The $1 trillion infrastructure bill President Joe Biden signed into law on November 15 attracted the votes of both Republican and Democratic lawmakers in Washington and has attracted praise from many North Carolina leaders, as well — once more illustrating the fact that bad ideas can also be popular ideas.
The bill is bad because it’s misleading (only about half of the total, $550 billion, represents truly new spending). It’s bad because it’s unconstitutional (the federal government was never supposed to be so heavily involved in purely local and regional infrastructure). And it’s bad because it’s wasteful (all the federal strings attached to the funds, including union-scale wage requirements, will make the investment far less efficient than if states and localities funded the projects themselves).
As with other government services, it is a mistake to equate dollars spent with value added. For example, the bill includes $110 billion for roads and bridges and $105 billion for rail and transit. The relative proportions are absurd. Dollars spent on highways are far more productive than dollars spent on transit or Amtrak.
Even within the highway category, some states are going to spend the dollars prudently and others poorly. North Carolina, as it happens, will likely perform comparatively well. Although our Department of Transportation has recently struggled to produce accurate forecasts of future projects, changes in the state’s funding formulas and procedures have significantly boosted the productivity of our highway investments over the past decade.
A California-based think tank, the Reason Foundation, conducts an annual study of the cost-effectiveness of state highway systems. As recently as 2016, North Carolina ranked 17th in the study (which the think tank I used to head, the John Locke Foundation, published for a number of years before Reason took the baton). The latest edition, which draws on 2019 data, ranks North Carolina fifth in the nation.
Reason’s ranking system incorporates both cost and value measures. North Carolina keeps its per-mile administrative expenses modest (11th lowest) while the condition of our pavement is rather good (8th best for rural roads and 10th for interstates and urban roads). Our fatality rates are close to the national average, as is traffic congestion in our urban areas (which actually constitutes an improvement from years ago). North Carolina’s worst performance (39th) is for the share of bridges that are structurally deficient.
Care to take a guess at which states get the least bang for their highway bucks? Yep, for the most part it’s the usual suspects: California (45th), New York (46th), and New Jersey (50th), plus the hard-to-build-in states of Hawaii (47th) and Alaska (48th). Florida (41st), as it happens, fares poorly in this area, too, while Texas (16th) is significantly above average.
That states vary so widely in the cost-effectiveness of their highway spending is a major reason for Washington to butt out of it — and, for the most part, out of infrastructure funding more broadly.
Back when presidents and congresses cared about such constitutional niceties, more than half a century ago, they justified the federal interstate highway system as a defense measure to ensure that troops and materiel could be moved rapidly across the country in case of attack. There remains a similar justification for some federal spending on infrastructure, to be sure — to make sure we have secure lines for transmitting information and energy during wartime, for example.
But the vast majority of the benefits of roads, bridges, transit, broadband networks, and water systems will accrue to those who live near and make use of those systems on a regular basis. They ought to pay for them, with some combination of user charges and taxes, and their elected local and state representatives should be the ones making decisions about infrastructure needs, investments, and operations.
Removing these responsibilities to Washington doesn’t turn the resulting projects into free gifts. It merely socializes cost and reduces efficiency. North Carolinians would be better off if the federal infrastructure bill had never passed.
John Hood is a Carolina Journal columnist and author of the new novel Mountain Folk, a historical fantasy set during the American Revolution.