Clear the Infrastructure Investment Deficit While Interest Rates Are Low

Written by Rob Horr, IBTTA President

It’s time to start looking at the transportation infrastructure crisis as a moment of golden opportunity.

With America’s highways in dire condition, we know there’s no time to lose in closing the infrastructure funding gap. In its 2013 Report Card for America’s Infrastructure, the American Society of Civil Engineers (ASCE) delivered grades of C+ for the nation’s bridges and D for its roads, calculating that an additional $846 billion will be needed to bring surface transportation up to a B grade by 2020.

But what makes this investment deficit even more appalling is that there could hardly be a more cost-effective time for state governments to invest, using tolling to bridge the gap between public sector need and private sector funds. At IBTTA’s 2013 Transportation Finance and Mileage-Based User Fee Symposium in April, Robert Keough of John Hancock Financial Services said historically low interest rates make this an ideal time to invest.

“We’re looking for assets where we can take the money we’re getting today and invest it for the long term, and from your point of view, that should be exciting news,” he said. “You’re effectively focused on exactly what we’re looking to buy.”

Even if the window is beginning to close on record-low interest rates, a weak economy is still a good time to roll out a major project. Contractors know it’s a buyers’ market. Materials are reasonably affordable, as well. So there’s a moment of opportunity to be seized, if only we can seize it.

A Different Kind of Crisis

As a citizen and a taxpayer, I understand that governments are in fiscal crisis. But I also know that continuing inaction on transportation infrastructure is leading to a far worse crisis of a different kind. As a bridge operator, I’m extremely sensitive to the possibility of physical infrastructure failing. It’s something I never want to see in my career.

But the ASCE report card pointed to 607,380 bridges across the U.S. that were functionally obsolete or structurally deficient in 2012. When a bridge, road, or tunnel does fail, it could be construed that a government was derelict in its duty to protect the lives and safety of the public.

The irony is that solving this crisis is the ticket to confronting the one that legislators are most concerned about.

The Perfect Time to Invest

In a breakfast talk earlier this month, former Treasury Secretary Larry Summers connected the dots between the two different types of deficit. “Just as you burden future generations when you accumulate debt, you also burden future generations when you defer maintenance,” he said.

The job for every IBTTA member is to press the case that transportation infrastructure investment will help build a long-term economic recovery. Highway, bridge, and tunnel projects involve significant investment in engineering and design, followed by many months or several years of construction. They create secure, well-paid jobs at every stage.