The Scope and Funding for Infrastructure Plans

We welcome the public convenience, safety benefits and economic advantages that flow from revitalizing our infrastructure. Moody’s estimates that $1.44 is returned for each infrastructure dollar invested. The case for upgrading infrastructure sounds straightforward, but the depth and scope of upgrade, the competing claims on federal funds and other political agendas make infrastructure a complex topic.

The White House is proposing a $1 trillion infrastructure plan with “$200 billion in new federal funding parceled out as incentives to localities that raise their own funding for building projects… Cities and states could turn to private-sector financing or levying tolls and taxes to pay for new bridges and roads instead of relying on the federal government.”

Cities and states deserve a say where infrastructure funding is spent if they contribute a large part of the budget for the improvement. Of course, some cities and regions will object, claiming their initiative is too important for their impoverished condition to limit the federal funding they are given.

The White House proposal focuses on “roads, rails, ports, and airports” and makes a vague reference to “rebuild our cities and states” and to a “work-force training initiative focused on skill-based apprenticeship education.”

Except for damage repair from calamities such as hurricanes Harvey and Irma, we can regard “rebuilding cities and states” as hyperbole. Major roads and bridge projects usually receive funding from the Federal Highway Trust Fund (FHTF) and the White House’s infrastructure proposal cannot be a substitute for that. Congress passed a $305 billion highway bill to fund FHTF maintenance for five years, but that is a small part of the $1.7 trillion in infrastructure needs over the next decade. The President’s infrastructure proposal is just a down payment on those larger needs. The private sector and state and local funders will ultimately bear the brunt of infrastructure upgrades.

Apprentice education is an idea that has worked for traditional trades (plumbers, electricians, carpenters…) and it could work for high value skills such as data mining, application design and coding, and cyber security. Provided the apprentice curriculum is consistent with state-of-the-art information technology, is limited to the most important job skills, and is protected from the National Labor Relations Board’s penchant for unionizing students, these adult education programs will mint employees qualified for well-paying jobs and they will increase labor productivity. While improvements in labor skills and earnings are welcomed, apprenticeship programs are an awkward fit in infrastructure programs.

Beyond the narrow scope proposed by the White House, most expect that infrastructure revitalization should include clean water, proper waste handling, bridges and levees that don’t collapse, and critical infrastructures (finance, power, health care and communications networks) kept safe from foreign cyberattacks. State sponsored cyberattacks are becoming more dangerous and the resilience of critical infrastructure needs continuous attention by highly skilled workers.

Regardless of how broadly we define “infrastructure upgrades,” we want a cost-efficient infrastructure upgrade plan. Obtaining agreement on a suitable plan will call for resisting attempts to overloaded it with nice to have elements or elements that we cannot afford. We must be watchful for special-agenda advocates who will fight to include their favorite items, but which belong elsewhere. We should be alert for political boondoggles that increase costs such as mandatory use of unionized labor in federal contracts.

All too often, an infrastructure proposal that sounds attractive becomes bogged down in red tape that adds 8 years of delay, usually for an environmental impact study. A recent analysis in The Atlantic admits that the project delay is usually a partisan tactic to drive up the initiative’s cost, and is intended to cause death of the proposal. The analysis suggests that left-wingers would be willing to forgo the egregious delays if right-wingers would increase taxes to pay for infrastructure initiatives.

Already the scale and content of the 2017 infrastructure plan is being shaped by competing demands for funding. Money for repair of damage caused by Harvey, Irma and other calamities is being considered at the same time as initiatives to raise the federal debt ceiling, pass a federal budget, find money for health insurance subsidies, and protect funding needed for infrastructure upgrades. Supporters and opponents will try to raid funding set aside for initiatives that they favor less.

There is little doubt that we need major upgrades to our infrastructure, but amidst so many distractions, it will be difficult to focus the Hill on a sizeable infrastructure plan. Perhaps our elected representatives will look more favorably on the estimated 2 million additional well-paying jobs that would come from infrastructure projects.

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