The Crumbling of America - Our precious infrastructure inheritance and how we’re squandering it

City Journal ^ | 3 August 2007 | Nicole Gelinas

[neverdem]

It’s not clear why a major section of the nation’s interstate highway system collapsed Wednesday night over the Mississippi River in Minnesota, causing a still unknown number of fatalities and indefinitely severing an important transportation link. But one thing has been all too clear for decades: America is neglecting its vital physical infrastructure, and the bill is coming due.

As a nation, we’ve long borrowed from our future; everybody knows about the inevitable Social Security and Medicare crises that will happen in the next three decades as the number of retirees expands in relation to the number of workers. Far fewer people understand that we’ve also been borrowing from our past. The federal highway system, the backbone of America’s modern economy, turned 50 last year. But, as I wrote in Forbes magazine in April, we haven’t spent enough, or thought enough, to keep it—and other physical assets that previous generations built—in good working order. We spend only 60 percent of what’s needed to keep roads in good condition, according to the American Society of Civil Engineers. In New York State, for instance, 35 percent of major roads are in “poor or mediocre condition,” the ASCE says, while 38 percent of bridges are “structurally deficient or functionally obsolete.”

Even where they’re safe enough, transportation assets suffer from obsolescence, as traffic and vehicle weights increase annually while road spending lags. Rush hour on Northeast and West Coast freeways goes on all day and half the night. And it’s not just roads and highways; mass-transit assets in major cities have deteriorated, too. The ASCE gave the nation’s infrastructure—including airports, bridges, dams, water and wastewater systems, rails, and roads—a grade of “D” two years ago, warning that “with each passing day, aging or overburdened infrastructure threatens America’s economy and our quality of life.” New Orleans residents found that out when Hurricane Katrina hit in 2005 and the levees broke, allowing water to inundate the city.

It’s easy to see how this happened. If the fifties were the decade of infrastructure, the sixties were the decade of entitlements and social services—and the sixties haven’t ended. Just five years ago, a Republican Congress scrambled to add a huge new prescription-drug benefit to the 1965 Medicare program. Even when we do spend money on infrastructure, it often suffers from confusion of purpose. Congress treats federal transportation bills as opportunities for political earmarks, rather than for rational growth. And states see infrastructure projects as ways to funnel money to politically favored contractors and powerful construction unions, rather than as worthwhile undertakings to be done as efficiently and effectively as possible.

At the state level, Medicaid spending dwarfs infrastructure spending, and most governors don’t sound the alarm. One exception is California governor Arnold Schwarzenegger, who expressed grave concern about his own state’s levees in the months after Katrina, and who won voter approval last year to float tens of billions in bonds to fund infrastructure upgrades. But Schwarzenegger and California’s legislature don’t want to cut back on anything else to pay for that investment, preferring both bridges and butter—and that’s not sustainable for long.

The problem isn’t just the possibility of future disasters. To understand the true scope of what we’re facing, think about that other boring problem that nobody likes to worry about: our unfunded obligations to Social Security and Medicare, incurred by borrowing from the future for so long. Many independent experts say that even with robust economic and productivity growth, America simply cannot grow its way out of these entitlement-program problems.

We’ll see. But we definitely can’t grow our way out if our economy—during the very years when it must generate enough tax revenue to fund benefits for retiring baby boomers—is straitjacketed by failing, outdated physical infrastructure. Our future obligations continue to grow while the assets that we have—gifts from the past—deteriorate. Every year that we refuse to confront the problem, we fall farther behind.

[OCC]

A first step in rebuilding Americas infrastructure would be banning naming any bridge, dam, highway or Public building after an elected official.

[DoughtyOne]

In Los Angeles proper we’ve done very little freeway construction over the last 50 years. Now the powers that be want us to use buses and trains that don’t start or end anywhere near our homes or place of business.

They’ve been stealing the gas tax dollars that were supposed to go toward freeway upkeep, and now want to open toll booths on our freeways.

During rush hours three to four lanes travel between 10 to 30 miles per hour while 25 to 33% more capacity sits empty in the middle of the road, for a car-pool lane.

It’s difficult to imagine having more contempt for public officials than I do. Their incompetance is blamed on us at every turn.

I love this comment perhaps the most. “We need new methods of transportation and the public needs to be tapped to pay for it.” H-E-L-L-O-! Direct the gas tax dollars back where they belong you idiots.

Double decking highways would eliminate the traffic problems within a decade if the powers that be would pull their heads out. Instead global warming and the American public are blamed for not living within two blocks of their workplace. This means that the husband, wife and any children that work would need to work nearby. In places like LA, that’s nearly impossible.

We need some leaders that have vision who are not blackmailable by every whack-job leftist group on the block.

When I look back on the generation before last who created our roads, I see foresight. Today all is see is stupidity and ineptitude.

[Constantine XIII]

Oh brother...

[OCC]

Ronald Reagan being the one exception!

[cherry]

this writer at least gets most of it.....

people need to realize however that SS and Medicare are only PART of the problem......we have billions promised to civil servants as well as paying them handsomely now with all their benefits.....

we need more police, but one policeman with his pay, his benefits and the wonderful pension after 20 yrs with medical makes hiring new police almost impossible.....

look at the pie charts.....as long as all or most of our money is going to pay and benefits, there is no money to actually build something, let alone maintain it....

in our state, parks get closed rather than maintain them, even after we taxpayers paid for the land and the restrooms and the boat docks etc etc....

[endthematrix]

"Congress treats federal transportation bills as opportunities for political earmarks...states see infrastructure projects as ways to funnel money to politically favored contractors and powerful construction unions"

BINGO!

[endthematrix]

"Double decking highways would eliminate the traffic problems within a decade if the powers that be would pull their heads out."

Even reversing a highway lane for "rush hours" would help.

[Spktyr]

Double-decking highways is an incredibly bad idea in a seismic zone. See the Cypress Street Viaduct incident for more details: http://en.wikipedia.org/wiki/Cypress_Street_Viaduct

[neb52]

“A first step in rebuilding Americas infrastructure would be banning naming any bridge, dam, highway or Public building after an elected official.”

Well there goes all of West Virginia’s bridges and government building. :P

[nyyankeefan]

tell it to kkk byrd and the bought & paid for state of west virginia!!!!

[SauronOfMordor]

we need more police, but one policeman with his pay, his benefits and the wonderful pension after 20 yrs with medical makes hiring new police almost impossible.....

Ummm, no. We don't need more police. The police we already have are more than enough to catch far more criminals than the justice system can convict, or the prison system can hold, with the result that criminals are put back on the street in a futile catch-and-release cycle.

We need more prison space and we need to loosen rules of engagement for homeowners and CCW holders so that criminals decide it's more healthy to get a McDonalds job

[Ben Ficklin]

You are right and wrong about "stealing", or diverting, fuel taxes to other uses.

At the fed level, the fuel taxes have been used to "buy votes" which has resulted in a few(usually smaller) states receiving a significantly higher amount of dollars than what they paid into the Fed Hiway Trust Fund. Most states receive less than what they pay in.

It is also happening at the state level. In the case of Texas, it was the voters(in a constitutional referendum) who authorized diverting 25% of the gas tax to education. OTOH, in a few states, some tax money is being diverted to roads.

But the main problem is past and future increases in gas mileage mean that the dollars per mile of tax collected has fallen/will fall. This makes the gas tax an obsolete method of financing roads.

The federal highway trust fund is projected to go into deficit in 2009. There will be significant opposition to raising it. The alternative, user fees(tolls), will also be significantly opposed.

Everyone wants it free.

[Freedom4US]

If Gibbons is any guide, eventually our crumbling interstates will still provide a handy method of invasion.

[sphinx]

This is part of the answer. Another aspect of the infrastructure problem is that -- thanks to immigration -- we're on track to double the population every 40 years or so, and we're simply not keeping up. We compound that by lavishing subsidizing sprawl while neglecting the infrastructure in older neighborhoods.

Minnesota has had plenty of dollars over the years to fix the bridges. However, they've chosen to spend the money on commuter roads to cul de sac land and McMansion Acres. Low density sprawl maximizes road maintenance costs.

[Leisler]

Now that You Mention It... Radley Balko | August 3, 2007, 11:08am

Minnesota Twins postpone groundbreaking for new $1.1 billion stadium due to I35 bridge collapse. Apparently up until this week they didn't have any more pressing construction projects on which to spend that money.

Two-thirds of the stadium is publicly funded. The land was acquired through eminent domain.

[hershey]

CNN is already blaming Bush. Katrina redux.

[TalBlack]

We’ve been ignoring infrastructure since LBJ’s Great Society began robbing peter to pay paul(1960’s). NYC went thru this in the early 80’s. Politicians can pretty much do as they please with the money they take from us because, essentially, no one is watching or cares. (until a bridge falls down and takes momma, poppa, sonny or sissy with it.)

[MNJohnnie]

The Bridge was determined deficient in 1990.

During the 1990s the Democrat Politicians in Minneapolis and Hennipen County, convinced both the State of MN, and the Fed Govt, to divert over $1,000,000,000 transportation dollars to an eco freak “light rail” project between Minneapolis and the Airport with a spur to the Mall of America.

The really ironic thing is the terminal for this billion dollar boondoggle is about 1 mile from this collapsed bridge.

The problem isn’t the Govt not having enough to spend, it is the Govt, at all levels, continually misspends the money it has.

[Cvengr]

Who says the infrastructure is being ignored? We’re too busy rerouting two way traffic from the collapsed Interstate 35 E onto the still standing twin sister Interstate 35W bridge. /sarcasm off

[MNJohnnie]

Not only that it is new construction is “legacy building” for politicians. New projects and construction give them an issue to go home and campaign on. Maintance isn’t Public Relations sexy. They cannot go home and run on “fixing insfastructure”.

Maybe some of them will finally wake up to the fact they are fiddling while the US burns.

[MNJohnnie]

Low density sprawl maximizes road maintenance costs.

Nice statement of the PC class economic dogma, factually incorrect.

What MN has done is divert billions of tax dollars into feel good eco freak projects like "light rail" and "green spaces".

The problem isn't the suburbs sprawl. The problem is the Urban clowns waste their money on goofy socialist project like "Light rail" that cost over $1,000,000,000 and do not return a dime to the treasury.

Roads pay for themselves. The gas taxes, the increased economic activity, the goods and serviced delivered via those roads are all taxable activities.

This is the Big Lie of the Greens. That roads are subsided by Govt money. NO they are not. They pay for themselves.

[poobear]

I think our leaders are waiting until enough of our infrastructure crumbles to justify making most of our Federal highway systems privately owned and of course ALL toll roads. Then guess whose names suddenly appear on the board of directors.

Just a thought...

[MNJohnnie]

Don’t forget the more then 1 billion dollars of transportation money “Light Rail” has all ready drained out of the transportation budget.

MAYBE instead of spending so much time and effort trying to force people out of their cars, the Political Class in MN MIGHT actually do their job and fix our road net?

Absolutely NO reason for the level of incompetence in design and execution we see in our road net. Projects only partly completed, then redone in a couple of years or so, deliberate designed choke points on our major roads. Clover leaf design from the 1950s still being used! Too many on ramps and exits on arterial routes, maintance delayed and delayed and delayed for new contuction etc etc etc etc Time for the Political Class in MN to give up their Socialist dogmas and build roads as the people want.

[normy]

Agreed. We need fewer laws and we need the leaders of our governments to have police working smarter, not hiding out in unmarked junkers on the freeways and side streets handing out seat belt tickets. The police also need the right to judge for themselves to ticket or not.

[Jim Noble]

Their incompetance is blamed on us at every turn.

And rightly so.

[Leisler]

"Absolutely NO reason...:

MONEY. What you mean to state is that it isn't clear who gets the benefits and money from these seemingly senseless activities. Somewhere, someplace for someone this all makes perfect economic senses. Just not to the public. But since they aren't involved other than being political and economic sheep for the shearing, why sould it make sense?

Contractors, unions, love to build, rip down and build again. Politicians love to dole out power, money and jobs. So long as they keep theirs.

Citizens have given, never to get back, all the power to the political system and its' Roman Legions of contractors and unions. The American citizens should just watch their large screens and shut up.

[Leisler]

"Today all is see is stupidity and ineptitude"

When I was a kid, I used to find and read in the school library books about heroic bridge, railroad engineers. Aircraft designers, sea captains, explorers. You think those books exist now? More likely how your daddy's boyfriend can be your friend too, and maybe you like boys too.

Anyways we live in a system whether if you dig fence posts, ditches are a engineer doctor, cook any freek'n productive person.....you are taxed to support lazy, unproductive idiots. So of course you get what you subsidize and less of what you punish.

Nothing is by accident.

[sphinx]

Sprawl happens because we've largely socialized the infrastructure costs. It's not just the roads; it's the water and sewer systems; it's the new schools; it's utility pricing structures that subsidize load growth. Government has made it artificially cheap to do greenfields development while neglecting the core, which has been allowed to deteriorate.

Maintenance of key infrastructure should go first, not last. Too many places get it the other way around, mainly because the yuppie havens out in the 'burbs are full of voters who demand four-laned expressways back into the cities they've just fled, except for their jobs. These new roads, of course, often smash through older, established neighborhoods, degrading the quality of life there. (Not that a yuppie commuter would ever care about anyone else's property rights.) Don't misunderstand me; I'm not opposed to progress, but I am opposed to using eminent domain to take people's front yards for road widening, all to slice five minutes off the commutes of people who have chosen to live 30 miles away from their jobs.

Yes, gas taxes pay for the roads. That's not the issue. The issue is, Minnesota in this case didn't do enough basic maintenance on critical infrastructure. I don't know how much the state squandered on light rail vs. squandered on new commuter sewers out to the 'burbs. I'd put bridge repair above either one.

As to new development, let the developers -- which is to say, the homebuyers out in the burbs -- pay the full incremental cost of new development. You would immediately see the emphasis shift to redevelopment of the core and much denser incremental growth around the periphery. This is how cities used to grow, back before federal and state dollars in large amounts changed the game.

Yes, socialism is the problem.

[patton]

I like the article, but I disagree with the “borrowing from the future” line.

Excess SS funds are not borrowed from the future, they are stolen from current receipts.

[NoControllingLegalAuthority]

If more freight went by rail, we could reduce the pounding our roads and highway bridges are taking. Our highway bridges would last practically forever if only passenger cars and light trucks used them. The roads are being destroyed by relentless passage of very heavy trucks.

What a lot of people do not know is products are not warehoused as they used to be. The trucks themselves have become rolling warehouses delivering goods "just in time" to the selling or manufacturing location.

There are too many heavy trucks on the highways and they are the source of the destruction of highway bridges and roads.

If you have seen a decal on the back of a large truck trailer saying something such as "This truck pays $2,500 a year in road taxes," know that those taxes do not begin to pay for the damage caused by the heavy loads relentlessly carried in that trailer.

[robertpaulsen]

"But, as I wrote in Forbes magazine in April, we haven’t spent enough"

And if we followed your advice, we would have spent billions on roads, mass transit and dams, the focus of your article. The bridge would still have collapsed.

Anyone can write an article on "America Needs to Spend More on _________", then wait for the next collapse, fire, terrorist attack, spill, collision, etc. and say, "See? I told you so!".

We could triple governmentr spending and it still wouldn't be enough -- we could always have "done more".

[rabscuttle385]

The author is correct, in a sense. Using Social Security receipts for non-related activities is “borrowing from the future” (without intent to return, of course). Somebody will bear the burden of paying for the benefits of the 77+ Million baby boomers: taxpayers like me who are or will be in the workforce on a regular basis within the next 5-10 years.

[Leisler]

The bridge did fine. It was not the traffic. It was the maintenance. Everything needs it. The citizens of Minnesota and Minneapolis spent a billion on a unused touchy greenie light rail and another billion for a base ball stadium for a Democrat billionaire. Further Minnesota has been getting ever more money from the Feds for, supposedly, bridge and road work.

You know the drill.

The money was always there, and is and will be. It’s just that it goes to ‘projects’.

But, hey, many hardworking businesses and people leave the northern socialist, Democrat high tax/fee/permit/fine/rules/payoff states everyday. The bridge had been showing signs of not being appreciated or taken care of for a decade and a half. Maybe this was just its’ way of saying, “I have had enough and am leaving”. Which is actually all true. The bridge had had enough of being treated like dirt, and it did leave.

[rabscuttle385]

Too many places get it the other way around, mainly because the yuppie havens out in the 'burbs are full of voters who demand four-laned expressways back into the cities they've just fled, except for their jobs.

Those would be the Federales, here in Northern Virginia.

But not all in the Northern Virginia suburbs work in DC. Many work in other suburbs. The problem with infrastructure here is that it is in a hub-and-spoke layout: roads tend to lead from suburbs into Alexandria or Washington. This is fine for the Federal workers, except that most traffic in the area is suburb to suburb.

[omega4179]

First of all, the money was sent to Nola to repair levees and THEY squandered it.
Always first look at local government for blame.

[MNJohnnie]

Sorry but that example of the usual urbanist diatribe against the Suburbes is factual incorrect. Your state money doesn’t build roads in new development. That is money cost is paid for as part of the development. YOU don’t pay them, the new home buyer, and the local taxpayers, do.

60% of the state transportation dollars in the State of Minnesota get spent in the 7 county area. The PROBLEM is what you people waste your slice of the money on, NOT that you do not get a big enough slice of the budget.

Sorry but this is a Conservative website, this neo Socialist dogma of “sprawl” doesn’t sell any better here then the nonsense about global warming does.

Not really intrested in hearing self appointed Urban elitest lecture the rest of us about how we all have to live in the 3rd world style hell holes they have created out of most of our major urban areas just because their local goverments are too fiscally irresponsible to do their job.

[RipSawyer]

This means that the husband, wife and any children that work would need to work nearby. In places like LA, that’s nearly impossible.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

It is truly amazing how some cannot see the reality in front of their noses! Probably 25 years ago I remember reading an article I should have clipped and kept, it was written by some “intellectual” who obviously had spent his entire life in a big Northeastern city. In the article he was “explaining” to us ignorant types that you could tell whether a product was a necessity by whether it was widely advertised and that massive advertising campaigns were necessary for automobiles because people did not need them! I wonder if the same sort of fools lived in Tombstone in the old days and tried to explain to Wyatt Earp that he didn’t need a horse.

[jwparkerjr]

We are in the midst of a tax- cutting frenzy here in the State of Florida. It seems tax revenues are falling short of projections, imagine that, and some pretty hefty cuts are going to be needed to get the budget back in balance. It’s hard to believe tax revenues are down when the economy in Florida is doing quite well. Insufficient tax revenue is something usually associated with hard economic times, not the boom that Florida has enjoyed the last few years.

It was only a matter of time until government’s proliferate spending would run into the wall of taxpayers’ inability to continue funding them. Government spending at every level has risen year after year far faster than the growth in the economy. Sooner or later it was bound to reach the point that it became too much for even a good economy to sustain.

We have water and sewer lines that are almost 100 years old now and no provision has ever been made for replacing them, even though it’s pretty well accepted that nothing lasts forever.

The city of Tampa had to eliminate over 100 positions to meet the restrictions being imposed by the state legislature. Hillsborough County has to find almost 500 positions to eliminate. Of course they go after the ones that will cause the most discomfort for tax payers to start with, sort of a way of punishing citizens for not being willing, or able, to provide for government’s largess.

If we can’t pay the bills of our government now, when times are good by any measure, what’s going to happen when the inevitable downturn comes along in a year or two?

[RightWhale]

The USA owes about $20 trillion, public and private, but some count maybe $100 trillion. One thing we can do is build new things. One thing we are not good at is maintaining existing things, and maybe that’s because it is not worth maintaining old existing things. Maintenance consists of ripping out old parts and replacing with new parts. It is not a case of painting the concrete and steel. New things can be built for the same price. So, blow it up and rebuild. A fine sight—a Cat D9 with a ripper tooth.

[Blue_Ridge_Mtn_Geek]

A good discussion of this issue:

http://online.wsj.com/article/SB118618797841987920.html?mod=opinion_main_commentaries

How to Keep Our Bridges Safe
By STEVEN MALANGA
August 4, 2007; Page A7

The tragic bridge collapse in Minneapolis is a stark reminder that too much of our transportation infrastructure is not well-maintained and requires extensive, costly investments to be fixed or even, in some cases, completely replaced.

Nearly a fifth of America’s roads are now considered in poor shape and about one-in-four bridges is rated “structurally deficient.” The U.S. Department of Transportation estimates that the cost to fix these problems is a staggering $460 billion. The tab grows far larger when you add in the hundreds of billions to build the new transportation infrastructure that’s needed to handle the country’s growth.

Part of the problem is that big increases in state and local spending for politically popular programs, especially Medicaid and education, as well costly public employee pensions and benefits, have crowded out infrastructure — even as some traditional sources of financing for roads and bridges, such as the proceeds from gas taxes, haven’t kept pace with demand.

It’s unlikely that public funds alone will supply what’s needed. Rising gasoline prices have made it politically unpalatable to increase fuel taxes, while some state and local budgets are already groaning under the weight of decades of borrowing, making massive new debt offerings more and more difficult. More federal transportation money? The problem is that 98% of our bridges and 97% of our roads are owned and operated by state and local governments — and that these governments have often used past increases in federal transportation aid simply to replace their own infrastructure spending.

Instead, a few states and cities are now creatively turning to the private sector for help. They are partnering with private investors to build from scratch new toll roads, bridges and other infrastructure that the private owners — not government — will finance and operate. A few cash-strapped cities and states are also replenishing their transportation trust funds — so that they can pour more money into repair and maintenance — by auctioning off existing toll roads and bridges to private operators, who are bidding far more for these assets than most experts would have predicted.

Tapping private investors to build and operate public roads and bridges is nothing new around the rest of the world. Starting with 1955 legislation which allowed the government to select local groups to build toll roads, France licensed private investors to construct and operate some 5,500 kilometers of inter-city autoroutes.

In Britain, Margaret Thatcher’s privatization movement in the 1980s spurred both the sale of existing government assets and public-private construction projects. Later, the fall of the Soviet Union produced a vast round of privatization of public assets in formerly Eastern bloc countries. The U.S. Department of Transportation estimates that world-wide there have been more than 1,100 public-private deals in the transportation field alone in the last 20 years, with a value of some $360 billion.

Only recently have a few intrepid U.S. politicians tested the waters, with startling results. Confronting a $3 billion transportation-funding shortfall, Indiana Gov. Mitch Daniels in 2006 auctioned off the rights to operate the Indiana Toll Road to a private consortium for a staggering $3.85 billion.

In effect, the private operators gave the state a fat up-front payment in exchange for the right to collect tolls for 75 years. The agreement requires the private operator to invest in rebuilding the road over time, and as well to follow a lengthy list of operating standards, from how best to fill potholes to how quickly to clear roadkill. The agreement also limits toll increases, setting out a schedule of fee hikes over the years that the new owner must adhere to.

The winning bidder — a consortium of Cintra of Madrid and Macquarie Infrastructure Group of Sydney — agreed to these conditions and still offered far more than anyone expected. This demonstrates a basic principle that anyone who has ever sold something on eBay readily understands: The true worth of something is what someone is willing to pay for it.

Using traditional means of valuing a public asset — which is to calculate how much in municipal financing could be raised by floating bonds backed by the road’s tolls — Indiana pegged the road’s value at $1.8 billion. Instead, the nearly $4 billion that Indiana got has replenished the state’s transportation fund and allowed the state to embark on an aggressive program of new building and maintenance.

Mr. Daniels is not the only public official to tap the market. Chicago Mayor Richard Daley garnered $1.8 billion auctioning the city’s Skyway to the same partners who purchased Indiana’s Toll Road. He’s now trying to sell Midway Airport, which could fetch up to $3 billion. As in the Indiana deal, Chicago discovered that its roadway, whose worth the city’s advisers had pegged at $900 million, was far more valuable to private investors. The vast disparity in valuation highlights essential differences between the private and public sectors.

For starters, private financiers in these deals — mostly managers of international pension funds with enormous sums to invest — often have a greater taste for risk than the typical conservative investor in municipal bonds. The winning consortium in the Chicago Skyway auction estimated that traffic would grow annually by about 3%. The city’s own study used a more conservative 1% growth rate. The small difference, stretched out over decades, resulted in a vastly greater valuation.

Moreover, the Skyway sale transfers risk from the taxpayer to the private owner. If the road’s traffic doesn’t grow as anticipated, investors must accept a lower rate of return. Thus incentivized, the Skyway’s new owners quickly installed an electronic toll-collection system and assigned additional collectors during rush hour to reduce wait times and expand use of the road.

The success of the Chicago and Indiana sales now has some political leaders scrambling to find other privatization possibilities. There are some estimates that several dozen deals could transpire in the next two years, yielding up to $80 billion for governments.

But selling existing assets may turn out to be only a small part of the story. Budget-squeezed governments are also accepting bids by private investors to finance, build and operate new roads.

Texas has made private capital a key ingredient in a vast road-building project known as the Trans-Texas Corridor. The state has already entered into a build-and-operate deal with an international consortium (Zachry American Infrastructure and Cintra) to construct a 320-mile toll road for an upfront payment of $1.3 billion to the state and the right of the private owners to operate the toll road for 50 years. In California, a private company is building a nearly 10-mile, $800-million extension of Route 125 south of San Diego in exchange for a 35-year lease to operate the road and collect tolls.

Such deals bring welcome benefits to the transportation sector. A 2002 government study in Britain, where public-private transactions are more common, found that while 70% of construction undertaken by the government came in late, just 24% of projects contracted by government to private builders finished behind schedule.

Nevertheless, opponents of privatizations and private-public partnerships argue that private operators can only make money “at the expense of” taxpayers, and that the new owners will skimp on maintenance and repair work in order to squeeze profits out of these operations. These objections typically ignore the significant restrictions and operating requirements written into the contracts — here in the U.S. and around the world — which allow governments to cancel the deals, take back the roads and bridges and keep the cash if operators don’t live up to the terms.

Taxpayers are protected by an even more powerful mechanism, namely consumer choice. The majority of toll roads, to take one example, are built as high-speed alternatives to already existing routes. If the roads become too expensive or unpleasant to drive, their owners risk losing business that they are counting on to make their investments successful.

Some objections to private ownership are simply cynical ploys by politicians looking to maintain their hold on public assets, especially since roads and bridges operated by transportation authorities are often job-patronage mills. Politicians from both parties in New Jersey railed against a recent study recommending leasing some of the state’s toll roads, claiming such a deal would shortchange taxpayers. Of course, the state government is among the most bloated and costly for taxpayers in the country — and the Reason Foundation recently rated New Jersey roads worst in the nation. Yet the politicians worried that an auction, which could have raised some $20 billion for the fiscally challenged Garden State, might allow a private operator to take advantage of its citizens.

Transparent as they are, anti-privatization arguments can resonate with taxpayers who wonder whether such complex transactions will prove too good to be true. Public officials will need to spell out the benefits of these deals, hold buyers to exacting standards, and explain the steep cost of the alternatives: either allowing infrastructure to languish at the risk of tragedy, or hiking taxes. Public officials will also have to resist efforts to funnel privatization proceeds to politically popular programs or to short-term budget fixes, instead of using the money to further enhance their transportation infrastructure.

Difficult political battles are ahead. But for the first time in over a generation, America’s mayors and governors are looking at a realistic way to jumpstart spending they’ve neglected for too long. The stakes are high. Traffic congestion already costs our economy about $65 billion a year in lost productivity. Research also suggests that every $100 million invested in road maintenance and repair will save about 145 lives over the next decade.

As Gov. Daniels told critics at a Congressional hearing last year: “Does no one notice the risk of inaction?”

Mr. Malanga is senior editor at the Manhattan Institute’s City Journal, from whose summer issue this is adapted.

[patton]

The crime was in collecting it in the first place - there never was a plan to save any of it.

Nor could there be. If you put that much money in the bank, it would collapse the world economy.

So the lie is in raising the taxes, claiming it will be saved for future needs, when they know darn well it is not possible.

[Milhous]

Thanks for great FReeper commentary!

Roads pay for themselves. The gas taxes, the increased economic activity, the goods and serviced delivered via those roads are all taxable activities.

Allow me to note the financial history of the Mackinac Bridge.

In order to make the bonds more attractive, the Legislature passed an act during the Spring of 1953 whereby the operating and maintenance cost of the structure, up to $417,000 annually, would be paid for out of gasoline and license plate taxes. Another effort to finance with this added inducement in June of 1953 was likewise unsuccessful, but toward the end of the year the market recovered and $99,800,000 worth of Mackinac Bridge bonds were bought by investors all over the country. Contracts which had been awarded contingent upon this financing were immediately implemented.

...

The bridge opened to traffic on November 1, 1957 according to schedule, despite the many hazards of marine construction over the turbulent Straits of Mackinac. The last of the Mackinac Bridge bonds were retired July 1, 1986. Fare revenues are now used to operate and maintain the Bridge and repay the State of Michigan for monies advanced to the Authority since the facility opened to traffic in 1957.

[Old Professer]

From caltrans:

FACT SHEETImportant Events in Caltrans History

1769

California’s first road, El Camino Real was established by Spanish explorers Father Junipero Serra and Governor Don Gaspar de Portola which linked the coastal missions founded by Father Serra.
1849

California ceded to the United States.
Thousands of “49ers” migrate to California in wagon trains to search for gold.
First river steamboat in California (Benicia).
1850

California admitted into the Union.
Surveyor General S. H. Marlette was assigned to take first surveys and make plans for transportation and navigational improvements.
1853

All mountain passes through the Sierra Nevada Mountain Range had been opened up by immigrants. Many new roads and trails had been created to meet the increasing demand.
1855

Marlette commissioned the first formal survey toward construction of a wagon road across the Sierra Nevada roughly where U.S. Highway 50 is today from Placerville to Nevada.
1863

Central Pacific Railroad begins laying track in Sacramento for the Transcontinental Railroad.
1869

Transcontinental railroad completed.
1879

The first bicycle club established in San Francisco.
1895

The Bureau of Highways created by the Legislature.
The three newly appointed officials of the Bureau of Highways, R. C. Irvine of Sacramento, Marsden Manson of San Francisco, and J. L. Maude of Riverside, purchase a buckboard and visit every county of the state during 1895 and 1896, covering some 7,000 miles through the coast, valley, mountains, and deserts. Their recommended highway system becomes the foundation of the system that exists today.
1896

Lake Tahoe Wagon Road deeded to California, becoming the first state highway.
1897

The Department of Highways replaces Bureau of Highways.
1907

The Department of Engineering replaces Department of Highways. It includes four-member Advisory Board. A state engineer also is appointed.
1909

First State Highway Bond Act issued to establish a State Highway system ($18 million).
1912

Construction begins on California State Highway Contract No.1, between South San Francisco and Burlingame. Groundbreaking ceremonies are held on the El Camino Real in San Mateo County.
Materials testing lab (Translab) authorized.
1915

California law passed allowing convict labor to be used for building roads.
1916

Second highway bond issue for $15 million is approved by voters.
1919

Third highway bond issue for $40 million approved by voters.
1920

Highway Commission recommends fuel tax solely for highway construction.
1921

Department of Public Works created to include Department of Highways.
1923

Two-cent-per-gallon fuel tax approved. One cent is devoted to maintenance and reconstruction, and one cent for county roads.
Highway Commission created as separate state department. State Highway Engineer appointed to handle only highway work.
1926

U.S. Highway Numbering System adopted. Auto Clubs in charge of signing.
Antioch Bridge opens, located on Highway 160 near Highway 4 in Contra Costa County and Highway 160 in Sacramento County.
1927

One cent increase in fuel tax approved for new construction (total 3 cents).
Dumbarton Bridge opens, located on Highway 84 between San Mateo and Alameda counties.
Carquinez Bridge opens, located on Interstate 80 between Contra Costa and Solano Counties near Vallejo.
Department of Public Works re-established with Division of Highways as a major division. Governor to appoint five Highway Commissioners to serve without pay, with powers to alter state routes, authorize right-of-way, and allocate money to build or repair state highways.
1929

Legislature establishes California Toll Bridge Authority and authorizes acquisition of all toll bridges on state highways. Department of Public Works authorized to begin work on the San Francisco Bay Bridge.
1934

State highway code realigned to allow state highway department to build state highways in cities, and reapportioned gas tax revenues to allow building of urban highways.
California State Sign Route Numbering System adopted. Auto Clubs do signing.
1936

San Francisco-Oakland Bay Bridge opens to traffic on Nov. 12.
1937

Golden Gate Bridge opens, located on Highway 101 between San Francisco and Marin counites.
1938

Ground broken for California’s first freeway, the Arroyo Seco, still in existence as the Pasadena Freeway.
Key System electric train service begins across the San Francisco-Oakland Bay Bridge.
1940

California’s first freeway, the 6-mile Arroyo Seco Parkway, now known as the Pasadena Freeway, opens to traffic in Los Angeles County on Dec. 30. It connects Pasadena, South Pasadena and Los Angeles.
1942

California speed limit reduced to 35 mph/25 mph near military bases.
1947

Collier-Burns Act raises auto license fees to $6. Gas, diesel and LPG taxes are raised to 4.5 cents per gallon. It also asserts the state’s obligation to complete construction of the rural highway system and build urban highways.
California Division of Highways takes over signing from the Auto Clubs.
Plans revealed for the world’s first “four-level grade separation” near downtown Los Angeles, connecting the 101 (Hollywood) and 110 (Harbor and Pasadena) freeways.
1953

Fuel tax increased to 6 cents per gallon. Diesel taxes increased to 7 cents.
An urban right of way acquisition fund established. With fuel tax money plus federal aid, Division of Highways plans Freeway and Expressway System totalling 12,414 miles.
The “Four Level” interchange near downtown Los Angeles is completed.
1956

Richmond-San Rafael Bridge opens, located on Interstate 580 between Contra Costa and Marin counties
1959

Senate Bill 480 establishes a 12,414-mile freeway and expressway system.
1961

Legislature combines Departments of Public Works, Motor Vehicles and Highway Patrol into Highway Transportation Agency.
1962

Benicia-Martinez Bridge opens, located on I-680 between Solano and Contra Costa counties.
1963

Legislature increases gas and liquid petroleum taxes and commercial weight fees to aid cities and counties. Fuel tax stands at 7 cents per gallon.
Renumbering of State Highway System approved, to go into effect July 1, 1964.
Master plan for Scenic Highways established by Legislature.
Vincent Thomas Bridge opens, located on Route 47 in the San Pedro area of Los Angeles.
1965

Highway Transportation Agency changes name to Transportation Agency.
Final payment made on third State Highway Bond Act of 1919.
1967

San Mateo-Hayward Bridge opens, located on Highway 92 between San Mateo and Alameda counties.
1969

San Diego-Coronado Bridge opens, located on Route 75 between the City of San Diego and the City of Coronado.
1971

Sylmar earthquake strikes north of Los Angeles, causing damage to the under-construction Antelope Valley Freeway and prompting engineers to re-examine the way bridges are affected by earthquakes.
1972

Assembly Bill 69 consolidates the Department of Public Works and Aeronautics into the Department of Transportation (Caltrans) with six divisions: Transportation Planning; Highways; Mass Transportation; Aeronautics; Administrative Services and Legal.
1974

Proposition 5 passes. Shifts highway dollars to public transportation.
1978

California Transportation Commission formed to replace California Highway Commission, State Transportation Board, Aeronautics Board and California Toll Bridge Authority.
1983

State gas tax increased to 9 cents a gallon.
1984

Business and Transportation Agency renamed Business, Transportation and Housing Agency.
Santa Clara County becomes the first California County to approve a county sales tax increase devoted to transportation improvements.
1987

Governor signs bill allowing counties to ask voters for up to a penny hike in the state sales tax to pay for new roads and mass transit.
Governor signs bill allowing the construction of three toll roads in Orange County.
12th regional Caltrans district opens in Orange County.
1989

Governor signs SCA1, a transportation package designed to provide $18.5 billion for transportation over 10 years. The package depends on voter approval of three ballot measures in June of1990.
Loma Prieta earthquake strikes the San Francisco Bay area, causing widespread damage to infrastructure. The Cypress Freeway (880) and the San Francisco-Oakland Bay Bridge are damaged.
A temporary statewide quarter-cent sales tax increase is enacted to pay for rebuilding and retrofitting in the wake of the Loma Prieta earthquake. The tax expires in 1991.
1990

Proposition 108, 111 and 116 pass, designed to generate $18.5 billion for transportation improvements.
The state gas tax is raised to 14 cents per gallon.
1991

State gas tax is raised to 15 cents per gallon.
1992

State gas tax is increased to 16 cents a gallon.
Voters reject a $1 billion rail bond measure.

1993

The 17.3-mile Glenn Anderson (Century) Freeway, Interstate 105, opens to traffic between Norwalk and El Segundo in Los Angeles County. The $2.3 billion project, which includes interchanges to four other freeways, is billed as the last new freeway in Los Angeles.
State gas tax increased to 17 cents a gallon.
1994

Northridge earthquake strikes the Los Angeles area, causing widespread damage. Four major freeways suffer heavy damage and are closed: the Santa Monica Freeway (I-10), the Simi Valley Freeway (118), the Golden State Freeway (I-5) and the Antelope Valley Freeway (14). Accelerated rebuilding effort results in all freeways being reopened by year’s end.
State gas tax increased to 18 cents a gallon.
Voters reject a $1 billion rail bond measure.

1995

In response to the federal government granting states the authority to set their own speed limits, Caltrans raises the speed limit from 55 mph to 65 mph on 2,800 miles of freeway and expressways.
1996

Voters approve Proposition 192, the Seismic Retrofit Bond Act, providing $2 billion in bonds to strengthen bridges to better withstand earthquakes.
Opening of $498 million Harbor Freeway Transitway, a 10.3-mile bus and car-pool facility running down the median of the Harbor (110) Freeway in Los Angeles. The project includes the first-ever viaduct built along an existing freeway in Los Angeles.
Speed limit raised from 65 mph to 70 mph along 1,300 miles of mostly rural interstates.

1997

Governor Pete Wilson endorses a Caltrans recommendation to replace, rather than retrofit, the earthquake-vulnerable eastern span of the San Francisco-Oakland Bay Bridge.
1998

Tolls on San Francisco Bay area bridges increase from $1 to $2 to pay for earthquake retrofit work.

[DoughtyOne]

Where that could be done I would agree.

[DoughtyOne]

Where it’s done poorly I would agree. If done properly there isn’t a problem. Even houses or highrises are problematic if not built to specific codes. Build these structures properly and they’re okay.

[attiladhun2]

It’s not clear why a major section of the nation’s interstate highway system collapsed Wednesday night over the Mississippi River in Minnesota

Instead of continuing to fix cracks on the underside of the bridge by bolting iron plates over the cracks, they began to resurface the roadbed, which added tons of weight onto the structure. That just might have had something to do with the collapse of the bridge, and not Bush's tax cuts.

[DoughtyOne]

Thanks for the response Ben. What I see is this. The tax per gallon is considerable. In some cases it’s taxed by the state and the federal government before it even hits the pump. Then it’s taxed again.

Why do some state’s citizens vote to divert funds? They do it because those states have overspent, neglected important things like schools, and then blackmail the public into doing what they do.

Local property taxes are diverted. State taxes are diverted. Federal taxes are diverted. Our leaders play this shell game and then come to us with sob stories in order to get our approval for something we shouldn’t. How many times have you heard it said that any cuts would hurt the police, firemen and libraries first? That’s the old ploy. Votes refuse to pay more taxes and the state politicos start playing hardball.

Handouts, commissions, plush appointments... none of these get chopped. No emergency services do to teach the public just who is boss.

There needs to be a top to bottom priority reallignment so that funds are going to where they should be. If that were done a lot of giveaways, chronyism and lucritive insider deals would be pealed off and we could afford the essentials again.

Every time someone comes to me with the type of arguement you did, I have to stop and ask myself how our forefathers built the infrastructure if we can’t afford it. We CAN afford it. We just aren’t spending wisely.

You mention that mileage is better today so taxes have actually dropped. You know better than that. Mileage has gone up but the number of cars on the road has doubled or even quadrupled. Much more gas is being sold today and much more taxes are being taken in.

Thanks for your comments Ben.

[DoughtyOne]

LOL... get outta here...

[DoughtyOne]

I can’t completely disagree. On the other hand how many times have you voted for a guy you thought was a stand up person, only to have them go south on you. As voters there really is only so much we can do.