Former US Transportation Secretary, Ray LaHood, on Infrastructure Spending

The incubators for creativity and new thinking in transportation are in the cities and in the states. This is where the action is happening. It’s not happening in Washington DC.
— Ray LaHood

Ray LaHood served as the United States Secretary of Transportation from 2009-2013. Prior to that, he served in the House of Representatives, representing Illinois's 18th congressional district. In this interview with Chuck Marohn, Mr. LaHood discusses bipartisan collaboration on infrastructure decisions, and his views on the presidential candidates' position on drastically increasing infrastructure spending. He answers questions like "If we're going to invest in infrastructure, where should that money come from? Who should decide how it is spent?" He also discusses his view on gas tax increases, and small-scale vs. large-scale projects.

His book, Seeking Bipartisanship: My Life in Politics, is available now.

Ray LaHood

Ray LaHood

This interview is part of our ongoing conversation on infrastructure spending.

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Chuck Marohn: This campaign season our leading political candidates have indicated that they want to make some game changing investments in infrastructure. In a nation that seems deeply divided on so many fundamental issues, the need for large investments in infrastructure is seemingly one place where we have a national consensus.

At Strong Towns we understand that America's approach to growth and development is bankrupting our cities and this begs the question, if we're committed to spending more money on infrastructure, how do we do it in a way that actually makes us better off?

Today we're really honored to explore that question a little more deeply with the former Transportation Secretary of the Untied States, Ray LaHood. Mr. Secretary, welcome to Strong Towns.

Ray LaHood: Thank you. Good to be with you.

Chuck Marohn: You were a Republican representative from Illinois before becoming the Transportation Secretary in a Democratic administration and you wrote a book called 'Seeking Bipartisanship: My Life in Politics.' I'd like to start off by giving you an opportunity to talk about how investments in infrastructure are a bipartisan undertaking.

Ray LaHood: Infrastructure in our country has always been bipartisan. There really are no Republican or Democratic roads or Republican or Democratic bridges. For me, the best illustration of that is during the time that I served in Congress in the mid 90's and early 2000, I was on the Transportation Committee.

We passed two bipartisan multiyear multi-funded transportation bills with Bill Clinton in the White House and Newt Gingrich in the Speaker's office and it was done in a very bipartisan way. It was done in a way that really reflected the idea that infrastructure, roads, bridges, transit, are really job creating kinds of opportunities in our country and economic development opportunities in our country.

If you really want to move the economy, if you want to put people to work, invest in infrastructure because you're investing in Americans and you're investing in the American economic system. You're investing in opportunities for economic growth. That's really what we were able to accomplish during our time in Congress.

Frankly, we were able to accomplish during our time as Secretary of Transportation, always working in a bipartisan way with Congress, with our partners the Governors, with Mayors and really improving infrastructure.

Chuck Marohn: Both of our Presidential candidates are recommending a large surge in federal infrastructure spending. What's your immediate reaction to that? I'm guessing you think that's a good idea. Can you elaborate a little bit?

Ray LaHood: I think the kind of investments that both Hillary Clinton and Donald Trump want to make in infrastructure is a signal that they get it when it comes to infrastructure in terms of jobs, in terms of investing in America, in terms of the fact that we have an aging interstate system. We have 50 to 60 to 70 year old transit systems all over America that need new cars and new infrastructure.

The one fault that I find with both of their proposals is, how to pay for it, how to really make huge investments because my belief is that we have to raise the gas tax, which is the pot of money that built America. The gas tax hasn't been raised to replenish the highway trust fund since 1993. That's over two decades.

Everything has gone up over two decades except the gas tax. We need to replenish the highway trust fund if we're really going to get serious about funding big projects in America, the way that historically, we've done. We funded the interstate system over 50 years using the resources of the highway trust fund. We funded transit systems around America. That fund is broke and as a result, America has ended up as a kind of a third world infrastructure country.

We need big, big resources. We need money. We need a big pot of money to get back to being number one in infrastructure.

Chuck Marohn: I want to ask you how you would go about distributing the money. Let's say that Congress did appropriate a trillion dollars and I'd like to chat about how we fund that in a bit but let's just say they come up with the money, something besides pension-smoothing to make that happen. What do you think the best way to get the biggest bang for our buck on that spending is? How would that be distributed out?

Ray LaHood: We've had a long, long rich history in America of the federal government working with the state governments, working with the Governors. Every state has a state DOT. Every state has full-time people that work every day in trying to improve transportation infrastructure. Most cities have transit systems that run their buses, or run their streetcars, or run their light rail. Most big metropolitan areas and cities have airports.

What you do is what we did during our four and a half years at DOT. We made good partners with Governors, with state DOT's, with airport authorities, with transit systems, with Mayors all over America. The incubators for creativity and the incubators for new thinking in transportation are in the cities and in the states. This is where the action is happening. It's not happening in Washington, D.C.

The way that you develop and redevelop the kind of infrastructure is through the great partnerships that the federal government has had with Governors, with state DOT's, with Mayors, with transit systems, with airports and it works very, very well.

Chuck Marohn: One of the things that we've observed here at Strong Towns is that a lot of times when the federal government funds major infrastructure projects, it's a very enticing thing for the local government. The federal government might pay 90% of the costs and you've got to come up with a small match but a lot of times then, a generation down the road, the maintenance of it, is solely a local responsibility.

What is the shift to maintenance and how do we keep these local governments from being swamped with these long-term maintenance obligations?

Ray LaHood: What's happened in America as a result of the fact that the resources, the money is not there at the federal level, Governors in more than 20 states and legislatures in more than 20 states have taken upon themselves to raise their own gas tax.

Most of that money goes to maintain roads and bridges, to fix up roads and bridges. Cities also have taken it upon themselves to put on the ballot referendums raising the sales tax in cities. Almost all of that money goes to infrastructure. Again, because cities are cash-strapped.

More than 20 states that have raised their own gas tax, cities that have raised their sales tax, local elected officials, whether they be Mayors or County Commissioners and then, of course, at the state level, Governors and State Legislators have raised their own revenue. They're not sitting around waiting for the federal government to provide the money because the federal government has no money and there is no plan to raise the kind of money that's necessary to be helpful to cities and counties and in states.

They taken on the leadership of doing it on their own and they've been very successful. As I said, over 20 states have raised their own gas tax. Cities all over America are raising sales tax a penny or two pennies and you can raise a lot of money and they devote that then, to infrastructure and putting friends and neighbors to work building it, rebuilding it and building these economic corridors all over the communities.

Chuck Marohn: Last Summer I was able to talk to Paul Trombino. He's the head of the Department of Transportation in Iowa. One of the fascinating things he said was that their system in Iowa's too big. He said, "We have too many highways, too many bridges and we actually need to get rid of some because not all of them are productive or needed."

What is that conversation like in the context of a surge in infrastructure spending? I want to get to the point of making hard decisions. Are we going to be investing that money in the best way possible if we've got DOT Commissioners saying things like, "Our system actually needs to shrink a little bit"?

Ray LaHood: I think that's the beauty of the American system, that these decisions are not made in Washington, that these decisions for what gets funded, what doesn't get funded, they're made in the states. They're made in the cities. They're made by local elected officials. They're made by officials that are elected in states, whether they be Governors, State Legislators who are elected by the people, or Mayors of City Councils, the County Commissioners. They're making the decisions about the how to fund infrastructure.

These decisions are almost always good decisions because they're based locally, they don't come from on high, they're based on what resources are available, they're based on what the needs are. If a state decides that they need to put their limited resources into much more limited infrastructure, they can do that if they want to do it.

Chuck Marohn: One of the things that we've seen and I think the Safe Routes to School program tries to get at this a little bit but of course, has very limited resources compared to the rest of what we spend on transportation.

One of the things we see is that a lot of the best investments today in our cities are very, very small, things like fixing sidewalks and putting in crosswalks and good street lighting. Those things are hard to fund at the federal level. Is there a role for the federal government in those kind of things and what does that do to the overall system, to have the federal government funding stuff that is very hyper local?

Ray LaHood: When we came into our job at DOT, the President was able to persuade Congress to pass an economic stimulus bill, $870-billion, which 48-billion came to the Department of Transportation and we developed a program called the Tiger program. This is an innovative program that allows innovative approaches in communities to come directly to DOT for money. They don't have to go to their legislature.

If a community, say in Indianapolis or other communities decides they want to have safe routes to school, or they want a streetcar, or they want new buses, or they want light rail, they can come directly to DOT, apply for the Tiger money, which now is in the amount of about $500-million total each year, and they can do innovative creative things.

I go back to the point I made earlier, cities are the incubators. Cities are where innovative creative approaches to transportation are really taking place. Safe Routes to School is a program that's been implemented in many places in America, not because the federal government said so, but because local Mayors and City Councils and citizens decided this is what they wanted.

They were able to tap into the Tiger program because they were taking an innovative approach to transportation, which is true of streetcars around America, bike share around America, walking and biking paths. These are the innovative creative approaches that cities are taking to improve transportation and be creative about it. Use some local money but also use some Tiger money to make it happen.

Chuck Marohn: What kind of projects would you like to see funded, with a surge in infrastructure spending? There's been a lot of debate lately about the value of the mega project we've got, the boring machine in Seattle that is on again/off again. There's a been a recent book about mega projects. I'm wondering what the balance is, from your perspective, between the large new game changing things and the more mundane maintenance stuff that is maybe a little less glamorous.

Ray LaHood: I think what we see are the young people coming out of college want to move back to the cities like Chicago and Philly and Denver, the bigger urban areas. Frankly, they don't want an automobile, so what they want are alternative forms of transportation. That's where we get to this idea.

I order to develop livable and sustainable communities, you have to have multi-modal transportation, whether it be light rail, or streetcars, or buses, or walking and biking paths, bike share, other kinds of opportunities for people who want to live in the cities but don't necessarily want to live in the congestion that they have to live with they if they own an automobile, which many do not want to do.

That's why you see the most innovative creative approaches to transportation taking place in Chicago, in Philly, in Denver, in Washington, D.C., in New York, where bike share is being developed, street cars are being developed, more buses are being developed. This is the way of the future right now.

Chuck Marohn: You talked a little bit about states being laboratories and cities and Mayors having good ideas and doing things a little bit differently. In an ideal world, if the federal government is distributing money down to states and to Mayors, what kind of strings are attached to that? Is that something that's pretty string-free or there a rule for the federal government in ensuring that the money's spent a certain way?

Ray LaHood: There has to be a mix. We can't give up on our interstate system. We have the best interstate system in the world. We have to maintain it. We're not going to be building anymore interstates. We've built out our interstate system but we have to maintain it.

What we really have to do is say to the Governors and to the Mayors and to those that are interested in transportation innovation and transportation creativity, and what we have to say to them is, "There has to be a pot of money for the big infrastructure to fix up these aging bridges." There's now 58,000 structurally deficient bridges in America. They need attention, so there has to be a pot of money for that, but there can also be a pot of money for other creative innovative things. You can do both.

That's really what we did while we were at DOT in terms of the leadership that we provided with Governors, with Mayors, with County Commissioners, with Transportation Experts and we made a difference. You can do both and we have to do both because we are a country of big infrastructure. We can't give up on that but we also can't neglect this idea that creative innovative new approaches to transportation are taking place all over the America.

Chuck Marohn: Where do you think the best innovation's happening right now?

Ray LaHood: In the cities. I look at Chicago ad I see what's happened along the river walk where Mayor Emmanuel was able to get money from the US DOT and transformed the Chicago River now into a whole series of restaurants and walking ability, to really take advantage of the Chicago River.

I look at Denver and what Hickenlooper did while he was Mayor, with fasTracks. I look at Minneapolis. I look in Detroit where they're putting a streetcar down Woodward Avenue but the community invested $100-million. We invested millions of dollars and they're going to have one of the best bust rapid transit systems with a streetcar. Hundreds of young people are moving into Detroit now.

It takes a mix of private dollars, foundation money, federal money, state money and it takes real leadership of the entire community to come together to say, "We want a mix of transportation," but the innovation that's taking place in America is not taking place in Washington. It's taking place in the cities, big and small.

Chuck Marohn: I want to talk about funding a little bit but before we do that, I know you've been an advocate for high-speed rail, I want to give you an opportunity to make the case on why that is a good investment for the country.

Ray LaHood: High-speed rail is the next generation of transportation. Transportation and infrastructure is about the next generation. It's not about Ray LaHood. It's not about my generation. It's about the next generation. Every generation has left the next generation, the next generation of transportation.

We can't build anymore interstates. What we can do though, is we can build rail. The AmTrak trains that leave Washington everyday are completely full. They're full of people that are working on the train. They're on their cellphones. Their on their iPads. They're on their laptops. They work all of the way to New York or Boston.

The high-speed rail that is being developed in California, some of which was started with federal dollars, will be a 200 mile an hour train. It will be a two high-speed rail. Private investment, public investment, mainly because of the leadership of Governor Brown and his team, they've decided that they're going to build high-speed rails to unclog their highways, to get people out of cars into safe transportation.

Along the I-55 corridor between Chicago and St. Louis, trains are now going 110 miles an hour with stops all along these college towns. The train in Illinois delivers college students from the suburban part of Chicago in Chicago to normal Illinois where there's 40,000 students, Champagne, Illinois where there's 60,000 students, all the way to Southern Illinois and all of the way to St. Louis.

The trains are the next generation of transportation for the next generation, for people who don't want a car, for people who want to get out of congestion, for people who simply want to get from point A to point B in a comfortable, affordable train. People love trains.

We're not going to be connected the way that Europe is connected but we are going to have connectivity with trains, not really because Ray LaHood wants it, but because the Governors in these states have made a commitment with local dollars, with state dollars, with federal dollars to make it happen.

Chuck Marohn: I watched the last Transportation bill get approved and it was this potpourri of funding options, the pension-smoothing and selling oil out of the strategic reserve and taking money from the fed, excess funds. What was you reaction to that bill and why is this so hard?

Ray LaHood: It's hard because politicians don't want to raise the gas tax, which was the big pot of money that built America. That's what we need to get back to. The gas tax has not been raised to replenish the highway trust fund since 1993. That's more than 20 years, more than two decades.

This potpourri of trying to grab money here and there is not going to get us where we need to be in terms of our ability to improve infrastructure, to expand, to build on, to really move forward with infrastructure. The idea that Congress passed a bipartisan bill a few years ago, is fine but look, here's the reality of it. It's a five year bill only funded for three years and it's only funded at $300-billion.

That gets us no where in terms of our ability to really do innovative creative things. It maintains the status quo. That's simply what it does and until we get serious about the idea of really raising the kind of revenue that gets us back into serious infrastructure development, serious infrastructure improvements, we're going to continue to maintain the status quo.

Chuck Marohn: I've read the through the American Society of Civil Engineer's projections for how much transportation funding is needed for maintenance and then also to make some strategic investments.

In Congress, we're talking politically of nickels and dimes and the really crazy radicals are talking 20 cents, 25 cents, but to me, these estimates from ASCE, we're talking 75 cents a gallon, a dollar a gallon. What if this money is just not going to materialize? What do we do at that point?

Ray LaHood: Continue to muddle along and see more bridges go on the structurally deficient list, see our interstates continue to crumble, see local and state governments raise their own revenue through the increase in sales tax or increase in their own gas tax.

If there's not a national commitment, which there should be, which is what built America, which is what built the interstate, then you'll continue to see local Mayors, County Commissioners, Governors, State Legislators, raise their own money in order to continue to try and make progress in their cities and their states.

Chuck Marohn: I'm just wondering about the notion of triage. I'm from Minnesota, we had the bridge fall down. It was a horrible tragedy. When we step back and we look at the number of bridges that we have to maintain, it seems like an amount that is not going to be possible.

Even with a bipartisan consensus, we're still not funding anywhere near where we would need to be. I guess I've got two questions here. Have we over-billed and is that going to require us to triage the system in a really difficult conversation kind of a way?

Ray LaHood: That's what we're doing now basically. We are triaging. We're going to the places where we know that a bridge is unsafe and putting duct-tape and band-aids and other things to try and hold it up, when we probably should be replacing a lot of these bridges.

It's very, very costly to replace 57,000 bridges, not that all 57,000 need to be replaced, but they need to be in a batter state of repair. We're doing the triage now because there is no money to do the major surgery, so to speak.

Chuck Marohn: Policy people tend to dislike the gas tax and favor something like the mileage tax that would have more feedback. Americans, we're human, we would all like more than what we're willing to pay for and the gas tax seems to provide a conduit to do that, at least in the short term.

Are we just going to be stuck with the gas tax for political reasons? Is there any chance that a mileage tax or something that would be a more responsive type of pay-as-you-go system? Is that just an impossibility from a political standpoint?

Ray LaHood: I think the gas tax is an example where if you have the kind of big pot of money that we once had in America, you can really make a difference. I also think that we've used that pot of money very, very effectively and we shouldn't give up on it.

The problem is that Politicians don't want to raise the gas tax. Vehicle miles traveled is something that's being tried in an experimental way in several places around the country and we'll see what the results are but my notion is, when you have 57,000 structurally deficient bridges and an interstate that's crumbling and 50 and 60 year old transit systems, that all need new equipment, new infrastructure, tolling and vehicle miles traveled, public private partnerships, all of which I agree with, all of which can provide some funding, are inadequate to meet the overwhelming critical needs of infrastructure that America's facing today.

Chuck Marohn: You've been very generous with your time and you have always done that. I think one of the things that transportation advocates have always appreciated about you is how accessible you've been, both in person and online. You've got a Twitter handle that you're pretty active in.

I know people would like to know, what's Ray LaHood up to these days? What are you doing now? Where can people, if they're interested in getting ahold of you, where can they look for your work?

Ray LaHood: I'm one of the co-chairs of Building America's Future, which is funded by Mike Bloomberg and his foundation. The co-chairs of that are Mayor Bloomberg and Governor Rendell, the former Governor of Pennsylvania and myself. What we do, there's no compensation involved but we travel around the country and we promote infrastructure and we promote creative innovative approaches.

I'm doing that. I'm doing some speaking on infrastructure, trying to promote it, trying to promote my idea of the big pot of money, so to speak and replenishing it and increasing the gas tax and indexing it and so forth. Trying to stir up the creative juices of the American people to persuade them that we need some leadership to get the funding for infrastructure.

I'm doing some consulting at a firm DLA Piper, which is a law firm. Even though I'm not a Lawyer, I'm a Policy Advisor here, so I'm doing some policy advising on infrastructure to some folks. When we have these opportunities to continue to promote infrastructure and promote funding infrastructure, we've continued to do that for four years because we think eventually, when we get people in office with a vision and leadership and courage, perhaps we will have the resources to address some of these critical problems.

Chuck Marohn: Secretary Ray LaHood, thank you so much for taking the time to chat with us.

Ray LaHood: Happy to do it. Thank you.

Chuck Marohn: You take care.

Ray LaHood: Take care.

(Top photo from USDAgov)

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