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The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Keith Reester
February 14, 2017
Transforming American infrastructure requires a reinvention of the regulatory framework. The recent presidential and congressional election cycle brought the usual lament the U.S. is falling behind on infrastructure investment. Reports from various sectors highlight the gap: the 2016 World Economic Forum Competitiveness Report puts the U.S. at 25th overall in infrastructure, while the American Society of Civil Engineering (ASCE) puts infrastructure nationally at a D- grade. The lack of infrastructure spending not only limits American job growth but is a throttle on global economic competitiveness. Not sure about that? Talk with the economic development leaders in rust belt cities. The biggest request they get when seeking to attract new projects are transportation and utilities to potential sites.
One limitation on the ability of states and local government to drive infrastructure change is the bridle placed on delivering projects that come with federal dollars. In looking at the Congressional Budget Office’s (CBO) 2014 report Public Spending on Transportation and Water Infrastructure, 1956-2014, one data point over time is particularly revealing: the percentage of funding by the level of government. State and locals have always outspent the federal government to build and operate infrastructure, but this gap has widened considerably since 1977. In 1977, the federal share exceeded 38 percent and by 2014 it reached an all-time low of 24 percent. During the last 15 years, all contribution has declined, with the federal share falling at a rate five times that of local investment.
Over the same 60 year period the level of federal regulations across all branches has grown an estimated 18 times, according to the Mercatus Center at George Mason University, and infrastructure control is no different.
The challenge facing all levels of government is how to be nimbler; how to successfully deliver infrastructure in response to community needs, efficiently on the ground and cost effectively on the balance sheet. Today we must also be inclusive of a variety of needs including multi-modal transportation planning, resilient infrastructure and environmental sensitivity. We have proven we can deliver projects in a rapid manner and still meet these requirements. Examples include the rebuilding of U.S. 34 in Colorado along the Big Thompson River after catastrophic floods in 2013 and the delivery of the I-35W bridge in Minneapolis after its collapse in 2007. In both instances, project implementation occurred in a timeframe that seemed unattainable in the ordinary process of delivering infrastructure projects, both less than 12 months.
In a now very difficult to find report, the U.S. House of Representatives Committee on Resources created a bi-partisan commission to review potential improvements to the National Environmental Policy Act (NEPA) in 2005. The committee developed 21 recommendations which would dramatically improve the process of delivering projects and programs under NEPA without undermining the intent of environmental protections afforded in the law. To date, not a single recommendation has been implemented or even proposed for a regulatory update.
Some would argue much of the regulatory framework present today in the transportation world developed during a time when the federal government held a much greater percentage of the purse strings attached to building major projects. The CBO report shows the share of federal dollars has not only declined dramatically but continues unabated in discerning future investment. The regulations that come with federal dollars has not dropped with the sea change in funding, leaving states and local governments to absorb the impacts.
What does this mean in dollars? In 2010, agencies in Northern Colorado partnered to deliver an interchange project at Interstate 25 and Highway U.S. 34 as a local agency project with no federal dollars. In building interstate projects, this methodology represents a tiny percentage; delivery of the completed projected totaled $12.1 million. A project analysis showed the same project with the overburden of federal regulations would have cost $14.2 million or a 17 percent increase. According to the CBO, all infrastructure spending totaled $416 billion in 2014. Using the Colorado example, streamlining the regulatory framework could potentially put an additional $70 billion in investment a year into our nation’s failing infrastructure.
Author: Keith Reester works with Matrix Consulting Group and engages with government organizations driving analysis, performance improvement and leadership improvements. Keith has extensive experience as a local government leader in multiple cities across the country. Reester is also the author of the top selling book Define. Measure. Create – Inspiring a Leadership Journey.