President Donald Trump has declared this week to be “infrastructure week” – with announcements each day highlighting some of the issues and investments he emphasized during the campaign.
While almost everyone agrees that we need to make significant improvements in our infrastructure, exactly how to do that is an area of significant dispute. Questions of priorities, sequencing and mechanisms for funding need to be resolved and agreed to by Congress and other interested parties, from states and cities to private investors. Reaching agreement will take the kind of leadership and dealmaking the president prides himself on. But it will also take painstaking attention to detail, compromise and careful weighing of the trade-offs involved in setting priorities.
So as the administration moves through infrastructure week, I want to offer some principles that can apply to all the efforts to improve and expand our various infrastructure – everything from roads and bridges to drinking water systems and electric grids. At Taxpayers for Common Sense, we’ve worked on various infrastructure issues long enough to know that the devil is in the details. But the principles for moving forward in a way that serves the national interest are the same.
The first principle is perhaps the most obvious. Voters, states and anyone else involved need to know how any new investments will be paid for. One efficient and historic principle we have championed is “user pays.” But the sad fiscal reality is that our tolerance for revenue generation in the form of taxes and fees is much smaller than our appetite for new infrastructure across-the-board. The shortfalls and budget gimmicks used to pay for surface transportation are perhaps the most famous: The last time the gas tax was raised was 1993; the highway trust fund has been backfilled with $140 billion in general revenue since 2008. Time and again, Congress wants to spend more money than it is willing to raise. Any new effort to increase spending must be based on realistic cost and funding estimates and be something that materializes when the rubber meets the road.
Because we are in a tight budgetary environment and traditional ways of funding infrastructure are broken, another principle we need is innovation and outside-the-box thinking to guide our investments in the future. On Monday, Trump announced his support for spinning off the country’s air traffic control system to a nonprofit corporation. This is not a new idea and is based on the successful Canadian model. Even with support of the House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) and the Air Traffic Controllers Association, it remains to be seen whether it can actually get done. Any transfer of federal assets needs to be closely watched to make sure that taxpayers are protected, but turning aside entrenched special interests in order to produce a more efficient system is exactly the kind of bold thinking and change we need.
We also need innovation in funding, but real innovation – not just more budget gimmicks. A rumored provision in the upcoming proposal is a reprogramming of $200 billion to leverage $800 billion in nonfederal funds. Note that it is nonfederal funds, not necessarily private funding – it could come from states, cities, counties, agricultural drainage districts or other public entities. We don’t have a problem with that and have consistently argued for greater state, local or other nonfederal cost-sharing where the project benefits are more local than national. It serves the principle of ensuring that project beneficiaries have skin-in-the-game, because people always act differently when it’s their own money at stake.
Speaking of national interest, what we can use most are explicit project prioritization systems for every type of infrastructure. What are the factors being put into place to ensure projects best serving the national interest are being funded? For example, there’s a race to the bottom along the East and Gulf Coast ports as each port tries to go deeper to attract larger cargo ships. But there are only so many ships coming to port. The country doesn’t need to subsidize all this development and over-capacity, and yet we are. Also, we know that it is a better investment to repair surface transportation over new lane mile construction, but many states sacrifice maintenance for new construction.
In general we need to incorporate a fix-it-first mentality where we get the most out of our investments instead of constantly moving to new projects. For a lot of our infrastructure we’ve already built out most of it. There are only so many spots on rivers that are economical to dam for hydropower. Hundreds of thousands of roads and bridges are already constructed – and in great near of repair. Yet have you ever seen a ribbon cutting ceremony for a maintenance project?
We also anticipate the president will spend lots of time talking about speeding up the process, rolling back regulations and streamlining the permitting and contracting projects. Once again, the devil is in the details. The current system is not perfect and there is certainly room for improvement. But it helps to remember that some of these safeguards are there to protect taxpayers by stopping wasteful projects and making sure that corruption and cronyism isn’t what gets the contract awarded. So any regulatory reform needs to produce a project planning and implementation process that keeps taxpayer protections – by all means, get good projects going quickly, but let’s not let expedience get in the way of excellence.
Finally we need to avoid federal taxpayers getting the short end of the stick. From what we’ve heard, the administration’s proposals will be taking life-cycle costs into account. If that’s the case, we certainly applaud it. Too often projects look cheaper at the outset and end up being long-term liabilities for taxpayers. Roads, dams, airports, bridges, locks and levees aren’t forever. What is the plan at the end of a project’s useful life? What are the costs of removal or replacement? Those all need to be factored into the decision-making process. It’s analogous to buying a car. In reality, that’s the cheapest part of owning a car – it’s the maintenance, gas, storage and disposal that hold the bigger costs.
Wednesday, the president goes to Cincinnati to talk about his infrastructure plans. Like you, we’ll be watching and waiting to see what he proposes this week on the banks of the Ohio River. Then we’ll turn to Congress and work to ensure that it is fiscally responsible and realistic. It is more than a little ironic that the announcement comes at the site of the inland waterway system, which receives a 90 percent federal subsidy to operate. So a good start to the president’s push would be a call to have the barge operators who use the system pony up a larger share of the cost.
Across the political spectrum, there is wide agreement the country needs a strong strategy and vision for infrastructure, investments commensurate with the need and accountability standards that make sure the public isn’t taken for a fiscal ride. Let’s hope the president and Congress can come together to work across party and regional divides to achieve that.