“With a national discussion on federal infrastructure investment underway, it’s worth remembering that many Americans live far away from the highest-ticket projects their tax dollars are asked to fund,” said Thune. “This hearing will look at how wise infrastructure investment decisions can ensure that all Americans benefit from improvements to national transportation and digital networks.”
- The Honorable Dennis Daugaard, Governor of South Dakota
- The Honorable Philip Levine, Mayor of Miami Beach
- The Honorable Carlos Braceras, Executive Director, Utah Department of Transportation
- Ms. Shirley Bloomfield, Chief Executive Officer, NTCA-The Rural Broadband Association
Wednesday, March 1, 2017
The hearing will be held in Senate Dirksen Office Building, Room 106. Witness testimony, opening statements, and a live video of the hearing will be made available here.
Chairman John Thune
Good morning. Last night, President Trump called for renewal of our nation’s infrastructure.
Today, we will hear from leaders representing the infrastructure needs of our geographically diverse country, from Miami Beach to Utah, and even from my home state of South Dakota, Governor Dennis Daugaard. Thank you all for being here today.
Though separated by thousands of miles, our communities are connected by a vital network of transportation and communications infrastructure. Providing this connection for people, goods, and information to travel safely and efficiently across America is a responsibility shared by all levels of government, as evidenced by our panel today.
Most recently, through the work of this Committee and others, Congress reauthorized federal surface transportation programs in the Fixing America’s Surface Transportation – or FAST Act – the $305 billion, five-year bill enacted to improve our nation’s infrastructure, increase safety, and enhance economic growth. The first long-term transportation bill in a decade, the FAST Act provided needed certainty and was a big step in the right direction, but our nation’s infrastructure is too important to American competitiveness not to remain a critical focus of this Committee.
For example, without a robust and efficient transportation sector, rural states like mine would be unable to get their goods to market. In 2015, South Dakota alone saw $65 billion in freight flows traveling to and from the state. The majority of that freight volume is made up of agricultural products, which help to feed Americans in places like Miami and Salt Lake City, and countless places in between. Commerce does not end at our state lines, or even our national borders.
In fact, in a recent letter to President Trump, over 200 agriculture producers and related businesses highlighted this point, stating, “Infrastructure that supports rural communities and links them to global markets has helped make the U.S. the unquestioned leader in agricultural production.”
More broadly, a more efficient transportation network boosts the competitiveness of nearly every sector of our economy.
Unfortunately, what used to be the best transportation infrastructure system in the world is now falling behind, unable to keep pace with the growing demands of our economy.
Similarly, while the U.S. is a global leader in broadband innovation and investment, millions of Americans still do not have access to the internet, most of them in rural communities. Our digital networks have primarily been built by companies using private capital—$1.5 trillion dollars of private sector investment over the last twenty years. Yet, in many parts of the country it is simply not economical to build broadband systems, leaving some communities behind. The federal government and many states have stepped in to address this funding gap, augmenting private capital with limited, but crucial, government support.
To continue bridging this digital divide, we need to examine existing programs to determine how best to improve their efficacy. And we need to explore new ways to reduce the cost of broadband, like reducing regulatory obstacles to deployment.
For example, the MOBILE NOW Act, which Ranking Member Nelson and I introduced and this Committee approved earlier this year, would make broadband deployment more affordable by streamlining the red tape broadband providers face and by helping to make more wireless spectrum available for mobile broadband services. Enacting this legislation would be a great down payment toward ensuring all Americans can benefit from the digital economy.
Fortunately, improving our infrastructure – for transportation and information – is an area where bipartisan agreement and cooperation among different levels of government can oftentimes be found. Of course, as we work to achieve our shared goals, we need to ensure that we are fully exploring funding options and being responsible stewards of federal funds.
In transportation, as reaffirmed with the passage of the FAST Act, states and local governments receive an allocated share of federal funding through formulas. This funding model has been widely considered appropriate and equitable for the states, as evidenced by the Senate’s strong vote of 83 to 16.
Outside of the direct funding model, infrastructure investment takes a variety of forms. Some of the more recently discussed, yet not necessarily new, approaches include bonds, tax credits, and credit assistance programs.
Compared to rural areas, high population density urban areas may be conducive to a more diverse range of financing options, including public-private partnerships, so-called P3s. In some cases, P3s can enhance capital efficiency by transferring greater responsibility to private entities in exchange for access to some sort of revenue, such as tolls, fees, or availability payments.
Despite ongoing interest, however, P3s currently account for only a small share of highway projects, partly because many projects do not make financial sense for private sector investment. Even with these limitations, in an era of scarce dollars, such financing tools should be considered a valuable supplement—but not a substitute –for traditional infrastructure investment.
We should be focused on what works for different areas of the country, not locked-in to a particular approach. This includes supporting existing authorized programs that work.
That is not to say that the existing federal funding system can’t be improved – or to suggest that more funding is always the answer.
In some instances, transportation providers and shippers have been saddled with unnecessary regulations and paperwork requirements that burden operations and inhibit capital investment. In other cases, a web of permitting processes unnecessarily slows project delivery and adds costs to project construction. Eliminating unnecessary hurdles, while maintaining an emphasis on safety improvements, can lead to a better use of both public and private dollars.
Thank you to all of the witness for being here today. I look forward to hearing your testimony. I will now turn to Ranking Member Nelson for his opening statement.
I'd like to thank all of the witnesses for being here today.
Last night, the president reiterated his call for a trillion dollar investment in our infrastructure.
I agree that it's critical for our economy that we repair and modernize our aging roads, bridges, airports and other vital modes of transportation.
Recently, I joined a number of my Democratic colleagues in introducing an infrastructure plan that could create millions of jobs across the country.
I strongly believe this investment is critical for our country to remain competitive in the global economy.
Sadly, we've seen a significant decline over the years in funding at all levels of government to keep our infrastructure from falling into disrepair.
Whether it's congestion on our highways, bottlenecks at our ports and on our rail lines, the intensifying impacts of climate change, or aging infrastructure that threatens our ability to get people to work, the numbers aren’t looking good.
The American Society of Civil Engineers graded our infrastructure at a D+.
The Road Builders found that there are 56,000 structurally deficient bridges nationwide, including more than 200 in Florida.
The bad news doesn’t end there.
As we will hear from Mayor Levine, climate change is undermining existing infrastructure in our cities already.
The main arteries of commerce—roads and pipes—are failing and rising seas, nuisance flooding, and saltwater intrusion accelerate the damage.
Not to mention the need to factor in climate change projections when planning the infrastructure of the future.
Rain-related flooding events in Southeast Florida have increased by 33 percent and tide-related flooding has increased by a whopping 400 percent.
Let me tell you, this is not good for business.
In 2015 alone, the Miami area experienced a record 18 tidal flooding events.
To address this economic and environmental crisis, Miami Beach, under Mayor Levine’s leadership, has launched a 400-million-dollar effort to raise sidewalks, install pumps, and rebuild roads at a higher level.
But we need to take action at the federal level.
It requires a strong, dedicated commitment from the federal government to keep these networks in tip top shape and make sure they are safe and ready for the future.
It also requires funding.
Local governments cannot be expected to face this challenge alone.
Federal agencies provide essential tools to help communities plan infrastructure that is built to last.
While some have suggested that loans and financing are a silver bullet, they are just tools.
And these tools are useless, if you don’t first have significant funding.
That’s why the Democratic plan I sponsored calls for direct federal investment.
We can't toll our way out of our infrastructure problems.
We need to invest funding to help build critical projects that are going to prepare our states and communities for the future like the resilience initiatives discussed by Mayor Levine, repairing the Herbert Hoover Dike in Florida, or building new rail lines and airports.
And it is essential that any investment in new infrastructure ensure that the project is designed to withstand future climactic conditions.
Further, we also need to address our broadband infrastructure.
?That is why the Democratic Blueprint included 20 billion dollars to help the nation expand access to essential high-speed broadband services, close the digital divide, and push the economy forward.
Even more significantly, a portion of those monies would be used to upgrade the nation’s aging 9-1-1 infrastructure to Next Generation 9-1-1 – a national imperative to keep our citizens safe and enhance public safety.
Federal funding could help support critical projects like these across the country.
These kinds of infrastructure investments have lasting impacts on our economy for decades to come.
I look forward to hearing from the panel on how federal investments can help improve our infrastructure.
I want to especially thank Mayor Levine from Miami Beach for being here today.
Witness Panel 1
The Honorable Dennis DaugaardGovernorSouth Dakota
The Honorable Philip LevineMayorMiami Beach
The Honorable Carlos BracerasExecutive DirectorUtah Department of Transportation
Ms. Shirley BloomfieldChief Executive OfficerNTCA-The Rural Broadband Association