Charles Chieppo is a research fellow at the Ash Center of the Harvard Kennedy School.E-mail: Charlie_Chieppo@hks.harvard.edu
It's temptingly easy for elected officials to underfund infrastructure. Doing so can help balance the books during tough times, leading constituents to believe that the officials are fierce guardians of the taxpayers' pocketbooks. By the time voters notice the crumbling roads, bridges and water systems, those who enacted the cuts have typically been out of office for years.
But the chickens are coming home to roost, and as the nation struggles to emerge from the Great Recession we find ourselves saddled by infrastructure that too often isn't up to the task of supporting economic growth. Recognizing this, the federal government and a number of state and local leaders are beginning to re-invest in long-ignored infrastructure projects.
One sign of reinvigorated infrastructure spending is state investments in bridge repair. A comparison of programs in Colorado and Massachusetts shows that all accelerated bridge programs aren't created equal. The difference is in how to pay for them.
The Colorado Bridge Enterprise, formed in 2009, operates as a government-owned business within the state Department of Transportation. So far it has completed work on 49 out of the 160 state bridges identified as needing repair or rebuilding.
Most of the money for the program comes from a bridge-safety surcharge on vehicle registrations, ranging from $13 to $32 depending on vehicle weight. Two years ago, the bridge program received half of the approximately $100 million generated by the surcharge. Last year the portion increased to 75 percent, and beginning this year, the Colorado Bridge Enterprise gets all the money.
In 2010, the Enterprise used the funding to back the sale of $300 million in Build America Bonds, federally subsidized bonds that reduced the cost of issuance by 35 percent. Proceeds from the offering are used to speed the pace of repairs. Accelerating the repair or replacement of crumbling bridges saves money in a couple of ways. Like anything else, construction costs rise over time, and acting sooner limits the effects of inflation. Even more important, a routine repair left undone can quickly turn into an expensive overhaul.
Massachusetts is spending nearly $3 billion on its accelerated bridge program, which was initiated in 2008. As of this March 1, 81 out of more than 200 planned projects have been completed. Massachusetts also is using Build America Bonds, which are providing about $1.9 billion for the program.
But unlike Colorado's bridge-safety surcharge, Massachusetts didn't create a way to pay for its program, other than putting taxpayers even further in debt. Whether it's by adding to the nearly $1.9 billion the Bay State already pays in annual debt service or by extending the term of the bonds, added costs will more than erase the acceleration-related savings.
That's not all. Every time a Colorado driver pays the bridge-safety surcharge, he or she knows where the money is going. Voters can compare transportation infrastructure to other spending priorities and express their approval or disapproval at the polls.
Not developing a revenue source to pay for the bridge program allows Massachusetts voters to believe that there is no cost associated with bridge upgrades and that no tradeoffs are being made. While this makes it easier for politicians to avoid political blowback, it does so at the cost of passing the program's bill on to our children and grandchildren.
With a presidential election campaign upon us, there will be no shortage of debates over the size and scope of government, but few would deny that providing basic infrastructure is a core government function. As Colorado and Massachusetts illustrate, there's more than one way — for good or ill — to approach that fundamental responsibility.