The Bipartisan Blue-State Bridge Bailout

The new infrastructure law’s Bridge Formula Program turns out to be a windfall for inefficient, unionized blue states.

T hroughout the bipartisan infrastructure law’s legislative journey, President Biden has repeatedly said that there are 45,000 structurally deficient bridges in the United States in need of repair. Repairing these bridges was one of the law’s biggest selling points; proponents emphasized that it was the kind of “hard” infrastructure legislation that funded bridges and highways.

The bill included a total of $1.1 trillion in spending, $550 billion of it new. Yet when the Federal Highway Administration (FHWA) announced the apportionments for each state in the bipartisan infrastructure law’s Bridge Formula Program (BFP) on January 14, we learned that it allocates a total of only $26.5 billion for bridge projects.

Don’t misread: $26.5 billion is still a lot of money. But if you’re going to emphasize over and over that the $1.1 trillion spending bill is going to repair America’s bridges, it’s a little underwhelming to learn that only 2.4 percent of the bill actually goes to that purpose. What’s more, according to the DOT, the BFP is expected to help repair approximately just 15,000 highway bridges. In other words, despite the $1.1 trillion spending tag, two-thirds of the 45,000 bridges Biden claimed were in desperate need of repair won’t actually be fixed by the legislation.

Let’s also consider that 45,000 number in perspective. According to the Bureau of Transportation Statistics, there were over 130,000 structurally deficient bridges in 1990. That number steadily declined over the next 20 years with no bipartisan infrastructure law. Measured by bridge deck area, the percentage of the country’s bridges that are rated “poor” has been nearly flat since 2012, and in 2020 sat at about 7 percent. Should those bridges be replaced? Yes. But there are better ways to go about funding those projects than spending $1.1 trillion of federal money, 97.6 percent of which isn’t for bridges.

The FHWA refers to the BFP as the “largest dedicated bridge investment since the construction of the Interstate System.” But that’s only true if you ignore the billions upon billions of dollars that state governments have invested in bridges since 1955. Remember, state and local governments — not Washington — own and maintain the nation’s highways, including the Interstates. These governments do most of the heavy lifting on funding them as well, despite receiving some federal aid for that purpose.

In other words, when it comes to highways, the states are hardly helpless bystanders. But now we have a new federal program, the BFP, to give them extra money for bridges. As the name of the program suggests, a formula determines the amount of funding each state receives. It’s common for the federal government to base similar funding schemes on population, but the BFP does not. According to the FHWA, the funding apportionment is 75 percent based on the total cost of replacing every bridge rated “poor” in a state, and 25 percent based on the total cost of rehabilitating every bridge rated “fair” in that state, relative to the entire country. The idea was to allocate funding based on need.

The DOT provides a website with a clickable map that shows how much BFP funding a state receives along with how many bridges in that state are in poor condition. It doesn’t take long to realize there is very little correlation between those two numbers. The following graphs compare the top ten states by BFP funding with the top ten states by number of bridges in poor condition.

California received more than double the funding of any other state, yet it does not have anywhere near the most bridges in poor condition. Iowa, which has the most, doesn’t even crack the top ten in BFP funding. And it’s hard not to notice that nine of the ten states that got the most funding voted for President Biden in the 2020 elections, while the states with the most bridges in poor condition are much more politically mixed. What accounts for this disconnect? Remember that the funding formula in the law does not consider number of bridges at all, because that isn’t a very good unit of measure. You could have 100 short bridges that combine for a shorter length than one extremely long bridge. That’s why the BFP considers the deck area of bridges in poor condition in a state. Here’s a graph illustrating the metric:

This one has California first, which makes sense: The state’s extensive freeway network has many long, wide bridges, and the square feet add up fast. But that still doesn’t explain why California is getting such an outsize amount of funding. Illinois isn’t far behind on deck area. And New Jersey, Massachusetts, Washington, and Connecticut — all in the top ten in BFP funding — are nowhere to be found on this graph.

To explain the rest of the discrepancy, we need to look at the other part of the formula in the law: estimated costs. The FHWA publishes bridge replacement unit costs by state. By dividing the total cost of replacing the bridges in poor condition by the deck area of those bridges, we can obtain the replacement cost per square foot for each state. For this graph, all states (plus D.C. and Puerto Rico) are included, so you can see the full breadth of the cost disparity between states.

Hawaii is far and away the most expensive, but there are probably unique geographic concerns that contribute to those costs. Look at California; it is easily the most expensive place to build bridges in the contiguous states, at almost three times the average for the whole country. And look which state is cheapest: Texas. That’s why the latter is receiving relatively little BFP funding despite having the largest state highway network in the country: It gets the most bang for its buck on bridge building. Replacing a square foot of bridge in poor condition in California costs almost nine times as much as replacing a square foot of bridge in poor condition in Texas.

That’s how California winds up getting about 16 percent of the entire country’s funding for the BFP. Not only does it have the largest amount deck area in poor condition, but it also costs more to build bridges in California than in any other state save Hawaii.

Baruch Feigenbaum is the senior managing director of transportation policy at Reason Foundation and the lead author of the foundation’s Annual Highway Report, which analyzes the quality and cost-effectiveness of highways by state. He tells National Review that of the factors that make building in California more expensive, “by far the biggest is the unionization of Caltrans [the state department of transportation] and the workforce there.” And California isn’t the only state where that’s the case. “When we look at the most expensive places to build projects, they are almost exclusively liberal, Democratic states with strong unionization,” he says.

The bridge-replacement cost data bear that out. Of the top ten most expensive states, only one (Alaska) voted Republican in 2020. The flipside is true as well. Of the top ten least expensive states, only one (Wisconsin) voted Democratic in 2020. In other words, the BFP rewards states that waste more money with more federal aid. “It incentivizes states to do a bad job maintaining their highway networks,” Feigenbaum says. His idea for a better structured program: “We should say if you have X amount of bridges in poor condition, you get the number of miles multiplied by a fixed rate.” But as it stands, he says, “We’re giving states the amount of money they are spending on bridges instead of the amount of money they should be spending on bridges.”

The law also contains provisions that ensure the money won’t go as far as it should. First, as an FHWA memo says, “Davis-Bacon wage requirements apply to all projects funded with BFP funds.” That means all the contractors involved in the projects must be paid the prevailing wage, which is commonly the same as the union wage, de facto excluding non-union construction workers from the jobs. The Congressional Budget Office has found that the Davis-Bacon Act costs the federal government about $1 billion per year in inflated contractor wages, and labor economist James Sherk has found that survey errors in calculating the prevailing wage rates inflate federal construction costs by 10 percent.

The BFP is also subject to Buy America provisions. According to the FHWA, all federal infrastructure programs receiving federal assistance under the bipartisan infrastructure law must have domestically made iron, steel, construction materials, and manufactured products. Also, at least 55 percent of the cost of all components of manufactured products must be for domestically produced items. Domestic purchasing regulations create costly bureaucratic headaches and fail to achieve their goals of domestic job growth; in fact, they end up costing America jobs, according to a 2017 Heritage Foundation report.

Then there’s the cherry on top: Because of the pandemic, state governments are already awash in revenue without the BFP. Individual income-tax collections are up because of the stimulus-assisted boost in personal income and bracket creep in states that don’t adjust their tax brackets for inflation. Sales tax collections are up because consumers have shifted their spending away from services and towards goods, which are more likely to be subject to sales tax.

California in particular is running a $31 billion surplus, and state legislators want to spend a “significant portion” of it on infrastructure, according to the Sacramento Bee — and they haven’t received a penny of their $4.2 billion in BFP funding yet. According to the National Association of State Budget Officers, 47 states saw their general fund revenue exceed projections in fiscal year 2021, and 42 states said they were exceeding projections or on target for fiscal year 2022.

Rarely in American history have states been less in need of federal aid. But they’re going to be getting more as portions of the $1.1 trillion bipartisan infrastructure law continue to roll out. The BFP is only one of many programs in the bill that will send money to states to fund the infrastructure they own and maintain — infrastructure they should be incentivized to fund on their own. Instead, inefficiency gets you more federal funding, while efficiency goes unrewarded.

Assuming for sake of argument that the DOT’s projection of 15,000 bridges repaired and replaced is correct, there will still be 30,000 bridges in poor condition (and more that will deteriorate into poor condition in the intervening years). What’s to stop the next president from saying, “Our infrastructure is crumbling! There are over 30,000 structurally deficient bridges in the United States,” and starting the cycle all over again, wasting gobs of federal dollars every step of the way?