Coalition wants to transform federal funding of infrastructure
A consortium of U.S. mayors has released a playbook with 18 recommendations to overhaul how the federal government funds infrastructure and partners with localities.
Some of the recommendations the New Partnership on Infrastructure released Tuesday would refine programs created during the Obama administration, while others would create new financial tools to help cities tackle the national backlog of infrastructure projects.
"The playbook is not just another laundry list of platitudes," said Los Angeles Mayor Eric Garcetti, who serves as chair.
“It’s actionable,” Garcetti said. “We didn’t need another think tank, we needed a ‘do tank.’”
The partnership was conceived in February, as presidential candidates came together at a forum in Las Vegas to present their infrastructure visions for the country, but the proposals were re-tooled after the COVID-19 crisis struck, organizers said.
The effort is spearheaded by Accelerator for America, a coalition Garcetti and his former chief of staff, Rick Jacobs, created with a stated mission of developing solutions to economic insecurity.
The bipartisan coalition of mayors includes both Republicans and Democrats, said John Porcari, president of U.S. Advisory Services for WSP. The coalition, originally created by Accelerator for America, now includes WSP USA, City Possible, the U.S. Conference of Mayors, Meridiam NA, ACEC Research Institute and HNTB.
The playbook was released just prior to an online panel discussion led by Garcetti and Dayton, Ohio, Mayor Nan Whaley covering the merits of the proposals.
Among the recommendations were refinements to programs like The Transportation Infrastructure Finance and Innovation Act, the Water Infrastructure Finance and Innovation Act and the Transportation Investment Generating Economic Recovery grant program, originally funded with $3.5 billion as part of the American Recovery and Reinvestment Act, the stimulus bill crafted in the wake of the Great Recession.
Cities would also be encouraged to refinance existing debt into lower interest rates through the TIFIA program, something that had been discouraged because the priority was to fund new infrastructure, Porcari said.
The coalition also wants to bring back Build America Bonds, Porcari said.
That short-lived stimulus program, in which issuers sold taxable bonds and received interest payment subsidies or tax credits from the federal government, was "a runaway success," Porcari said. It expired in 2010.
“The idea of having tax-free infrastructure debt issuance that can help finance larger projects makes a lot of sense,” Porcari said.
Porcari, who called threats to municipal bond tax exemption “a life or death matter for cities and counties,” in an interview following the online event, sits on the advisory board of Accelerator for America.
"One of the first priorities will be protecting the tax exemption for municipal debt," said Porcari, who was deputy secretary of the U.S. Department of Transportation during the Obama administration.
Municipalities would not be able to afford to build infrastructure including bridges, roads and school buildings without access to the low interest debt that tax-exempt debt provides, Porcari said. The availability of tax-exempt debt also attracts private investment to public-private partnerships, he said.
Bringing back BABs would provide additional market demand and spur more infrastructure construction as well, he said.
“I know you have been working on this for a long time,” U.S. Rep. Karen Bass, D-Calif., said during the online event.
“I hope to make it all come true," she said.
Bass said she is working with her colleagues in Congress on the Investing in a New Vision for the Environment and Surface Transportation in America Act.
The Invest Act advanced from the House Transportation and Infrastructure Committee on June 18 on a partisan voice vote, backed by majority Democrats.
Democrats have hailed the legislation as a significant departure from previous transportation bills because it focuses on maintenance spending and provides a framework for a zero-emissions future. Republicans have opposed the bill saying it’s partisan and does not include a plan to cover the $494 billion cost.
It's the right thing to do, even as the nation faces the coronavirus pandemic, Bass said.
“When we are getting back to a life that is normal, we are still going to have holes in our economy,” Bass said. “An infrastructure package is something we have needed to do for years.”
The recommendations include plans to tie the funding to providing jobs to people who live in the community where the infrastructure is being constructed.
“I have been championing the ability to use federal transportation dollars to aid localities since I was elected to Congress,” Bass said.
It is devastating for local residents to watch people come in from the outside and do those jobs, when they are out of work, she said.
“We want to make sure in this bill, that we tie it to local hires,” Bass said. “And that we provide jobs for women as we build that infrastructure out. In the United States we should have the world’s greatest infrastructure, and we do not.”
The coalition has been briefing federal lawmakers on its infrastructure goals.
“There are elements of this effort in the House bill,” Porcari said. “For instance, rebuilding infrastructure to a more resilient standard.”
In the past, he said, the federal government would only help fund the replacement of projects built to the original standards. As a result, cities and counties were in the situation of rebuilding, for instance, a washed out bridge, over and over.
The coalition and the House’s proposal is that a washed out bridge could be built using more current, sustainable methods of construction, he said.
“We believe it’s the perfect time to have this discussion, particularly given that the innovation is happening at the local level and bubbles up,” Porcari said. “It’s not some Washington-based directive that trickles down.”
It’s the perfect time, Porcari said, because infrastructure is economic development.
“It would be putting people back to work,” Porcari said.
The playbook looks at great innovations for cities that are large and small, Porcari said.
“It’s a result of the hard work by the mayors and county commissioners. It reflects a belief that national discussion around infrastructure should reflect the realities on the ground. Innovation occurs at the local level and the federal government should support that, rather than vice versa.”
The playbook advocates for a system in which smaller cities are on a level playing field in competing for federal funds, Whaley said.
Some of that would come as a result of programs providing technical assistance to smaller cities, who might not have the deep bench of financial professionals on staff that larger cities do.
"What we have seen in the past is funding distributed in a way that is unequal," Whaley said. "This has to be something that helps small and mid-sized cities."
The playbook makes sure that cities under 500,000 aren't missed in conversations about federal aid, said Waterloo, Iowa, Mayor Quentin Hart.