Ed Rendell is putting out a call to the American people: give the government a “permission slip” for investment in infrastructure because the cost of inaction is greater than the cost of action.
“Infrastructure probably is the least sexy word in the English language,” Rendell told Greater Baltimore Committee members on November 12. But the fact is the United States’ inattention to maintaining and improving roads, bridges and other transportation infrastructure is making our nation less competitive, according to global rankings, and will continue to do so, he said.
Baltimore’s port and airport are positioned well to compete for growth in waterborne and air cargo, but there are still strides to be made, said Rendell and three other transportation experts at the GBC’s 5th annual Transportation Summit at the Renaissance Baltimore Harborplace Hotel.
Congressional studies show the United States currently spends $82 billion a year on transportation infrastructure, but needs to spend closer to $220 billion a year over 10 years to adequately address infrastructure needs, said Rendell. He noted that existing user-generated funding for transportation infrastructure too often gets diverted to other uses.
For example, a national harbor management trust fund should have $90 billion in it, but the fund “has been raided consistently” by Congress over the past five or six years to help balance the budget, Rendell said.
So where can we find up to $200 billion a year for infrastructure improvements? First, we can look overseas, where we’ve been spending $100 billion a year in Afghanistan and Iraq. Also, the Congressional Budget Office estimates $180 billion a year could be invested in infrastructure without hurting the economy, Rendell said.
But even if the federal government took none of these suggestions, the cost of inaction would be greater in the long-term. Rendell cited examples such as New Orleans where, prior to Hurricane Katrina, local government was unable to obtain $800 million in federal funds to fix the levies. The cost to repair broken levies after Katrina was $18 billion.
Damage to New York’s flooded subways following Super Storm Sandy totals $30 billion. Bangkok, on the other hand, invested far less in elevated entrances to their subways so when floods occur, there is no damage to the rail system.
Rendell conceded that the American people’s confidence has proven to be lost in the government’s ability to use transportation infrastructure funding for their intended purpose. But that can be rectified if the right approach is used.
Greg Principato, president of Airports Council International – North America, said Virginia implemented the biggest transportation fee increase in its history during the late 1980s. The administration of Governor Gerald L. Baliles gained public acceptance by asking “what will happen if we don’t do it” as opposed to stating “we are doing this because.”
Principato stressed the importance of constituents seeing bulldozers out on the street quickly and recognizing the immediate effects of the investment of taxpayers’ money.
Transportation resources are big job generators, Principato said. If all of the nation’s airports were one company, it would be the second largest employer, next to Wal-Mart. The United States can strengthen its global competitiveness if it invests in them, as opposed to taking the complacency approach similar to what it did with the steel industry post-World War II.
In a global industry like airports, complacency is “a suicide note,” Principato said. If we fail to reshape the status quo, we know what the future holds: “an absence of growth, and protectionist complaints about competition from folks overseas who are eating our lunch.”
Paul Wiedefeld, executive director of the Maryland State Aviation Administration, said improvements to BWI-Thurgood Marshall Airport have helped position Baltimore be a leader in passenger and air cargo growth.
The airport just recently had its busiest third quarter ever and had its busiest month ever in July. Ten years ago, it was the first airport in the United States to begin the current security checkpoint model. Concession growth and revenue doubled from $50 million to $110 million, and the development of its Airmall food and beverage service generated a 70 percent in sales per plane passenger.
Currently, the largest domestic origin and destination airport in the region, BWI Marshall will see additional growth in the spring with the new B/C connector, opening up 14 more gates and gaining additional concessions, as well as the pavement management program to increase runway safety.
“We’re not building monuments to ourselves. We build where there’s a strong business need,” Wiedefeld said.
The Port of Baltimore has taken advantage of recent developments to also position itself for growth, according to Dr. John C. Martin, president at Martin Associates, airport and seaport planners and economists.
A development shift in major retailers distribution channels came as “very good news” for East Coast and Gulf Coast ports because it drives steamship services into those ports and the competitive situation “stacks up well for the Port of Baltimore,” said Martin.
Baltimore’s 50-foot channel, mix of containers, balance of private-sector terminals and MPA terminals, CSX intermodal and private-sector partnership with Ports America make Baltimore the most cost-effective port to serve major container markets.
On the East Coast, Baltimore is the leading automobile port, the leading roll-on/roll-off port, and the leading forest products import port, providing 40,000 jobs, $3 billion in wages and salaries and $1.7 billion in revenue, Martin said.