The infrastructure devil is in the (financial) details

Here is an interesting argument: generally, people like the idea of improving infrastructure until the details about finances and completing the project come up.

But beyond the potentially divergent approaches looms the question of how the expansion and improvements will be paid for. Abernathy’s colleague Eric Harris Bernstein pointed to an infrastructure proposal released by the Trump campaign in October that would rely on public-private partnerships, tax credits, and other private-sector incentives, which would likely require toll roads and bridges to entice investment. Bernstein characterized this approach as “a huge departure from this sort of populist message Trump ran on.”“They’re talking about having it all be financed by private investment, which is essentially the opposite of targeted [investments],” Abernathy adds. “It’ll go to the communities that have the potential to pay user fees and have the highest profit and ultimately reduce access and equity and basically turn our highway system into a bunch of toll roads.”

Richard Geddes, a professor of policy analysis and management at Cornell University and a visiting scholar at the conservative American Enterprise Institute, says that there is harmony across the political lines on “the notion that overall spending on infrastructure has been inadequate.” He suggests that the best way forward is to eschew the moonshot in favor of a more “surgical” approach to improving infrastructure quality. “The spending really has to be targeted on better, more efficient maintenance and operation of what we have, plus targeted expansions in the system,” he says. “We’re not going to rebuild the entire highway system, we’re going to add capacity—meaning a lane here, a lane there, expand facilities, particularly in urban areas as people move there.”

To pay for it, Geddes suggests there is some bipartisan consensus  for public-private partnerships, but he also believes the private sector will be instrumental in funding the work ahead. One solution he encourages would include making tax-exempt municipal bonds, which citizens buy to help communities pay for local projects, available to the private companies to incentivize them to renovate infrastructure. Another possibility he offered would be to update the gas-tax system to collect revenue from drivers based on miles traveled rather than gallons purchased, which would generate more revenue from hybrid or electric cars…

Of course, many Democrats and the Roosevelt Institute suggest that some infrastructure projects be financed by tax increases, be it on the wealthy or by closing of corporate loopholes or instating carbon taxes. These suggestions are anathema to Trump and many Republicans, some of whom have vowed not to raise taxes and not increase the debt. Meanwhile, on Tuesday, The Washington Post reported that House Democratic leader Nancy Pelosi said that she would oppose an infrastructure bill that banked heavily on tax breaks and privatization.

This is where finishing under budget and ahead of schedule would be helpful. I don’t know if there is much hope that any large infrastructure project (especially for the huge projects like major bridges or tunnels) can do this these days.

Perhaps infrastructure could also be a leading indicator in current American society regarding a lessened ability to plan for the long term. Infrastructure is not a very sexy topic yet people will complain vehemently if it ends up falling into disrepair.

One thought on “The infrastructure devil is in the (financial) details

  1. Pingback: Snowproofing the morning commute | Legally Sociable

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