U.S. Sen. Jim Inhofe (R-Okla.) questioned witnesses at an EPW hearing yesterday to receive testimony on highway infrastructure and accelerated project delivery.
Witnesses included Patrick McKenna, Vice President of the American Association of State Highway and Transportation Officials; Steven Demetriou, Member of the Business Roundtable Infrastructure Committee; and Michael Replogle, Deputy Commissioner for Policy at the New York City Department of Transportation.
Inhofe: I thank you very much Mr. Chairman for allowing me to go out of turn here. I wanted to do it because there are two things that I want to emphasize. Now you've done a pretty good job at emphasizing Mr. Demetriou, but it's worth repeating. You hear the word investments all the time, every big spender around, every big spending program, but you never hear the word spending, you never hear the word deficit, you here just investments. A lot of times, it's a phony characterization, however in transportation it’s not. It is real. In my state of Oklahoma and because of some massive improvements we've made in our transportation system, two of our communities — one Durant and the other Inola — are directly the beneficiaries as a result of what happened in their highway programs. In those two communities, the companies are investing $250 million in one and $360 million in the other, creating 300 new jobs in each location. The investment the Oklahoma Department of Transportation and the federal government has made to improve these highways results in additional property tax, additional sales tax, and additional income tax revenue.. What I'd like to get from you Mr.McKenna and you Mr. Demetriou, just any elaboration on this and just very briefly on what you see as a return on investment. Alright, let's start with you Mr. McKenna.
McKenna: Thank you Senator, that's a great question. In Missouri, we actually track our capital program. We are at present put about $900 million per year into that program. We track that and we measure that with an economic study on each five year period. And what we find is when we are at that $900 million to over a billion dollar level we see returns of four to one in economic benefits. When we have instability of federal funding and we tighten down the types of projects that we work on, we can see that drop to two dollars to two and a half dollars per dollar invested. Consider that the changes between a short-term paving program or a long-term capital investment program and those returns are really stark. And we've tracked that for over twenty years.
Inhofe: Okay I appreciate that very much. Mr. Demetriou you did cover this, is there anything you want to add from what you already said concerning return on investment?
Demetriou: I think I stated it. There's a tremendous return and Patrick just covered that as well. Each of you have a fact sheet on your state hopefully that's been put together by the business round table and specifically for Oklahoma, the additional jobs were laid out but more importantly the benefits to the mining industry, finance, insurance, real state industries which are important to your state and each and every one of you have the similar fact sheet. This is, for me as a business leader, it's completely tied to what we do every day to drive investment and get a high return on that capital and it's clear from an infrastructure standpoint that that's what we’re talking about.
Inhofe: Okay, the second thing I'd like to have you elaborate on a little bit has to do with streamlining. In the last two transportation bills that we had — actually they were when I was chairing this committee, we concentrated on streamlining and it hadn't been done before. I remember that Barbara Boxer at that time came around in a lot of areas where she didn't agree initially. She changed her position. I think the streamlining has come a long ways. Mr. McKenna, you didn't say too much about that, but tell me what your thoughts are on streamlining. Some people are saying we've already addressed that, we don't need to address it more. Why do we need to address it more in this bill?
McKenna: Thank you Senator. We do believe we're along a path. We've made significance progress in streamlining. A lot of coordination that's going on among and between federal agencies. We're trying to mirror that at the state level between cabinet agencies in each state. So the coordination efforts that are going on are substantial. We do believe that we still have progress to be made and I want to make sure that everybody realizes we're not suggesting that we delve into the environmental issues themselves, we do not wish to impact the environment negatively but we do think that on a process standpoint, even on simple projects where we have categorical exclusions, the coordination can still be improved we have more work to do. If we can shave on average three months off of 95 percent of the projects that we do, that's a substantial return for the taxpayer.
Inhofe: That translates into more money for infrastructure. Do you agree with that Mr. Demetriou?
Demetriou: Yes I do. I really do encourage you to put into the law the executive orders that are putting the two year limit on the permitting process. But I also want to say there's great examples where those projects recently that are applying the FAST Act, that are applying the deadlines, collaborating, cooperating with all the stakeholders, ensuring government and environmental regulatory is preserved. We're seeing opportunities to improve and shorten the timelines.
Inhofe: Appreciate that very much. Thank you Mr. Chairman.