The $1 Trillion Infrastructure Bill Spends a Lot More Money on the Same Old Highway Programs

Virginia spends around $35,000 per mile of state-controlled road. In New Jersey, it's $1.1 million. Both states are about to get a lot more federal funding.

The $1 trillion infrastructure bill that President Joe Biden signed into law earlier this week dumps a lot of new money into existing highway programs to be spent by state departments of transportation (DOTs).

The price tag of the bill—which includes $550 billion in new spending, $110 billion of which is earmarked for highways and bridges—has seen it be described as a "historic" investment by supporters and a "monstrosity" by critics.

But by mostly topping off existing programs, it will largely maintain a status quo where some states deploy their highway dollars effectively, while others continue to set them on fire in the hopes that that will produce better roads.

"I don't think it's going to change a whole heck of a lot," says Baruch Feigenbaum, a senior managing director of transportation policy at the Reason Foundation (which publishes this website). "There's no limit to the amount of money a [state DOT] that's poorly run can waste. So, in some regards, it could make some of these bottom states even more wasteful."

That would include places like New Jersey, which ranked last in a report on state highway performance released by the Reason Foundation today.

The Garden State, per the report, spent $1,136,255 per mile of state-controlled road in 2019 while also having some of the worst urban congestion and pavement conditions in the country.

That's well above more cost-effective states like Virginia. It managed to spend only $34,969 per mile of state-controlled roads while also having above average pavement quality and slightly worse-than-average congestion. (Virginia ranked second overall in the Reason highway report, right behind North Dakota.)

Feigenbaum says part of New Jersey's high expenditures can be chalked up to the high design quality of its highways, which have generally wider lanes and straighter curves in order to improve safety. (It ranks fourth in the Reason report in terms of overall fatality rate). But he also says a lot can also be explained by a cronyist state DOT that's dominated by political appointees.

A state like Virginia has been able to keep up road quality while keeping overall road spending in line by having a more professionally run DOT, he says. It also makes heavy use of public-private partnerships, whereby private companies put in their own capital to rebuild or expand highways in return for being able to charge tolls on the lanes that they build, says Feigenbaum.

In keeping with its "spend more on the same old programs" nature, Biden's new infrastructure bill does remarkably little to advance public-private partnerships or expand the interstate tolling that supports them.

The infrastructure bill does increase the amount of private activity bonds (tax-exempt bonds issued by a private company to fund an infrastructure project) that can be issued from $15 billion to $30 billion. It also reauthorizes a handful of limited programs that allow states to use tolls to reduce congestion or rebuild bridges. But it leaves in place a general prohibition on tolling interstate highways.

The overall trend in highway spending over the past decade has been higher spending and marginally improved roadway quality, says Feigenbaum, with some states standing out for either their innovations or their wastefulness.

The new infrastructure bill will likely produce more of the same.