Transportation & Infrastructure
For years, we have heard about the deteriorating state of our nation’s infrastructure. The American Society of Civil Engineers (ASCE), considered one of the leading professional organizations in evaluating America’s infrastructure, publishes their report card at four year intervals. The most recent was completed in 2005 and they are currently preparing the 2009 edition. There are 15 categories that are evaluated for the report card including: aviation, bridges, dams, drinking water, energy, hazardous waste, navigable waterways, public parks and recreation, rail, roads, schools, security, solid waste, transit, and waste- water. As of the 2005 Report Card, America’s infrastructure graded a D overall (poor) with an estimated total investment need of $1.6 trillion over the next five years just to maintain and improve the infrastructure we currently have.
Clearly, we as a nation are not investing the amount of money that is necessary to fix what is broken and build what is needed. In the 1950’s we spent 11.5% of our national budget on infrastructure. Today we spend only 2.5% of our national budget on infrastructure. This quite possibly could be a short term answer to solving some of our infrastructure needs, but it is by no means a permanent solution. Long term changes in the way this country finances its infrastructure needs are required and bold steps must be taken by the Obama Administration and the 111th Congress to address the problem.
We realize there will not be one solution, but a combination of several alternatives that might include:
- Elimination of unnecessary spending and re-direction of budget dollars into infrastructure investment.
- Substantially increase the funding level of the State Revolving Loan Fund (SRF) program which provides low interest loans for use on drinking water and wastewater projects. Formation of a national infrastructure bank which could be used to raise capital by issuing tax credit bonds and in turn give loans, grants or loan guarantees to states and local governments for infrastructure projects.
- Formation of a water or wastewater trust fund which could provide a reliable source of funding as long as it is not financed through new taxes or surcharges on water use.
- Elimination or reduction of unfunded mandates.
- Ensuring future EPA regulations and modifications to existing standards are reasonable, achievable, affordable, and bring a meaningful, quantifiable improvement to the environment.
- Streamlining the environmental process. Tasks that add years to the infrastructure project also add considerable dollars to the project cost, many times for little or no benefit.
- Incorporation of “green” or sustainable design if it is cost effective and has an environmental benefit over the long term.
Chamber Position: Funding and improving our nation’s infrastructure will immediately bolster our nation’s struggling economy and provide the needed infrastructure to support long term stability and economic growth while maintaining the public health and safety and the security of our nation.
Surface Transportation – Investment
Background
The nation’s transportation infrastructure is heading toward a state of disrepair. For example, 33 percent of our roads are in poor or mediocre condition and 27 percent of the nation’s bridges (32 percent of Kentucky’s bridges) were either structurally deficient or functionally obsolete, according to ASCE. Public transportation use was up 21 percent in our country from 1993 to 2002, while investment is declining.
This condition is primarily the result of the federal government’s underinvestment in all modes of transportation. According to the Transportation Research Board’s National Cooperative Highway Research Program, there is an average annual gap of over $50 billion in capital, operations and maintenance funding to maintain the nations highway and transit systems from 2007 to 2017, and an average annual gap of over $100 billion to “improve” these systems. For example, Kentucky’s $8 billion six-year road plan is facing an approximate $3 billion funding shortfall.
The negative impacts of our deteriorating transportation infrastructure are felt far and wide. From an economic perspective, productivity is severely impacted. The Federal Highway Administration tells us that from 1982 to 2003, the number of hours commuters spent in traffic increased from 25 hours to 85 hours annually. Traffic congestion costs Americans an estimated $200 billion each year while only 54 percent of American households have access to public transportation of any kind. Furthermore, highway and rail capacity is not keeping pace with the increasing demand to move our nation’s freight.
Our aging infrastructure and the resulting congestion is also choking our environment. Congestion in our country’s urban centers wastes 2.9 billion gallons of fuel per year – enough to fill 58 supertankers. An individual switching to public transit can reduce their carbon emissions by an average of 4,800 pounds per year.
Unsafe infrastructure also costs us dearly in both human and economic costs. Approximately 42,000 people are killed annually on the highways, with 15,000 of those fatalities in crashes where substandard road conditions, obsolete signage, or roadside hazards were a factor – Kentucky is among the top five states in fatalities resulting from roadway hazards. The national economic cost of vehicle crashes annually is over $230 billion.
Chamber Position: The Northern Kentucky Chamber urges Congress to reform transportation programs and maximize federal investment in roads, bridges and public transit. Maintaining and improving the nation’s transportation infrastructure is a national problem and must be a national priority.
Surface Transportation - Process
Background
We are in the midst of a perfect storm involving this country’s transportation infrastructure troubles. The next federal transportation bill must address the need for additional resources while focusing on the inefficient federal process which administers transportation funds.
Some of the challenges inherent in this process are illustrated by the 60-month average to complete environmental requirements, the 13 year average to complete major highway projects, and the long project delays that often result due to the fear of litigation.
The unnecessary delay associated with this process significantly increases project costs. As building material inflation increases due to world demand, delays cause a critical reduction in the buying power of dollars spent on infrastructure. Every year of delay means tens of billions of dollars are lost. Millions of additional transportation dollars would be available if a more efficient process were applied to every infrastructure project in the country. If the process were streamlined to reduce the time to build the Brent Spence Bridge Corridor project by just 30 percent, it could save $1 billion.
Unless the process is streamlined, there is no reasonably expected amount of federal dollars that will yield a competitive transportation infrastructure grid.
Chamber Position: The Northern Kentucky Chamber urges congress to streamline the administrative review and permitting process for federally funded transportation projects.
Water & Wastewater
Background
America’s water and wastewater infrastructure systems are national assets that yield dividends to all citizens in the form of healthy natural ecosystems, protection from waterborne diseases, and they provide for a healthy and growing economy. Municipal drinking water treatment plants ensure that raw source water is appropriately treated to meet or surpass all federal and state regulatory standards to provide safe, clean and sufficient water supply that is critical to the served communities for their overall well being. Municipal wastewater treatment plants prevent billions of tons of pollutants each year from reaching America’s rivers, lakes and coastlines. Clean rivers, lakes, and coastlines attract investment in local communities and increase land values on or near the water, which in turn, create jobs, and incremental tax base, and increase income and property tax revenue to local, state, and the federal government.
Clean water is essential to Northern Kentucky’s health and economic vitality and is one of the largest infrastructure needs in the region.
The water and wastewater infrastructure in Northern Kentucky is facing critical needs in the years ahead. It is estimated, in excess of,$1 billion is needed over the next twenty years to repair, replace and rehabilitate aging and failing pipes, improve treatment facilities and build new infrastructure to comply with increasingly complex and demanding regulations.
Northern Kentucky has more than 1,000 miles of water mains, 50% of which are over 50 years old and need to be replaced to ensure the reliability and safety of the drinking water in the community. Over 1,500 miles of sanitary sewer lines span Boone, Campbell and Kenton Counties. Nearly 300 miles of those lines exist in the older river cities where some lines are 50 to 100 years old. Sewer systems throughout the region are plagued by chronic overflows during major rain storms bringing about the discharge of untreated wastewater into the community. Nearly one-fourth of the area’s sewer system is at risk of reaching capacity in the near future due to storm water infiltration and continued population growth.
A number of legislative and regulatory measures in recent years, such as The Public Health Security and Bio-terrorism Preparedness and Response Act, the EPA’s Combined Sewer Overflow Control Policy, Storm Water Phase II Program and EPA’s Stage 2 of the Disinfection By-Product Rule have increased the financial burden on local entities as they attempt to comply with new requirements and regulations.
Today, Northern Kentucky faces future financial challenges in the water and wastewater sectors that far exceed historical investment patterns. Despite these needs, the federal contribution to water and wastewater continues to decline.
Northern Kentucky residents alone cannot continue to bear this financial burden. Operating efficiencies and private capital have provided part of the solution, but as local utilities are forced to pass these additional costs along to users, water and sewer rates have increased dramatically.
The bottom line is that without a significantly enhanced federal role in financing drinking water and wastewater infrastructure, critical investments may not occur, which could in turn jeopardize the continued economic success of this region.
Chamber Position: The Northern Kentucky Chamber urges the 111th Congress to develop legislation that provides funding assistance for aging water and wastewater infrastructure needs, limit unfunded mandates and provide funding assistance for regulatory compliance.
Aviation
Background
“Every day, the airline industry propels the economic takeoff of our nation. It is the great enabler, knitting together all corners of the country, facilitating the movement of people and goods that is the backbone of economic growth. It also firmly embeds us in that awesome process of globalization that is defining the 21st century.” (Pulitzer Prize winner Daniel Yergin, 2005)
The national economy is highly dependent on commercial aviation, which is directly or indirectly responsible for 5.8 percent of gross output, 5.0 percent of personal earnings and 8.8 percent of national employment (The Campbell-Hill Aviation Group, Commercial Aviation and the American Economy, March 2006).
Aviation plays a vital role in the local and national economy. The Cincinnati/Northern Kentucky International Airport (CVG) is a key player in the overall national airspace system. Home to Delta Air Lines and Comair, CVG is a major economic engine for the Tri-State Region. The 2004 economic impact study by the University of Cincinnati reports that CVG provides an economic benefit of $4.5 billion dollars annually and supports more than 55,000 local jobs. The CVG hub has also given our region the opportunity to compete in the global marketplace on a level it wouldn’t otherwise enjoy.
In December 2005, Delta Air Lines and Comair reduced their operations at CVG by approximately 26% and have continued reductions through 2008. The reduction in air service at CVG is part of Delta’s right sizing plan to better balance connecting passengers and local passengers in their overall efforts to re-structure and return to profitability. The reduction in air service translates into reduced funding levels for CVG from both the Airport Improvement Program and the Passenger Facility Charge Program, since both funding sources are tied to passenger activity levels. While operational levels have decreased, some capital projects are still required for safety reasons. A reliable aviation funding source is needed to ensure these critical projects are constructed.
The Northern Kentucky Chamber urges the 111th Congress:
- To pass a multi-year FAA Re-Authorization Bill, which expired September 30, 2007, at the fully funded level recommended by the FAA, enabling airports to move forward with critical projects.
- To allow full implementation of streamlining the environmental process as it relates to the aviation industry.