Competitiveness Loses With Transportation Cuts
Expert offers much needed ideas to ensure future of transportation infrastructureApril 20, 2011 | by Pat Vaughan Tremmel
EVANSTON, Ill. --- The U.S. House of Representatives just approved legislation (235-193) that would cut $318 billion in federal transportation investments during the next decade.
Policymakers and legislators need to think again about narrow cost accounting and short-term solutions related to the nation’s transportation infrastructure, especially in these budget-slashing times, according to Joseph Schofer, director of the Infrastructure Technology Institute at Northwestern University.
“Almost anything that affects transportation costs influences economic competitiveness -- and that means jobs,” says Schofer, also a professor of civil and environmental engineering and associate dean for faculty affairs at Northwestern.
Addressing the nation’s considerable infrastructure problems means spending money, but at the same time all levels of government rightfully are concerned about controlling and reducing expenditures, he says. “It’s a conundrum without a simple solution.”
Roadway congestion and crowding on urban transit systems are obvious symptoms of neglected infrastructure problems, Schofer notes. A lack of resilience and preparation also is reflected in weather-related breakdowns in transit services in major cities; in out-of-service escalators and elevators (recently, 11 percent of the escalators in Washington Metro); and in the freight sector, in weather disruptions that affect freight as well as passengers and in bottlenecks due to facility condition and congestion that affect reliability and safety.
Narrow cost accounting is the root of transportation infrastructure problems, Schofer stresses.
“Delays and disruptions experienced by travellers and carriers, for example, do not directly show up in the accounts of transportation agencies,” he says. “Benefits that customers would realize by remedying such delays would not translate directly in the form of revenue streams that will pay agency bills. In times of panic about the deficit, it is too easy to ignore the costs of not maintaining the infrastructure. These costs are widespread, insidious and, in the end, our children and grandchildren will be forced to pay them.”
Similarly, bridge rehabilitation is among the immense backlog in projects needed to renew and improve surface transportation. “When managers responsible for today’s budgets are offered the opportunity to replace a bridge with an advanced material with a lower life-cycle cost but a marginally more expensive initial cost, they often focus only on initial savings,” Schofer says. Long-term or life-cycle costs get short shrift in the myopic budgetary analysis.
“Rehabilitating a bridge may save user operating costs, but those savings do not directly find their way back to pay for the rehabilitation,” Schofer says. “They do not generate an immediate and allocatable cash flow.”
Opting for immediate savings often means not benefiting from innovations that deviate from long-standing design codes or specifications, and thus not taking advantage of reduced long- term costs or improved performance from new materials, technologies and designs.
“We must keep in mind that our children and grandchildren will pay a big price for our plodding along with failing infrastructure and the resulting need to rebuild a large fraction of the infrastructure in a short period of time,” Schofer says.
Schofer’s ideas about ensuring the future of U.S. transportation infrastructure follow:
• The United States has benefited from relatively cheap transportation because user fees have been kept below the level necessary for maintaining transportation infrastructure over time and intensive use. For example, the federal motor fuel tax on gasoline, now 18.4 cents per gallon, has remained constant for 18 years. In that period of time the construction cost index -- largely driven by the price of energy -- has increased by 100 percent and the consumer price index by 50 percent. The publicly owned transportation infrastructure is being consumed faster than it is being rebuilt. At current tax rates, motorists pay less than two cents per mile to use the road network. That’s a bargain we can no longer afford. No private enterprise would continue to hold prices constant while costs doubled.
• Resources should be put aside to cover the costs of repair, rehabilitation and reconstruction. Take the $5.25 billion plan to expand the capacity of the Panama Canal to maintain its global competitiveness. The project will be paid for by tolls, which have been systematically increased for the past eight years, so that 60 percent of the expansion costs will be paid from retained revenues and the rest from borrowing secured by a growing future revenue stream.
• The motor fuel taxes collected at the federal and state levels -- 18.4 cents a gallon, federal, and 19 cents per gallon in Illinois, are in fact user fees, dedicated for building and maintaining the highway network. A fraction at the federal level is applied to public transit, which in larger cities contributes to reducing roadway congestion. This amount is insufficient to meet the need, and gross revenues are declining because vehicles are becoming more energy efficient and more vehicles are using alternative fuels. At the same time, the need for reinvestment in the road network continues to climb. Not spending this money at this time is a disinvestment in our future. Not finding ways to increase these revenues is equally short-sighted. Increasing the gas tax by five cents per gallon would cost the average motorist about $25 per year, or less than five cents per commuting trip. At the national scale, it would yield about $7 billion for transportation infrastructure.
• Remember, it’s all about employment -- job creation -- and economic competitiveness, but not just for today. As a recent monograph published by the Bipartisan Policy Center suggests, to promote long-term economic development, transportation investments must be targeted to real increases in connectivity and reliability, rather than being spread thoughtlessly across the landscape. We need to make the right transportation investments, not just any investments.
• When budgets are tight, as they are exceedingly so today, the value of information goes up. Decisions need to be driven with objective information on conditions of infrastructure components, the role and utilization of those components and the costs to fix problems. Real facility condition must be assessed, not simply the recorded ages of infrastructure elements, and real-time structural health monitoring systems, a key part of the work of Northwestern’s Infrastructure Technology Institute (ITI), need to be developed and deployed. Reinvestment priorities should be based on the importance of infrastructure elements to the economy and society, and, in consideration of the next generation, the analysis of costs must expand to include life-cycle costs.
• Serious consideration must be given to innovations that can produce better performance and/or reduce costs, including materials and technologies that facilitate rapid (minimum disruption) repair and that deliver more cost-effective service over their lives. Among the many barriers to innovation is the rigidity of codes and standards, which, developed long ago, make it difficult to move new ideas into practice. As ITI-supported research by Northwestern’s Professor Zdeněk Bažant shows, using outdated design codes can lead not only to adverse performance and cost but also to long-term life-safety risks. Methods and models for rapid testing and evaluation of new materials and methods will help deliver the confidence that designers and decision makers need to implement new ideas in the field.
• The performance and costs likely to be experienced by future generations must be central to investment planning. This means estimating and conveying to decision makers and the public the life-cycle costs and performance of proposed infrastructure actions -- and the impacts of inactions. Communication must include both outcomes and uncertainties to ensure that infrastructure investment decisions are founded on the best possible information.
• Finally, the benefits and costs of safe, reliable and resilient transportation in the long term must be communicated more realistically to the public and our leaders, so that we have the resources to assure the best transportation system for the future.