Thoughts on an infrastructure bill (part 1)
The election and post-election discussions have included some concepts about funding for infrastructure. While this may have been more focused had Clinton been elected, it remains a discussion topic in the Trump White House. How it would be manifested is a question, with Trump’s faction discussion private cash influxes to make this happen. The Senate seems to view infrastructure as DOA, which means nothing might occur. However, in any instances, there needs to be a definition of the word infrastructure and what would qualify for funding. There are three basic types of infrastructure – public, private and regulated private. Most SRF programs limit recipients of funding to public entities.
The infrastructure in the public arena falls into three categories which have vastly different types of infrastructures:
Local – water, sewer, stormwater/drainage, local roads, limited bridges. In larger communities, rail and airports might be included, but the latter is mostly federal subsidies. Much of water and sewer infrastructure is over 50 years old and is showing signs of weakening. Buried pipelines are the most at risk. This would include the 6 million lead services lines in place. Sewer lines are primarily vitrified clay, also 50+ years old and likely cracked. Stormwater is corrugated metal and concrete. Roadway bases in most communities are historical and do not meet today’s standards. Hence ASCE rates these a D or D-. Municipal buildings in older communities may also have lead services, asbestos, wood and galvanized pipelines, and other issues to address. The majority of infrastructure under this definition is under local control.
State – highways and bridges – much of America’s commerce depends on these roadways. 25% of bridges need work, 10% are deficient. Funding for rail and airports is a need from a state perspective. States may spend more money on transportation that all other infrastructure combined.
Federal – these are very large scale projects like dikes, dams, reservoirs and water transmission systems. It also includes national parks ($11 billion deficiency), and federal buildings. The dikes in New Orleans are an example. However a lot of the funds for these projects are disseminated to locals (like New Orleans), so the actual use may be unclear.
The literature suggests that public investments in infrastructure create at least a 4:1 return. Good infrastructure is necessary for a vibrant economy. Deteriorating infrastructure leads to …. Flint, New Orleans after Katrina, and a host of obvious failures. The impact of climate on communities, particularly sea level rise, can be partially addressed with infrastructure improvements. Large scale construction can secure jobs both immediately and for the foreseeable future. The question then is how to secure finding that will lead to jobs, lead to economic development and return on those investments, and will make notable improvements. That is the challenge at all three levels. The easiest to address from a sill perspective is state roads and local infrastructure. From a state perspective the work is focused on highways and transportation. Locally, the benefit is the local labor force that requires no travel or added overhead. Just training. So the question is whether an infrastructure bill can/should have a jobs component built in?