Infrastructure bill (part 2)


Many communities that have issue with older infrastructure may suffer from loss of economic opportunities (Flint, Detroit, Cleveland).  This compounds the problem with local capacity for maintenance and report of infrastructure. Many of these issues result from the lack of funding due to the unwillingness of local officials to raise water rates and address hidden infrastructure. Others may feel limited due to the loss of economic activity – Rust Belt cities and the northeast are older; inner cities may be more impacted.  Different areas of the country will have different needs and maybe different magnitudes of need.  Rural communities may not have funding to replace infrastructure.  The first community that abandoned their system was rural.  Newer communities with newer pipe will have far less needs today, but few are taking steps to avoid the infrastructure pitfalls that have hit older communities.  Ultimately these conditions make for a huge backlog of deferred infrastructure investments, mostly in pipe and service lines beneath roads. The only good news is that by correcting the piping, much of the roadway base issues could also be resolved concurrently.

A concurrent problem in the communities hardest hit with infrastructure issues is often that there is pool of skilled labor, but said labor may not be skilled in areas to address their own infrastructure problems.  Likewise youths may be challenged to find work local. The solution to both issues may be similar to that posed by the CETA programs in the late 1970s. In those programs local and state governments were given funds to hire staff to be trained for certain jobs, with the intention that these trained workers would become part of a permanent, expanded workforce.  A similar solution today as a part of an infrastructure bill could be to provide local and state governments for funding for personnel to be trained to perform such work.  The workers could receive training on safety, OSHA issues, and equipment from a local community college or university that would be paid for by the infrastructure bill.  These same people would then be hired by local governments to perform rehabilitation and replacement work, fully funded initially by the federal government s but with an anticipated transition period where by 10 years out, the workforce could be demonstrated to have been expended as a result of the program.

Note that hiring by local governments is a key.  Private sector hiring tends to be job specific and the jobs disappear when the activity moves or ceases.  Hence finding the private sector likely leads only to a temporary increase in labor development.  Local government hiring would more likely increase permanent employment.  The local agencies would need to be given an incentive to encourage this since far too many elected officials see government employment as a negative thing.  This is partly why we have the infrastructure quagmire today.  That attitude needs to change.

The private sector will want their share, and privatization is a confounding issue because people get laid off through privatization and indications are that the middle class gets hurt by privatization (lower wages for the same job).  But the public sector does not manufacture pipe, equipment like backhoes and rollers and other materials would be paid to private vendors in accordance with local and state bid rules.  That would move monies for capital to private vendors.  For large projects the work rules could be applied to contractors much like the ARRA funding requirements – shovel ready and US materials and newly trained staff making up a portion of the work force.  That would meet the tenets of local jobs, fixing local problems with federal dollars for a period of time, perhaps as a mix of grants and low interest loans.

At least 20 years of infrastructure needs exist.  Hence the longer term program could be sustained.  A funding mechanism is in place via state revolving fund programs for a portion of the effort, much like the water, sewer and stormwater funds were channeled through the SRF programs under the ARRA program.  WIFIA and other programs could be used as a dispersal agent, so new bureaucracies would not need to be created.   A prior pattern for implementation is in place and would just need to be “dusted” off an updated.  Bi-partisan support enacted these program in the past and it would seem this would be good for all.

The potential for concern would be raised by private utilities (power, cable, telephone and private water and sewer utilities) which would be effectively shut out of funding, but they are private entities and they have the ability to raise funds on the private equity market.  Capitalism will work well for these organizations, but it does not for most local public works infrastructure systems.  That is why they are public, not private.  Some local governments would resist the requirement to expand the workforce – but that is their choice – a requirement to participate is not implied just as it is not with SRF funds.  Local business communities would likely drive the effort to be involved.

So now we wait and see if anything happens……

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