What You Need to Know About Our Infrastructure
Updated: Jul 14, 2021
While the focus right now is justifiably on the energy sector and the power grid in Texas, all of our nation's infrastructure systems—transportation, water, and power—are at risk from extreme weather. Infrastructure connects our businesses, our communities, and drives our economy. The United States has been underinvesting in infrastructure for decades, while most of the European countries and China have surpassed us in investing and developing their infrastructure.
Infrastructure investments have some of the largest influences on our GDP (Gross Domestic Product) and several studies have shown that for every dollar that was invested in transportation infrastructure, it generated anywhere between $3 to $6 in output gains. Some of the analysis of data from the Bureau of Labor Statistics shows that about 68 percent of the jobs created by investing in infrastructure are in the engineering and construction sector, 10 percent in the manufacturing sector, and 6 percent in retail trade.
The Congressional Budget Office estimated we spend about 2.3 percent of U.S. GDP on infrastructure. As of 2017, combined federal, state, and local spending is about $441 billion, which is well below the estimates needed to keep our infrastructure in an acceptable condition. We need to spend at least 2.5 percent of the GDP to get ahead of the issues that we are facing.
The Impact & The Concern Our infrastructure is expired, and it needs an overhaul. We are advised to design infrastructure that will hold for 50 to 75 years, and there are numerous dams, bridges, and roads that were built during or just after the second world war and have passed their expiration date. We should not wait for a disaster to happen before we invest in a change.
The Highway Trust Fund finances most of our federal government spending on highways, and mass transit gets most of its funding from transportation-related excise taxes (revenue from the federal tax on gasoline and diesel fuel). Since 1993, fuel tax rates have been fixed at 18.4 cents per gallon for gasoline, and 24.4 cents per gallon for diesel. Because the federal gas tax is not linked to inflation, the purchasing power of the revenue has eroded over time — 18.4 cents buy 43% less in 2019 than it did in 1993 (Peter G. Peterson Foundation).
Below is the 2021 ASCE infrastructure report card in the United States and the 2021 ASCE report for Texas. As you can see, there is much improvement needed statewide and nationally.
This is alarming and should get everyone’s attention. There is a lack of investment across the board that needs to be addressed sooner rather than later.
The Solution We need to make investing in our nation's infrastructure a top priority. Construction costs have gone up at the rate of inflation or faster and that has created a disparity between spending and revenue. The Congressional Budget Office (CBO) projects that the Highway Trust Funds will run out in 2022. Tax rates on motor fuels have not changed since 1993, if tax rates had been indexed for inflation then the current tax on gasoline would be about 33 cents per gallon on gasoline and 44 cents per gallon on diesel fuel. One solution would be to index tax rates with inflation, but this would only be a temporary fix as cars become more fuel-efficient and electric cars gain popularity.
What we can do is to inform co-workers, colleagues, the public, our political leaders, and our legislators about the status of infrastructure and how it affects our community, our local economy, our daily commutes, our commerce, and let them know what needs to be done.
At DEC, our core values of trust, respect, and excellence guide us to do our part by being a good steward of our client's trust, the public, and our industry while providing the best engineering product we can.
The Future The COVID-19 pandemic has affected and changed our economy significantly and has created many challenges to every aspect of our daily lives and the lives of our employers. The Transportation and Infrastructure market in both the engineering and construction industry have experienced server slowdowns, a reduction in the number of projects, delays, and even some projects being put on hold indefinitely due to funding shortfalls and uncertainties.
What can be done? A government stimulus is what our economy and most businesses need. That could save millions of private and public sector jobs and have a major impact on the Engineering and Construction sectors. However, every community and nation around the world was caught off guard and was unprepared to handle this pandemic.
Though a stimulus package would alleviate some damage, it is hard to forecast what our nation's economy will look like a year from now with the uncertainty that COVID-19 will be totally under control. However, one thing is for certain, we as a nation have faced tough challenges in the past and have prevailed. We will overcome this pandemic and will become stronger as a result of it.
Advice for Future Engineers? My advice to any student who is interested in civil engineering as a career is to make sure you have a strong passion for being an engineer. It is a rewarding and noble profession, and you carry the public’s trust. You can make a difference in your community and be a good ambassador for your profession. If you go in with a positive attitude and a willingness to learn, people may overlook any lack of experience and be more willing to work with you and teach you.