Progressive States Network, May 10, 2007


[Rachel's introduction: "There is simply no way around it -- the current level of infrastructure investment cannot sustain current economic activity." Privatization has siphoned resources away from nuts and bolts projects needed to keep the economy going, such as the Chicago transit system.]

By J. Mijin Cha

A major new report released this week by the Urban Land Institute and Ernst & Young revealed shocking statistics on the state of transit infrastructure in the U.S., including:

* 83 percent of the nation's transportation infrasturcture is not capable of meeting the nation's needs over the next 10 years.

* 97 percent of roads, bridges and tunnels, and 88 percent of transit/rail systems will require at least moderate improvement.

* Chicago alone needs $6 billion to bring its subways into good repair. Rehabilitation of the Tappan Zee Bridge north of New York City will cost as much as $14.5 billion.

* There is a $1.6 trillion deficit in needed infrastructure spending through 2010 for repairs and maintanence.

A Threat to Economic Growth

Beyond the inconvenience of longer commute times due to poor upkeep of roads and transit systems, these numbers signal real economic trouble. The loss in time and productivity will slow economic growth, drive job losses, and result in the U.S. becoming less economically competitive globally.

Around the world, our economic competitors are investing heavily in infrastructure to strengthen their economies, yet the U.S is spending less than 1 percent of its GDP on infrastructure. Contrast that with India, which spends 3.5 percent on infrastructure, or China, which spends 9 percent of its gross domestic product on infrastructure in its quest for economic growth.

The U.S. infrastructure neglect is not limited just to transit. In order to comply with safe drinking water regulations, the U.S. must spend ten times its current budget for replacing aging systems. The power grids are also a mess and poor transmission networks are resulting in loss of electricity and extremely inefficient power delivery.

The False Promise of Privatization

The report emphasizes that the recent hype around privatization of public assets like roads won't solve the problem-- and could make it worse. Another new report released this week, also highlights how states have been wasting taxpayer money by outsourcing and experimenting with other forms of privatization that have just added to costs.

Looking Forward

There is simply no way around it -- the current level of infrastructure investment cannot sustain current economic activity, let alone allow our states to grow competitively in the global economy. Any further delay investing in infrastructure will only result in much greater physical repair costs and even greater costs from job losses.

The first step is facing up to the need for new revenue. The reality is that the gas tax, when adjusted to inflation, is half of what it was in the 1960s. Road tolls aren't paying enough for overall infrastructure upkeep and other revenues are not making up the slack. New revenues need to be combined with better planning to reduce road congestion and promote more efficient public transit.