This week, President Obama banks again on infrastructure investment to stimulate the nation’s economy. Also, a key Senate committee approves a four-month extension of surface transportation programs as a House Appropriations subcommittee passes a 2012 transportation budget that cuts overall spending and Administration-favored programs. There are also items this week on congestion reduction, sprawl and smart growth.

The President fired a shot across the bow of Congress last night with his $450 billion proposal to address the jobs crisis.  In a reprise of the Recovery Act of 2009 (the “stimulus”), the majority of new spending in the proposal would flow through state and local government with over $110 billion devoted to infrastructure and education alone.  However, state budget planners need not revise their mid-year predictions just yet as the bill will face a hurricane-force headwind as soon as it hits the House of Representatives next week. 

State transportation officials this week called on Congress to take action by September 30th to extend the 18.4 cents-per-gallon gas tax that funds federal highway and transit programs and to pass a long-term reauthorization of those programs. I also have items this week on the future of infrastructure finance, tolling, public transit, Smart Growth, a model for regional freight plans, Seattle’s new Big Dig and possible restructuring for the South Carolina Department of Transportation following a recent fiscal crisis.

To improve state's infrastructure, Nebraska legislators decide to add new revenue source for roads.

With Washington still embroiled in the debt ceiling debate and no momentum for a new transportation reauthorization bill, we get a glimpse this week at the potential cost of doing nothing to improve America’s infrastructure. The American Society of Civil Engineers (ASCE) issues a new report today entitled “Failure to Act: The Economic Impact of Current Investment Trends in Surface Transportation Infrastructure.” The report indicates that not only are American households and businesses absorbing enormous costs today as a result of deteriorating infrastructure, over the next 30 years these costs could further reduce America’s productivity and competitiveness in the world, cause millions of Americans to forgo discretionary purchases in order to pay transportation costs that could have been avoided, cause the U.S. to lose out on creating jobs in high paying services and manufacturing industries, produce a significant drain on wages and productivity and result in the United States losing billions of dollars in foreign exports.

The U.S. Senate Environment and Public Works Committee released a three-page outline of a bipartisan bill to authorize federal transportation programs Tuesday and held the first hearing on the plan Thursday. There is also news this week about state efforts to find new sources of revenue to fund transportation, including public-private partnerships.

Although traditional revenue sources for transportation such as gas taxes are in decline, little was done to shore them up in 2011 legislative sessions. While a handful of states enacted major transportation finance legislation, budget cuts and bare-bones plans were more common. Some states are exploring public-private partnerships or alternative finance mechanisms to help meet their infrastructure needs. But a number of states this year created committees to study transportation finance needs and report back on potential solutions at a future date.

More than 30 states and Puerto Rico have created a state infrastructure bank, a type of revolving infrastructure investment fund that can offer loans and credit assistance to public and private sponsors of certain highway construction, transit or rail projects. Five states--Florida, Georgia, Kansas, Ohio and Virginia--have established banks or accounts within their banks that are capitalized solely with state funds. These banks were designed with the unique needs of each state in mind and their experiences have varied. The future of state infrastructure banks may depend on the next federal surface transportation authorization and what kinds of federal funding and financing resources may be available to states in the future.

The American Recovery and Reinvestment Act of 2009 provided $48 billion to states for transportation infrastructure projects. States achieved significant successes in 2010 in  meeting deadlines associated with the legislation, starting and completing projects on time and under budget, creating jobs and doing it all with little fraud or waste. Still, some questions have been raised about whether the stimulus could have had a greater impact, which types of projects were funded and which states received the most funding. Despite its political unpopularity in 2010, the Recovery Act proved its worth to state transportation officials around the country.

Chapter 9 of the 2011 Book of the States contains the following articles and tables:

Book of the States 2011

Chapter 9: Selected State Policies and Programs

Articles:

  1. An Impossible Choice: Reconciling State Budget Cuts and Disasters that Demand Adequate Management
  2. ...

Pages