In my April column ("The continuing infrastructure fiasco"), I lamented Congress's long history of inaction when it comes to funding critical infrastructure repairs and improvements. And nothing has changed in the months since. Although President Trump has asked for legislation that would produce a $1 trillion investment in U.S. infrastructure (financed by $200 billion from the federal government with the remainder coming from private sources or private/public partnerships), there's been no progress on that front. Now, Congress has gone into summer recess until September.
When legislators return after Labor Day, they'll face a jam-packed agenda. Along with tackling tax reform, they must pass a $700 million bill to fund the Pentagon, reauthorize the Federal Aviation Administration and Food and Drug Administration, decide whether to privatize air traffic control, and find a way to keep the government open past the end of September. Transportation Secretary Elaine Chao, who had promised an infrastructure plan by September, has now pushed that date out to the end of the year. I would be surprised—in fact, shocked—if anything happens by then.
I have long believed that it is the federal government's responsibility to plan and fund the nation's infrastructure—to develop and preserve a national transportation system adequate to meet the needs of commerce and serve the public interest. The current interstate highway system, conceived in 1956, is an excellent example of a federal infrastructure project undertaken for the national good. But since that time, most of the infrastructure funds have been allocated to the states to finance their own projects. There has been no "master plan." Although the Obama administration did draft a blueprint of such a plan, then-Transportation Secretary Anthony Foxx characterized it as "a conversation about the future rather than a conclusive definition of a path forward." I assume that it's sitting on a shelf somewhere, a victim of the "not invented here" syndrome. All these developments, and the lack of others, have caused me to reluctantly change my position on congressional responsibility.
I now believe our best shot at fixing the nation's infrastructure is to just let the states do it. Give them whatever federal funds are available and let them take it from there. This is not a wholly new idea. In the past five years, 22 states have raised their fuel taxes to fund their own improvements, due to Congress's failure to act. Congress seems to be terrified of endorsing a fuel tax increase, although the states have done so with little pushback. I suspect this is largely because the taxpayer can readily see where the money is going.
The major risk here is that the states will choose projects that benefit the state but contribute little, if anything, to a national highway system. A case in point is the infamous Interstate 69. Begun in the early 1990s, I-69, called the NAFTA Superhighway, was envisioned as a corridor running from Canada to Mexico through the U.S. heartland, connecting all three countries and spurring economic growth along the way. More than 25 years later, the highway is nowhere near complete.
Although the project was ostensibly stalled by a lack of funds, consider how things played out in one of the affected states, Tennessee. After completing some I-69-related work at the Kentucky and Mississippi borders, Tennessee halted construction through the rest of the state due to lack of funding. It did find money, however, for a $753 million Nashville bypass, and the state completed it instead. While this has been a great thing for those traveling from Memphis to Knoxville on football weekends, is it more important than the NAFTA Superhighway? To most Tennessee residents, it probably is. State biases notwithstanding, I have come to the opinion that the advantages of state initiatives will outweigh the disadvantages of their unilateral actions.
Gartner, Inc.
