Road Funding: An Analogy

One of the great aspects of writing about urbanism is the multitude of other folks writing eloquently and persuasively on the same topic.  Yes, the wealth of good scholarship casts my efforts in a harsh light, but that’s a small price to pay for being in the company of insightful and passionate people.

I was reminded of this a couple of weeks back when I listened to a StrongTowns webinar.  The primary topic of the webinar was an approach to low-cost, neighborhood-level community improvement projects.  It was an intriguing subject that will eventually work its way into this blog.

But for this post, I want to write about and build upon a story that StrongTowns founder Chuck Marohn told during his introductory comments.

StrongTowns is a well-known and well-regarded urbanist advocacy organization.  I have objective data on this from a questionnaire I was recently asked to complete, asking to which urbanism organizations I belonged.  StrongTowns was among the fifteen organizations listed.  So I have at least one data point putting StrongTowns among the top fifteen urbanist organizations.

StrongTowns was founded and remains based in Brainerd, Minnesota, a community of fewer than 14,000 people about 125 miles north of Minneapolis.  One would think that a town of that size, as the headquarters of one of the top fifteen urbanist organizations, would have an awareness of urbanist thinking, if not an urbanist policy slant.  One would apparently be wrong.

Marohn told of recently being surprised by a proposed $7.15 million water and sewer extension from Brainerd to the nearby Crow Wing County Airport.   Despite the absence of public awareness, the concept was well along, having been included in state legislation that allocated dollars from a state infrastructure revolving fund.

When StrongTowns tried to research who the project advocate might have been, the two state legislators were unhelpful, one advising that funding action had been in response to a request from constituents and the other saying that the funding was intended only to begin the conversation, not to conclude it.

City Hall wasn’t helpful either, claiming that the waterline extension was required by the State Fire Marshal to improve water pressure at the airport, only to have the Fire Marshal dispute the account, stating that he was told the extension was already underway when he first began the conversation about airport service.

Thwarted on their initial argument, City Hall rolled out the standard arguments about job creation, development potential, and free money.

Despite the lack of anyone claiming parenthood, the project moved ahead, advancing to the City Council for approval of the local funding match of approximately $700,000.  The Council expressed dubiousness about the project, questioning whether it was worth the use of city funds.  (Let’s take a moment to consider that position.  If it’s uncertain whether it’s worthwhile to spend $700,000 to gain a $7.15 million improvement, doesn’t that imply that the benefit/cost ratio, at least in the minds of some Councilmembers, is around 0.10?)

Faced with a wavering City Council, the regular infrastructure supporters rallied to the cause.  The contractors, developers, engineers, and realtors waved the same flags as City Hall.  Those being the banners of job creation, development potential, and free money.  The City Council fell into line and approved the project, leaving the public with a debt of $7 million and the only clear benefits being to the pockets of private businesses.

I’m not suggesting that this story is in any way unique to Brainerd.  I expect that similar stories can be told about pretty much every city in the U.S.  But doesn’t it feel like a silly way to make public funding decisions?

Pondering that silliness, I found myself toying with an analogy.  What if, in addition to funding our roads, we also funded our cars with most of the cost being covered by the tax rolls?  If we wanted a $30,000 Ford, it would cost us only $3,000, with the other $27,000 becoming a public debt, secured by ourneighbors and others in the community.  What would the world look like in this scenario?

·         To begin with, we’d all be driving Mercedes, Porsches, and Ferraris.  If they had a total cost to us of only $10,000, why wouldn’t we go upper-end?  It’d be stupid not to, right?  And it would create jobs.

·         Our tax bills would be significantly higher from the cost of covering our neighbors’ cars.  But the bills wouldn’t be as high as they should be, because our political leaders would be busily creating financial schemes to move much of the debt onto the next generation, leaving it to our children to pay for our cars.

·         Our roads would likely be more crowded, with everyone driving their Mercedes, Porsches, and Ferraris, putting more strain on road budgets.

·         But at least we’d be driving cool cars, right?  Well, maybe.  Another possibility is that we’d be so stretched with the tax increases, insurance, and gas that we’d have to scrimp on maintenance, resulting in our Mercedes, Porsches, and Ferraris rattling down the roads.

·         Sensing our disappointment in our under-maintained cars, our political leaders would propose new taxes to help cover maintenance.  But knowing that maintenance alone likely wouldn’t get much support in the voting booth, they’d also include an expansion of the car purchase program, perhaps reducing our share of new car costs.  It’d be the 21st century version of bread and circuses.

·         It wouldn’t be that the politicians are blind.  Most of them are relatively intelligent.  They’d see the flaws in the car purchase program, but they’d also be aware of re-election.  And as much as we say we want to be told the truth, we relegate most truth-tellers to the sidelines.  And so the car purchase program would continue.

It’s a pretty ridiculous picture, isn’t it?  But, while no analogy is perfect, it does mimic our current infrastructure funding approach on many points.

I’m not arguing that we need to immediately cease all cost-sharing and revolving fund approaches.  Going cold turkey would create unreasonable dislocations.  But we do need to begin unwinding the most unreasonable and unintended effects of the current funding approach.

I don’t know exactly what that unwinding would look like, but I know it’s time to begin discussing it.  Indeed, it’s well past time.

Related Topic

I was offended yesterday morning, barely 24 hours after the natural gas explosion in Harlem killed at least seven people and destroyed two buildings, to receive an email from the American Society of Civil Engineers claiming that the explosion and loss of life highlighted the need for infrastructure funding.

It’s a legitimate argument that the Gothamist makes well.  It’s the contention I’ve often expressed that “We built all this stuff, we really should take care of it.”

But ASCE has always paired funding for infrastructure maintenance with funding for new infrastructure, effectively building more stuff for which the maintenance will be uncertain.  Given that background, I found it in poor taste for them to use the loss of life and property in Harlem as a point in their favor.  They should have waited.  Or perhaps never made the connection.

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. - Dave Alden (davealden53@comcast.net)