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Chieppo and Poftak: Maintaining infrastructure saves a lot

08:08 AM EDT on Thursday, August 23, 2007

CHARLES D. CHIEPPO and STEVE POFTAK

BOSTON

THE MINNESOTA BRIDGE collapse is just the latest evidence that too often it takes a tragedy to get our leaders to do what they should be doing in the first place. Crass as it may sound, turning the lessons of tragedy into real change requires us to be opportunistic — we must act while public attention is still focused on the issue at hand.

A recent Pioneer Institute study found that the Commonwealth’s infrastructure assets, such as roads, bridges, transit and buildings, face a deferred maintenance backlog that is at least $17 billion and might be substantially higher. Addressing that backlog will probably require new resources, but we should fundamentally reform how we finance assets to focus on maintenance before asking citizens to provide those resources.

Governor Patrick recently proposed a dramatic jump in the state’s capital budget. But borrowing more to increase capital spending is just more debt, not new revenue. Paying it back threatens to further restrict our capacity to maintain public assets in the future. Anyone who doubts this need only look at the fiscal straits that New Jersey finds itself in thanks to deferring pension and retiree health-care costs.

Regular maintenance improves the performance of infrastructure assets, extends their useful life and is the best insurance against tragic failures like the one in Minneapolis.

It’s also cost-effective. The Pioneer study, which uses the Longfellow Bridge, between Boston and Cambridge, as a symbol of Massachusetts’s chronic neglect of maintenance, found that taxpayers would have saved more than $80 million if the state had performed routine maintenance on the bridge rather than running it into the ground. Today, repair costs will be at least $200 million.

A number of steps should be taken to fundamentally reform how Massachusetts cares for its infrastructure. The capital budget is designed to pay for long-term assets, but is littered with at least $200 million in spending on payroll, vehicles, computer equipment and software. These expenditures should be shifted to the operating budget, where they belong.

Elected officials thirst for the instant gratification of unveiling new projects, a reality exacerbated by the fact that the cost of deferring maintenance often doesn’t become apparent for years. But Massachusetts should take an approach similar to Utah’s, which prohibits funding new projects until sufficient money has been appropriated to maintain what they already have.

When new projects are approved, they should be assessed and appropriations made based on life-cycle costs, which take into account the price of both construction and maintenance.

State agencies should pay for regular maintenance out of their operating budgets. Requiring each agency to spend 2 percent of the replacement value of its assets on maintenance would allocate almost $500 million.

We should follow Missouri’s lead and create a maintenance reserve fund. There, the state began by setting aside 0.1 percent of general-fund revenue and increased it by 0.1 percent each year for a decade until it reached a total of 1 percent of the general fund. Today, 1 percent of the general fund would fund a maintenance reserve of nearly $180 million. While it sounds like a lot of money, $180 million would not even fully fund the Longfellow Bridge rehabilitation.

Finally, we should clarify that the Division of Capital Asset Management and the Executive Office of Transportation and Public Works have primary responsibility for maintaining state assets, and provide each with adequate funding to fulfill those responsibilities.

Like any fundamental change in the way government operates, these steps will not be easy to achieve. In addition to conflicting with the natural desire of elected officials to attend ribbon cuttings for new projects, it would also draw the ire of advocates who have long used political influence to secure the approval of favored projects.

But the benefits are more than worth the battle required to create a reformed capital-investment process that focuses on maintenance. In addition to preventing the commonwealth from being overwhelmed by a tidal wave of replacement costs, and making us all safer, it would provide the accountability and transparency necessary to convince a skeptical public that they are getting real value in return for increasing their investment in infrastructure.

Charles D. Chieppo, an occasional contributor, is a senior fellow and Steve Poftak is director of research at the Pioneer Institute, a Massachusetts public-policy think tank.

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