Lucia

de Vernai

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June 30, 2008

We Need a New Way to Pay for Infrastructure, Even If It’s Foreign Investment

The ubiquitous disappearance of peanut packets from domestic flights was the most obvious sign that air travel was headed for hell in a hand basket. Some airlines are now requiring that passengers pay for any checked luggage. Yet no matter how miserable they make the flights, the budget cuts will not be enough to repair the infrastructure contributing to the delayed flights and hour-long taxiing.

In its latest Report Card on America’s Infrastructure, the American Society of Civil Engineers gave aviation infrastructure a grade of D+, naming increased passenger flow and outdated air traffic control systems as obstacles to functioning. Withholding complimentary drinks won’t help much. Airport ownership is split up between local governments and private owners and investors, placing the primary focus on their own interests, leaving national-level concerns on the back burner.

The nation’s roads, bridges, dams and highways, railways and bodies of water face a similar fate, with the cost of repairs for existing infrastructure estimated at $1.6 trillion. In response, Pennsylvania Governor Ed Rendell, California Governor Arnold Schwarzenegger and New York Mayor Michael Bloomberg created a bipartisan coalition promoting private investment in public projects.

Proponents like Schwarzenegger point out that through these infrastructure funds, firms made $100 billion over last five years. It certainly seems like a good alternative to raising money in a country where raising taxes is the strategy of last resort. Infrastructure investments may be good deals, but they are also unfamiliar to an electorate used to government bonds. The strategy becomes an even harder sell when the topic of foreign investment comes up. 

While American investment and influence on public and private endeavors around the world is not only acceptable but expected, allowing corporations from countries where we invest to invest in us makes legislators uncomfortable. If the fear of losing control is stronger than the civic duty to improve infrastructure, the end result can only be higher taxes.  

If anything, this new approach to government investment would be a positive change for the economy. It could create an estimated one million jobs, and none of them, by definition, could be outsourced. Areas experiencing the most unemployment around the country are also the ones most likely to suffer from budget deficits that result in hazardous roadways, solid waste disposal allocation and poorly maintained parks and recreational areas. Likewise, at a time when a credit crunch is affecting the nation, investment in tangible property is a welcome change. Infrastructure funds could be a significant part of solving more than one of the nation’s problems.

Infrastructure is the foundation upon which all other activity in the country depends. Too often it is only when it is beyond repair that we acknowledge its importance. Time, money, our children’s education and even complimentary peanut packets are all in some way tied to the state of the infrastructure. New ways of finding funding for its maintenance may be uncomfortable at first, but policymakers owe it to their constituents to use non-tax dollar funding.

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