As Robert Caro chronicled in his riveting biography “The Power Broker,” the great builder Robert Moses had a foolproof strategy for getting new highways approved. He’d take a little bit of money and get the project started, driving stakes in the ground and manufacturing expectations about future development opportunities. Then he’d dare the Legislature not to give him the money to finish the project. They invariably did.
The political allure of the building big projects–especially bridges and highways–continues to this day. Call it the “Edifice Complex.” With a bonanza of jobs and contract dollars, there are a wealth of constituents who support more spending and the prospect of a prominent ribbon cutting and a tangible evidence of your efforts to reduce congestion and speed traffic. But as Bengt Flyvbjerg has documented the construction of megaprojects–ranging from Boston’s Big Dig, to Seattle’s Bertha boring machine to San Francisco’s expensive new Bay Bridge–is one of repeated and substantial cost overruns. Megaprojects have their own pathology: they are the product of excessive optimism, over-predicting revenues and benefits, and consistently under-estimating costs and risks. Public officials routinely engage in “strategic misrepresentation”–Flyvbjerg’s polite academic term for “lying.” And cost overruns predictably average 30 percent above budget.
Build now, figure out how to pay later
In many respects, one current project, the replacement of New York’s Tappan Zee Bridge, symbolizes much of what’s wrong about the way we try to tackle infrastructure problems in the US.
The Tappan Zee construction site afforded a great backdrop for a photo op with the President. (WNYC).
The Tappan Zee Bridge spans the Hudson about 25 miles north of New York, connecting suburban Westchester County with Rockland County. The original bridge, built in 1955 carries about 138,000 vehicles per day. A $3.9 billion replacement project is now underway, which would build a new and larger freeway bridge, with eight lanes (and space for more). According to the New York Thruway Authority, the state agency charged with building the bridge the Tappan Zee is the largest infrastructure project underway in the country right now.
But even though construction on the replacement bridge is now 25 percent complete, the agency started construction without a complete financial plan explaining how it will be paid for. The Thruway Authority has blocked requests from local newspapers to release financial data and documents. From what is known, it’s likely that the new bridge, once completed will require a doubling of one-way tolls from the current level of $5 per vehicle to $10 or more. Like many highways around the country, traffic growth on the Tappan Zee bridge is stagnant, having peaked in 2004. The danger is that high tolls could further depress traffic across the bridge and produce a financial death spiral, as higher tolls are needed to make up for lower traffic. Since no financial plans or toll revenue forecasts have been released to the public, it’s impossible to say how likely this is. Nonetheless, the Thruway Authority has issued upwards of a billion dollars in debt, and negotiated a TIFIA loan from the US Department of Transportation. And because the Tappan Zee is the largest source of toll revenue for the Thruway Authority, shortfalls in expected revenue from this project are likely to impact the financial condition of other state toll roads.
Project development processes almost invariably focus on the most expensive build alternatives. Early on, engineering estimates suggested that the existing bridge could be renovated at a cost about 40 percent less than building a new highway bridge (Philip Mark Plotch: Politics Across the Hudson: The Tappan-Zee Megaproject, Rutgers University Press, 2015). Nonetheless the state moved ahead with a more expensive full replacement alternative (albeit after stripping out a long-sought transit component to save costs).
The way we design, select and pay for big highway projects tends automatically to generate bloated projects. The reason: the cost to project beneficiaries of pursuing big projects that benefit them is low or even zero. Big projects funded by state or federal gas taxes (or any statewide or regional funding source) generally don’t require any special contribution from the local community or properties that will benefit. With essentially no cost and big local returns, it’s no surprise that local officials clamor for big highway projects. In short, our method for selecting and funding highway projects encourages communities to pursue the biggest, most expensive project they can get because other people will be paying for it. “I’ll have the biggest solution someone else will pay for. ”
Questionable finances, but great politics?
Despite the project’s shaky finances, demonstrable risks, and questionable utility, it is widely seen as a substantial political achievement for Governor Andrew Cuomo. The New York Times described the Tappan Zee project, along with a proposed renovation of LaGuardia Airport’s terminals as the signature accomplishments of Cuomo’s administration. In the eyes of the political observers and academics the Times quoted, the Governor would get credit for building things. One lauded Cuomo for “taking a page from the Robert Moses playbook” and another said “You get credit for things you build, not things you maintain.”
But is it either good government or smart transportation policy? As WNYC’s Andrea Bernstein pointed out, Governor Cuomo unilaterally decided to exclude transit options from the project, and has been anything but transparent about how the bridge will be financed. The state Thruway Commission blocked release of a federal report on bridge financing in which the US Department of Transportation described the state’s financial plan as “hypothetical, misleading and inaccurate.”
And there are good reasons to question the utility of the proposed project. As Streetsblog’s Stephen Miller has said, Governor Cuomo is building a legacy for the 1950s. A new eight-lane freeway bridge–with no provisions for dedicated transit service, and room for widening is a project from another era.
The allure of megaprojects vs. the tedium of maintenance
The Tappan Zee Bridge is just the biggest example of the edifice complex at work. The temptation to spend money on shiny new projects and to defer or under-fund maintenance has an irresistible political logic. New projects provide showy ribbon cutting opportunities that make great campaign fodder–while the costs of debt service and deferred maintenance are largely invisible and gets passed on to your political successors.
Short-changing maintenance, in turn, becomes fodder for a kind of bait-and-switch tactic in which politicians point to rough roads, sub-standard bridges and maintenance backlogs as a justification for new funding–and then once new revenues are approved, shift the money to pay for new projects. Examples of this kind of politically expedient thinking are abundant: Louisiana’s decision to raid its maintenance funds for $21.6 million per year, for the next 28 years, to fund new highway construction is one such example.
Megaprojects suck the life out of state transportation budgets. In Connecticut, a single megaproject is consuming more than 90 percent of available state highway funds, even as the state faces a significant backlog of maintenance on overburdened highways and rail lines.
In “Overpasses: A Love Story,” Politico’s John Grunwald chronicles Wisconsin DOTs continuing plans to build new and wider highways while deferring maintenance. Despite the fact that 70 percent of the state’s highways are in fair or poor condition, Wisconsin spends more money on new projects than on maintenance. And in turn, the chronic fiscal crisis of highways becomes an excuse to underfund transit spending.
Growing reliance on debt-financing for new capital projects, coupled with stagnant growth in gas tax revenues (largely a product of much absolute declines and slower growth in driving) mean that maintenance budgets are steadily squeezed already. Prior to adopting its latest transportation spending package (funded by a 7 cent per gallon increase in the state gas tax) Washington State was on track to spend nearly 70 percent of its state gas tax revenue retiring debt for earlier projects.
The “Git ‘er done” mentality impresses people in some quarters, particularly when it’s their projects that are advanced. But in an era of scarce resources, diminished driving, and deferred maintenance, the reckless borrowing and optimistic projections that fuel big spending for these megaprojects come with huge opportunity costs. Money spent on over-built and under-used highways and bridges means other needed projects, including transit, don’t get built. And while politicians today are still executing the classic tactics from the Bob Moses playbook for pushing megaprojects, the old master-builder left no notes on winning strategies for paying ongoing maintenance costs. The money spent on a few prominent megaprojects isn’t available to pay for maintenance and the debt service burdens incurred to get new construction today will be a burden on transportation finance for decades to come. That’s frequently the real legacy of the edifice complex.