Municipalities shouldn't count on a federal infrastructure bill passing soon, and must continue to find other ways to fund their infrastructure even if the federal government could still play an important role, policy experts said Tuesday.
That narrative emerged at a Brookings Institution event held in Washington. DJ Gribbin,a nonresident senior fellow at Brookings’ Metropolitan Policy Program and former special assistant to President Donald Trump for infrastructure debated John Porcari, president of U.S. advisory services at WSP and former deputy secretary at the U.S. Department of Transportation, on the federal government’s role in infrastructure funding.
Both had very different ideas on how federal funding should be used. Gribbin advocated for states and localities finding ways to fund infrastructure instead of relying on the federal government, while Porcari said the federal government needs to be a helping hand.
Porcari said that the federal government’s help with aviation and highways helped make them successful and that it should be used in other areas.
“If we had made the same local, state and federal commitment on transit and passenger rail we would have great systems there too,” Porcari said. “We just don’t have that consensus.”
While special assistant to Trump in early 2018, Gribbin unveiled an infrastructure plan that would use $200 billion of federal funds to leverage $1.5 trillion in infrastructure investment, mostly through local and private funding. Gribbin resigned from that position in April 2018.
Gribbin agreed with Porcari that the federal government should fund the Federal Aviation Administration and the interstate system, but that’s it, Gribbin said. He also highlighted the myth that federal funds are free and said they instead comes from communities.
“Every dollar the federal government gets comes from a community,” Gribbin said.
Gribbin said the federal role should be matched to the needs of the 21st century as opposed to 1956 when the Federal Aid Highway Act was enacted. It authorized the construction of a 41,000-mile network of interstate highways.
“So we still have a 1956 mentality in the federal role when it comes to highways,” Gribbin said. “How do we move that to a more efficient federal responsibility?”
With signs of an infrastructure bill becoming less likely to pass, more municipalities are turning to gas taxes, user fees and the private market to fund projects.
“The good news is that people aren’t just sitting around and waiting for Washington to act,” Gribbin said, citing a recent Alabama gas tax increase. “What we want to do is accelerate that trend and get even more investment.”
Gribbin also told The Bond Buyer that doesn’t believe an infrastructure bill will pass and said municipalities should rely less on the federal government to fund their projects.
Porcari said that public-private partnerships will become more prevalent and value capture will become a rising tool.
Value capture is increasingly used to fund capital projects, which Gribbin included in his initial infrastructure plan to the Trump administration and a tactic that Porcari agrees with. Value capture is a mechanism that dedicates a portion of property tax revenue increase to pay for capital projects and operating costs.
Porcari referenced Chicago’s CTA Red Line which has proposed using value capture to fund its
Recently, New York Mayor Bill de Blasio
Porcari said he has seen more value capture in general, but added it is difficult to do because it raises taxes and benefits usually aren’t seen for up to 10 years.
“You’re seeing it more and more,” Porcari said. ‘It’s a relatively new trend.”
Federal, state and local governments and the private sector need to come together to get projects done, said Ryan Abraham, a principal in Washington Council Ernst & Young who previously worked on the Democratic staff of the Senate Finance Committee for 14 years.
The private sector is stepping in and bringing in capital, but to do larger projects, it would be helpful for Congress to provide additional resources, Abraham said. It would then lead to more investment from the private sector and state and local governments, he added.
Abraham is
The federal government could leverage money through matching grants and other ways to save costs and bring more private investment, Abraham said.
States are already stepping up, but the federal government can find ways to better leverage private investment, Abraham said. Private investment won’t back out without federal help, but overall a robust plan is needed with support from the federal government, Abraham added.
