Posted: August 12, 2011

A bipartisan group issued a stinging appraisal of America's infrastructure last week.

Titled "Falling Apart and Falling Behind," the report catalogs America's ailing infrastructure, from ports to railroads and airports.

The group, Building America's Future Educational Fund, is co-chaired by New York City Mayor Michael Bloomberg, former Pennsylvania Gov. Ed Rendell and former California Gov. Arnold Schwarzenegger.

The report compares America's infrastructure to the transportation network in other countries and suggests ways to fix the disparities.

As a start, the group advocates investing $200 billion a year in America's infrastructure over the next 10 years.

The program should focus not only on transportation but water and wastewater systems, dams, and the country's electric grid and broadband system.

Such a plan would create 5 million jobs over the next decade at more than 250,000 construction sites and factories, the report said.

The group also advocates passing a new six-year transportation bill instead of extending the funding for the 2009 bill every year.

The new bill must move from an essentially recycled version that thinly distributes funds based on archaic formulas and political expediency to a plan that sets clear priorities and makes hard choices based on increasing economic return and mobility while reducing congestion and pollution, the report said.

In addition, the group is pitching a national infrastructure bank that would leverage private dollars for regional projects, spanning several states.

Such a bank was pitched a decade ago, yet Congress and the White House never embraced the proposal.

But the idea has become popular again among states faced with mounting transportation problems and a backlog of highway projects.

Virginia is a good example.

Virginia's legislators approved a $4 billion transportation package advanced by Gov. Bob McDonnell this year.

A transportation infrastructure bank was part of the package to issue $3 billion in bonds, or debt.

The national group's idea mirrors Virginia's package.

To pay for projects, the national group proposes raising the federal gasoline tax and indexing it to inflation and generating long-term revenue streams, such as congestion pricing, carbon auctions, fees based on miles traveled or reserves built into capital budgets.

The report presents some searing statistics.

U.S. infrastructure has fallen from first place to No. 15 today, the report said, citing statistics from the World Economic Forum's 2005 economic competitiveness ranking.

The size of federal investment in transportation infrastructure, as a share of GDP, has been dwindling for decades. Current U.S. transportation investments represent 1.7 percent of total GDP.

Americans wasted 4.8 billion hours sitting in traffic at a cost of $115 billion based on 2009 calendar.

By 2035, an estimated 70 million more people will live in U.S. metropolitan regions.

Every American accounts for about 40 tons of freight to be hauled each year - so an additional 2.8 billion tons of freight will be moved to and from major metropolitan regions in 2035.

U.S. rail infrastructure now ranks 18th in the World Economic Forum's Global Competitiveness Report, the report said.

U.S. freight rail tonnage is expected to rise 88 percent through 2035. A projected $148 billion is needed by 2035 to expand capacity and cope with this increased volume.

There are more than 15,000 miles of true high-speed rail in operation around the world - none in the U.S.

The World Economic Forum said U.S. port infrastructure ranks 22nd in the world behind countries like Iceland, Germany and Estonia.

China now boasts six of the world's top ports - and none of the top 10 are located in the U.S.

The port of Shanghai now moves more container traffic a year than the top seven U.S. ports combined.

America's air transportation infrastructure is ranked 32nd in the world behind countries like Panama, Chile and Malaysia, the World Economic Forum said.

The U.S. has the world's worst air traffic congestion - a quarter of flights in the U.S. arrive more than 15 minutes late. The national average for all delayed flights in the U.S. - about 56 minutes - is twice that of Europe's average.

By Philip Newswanger

philip.newswanger@insidebiz.com