Infrastructure Returns to USA ….But Not Maintenance

Press reports a potential $1 Trillion bipartisan infrastructure bill could soon end America’s decades long disinvestment in its own hard assets, the roads, bridges, tunnels, water systems, power systems and public transit, including passenger rail, that our country built generations ago and has let deteriorate over the last 50 years. America’s shameful decades long neglect for these built systems we publicly own has not only diminished the quality of life for those of us who live in the USA, it has made us a laughingstock for late night comedy.

Not only does this infrastructure bill cover the cost of badly need renovations for traditional infrastructure investments that our country has depended on for over 150 years, since we entered the machine age. The bill also provides $50 billion to build new infrastructure for solidifying our 21st century lives as we face climate change and the need for cybersecurity in a new digital age. This has been a promise deferred for too many years.

Maintaining our infrastructure is expensive. ITDP estimates the cost to maintain the public’s built infrastructure at 1.4% of the cost to build the infrastructure. What this $1 Trillion infrastructure bill is intended to cover are the one time renovations required in our most essential infrastructure systems. The money will address the renovations needed for roads, bridges, electric and water systems, etc. for the decades of neglect. The money does NOT address the cost of maintaining our infrastructure.

Our American budgetary system is prone to the whims of political policy viewpoints. The nation’s founders believed we were “in it together” and what taxpayer money built was to benefit the lives and safety of all our people. At some point arount the time Ronald Reagan became President, the political consensus began to shift. The services provided by our Federal government became unnecessary luxuries, parenthetically, for the “undeserving poor”. A case was made and reinforced for cutting Federal government funds for luxuries like maintaining roads, and clean water. Flint Michigan paid a very public price for this shift in the nation’s view of government services. The $1Trillion is a stopgap remedy for the shoddy infrastructure we have come to expect.

The funds will provide renovations but who will pay for the maintenance?

Preventative maintenance is an essential budgetary item that should be included annually in all Federal, state and municipal budgets to cover the costs of all our infrastructure, keeping it in shape and working for the public good. Preventative maintenance avoids crumbling bridges, failing electrical grid systems and collapsed buildings, like the condos in Surfside, Florida, that fell recently, killing over 90 people.

What does it cost? Assuming we need to spend 1.4% per year of the cost of the infrastructure, how can we estimate the cost, especially when many of these structures are 100 years old when a dollar then would be worth $13.78 today? One way to estimate the value of publicly owned infrastructure is to look at what insurance considers to be it’s replacement cost. In the Town of Arlington MA, a smallish, bedroom community of about 45,000 in New England, the infrastructure consists primarily of schools, libraries, Town Hall, police and fire stations. The replacement cost of the infrastructure owned by this small town would be about $135 Million (in 2020 dollars). The estimated cost for maintenance (here defined as capital improvements for preventing small problems from becoming bigger ones, not for janitorial services) for these structures should be about $1.9 Million. Arlington is not generally troubled by fads about whether or not tax money should be used to preserve publicly owned property. In 2020 the town estimated it needed about $3.9 million and, as has been the case for the last 30+ years, the town got it. But the town has a plan to spend on capital improvements a proportion of the total Town budget. For the nation’s built environment, owned by and for the nation’s citizens and maintained by the Federal government there is no such plan.

So we arrive today at the absurd position of recognizing that we need $1 Trillion for infrastructure improvements but somehow thinking that this is a one time only expenditure and, even more absurd, refusing to use the estimated $1 trillion a year that we intentionally forego by not enabling the Internal Revenue Service to fully collect the taxes that are owed to the United States by some of it’s more well heeled taxpayers.

John Oliver? Are you watching this?

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