Legislative/Regulatory

COVID-19 Hits Infrastructure With Double Whammy

U.S. waterways are “ideally situated” to be addressed as part of a COVID-19 relief funding package, according to a recent special report issued by the American Society of Civil Engineers. The ASCE, well-known for its periodic “report cards” on American infrastructure, released its report, titled “STATUS REPORT: COVID-19’s Impacts on America’s Infrastructure,” on June 25.

The report begins by noting continuing U.S. underinvestment in infrastructure. Infrastructure investment was 2.5 percent of gross domestic product (GDP) in 2019, versus 4.2 percent in the 1930s, when most of today’s locks and dams were originally built. “Congress should make infrastructure investment a centerpiece of its immediate response and long-term recovery strategy,” the report urges.

The economic slowdown caused by the virus has hit infrastructure spending with a double whammy. Much U.S. infrastructure is supported by user revenues, which are significantly down. At the same time, states, cities and localities, which contribute to infrastructure maintenance, have also been hit with substantial revenue declines as portions of their tax base, such as restaurants and some retail businesses, are closed. They will be unable to contribute as much to infrastructure plans as they would have before the coronavirus hit.

Waterways

Unlike some other areas of infrastructure, the report says, “Robust funding to repair and replace locks and dams will provide nearly immediate value to the economy and ultimately support the U.S. agricultural sector and other industries that rely on the waterways to get goods to market.” While U.S. investment in waterways has increased in recent years, “upgrades to the system still will take decades to complete.” The report urges Congress to provide adequate efficient funding in the next Water Resources Development Act (WRDA) funding bill.

Ports

The impact of COVID-19 to ports illustrates the double whammy. In its 2017 report card, the ASCE noted ports are responsible for $4.6 trillion in economic activity, or about 26 percent of the U.S. economy. The movement of goods through ports supports 23.1 million jobs, and in normal times provides $321.1 billion in tax revenue to federal, state and local governments. But the economic decline due to COVID-19 is estimated to cause revenue declines of between 20 and 30 percent to ports.

The report addresses every sector of infrastructure, including dams. The average age of dams is 57 years, and in 2017, more than 2,170 high-hazard potential dams were identified as deficient. Record rainfalls in May contributed to the catastrophic failure of two high-hazard-potential dams in Michigan, resulting in extensive property damage and the evacuation of thousands of residents.

Domestic air travel declined by 95 percent at the height of the COVID restrictions. While the Coronavirus Aid, Relief and Security Act (CARES Act) provided $10 billion in emergency relief to airlines, the ASCE report urges another $10 billion “to mitigate growing pandemic industry impacts.”

The average age of the energy grid is more than 50 years old, older than that in some places. A damaging wildfire in California was blamed on hardware malfunction in a 100-year-old section. Pipelines, drinking water infrastructure and highways and bridges all require significant upgrades as well, according to the report.

The full report is available at https://www.infrastructurereportcard.org/COVID_STATUS_REPORT.

 

 

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