Failure to act is leaving us falling apart and falling behind.
By William Atkinson
Look what’s happened to America’s infrastructure. According to construction industry watchdogs and front-line observers, things are looking rather bleak because of neglect and a lack of funding for too many years. In this dark economy, is there any hope for a reversal of this trend?
Earlier this year, the American Society of Civil Engineers reported: “In 2010, it was estimated that deficiencies in America’s surface transportation systems cost households and businesses nearly $130 billion. This included approximately $97 billion in vehicle operating costs, $32 billion in travel time delays, $1.2 billion in safety costs, and $590,000 in environmental costs.”
Another transportation infrastructure report, “Building America’s Future: Falling Apart and Falling Behind,” published by Building America’s Future Educational Fund, found that U.S. infrastructure has fallen from first place in the World Economic Forum’s 2005 economic competitiveness ranking to No. 15 today. The report goes on to note that even as the global recession has forced cutbacks in government spending, other countries are investing significantly more than the United States to expand and update their transportation networks. Canada spends 4% of its GDP on transportation investment and maintenance, and China spends 9%, compared with the United States’ 1.7%, it says.
In addition: “The U.S. is one of the only leading nations without a national plan for public-private partnerships for infrastructure projects or a National Infrastructure Bank (NIB) to finance large-scale projects and leverage private capital. While we fail to leverage government dollars to attract private investors, billions of dollars of private capital are flowing to infrastructure projects in other countries. While Congress continues to bicker over legislation to create a National Infrastructure Bank, the European Investment Bank in 2009 lent $116.7 billion to infrastructure projects, of which $23 billion were transportation projects.”
“The government does a lot of things,” notes Ty Gable, president of the National Precast Concrete Association. “A lot of what it does is nice to have, but it doesn’t need to be done. Infrastructure, however, is a necessity. It is as important as defending our shores.” If this country neglects its roads, bridges, highways, stormwater management and sewage management, it has horrible implications for public safety and public health. “We simply cannot wait to do projects, patch things up and hope for a better day.”
In fact, according to Gable, patching up is what happened with shovel-ready projects. “Shovel-ready meant they were just going to patch potholes, weld bridges or extend turn lanes,” he said, adding that these were nice but didn’t put a lot of people to work. “The way to put people to work is to move dirt.”
Gable notes that there are bridges in this country that school bus transportation officials route around, because they can’t carry the load of a school bus. If we don’t fix these bridges, public safety and public health are adversely affected, he says.
As Brian Pallasch sees it, his goal is to always be hopeful and to continue to think that we can overcome some of the challenges related to infrastructure advancement and funding. “I think the infrastructure community has made a tremendous amount of progress in the simple concept that folks now acknowledge that we have a significant infrastructure problem,” says Pallasch, managing director of government relations and infrastructure initiatives for the American Society of Civil Engineers (ASCE) in Reston, Va. “So, we have accomplished Job One. There is a strong understanding that our infrastructure is in bad shape and is getting worse.”
ASCE has published report cards since 1998. They are backward-looking, in that they ask and answer the questions: “Over the last four years, how has our infrastructure fared? Did we make any progress on making these better?” While there have been a few places with bright spots, progress has been difficult since 1998, says Pallasch. In its forward-looking report (“Failure to Act: The Economic Impact of Current Investment Trends in Surface Transportation Infrastructure”), the first in a series, ASCE looks at what will happen to the U.S. economy if the government maintains its current funding level. “Like the report cards that we have been releasing for 14 years, the outlook in this year’s study is not necessarily a good story, either,” says Pallasch. “If we don’t do some of the work that needs to be done, the economy will take a hit, families’ standards of living will take a hit, and from a global perspective we end up losing exports.”
According to Marcia Hale, president of Building America’s Future, Washington, D.C., a case has to be made that we need to do better and more investing in infrastructure. “A major reason is that we are beginning to fall behind our economic competitors in this area,” she says. “We are not building the type of infrastructure that is necessary for us to compete in the future. However, I don’t think there is any doubt that, at some point in the future, we will see some fairly aggressive attempts to build new infrastructure.”
Of course, the big question on everyone’s mind is funding. Is there funding available? If so, what are the sources?
First, though, what has happened with past funding, especially the stimulus package? “We are seeing the last of the stimulus money this summer,” says John Lendrum, president of Norwalk Concrete Industries in Norwalk, Ohio. “I am a little concerned about the ability of state and local governments to continue infrastructure spending at the same rate.” Lendrum believes that there will be some drop-off, at least in his region.
Although tax revenues have started to come back up a little, they’re still not where they need to be. “In order to balance the budget, a lot of money that used to flow to the local level from the state has been cut,” says Lendrum. “As a result, small villages and municipalities have less flow-through money for things like paving, water, sanitary improvements and other projects.” Once the stimulus money ends, Lendrum expects to see a drop-off in this type of work.
“I think one of the biggest needs that is not being addressed these days is electrical infrastructure,” continues Lendrum. “No one seems to be looking at that very hard. It is underground, so you don’t notice it until the ‘juice’ is off. Everyone sees the potholes in the roads.” Of all of the funding programs that are being put out there, Lendrum believes that electric prime power distribution is one that has not been looked at as hard as it should be.
Gable notes that America’s infrastructure is publicly financed using various funding mechanisms, such as taxes. Specifically, transportation infrastructure has been funded for many years by a “cents per gallon” tax that goes into the Highway Trust Fund, which is used to maintain roads, highways and bridges, and also build new ones. “Obviously, with energy costs increasing, people are driving less and are investing in more fuel-efficient cars,” he says. “As a result, this funding mechanism becomes less and less. This poses a challenge, so we need to begin looking at other ways to fund infrastructure.”
Gable adds that the Highway Trust Fund has always been controversial. The last time we had a highway bill was 2003, and it was for six years. “Since 2009, we have been extending the old bill by six months here and there, kicking the can down the road,” he says. “These stop-gap measures are not doing any good, because states, counties and cities need ample notice before they can commit the resources to plan, survey, acquire land and even begin the process of building a new bridge or highway.” All of this costs money, and state and local governments are not going to commit this money if they don’t know if or how much funding is going to come from the federal government.
We went to Congress a year ago and pleaded, “We know times are tough. Why don’t you cut the transportation funding by 30%, but pass it as a six-year bill?” According to Gable, the idea fell on deaf ears, and Congress is still arguing. The latest proposal is to extend it for two years. This still isn’t enough time, though. “That six-year time period is there for a purpose,” notes Gable. “This gives states and local governments the time to plan, build and pay for projects.”
According to Pallasch, we are in an interesting time. “The deficit commission report that came out last December suggested that we need to spend additional resources on transportation infrastructure,” he says. “For many of us, the next few months will be spent trying to convince this new super-committee that was created in early August 2011 that, as they try to search for solutions to the nation’s deficit problem, they also try to find a solution for the infrastructure investment deficit.”
Hale believes that funding for infrastructure will come from a combination of federal, state/local, and private sources. “The times almost insist that there be some outreach to the private sector through either public-private partnerships or a National Infrastructure Bank that would help finance critical infrastructure across the country,” she says. “These would probably be very large-scale projects that encompass several states.”
As Hale sees it, those involved in infrastructure should have at least three goals for the near term. “We need to have a final Federal Aviation Administration bill done,” she says. “We need to reauthorize the Surface Transportation bill, which expired Sept. 30. Third, we need to create some interest and enthusiasm for a National Infrastructure Bank.”
Here are some recommendations for precasters on how to help get things moving toward these and other goals:
1. “Get in touch with your legislators at all levels of government – federal, state and local – because all levels have a role in infrastructure,” suggests Pallasch.
Lendrum agrees. “Stay in touch with your legislators, and tell them what is important to your business,” he says. “Everyone else is doing it, so precasters should be doing it, too. You should also be able to get help doing this through your state contractors association. Road contractor associations, for example, are all lobbying to get the new transportation bill passed.”
Gable says, “We at NPCA can only do so much at the national level, going to Washington. What is important to realize is that all politics is local,” adding that precasters need to get to know their city and county council people, their mayors and their congressional representatives. They need to make appointments with their congressional representatives when they are in town. “Then look them in the eye and explain how lack of funding for infrastructure negatively affects their employees and citizens, and how funding means jobs,” says Gable. Precasters should also attend town hall meetings and try to get infrastructure development on the agenda.
2. Pallasch has heard of some other organizations getting started with another strategy, and he believes that it is something that ASCE also needs to look into. “It’s not enough to just have people within our industry talking to legislators about how important infrastructure is,” he explains. “It is quite obvious to a legislator why a civil engineer or a precaster cares about infrastructure funding.” Maybe it is time that people in the industry actually go out and talk to other people who are not in the industry. One organization with which Pallasch is familiar has a program that encourages each of its members to go out and talk to at least five other people who have no relationship at all to the industry. These can be people at a PTA, a church, or elsewhere. “Then explain to these people why a good road or good water infrastructure is important,” he suggests. “It is important to explain to these people what has been going on and what might go on to get them to focus on what we need to do to make a difference.” In other words, don’t just focus on saying “We need more money.” Focus on explaining why infrastructure investment is good for the economy and the nation as a whole. Then encourage these people to become advocates for infrastructure funding and talk to their legislators.
3. The other thing precasters can do, according to Norwalk’s Lendrum, is look at cast-in-place projects and try to convert them to precast. “There are still a lot of projects where cast-in-place is specified, but which are certainly suitable for precast,” he says.
William Atkinson, Carterville, Ill., is a freelance writer who covers business and safety issues.