Third World Infrastructure?

In general, according to a Governing magazine columnist, America’s infrastructure is lacking in overall quality compared to some other developed countries. Budgeting is cited as one reason, with maintenance funds falling victim to budget shortfalls.

A German graduate student once told me he was amazed at the poor roads, sidewalks and other features in Cambridge, Mass., where we were both living and studying at the time.

“It looks like a third-world country here,” he said. “Apparently, no one cares.”

I don’t think that is the case, but I do think we have become accustomed to a lower-quality public environment, one that would not be tolerated in France, Germany or Japan. It was already ironic that Cambridge, a rich, liberal city that lavishes praises on the public sector, put up with it. Regardless, the chronic maintenance cutbacks in this country result in shoddy-looking and poor-performing infrastructure systems, more accidents and a negative impact on economic capacity.

One explanation may be our budgeting process. States and cities generally pay for maintenance from annual operating budgets. You can’t borrow money to repair a pothole. That leaves the pots of money set aside as tempting targets.

“Maintenance budgets are one of the first places mayors and governors look for money to fill budget shortfalls,” says William Reinhardt, editor of Public Works Financing. “That’s because the effects of underfunding maintenance are not immediately obvious.”

In contrast, states and cities borrow money to build new roads, bridges and train lines. It can be tempting to use the money that would have gone for maintenance to pay the interest costs on bonds sold to build new stuff. Political pressures come to bear as well. Developers and real estate interests often clamor for new highways and other infrastructure, and fund politicians who support them. While citizens whine about potholes, they rarely vote on that basis.

Whatever the reason, peculiar budgeting practices occur. A transit manager at a major American city told me a revealing story during a tour:

“See those lights,” said the official, pointing to some bulbs within some rusting metal frames hanging over the platform. “It would only cost about $1,000 a year to maintain those well. We can’t get that. So instead, we will wait until they rust out and fail completely. Then we will replace them, at a cost of perhaps $100,000.” This is poor governance and poor economics, to say the least.

Business Movement Grows to Support Transportation Infrastructure

The U.S. Chamber of Commerce sent a letter to Congress on January 23 encouraging it to support investment in the nation’s surface transportation infrastructure. The letter had around 1,000 signatories from the business community, as most feel enhanced transportation infrastructure (better bridges, public transportation, etc.) will make America a better place to do business. Congress has until March 31 to reauthorize the current funding law: 


As Congress embarks on a new legislative session, we, the undersigned companies and organizations, urge you to Make Transportation Job #1 in 2012 and pass federal highway, transit and safety legislation before the current law expires on March 31. The long-delayed reauthorization of federal highway and public transportation programs is a major piece of unfinished business that can provide a meaningful boost to the U.S. economy and its workers and already has broad-based support.

To grow, the United States must invest. There are few federal efforts that rival the potential of critical transportation infrastructure investments for sustaining and creating jobs and economic activity over the short term.

Maintaining at 2011 levels—and ideally increasing—federal funding for road, bridge, public transportation and safety investments can sustain and create jobs and economic activity in the short-term, and improve America’s export and travel infrastructure, offer new economic growth opportunities, and make the nation more competitive over the long-term. Program reform would make the dollars stretch even further: reducing the time it takes transportation projects to get from start to finish, encouraging public-private partnerships and use of private capital, increasing accountability for using federal funds to address the highest priority needs, and spurring innovation and technology deployment.

We recognize there are challenges in finding the resources necessary to adequately fund such a measure. However, with the economic opportunities that a well-crafted measure could afford and emerging political consensus for advancing such an effort, we believe it is time for all involved parties to come together and craft a final product.

In 2011, political leaders—Republican and Democrat, House, Senate and the Administration — stated a multi-year surface transportation bill is important for job creation and economic recovery. We urge you to follow words with action: Make Transportation Job #1 and move legislation immediately in the House and Senate to invest in the roads, bridges, transit systems that are the backbone of the U.S. economy, its businesses large and small, and communities of all sizes.


Kentuckiana Bridge Project Moving Forward

As southern Indiana continues to work toward enhancing its economy, one critical component is the Ohio River Bridges Project. The governors of Indiana and Kentucky announced Tuesday they are eager to continue the endeavor:

Governor Mitch Daniels, Kentucky Governor Steve Beshear and Louisville Mayor Jerry Abramson today convened the first meeting of the 14-member Indiana-Kentucky Bi-State Authority.

“It’s time to move, and in a way that creates a model on how two states can act together for the good of all,” said Daniels.

The Bi-State Authority was created to spearhead the project to construct two bridges over the Ohio River and to rebuild the Kennedy Interchange, where Interstates 64, 65 and 71 come together in downtown Louisville.

The authority’s mandate includes devising a financial plan for the project. The initial plan set the estimated cost at $4.1 billion. Indiana’s share is 30 percent.

“We’re taking a historic step today,” Gov. Beshear said. “The task before this authority is challenging but critically important. The work done here will benefit both of our states for generations to come.”

“It has taken many years, and lots of hard work, but we are now ready to move this important project forward,” Mayor Abramson said. “This authority will lay the groundwork for a vastly improved transportation system in Louisville and Southern Indiana.”

Beshear proposed the creation of special authorities to oversee development and financing of “mega” projects – those costing more than $500 million – between Kentucky and Indiana. The Kentucky General Assembly enacted the proposal in 2009. It created the statewide Kentucky Public Transportation Infrastructure Authority, which voted in October 2009 to recommend that Beshear, in cooperation with Daniels, create a bi-state authority for the Ohio River bridges project.