Critical times lie ahead.
The jury is still out on whether extenuating factors from around the world will impact the U.S. economy and send us into another recession by 2014. There are paths to take that could mitigate those circumstances, but the course will largely remain unresolved until after the November 2012 elections.
In the meantime, many U.S. cities struggle to do whatever they can to meet their infrastructure obligations – often driven by EPA Consent Decrees – but unfortunately for too many, those efforts are insignificant and fall behind a long list of other pressing priorities.
Stockton, CA, is the latest in a series of cities to declare bankruptcy, a victim of financial mismanagement and misguided vision dating back to the 90s (it all seemed to start with a decision to provide firefighters full healthcare in retirement and soon all other city departments demanded – and received – the same package). Scranton, PA, is teetering on the brink of bankruptcy. Their mayor recently received a lot of attention for his plan to cut city employee salaries back to minimum wage as Scranton’s bank account is almost exhausted. Scranton has been operating under Pennsylvania state supervision for financially distressed municipalities since 1992.
While those cities, and hundreds more just like them, have the best of intentions, most do not deserve our sympathy. While there are a litany of excuses – many valid – the fact remains that cities more often than not have created their own problems by failing to fulfill fiduciary responsibilities regarding the economic health of their communities – and that includes infrastructure. As a Federal Justice Department lawyer once told me, once a formal, detailed brief is compiled and actually filed in court, 99 percent of cities will acquiesce immediately and seek negotiation with the EPA regarding their out-of-compliance systems. Cities aren’t surprised by the lawsuits – their personnel already know they are out of compliance. But out-of-sight infrastructure always loses the attention and funding battle to potholes and bumpy roads. Until the hammer of the EPA comes slamming down, that is.
The transportation industry got their federal funding recently with a $104.4 billion, 27-month highway and transit authorization bill. While the increase in funding was nominal (just enough to cover inflation), it was no surprise that this highly visible industry with a powerful voice and allies got their money. The sewer and water industry will see their tiny piece of the federal pie cut again – no surprise there either.
A funding source has to be found, whether that be in the form of an infrastructure bank or something else yet to be determined. But what took centuries to create cannot be fully funded in a decade. The key will be to have steady funding that allows cities to steadily chip away at a rate exceeding infrastructure decay and natural system growth. What is the figure? I don’t know that anyone has a truly accurate target number, but that would be very interesting to know. Such a figure could be used as a baseline for the mythical infrastructure bank or other funding sources.
We have to realize that to repair/expand our infrastructure will take more than just the federal government. States and cities have to commit as well, working in a long-term, focused partnership. That may be unusual in these days of partisanship, but it is the only way a long-term infrastructure rescue plan can be effective.
Is this possible in these days of recession, annual trillion dollar deficits and 100 million Americans on the dole? The short answer is yes but only with a quantum change in the distribution of monies for entitlements and pork projects. Admittedly, such a change may be dreaming the impossible dream.
But the positives could rescue America. Tackling our massive infrastructure problems in an aggressive, stay-ahead-of-the-curve approach would stimulate massive job creation at solid wages and for long-term duration. Much better to increase our federal coffers with a large, dutifully employed workforce generating tax dollars than to stress our country with a perpetual budget-cutting crisis and increasing taxes.
An over-simplification? Sure, the concept is sound. It’s the bureaucratic reality that stands in the way.