Oops, cost of neglected roads and transit is worse than expected

Our view: Latest report shows government's failure to invest enough in transportation infrastructure is going to prove costly to economy

August 11, 2011

Even engineers can make a mistake.

Last month, the American Society of Civil Engineers released a study of U.S. transportation needs and found that the country's failure to invest sufficiently in roads, bridges, rail and other infrastructure is going to reduce personal income by $930 billion by 2020 but might recover slightly by 2040.

Turns out, that was wildly inaccurate. After returning to the drawing board and scrutinizing the issue more closely, the engineers came out with a more complete accounting of the consequences of the deteriorating network.

In fact, Americans are set to lose $3.1 trillion in personal income by 2040 — far worse than originally reported.

How is this possible? The calculation is based on all the expenses incurred by poor roads, bridges and transit systems. For instance, each year these deficiencies mean an extra $97 billion in vehicle operating costs, $32 billion in travel delays, $1.2 billion in safety costs and $590 million in environmental costs.

As the transportation system worsens, the costs increase markedly. Without greater investment, the average household stands to lose about $7,000 in household income each year within a decade, according to the report.

Raw materials will cost more because they'll be more expensive to transport. U.S. exports will fall because they'll be more expensive to ship to the global market. An estimated 877,000 jobs will be lost by 2020 — and those who remain employed will pocket less.

This is why most business organizations, from the U.S. Chamber of Commerce down to local advocates for economic development, are pushing for both the federal and state governments to invest more money in transportation — even given concern over the deficit.

Saving money by reducing transportation spending is akin to deferring vital maintenance to the roof of your home. It may save you a little bit in the short run, but when the roof gives out, the cost will be exponentially more than the annual maintenance would have been.

The transportation bill pending in Congress represents one of the few job-creating opportunities available to Washington. Yet the long-term reauthorization languishes on Capitol Hill, and the most recent temporary extension of transportation funding is set to expire on Sept. 30 — and will likely have to be replaced with another temporary extension. Even so, some in Congress are concerned that all the anti-tax rhetoric of late will prevent a renewal of the federal gas tax, the main source of revenue for the Highway Trust Fund.

Yet the bottom line is the nation needs to spend more money on transportation, not less, or else households will see their income depleted by the high cost of doing nothing. If states and the federal government simply allowed their respective gas taxes to keep pace with inflation, the outlook would seem less dire.

The Maryland General Assembly would be wise to take up the matter when it convenes for a special session in October. Gov. Martin O'Malley has made job creation a priority, and contracting highway and transit shovel-ready projects is one of the most effective ways government can get people working again.

What effect might a dime increase have on the economy? Not much. Gasoline prices have risen and fallen by far more than that just in the past several months, with little effect. Yet that same 10 cents could put thousands of unemployed back to work and spur the kind of economic opportunity that the state could use right now.

Voters don't want to hear about taxes right now. That's understandable. But they should be concerned about the economy and their own personal income. As the revised civil engineers' study demonstrates, investing pennies now could spare households thousands of dollars in the future. That's why transportation funding is a critical investment, not a luxury to be ignored when times are tough.

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