Report Cites Dire Need for Infrastructure Funds

WASHINGTON — Infrastructure in the U.S., especially for water systems and surface transportation, is desperately in need of investment, the Urban Land Institute and Ernst & Young declared this week. Their report criticized governments from the local to federal levels for their sluggish movement toward transportation and infrastructure financing reform.

“Despite the national highway trust fund nose-diving into insolvency, Congress ­delays action on raising revenues to help pay for roads and transit either through a gas tax hike or user fee initiatives like tolling interstates,” the institute and firm said.

The report, based on interviews and data, was released as Congress and the White House struggle with how to fund future infrastructure needs — particularly whether to increase fuel taxes to pay for transportation, alter the federal government’s role in tolling, or establish metropolitan or federal infrastructure banks.

“Local, state, or federal taxes must increase to meet the burden” of aging infrastructure, the report said.

However, the consensus in Washington is that such a tax increase at the federal level would be politically toxic, particularly as this is an election year.

The country’s disintegrating infrastructure is a systemic problem that can be blamed on all levels of government, the report said.

A “crazy quilt” of counties, towns, municipal governments, school districts, and other jurisdictions has caused ineffective regional planning for infrastructure, and “large deficits constrain options and inhibit the country’s ability to formulate and fund a cohesive national infrastructure strategy,” it said.

The report also predicted that “likely future funding” will come from more and higher user fees as well as public-private partnerships. It recommended creating a national infrastructure bank and new tolling systems.

The funding needs for the nation’s water systems alone are now tremendous, the report said. It estimated that water infrastructure will cost $10 billion to $20 billion per year over the next 20 years.

“While transportation-related issues and energy needs typically dominate infrastructure agendas, ensuring water availability and maintaining water quality also require immediate attention to manage supply and demand,” it said.

Additionally, there is a gulf between water infrastructure funding needs and the low rates charged to water users — just as there is a disconnect between road-funding needs and road-user costs, the report found.

“Cheap water enables big lawns and long, hot showers in many regions where limited water resources can’t sustain current consumption levels … and water main leaks increase,” it said.

The report cautiously praised the Obama administration and Congress for initiating a high-speed rail plan and putting some money behind it.

But it noted that the $8 billion “down payment” for the plan would cover 20% or less of California’s program alone.

“Obviously, the $8 billion in stimulus funding won’t go far, but it’s a start,” it said.

The report also criticized the American Recovery and Reinvestment Act’s level of infrastructure funding — less than one-sixth of the total package.

It said that should be turned into an “opportunity for the administration to experiment with new, merit-based approaches to awarding transportation dollars,” while noting the potential for damaging long-term public support for infrastructure spending due to a backlash against the package’s size.

The administration has done well to open a dialogue about creating a national infrastructure policy, but the effort has largely failed to generate real results in Congress, according to the report.

The Urban Land Institute and Ernst & Young recommended that politicians launch a campaign to inform the public about the realities of infrastructure costs and the need for a national plan.

They also echoed the recommendations made by industry groups during the past two years for lawmakers to implement a “Great Depression-era public works initiative” that would serve a dual purpose of creating jobs and rebuilding ­infrastructure.

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