Learning Curve For a New Transportation Commissioner

One year ago it was my privilege to accept an appointment to the South Dakota Transportation Commission by Governor Daugaard. The Commission is responsible for policy and operational oversight of our state’s transportation system. As I quickly learned, it is an awesome responsibility that every member of the commission takes very seriously. In addition we have a great Secretary and staff to work with in building and maintaining the transportation infrastructure needed to serve the citizens of our state.

Unfortunately, the amount of money available to meet those needs is limited and is declining relative to inflation. There is also a continuing decline in highway tax revenues. This did not happen overnight. It has been happening for many years in nearly all states. The causes of this decline are many, some of them debatable as real factors. That debate is for another time.

I want to focus on the money problem and what appears to be a long term shift in the willingness and/or ability of elected policy makers at all levels of government to make infrastructure investments.

This election season we have a fundamental debate over how best to create a tax and regulatory structure that creates strong incentives for businesses to flourish, producing a growing economy that also produces growing government revenues.

The World Economic Forum’s 2011-12 Global Competitiveness Report ranks the United States No. 5 — and first among large economies. There has been some decline in this ranking the past few years. It can be improved. Over time our economy is capable reversing that decline.

However, we are worse off than 30 years ago in infrastructure investment. The country spends much less on infrastructure as a percentage of gross domestic product (GDP) than it did then.

The result is that we’re falling behind fast. In 2001, the World Economic Forum ranked our infrastructure second in the world. In its latest report we were 24th. The United States spends only 2.4 percent of GDP on infrastructure, the Congressional Budget Office noted in 2010. Europe spends 5 percent; China, 9 percent.

In other words, there has been a great shift in the U.S. economy over the past 30 years – a decline in investment in physical capital. Our roads, highways, bridges and other infrastructure are aging and in need of major repair, replacement, and upgrading to modern standards. I hope candidates for elected policy positions at all levels of government will keep this in mind as they set their priorities for the goals they will pursue if elected.

 

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