Tuesday, December 6, 2011

The need for regional infrastructure consortiums

There is an article in The Washington Post entitled "Experts struggle to express direness of infrastructure problem to a wary public" which clearly expresses that there are looming (if not current) problems with our infrastructure, but then does quite a poor job of explaining the true financing aspects. These "experts" somehow misguidedly presume that only the federal government should be taking the lead in financing of infrastructure. I would submit that the primary burden of planning and financing of infrastructure should be at the state and regional level, with emphasis on regional consortiums such as the Port Authority of New York and New Jersey.
Sure, the federal government should have a role, such as in setting standards for quality and safety, but there is no good reason for the extremely inefficient mechanism of taking money out of states up to the federal government and then parceling that money back to the states. Let the states, or those regional consortiums, handle the financing, whether through state and local taxes, bonds, or user fees.
In some cases, the federal government may have national interests beyond the interests of the states and regions, so in some few cases maybe the federal government may need to take the lead in financing, but those would be exceptions and not the bulk of the cases.
There might also be a need for a federal bond guarantee program, but that should be based on standards and having financial standards and financial reviews for states and regional consortiums issuing infrastructure debt that must be met in order to secure such a debt guarantee before it is granted.

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