shutdown of the deteriorating D.C.-area Metro subway system was a stunning example of the kind of disruptions we can expect unless we face up to the investments we need to make. Read on...