Sea-level rise: the defining issue of the century | Editorial

May 4, 2018, 8:00 AM

 

No graver threat faces the future of South Florida than the accelerating pace of sea-level rise. In the past century, the sea has risen 9 inches. In the past 23 years, it’s risen 3 inches. By 2060, it’s predicted to rise another 2 feet, with no sign of slowing down.

Think about that. Water levels could easily be 2 feet higher in 40 years. And scientists say that’s a conservative estimate. Because of melting ice sheets and how oceans circulate, there’s a chance South Florida’s sea level could be 3 feet higher by 2060 and as much as 8 feet by 2100, according to the National Oceanic and Atmospheric Administration.

It’s not just a matter of how much land we’re going to lose, though the barrier islands and low-lying communities will be largely uninhabitable once the ocean rises by 3 feet. It’s a matter of what can be saved. And elsewhere, how we’re going to manage the retreat.

You see the evidence several times a year in Miami Beach, the finger isles of Fort Lauderdale and along the Intracoastal Waterway in Delray Beach. During king tides on sunny days, seawater bubbles up through storm drains and over seawalls into lawns, streets and storefronts. That didn’t happen 20 years ago, but it’s going to happen more and more.

JIM MORIN CARTOON 5/6/18 (Climate Change Sea Level Rise)
JIM MORIN CARTOON – Original Credit: Jim Morin – Original Source: Handout (Courtesy)

 

Of the 25 American cities most vulnerable to sea-level rise, 22 are in Florida, according to the nonprofit research group Climate Central. They’re not all along the coast, either. Along with New York City and Miami, the inland cities of Pembroke Pines, Coral Springs and Miramar round out the top five.

Flooding also is increasing in South Florida’s western communities — like Miami-Dade’s Sweetwater and The Acreage in Palm Beach County — because seawater is pushing inward through our porous limestone foundation and upward into our aged flood control systems, diminishing capacity. Sawgrass Mills in western Broward closed for three days last year because the region’s stormwater system couldn’t handle a heavy afternoon thunderstorm. You’ve never seen that before.

The encroaching sea is bringing sea critters, too. Catfish were spotted swimming through floodwater at a Pompano Beach apartment complex west of I-95 last year. And don’t forget the octopus that bubbled up through a stormwater drain in a Miami Beach parking garage.

Not a distant threat

More than the rest of the country, South Floridians get it. The Yale Climate Opinion Maps show 75 percent of us believe global warming is happening, even if we don’t all agree on the cause. We understand that when water gets hotter, it expands. And warmer waters are melting the ice sheets in Greenland and Antarctica. If all of Greenland’s ice were to melt — and make no mistake, it’s melting at an increasing clip — scientists say ocean waters could rise 20 feet.

The problem is, we’re not convinced sea-level rise will harm us in our lifetimes. We’ve got to change that mindset because it already is. Like most of us, Doris Edelman of Hollywood hadn’t heard of king tides five years ago. Now she can’t leave her house those autumn days when king tides lift the Intracoastal Waterway over its banks, over her street and halfway up her driveway. Hers is not an isolated case.

One of the reasons sea-level rise feels like a distant threat is because construction cranes still dot our skylines, the population keeps growing and politicians keep approving new developments.

Yet government officials see the danger ahead. South Florida’s four counties have created a climate compact that, among many things, requires new construction to anticipate that minimal 2-foot rise in water levels by 2060.

However, sea-level rise is not yet on the short-term horizons of the mortgage and insurance industries. Perhaps that’s because lenders generally recoup their money within 10 years and insurers can cancel your policy year to year.

But government officials well know their successors will be stuck with abandoned properties when the water rises. And part of their responsibility will be to clean the debris to ensure pristine ocean water for future generations.

Perhaps you think you’re safe because the flood map shows your home is on high ground. But you still need infrastructure — things like roads, power plants, water treatment facilities, airports and drinking-water wellfields. So while your house may be high and dry, good luck getting to the grocery store, the doctor’s office or out of town.

It’s tricky to trumpet the threat headed our way. Scientists like Harold Wanless, a noted University of Miami coastal geologist, have the freedom to be blunt. He says says the local projection understates the accelerating rate of rise. “By the end of the century and just after,” Wanless says, “South Florida will be a greatly diminished place and sea level will be rising at a foot or more per decade.”

But local leaders fear scaring people and damaging our economy. Though our region is certain to be reshaped, they express confidence that we can adapt if we start planning now to raise roads, elevate buildings, update the region’s 70-year-old flood control system, buy out flood-prone properties and make smart choices about what to save and where to invest.

Leadership lacking elsewhere

At the federal level, little leadership is being shown on the threat of sea-level rise. President Trump recently rolled back the Obama-era order that requires infrastructure projects, like roads and bridges, be designed to survive rising sea levels. And though membership is growing in Congress’ Climate Solutions Caucus, too many Republican members still deny the reality of climate change and sea-level rise, perhaps fearing political retribution by right-wing deniers. U.S. Sen. Marco Rubio resides in that camp.

In Tallahassee, after years of silence on sea-level rise, Gov. Rick Scott this year finally requested $3.6 million — a pittance, really — to help local governments plan. But despite the efforts of some South Florida lawmakers, the issue wasn’t on the Legislature’s agenda, partly because of the politics of climate change and partly because term limits create a revolving door of lawmakers who focus on today’s hot buttons, not tomorrow’s existential threats.

“It’s not something we’ve taken a position on,” Cragin Mosteller, communications director for the Florida Association of Counties, said in December when asked about sea-level rise. “We represent 67 counties who have differing opinions … So for us, we’re trying to focus on the things counties need to manage water.”

Mark Wilson, president of the Florida Chamber of Commerce, says that to get Tallahassee’s attention, we must first raise public awareness. Then, people need to make their voices heard.

“I travel the state more than anybody but the governor. I promise you that people are not demanding that their local House member and their local senator drop what they’re doing and do something about sea-level rise,” Wilson said. “The solution is to raise awareness to it.”

Raising our region’s voice

To that end, the editorial boards of the South Florida Sun Sentinel, Miami Herald and Palm Beach Post — with reporting help from WLRN radio — are joining hands in an unprecedented collaboration this election year to raise awareness about the threat facing South Florida from sea-level rise. In drumbeat fashion, we plan to inform, engage, provoke and build momentum to address the slow-motion tidal wave coming our way.

Sea-level rise is the defining issue of the 21st Century for South Florida. Some of us might not live long enough to see its full effects, but our children and grandchildren will. To prepare for a future that will look far different, we’ve got to start planning and adapting today.

“The Invading Sea” is a collaboration of the editorial boards of the South Florida Sun Sentinel, Miami Herald and Palm Beach Post, with reporting and community engagement assistance from WLRN Public Media. For more information, go to InvadingSea.com

Editorials are the opinion of the Sun Sentinel Editorial Board and written by one of its members or a designee. The Editorial Board consists of Editorial Page Editor Rosemary O’Hara, Elana Simms, Andy Reid and Editor-in-Chief Julie Anderson.

State gives first look at possible Coastal Connector highway routes

All five of the proposed routes meet again at U.S. 27 near Fellowship and west of Golden Ocala Golf and Equestrian Club.

State road planners on Thursday revealed a spaghetti map of possible routes for the proposed “Coastal Connector” highway project — including one that could bring a new interchange at Interstate 75 in north Marion County.

The plan is in its earliest stages and the current study is only gathering public input. The highway would connect north Central Florida with the Tampa area and run through Citrus and Marion County. The new road, likely a toll road, would reduce the strain on Interstate 75 with the goal of keeping up with growth and improving transportation and future emergency evacuations.

The project is decades from fruition with no construction expected before 2045, according to Harry Pinzon, an environmental engineer with the Florida Department of Transportation.

The five routes unveiled on Thursday all start at the end of State Road 589 (Suncoast Parkway) which is now set to end at State Road 44 in Citrus County but could go as far north as County Road 486 in Citrus. From there, the routes split off and would cross over the Withlacoochee River at one of four points between Lake Rousseau to the west and near State Road 200 to the east

All five of the proposed routes meet again at U.S. 27 near Fellowship and west of Golden Ocala Golf and Equestrian Club. The road would continue north and would either follow the current path of State Road 326 east to U.S. Highway 441 or would continue north and exit just south of the U.S. 441/U.S. 301 split. The more northerly route would not mirror an existing road and would need a new interchange at I-75.

While still in the very preliminary stages, Randy and Sally Keller came out to a public meeting held in Crystal River on Thursday evening to see where their property sat in relation to the routes. A similar meeting is set for Ocala on May 1 at the Hilton Ocala, 3600 SW 36th Avenue at 4 p.m.

Turns out their 5-acre lot is only a few hundred feet away from one of the proposed routes.

“It’s kind of scary,” said Sally Keller. “Now I know why we’ve gotten six letters from people wanting to know if we wanted to sell. I knew something was up.”

The Kellers live in Brooksville and their property near Dunnellon is raw land.

But dozens more attended the meeting and many huddled around several big screen monitors to try and pinpoint their homes. Some routes do overlap existing home sites.

For Sandra Marraffino, who lives in Dunnellon, none of the proposed routes crossing the Withlacoochee are ideal.

“That is all very sensitive land from an ecological standpoint,” Marraffino said.

Tens of thousands of birds nest on islands on Lake Rousseau and the route closest to State Road 200 would cut through Halpata Tastanaki Preserve, home to a population of Florida Scrub Jays. The dwindling species is only found in Central Florida. In between, there are other bird habitats including burrowing owl, said Marraffino, a member of the Marion Audubon Society.

Her suggestion for a route crosses the Withlacoochee further west and takes the road through Levy County and into Alachua County.

Despite some misgivings, all those approached at Thursday’s meeting agreed that a new road is necessary given the state’s growing population and the bottlenecks formed during Hurricane Irma evacuations last year.

“We are really open to what’s going on,” said Nancy Huff, who also lives near one of the routes. “But it’s going to take so long, who knows what it will really look like.”

Learn more

• Watch the state presentation about this possible new road at http://www.coastalconnector.com/onlinemeeting2/. The site also has links to a map of the proposed corridors.

• See documents about the study at http://www.floridasturnpike.com/coastalconnector.html#resources

 

Trump’s highly touted infrastructure dream nixed for this year

Infrastructure is an early casualty of Washington’s fixation on the November mid-term elections. Retiring House Speaker Paul Ryan, R-Wis., Senate Majority Leader Mitch McConnell, R-Ky., and others are signaling that Trump’s $200 billion federal infrastructure plan is all but dead for this year.

By John D. Schulz · April 18, 2018

 

Wait ‘til next year. Maybe.

If promises were concrete and asphalt, this country would have the world class infrastructure that President Donald Trump keeps talking about. Unfortunately, it takes careful planning, political will and, most importantly, billions of dollars. All those characteristics are in short supply in the Trump administration.

Infrastructure is an early casualty of Washington’s fixation on the November mid-term elections. Retiring House Speaker Paul Ryan, R-Wis., Senate Majority Leader Mitch McConnell, R-Ky., and others are signaling that Trump’s $200 billion federal infrastructure plan is all but dead for this year.

Even Trump admits infrastructure is dead until 2019—or maybe forever. He has been talking about infrastructure improvements for at least three years since the early days of his candidacy, often calling U.S. roads and bridges akin to “a Third World country.”

“I don’t think you’re going to get Democrat support very much,” Trump said in Ohio recently, before adding: “And you’ll probably have to wait until after the election, which isn’t so long down the road. But we’re going to get this infrastructure going.”

Maybe yes, but maybe no. There is the not-so-small area of how to pay for these improvements without resorting to usual Washington bookkeeping and scorekeeping trickery. Truckers and the U.S. Chamber of Commerce briefly floated a nickel-a-year increase in the fuel tax—18.4 cents a gallon on gasoline, 24.4 cents on diesel, unchanged since 1993—but that trial balloon crashed and burned by the no-tax pledge signed by most Republicans in Congress.

In more bad news, a planned infrastructure fund by the private equity firm Blackstone that was said to be creating up to $40 billion in private money has been slow to get off the ground. Saudi Arabia was supposed to be the fund’s largest backer, but they have backed off. Saudi money was supposed to be half of the $40 billion.

According to a New York Times report, Blackstone’s goal is now $15 billion, but even that figure is suspect because of lukewarm returns on infrastructure investments.

So that leaves truckers and other motorists absorbing billions of dollars in delays and repairs due to outdated infrastructure at highways, bridges and intermodal facilities around the country.

American Trucking Associations President and CEO Chris Spear has estimated the trucking industry currently loses nearly $50 billion annually to congestion. “That is unacceptable,” he said recently. “We must unclog our arteries and highways and make our infrastructure safer and more efficient by investing in our roads and bridges.”

Jim Burnley IV, who was Transportation Secretary under Ronald Reagan, said working on an infrastructure program in an election year is a neat political trick—and one just not possible in the current political climate.

“Sadly, that’s probably true,” Burnley, now a partner with the Venable Inc. law firm in Washington, told LM. “We’re just not in a political environment where big, bold infrastructure programs are available.”

With the Highway Trust Fund collapsing, Burnley said, the time is ripe for bold, new thinking. According to the Congressional Budget Office (CBO), from 2021 to 2026 trust fund revenue is projected to total $243 billion. But outlays will amount to $364 billion, resulting in an imbalance of $121 billion. Each year during this period, the trust fund faces shortfalls of between $19 billion to $23 billion, the CBO says.

“Was it this hard when I was there? Yes,” Burnley said. “I hope Congress will have the political will to really come to grips with that fundamental resource. That doesn’t mean dramatic increases in the fuel tax. There are almost an infinite other ways to do it. But the political will has to be there—and right now it isn’t.”

Even if funding is coming from Washington, a majority of it appears heading to rural states that supported Trump. Transportation Secretary Elaine L. Chao recently said DOT awarded more than 64% of this round of TIGER funding was for rural projects, as opposed to bottlenecks in and around urban areas.

The only thing the White House has been able to produce on infrastructure this year is a vow to expedite review and permitting for major U.S. infrastructure projects. It establishes a lead federal agency with a commitment to oversee any major projects, but few details how this will streamline complex deals. Under the current process, agencies may conduct their own environmental review and permitting processes sequentially resulting in unnecessary delay, redundant analysis, and revisiting of decisions.  Now federal agencies conduct their processes at the same time.

But at least that was welcome news in some quarters of the business community looking for any action on infrastructure.

“(That) is a welcome change that will not only expedite review and approval of important infrastructure projects, but also help increase American competitiveness and economic growth,” said Mike Burke, Chairman and CEO of AECOM and Chair of the Business Roundtable Infrastructure Committee. “While much work remains to revitalize our nation’s aging infrastructure, this is a vital step forward in accelerating long-overdue infrastructure improvements throughout the country.”

Illinois Roads and Transportation Builders Association President and CEO Michael Sturino said while the plan helps cut through red tape, it probably won’t help Illinois because it favors rural (Republican-leaning) states at the expense of blue states.

“This is really going to go to more of the Wyomings, and the Oklahomas, and the Dakotas, those very sparsely populated states,” Sturino told the Illinois News Network.

About the Author

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.

Trump’s Infrastructure Strategist Is Leaving The White House

April 4, 2018, 4:51 PM ET

Another top adviser to President Trump is leaving the White House. An administration official tells NPR that DJ Gribbin, architect of the president’s $1.5 trillion infrastructure plan, “will be moving on to new opportunities.”

This latest staff departure comes as the infrastructure plan hits a roadblock in Congress.

A little over a year ago, Gribbin left his job at Macquarie Capital, a finance and asset management firm where he focused on public-private partnerships, to take the lead on crafting a infrastructure plan for the president. The proposal relies heavily on using incentives to attract private investments.

Trump initially promised he’d deliver a trillion-dollar infrastructure plan in his first 100 days, but it took more than a year until Gribbin and the White House would unveil and deliver the plan to Congress in February. And the president upped the ante, calling it “the biggest and boldest infrastructure plan in the last half-century,” promising it would generate a $1.5 trillion investment in rebuilding the nation’s highway, railways, bridges, tunnels, airports, seaports and water systems.

But the Gribbin-drafted proposal calls for federal spending of just a fraction of that, $200 billion over 10 years, with the rest coming from state and local governments and private investors.

Gribbin told NPR’s All Things Considered that America is up to the task. “It’s apparent that cities and states and counties are eager to invest more in infrastructure,” he said.

And he pushed back on the notion that the administration can’t ask state and local taxpayers for such funding, when a much a bigger federal investment in infrastructure is long overdue.

“All of these funds come from taxpayers — right?” said Gribbin. “And if you go out and you ask the public, you know, where do they want to invest? They have much more confidence if they write a check locally that that money will be spent in a way that they can be held accountable for than if they send a check to Washington.”

He also added in a briefing for reporters that “this is in no way, shape or form … a take-it-or-leave-it proposal. This is the start of a negotiation.” And White House officials added that “the president has said he is open to new sources of [federal] funding,” including an increase in the gas tax. “We want it to be bipartisan.”

Nonetheless, the plan has received a cool reception in Congress. It calls for the $200 billion in federal funding coming from unspecified cuts elsewhere to the federal budget, which Democrats vehemently oppose. Democrats also want a much bigger portion of the infrastructure spending to come from federal sources, such as the gas tax, while many Republicans refuse to consider a gas tax hike to fund it.

At an event to promote the infrastructure plan in Ohio last week, Trump went off script and acknowledged his plan to rebuild and repair the nation’s roads and bridges isn’t going anywhere fast, telling the crowd, “you’ll probably have to wait until after the election” in November.

 

COMMENTARY: Replacing Per-Gallon Taxes With Per-Mile Charges Is the Best Path Forward

The transition from per-gallon to per-mile will be a major shift in transportation funding.

By ,

 

Regular readers of this column for Public Works Financing know that I’m a big fan of tolls as a better highway funding source than fuel taxes. But even those who aren’t big fans of tolling should be concerned about the coming demise of fuel taxes as the primary source for funding America’s highways.

Back in 2005, I served on a special committee appointed by the Transportation Research Board (TRB). Our challenge was to examine likely future changes in vehicle propulsion and the demand for highway travel. Even then, it became clear to all 14 members that fuel taxes were not sustainable, long-term. Our report, The Fuel Tax and Alternatives for Transportation Funding, explained why we’d reached this conclusion and suggested steps toward finding a replacement. They included:

  • Retain and strengthen the users-pay principle;
  • Expand the use of tolls;
  • Test what we now call mileage-based user fees; and,
  • Find a stable source of tax funding for transit.

Our findings were reinforced several years later when the congressionally-appointed National Surface Transportation Infrastructure Financing Commission assessed a wide array of replacements and concluded that replacing per-gallon taxes with per-mile charges (mileage-based user fees—MBUFs) was the best way forward.

For the last five years or so, a growing number of state DOTs have operated pilot programs to test various ways of implementing MBUFs to replace per-gallon fuel taxes. They have learned that it’s wise to offer people several alternative ways of having their mileage reported and that it might make sense to have private firms provide the interface with vehicle operators to alleviate concerns over government monitoring people’s travel. They’ve also found that actual experience with a per-mile charging system alleviates most of the concerns people have based only on what they’ve read about the idea.

The transition from per-gallon to per-mile will be a major shift in transportation funding. So it is critically important that we think hard about the scope of this change. As I see it, there are four serious flaws with the 20th century model of paying for highways via per-gallon tax in addition to dependence on one particular mode of vehicle propulsion. The others are:

  1. Most fuel taxes are not indexed for inflation;
  2. The original users-pay/users-benefit principle has been seriously breached;
  3. Fuel taxes are viewed by people as taxes, not payments for highway use; and,
  4. Fuel tax revenues are sent to politicians, not directly to highway providers.

Ideally, we should fix these four flaws as part of the transition from per-gallon to per-mile.

Problem one is the smallest change. A growing number of US toll roads now index their toll rates to the Consumer Price Index (CPI) or some other inflation index; this has been made a lot easier thanks to all-electronic tolling. Eight states have recently indexed their fuel taxes to inflation, too, so inflation-indexing state MBUFs should not be a big deal.

Problems two and three are related, I believe. Highway users readily accepted gas taxes when they began at the state level in 1919, because they were sure that although it was called a tax, it actually operated as a pure user fee: all the revenues were deposited into a dedicated state highway fund, so the users-pay/users-benefit principle was visible and widely understood. But in the second half of the 20th century, that principle was eroded, bit by bit, as state highway departments became state transportation departments. In a large number of states, the dedicated highway fund morphed into a state transportation fund, supporting a whole array of transportation modes. Congress did the same thing with federal fuel taxes, starting in the 1970s. But the large majority (and in some cases all) of the revenue still comes from “highway user taxes.” Thus, while users-pay has been retailed, the users-benefit part of the deal has been seriously undercut.

And that, I believe, has contributed to the public perception of a “gas tax increase” as simply a tax increase, and therefore something to be resisted. House Speaker Paul Ryan (R-WI) objected vociferously to recent calls for a federal gas tax increase, right after Congress had given most Americans a tax cut. A whole array of taxpayer groups seconded that motion, and the odds of Congress enacting a federal fuel tax increase look very small.

That kind of battle does not, for the most part, occur when your cell phone company increases rates in order to add more cell towers to give you better reception. Nor does it occur when your electric company replaces an aging coal-fired power plant with a state-of-the-art gas-fired plant. A well-supported rate increase for such a project is likely to be approved by the state regulatory commission without much fuss. In these and other cases, what you pay is clearly a user fee—one that meets the users-pay/users-benefit principle. And this is true even when the supplier in question is a municipal electric, gas, or water utility. You pay utility bills, not tax bills.

Those utility cases are also different from highways in that you pay the user fees directly to the provider of the service. Here again, the same is true whether the utility is run by the local or state government or is an investor-owned company. You are charged based on how much or what category of service you use, and you pay the provider, not the government. The only case where this is true in the highway sector is toll roads (whether private or public).

My point here is that the emergence of viable methods of charging per mile also makes it feasible to de-politicize highways and re-organize them along the same lines as the other public utilities on which our economy depends. If we are going to go through the great effort it will take to change the method of paying for highways, let’s at least attempt to fix all the flaws that are now evident with today’s fuel tax model.

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.

This column first appeared in Public Works Financing.

ICYMI: This new Florida city will produce its own power and run self-driving buses

BY DANIEL SHOER ROTH

 

Posted January 09, 2018 07:29 AM, Updated January 10, 2018 08:25 PM

Mayors Are Demanding a Better Infrastructure Deal

Members of the National League of Cities are meeting in D.C. this week to make their case for more federal funding.
It’s no secret that America’s crumbling roads and bridges and chronically struggling transit systems need help: The American Society of Civil Engineers estimates it would take $2 trillion to bring the nation’s infrastructure into an “adequate” state of repair. That dire situation has been a recurring theme of President Donald Trump’s never-ending infrastructure week.
But the proposal the White House finally released last month to address the problem has drawn criticism from city leaders for shifting the funding burden onto the backs of state and local governments. At the National League of Cities’ annual conference this week, mayors and city council members declared rebuilding infrastructure as their number-one priority in the year to come. And they’re determined to negotiate better terms on Trump’s infrastructure deal.“
A good plan is not a good plan unless there’s money connected with it,” said NLC executive director Clarence Anthony at a press conference Monday morning. While the White House proposal, “Rebuilding Infrastructure in America,” is often billed as a “$1.5 Trillion Infrastructure Plan,” many critics have noted that this figure is misleading at best. Instead of direct federal funding, Trump’s proposal requires cities to prove they can shoulder up to 80 percent of the bills for federally funded infrastructure projects themselves. That sum would then be matched by a federally sourced 20 percent. In all, only about $200 billion of that $1.5 trillion would come from the feds.
City leaders are now in D.C. to lobby lawmakers for a better deal. “We are asking our partners—because we do recognize you as partners—in the federal government to rebuild with us as we rebuild our cities,” said NLC vice-president Karen Freeman-Wilson, mayor of Gary, Indiana.
On Monday, delegates met with DJ Gribbin, the special assistant to the president for infrastructure policy; on Wednesday, they’ll talk with House and Senate leaders, particularly key members of the infrastructure committees. And on Thursday, they’ll go straight to the White House to make their case. “At minimum, we’re asking for an equal partnership of 50 percent funding from the federal level to local governments,” said Anthony.“
The 80-20 split is off the table,” added Los Angeles city council member Joe Buscaino. “An equal partner is an equal partner.”
Mark Stodola, mayor of Little Rock, Arkansas, and the president of the NLC, outlined four critical infrastructure areas: water, transportation, broadband internet, and workforce development. “We’ve got to make sure we provide a sustainable investment,” said Stodola. “We’ve got to address not only the existing infrastructure backlog, but also long-term funding streams that are necessary to maintain this infrastructure.”
The statistics are daunting: More than 6,000 bridges are structurally deficient, and 41 percent are over 40 years old; access to broadband internet, meanwhile, is lacking for 78 million people, due to connectivity issues or prohibitive cost. Cleveland city council member Matt Zone also emphasized the importance of climate resiliency in rebuilding: 2017 was already the most expensive year for natural disasters in history, due to extreme events like hurricanes Maria and Harvey, costing $306 billion in damages. “We’ve got to invest in durable infrastructure, not just infrastructure—infrastructure that doesn’t need to be continuously rebuilt when every storm happens,” Zone said.
Instead, the White House is going in the opposite direction, proposing $275 billion in cuts to the U.S. Army Corps of Engineers, a key player in post-storm emergency response, and $30 billion from HUD’s Community Development Block Grant Program, which funds affordable housing and allows cities to use discretionary funds for infrastructure resilience projects.
And it’s not just that local budgets don’t feel like inflating their infrastructure contributions. A lot of them can’t: In 47 states, preemption measures curb cities’ ability to raise their own revenue to meet infrastructure needs; in 22 states, cities can’t use sales tax hikes to fund infrastructure.
The NLC presser also touted some of the creative funding fixes cities have employed recently, such as L.A.’s Measure M, which raises transit funding via a sales tax increase (and which was recently cited approvingly by an unnamed Trump staffer). Other cities have turned to public-private partnerships: Virginia’s high occupancy toll lanes on the Beltway got a funding boost from a private firm; and New York and New Jersey are reconstructing the Goethals Bridge with the help of an Australian bank.
Smaller communities—the ones that need a federal assist the most—have also raised cash by selling off public utilities like water systems, but studies show that residents often end up getting charged more for the same product. “Our ability to pay doesn’t change the need for that infrastructure,” said Gary’s Freeman-Wilson, “but it certainly determines our ability as local elected officials to deliver.”
Bipartisan aspirations on immigration and health care reform have been dashed before, and leveling funding to 50/50 is an ambitious target. But at Monday’s press conference, Stodola expressed confidence that the NLC’s negotiations in the coming days will bring results.
“It seems like Congress has got their feet in concrete, and they need to take them out,” said Little Rock Mayor Stodola. “So we’re going to break that rock. We’re going to knock them out of that concrete, and by golly we’re going to take it to them on the Hill.”
About the Author
Sarah Holder
Sarah Holder

Sarah Holder is an editorial fellow at CityLab.

 

Senate Kicks Off Series of Infrastructure Hearings With Focus on Broadband

Sen. Wicker says better data about high-speed availability is crucial

Posted 3/13/2018 3:10 PM Eastern

By: John Eggerton

The Senate Commerce Committee kicked off a series of infrastructure hearings Tuesday with one focused on broadband, including a big focus on collecting accurate date about where broadband is, and more importantly, isn’t.

Sen. Roger Wicker (R-Miss.) presided, saying he was greatly encouraged by the President’s support for programs to increase broadband infrastructure in rural areas. While the President said getting broadband to farmers was a priority, he didn’t actually earmark any funds for broadband in his infrastructure plan, though he did say that $50 million would be going to rural infrastructure, with states free to use all or part of that for broadband.

Congress is currently weighing the best way to deploy that service. Democrats like to factor cost and underserved communities in the equation, while Republicans — and ISPs — want the money targeted to the unserved, rather than overbuilding existing private investment with public money.

Wicker said the process of identifying those unserved areas starts with collecting accurate date, something the FCC has been charged with since the Obama-era stimulus funding for a National Telecommunications & Information Administration broadband mapping program ran out in 2015, though some in Congress are trying to return that function to the NTIA with new money.

The FCC recently released a new map to help identify where broadband subsidies related to the Phase II Mobility fund should be going, but critics, including Democratic commissioner Jessica Rosenworcel, have pointed to some errors.

Wicker said it was critical to have good information so that communities that “truly lacked service” could be identified.

“Inaccurate information would only exacerbate the digital divide, he said, adding, “We don’t have accurate data yet.”

Related: White House Defends Lack of Direct Rural Broadband Investment (Or Any Direct Broadband Investment for That Matter)

Senate Commerce Committee ranking member Sen. Bill Nelson (D-Fla.) pointed out that he and his colleagues had wanted direct investments in broadband to be part of any infrastructure plan and called the Trump proposal — $200 billion in federal funds for all infrastructure, with $50 billion for rural, but no direct earmarks for broadband and the hope that the private sector leverages that $200 billion into a $1.5 trillion rebuild/buildout — “simply inadequate on broadband expansion.”

He signaled it was up to the Senate Commerce Committee to step up and fill that void with “critical” direct investment in broadband, something Democrats have done in their own infrastructure proposal to the tune of $40 billion.

Nelson used the hearing to put in a plug for a “reasoned discussion” about sensitive regulatory issues related to the build-out of small-cell 5G wireless broadband, including historic preservation and environmental concerns. The FCC next week is planning to vote on an order that would exempt some small-cell deployments from historic preservation and environmental reviews, something CTIA: The Wireless Association says could save $1.6 billion over the next eight years.

Nelson noted that the FCC seemed eager to, in his words, “wipe away key laws and regulations meant to protect our fellow citizens and important federal, state, local and tribal interests.”

Sen Brian Schatz (D-Hawaii), ranking member of the subcommittee, warned that Democrats were unlikely to support shifting the broadband infrastructure responsibility to states and localities, or undermining labor or environmental protections.

Gary Resnick, mayor of Wilton Manors, Fla., who testified at the hearing, said that while he agreed with removing impediments to deployment of broadband, like encouraging “dig once” policies for combining road revamps with laying broadband conduit, he said that preempting state and local reviews for small cell deployment was bad policy and that such deployments would not close the digital divide. “Small cell technology is not called small because the technology is small,” he said, “but because the signal covers a small area.”

Steve Berry, CEO, Competitive Carriers Association, was one of those not high on the FCC’s new broadband map. He said the FCC should have measured signal strength, rather than the map the FCC produced that identified the areas it thought were eligible for the USF Phase II mobility fund.

“I am very concerned that the map is so disfigured in terms of its reality on the ground that it is almost impossible to successfully challenge [it],” Berry said.

Bob DeBroux of TDS Telecom said he thought the FCC had made a good start using the data it had, and would be building the map as time goes on. He conceded that there were definitely flaws in the map, but that they could be refined and that the underlying data “is there.”

Our Infrastructure Inefficiency

 

From President Trump’s Camp David retreat with cabinet officials and congressional leaders at the beginning of this year, word emerged that the president and his advisers are divided on the best policy for infrastructure. Gary Cohn, director of the National Economic Council, presented a detailed plan to make $200 billion in federal investments in order to unleash $1 trillion of total infrastructure investment through public–private partnerships, a plan that has now been leaked to the media. The president himself, meanwhile, reportedly prefers a more straightforward national building program.

Any discussion of infrastructure spending needs to recognize the stark reality of the American cost disease. As explained in a December New York Times report on the New York subway, when the United States builds infrastructure, it often costs more than any similar industrialized country would consider spending. New York City brings the cost disease to its highest fever, but even cities that excel at cost containment by American standards would have their numbers thrown out on their ear in many other countries. Liberals sometimes wave away cost concerns by reemphasizing the need for any particular project, and conservatives sometimes blithely presume that any project is wasted money. But all parties involved must recognize and address the cost disease, which drastically reduces the amount of infrastructure Americans can get out of any particular budget figure. Building a tunnel six times more expensive than one in France means that you get one-sixth the tunnel that you should. As transit researcher Alon Levy has shown, the American cost disease is real, and the situation is dire.

While the entire basis of these cost overruns is still not known, it is clear that American labor costs significantly contribute to project-cost inflation. Prevailing-wage standards, set under the Davis-Bacon Act, are a frequent target of the ire of conservatives, who charge that the requirements empower unions to run up prices and drain the public purse. These prevailing wages certainly inflate costs, and repeal or reform of Davis-Bacon would help the taxpayer receive a fair value for his investment. However, competitor nations such as France and Spain cannot be said to possess weak unions or ungenerous labor laws, and those nations still manage to build infrastructure for a fraction of American per-mile costs. Davis-Bacon repeal is no silver bullet, and further reforms will be needed.

As Jarrett Walker explains in his book Human Transit, operation costs in industrialized countries are dominated by labor. Simply put, people are expensive in rich countries, and hiring workers requires paying significant wages and benefits. Thus, one of the most effective ways to exercise fiscal prudence is to ensure that human personnel are not wasted in their transit work. Unfortunately, wasting person-hours seems to be American transit’s most consistent accomplishment. Subway trains that should be able to be run by computer often must be managed by one or two drivers, and tunnel-digging machines that the French operate with fewer than ten people are managed by more than two dozen well-compensated Americans.

Capital costs, meanwhile, are also inflated by “buy American” procurement rules attached to federal infrastructure financing. When local governments take advantage of federal grants or loans to expand their infrastructure, they are required to buy at least 60 percent of rolling-stock components, such as rail cars and buses, from American manufacturers. (Current law requires that level to rise to 70 percent by 2020.) Manufactured goods, on the other hand, must be 100 percent American in materials and manufacture. While well-intentioned in their concern for American manufacturing, such policies can further inflate the cost of infrastructure. For example, according to the American Action Forum, Americans pay 34 percent more for their metro cars than the global average. Even with such policies in place, contracts often go to the most competitive global firms, which then set up separate manufacturing facilities in the United States. The profits are passed back to the foreign headquarters, while taxpayers pay the price for not being able to access the normal industry supply chains.

For the American taxpayer to receive assurance that his money is being spent wisely, any major infrastructure investments should be accompanied by actions to treat the cost disease. Already, the governors of New York and New Jersey are expressing indignation that the Trump administration has renounced an Obama-administration plan to fund half the ballooning cost of their new tunnel-building program. They would do well to turn that indignation toward their own transit authorities for wasting historic amounts of money. The 50 percent of the projected cost that the governors were already willing for their states to pay should be beyond sufficient to complete the entire project, and then the concerned states would not have to go through federal procurement channels at all.

Furthermore, when the national government picks up significant portions of the tab, it often incentivizes projects that should never have been undertaken at all. In 2010, self-described “recovering engineer” Charles Marohn pointed to a project in Staples, Minn., that cost $9.8 million to build an overpass above a railroad in order to connect two state roads and ease the congestion that came from waiting for train cars to pass. Staples has a population of 3,000. The federal government offered it $8.8 million for the project, and the state of Minnesota chipped in for the other $1 million. While the good people of Staples might enjoy their uncongested cross-town connection, Marohn wryly predicted that if they “were asked to simply pay 10 percent of the cost, . . . this project would not be happening.” Most federally supported projects are not so heavily subsidized, but a more customary 80 percent federal match was enough for the Louisiana city of Shreveport to attempt the decidedly retro project of bulldozing a working-class, mostly black neighborhood to build an urban highway connector through the city in the name of economic development.

The good news is that even as Washington continues to argue over the best way to make infrastructure investments, private actors are already emerging to offer innovative means of transportation. Whether with cars, trains, or the humble bicycle, new companies are stepping up to unleash American mobility, and each innovation holds the potential to reshape demand for other infrastructure components as people adjust their living and travel patterns.

Virginia’s McAlester’s Field Guide to American Houses conveys this recurring effect in a few pages as it details the development of American neighborhoods. Towns and cities were first built to be accessed most regularly on foot, meaning that homes, workplaces, and shops necessarily intermingled, all built on relatively narrow plots of land. The advent of horse-pulled streetcars stretched out development along a commuting pattern that opened up land for neighborhoods of residential rowhouses. The electric streetcar created spokes of development, populated by detached houses, emanating out from city centers. Because the neighborhoods still had to be navigated on foot after residents disembarked from the streetcar, though, homes in these early suburbs were built on relatively narrow lots. The automobile filled in the land between the streetcar spokes and eventually pushed out to fields opened up by freshly paved highways, allowing direct access to ranch houses and split-levels built on much wider lots.

We may now be approaching a similar point of transformative change through the explosion of private transportation services. The most well-known newcomers to the transportation scene are ridesharing companies such as Uber and Lyft. By enabling people to turn their personal cars into de facto taxis, the services upended the long-standing taxicab-medallion cartel system and tapped an explosive reserve of unmet consumer demand for point-to-point mobility. Uber and Lyft are also among the most active investors in what is widely projected to be the next phase of the automobile’s development: the autonomous vehicle.

Cars are far from the only mode of transportation undergoing significant innovations, however. In Florida, the “Brightline,” the first private passenger-rail project to be constructed in the United States in a century, is taking paying customers. The privately funded, financed, built, and operated line connects West Palm Beach and Fort Lauderdale, with stations in Miami and Orlando set to follow over the next few years. And Texas Central recently passed its first major federal environmental review on its way to constructing the first true high-speed-rail system on the American continent. Texas Central will connect Houston and Dallas, the fourth- and fifth-largest metro areas in the country, and it will run without state subsidies.

Creativity is also bubbling up in the bicycle world, as many American urban centers have seen bikeshare programs emerge. The market appears to have decided that the time is ripe for such systems to make money. Companies such as Ofo, Mobike, and Limebike are surging into city centers and finding huge numbers of customers. Seattle, for instance, had just wound down its failed city-run bikeshare program when three dockless bikeshare companies filled the void, building the second-largest city bikeshare fleet in the country without spending a single public dime. In China, such dockless bicycle companies, which offer cheap and easy last-mile connections, have dried up the ridesharing services’ market in short-range trips and driven demand back into transit.

To commit enormous federal funds right now while the forms of American mobility are so rapidly shifting, then, would be to bet one’s stack of chips while one’s hand is still being dealt. Instead of rushing to build new roads and highways based on past habits, we should turn our focus to rescuing and reinforcing the investments we have already made. The “crumbling” bridges and roads that President Trump decries will not crumble any less because a new bypass is being built on the other side of town, and maintenance liabilities are already outstripping many communities’ capacity.

Instead of starting another highway-building program, the United States would do well to focus on maintenance, to devolve planning and funding decisions to localities, and to ensure that the playing field is level enough to accommodate whichever road the future of transportation goes down.

– Mr. Coppage is a visiting senior fellow at the R Street Institute, where he studies conservative urbanism and the built environment.

A Summary of the Annual Report of the Council of Economic Advisers

The purpose of the Annual Report of the Council of Economic Advisers is to provide the public and the economic policy community with a detailed account of the performance of the U.S. economy in the preceding year and with an analysis of the Administration’s domestic and international economic policy priorities for the years ahead. In this Report, we thus review the salient policy developments of 2017 and preview policy aims for the coming years, in the context of the Administration’s unified agenda to expand our economy and the economic prosperity of all Americans.

The U.S. economy experienced strong and economically significant acceleration in 2017, with growth in real GDP exceeding expectations and increasing from 2.0 and 1.8 percent in 2015 and 2016 to 2.5 percent, including two successive quarters above 3.0 percent. The unemployment rate fell 0.6 percentage point, to 4.1 percent, its lowest level since December 2000, while the economy added 2.2 million jobs, an average of 181,000 per month. Notably, manufacturing and mining—having lost 9,000 and 98,000 jobs, respectively, in 2016—added 189,000 and 53,000 jobs during 2017. Labor productivity grew 1.1 percent, compared with a decline of –0.1 percent in 2016, and average hourly earnings of private employees rose 2.7 percent, compared with average growth of 2.1 percent during the preceding 7 years. Reflecting the economy’s outperformance of expectations, the January 2017 Blue Chip consensus forecast of 2.3 percent GDP growth in 2018 was revised upward in February 2018 to 2.7 percent.

The four quarters of 2017 thus marked a nontrivial trend shift. From 2010 through 2016, real output in the United States grew at an average annual rate of 2.1 percent, while labor productivity grew, on average, by less than 1 percent. The pace of economic recovery was slow by historical standards, particularly because recent research has confirmed Milton Friedman’s original observation that in the United States, deeper recessions are typically succeeded by steeper expansions, and that this correlation is in fact stronger when the contraction is accompanied by a financial crisis. Since the nineteenth century, the recent recovery was one of only three exceptions to this pattern.

In the Report, we provide evidence that the historically anemic recovery from the Great Recession was not independent of policy choices, and accordingly we proceed to identify the exacerbating factors in the weakness of the post-2009 recovery and the current Administration’s strategies and menu of policy options to address them.

First and foremost, on the historic Tax Cuts and Jobs Act (TCJA), we find that investment and labor productivity have been inhibited in recent years by the coincidence of high and rising global capital mobility and an increasingly internationally uncompetitive U.S. corporate tax code and worldwide system of taxation. This combination had the effect of deterring U.S. domestic capital formation, thereby restraining capital deepening, productivity growth, and, ultimately, output and real wage growth, with the economic costs of corporate taxation thereby increasingly and disproportionately borne by the less mobile factor of production—namely, labor. Indeed, the five-year, centered-moving-average contribution of capital services per hour worked to labor productivity actually turned negative in 2012 and 2013 for the first time since World War II. We estimate that by lowering the cost of capital and reducing incentives for corporate entities to shift production and profits overseas, the corporate provisions of the TCJA will raise GDP by 2 to 4 percent over the long run, and increase average annual household income by $4,000.

Similarly, we discuss a large body of academic literature indicating that an excessive regulatory burden can negatively affect productivity growth, and thus overall growth, by attenuating the flow of new firms’ entries and established firms’ exits, and also by amplifying the spatial misallocation of labor and creating employment barriers to entry. We furthermore highlight actions the Administration has already taken to eliminate inefficient and unnecessary regulations, with the effect of raising prospects for innovation, productivity, and economic growth.

On labor markets, we find considerable evidence suggesting, as with regulation, that postrecession efforts to strike a new optimum on the frontier of social protection and economic growth may have sacrificed too much of the latter in pursuit of the former. We also find that while demographic shifts owing to the retirement of aging Baby Boom cohorts exerted strong downward pressure on the labor force participation rate, factors other than demography accounted for one-third of the overall decline in participation during the recovery, and half the decline since the cyclical peak in the fourth quarter of 2007. For instance, we find that increases in fiscal transfers during the Great Recession intended to mitigate the demand-side effects of rising unemployment generated persistent negative effects on the prime-age labor supply. Meanwhile, structural unemployment coterminous with imperfect geographic mobility—exacerbated by regulatory restrictions, drug abuse, and inadequate investment in infrastructure—have similarly intensified downward trends in labor force participation among prime-age workers.

These challenges, however, particularly those of low labor productivity growth and declining labor force participation, are not policy-invariant. For example, policies that incentivize highly skilled and experienced older workers to defer retirement, such as the marginal income tax rate reductions enacted by the TCJA, can have important implications not only for labor force participation but also for productivity. Moreover, by raising the target capital stock, we expect the TCJA to result in capital deepening, again contributing to productivity growth and rising household earnings.

Relatedly, we document the deficiencies of our current public infrastructure, and investigate the adverse effects of these deficiencies on economic growth and consumer welfare, as well as potential remedial policy options. In particular, we examine how the fundamental mismatch between the demand for and supply of public infrastructure capital could be ameliorated by utilizing existing assets more efficiently and by adjusting longrun capacity to levels best matched with local needs, which would allow local governments more flexibility in giving prices a larger role in guiding consumption and investment decisions, and in streamlining environmental review and permitting processes. Moreover, addressing the current inadequacies of our public infrastructure would help to attenuate the coincidence of structural unemployment with imperfect geographic mobility—again, exacerbated by regulatory restrictions—that has been a factor in the decline of labor force participation.

We also look at issues in international trade policy and actions the Administration has taken and could take to generate positive-sum, reciprocal trade agreements with our trading partners. Specifically, in addition to reviewing the benefits of economic specialization and consequent gains from trade, we also demonstrate how instances of unfair trade practices by a subset of our partners have had the effect of limiting the potential gains from trade to the United States and the world, with particularly adverse consequences for the U.S. manufacturing sector. Addressing these issues would raise productivity by encouraging greater investment in sectors where the U.S. economy enjoys a comparative advantage, especially but not exclusively energy and agricultural products.

We then turn our attention to the health of the true catalyst of U.S. economic growth: the American worker. Although the Affordable Care Act (ACA) expanded insurance coverage to at most 6 percent of the U.S. population—through Medicaid, marketplaces, and the dependent coverage provision—we survey a large body of academic literature that estimates the effect of insurance coverage on health to be substantially smaller than commonly presumed. Indeed, for the first time in over 50 years, U.S. life expectancy declined in 2015 and 2016, suggesting that factors such as drug abuse, particularly of opioids, and obesity may have a larger impact than insurance coverage alone can redress. Instead, we find that increased choice and competition, along with a recognition by policymakers that the determinants of health are multidimensional, may constitute more efficient avenues for improving health outcomes, particularly among lower-income households. Fundamentally, it is the view of this Council that healthy people not only live longer, more enjoyable lives but are also an essential component of reversing recent trends in labor productivity and labor force participation.

We then consider the emerging challenge of cybersecurity, particularly in the context of our ongoing transition to an information economy. Malicious cyber activity presents new threats to the protection of property rights, including rights to intangible assets and even information itself, and thus imposes large and real costs on the U.S. economy. Given the existence of positive externalities from investing in cybersecurity, we discuss policy options that might shift this investment to its socially optimal level, including public-private partnerships that promote basic research, protecting critical infrastructure assets, disseminating new security standards, and expanding the cybersecurity workforce.

Finally, we examine the year in review and survey the years ahead. Acknowledging underlying strengths and challenges, the Administration’s November 2017 baseline forecast, which excludes the effects of the TCJA, projects that output will grow by an overall average annual rate of 2.2 percent through 2028. The policy-inclusive forecast, however, which assumes full implementation of the Administration’s agenda, is for average annual real GDP growth through 2028 of 3.0 percent. We expect growth to moderate slightly after 2020, as the capital-output ratio approaches its new steady state level and the pro-growth effect of the individual elements of the TCJA dissipate, though the level effect will be permanent. However, expected further deregulation and infrastructure investment will partly offset the declining contribution to growth of tax cuts and reforms toward the end of the budget window. The policy-inclusive forecast is conservative relative to those of previous Administrations, and in fact is slightly below the median of 3.1 percent. Moreover, the baseline forecast is precisely in line with the long-run outlook given in the 2017 Economic Report of the President, reflecting our view that nonimplementation of the current Administration’s policy objectives will imply a reversion to the lower growth trend of recent years.

Preliminary indicators suggest that markets indeed detect a trend shift. In the weeks immediately following the TCJA’s passage, over 300 companies announced wage and salary increases, as well as bonuses and supplementary 401(k) contributions of $2.4 billion affecting 4.2 million workers, citing the new law. In addition, by the end of January 2018, this Council tallied $190 billion in newly announced corporate investment projects that were publicly attributed to the TCJA, revealing that firms are responding to the TCJA as theory and empirical evidence predicted.

As a society, we hold many values and aspirations, including but not limited to expanding economic prosperity, that may not exist always and everywhere in complete harmony. It is the view of this Council that in recent years, the pursuit of alternative policy aspirations at the expense of growth has imposed real economic costs on the American people, in the form of diminished opportunity, security, equity, and even health. We therefore endorse an agenda for returning the American economy to its full growth potential.