Stronger Infrastructure Moves America Ahead: Aging Roads And Bridges Nationwide Diminish Our Nation’s Productivity
Written by John Ruan III, Kristine Young, and Mary Vermeer Andringa
Stronger economic growth and more jobs are on every American’s list of resolutions as 2012 begins. But the question remains whether Congress will play a supporting role, or if it will choose to impede private-sector growth and job creation because of an intense partisan stalemate. If there were ever an issue ripe for breaking the jobs agenda gridlock, it’s transportation infrastructure investment.
Inarguably, our infrastructure has outlived its useful life. In the 1950’s, 60’s, and 70’s America wowed the world by building a vast interstate highway system. We were a model for progress and engineering magnificence. In the years since, we’ve moved from first in the world to middle of the pack.
The U.S. Chamber’s transportation performance index shows that a steady decline in how well our roads, rails, runways, and rivers serve business and the economy costs us nearly $1 trillion a year in lost economic growth. U.S. infrastructure has dropped precipitously from first place in the World Economic Forum’s 2005 economic competitiveness ranking to Number 15 today. The American Society of Engineers rates
our system as a “D.”
Little by little, this decline chips away at our competitiveness, our economy, and our quality of life.
An aging infrastructure diminishes productivity; road congestion costs the American public $115 billion a year in lost time and wasted fuel—$808 out of the pocket of every motorist. It also makes us less safe; AAA estimates that the annual societal cost of crashes is $300 billion and 33,000 lives per year. Poor road conditions are a factor in one-third of all traffic fatalities.
By making the necessary infrastructure investments, we could gain nearly $1 trillion in unrealized economic potential, create millions of jobs, reduce transportation crashes, injuries, and fatalities, lessen congestion and emissions, produce more exports, and attract greater investment.
Iowa has much to gain from increased investment in roads, bridges, and highways. For example, the expansion of U.S. Highway 30 into a four-lane route from Clinton to Ames would create more than 9,000 jobs, induce more than $341 million in economic activity, support $309 million of payroll, and generate $1.9 million in annual sales tax revenue in the counties along the expanded highway.
In addition, improvements to the Interstate Highway 74 corridor that move people and goods and services between Iowa and Illinois is expected to increase employment in the Quad Cities region by 33% over a 37-year period.
According to a study from Iowa State University, our strong manufacturing sector already accounts for 17.8% of Iowa’s total gross domestic product and $1 in $3 of income in Iowa is directly or indirectly linked to manufacturing sales. Improving the ability to move manufactured goods and services would strengthen these numbers and, as a result, strengthen our economy.
We need to be more strategic and spend federal money on projects that best serve the national interest. Congress has already pledged to stop earmarking; additional reform and accountability measures are necessary.
We must leverage public funds to draw private investment. Every $1 billion of federal money can result in $30 billion in transportation investment. We need to remove regulatory impediments, state and local laws, and outdated attitudes that are taking an estimated $250 billion in global capital out of play. That private capital would create 1.9 million jobs over 10 years and spur untold economic growth.
We must find new and innovative ways to augment federal revenues for infrastructure investment.
In recent years, receipts to the federal Highway Trust Fund have fallen substantially due to improved gas mileage and reduced travel. In the near term, a modest, phased-in increase in the federal gas tax—which hasn’t moved from 18.4 cents per gallon for 18 years— is the simplest way for motorists who use our roads everyday to contribute to their improvement.
Finally, it is long past time for Congress to pass long-term highway, transit, safety, and aviation laws—instead of short-term extensions—that maintain or increase investment levels. Without the certainty of multi-year funding, projects will continue to move along haltingly, allowing road, transit, and aviation systems to fall to greater levels of disrepair and land, labor, and materials costs to rise.
Putting America’s infrastructure back on top is a significant task, but one that business, organized labor, and Americans agree should be a top priority. It all begins with Congress making transportation investment priority number 1 in 2012.
About the Authors
JOHN RUAN III is chairman of Ruan Transportation Management Systems in Des Moines and chairman of the U.S. Chamber of Commerce.
KRISTINE YOUNG is president of the Associated General Contractors of America and president of Miller the Driller in Pleasant Hill.
MARY VERMEER ANDRINGA is president of Vermeer Corp. in Pella and chairwoman of the board of the National Association of Manufacturers.
This guest editorial was originally published in the Des Moines Register on January 27, 2012.