Posted on January 17, 2013 3:18 PM
New Report Estimates Economic Impacts of Failing to Invest in Infrastructure
On January 15, 2013, the American Society of Civil Engineers (ASCE) released a report on the economic impacts of inadequate investment in infrastructure, including surface transportation, water and wastewater, electricity, airports, and inland waterways and marine ports. Titled “Failure to Act: The Impact of Current Infrastructure Investment on America’s Economic Growth,” the report predicts a $1.1 trillion infrastructure funding gap by 2020 and a $4.7 trillion shortfall by 2040; surface transportation funding represents the majority of both shortfalls. ASCE estimates inadequate funding for infrastructure will impose substantial economic costs over time, including a cumulative loss of $3.1 trillion in gross domestic product, 3.5 million fewer jobs, and a reduction of $3,100 in annual personal disposable income between now and 2020.
This report underscores how important adequate funding for transportation and other physical infrastructure is to the nation’s economic well-being. Inadequate transportation investments impose costs on households and businesses in the forms of wasted time and fuel due to congestion, additional vehicle maintenance due to poorer pavements, and foregone economic and social opportunities.
“Failure to Act” comes on the heels of two recent reports that analyzed our region’s growing infrastructure needs. Last November, the Civic Federation issued a report, “The State of Illinois Infrastructure,” examining capital needs for highways and roads, bridges, mass transit, aviation, drinking water, wastewater, and dams. In December, DePaul University’s Chaddick Institute issued a report on the region’s growing capital needs for transit. As part of the “Failure to Act” project, ASCE previously issued four supporting reports that focus in more detail on electricity; water and wastewater; surface transportation; and airports, inland waterways, and marine ports, all of which are featured at www.asce.org/economicstudy. Previously, ASCE issued the 2009 Report Card for America’s Infrastructure with a similar focus.
GO TO 2040 acknowledges the grave funding needs facing the region’s infrastructure. The plan forecasts that 86.4 percent of the region’s transportation revenues will be required just to maintain its highway and transit facilities at a “safe and adequate” level. This leaves only 13.6 percent of total expected transportation revenues to address vital modernization and expansion projects that can reduce congestion, offer new access, and improve travel options. To help provide new resources for the transportation system, GO TO 2040 calls on the State of Illinois to increase its motor fuel tax by eight cents per gallon and encourages the implementation of congestion pricing, variable pricing for parking, and other innovative finance mechanisms. The plan encourages infill development in areas that already have infrastructure in order to more fully utilize our existing capital investments and reduce the need to pay for new infrastructure. GO TO 2040 also includes recommendations to conserve water and energy resources, leading to financial savings and reduced investment needs.