Dams, highways, telephone poles... all of these things fall under the huge umbrella we call INFRASTRUCTURE. But what does all that concrete and copper have to do with government? More than you might think. Our infrastructure is what gives Americans access to community, communication, and business – it’s a system so complicated it takes dozens of federal administrations and agencies to oversee and regulate it.
In this episode, the first in a sporadic series on American infrastructure, we look specifically at roads. Who pays for them? How do we benefit from roads, even if we aren't the ones driving on them? What the heck is a public-private partnership? Our guests are Civics 101 Senior Producer Taylor Quimby, and Shailen Bhatt, President and CEO of the Intelligent Transportation Society of America.
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Virginia Prescott: [00:00:23] This is Civics 101, the podcast refresher course on the basics of how our democracy works. I'm Virginia Prescott and today we're kicking off an occasional series on infrastructure. Infrastructure may sound like a bit of a snoozer. It's something you don't really think about until a sinkhole appears or a storm drain clogs up and floods your street. But before you start falling asleep. Senior Producer Taylor Quimby is here to assure us that it is deeply fascinating.
Taylor Quimby: [00:00:57] That's right. That's right and let me start off with that in mind with a factoid that got me hooked. Which is the very first federal agency dedicated to studying and building roads was called the Office of Road Inquiry and it was founded in 1893 partly because of the growing popularity of the bicycle.
Virginia Prescott: [00:01:15] Not until 1893 though? That's a little surprising.
Taylor Quimby: [00:01:18] Yeah you know, especially if you think about, you know that wasn't that long ago and today the Department of Transportation has, I'm going to list off, these are all agencies that fall under the Department of Transportation: the Federal Aviation Administration, the Federal Highway Administration, the Federal Motor Carrier Safety Administration, the Federal Railroad Administration, the Federal Transit Administration, the Maritime Administration, the National Highway Traffic Safety...
Virginia Prescott: [00:01:41] Stop the fight...
Taylor Quimby: [00:01:41] It's a firehose.
Virginia Prescott: [00:01:44] So in a minute we're going to bring on our guest. But first let's go through some quick themes for this episode.
Taylor Quimby: [00:01:50] The first one is this idea that geography is obviously a huge part of infrastructure in America. We have geography that poses some funky challenges.
Virginia Prescott: [00:01:59] You mean not just a space, there is so much of it, but up, down, water, mountains, all that. Exactly. Although space has a big role to play. So the Highway Act of 1555 was an English law and it was sort of the model for Colonial's as they came in. So in Virginia for example they passed a law in 1632 that was very similar, and it basically said that parishes would be responsible for maintaining highways inside the borders of that parish. So you'd get a couple of people from the parish they would be elected surveyors, they would sort of look at what roads needed to be built for the area, and then shortly after Easter they would make this announcement and say OK we're going to work on this section this year. And everybody in that parish would have to work like four or six days for the entire year to get all that roadwork done. And and that's basically how it started in terms of like we need roads here's how we're going to build it piece by piece parish by parish.
Virginia Prescott: [00:02:55] But the United States is much bigger than England.
Taylor Quimby: [00:02:58] Exactly. So you think about England, sort of all these connected parishes and why that might actually function. But the U.S. in the very beginning, this is pre declaration of independence, we're talking about massive spaces. And it was really complicated and frankly it just didn't sort of do the trick. So layer after layer of this onion has gotten more complicated as we figured out how to build roads to serve our needs.
Virginia Prescott: [00:03:21] OK then who pays for the roads.
Taylor Quimby: [00:03:23] Right. And this is sort of the other biggest theme that I would say is that determining who pays for roads and infrastructure in general is a debate that goes all the way back to the beginning. So you know there's that question: Does everybody pay a little bit or do the people who use the roads the most, should they pay? So in Virginia early on they actually didn't need roads as much as you might see in a place like England is because they had all these waterways. So they were able to use boats to move goods in and travel and do various things like that. But that does mean that they needed ferries. They knew bridges. They needed a different type of infrastructure. And there was a law that basically was passed so that people would be taxed and that tax would help to go pay for ferries and things like that. And then there was a big protest and people said hey I don't live that close to the ferry I never use the ferry. I shouldn't have to pay for the ferry and so instead they basically instituted a toll system in this one area. And so it goes to show you you know even early on there was this question and people getting angry about like why am I paying for a road I don't drive on.
Virginia Prescott: [00:04:29] Right. Even though they may get some benefits from being close to that road or being even far from that road.
Taylor Quimby: [00:04:36] Exactly. And this is another big point. Another big theme which is that there are big economic benefits that are sort of greater than whether or not you specifically drive on a road or use a ferry. And that's because you know goods and services and lots of different things travel on roads that maybe you don't use but um...the wool that is being sold by the wool guy let's say in colonial Virginia...
Virginia Prescott: [00:05:03] The famous wool guy.
Taylor Quimby: [00:05:05] Yeah the wool guy needs to get his stuff to market and if he doesn't have a road to drive on, or if it takes him longer because the road is really bad then maybe that gets passed to you in the form of the cost of the wool.
Virginia Prescott: [00:05:17] OK. And this is just the warm up?
Taylor Quimby: [00:05:20] Yeah I know this is just the warm up. And since we're not going to talk about this last point I really think that it needs to get brought up which is that road infrastructure is all about access right. All right. Access to goods access to community. It's no surprise that the history of infrastructure has been a platform for both wins and losses in the civil rights movement. You know big projects have been built that gave economic freedom to some communities while cutting off or just paving over other communities...
Virginia Prescott: [00:05:45] Right through many of them especially in inner city, you know urban renewal, in the 1950s, 40s, 50s, 60s.
Taylor Quimby: [00:05:52] Exactly. So you know you see some of the same themes how you know the idea that one community is going to benefit while sometimes other communities have really suffered when they get cut off from those same economic goods and disproportionately it's been communities of color. On the other hand you know transportation is all about efficiency. So there's there's been some historical examples where big civil rights battles were fought on and over access to public transportation.
Virginia Prescott: [00:06:14] The bus boycott.
Taylor Quimby: [00:06:15] The bus boycotts. Yeah, Rosa Parks.... I mean so you think infrastructure is boring? Maybe on its face it sounds that way but it's incredibly important to sooo many aspects of our lives and that is why we are covering it on Civics 101.
Virginia Prescott: [00:06:27] Infrastructure. The new thriller.
Taylor Quimby: [00:06:28] I packed the information about like a traffic jam.
Virginia Prescott: [00:06:34] That's what infrastructure is all about!
Virginia Prescott: [00:06:43] So to zoom out and tackle the whole complicated onion that is our transportation infrastructure, today we have Shailen Bhatt, the former executive director of Colorado's Department of Transportation, currently president of the Intelligent Transportation Society or I TS of America. Shailen, welcome to Civics 101.
Shailen Bhatt: [00:07:01] Thank you. Thank you for having me.
Virginia Prescott: [00:07:03] So every four years the American Society of Civil Engineers gives America an infrastructure report card, the latest grade barely passing D +. But infrastructure is such a big umbrella that it's hard to know exactly what we're talking about when we use it. So what fits under that umbrella for transportation?
Shailen Bhatt: [00:07:26] Yeah that that is a very consistent grade that infrastructure receives in America, and I wish my parents were as forgiving if I had brought home a D plus as the American public seems to be in accepting that D plus year over year. You know infrastructure is a big is a big tent. And when we talk about infrastructure, you know, we generally refer to roads and bridges, and even just within transportation people often don't think about things like culverts, or traffic signals, but then you take that to another level, there are dams as part of infrastructure, the power grid is part of the infrastructure, ports... I was recently at the Port of L.A. and b etween the Port of L.A. and Port of Long Beach 40 percent of American goods come in and then have to be distributed over a transportation system. And lastly, more and more the technology piece, whether it's cellular towers or broadband technologies are becoming more important with this future of connected autonomous vehicles. So it is a pretty big umbrella.
Virginia Prescott: [00:08:28] How did our highways initially get built? So you know you talk about history. You know President Eisenhower had been a part of a convoy in WWI that had gone across the country and it took them you know a few weeks and he saw the, you know that many roads in America at that time were nothing more than dirt roads. Then when he went to Germany in World War II that he saw how the Autobahn, and the infrastructure investments that had been made were helping drive the German economy so he came back, and when he became president he said "let's do that." But the key thing to remember is, is that taxes at that time were much higher. And I know nobody likes to pay taxes. But I think the marginal tax rate in the 1950s was something like 90 percent.
Virginia Prescott: [00:09:13] You mentioned the Port of Los Angeles and to Taylor's point earlier, people often benefit from infrastructure even if they don't think they use it personally. I mean so back that up again. Why is infrastructure important economically speaking even if I'm a relative homebody living in a rural area?
Shailen Bhatt: [00:09:31] And this is the the very persuasive argument that I think that we should be making which is that, you know not only do you get the jobs that are associated with the you know, whether it's a road or a new bridge or repair a failing infrastructure,you get the economic benefit of those goods flowing more smoothly: people being able to get to work. People being able to make investments and not adding costs get passed on. So if it takes a product that comes into the Port of L.A. an extra 30 percent of time time is money to get to market that 30 percent is being passed on to consumers, and it is just friction and a drag on the economy for everybody.
Virginia Prescott: [00:10:09] But if we look at transportation throughout American history it seems like there are cycles of expansion and then maintenance. Do I have that right?
Shailen Bhatt: [00:10:19] I would say that there have been cycles of expansion. We haven't done a lot of expanding of late. So now it's just a lot of maintenance for the most part.
Virginia Prescott: [00:10:29] So that's where we are now in that cycle as a country as a whole.
Shailen Bhatt: [00:10:33] Yeah and I would say that we're not doing a good job of maintaining what we have so I'll just give you an example in Colorado. People always ask me why is traffic so bad in Colorado and I would say because we have a system that was designed in the 50s, built in the 60s for a population of the 1980s that was 3 million. There are six million people in Colorado today. They are going to eight million people in the next 20 years. But the transportation budget is not at all geared towards expanding the system. We are not even investing enough money to maintain what we currently have.
Virginia Prescott: [00:11:04] Who pays for roads and how?
Taylor Quimby: [00:11:07] Well you know there's there's a number of ways that roads get paid for. I think number one obviously with the federal gas tax. Every state that has a state gas tax, but there's a lot of issues with that. I think that one there is always a political issue with raising the gas tax at the federal level it's not been raised since 1992. Most states have not raised their gas taxes. I would say it's incredibly important that whatever the mechanism that we begin to take responsibility for our transportation system.
Virginia Prescott: [00:11:35] Well you hit on something that has been a big argument as people are saying no we don't want to pay more gas tax. Let's have more private investment in the roads. How does that work?
Shailen Bhatt: [00:11:46] It's just like if you were to say hey we need a grocery store in this area. But the government can't afford to build a grocery store. Let's get the private sector, the private... If the government can't afford to do it the private sector can help only if there are customers for that grocery store. And so what is key here is that public private partnerships or P3s are an important tool in the toolbox. But they are a financing piece, which means that the private sector brings their capital in and then the private sector expects a return on that capital.
Virginia Prescott: [00:12:16] Right. How do they get paid back?
Shailen Bhatt: [00:12:18] So it depends on on the way the deal is structured, so you can do things like availability payment. An availability payment says that the government entity was going to pay 20 million dollars a year to maintain this thing whatever it is. And so in lieu of us paying somebody else we'll give it to the private sector, the private sector then brings their money on the front and builds it. Another typical way is through tolling. You build it you maintain it and then you get to keep the revenue. The challenge for us, in Colorado Governor Hickenlooper would talk often about how we need to make sure that all of Colorado is benefiting, but as a DOT director there, it was hard for me to get a company to say, let's put let's expand a road in rural Colorado where there isn't a lot of traffic.
Virginia Prescott: [00:13:03] During the 2016 election then candidate Trump campaigned hard on infrastructure spending even out matching promises by Hillary Clinton his opponent. Recently the White House did release an outline of Trump's administration plan for infrastructure what does it say?
Virginia Prescott: [00:13:19] I think that this administration has been very clear that they want to change the traditional model of transportation funding and I don't see that in a pejorative sense. I mean I think what they're saying is there isn't enough money in transportation but the federal government isn't likely to come to the rescue here. And so what they'd like to do is to leverage state and local investment to make those federal dollars go further. And so this is where you see the president saying things like for a 200 billion dollar federal outlay. We'd like to see a trillion or a trillion five in actual dollars on the road.
Virginia Prescott: [00:14:00] So you said this is a departure... In the past has been the federal government more paying for the roads?
Shailen Bhatt: [00:14:07] Yes so typically you would expect that on a major interstate project or a major system project with national significance. The federal government would partner with you at 80 percent of that project costs and state locals would come up with 20 percent. And now what they're saying is that we want to drive down that federal number because we want to drive up the state and local piece. And I think part of it is political reality and part of it is also ideology around who should be responsible.
Virginia Prescott: [00:14:39] Trump is proposing that the federal government pay about 20 percent of the costs and then local and state governments pay about 80 percent.
Shailen Bhatt: [00:14:46] I don't know if it's I don't think it's flipping from 80 20 to 20 80 but it is certainly driving that number much closer to that.
Virginia Prescott: [00:14:54] Well the Department of Transportation's Office of Road inquiry really in historical terms has not been around that long. Now there are a number of agencies regulating transportation. Do you think that added complexity has helped. Can we feel more safe on the road and feeling that they are being watched in a careful way?
Shailen Bhatt: [00:15:14] Yeah I think it's it's important that we we again have a we always have the appropriate perspective. Nobody likes regulation. Everybody. You know I tell you in my in my time as a leader in transportation areas you just got to cut regulation, cut regulation and unleash the private sector to to do all the great things they do, and then you see some of the tragedies that we've had recently whether it's the bridge in Florida, or the you know issue in in Arizona, and then there's as rush to the other side well why wasn't this being regulated. And so I think what we need to be is thoughtful around the idea that overregulation can stifle innovation and is inefficient. But we also need to appreciate that many of the hardworking public servants that are regulators, We do want them making sure that safety is the number one priority because while a profit is a great thing for folks who want to achieve, public safety can never take a backseat to that. And that's why I believe that it's a healthy balance that's needed not an extreme one way or the other.
Virginia Prescott: [00:16:24] Well there was one time Shailen, where roads were necessary to get you know telephone poles and electricity out to customers in rural areas or just to connect them to the grid. Now we have some alternatives. For example we have cell phones. You don't really need telephone poles. We have drones that could possibly deliver goods to people in far flung areas. So could the argument me made that our road infrastructure like a lot of things that we used to depend upon, may not be as necessary as it once was?
Shailen Bhatt: [00:16:56] I would say that in some parts of the country we are absolutely at Peak Road meaning that you know to get more throughput on our roadways you're not going to be Widing them because technology is going to let us move more vehicles so for example right now we use 2000 vehicles per lane, per hour, is what an interstate will likely move... Well, with connected vehicles that are coming along we can shorten the distance between vehicles and we can maybe get 4000 vehicles per lane, per hour, through those same lanes. So I agree that you know when we say we need to invest in infrastructure. I don't know that we need mass widening of roadways out there but we do need to make an investment.