By Dr. Alison Premo Black, chief economist, ARTBA
An Oct. 15 Congressional Budget Office (CBO) report shows that while state and local spending on transportation and water infrastructure far outpaces that of the federal government, the priority for the two groups is clearly different. According to CBO, the federal government invested 73 percent—$72 billion—of its 2017 water and transportation infrastructure spending on capital activities. By comparison, 70 percent of the $342 billion in 2017 state and local spending in these areas was devoted to operations and maintenance activities.
This report illustrates a key error frequently made, intentionally or not, by some commentators on the nation’s infrastructure challenges about the minimal significance of the federal government. As President Donald Trump and members of Congress continue to talk about the importance of infrastructure improvements, the report is a helpful reminder that this area is a responsibility of all levels of government.
Of the $174 billion in capital spending on transportation and water infrastructure in 2017, federal funds accounted for 41 percent of that amount. The report does not break down the level of infrastructure spending between state and local governments. It does, however, show the percentage of federal spending on highways remained approximately 47 percent between 1956 and 2017, while the percentage state and local governments spent on highways declined to 38 percent in 2017 from approximately 70 percent in 1956. The percentage of transit and rail spending by all levels of government grew from a minimal amount in 1956 to 17 percent in 2017.
In addition to delineating the type of transportation and water infrastructure spending by the public sector, the report also illuminates the core reason the nation’s infrastructure challenges have increased so dramatically. Infrastructure spending was over 3 percent of Gross Domestic Product in 1961, but declined to 2.3 percent in 2017 despite dramatic increases in population and freight shipments over the last 56 years.
The recent CBO report is the latest third-party reinforcement of ARTBA’s ongoing push to support increased transportation and infrastructure investment by all levels of government. See the full report.