Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Why we’re ignoring our crumbling infrastructure

Posted by David Kassel on August 28, 2007

Two reports detail how the federal and state governments are allowing our nation’s infrastructure to crumble away through unconscionable political neglect.

In The New Republic, Sarah Williams Goldhagen writes about our “shocking national indifference” to the maintenance and upgrading of our infrastructure.  Equally required reading is “Our Legacy of Neglect:  The Longfellow Bridge and the Cost of Deferred Maintenance,” a comprehensive report about the situation in Massachusetts by the Pioneer Institute.  (Disclosure:  I used to work with David Westerling, one of the report’s co-authors, at the Massachusetts Inspector General’s Office.)

Between these two reports, a convincing case is made that unless we take meaningful steps to address this situation, the United States is headed from industrialized toward third-world nation status.  It’s already unsafe to drive on our bridges and through our tunnels.  Much of our population lives near environmentally contaminated sites, our school buildings are falling apart, our water treatment plants are aging, our dams are unsafe, and our national parks are unmaintained, among other problems  And all this is happening as new infrastructure demands are being created due to the ongoing shifts in our population from core cities into far-flung suburbs.

The Longfellow Bridge report notes that while there are pockets of excellence in Massachusetts government on maintenance issues…

there appears to be no high-level awareness of the magnitude of the problem of deferred maintenance, or any comprehensive statewide effort to address it in either the legislative or the executive branch of state government.

The report estimates a maintenance backlog in Massachusetts of $17 billion, across all levels of state government, including bridges, highways, MBTA facilities, the state university system and state and community colleges, courthouses and others.  The basic problem is that since asset deterioration occurs gradually, there is a tendency to defer preventative maintenance. At the same time, maintenance is treated in most agency budgets as a discretionary expense–one which takes away from spending on programs in the agency’s operational budget.  This, combined with a “diffusion of responsibility and outright inability to monitor asset condition,” results in the “massive and growing maintenance backlog.”

The Longfellow Bridge report cites DeSitter’s “Law of Fives,” which projects that if maintenance is not performed on a public asset, then repairs equaling five times the maintenance costs are required. It notes that states, including Texas and Arizona, that have created State Infrastructure Banks and have moved ahead of Massachusetts in providing for transportation infrastructure.

It will be a key test to see what Governor Deval Patrick does about this.  Will he propose legislaltion, as the report recommends, to enact a capital maintenance reserve fund, adequately fund the state Division of Capital Asset Management and empower it to oversee and monitor the state’s asset maintenance, and issue an Executive Order to compel state agencies to use DCAM’s existing computerized CAMIS database, which tracks the condition and maintenance of state-owned buildings?

In her article in The New Republic, Goldhagen suggests that we may have already traded places with many nations, particularly those in Asia, that used to be considered underdeveloped or “third world.”  She points out that:

Highways and roads in those (Asian) countries are not pitted moonscapes.  Public transportation, from trains to trolleys to buses, is plentiful, in good repair, and punctual.  Public structures of all kinds–from governmental and civic buildings to public parks and urban plazas to “streetscape” elements such as pedestrian bridges and roadway lighting fixtures–are of immensely higher design quality and in immensely better shape (than in this country).

Goldhagen identifies a number of politcal reasons for the American neglect of its infrastructure, but perhaps the key is that since the Reagan administration, the federal government has fobbed off its responsibility for maintenance and upgrades to state and local governments.   Partly as a result of that, the maintenance and upgrading of our infrastructure is increasingly falling into private hands.  Goldhagan believes this infrastructure privatization spells “social disaster” in the short term and “economic disaster” in the long term.  As Goldhagan puts it:

Infrastructure is the classic public good that the free market does not and cannot provide.  On the scale that is necessary, only the federal government can make the difference.

Goldhagen makes a number of recommendations that correspond, in a national sense, to the Massachusetts-based recommendations in the Longfellow Bridge report.  Among them are the need for a National Infrastructure Agency, that would plan, fund, and coordinate infrastructure maintenance and improvement over the long term.  She also recommends that Congres establish a federal line-item capital budget for infrastructure maintenance, as most other developed countries have done.

Finally, Goldhagen calls for leadership in addressing our infrastructure needs, and specifically lauds the leadership of then Massachusetts Transportation Secretary Fred Salvucci in the 1980s in getting Boston’s Big Dig project to happen.  The lack of such leadership today explains why the “pathetically ill-conceived” design for the Rose Fitzgerald Kennedy Greenway on the reclaimed Central Artery land has been “hung out to dry,” she maintains.

Advertisements

7 Responses to “Why we’re ignoring our crumbling infrastructure”

  1. Laurence Schiller said

    Goldhagen has hit the nail on the head. Since the so called Reagan revolution, we have seen government abandon one of their basic missions – that of maintaining public facilities. The Republicans and Libertarians call for less and less taxes and government, yet it is always they who complain when there are potholes on THEIR street. Folks, you can’t have it both ways. If you want government services, you have to pay for them. Period. The issue is efficientcy in government and making sure that we actually use tax money for the public good instead, as tends to happen in Chicago where I live, for friends of the Mayor and County Board President. There are so many issues that flow from this, such as clean financing for elections to get rid of big corporate influence which drains public funds into projects that benefit them (witness our oil and agricultural subsidies), and voter oversight of government. But, then, what can we expect with the Republicans treating government and the public treasury as a private preserve to benefit them and their friends. Like Louis XIV, they feel they can do anything they like. This will leave inevitably to more infrastructure disasters.

  2. David Kassel said

    Great points. I agree the Republican record in this area has been abysmally bad in recent years, although the Democrats don’t appear to grasp the scope of the problem either. I agree as well that the deferred maintenance situation exposes the contradiction in the argument of all those who say government has become too big and who, as you say, want government services.

    Just saw your second comment. Yes, what we need is a new approach in public service. It does seem a lot to ask for, but it seems to be working in many other countries. We used to be a source of leadership and inspiration to the rest of the world. No longer, it seems.

  3. Hal Davis said

    Here is one useful approach to insure that those wanting infrastructure and benefiting more than the community at large will have the option to finance such improvements on favorable terms:

    WHY WE NEED CHAPTER 40T TO SELF-FINANCE A PORTION OF THE COMMONWEALTH’S TRANSPORTATION INFRASTRUCTURE NEEDS

    Our State and municipal budgets are under tremendous financial strain. There is a huge back log of State and local infrastructure projects that need to be addressed. It is a rare state or community that is able to fund all the water, sewer, roads and other infrastructure needed to support existing neighborhoods and new desired development.
    We traditionally have relied upon State or municipal general obligation bonds, repaid from taxes to pay these costs. The State and local tax payers are saying no more. We can ill afford to miss out on alternative and innovative techniques to finance public works that many other states have used for years. In 2006, Massachusetts did not access any of the $15 billion in land-secured tax-exempt financing used to fund infrastructure. This financing can be as long as thirty-five years and carries a very attractive interest rate.
    The proposed Chapter 40T (S.146 and H.159) is a local option. Under the legislation, Development Zones (designated sections of a town or city benefiting and paying for the improvements) would be provided with access to this capital. Such Zones would serve much the same function as traditional betterment districts. In both, the costs of improvements such as new roads, highway ramps and transit stations could be assessed against the property receiving benefits as distinguished from the community at large. Chapter 40T does not provide any eminent domain powers and has no affect on local zoning and permitting.
    Chapter 40T offers several key advantages over traditional betterment financing. First, the Development Zone is a voluntary imitative by the property owners (at least 80% of the owners of all tax parcels and owners of 80% of the acreage) that benefit from and pay for the improvements. After a public hearing, the municipality must also consent to the use of Chapter 40T. Second, the project is financed by bonds issued by the Massachusetts Development Finance Agency or a Local Improvement District. The credit of the community is specifically NOT pledged to repay the bond issue. Third, the property owners may pay the assessments back over a term as long as thirty-five years as opposed to twenty under the General Laws.
    Chapter 40T has been designed to work with State and federal programs such as the State’s Revolving Loan Fund and District Improvement Financing. It would provide the best sources for funds needed to fill any gaps left by State or federal programs.

    Some typical projects that could be funded under Chapter 40T:

    • Does your town or city have neighborhoods that for years have complained about poor septic systems, roads or other public works needs? They could organize and petition the municipality to establish a Chapter 40T Development Zone to fund the improvements paid by assessments on the property within the Zone. This means that only those benefiting directly from the improvement would pay the cost.

    • Does the community wish to encourage new quality development but wants to make sure that additional services or facilities are paid for by the developer or new residents? The formation of a 40T Development Zone could fund such improvements.

    • Is funding for a highway ramp or other transportation facility holding up a desired real estate development? If State or federal funds are not available, such needs could be met voluntarily under the proposed legislation.

    The type of infrastructure that might be financed is very broad. It includes: “the acquiring, laying, constructing, improving and operating of capital improvements to be owned by a public facilities owner, such as, but not limited to, storm drainage systems, dams, sewage treatment plants, sewers, water and well systems, roads, bridges, culverts, tunnels, streets, sidewalks, lighting, traffic lights, signage and traffic control systems, parking, including garages, public safety and public works buildings, parks, landscaping of public facilities, cultural and performing arts facilities, recreational facilities, marine facilities such as piers, wharfs, bulkheads and sea walls, transportation stations and related facilities, shuttle transportation equipment, fiber and telecommunication systems, facilities to produce and distribute electricity, including alternate energy sources such as co-generation and solar installations, the investigation and remediation associated with the cleanup of actual or perceived environmental contamination within the development zone in accordance with applicable governmental regulations and provided that no such investigation or remediation shall impair the rights of the public facilities owner or any other person to contribution or reimbursement from any potentially responsible party for the costs thereof, and other improvements…”

  4. This is an interesting approach. My only concern is whether taxpayers are really off the hook for repayment if the developers default on the bonds. Would the commonwealth back or guarantee these bonds? Also, it seems as though it would be difficult for the affected property owners alone to shoulder all the costs of some of these projects. But the use of quasi-public agencies such as MassDevelopment to finance infrastructure and economic development projects is certainly not a new one and has worked well in many cases.

  5. Hal Davis said

    Good comment. Here is the exact language from Chapter 40T:
    “Bonds or notes issued under this chapter, unless otherwise authorized by law, shall not be deemed to constitute a debt of the commonwealth or the municipality, or a pledge of the faith and credit of the commonwealth or of the municipality, but the bonds or notes shall be payable solely by the issuer as special obligations payable from particular funds collected from infrastructure assessments levied pursuant to this chapter. Any bonds or notes issued by the issuer under this chapter, shall contain on the face thereof a statement to the effect that neither the commonwealth nor the municipality shall be obliged to pay the same or the interest thereon, and that neither the faith and credit nor taxing power of the commonwealth or of the municipality is pledged to the payment of the bonds or notes.”

    The bondholders rely exclusively on the bettermetn lien placed on the benfited property. Last yeat $15 billion in this type of financing was issued in about 39 states to fund infrastructure needs. Chapter 40T is essentially a volunatary program to fill the gap when state and local monies are not available.

  6. Longfellow said

    […] Longfellow Bridge may be falling down, but it’s easily is one of the most attractive bridges in Boston. It’s the only place for the MBTA bound to get an occasional and needed panoramic view of the river basin to remind them how horrible the non-view from their cubicles is, and for pedestrians has plenty of odd little nooks and crannies for surprises in the form of homeless persons to jump out at you. Unfortunately since it’s at least 50% not safe for walking anymore it will be closed for the 4th, but hey, any decent contractor will tell you you can’t get rich by ignoring the Law of Fives. […]

  7. The New America Foundation (a think tank) says it’s time for a new national infrastructure financing system.
    http://corpintel.wordpress.com/2008/06/10/national-infrastructure-bank/

    Also, we had some scary infrastructure problems in downtown D.C. recently.
    http://corpintel.wordpress.com/2008/06/15/our-fragile-infrastructure/

Sorry, the comment form is closed at this time.

 
%d bloggers like this: