Is Chicken Little right? Former Commerce Secretary Norm Mineta and others on America’s crumbing infrastructure

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Projects like the interstate highway system helped make the United States a global power, allowing freight and people to move about the country. Our airports are equally important domestically as well as our link to the world. Not to mention the whole specter of safety highlighted by falling bridges and urban sinkholes. The American Society of Civil Engineers says that repairing the nation’s bridges, alone, would cost at least $9.4 billion per year for the next 20 years. Another estimate by the ASCE puts the cost of bringing the entire US infrastructure up to an “adequate” level at $1.6 trillion. With billions spent on the Iraqi war, trillions more needed to bail out social security—and billions and billions more proposed for education and national healthcare, you get the picture. Former Commerce Secretary Norm Mineta, Bill Marcuson, president of the American Society of Civil Engineers, MN State Rep Phyllis Kahn, and other experts highlight some of the issues and proposed solutions: higher gasoline taxes, more toll roads, and public-private partnerships. Have a read, have a think. Good ideas desperately needed—this rig is running in reverse.

Projects like the interstate highway system helped make the United States a global power, allowing freight and people to move about the country. American commerce relies on roads, says someone who should know - Norman Mineta, former secretary of the commerce and transportation departments. So why he is worried?

Says Mineta, transportation is a policy issue that citizens take for granted until it’s denied to them. “Everything you need – what you eat, what you wear – got there through some form of transportation, but few people care unless they’re affected by it.”

However, even when they are affected by it – by broken levees in New Orleans or exploding steam pipes in New York – Mineta says most Americans would rather avoid the issue.

Referring to a poll about Americans’ opinions of an increase in the gasoline tax, taken in the wake of Minnesota’s Interstate 35 bridge collapse, Mineta says he was startled to learn that a majority of Americans opposed a five-cent increase in the federal tax that help fund road projects. “You would think that the tragedy would jar people into a realization that we need to be doing something about it, but it’s one of those issues that you need a constant beating of the drum,” he says.

Time to sound the alarm.
Mineta says he tried drawing attention to America’s crumbling roads while in office, but few people, including President George W. Bush, grasped the issue. “In my five and half years as secretary of transportation, I wanted to get one word in the State of the Union and it never happened,” says a disappointed Mineta.

To fund the Highway Trust Fund, which is expected to have a nearly $5 billion deficit in fiscal year 2009, Mineta says he suggested a 6-cent increase to the gasoline tax over five years to a transportation reauthorization bill, but Bush rejected it. “He pulled out his black Sharpie and said, ‘No, I don’t want a tax increase,’” Mineta recalls. “When I went back, I had no tax increase, but I had a [consumer price index] inflator for the fifth year of the bill and he said, ‘No, Norm, that’s a tax increase.’”

Says Mineta, “Later on, I remember when gasoline hit $3.50 a gallon and the President said, ‘Norm, aren’t you happy about not putting that tax increase in place?” Years later, Mineta is definitely not happy.

“China is sucking up all of the world’s cement and steel and there’s so much going on in the other BRIC [Brazil, Russia, India, China] countries while we, in this country, have an 18.4-cent gasoline tax that hasn’t changed since 1993,” says Mineta, who resigned from the Bush Administration in July 2006 and now works for Hill & Knowlton, a global public relations firm. “The current gas tax isn’t going to sustain the highway trust fund and, as we move to hybrid and more fuel-efficient cars, there’s got to be another basis for funding infrastructure in the future.”

The problem, says Mineta, isn’t just roads and bridges – it’s sewage treatment plants, airport, and other costly projects. “When the steam pipe explosion occurred in New York City, it was aging infrastructure, but there are parts of New York that still use wooden flumes to carry water. It’s amazing. We still have wooden flumes from the 1890’s carrying our water!”

Still safe but needs work
Administration officials agree with projections for the highway fund’s shortfall, but seem far less anxious than Mineta.

“The cost of concrete and steel is going up and China and other countries are driving up demand,” says Doug Hecox, a spokesman for the Federal Highway Administration. “As a result, the price per mile [to maintain roads] has gone up as a result.”

Hecox says he’s looking forward to the report of a group created by President Bush to examine transportation issues. “The president’s commission is coming out with recommendations later this year and, from a policy perspective, this is one of the most exciting times for infrastructure issues because we don’t know what comes next. It’s very exciting and very nerve-wracking for the States,” he says.

Regarding any increases in the gasoline tax, Hecox says that such a move could have little effect on increasing revenue. As the price of fuel rises, he says, some drivers may drive less, thereby nullifying a tax increase. In fact, he says, an increase could even lead to less tax revenue.

Hecox’s optimistic views were recently echoed on Capitol Hill, where Mineta’s successor, Mary Peters told one Senate committee that, “The answer is not to spend more, it is to spend more wisely.”

Testifying before the Senate Environment and Public Works Committee, Peters said, “While we can and must do more to improve the quality of our nation's infrastructure, it would be both irresponsible and inaccurate to say that the nation’s transportation system is anything but safe.”

Not surprisingly, Peters opposes a proposal by Democratic Rep. Jim Oberstar, chairman of the House Transportation and Infrastructure Committee, to raise the federal gasoline tax by 5 cents per gallon to pay for a bridge trust fund.

Despite the Administration’s outlook, the American Society of Civil Engineers says that repairing the nation’s bridges, alone, would cost at least $9.4 billion per year for the next 20 years.

The state of the country’s infrastructure has gotten to the point where the nation’s civil engineers need to stand up and say something about it, says the group’s president, Bill Marcuson.

“Engineers need to play a more prominent role in public policy development when it comes to infrastructure,” Marcuson says. “A crumbling infrastructure can’t support a thriving economy and we either must invest now or we’re going to pay more later.”

To fix the problem, Marcuson says national leadership is needed, but he’s disappointed with the lack of infrastructure’s place on an already cramped agenda for the 2008 presidential campaign.

“A lot of people are throwing their hats in the ring running for president and no one is addressing infrastructure issues,” Marcuson says. “In the last couple of years, we’ve had a ceiling failure in one of the tunnels in the Big Dig and we had a catastrophic failure with the I-35 bridge in Minnesota. All of these things have a pretty short window and the country has to take advantage of that window. We have to get the politicians’ attention.”

That might be difficult, says C. William Ibbs of the University of California at Berkeley, where he teaches engineering and planning. “Politicians want things that will bring them instant votes than things that take them 12 years to build. It’s a disconnect between the attention span of the politicians and the required time to build major projects,” Ibbs says.

More public-private partnerships
Says Phyllis Kahn, member of the Minnesota House of Representatives, increasing taxes is a tough sell, even in a state where the I-35 bridge collapse occurred. During a special session of the state legislature called by the governor in September, Minnesota politicians were limited to discussing bills aimed at helping victims of flooding in the southeastern portion of the state.

“The bridge collapse was terrible, but you didn’t have the people being hurt like you saw in the flood – people’s homes being wiped out and businesses being wiped out,” says Kahn. “With the threat of nothing being done for the flood victims, there was an enormous amount of pressure on us.”

Taxpayers, however, will still pay for saving the state’s infrastructure, she says. “The ripple effect is going to be higher property taxes so cash-strapped localities can make up for the lack of funding and, on the other end, a reduction in essential services.”

According to Ibbs, rather than taxes, states need to move toward asset-based pricing schemes. “If you offer people a free service like a highway, they’ll take advantage of it and there will be maintenance problems. If you charge for it, it will control for the amount of wear and tear. Also, there would be a revenue source generated for it,” says the Berkeley professor.

Traditional funding sources, he says, can lead to unforeseen problems. The Big Dig, he says, diverted money from areas far from Boston. “A large portion of the project came from federal money. The rest came from the state in matching funds. Because the state of Massachusetts had some free money, it diverted every spare highway dollar it had and devoted it to the Big Dig. The consequence was that highways in the western part of the state fell in disarray.”

Ibbs is not alone in calling for a new way to fund infrastructure projects. Venture capital and lobbying groups have been very active on the state and federal level, especially in the wake of the Minnesota tragedy.

The system for funding infrastructure still works pretty well in terms of how federal dollars flow, says Carolina Mederos, who co-chair’s the Transportation, Infrastructure, and Federal Funding Practice for lobbying law firm Patton/Boggs. However, she says, the system is self-correcting, perhaps explaining the increase in the number of public-private partnerships being developed around the country.

As a success, Mederos points to the 157-mile long Indiana East-West Toll Road, which is owned by the Indiana Finance Authority and operated by joint-venture between two foreign firms – one from Spain and one from Australia. “It provides quite a bit of money to address infrastructure projects downstate that have been on the books for years,” she says.

“We’re evolving into a different paradigm that will include a combination of a federal tax – be it the gas tax, indexed or increased – or a mileage-based fee, increased use of tolls, innovative financing, and public-private partnerships,” Mederos says.