Spending Increases, Road Quality Decreases

Source: “Repair Priorities 2019

A new study by Transportation for America and Taxpayers for Common Sense documents the magnitude of the “Growth Ponzi scheme” in the U.S. road transportation system. Between 2009 and 2017, the 50 states collectively added more than 223,000 lane miles to their road networks. At an average cost of $24,000 per lane mile to keep roads in a state of good repair, that means states and localities have pumped up their maintenance liabilities by $5 billion a year.

But the states aren’t keeping up with those costs, contends “Repair Priorities 2019.” Nationally, the percentage of roads in poor condition increased from 15% in 2008 to 20% in 2017.

The problem isn’t a lack of money, argues Beth Osborne, director of Transportation of America. “We’re finding the money for expansion. There’s too little money to do everything, but we’re insisting that we do everything.”

The federal government subsidizes the up-front cost of building new roads, highways and bridges. States jump at the chance to get this “free” money from Uncle Sam. In a parallel phenomenon first explained by Charles Marohn, leader of the Strong Towns movement, localities reap short-term gains in tax revenue from new real estate development, while real estate developers offset some of the up-front cost of building the attendant road improvements through proffers and impact fees. But developers do not pay for the ongoing cost of maintaining and operating the road network (and neither does the federal government). As road systems age, liabilities mount, and local governments spur more development to generate revenue to recoup those costs. And so the Ponzi scheme continues until it falls apart.

The “Repair Priorities” study documents the growth in road-miles and the increasing liabilities associated with that growth, as well as the failure of state and local governments to maintain those roads. As the report summarizes, “Despite more spending, our roads are not getting better.”

Quoting directly from the report:

$169 billion per year just to keep our good roads “good.”
As of 2017, we would need to spend an estimated $168.6 billion per year exclusively on road repair just to preserve the nation’s roads that are currently in good and fair condition in that acceptable state through routine pavement management practices.

$63 billion per year on top of that to address the backlog of poor roads.
We are also facing a substantial financial burden to bring the backlog of roads currently in poor condition into good repair. It is significantly more expensive to rehabilitate roads that have fallen into poor repair than to preserve roads in good condition on an ongoing basis through routine pavement preservation. We
estimate that the total cost to bring the nation’s current backlog of roads in poor condition into good repair is approximately $376.4 billion, or $62.7 billion per year over a six-year federal transportation bill.

Taken together, this means we are currently facing a total need of $231.4 billion per year just to keep our existing road network in acceptable repair.
For comparison, all highway capital expenditures across all government units totaled $105.4 billion in 2015, only a portion of which goes to repair. Policymakers treat roads as economic assets on their balance sheets, but they are also major financial liabilities. They bring guaranteed costs over their life cycles—costs that are rarely fully accounted for on the front end. The true cost of our roads is likely even higher than the figures above, which do not account for bridge repair needs and other costs associated with maintaining our road
network, such as snow removal, stormwater management, and traffic enforcement.

I have long maintained that the failure to properly maintain the road network represents a form of hidden deficit spending. Here are the numbers for Virginia:

Virginia state spending (2009 to 2014)
Annual average capital spending: $1.297 billion
Roadway expansion percentage: 31%
Roadway repair percentage: 19%
Other capital expenditures: 50%
Note: “Other” capital spending encompasses bridges, safety, engineering, traffic operations, and environmental enhancements.

State road conditions (2017)
Public center-lane miles: 12,752
% poor condition: 10% (13 best in the country)
% fair condition: 44%
% good condition: 45% (18th best in the country)

Change in pavement conditions by state
(roads reported in poor condition)
2009 — 3%
2017 — 10%

Lane-miles added (2009 to 2017)
(State-managed roads)
2011 lane-miles: 126.124
2017 lane-miles: 128, 189
Lane-miles added: 2,065
(All jurisdictions)
2009 lane-miles: 160,727
2017 lane-miles: 163,648
Lane-miles added: 2,271

Virginia accounted for only 1% or so of the total increase in lane-miles nationally, significantly less than its share of the population. However, using the report’s rule-of-thumb of $24,000 repair cost per lane-mile, Virginia added $54.5 million in annual maintenance liabilities between 2009 and 2017.

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14 responses to “Spending Increases, Road Quality Decreases

  1. “Eyeballing” the data … it looks like Federal funding after the so-called great recession grew from $38b to $40b (2012 – 2017). That’s 5.2%. However, the cumulative rate of inflation over that period was 6.8%. US population grew about 3.8% over that time. Didn’t road funding need to grow by 6.8% + 3.8% or 10.6% to keep up with population growth and inflation? If so, we’re growing the spend at 1/2 the pace it needs to grow. No? Are the dollars in your graph real or nominal?

    My inflation calculator – https://www.usinflationcalculator.com/

    The fatal flaw of the “road hating community” is the belief that one bright and beautiful day we will have built all the roadways we’ll ever need. When that day never comes they road haters cry “foul” or, worse yet, “smart growth”.

    Roads are a fact of life – just like waterworks, sewage systems, electrical transmission lines, power generation capability and other forms of infrastructure. As long as the population and economic activity grows we will need more of all infrastructure – including roads.

    Virginia population in 2009 – 7,928,779
    Virginia population in 2017 – 8,470,020
    Population growth over the period – 6.8%

    Road miles in 2009 – 160,727
    Road miles in 2017 – 163,648
    Road mile growth over the period – 1.4%

    Population grows at 6.8% while road capacity grows at 1.4%. Gosh … I wonder why we have continuing traffic congestion chaos. That doesn’t even consider the population shifts from rural to urban locations. I’d love to see these figures by locality. Are they available?

    In addition to keeping road capacity in line with population growth you have to budget to maintain what is built. Another intellectually complex thought for our General Assembly apparently.

    • I agree that the road system needs to grow as the population grows. But that’s no excuse for failing to maintain the roads and deferring costs — higher than they would have been otherwise — to a later date. I wonder if anyone in the General Assembly has even seen fit to look at the numbers in this way.

      • I agree on the maintenance issue. I doubt the General Assembly has considered the matter – at least not clearly in the minds of the elected politicians (I imagine the VDOT folks think about that). That’s a big problem with a part-time legislature with minimal office staffs. I’d wager that the average General Assembly member spends less time learning, studying and thinking about Virginia’s issue than you spend doing the same on this blog. In fact, a whole lot less time. Why bother to learn things yourself when there’s a handy dandy lobbyist just itching to come over to your office with a check and an explanation of what’s best for Virginia?

  2. Inadequate maintenance is worse than just deficit spending. Maintenance failures, particularly drainage maintenance, accelerate the rate of road condition decline and shorten the longevity of roads.

    VDOT’s 2019 Board of Supervisors Manual says that “inadequate or improperly maintained drainage facilities are responsible for most pavement failures and soil erosion.” They’ve said that for years, and VDOT cuts maintenance every year as a budget move without counting the long term cost.

    FHWA effect of saturation

    Conflating Norfolk street flooding with “anthropogenic global warming and the resulting rising seas” (Anthropogenic Global Warming Is Real. Now What?, DJ Rippert, 5/14/19) without considering the impacts of inadequate drainage maintenance doesn’t help either. (A side note is subsidence from excessive drawdown of water from the Potomac aquifer causes half of the “rising seas” in Norfolk. See USGS Circular 1392.)
    VDOT engineers have lost sight of watersheds and how they function. VA-DEQ ignores those failures to allow natural water flow and continues with flawed concepts of stormwater management that also impair natural flow. And we get flooding and premature road failures in the Commonwealth as a result.
    The federal subsidies for surface coating roads let VDOT hide the damage and pretend roads are in good condition until they collapse. So there’s no way to assess the true unfunded liability of road needs.

    • CJ – the section of my article labeled “yes, Virginia … we are among the most screwed” was a description of the future if sea levels rise due to anthropogenic global warming (which I believe will happen). The example of the Potomac River losing summertime flow and threatening the drinking water supply in Northern Virginia, for example, is something that might happen – not something that has happened.

      You should also probably read the comments that go along with the posted articles. Here’s one of my comments from the global warming article …

      “Subsidence is almost certainly more powerful than rising sea levels where subsidence is occurring.” I added a link to Sharp’s Island as evidence of the effects of subsidence.

      As far as drainage maintenance – that may be a fair point. I struggle a bit to believe that the lack of drainage maintenance is making a big difference in Hampton Roads but it could be making some difference. I’d also point out that the Dutch have been expanding their landmass and fighting off the sea for centuries. There might be a way to continuously battle flooding cause by subsidence, bad weather and global warming in Hampton Roads. It just won’t be cheap.

  3. A real life situation explains the realities of transportation politics. Yesterday, the Transportation Planning Board for the National Capital Region deferred a request by Maryland to amend the 2019-24 Transportation Improvement Plan to move some money around for the rebuilding of the Governor Nice Bridge. MDOT is considering two options. One would create an 8′ separated bike lane on the bridge. The other wouldn’t. Bikes would have to share traffic lanes with motor vehicles.

    The new bridge will be paid for entirely by tolls placed on motor vehicles. No fees will be paid by bicyclists or pedestrians. How would the gantries record them? Bicyclists and many local Maryland officials on the TPB object to the sharing of a lane in each direction by bikes, cars and trucks as unsafe. It’s hard to argue with that position.

    At the same time, MDOT estimates that adding the 8′ lane and related improvements will increase the cost of the bridge by at least $50 M and increase the tolls. Many comments, especially from local users of the existing bridge who will pay for the new bridge opposes high tolls and oppose any bike lanes whatsoever. MDOT, using local data and data from bike users on the Woodrow Wilson Bridge, estimates there will be an average of 50 bike riders using the new two-mile bridge daily. An number of TPB member believe that the added costs may make the new bridge unaffordable without providing significant benefits. It’s hard to argue with that perspective either.

    What should the TPB do? Approve the TIP modification with the chance the bridge will be dangerous for bike riders or not approve it and seek the bridge replacement project canceled. Unless the TIP is amended, no federal money is available for any transportation project.

    • 50 bike crossings a day, 365 days per year, 30 years = 547,000 bike crossings

      $50m / 547,000 = $91.32 per bike crossing.

      Sorry bikers.

      • I suspect the response you would get is: How can you put a price on a biker’s life. I don’t like the idea of putting bike riders in an unprotected lane with cars and trucks going 65 mph and more. But I must also ask: How much maintenance or other construction does not occur because we spend $50 million for 50 bike riders? Are bike riders more important than drivers, especially drivers whose tolls will pay for the new bridge?

        As I wrote, transportation funding can be very complicated.

  4. Ah Jim, bless you. I can’t wait to take this article to City Council … Planning Commission. 🙂 hee hee hee

    • Dear Jim & Don,

      And whence comes a large share of the population growth? From immigration! This is yet another example where immigration is both a subsidy to landlords and corporations and affluent homeowners, but a tax for everyone else, and the same is true for public schools and other “public services.” Follow the money and see who benefits, and it is not ordinary citizen.

      Sincerely,

      Andrew

      • You may be right but I don’t have the data.

        However, beyond immigration …. people have a warped sense of how much a new 3 or 4 bedroom house actually costs the community vs how much additional tax revenue it provides. When you add up schools, new road capacity, maintenance of the new road capacity, police , fire, ambulance service, etc, etc – it gets very hard to see how that house pays for itself. A new $500,000 house that attracts a young family newly arrived in Virginia might have major tax flows like this:

        Property tax at 1% of assessed value per year: $5,000
        State income taxes on owners making $200,000 per year: $11,000
        Sales tax assuming purchases of $50,000 per year (Fairfax County @ 6%): $3,000

        That’s $19,000 per year. The fiscal 2020 Fairfax County School System budgeted spend per pupil is $15,293 per year.

        If our theoretical family earning $200,000 per year and living in a half million dollar house has two school aged children attending public schools they are a money losing proposition based on their largest tax streams.

        I did this calculation more of less “off the top of my head”. I’d be happy to read any critiques or clarifications.

        The answer might be that the couple buys a $500,000 house that is really a $400,000 house with a $100,000 proffer. Of course, real estate and development special interests are the single biggest industry participating in Virginia’s unlimited campaign contribution program so don’t hold your breath on proffer increases.

  5. Fairfax County has long taken the position that few residential taxpayers’ payments are sufficient to cover the costs of services provided to residents, especially when one considers the costs for educating students. That’s why every supervisor ever has argued for more commercial development. It’s also why the County tries to attract people without school age children.

    Now we certainly need lower-priced housing (workforce and affordable (terms of art)). But we must also recognize that people living in this type of housing likely contribute much less than people living in market-rate housing.

    Further, there comes a point where local government goes beyond meeting the needs of its lower-income residents and becomes a target for more and more low-income people. I’m not suggesting Fairfax County is at this point. But those campaigning on let everyone live in Fairfax County without regard to their legal status is pushing the County to spend more and tax more, making the county less affordable to more people.

  6. On roads, are we arguing that we’re not generating enough funding from taxes or tolls or that we have enough funding but it’s not prioritized correctly?

    I think on the Nice Bridge – you need to think ahead – to the day when it will need maintenance and if you have extra lanes – you just divert the traffic to those extra lanes and do the maintenance – as opposed to go to one lane or some other mode that really affects all traffic.

    Not building the extra lanes is penny-wise and pound-foolish in the longer run.

    I do not mind putting a toll on bikes – myself – for facilities that are toll-financed but if you toll at $100 or more – you’re just stopping all bike traffic. How about folks on foot? same thing?

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