Market Matters Blog

Will Infrastructure Funding Become a Victim of COVID-19?

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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The Lafayette Bridge is one of the longest Mississippi River bridges in the Twin Cities, spanning the Mississippi River in downtown St. Paul, Minnesota. The bridge was at one time considered to be one of the state's most "worrisome" bridges, but after five construction seasons that began in 2011, the rebuilding of the Lafayette Bridge was completed in fall of 2015. There is concern that other bridges needing repairs will be put on hold because much of the funding comes from state gasoline tax and the drop in gasoline usage over the past month (because of stay-at-home orders) will affect that budget. (DTN photo by Mary Kennedy)

On March 31, four days after signing the Coronavirus Aid, Relief and Economic Security (CARES) Act, President Donald Trump called for a $2-trillion infrastructure plan. He wrote on Twitter, "With interest rates for the United States being at zero, this is the time to do our decades-long awaited infrastructure bill. It should be very big & bold, Two Trillion Dollars."

The Wall Street Journal noted that, "Democrats and Mr. Trump have long shared the goal of passing a major infrastructure bill and repeatedly failed to do so, unable to overcome differences over how to pay for the new investments."

Then, according to the Washington Examiner, on April 6, the White House scaled back expectations of a "huge" infrastructure bill in order to energize the coronavirus-crippled economy, returning focus to delivering money to struggling businesses and workers amid record unemployment increases.

On April 13, the American Road and Transportation Builders Association (ARTBA) released its annual Bridge Report based on the U.S. Department of Transportation's (DOT) 2019 National Bridge Inventory. The report confirmed the C+ grade given in the American Society of Civil Engineers (ASCE) 2017 Infrastructure Report Card. "Both reports illustrate that while the overall number of bridges deemed structurally deficient is decreasing, a significant amount of work remains as many of the nation's bridges are approaching the end of their design life," noted ASCE.

According to the ARTBA Bridge Report, more than one-third (37%) of U.S. bridges, nearly 231,000, need repair work. More than 46,000 bridges are rated in poor condition and classified as structurally deficient, while 81,000 bridges should be replaced. The states with the most structurally deficient bridges, as a percent of their total bridge inventory, are Rhode Island (22.3%), West Virginia (21%), Iowa (19%), South Dakota (17%), Pennsylvania (15.3%), Louisiana (13.2%), Maine (12.8%), Puerto Rico (12.3%), Michigan (10.8%), and North Dakota (10.7%).

States with the largest number of structurally deficient bridges are Iowa (4,575 bridges), Pennsylvania (3,501), Illinois (2,407), Oklahoma (2,352), Missouri (2,147), California (1,797), New York (1,745), North Carolina (1,714), Louisiana (1,701), and West Virginia (1,531).

Mike Steenhoek, Executive Director, Soy Transportation Coalition, noted in an email to DTN that most of the over 46,000 deficient bridges are located in rural areas. "The transportation needs of agriculture and the broader economy are significant and extensive, and repairing and replacing rural bridges can provide significant economic benefit," said Steenhoek.

Steenhoek added, "In the weeks and months to come, our time, energy and resources will need to transition from triage and stabilization to long-term wellness. As we do so, it is my hope that infrastructure investment will be regarded as one of the best opportunities to enhance the long-term wellness of agriculture and the broader economy. Appropriately, a significant percentage of the federal response to the COVID-19 pandemic has been designed to provide quickly accessible resources to address sudden and unexpected needs. The goal, in short, has been to allocate immediate resources for immediate needs."

MISSISSIPPI RIVER INFRASTRUCTURE GRADES D+

I have written many stories over the years about the current Mississippi River lock and dam system being in dire need of constant repair and/or replacement. The last story I did talked about the federal funding offered in the 2020 spending bill signed in to law on Dec. 20.

Read the story here: https://www.dtnpf.com/…

On April 14, American Rivers released their study titled America's Most Endangered Rivers of 2020. The Upper Mississippi River (UMR) in Minnesota, Wisconsin, Iowa, Illinois and Missouri was cited as the most endangered, followed by the lower Missouri River in Kansas, Nebraska, Iowa and Missouri. Severe flooding not just in 2019, but in other years as well, has taken a toll on these and nearly all of the rivers in the United States.

On the Missouri River, flooding in 2019 was so severe that many of the levees that had been destroyed are not yet completely repaired because the USACE was hampered by continued high water most of 2019. In a March 30 press release on the U.S. Army Corps of Engineers Kansas City District website, the Corps said that it continues to prioritize levee rehabilitation to repair damages incurred during 2019 historic flooding throughout the region. "We are also committed to providing on-site quality assurance to awarded construction contracts all while practicing social distancing as long as necessary."

The Corps also noted that challenging weather conditions and higher flows along the Missouri River throughout the basin persisted throughout the winter and are continuing this spring, initially delaying full assessments for many damaged systems. "Teams are ready to begin work with 13 contracts awarded and nine contractors having a 'Notice to Proceed' to move dirt."

Here is a link to the press release with more information on the levee repairs: https://www.nwd.usace.army.mil/…

In the UMR, USACE does an excellent job of keeping the locks and dams in service by constant and tireless repairs. In the far UMR, the St. Paul District does most of the repairs during the time the river is closed for the winter season at Lock and Dam 10 and above. Any money allocated to the locks and dams is constantly put to good use, but it is never quite enough to actually rebuild most, if not all of the locks and dams that exist well beyond their original life expectancy of 50 years.

"Infrastructure investment, in contrast, is designed to allocate immediate resources in exchange for future benefit. The profitability of our nation's farmers, small businesses, manufacturers and others can be significantly impeded or facilitated based on the condition of our multi-modal transportation system," said Steenhoek.

"Two important pieces of legislation, a surface transportation bill (commonly referred to as a 'highway bill') and a Water Resources Development Act (addressing the needs of the inland waterway system), were already agenda items for Congress and the Trump administration this year prior to the COVID-19 outbreak," said Steenhoek. "Our federal leaders would be wise to complete and pass both either independently or in combination with larger legislative items in 2020. The COVID-19 pandemic should create a greater commitment to investing in our infrastructure, rather than an excuse to postpone it."

Steenhoek noted that in addition to the job creating and maintaining impact of constructing roads, bridges, locks, ports and other infrastructure projects, having a well-maintained and capitalized transportation system is one of the best ways the federal government can advertise how the U.S. is the best place to do business.

Here is a link to the American River study highlighting the most endangered waterways: https://endangeredrivers.americanrivers.org/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(BE/BAS)

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