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The Best Ways to Pay for Our Failing Infrastructure

The Best Ways to Pay for Our Failing Infrastructure
Reuters

This week, writer Yonah Freemark suggested that infrastructure banks might be the best way to fund our failing highways and public transit systems. As he put it:

State infrastructure banks ... have gained support from both the left and right in recent months. These public agencies, provided some government funds, would be designed to encourage significant private investment. And they would do so with little interference from the national government.

"I-banks" could lend states, municipalities, and perhaps even private sector agencies a significant portion of project funds that would later be paid back through user fees, public-private partnerships, or dedicated taxes.

Commenters offered other solutions for fixing America's broken roads. Here's a round-up of some of the best ideas. Matthew Lawson asks whether an infrastructure bank can work:

I don't see how a revolving-fund infrastructure bank will solve the basic problem of insufficient revenue streams for infrastructure improvements. An infrastructure bank offers merely an alternative to current government bonding authority. The loan still has to be paid back. How is a town supposed to set up a public-private partnership to reconstruct and toll its neighborhood collectors? Why does the federal government refuse to allow PennDOT to toll I-80 to fund reconstruction? Why are politicians such wimps on gas or VMT taxes?

Josh Brandon calls on drivers to pay their share. He writes:

In the United States, cars are subsidized by billions of dollars every year with low fuel taxes. Then everyone else needs to pay for the infrastructure they use.

The Raven agreed:

How does an article titled 'How to Pay for America's Infrastructure' not mention taxes on motor fuels? The answer is raise the damn tax! "Infrastructure banks" are otherwise rubbish.

Russell50 proposed public-private partnerships:

I agree that funding our nations infrastructure is one the top, if not the top, priority facing our country. Though, it appears with the I-Banks that we would (and maybe already have) added yet another Federal agency that takes money away from the states. I know many state DOTs are looking or have successfully used a Public Private Partnerships (P3) as a method to finance infrastructure projects. Unfortunately, even with the private partners, the states do not always have the funds to make the P3 work financially for all parties involved. Thus, maybe the state DOTs could use this seemingly surplus of dollars, say $50B of funds, i.e. $1B per state, to offset shortfalls in funding, in P3 projects ONLY that would make P3s financially plausible.

And the last word from Isaac Persley:

Rail and highways, by their nature, span beyond state and local borders, and if we expect a 21st century transit system, we cannot expect individual states to take on that responsibility alone. Many large scale transit projects will cost in the billions of dollars. Major cities commonly spend over $1 Billion to to upgrade particular aspects of their transit. Do we really think a state run infrastructure bank would be willing to invest that type of money on one project, when their total assets may only be $1-10 Billion?

Also, now that cities and metro areas have grown, infrastructure needs to take on more of a regional role. Water and sewer systems, the power grid, and transit systems often span beyond city, county, and state borders. If we expect to create an efficient system that not only saves money, but conserves resources, we need to think regionally about these systems and not on a state by state basis.

I find it interesting that some of the very congressmen who are pushing the state by state way of infrastructure funding are probably more than willing to have the federal government fully involved in the Keystone XL Pipeline, which would not only span state, but international borders. Why can't we get that type of involvement to improve our infrastructure?

Keywords: Infrastructure

Amanda Erickson is a senior associate editor at The Atlantic Cities. All posts »

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