Infrastructure Stoppage: Fiscal Prudence or Politics?

Infrastructure projects were once largely bipartisan, but such efforts have been tied up in partisan battles over the role of government.
by | February 2011

In December, Virginia Gov. Bob McDonnell, a rising Republican star, announced a plan to borrow $4 billion to build more roads, saying, "Right now is the best time in modern Virginia history to get new roads and bridges built," because of "low construction costs and interest rates in an economy struggling to rebound." The state, he says, needs to "put people back to work."

A few weeks before McDonnell made his announcement, another rising Republican star, New Jersey Gov. Chris Christie, announced that his state could not commit $2.7 billion to a new commuter rail tunnel under the Hudson River to New York City, even though the project -- 20 years in the making -- was already under construction, and the federal government and a bi-state agency, the Port Authority of New York and New Jersey, were paying most of the $8.7 billion cost.

Although Christie campaigned in support of the tunnel, he now says the state cannot afford it, given the potential for cost overruns. Little mention was made of jobs, lower construction costs and the project’s long-term benefit.

What is going on here? Two Republican governors, of similar ideological hues, both elected in 2009, give different rationales for starting and stopping big infrastructure efforts. It’s as if the two lived not only in different states, but also different realities. The governors' actions are a sign of how political infrastructure building has become. While there was a time when infrastructure efforts were in large part bipartisan, much of it now, particularly when the word "train" is involved, has become tied up with partisan battles about the state’s role in lean economic times.

These lines were in evidence when Ohio and Wisconsin governors-elect, John Kasich and Scott Walker, respectively, pledged to throw more than $1 billion in federal funding back to Washington, D.C., for intercity rail service. Such projects, championed by President Barack Obama, would waste the state’s money in frugal times, they said.

For leaders in state and municipal governments, when it comes to infrastructure spending, the choices are about who to believe and follow. While distinguished economists back deficit spending, angry citizens advocate fiscal restraint. And while China, Western Europe and much of the world build high-speed train lines, they are still unproven in the U.S.

Yet McDonnell makes quite rational arguments about why infrastructure development is good to do right now. These arguments apply equally to train lines as to roads.

Given this, it’s hard not to see actions like Christie’s as particularly shortsighted by the very values espoused by his colleague in Virginia. The additional set of tunnels under the Hudson River were to supplement century-old tubes packed with hundreds of thousands of commuters every day. New Jersey Transit’s train ridership into Manhattan has grown from 10 million in 1980 to 45 million in 2008, according to the agency. There was no question the new tunnels were needed.

"Every year that goes by increases New Jersey’s need for this sort of tunnel," according to The Economist. "The existing infrastructure serving rail commuters is already under heavy strain. If a natural disaster or terrorist attack knocks out the current tunnel, there’s no backup. That would be devastating for the region’s economy."

It is widely believed that Christie’s main motivation was to take the tunnel’s billions of dollars and replenish the state’s impoverished highway trust fund, thus avoiding politically damaging gas tax increases. By canceling the project now, however, Christie is missing out on the lowest interest rates for construction costs in decades, condemning his citizens to a future of overcrowded trains and putting a ceiling on the growth potential of his state. For the moment though, Christie has won accoldaes for his fiscal austerity rather than condemnation for short-changing his state’s economic future.

Still, even with prominent leaders receiving praise for canceling projects and rejecting federal billions, other major infrastructure projects remain intact, even those involving trains and federal money.

In Los Angeles, Mayor Antonio Villaraigosa is pushing his 30/10 Initiative, which proposes to build 12 essential transit projects in the region in 10 years rather than a projected 30, using an already referendum-approved half-cent sales tax as leverage to seek federal loans. He’s taking a page from Denver’s FasTracks expansion program, which sought a similar rapid enlargement of its transit system.

How all these efforts fare in the next few years will say a lot about the state of the economy and the political climate intimately associated with it. The U.S. is typically said to suffer from an infrastructure deficit, which is true; we’re certainly spending far less than China or even Western Europe as a percentage of our economy. It would help us gain cohesion as a society to return to essential conceptions of infrastructure, as necessary investments for a strong future, when such projects are well conceived and well executed.

Alex Marshall
Alex Marshall  |  columnist
alex@rpa.org  | 

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