Repairing and upgrading our infrastructure will require money. A lot of money. Where do we find it?
The answer starts with Fred. (More)
Rebuilding America, Part III – Finding the Money (Non-Cynical Saturday)
This week Morning Feature looked at America’s crumbling infrastructure, with a focus on the five key solutions offered by the American Society of Civil Engineers. Thursday we considered federal leadership, and their proposals for federal, state, and regional infrastructure plans. Yesterday we looked at their heuristics for sound planning: sustainability, resilience, life-cycle costs, and ongoing maintenance. Today we confront the 800-pound gorilla of infrastructure: finding the money.
How much do we need?
The ASCE estimated the five-year cost to repair and upgrade our infrastructure at $2.2 trillion, about $440 billion per year. The easiest comparison item is defense, where President Obama requested $553 billion for the 2012 baseline budget and $118 billion for overseas operations. That totals $671 billion, about one-and-a-half times the ASCE’s infrastructure estimate.
While that’s an easy comparison, it’s also misleading. The defense budget comes entirely from federal funding. In contrast, infrastructure projects are divided among federal, state, and local budgets. According to Christopher Chantrill, who estimates government spending based on budgets and official reports, about 60% of government spending is federal. The rest spent by state and local governments. If we apply the same percentages to the ACSE’s estimate, our infrastructure needs about $264 billion per year in federal spending – less than half the 2012 baseline defense budget – and $176 billion per year in state and local spending.
Creative funding … or not?
That’s still a lot of money, especially in a sluggish economy. How do we find it? At a roundtable discussion last year, civil engineers and economists discussed the ACSE’s fifth key solution, increase and improve infrastructure investment:
All levels of government, owners, and users must renew their commitment to infrastructure investments in all categories. All available financing options must be explored and debated. The longer critical investments to improve the operability, safety, and resilience of the nation’s infrastructure are withheld, the greater the future cost and risk of failure.
The participants discussed several seemingly creative funding options, including a proposed National Infrastructure Bank. But economist James O’Keefe was not impressed:
An infrastructure bank really frustrates me, not because there’s anything specific about it I don’t like, but because I don’t understand its purpose. I think there are a lot of people who talk about it in a very supportive fashion, and everybody has a different vision in mind when they’re supporting it. From what I understand, Governor Rendell [of Pennsylvania] is really supportive of an infrastructure bank because he wants to address megaprojects. I think it’s trying to accomplish a lot of different things, and I’m not sure it’s necessarily the best way to do any of them.
Government affairs consultant Kathy Ruffalo agreed:
I don’t know what it is, either. There is some reason why different people have advocated it — each with different reasons—but I always struggle with what’s the problem that we’re trying to solve with an infrastructure bank that can’t be solved with some tweaks to a current program? If we’re going to do something like this, we should be trying to solve a problem that’s not already being solved somewhere else.
The buzz phrase “public-private partnerships” was bandied about to a similar conclusion. Finance expert Brian Chase said:
I would like to identify what I see as trends evolving out of public-private partnerships in the United States. The type of deals that are being done has evolved in the last eight years. We started off with asset modernization deals — the Chicago Skyway, the Indiana Toll Road. It’s basically like giving the current elected official an infrastructure credit card. They charge a lot of money against it and they leave it up to future generations to pay it off without any corresponding benefit. Then we moved into what is sort of called ad hoc projects, represented by some of the things Florida has been doing — the I-595 Port of Miami tunnel, for example. Now we’re moving into a more pragmatic view of public-private partnerships. We’re not saying they are good or bad ideologically but that they will be a tool that may be helpful in a particular situation.
Public-private partnerships usually work only if the project will generate revenue to provide a profit for the private investors. While some infrastructure projects can do that, many cannot. In the end, they agreed, most of the money will have to come from the most familiar – and most politically challenging – of sources: taxes and fees.
Change comes from …
How can government raise those taxes and fees, in an ideological climate of “no new taxes?” The participants generally agreed that elected officials respond to public pressure. According to Kathy Ruffalo:
There are plenty of examples of people being willing to tax themselves if they know what they’re buying and they know that the elected officials will be held accountable for that list. […] Part of what I think our problem is, is that all of us talk to ourselves and lament the situation and ask why it doesn’t get any better. It’s always the same kinds of groups that sit around and do this, and at some point we’ve got to bring this down to the American people’s level and get them to understand that we can improve the quality of their life and their commute if we get them this vision. But I’m afraid that this time around, the top-down [approach] isn’t going to work. It’s going to have to be the American people saying, ‘We want that new wastewater system; we’re tired of the system we have.’ The same on transportation. I think without that, we’ll be sitting here five years from now, six years from now, having this same conversation.
Jill Ingrassia of the AAA seemed to agree, but then:
Something that is critically important is, how do you educate the public about the importance of transportation and reinforce the important role it plays in their quality of life and the economy? I think the first step is getting some sort of clearer vision in Congress and articulating some type of national program that’s tied to national goals and national priorities that can be communicated to the public.
O’Keefe took it even higher:
In terms of leadership, I think that there are a number of people in Congress who are very active and very passionate. But I’d like to argue that where this really needs to come from is the White House. And I don’t think — for example, on the fuel tax end — I don’t think there’s going to be a fuel tax increase unless the White House is actively pushing it.
So change must start with “the American people.” Specifically, 536 American people in Washington, D.C. More specifically, one American person in the White House.
… the bottom up.
Kathy Ruffalo was right. If the infrastructure debate remains engineers, economists, and other experts telling each other why improvements won’t happen until the president and Congress sell it to the American people … we won’t see much progress. To make change happen, they need to stop talking to each other and start talking to Fred, our archetypal median voter.
Programs like the History Channel’s Inspector: America are a good start. Host Timothy Galarnyk has 30 years of experience in civil engineering and safety assessment. He’s an infrastructure wonk, but he doesn’t talk like one. Galarnyk shows you the problems: bridge supports so corroded he can peel off chunks of concrete with his hands, water main bursts that collapse sidewalks, clogged and collapsing drainage tunnels, emptying reservoirs, and neighborhoods destroyed by sinkholes.
But Galarnyk goes beyond doom and gloom. He also shows the working folks who try to solve those problems. He lets them talk about what they do, and lets you watch them do it. Many of them use new tools and ideas that save money, reduce pollution, and get the job done faster. And when a job can’t be done a newer-and-better way, when old-fashioned skill and sweat remain the only answer, Galarnyk explains why.
Galarnyk also talks with ordinary citizens, in barber shops and malls, on streets and front porches. He asks about their needs and their worries, their hopes and their complaints. And he listens.
We can have better infrastructure. We can afford it, if we make it a priority. But that won’t start with Congress or the president. It has to start with We the People. It has to start with Fred.