US infrastructure is falling apart

The basic infrastructure all of us depend on every day – including aviation, highway, public transit and rail – is falling apart and needs a proper flushing, if we could find a public water system that worked properly.

That pretty much sums up a depressing report issued today by the congressional watchdogs at the Government Accountability Office today on the state of the US infrastructure. Not only are the problems large, but some of the solutions, such as increased taxes, vehicle usage fees, airline passenger levies as well as adding tolls on highways are as controversial and they would be painful.

And then there are the problems. “For example, demand has outpaced the capacity of our nation’s surface transportation and aviation systems, resulting in decreased performance and reliability. Furthermore, as we recently reported, federal surface transportation programs are not effectively addressing key challenges, such as congestion, because the federal goals and roles are unclear, many programs lack links to performance or needs, and the programs often do not employ the best tools and approaches. In addition, water utilities are facing pressure to upgrade the nation’s aging and deteriorating water infrastructure to improve security, serve growing demands, and meet new regulatory requirements.

Given these types of challenges and the federal government’s fiscal outlook, it is clear that the federal government cannot continue with business as usual, ” the GAO said.

An examination of the vastness of the US infrastructure underscores the issue: There are about 4 million miles of roads, 117,000 miles of rail, 600,000 bridges, 79,000 dams, 26,000 miles of commercially navigable waterways, 11,000 miles of transit lines, 500 train stations, 300 ports, 19,000 airports, 55,000 community drinking water systems, and 30,000 wastewater treatment and collection facilities. Collectively, this infrastructure connects communities, facilitates trade, provides clean drinking water, and protects public health, among other things, the GAO said.

And the problems are many the GAO states, including:

· Despite increases in transportation spending at all levels of government and improvements to the physical condition of highways and transit facilities over the past 10 years, congestion has worsened and safety gains have leveled off. For example, according to DOT, highway spending by all levels of government has increased 100% in real dollar terms since 1980, but the hours of delay during peak travel periods have increased almost 200% during the same period. In addition, demand has outpaced the capacity of the system, and projected population growth, technological changes, and increased globalization are expected to further strain the system. Without significant changes in funding, planned spending, or both, the balance of the Highway Account of the Highway Trust Fund—the major source of federal highway funds—is projected to be exhausted at some point during fiscal year 2009.

· The Federal Aviation Administration (FAA) faces significant challenges in keeping the nation’s current airspace system running as efficiently as possible as the demand for air travel increases and the air traffic control system ages. System congestion, and the resulting flight delays and cancellations, are serious problems that have worsened in recent years. For example, according to DOT, 2007 was the second-worst year for delays since 1995. To accommodate current and expected demand for air travel, FAA and aviation stakeholders are developing the Next Generation Air Transportation System (NextGen) to modernize the nation’s air traffic control infrastructure and increase capacity. This effort is complex and costly. Although there is considerable uncertainty about how much NextGen will cost, FAA estimates that NextGen infrastructure will cost the federal government between $15 billion and $22 billion through 2025.

· Water utilities nationwide are under increasing pressure to make significant investments to upgrade aging and deteriorating infrastructures, improve security, serve a growing population, and meet new regulatory requirements. Water infrastructure needs across the country are estimated to range from $485 billion to nearly $1.2 trillion over the next 20 years. According to the Environmental Protection Agency’s (EPA) June 2005 Drinking Water Infrastructure Needs Survey, the largest category of need is the installation and maintenance of transmission and distribution systems—accounting for $183.6 billion, or about 66% of the needs projected through 2022. Many drinking water and wastewater utilities have had difficulty raising funds to repair, replace, or upgrade aging capital assets; comply with regulatory requirements; and expand capacity to meet increased demand. A significant percentage of the utilities serving populations of 10,000 or more—29% of the drinking water utilities and 41% of the wastewater utilities—were not generating enough revenue from user charges and other local sources to cover their full costs of service.

While the problems are many, the solutions don’t sound so hot either. For example, the GAO notes a number of taxes and user fees that would generate more fix-up cash for federal, state and local governments.

Among the suggestions it offers:

· Congestion pricing. Congestion pricing, or road pricing, attempts to influence driver behavior by charging fees during peak hours to encourage users to shift to off-peak periods, use less congested routes, or use alternative modes.

· Tolling. Roadway tolling has the potential to provide new revenues, promote more effective and rational investment strategies, and better target spending for new and expanded capacity for surface transportation infrastructure.31 For example, the construction of toll projects is typically financed by bonds; therefore, projects must pass the test of market viability and meet goals demanded by investors, although even with this test, there is no guarantee that projects will always be viable. Tolling potentially can also leverage existing revenue sources by increasing private-sector participation and investment through such arrangements as public-private partnerships.

· Freight fees. Given the importance of freight movement to the economy, the Policy Commission recently recommended a new federal freight fee to support the development of a national program aimed at strategically expanding capacity for freight transportation.

· VMT fees. To more directly reflect the amount a vehicle uses particular roads, users could be charged a fee based on the number of vehicle miles traveled. In 2006, the Oregon Department of Transportation conducted a pilot program designed to test the technological and administrative feasibility of a VMT fee. The pilot program evaluated whether a VMT fee could be implemented to replace motor fuel taxes as the principal source of transportation revenue by utilizing a Global Positioning System (GPS) to track miles driven and collecting the VMT fee ($0.012 per mile traveled) at fuel pumps that can read information from the GPS. As we have previously reported, using a GPS could also be used to track mileage in high-congestion zones, and the fee could be adjusted upward for miles driven in these areas or during more congested times of day such as rush hour—a strategy that might reduce congestion and save fuel.27 In addition, the system could be designed to apply different fees to vehicles, depending on their fuel economy.

· Aviation user fees. Many commercial airports currently impose a user fee on passengers—referred to as a passenger facility charge—to fund airport capital projects. Over $2 billion in passenger facility charge revenues are collected by airports each year, representing an important source of funding for airport capital projects. In contrast, FAA’s activities, including the transition to NextGen, are largely funded by excise taxes through the Airport and Airway Trust Fund. To better connect FAA’s revenues with the cost of air traffic control services that FAA provides, the administration has proposed, in its FAA reauthorization bill, to replace this excise tax funding system with a cost-based user fee system. This new system would aim to recover the costs of providing air traffic control services through user fees for commercial operators and aviation fuel taxes for general aviation.

Submitted by Layer 8 on Thu, 05/08/2008 – 4:42pm.


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