After decades of neglect, America’s infrastructure is in shambles. To get back on track, we need to invest at least $3.6 trillion in the next five years, according to the American Society of Civil Engineers. Coming up with all that cash will be a herculean task, especially since the Highway Trust Fund, which pays to build and repave our roads, is at its lowest balance since 1969 and is set to run out of funds this summer.
While Congress works to find a way to rebuild America, here are three innovative methods already underway.
West Coast Infrastructure Exchange
Where: Portland, Ore.
Problem: Almost 90 percent of the total freight moved across the country in 2011 was carried by trucks and trains, up from 70 percent in 1980, meaning businesses are some of the largest stakeholders in the state of our roads and railways. Private corporations often aren’t asked to invest, even though they stand to gain the most. And government can’t foot the entire bill for infrastructure upkeep.
Solution: Ask capital managers to fund new investments. The West Coast Infrastructure Exchange (WCX) was founded in 2012 with just that purpose in mind. A nonprofit operating in California, Oregon and Washington (plus the Canadian province of British Columbia), the exchange is the key “translation point” between the public and private sectors, insiders say. In particular, WCX targets union and public employee pension funds, which invest hundreds of billions of dollars. Since pension funds have long-term scope, it gives an infrastructure project decades to pay back dividends. Even better, the creation of new jobs and economic growth from the investment usually align with the mangers’ interests.
So far, the project has raised $18 billion along the Pacific. “We all know the time to invest in American infrastructure is now, and the establishment of the West Coast Infrastructure Exchange sets down a marker that says these states won’t wait to be told how to rebuild for the future they need,” says former Pennsylvania Gov. Ed Rendell, now co-chair of Building America’s Future, which lobbies for infrastructure investment. “I strongly support this effort, and I intend to help the new exchange build a national, ‘bottom-up’ infrastructure network to help get the job done.”
Enhanced Infrastructure Financing District
Where: Los Angeles
Problem: In limited budgets, infrastructure investment competes with core government services. For nearly 60 years, California had combatted decaying infrastructure through nearly 400 local redevelopment agencies, which locked in the share of property taxes for government services and diverted any revenue growth to redevelopment of areas deemed “blighted.” But by 2012, struggling to emerge from the recession, a court ruling dissolved these groups after Gov. Jerry Brown argued that they diverted funds from essentials like fire departments and schools into the mismanaged agencies.
Solution: Enhanced Infrastructure Financing Districts (EIFD) are the new government model proposed to replace the failed redevelopment agencies. The agencies work much the same way, allocating increases in property taxes back into local investment — although there’s now protections for schools to claim their share and exemptions available to counties and other special districts. They now allow a wider scope of projects like affordable housing, and they no longer come with the requirement that a district be blighted to justify capital investment. “Redevelopment was a power tool, and this is more like a hand tool,” Jon Goetz, a municipal law attorney, tells the Los Angeles Times. “It does force more cooperation between layers of government, particularly between the city and county. And it forces local governments and developers to put their heads together and come up with plans to benefit everyone.”
Los Angeles took steps to create the state’s first EIFD in January, with their eye on transforming the trash-clogged, concrete-channeled trickle of water known as the L.A. River. There’s also a couple of proposals before city council — creating three dozen acres of wetlands near Glendale, widening the river at Taylor Yard along the I-5 freeway and landscaping an industrial area downtown with native plants — all involving new parkland and economic opportunities. It’s a local investment in local solutions, matching a project’s vision with what the neighbors next door desire.
Transportation Investment Advocacy Center
Where: Washington, D.C.
Problem: Politics. In the last session of Congress, bills that would’ve funded green job creation and long-term treasury bills that could spur corporate investments with tax breaks were proposed, but nothing made it to the President’s desk (other than hot air).
The same inaction on infrastructure funding plagues state governments across the country as well. It’s what causes fuel taxes to vary from as little as 11.3 cents per gallon (in Alaska) to as high as 50.5 cents (in Pennsylvania), and why we’re all stuck in traffic while politicians debate.
Solution: The Transportation Investment Advocacy Center studies major transportation-related infrastructure bills that are popping up at statehouses across the country to find how to bypass the political gridlock. They dig into the minutiae of successful campaigns to figure out what worked and perform autopsies on unsuccessful ones to see what went wrong. Together, these in-depth case studies provide a guide for lawmakers on the best practices for passing major bills.
A recent dissection of a five-year, $3.4 billion plan to modify the gas tax in Virginia and instead raise money through a motor fuel tax found that a few bipartisan allies, like Republican Gov. Bob McDonnell and a majority of the Democratic legislators, helped the bill become law. The conservative governor was able to claim credit for making Virginia “the first state to kill its state gas tax” (even though it merely shifted the tax to diesel and wholesale gas, plus a small increase in the overall sales tax), while liberals appeased union workers who’d have new construction jobs. Instead of talking about the impossibility of working together, politicians discussed the “impossibility of inaction” and reached a compromise.
Let’s fix this country together.