Transportation Policy Academy 2015 – DC – Brian Pallasch, American Society of Civil Engineers

Brian Pallasch is the managing director for government relations and infrastructure initiatives at the American Society of Civil Engineers (ASCE) in Washington, DC. He was among the presenters at a policy roundtable CSG hosted on May 12 as part of the 2015 Transportation Policy Academy in Washington. During these excerpts from his remarks, he discusses ASCE’s 2013 Report Card for America’s Infrastructure, the economic costs of not investing in infrastructure, why ASCE supports an increase in the federal gas tax and a permanent fix for the Highway Trust Fund and why he believes a proposal to eliminate the federal role in transportation is a bad idea.

On the overall grade given to the nation’s infrastructure in the 2013 Report Card…

Pallasch: “America’s GPA for our infrastructure is a whopping D+. I would say the good news is that’s up (from the previous report card). It was a D in 2009.”

On why grades in some infrastructure categories went up…

Pallasch: “A few of the (infrastructure) categories went up. What I would say about those categories and the thread that runs through all of them is they are areas where either someone spent more money, meaning that they focused some more resources on it. If you think about wastewater and drinking water and roads and bridges, this report card came out closely with the data on the (2009 American Recovery and Reinvestment Act) and a little more public investment and some more private investment in a few categories and so we think that’s why really the grades went up. Folks started focusing on some of these issues.”

On the grade for Rail of a C+…

Pallasch: “In the rail area, the railroads have begun to spend a lot more money on their own infrastructure. It’s obviously mostly private, other than some right-of-way stuff, so they’ve actually focused a lot of their own resources. … They have consistently been spending in the $15 billion to $20 billion range (annually) … on their own infrastructure and that certainly helped. One of the reasons they did that (between 2009 and 2013) … is there was a recession and the traffic was down so there was less of an impact on the rail system if they were doing work on the system.”

On the grade for Bridges…

Pallasch: “When you look at the Bridges grade of a C+ … 11 percent of our nation’s bridges are structurally deficient. We have over 600,000 bridges in this country and so that number translates into about 70,000 structurally deficient bridges. That number has been coming down and we think that’s a good thing. Folks have asked me ‘what’s the right number?’ Zero is not possible when you’ve got 600,000 assets aging as they are. We think a goal of 5 percent seems like a good number. Some states (like) Pennsylvania are up in the 20s. There are some states that are at that 5 percent goal and that’s a good thing and we think that goal of 5 percent is achievable. It’s going to take a little bit longer in some places. One of the issues that we do have concern about as we look at these bridges is the traffic volumes and where the traffic is going and how the traffic is flowing on the most critical bridges. Urban bridges seem to be a little bit higher percentage of the deficient bridges. Obviously they’re going to have the most traffic so if you’re making decisions at the state level where to spend some of your money, using traffic volumes as a way to address some of those issues might be a worthwhile thing to look at. I will also note that sometimes those urban bridges are the most expensive ones to fix and they’re also the most disruptive to fix.”

On the grade for Roads…

Pallasch: “In the Roads area, you see the D grade and that’s up a little bit from 2009. We still have pavement conditions that are not great. … Congestion is costing the economy a great deal of money. Increased congestion costs about $100 billion a year to the economy. That’s wasted fuel, that’s wasted time for all of us, that’s opportunity lost, it’s delays in delivery. If you have an on-time manufacturing business and the truck gets stuck and your plant is on hold for a couple of hours while you’re waiting for parts to be delivered, that is a significant problem and one that really needs to be addressed. Thirty-two percent of our roads are in poor or mediocre condition, costing motorists who are traveling—and not only the congestion cost but just the deficient pavement and the problems we all face certainly in the Northeast or an area that gets weather like we do—about $67 billion a year, which equates to about $325 per motorist. …”

On the grade for Transit…

Pallasch: “Transit is a grade of D. I think one of the issues we face is that transit ridership is growing. … Transit doesn’t pay for itself in the normal sense where you’re collecting all the money at the fare box. But it is something that provides people the mobility and the opportunity to get to work in a different way so you don’t have to be stuck like I was in traffic this morning. But also, we do have a situation where 45 percent of Americans actually lack access to transit. And that’s one of those things where I’m not sure we’ll ever get to 100 percent of the households having access to transit but we probably can do a little bit better than only 55 percent. And there are some discussions among those 55 (percent) that do have access. Not everyone thinks they have great access and appropriate access. So trying to find a way to give people better access and to provide better transit services is something we think is an important part of dealing with our infrastructure and making it more workable for the nation at large.”

In the 2013 Report Card, ASCE estimated a $3.6 trillion need across all infrastructure over an eight-year period…

Pallasch: “Probably the most significant need remains in the area of Surface Transportation. We really are only funding at about 50 percent of the level that we really need to be funding across the board. These are numbers that are federal, state and local and private so this is not just a federal issue.”

“The current funding of that $3.6 trillion—about $2 trillion. … We did this back in 2012, laying out the normal funding that happens and if we flat-funded or funded the way we’ve been funding for the last number of years, we would cover about $2 trillion of that $3.6 trillion. … Only in Washington can we say this: over the eight years of this Report Card, it’s only $200 billion a year, which is clearly an absurdly large number and one that can’t be necessarily met easily and not one that can be met quickly. But the notional idea behind that is … I’m not sure we’ll ever get to fill the entire hole (so) … we need to do a better job of picking the right projects and focusing the money where it’s needed. But it’s probably important to have the discussion to say these are the needs of what we have.”

On a lack of focus on infrastructure investment at the federal level…

Pallasch: “It’s a daunting issue and one that can’t be lightly taken but I think what we’re concerned about is the fact that there is not enough focus certainly at the federal level. I know some states … are doing probably a lot better job lately than the federal government in actually focusing some efforts on this. But at the federal level, we still are sort of in search of the right answer and maybe sometimes in search of the right question. … But this idea that we do need to start addressing some of this (infrastructure) deficit. And the sooner we start addressing it, the sooner we can stop some of the effects.”

On the economic costs of not investing in infrastructure…

Pallasch: “Our infrastructure is the backbone of our economic competitiveness and if we don’t start addressing it, not only does our competitiveness suffer, but American businesses and workers will pay a price and ultimately our families actually end up having a lower standard of living. … Four years ago, ASCE released an economic study based on this idea of … if we stay at the same level of funding—so nothing changes because it hasn’t been changing obviously—what’s the effect on the economy? … The reports focus on the years 2020 and 2040. … What we found for surface transportation … by 2020, the economy will lose 877,000 jobs in that year. … The gross domestic product will underperform by close to $900 billion. … The impact on a family’s budget … is about $1000 a year. There have been discussions recently and murmurs and comments made that success in reauthorizing the (2012 MAP-21) surface transportation bill will be flat funding for four or five years. If we do flat funding for four or five years, that slide comes true. And I think our concern is that’s not good enough for the American people and that’s not good enough for our economy. Admittedly that slide does not take into account state level spending. … We have seen states that are actually increasing what they’re doing and the ones that haven’t quite gotten there yet are actually talking about it. What we think is that there does need to be a little more time spent on this and claiming success by having a flat-funded program—whether it’s flat-funded plus a little inflation or just flat-funded—is not really a success.”

“One of the things I have concern about is if you get to that flat-funded program, some of the major projects that we know we have that are big infrastructure projects are simply not going to get done. The one that everyone talks about … is the Brent Spence Bridge between Kentucky and Ohio. If we flat fund this program, that bridge will not get done. I just can’t foresee how that transpires. And that’s a bridge that has a significant economic component to it. It has an effect on the economy not only of that region but in a much larger fashion.”

On why a permanent, sustainable fix for the federal Highway Trust Fund is needed…

Pallasch: “We do need to fix our (Highway Trust Fund) … with long-term, sustainable revenue so that we can actually grow the program. You all need that. You need the certainty of that. You guys don’t do your budgets at the state level six months or three months at a time. … Most states have a long list of projects and solutions to problems that they’d like to implement and the federal government should be a partner to that. Right now, I would argue, they’re not being a terribly good partner.”

On why proposals to eliminate the federal role in transportation and allow states to take on more responsibilities—financially and otherwise—wouldn’t work…

Pallasch: “We have a national system. We have interstate commerce and as a result the federal government has a role … in making sure that the products that end up in Long Beach on big container ships can actually get to Iowa … and likewise that you can get the stuff you make in Iowa either down to New Orleans and get it out or out to California and get it out.”

“I think it’s pretty easy to point the finger at the federal government sometimes and say ‘they’re the problem’ when it may in fact be maybe the state’s a little slow walking some stuff sometimes. … We’ve heard lots of concerns about how environmental regulations slow things down. We think we can streamline and take some time out of that. We agree with that. But sometimes you get done with your environmental review and you’re ready to go and someone says ‘oh yeah, but we don’t have the money yet.’ And the environmental review gets old and stale and you’ve got to go back and do it again. Now there’s a big waste of money.”

“Lots of states would actually end up needing to raise their gas tax considerably more than what the 18.4 cents that (the federal gas tax) currently is (to make up for the loss of those revenues if the federal program were to go away).”

On why ASCE supports a federal gas tax increase…

Pallasch: “I’ve heard folks say … ‘well, y’know (the gas tax) just doesn’t bring in as much money as it used to at the federal level.’ That’s not exactly true. … It remains about 40-some billion dollars a year. It’s been that way for some time. Our problem at the federal level is we’re spending more than that. Not a very tenable situation. Congress refuses to lower the amount of funding, which is good. None of us would disagree. But they’re not willing to fill the hole appropriately. … Congressman (Earl) Blumenauer has a bill that we like. It raises the gas tax 15 cents over a number of years. … That’s probably still not enough. That fills the hole and gets you a little bit of growth. What would that cost each of us as consumers? I (calculated) it for the purposes of my vehicle—my Ford Fusion, slightly fuel-efficient vehicle … (it would) cost me about $175 a year. … When you take that in conjunction with the fact that I’m wasting money on congestion, I’m wasting money on car repairs, I’m wasting other time and gas and stuff like that, it may balance itself out a little bit. In fact, you may end up gaining a little bit. … (But) Congress has no leadership or courage on this issue at this point.”      

Further Reading & More

The 2015 CSG Transportation Policy Academy was presented with the support of the American Society of Civil Engineers, Nissan and UPS.