ASCE outlines impact on American households of not investing in U.S. infrastructure

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A new report from the American Society of Civil Engineers (ASCE) has found that American households will bear a large amount of the costs associated with deficiencies in the country’s network of roads, bridges and transit, equating to as much as $12,500 per household over the next two decades.

The nation’s surface transportation infrastructure impacts nearly every aspect of American life, from jobs to vehicle maintenance to supply chain effectiveness. And while roughly $4.1 trillion will be needed from 2020 through 2039 to sustain surface transportation across the United States, that system faces an estimated funding gap of about $2.1 billion during the same time period.

That investment gap includes a $176 billion backlog for transit investments which is expected to grow to nearly $500 billion through 2039 as existing assets age. Failure to act on closing that gap could cost every American, ASCE said in its report, “Failure To Act: Current Investment Trends in Our Surface Transportation Infrastructure.”

“Should investment in our nation’s highways, bridges, and public transportation systems continue at current trend levels of capital spending, households and businesses will incur nearly $2 trillion in extra costs cumulatively over the 20-year timeframe of this study,” the organization said in a statement.

The cost of not adequately funding the country’s surface transportation system will produce a mounting burden, the group said, which will in turn increase the cost of doing business, reduce the opportunities for firms to invest, slow down the research and development sector and leave American households with less disposable income. At worst, the group said, it would damage the country’s competitive position in the world’s economy.

In its preliminary findings on surface transportation systems, the organization said infrastructure across the country is impacted.

“For many years, the nation’s surface transportation infrastructure has been underfunded and continues to experience deterioration, in both its condition and its capacity to perform. Moreover, even where conditions are now stable, backlogs are growing, potentially signaling future decline,” the report said. “Because this deterioration and accumulating backlog have been diffused throughout the nation and has occurred gradually over time, its true costs and economic impacts are not always immediately apparent.”

ASCE said transportation funding that is appropriated is typically spent on a variety of preservation projects and system expansion projects. “While these allocations have often been sufficient to avoid imminent failure of key facilities, the continued deterioration leaves a significant and mounting burden on the U.S. economy,” the report said.

America would need to spend nearly a third more than it does right now to address the backlog for rehabilitating pavement alone. Citing data from the Federal Highway Administration, the report said that $53 billion in average annual funding will be required to repair pavement and other operational conditions. “Meanwhile, projected spending is estimated at only $41 billion annually,” the report said. “In other words, spending must increase 29 percent over current spending levels to address the current backlog and urban and rural collectors and non-interstate highways anticipated future backlogs, after adjusting to 2019 dollars.”

And fixing the pavement issue, while expensive, would pay off in the end, the ASCE said, because of the savings it would generate when it comes to congestion alone.

“Meanwhile, congestion on the nation’s highway network is an increasingly significant problem, particularly in metropolitan areas with severe bottlenecks,” the report found. “The cost of congestion was monetized for highway users and found to be almost $180 billion in 2017. The average yearly congestion delay per auto commuter grew by 15 percent between 2012 and 2017. Over the same five-year period, congestion costs have grown more steeply, increasing 19 percent for all vehicles, while truck congestion delay costs increased by 35 percent.”

Replacing deficient road networks, the group said, and could have a price tag of as much as $4.2 trillion over the next 20 years. That price tag includes vehicle maintenance expense, direct time costs in truck delays, excess petroleum-based fuel burned by slowed autos and trucks, and even the logistical costs from delays for the freight carried on trucks to markets.

That number far exceeds the amount needed to maintain the infrastructure system, the group said.

“The cumulative investment gap between current spending and needed expenditures to decrease congestion and maintain our assets in a state of good repair is approximately $1.5 trillion in 2019 dollars,” the group said in its report.

Businesses would also suffer. According to its investigation, American businesses would stand to lose $216 billion in sales, leading to a loss of 378,000 jobs in the year 2029. In 2039, if the funding gap is not addressed, businesses would face a loss of $824 billion, leading to a loss of 726,000 jobs.

And if those business losses are pushed to the consumer, American taxpayers could see a decrease in the amount of money in their pocket, the group said.

Should investment in our nation’s highways, bridges, and public transportation systems continue at current trend levels of capital spending, households and businesses will incur nearly $2 trillion dollars in extra costs cumulatively over the 20-year time-frame of this study,” the report said. “The direct costs to households equate to more than $1,500 per household over 20 years. Moreover, if industry costs are passed onto consumers, the cumulative cost per household could be as high as $12,500 over 20 years, or $625 annually.”

And the longer the funding gap is not addressed, the more costly the problem becomes for both households and businesses, which stifles the national economy.

“For example, the costs imposed by congestion and poor infrastructure will increase prices and decrease profits of goods and services provided by U.S. businesses, leading to reductions in wages and disposable income of households,” the report’s authors wrote. “Moreover, households will have to divert more dollars to offset transportation costs and away from other purchases, just as overall income is decreasing.”

The result is that cumulatively from 2020 through 2039, $6.2 trillion in national gross output will be lost, GDP will be $2.8 trillion lower, and disposable household income will drop by $1.8 trillion, according to the ASCE report.