Aaron M. Renn
The circus that is today’s Washington is detracting from one thing that the president and lawmakers on both sides of the aisle agree on: America’s infrastructure is in disrepair and overdue for a tune-up if not an overhaul. While the main priority for U.S. infrastructure is maintenance, there are 10 projects — from New York to Denver, Phoenix to Las Vegas — that deserve a green light to expand or build.
The question is how to prioritize them while avoiding boondoggles or another “bridge to nowhere.”
First, new or expanded infrastructure may be needed when existing infrastructure is at or over capacity and where there has been rapid and significant (not just projected) growth in a region.
Austin, Texas, is an excellent example of this. It has been the fastest growing metro region in the country since 2000, overwhelming its infrastructure. The Texas Department of Transportation is developing a project to add two lanes in each direction on Interstate 35 through Austin, currently the second-most congested highway in the state. Though a needed project, newly added lanes should be built as toll lanes in order to keep them from drawing even more traffic and becoming hyper-congested again.
The requirement of being in a high-growth region is important. Slow growing (or even shrinking) regions sometimes build infrastructure for their few hot new suburbs, but this is just paying people to move around inside a region, not supporting real growth.
A second case for new infrastructure is when the existing facility is obsolete. A good example of this is the Kansas City airport terminal replacement project. The existing terminals there were built in the 1960s, largely to the specification of Trans World Airlines, a company that no longer exists. The terminals were built as a series of horseshoes that allowed passengers to drive conveniently almost directly to their gate. Increased security requirements in the wake of 1970s-era hijacking made this design obsolete. Post-9/11 security made it nearly unbearable. The city is planning to replace these terminals that rank among the nation’s worst with a modern facility.
A third case is when changes in development patterns necessitate new infrastructure links. For example, the interstate highway system was laid out in the 1950s when America looked very different than it does now. Phoenix and Las Vegas were both small cities at that time, so there was no interstate highway between them.
Today, Phoenix is the 11th-largest region in the United States and Las Vegas is a leading vacation destination. Clearly, a high-quality freeway link — the proposed Interstate 11 — between these two major metropolises is a good idea, if not an absolute necessity.
A final case for expansion is when the cost can be recovered fully from user fees or tolls. This is a market signal that the project in question makes business sense.
An example of this could be a new natural gas pipeline into New England. Gas demand has soared as electric utilities have switched from coal and oil to gas — going from 15 percent gas in 2000 to 49 percent today. The existing pipelines are at capacity, meaning during times of peak demand, already high regional prices for gas and electricity soar. New England has been importing gas via tanker from Russia, which makes no sense in a country awash in gas from fracking.
Opponents of pipelines have been able to stymie new construction, but if regulators would allow the pipelines, then companies, which could sign enough contracts with customers to pay for the costs, would be free to build.
New and expanded infrastructure projects can be justified in some circumstances, provided they don’t take away money from needed repairs. But it’s important to establishclear criteria for project selection to avoid boondoggles and bad investments.