February 5, 2013

U.S. is steering toward a crisis on highway funding

Energy-rich Texas has built more highways and bridges than any other state, but over the next two decades, it will fall $170 billion short of what it needs to keep the sprawling network in good repair. So will other states, analysts warn.

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WASHINGTON -- Oil-rich Texas has built more highways and bridges than any other state, but over the next two decades, it will fall $170 billion short of what it needs to keep the sprawling network in good repair.

In California, transportation officials estimate that 60 percent of the state's roads and a quarter of its bridges need to be repaired or replaced, at a projected cost of $70 billion over a decade, some $52 billion more than what's available.

North Carolina will confront a $32 billion road maintenance shortfall over the next 30 years, a financial squeeze that worsened when it directed at least $3 billion in federal highway money from 2004 to 2011 to building new or bigger highways -- five times what it spent on repairs.

America's highway system, once a symbol of freedom and mobility envied the world over, is crumbling physically and financially, the potentially disastrous consequence of a politically driven road-building binge.

President Barack Obama, state transportation officials, civil engineers, road builders and business groups all say the country needs to invest trillions of dollars in infrastructure. But there's little consensus on how to finance it or what the most pressing needs are.

The Congressional Budget Office estimates that the country needs $14 billion in additional federal funds each year just to maintain highways and $50 billion more to improve them.

Government analysts, taxpayer advocates and transportation experts warned for at least a decade that states were spending too much on building highways and too little on fixing them and that maintenance costs would skyrocket.

"We've engaged in a dangerous game of deferred maintenance," said Brian Taylor, a professor of urban planning and the director of the Institute of Transportation Studies at the University of California, Los Angeles.

Five years after the Interstate 35 bridge collapsed in Minnesota, killing 13 people and injuring 145, the country still has a bridge repair backlog of $65 billion, according to the Federal Highway Administration.

At a time when Congress is proposing significant budget cuts and tax increases have little support, states are canceling or scaling back highway projects. They are looking for private partners to help finance construction and are still coming up short. Motorists are discovering that the roads they thought were free are anything but.

Over the past four months, McClatchy traced the extent and causes of yet another financial crisis that's developed below the radar of most Americans.

A review of government reports, an analysis of thousands of state and federal campaign donations, and interviews with dozens of current and former elected officials, watchdogs and transportation officials showed that a lot of hands were on the wheel as the system veered off course.

For example:

The oldest parts of the interstate system have reached the end of their life cycle, including thousands of bridges dating to the 1960s, a potential threat to public safety and commerce demonstrated by the Minnesota bridge collapse.

The federal gasoline tax no longer covers the country's annual highway spending, but few leaders in Washington are willing to take on the political risk of increasing it. That forces states to borrow more money, raise tolls or ask residents to approve new taxes.

Even though members of Congress are banned from "earmarking," or skimming money for pet projects back home, lawmakers and the special interests that bankroll their campaigns still exert outsize influence on where federal highway funding goes.

The U.S. Transportation Department long ago ceded control over most highway decision-making to the states and didn't have well-defined national transportation goals, leaving a large portion of federal money up for grabs for those with the most clout.

Falling apart

When Al Biehler became Pennsylvania's transportation secretary a decade ago, he found that the state had been spending more on expanding its highway system than on keeping it in good repair.

"If you don't put money into fixing things," Biehler said, "there will be more things to fix."

So he did the unthinkable: He put the brakes on some projects, risking the wrath of highway contractors and the state lawmakers who supported them.

"Projects that we knocked off the program, some of them weren't terrible projects," he said. "I just felt we couldn't afford them."

According to the National Center for Pavement Preservation, a research lab for road-building materials at the Michigan State University engineering school, every dollar spent to maintain a road in the first 15 years of its life saves $6 to $14 in maintenance costs after 20 years.

The Federal Highway Administration doesn't require states to put money into repairing roads before building new ones.

In 2004, Pennsylvania was spending its federal funding almost evenly on expansion and maintenance, according to federal data reviewed by McClatchy.

By 2011, it was spending about four times as much on repairs, and it was still struggling to keep up.

The Pennsylvania State Transportation Advisory Committee reported in 2010 that the state needed an additional $2.1 billion a year to properly maintain its highways and bridges.

"More than half of our bridges have reached their intended life span date," said Barry LePatner, a New York construction lawyer who has cataloged nearly 8,000 of the nation's most troublesome spans. "Without maintenance money, cost of repair equals cost of replacement after a certain period of time."

Some budget watchdogs were encouraged that the most recent federal transportation bill, MAP-21, which Congress approved last summer, pushes states to develop performance standards for federal highway spending that result in the greatest improvement to roads and bridges.

But it's too soon to know whether the measures will have any impact, and the legislation expires at the end of next year. Meanwhile, states face tough choices.

Emil Frankel, who was assistant secretary for transportation policy under President George W. Bush and is a former Connecticut transportation commissioner, said the country needs to establish priorities.

"Thirty years ago, 'like it' might have been good enough," said Frankel, now a visiting scholar at the Bipartisan Policy Center, a research hub in Washington, D.C.

"'We'll do it because we like it.' We can't afford to do that anymore."

Running on empty

Congress hasn't raised the gasoline tax in 20 years. The 18.4-cents-a-gallon tax has lost a third of its buying power to inflation and rising construction costs.

The tax feeds the federal Highway Trust Fund, which has long paid for a portion of highway construction and repairs in all 50 states.

The fund used to carry a surplus, but lawmakers have bailed it out since 2008 by tapping the Treasury for $50 billion.

"That can't continue indefinitely," said John Horsley, who retired in January as the executive director of the American Association of State Highway and Transportation Officials. "Congress is going to have to find a way to restore funding."

Simply increasing the gas tax may not be the best option.

Americans have been driving less since 2007, partly because of the recession and higher gas prices and partly because of a generational shift away from car ownership. Rising fuel economy in cars and trucks has also contributed to the decline in gas tax revenue.

Horsley proposed replacing the per-gallon gasoline tax with a percentage-based sales tax. Sen. Barbara Boxer, D-Calif., the chairwoman of the Senate committee that drafts transportation legislation, said she'd consider the idea along with other alternatives, including a carbon tax and a tax based on the number of miles people drive.

Congressional gridlock has left the states to find other revenue sources, with mixed success.

States have added debt, and some have about as much as they can support. According to the Federal Highway Administration, the states carried a combined $56 billion in road bond debt at the end of 1995, in current dollars.

By 2010, they owed $154 billion.

State and local governments have asked voters to approve sales tax increases, and about two-thirds of such measures pass.

States have also turned to the private sector for infrastructure money, an arrangement that's common worldwide. Indiana and Illinois leased toll roads for money that they used to bankroll highway projects. Virginia and California have sought private partners to build bridges and highways.

Most of the interstate system has been free of tolls for its 57-year history, but that might end as states face the challenge of rebuilding the aging roads. Missouri, North Carolina and Virginia plan to add tolls to parts of major interstates to pay for repairs.

Other states, such as Texas and Florida, have been building their own toll roads for years.

Texas gets shorted

According to the Government Accountability Office, Alaska gets back $5 for every dollar it sends to Washington. Texas gets only $1, even though members of the state's congressional delegation have fought for more.

"States that have been well-represented on key congressional committees have tended to do very well compared to other states," said Jeffrey Brown, an associate professor of urban and regional planning at Florida State University.

For years, powerful members of Congress got hundreds of millions of dollars in federal money by dressing up highway projects that wouldn't have been at the top of anyone else's list with names such as "High Priority Corridors" or "Projects of Regional and National Significance."

While some lawmakers railed against spending millions of federal dollars on bike paths, flower beds and train museums, others brought home vastly more money to cast their legacies in concrete, even if just to build an interchange or a few miles of pavement.

Highway projects generate work for engineering and construction firms, and the industry is a top political donor.

Business interests, wealthy landowners and developers who benefit from new highways also write big checks to lawmakers who deliver fresh pavement.

"It's a free-for-all where the most well-organized and well-financed political interests are driving our transportation policy," said Donna Cooper, a senior fellow at the liberal Center for American Progress in Washington.

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