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Alarm Over the U.S.’ Crumbling Transportation Infrastructure Begins to Pull in CEOs

There’s quite a political donnybrook going on in Michigan right now, as business leaders froth at the crumbling condition of the state’s roads, while politicians scramble to finger new funding sources after voters in early May solidly rejected the idea of boosting sales taxes to pay for the repairs. But some experts—in particular Harvard Business School professor Rosabeth Moss Kanter, who wrote the book, Move: Putting America’s Infrastructure Back in the Lead—believe other states and cities easily could find themselves in the same place.

This is a top concern of CEOs. Many have made it clear that the condition of their local, regional and national transportation infrastructure is a pivotal competitive differentiator, with company site selectors selecting “highway accessibility” as the most important criterion for locating a factory in the latest annual survey by Area Development magazine.

In Michigan, voters turned down a sales-tax increase proposed by Governor Rick Snyder and a bipartisan bevy of other politicians, in part, because the pols insisted on salting a bunch of other funding needs, including school funding, into the proposal instead of making the tax increase just about road repair. Now Snyder and allies are hunting around for other ways to get more funding for roads, including stealing it from the state’s popular “Pure Michigan!” tourism- advertising campaign or curbing not-quite-as-popular film-production subsidies to do so.

“Sixty-six percent of respondents to a new poll, in fact, said they would support redirecting the state’s $50-million annual film subsidy to fixing the roads.”

Sixty-six percent of respondents to a new poll, in fact, said they would support redirecting the state’s $50-million annual film subsidy to fixing the roads. “Clearly, Michigan voters recognize the benefit of reorganizing existing resources to fix the roads,” said Rich Studley, president and CEO of the Michigan Chamber of Commerce, which conducted the poll along with the Mackinac Center for Public Policy, calling the film subsidy “costly and ineffective” and “a waste of taxpayer dollars.”

Meanwhile, in her book, Kanter emphasizes the idea that America’s toothsome roads and rickety bridges comprise one big giant pothole in the way of true long-term economic prosperity and pose a clear and present danger to the nation’s competitiveness with other advanced economies.

“Why is it so hard to secure public support for long-term infrastructure investments and get Congress to vote for them?” she asks in her book. Her answer is that it’s a structural issue featuring “silos, narrow interest, and fragmentation” that “mute outrage.”

But Kanter’s book also is a call to action. and some CEOs are taking it upon themselves to attack the problem, such as CSX CEO Michael Ward, who is leading the rail company’s investments in repairing tracks. In Michigan, business chiefs also are trying to provide leadership through the political brambles and toward a solution to the state’s road-funding challenge that is broadly acceptable.

Clearly, other CEOs and company owners will have to join them if America is to come up with broad-based solutions to this challenge.



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