Declining Global Ranking for U.S. Infrastructure + Looming Highway Trust Fund Insolvency = Need for New Investment

The World Economic Forum (WEF) “The Global Competitiveness Report 2019” ranking of America’s infrastructure and the future insolvency of the Highway Trust Fund (HTF) prove the serious and coast-to-coast issues that our nation and elected leaders need to address.

Good public policy cannot be separated from the more than 327 million people and millions of American and global businesses that rely on America’s infrastructure, including utility, transit, airport and road networks.

In the WEF report, the United States is ranked 13th in infrastructure — a score of 87.9 (out of 100) and a finding that is disappointing on many fronts: one, well-maintained and modern infrastructure are important for any world economy; two, the United States’ transportation network was once unparalleled in the world; and three, 21st-century mobility and commerce rely on first-rate surface transportation.

Last year, the WEF’s global ranking on U.S. infrastructure was 9th. In the recent report, more specifically, the WEF ranks America’s “transport infrastructure” 12th and gives a score of 79.6. Quality of road infrastructure, one of the categories assessed, receives a score of 74.5 and a ranking of 17th.

It’s important to consider all of this to the backdrop of future revenue shortfalls for highway and transit funding and a widening deficit. Last week, the Eno Center for Transportation and Senior Fellow Jeff Davis reported in detail on the Congressional Budget Office’s (CBO) annual Budget and Economic Outlook.

• U.S. Ranked Thirteenth
  Out of 141 economies surveyed, the United States ranked 13th for infrastructure

Davis wrote: “The new forecast projects that the Highway Account of the HTF won’t need another bailout — fingers crossed — until the end of fiscal 2021 under current spending levels. The Highway Account is projected to end FY 2021 with $5.9 billion in balances. The Mass Transit Account, however, is projected to end FY 2021 $235 million in the red. … The new CBO projection says that the ten-year Highway Trust Fund insolvency total (end-of-2030 balance) is an astounding $193 billion, including cash cushion. To put it in perspective, CBO projects that total tax receipts at current rates will be $426 billion over 10 years, and the Trust Fund needs another $193 billion on top of that to maintain current-plus-inflation spending. $193 billion is 45 percent of $426 billion.”

Global Issues, Local Implications

“The global marketplace is highly competitive. America is falling behind and we need to turn that around for everyone’s sake. Our maintenance backlog is huge at a time when we should be moving forward. We need new investments to prepare us for smart cities, congestion-taming technologies, and to proactively manage the risks to our nation’s infrastructure associated with changing climate conditions. More severe storms and flooding, and higher storm surges, will affect the reliability and capacity of transportation systems,” says American Council of Engineering Companies (ACEC) President and CEO Linda Bauer Darr.

Infrastructure continues to be identified as a bipartisan issue around which elected leaders can coalesce in the political milieu of D.C.

The House Ways and Means Committee held a Jan. 29, 2020, hearing on infrastructure. Proponents hope this a step toward a comprehensive infrastructure package; however, ways to pay for improving America’s transportation system (including addressing the deflated federal fuel tax) are among issues that need to be resolved for America to remain strong and secure.

Notably, the WEF report magnifies how important public investment is for all countries.

“As an example, lacking investments in transport infrastructure has led to a deterioration of road quality,” it says. “Public investments in particular have been declining in most advanced and emerging countries. As a result, general purpose research has diminished, and public capital has decreased. By reigniting public and private investment in infrastructure, education and innovation, countries would not only enhance productivity growth but also further support employment and broaden aggregate demand.”

Throughout the country, regions are struggling with underfunded and overburdened infrastructure as states face aging, less efficient and congestion-impacted transportation systems.

“America needs private investment and state and local revenue to help address deteriorating transportation infrastructure, but because we have a national system that is regionally linked, we must have long-term federal funding to achieve any national objectives for modernization, safety improvements, and integration of new innovation and technology,” says Americans for Transportation Mobility (ATM) Coalition Executive Director Ed Mortimer. “It’s telling that road connectivity was one of the areas where our nation received a high mark from the World Economic Forum. This is because we have historically had a strong federal program and we still need one if we want to improve the quality of life for all Americans.”