DALLAS -- Targeted, long-term increases in public transportation infrastructure investments are needed to overcome a 10-year backlog of essential projects, the National Association of Manufacturers
The status quo isn't good enough, NAM said, proposing an increase of $100 billion a year in a 15-year program to boost public and private spending for highways, airports, and surface transportation infrastructure.
Inflation-adjusted spending on U.S. public infrastructure dropped 10.5% to $379.2 billion in fiscal 2012 from $423.9 billion in 2003, according to the report conducted by Inforum at the University of Maryland.
"It is not just a matter of restoring growth to infrastructure budgets to reverse the decade-long decline," NAM said in the report. "Current approaches to funding, financing, building, and maintaining infrastructure do not create the opportunity to catch up on a backlog of deferred projects that states and localities have been unable to complete."
Annual real spending on infrastructure tripled from 1956 to 2003 but has since declined, NAM said. Federal stimulus spending and the proceeds from Build America Bonds provided a respite in 2009 and 2010, but since then annual funding has slipped to levels posted in the 1990s.
Total real highway spending has fallen for a decade, NAM said. Spending on other public infrastructure categories posted similar but less marked declines.
Total public investments in highways, roads, and bridges fell an inflation-adjusted 3.5% a year from 2003 to 2012 and that means a rough road ahead for the American economy, said Jay Timmons, NAM's president.
"The United States is stuck in a decade-long period of decline that will eventually harm job creation, future productivity, and our ability to compete head-to-head with companies all over the globe," Timmons said.
Timmons said aging roads and railways are falling into disrepair, causing congestion and bottlenecks in the freight transportation network relied on by manufacturers.
By 2020, he said, a third of the entire 47,000-mile Interstate Highway system will be congested, impairing freight reliability and increasing the cost of moving goods.
Congress needs to bring infrastructure spending to an increased and sustainable level with the next highway bill to avoid hampering the economy, he said.
"We need legislation passed to help fund transportation and infrastructure," Timmons said.
"Lawmakers must address these challenges and adopt a multiyear, fully-funded surface transportation bill that offers certainty and support for infrastructure projects that improve safety, facilitate trade, and create jobs," he said. "Congress must bring the federal Highway Trust Fund to an improved condition of solvency and long-term sustainability."
In a conference call with reporters, Timmons declined to support an increase in the federal gasoline tax or new taxes to fund the additional infrastructure spending that he recommended.
"It's going to be a robust discussion on funding mechanisms, and we don't think any potential funding source should be off the table," he said. "States are creating alternative funding streams and they've served as laboratories so we need to evaluate those solutions to see if they can be applied to the federal level."
The private sector can play a bigger role in the financing, construction, and operation of public infrastructure resources than it has, NAM said. Public-private partnerships are common in Europe, Asia, and Australia but not yet well developed in the U.S., the report said.
"P3s are not a complete solution to filling current infrastructure gaps, but evidence suggests that there are opportunities for broader applications," NAM said.
