U.S. Governors Shun Some Big Public Transportation Projects; U.S. Infrastructure Spending Stands at 2 Percent of GDP

U.S. Governors Shun Some Big Public Transportation & Other Public Works Projects

October 21, 2010

Associated Press – New Jersey's governor wants to kill a $9 billion-plus train tunnel to New York City because of runaway costs. Six thousand miles away, Hawaii's outgoing governor is having second thoughts about a proposed $5.5 billion rail line in Honolulu.

In many of the 48 states in between, infrastructure projects are languishing on the drawing board, awaiting the right mix of creative financing, political arm-twisting and timing to move forward. And a struggling economy and a surge of political candidates opposed to big spending could make it a long wait.

Has the nation that built the Hoover Dam, brought electricity to the rural South and engineered the interstate highway system lost its appetite for big public works projects? At a time when other countries are pouring money into steel and concrete, is the U.S. unwilling to think long-term?

"My sense is things have changed," said Andrew Goetz, a University of Denver professor and an expert on transportation policy. "People now tend to see any project as a waste of money, and that's just wrong."

"I call it the Bridge to Nowhere syndrome," he added. "High-profile projects get publicized and they become a symbol for any infrastructure project that's out there, and even the ones that are justified get tarnished by the same charge."

The so-called Bridge to Nowhere would have cost hundreds of millions of dollars to connect one Alaskan town to an island of 50 residents. It figured in the 2008 presidential election when then-Alaska Gov. Sarah Palin was criticized for initially backing the plan, which was eventually scrapped.

The other cautionary tale of the past few years is Boston's Big Dig, the highway and tunnel project that was originally envisioned at less than $3 billion and wound up costing nearly $15 billion.

The Big Dig has made it far easier for motorists to get to and from Boston's airport, and it eliminated a noisy and unsightly elevated highway that cast a shadow over some of the city's neighborhoods. But construction was plagued by years of delays, corruption and shoddy workmanship that resulted in the death of a motorist in a ceiling collapse.

A report this month by the Treasury Department and the Council of Economic Advisers paints a picture of a country dissatisfied with the state of America's aging infrastructure and in favor of improvements, but not necessarily eager to commit the dollars to fix it.

Standing in New York's Penn Station on Thursday in front of a sign touting the proposed tunnel, commuter Bill Mischell of Plainsboro, N.J., gave voice to those conclusions.

"You could make the argument that it will make New Jersey a better place to live, but you also have to weigh it impartially against the huge cost," Mischell said. "The state's in pretty significant financial trouble, and the money's got to come from somewhere."

Infrastructure spending in the U.S. stands at 2 percent of the country's gross domestic product— half what it was in 1960 — compared with approximately 9 percent in China and 5 percent for Europe, according to the government report.

"During recessions it is common for state and local governments to cut back on capital projects — such as building schools, roads and parks — in order to meet balanced budget requirements," the report concluded. "However, the need for improved and expanded infrastructure is just as great during a downturn as it is during a boom."

The American Society of Civil Engineers calculates that the U.S. would need to spend an additional $1.1 trillion over the next five years to restore roads, bridges, dams, levees and other infrastructure to good condition. In its latest report card, the engineering society gave the nation's public works a "D" grade.

"Somehow we believe if we ignore it, it will go away," said Blaine Leonard, the society's president. "And it won't. We have to stop hitting the snooze button on this problem."

He said now is a good time to spend money on infrastructure because construction companies in this weak economy are hungry for work and the costs are relatively low as a result.

Major infrastructure projects of the past benefited from strong leadership, notably the interstate highway system pushed by President Dwight D. Eisenhower in the 1950s, he said.

Today, though, "there isn't any high-level leadership about infrastructure," so there's no agreement about priorities, Leonard said.

CG/LA Infrastructure LLC, a Washington consulting firm, recently put together a list of the worthiest 100 large infrastructure projects in North America, totaling about $400 billion. Among the suggestions: a next-generation air traffic control system; high-speed rail linking Minneapolis, Milwaukee and Chicago; a pair of highway projects in Texas; and the tunnel that New Jersey's governor has threatened to scuttle.

To be sure, there are large-scale projects under way, notably in California, where a combination of federal dollars and voter-approved bonds and local tax increases are funding improvements, from highway widening to the $6.2 billion renovation of the Bay Bridge between San Francisco and Oakland. And this week, Arizona and Nevada hailed the opening of a $240 million bridge that bypasses Hoover Dam.

However, many projects recently completed or in the pipeline secured funding before the economy went into a slide. Some of them might not be approved today.

In New Jersey, construction on a rail tunnel connecting New Jersey and New York City — the largest transportation project under way in the U.S. — began in 2009 under then-Gov. Jon Corzine, a Democrat. It is projected to double train capacity at peak times as well as provide 6,000 construction jobs immediately and up to 40,000 jobs after its completion in 2018. About $6 billion of the cost is being covered by the federal government and the Port Authority of New York and New Jersey.

Earlier this month, Republican Gov. Chris Christie announced he was pulling the plug because the cost had escalated from $5 billion in 2005 to more than $9 billion by the federal government's estimate, and as much as $14 billion by Christie's reckoning.

"I simply cannot put the taxpayers of the state of New Jersey on what would be a never-ending hook," he said.

Christie later agreed to reconsider. The two-week review period expires Friday.

In Hawaii, Republican Gov. Linda Lingle announced recently that she wouldn't sign off on a federally subsidized rail line until an updated economic study is conducted. And that may not be completed before she leaves office in less than two months. That means the project's fate could be in her successor's hands.

In Seattle, new Mayor Mike McGinn is threatening to hold up construction of a massive highway tunnel to replace the waterfront's dilapidated, earthquake-damaged Alaskan Way Viaduct because he fears city taxpayers will be on the hook if costs spiral beyond the $4.2 billion price tag.

"The issue of the overall cost of the tunnel has been a concern to voters since before the recession, and I think the severity of the state's and the city's fiscal situation is causing people to take a harder look at ... an expensive and risky project," McGinn said.

In Wisconsin, Ohio and California, Republican candidates for governor have vowed they won't endorse high-speed rail projects, despite the promise of billions of dollars from Washington.

Other countries are spending heavily on job-creating infrastructure. Projects include Algeria's $11.2 billion east-west highway; a planned $10 billion bridge linking the Indonesian islands of Java and Sumatra; and China's $60 billion Yangtze River diversion project.

Australia plans to spend $38 billion to relieve traffic congestion in Melbourne, while Britain is preparing for a $45 billion high-speed rail link between London and the West Midlands. Japan is building a $70 billion highway from Tokyo to Osaka, scheduled for completion in 2020.

In the U.S., it often takes a catastrophe to give infrastructure improvements more urgency. The Minneapolis bridge collapse in 2007 that killed 13 people prompted reviews of aging bridges around the country.

"Unfortunately, our attention span is short," Leonard said. "You would think the Minneapolis bridge collapse would have sent repercussions throughout the system that would have resulted in a transportation funding bill, but it didn't. Even bridge funding bills didn't get through Congress."

Consultant Norman Anderson of CG/LA Infrastructure said the federal government's recent emphasis on smaller, "shovel-ready" projects to stimulate the economy is misguided and shows a lack of vision.

"You don't do 'shovel-ready.' That is idiotic and extremely uninformed," he said in an e-mail. "You do projects now because they produce value for an economy 20 to 30 years into the future, as well as producing immediate jobs."