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What We're Reading in Infrastructure, July 23

The staff of the Bipartisan Policy Center’s (BPC) Executive Council on Infrastructure share some recent publications, speeches, and testimony relevant to infrastructure policy and finance. The views expressed in these pieces do not necessarily represent the views of the council, its co-chairs, members, advisors or BPC.

Compiled by Nikki Rudnick, Katie Golden and Jake Varn

Senators Hoeven and Wyden Tout Infrastructure Investment at BPC
By Benjamin Chia, Bipartisan Policy Center

“Senators Ron Wyden (D-OR) and John Hoeven (R-ND) spoke at the Bipartisan Policy Center (BPC) last week about the ability of private investment to bridge the gap between infrastructure needs and existing funding.

“In a bipartisan effort to catalyze investment in American infrastructure, Sens. Wyden and Hoeven have introduced the Move America Act of 2015. The bill creates new tools within the tax code to better incentivize private investment in public infrastructure through Public-Private Partnerships. The act aims to bring billions of dollars of investment to state and local governments to grow and repair their infrastructure by expanding tax-exempt private activity bonds and creating a new infrastructure tax credit.” Read the article.

Highway Deal Bill Text Released
By the U.S. Senate Committee on Environment & Public Works

The bill text is now available for the highway deal reached between Majority Leader Mitch McConnell, R-Ky., and Sen. Barbara Boxer of California, ranking Democrat of Senate Environment and Public Works. Read the press release. Read the bill.

How Public Pensions Are Getting Smart About Infrastructure
By Jill Eicher, Governing

“While American politicians talk about changing public policy to increase investment in U.S. infrastructure, America’s public pension funds are investing their money in infrastructure overseas.

“The largest U.S. public pension fund, the California Public Employees’ Retirement System (CalPERS), recently announced a $1 billion deal with Queensland Investment Corp. (QIC), an Australian pension fund, to invest in Australian and Asian Pacific infrastructure.” Read the article.

Hearing: The Economic Exposure of Federal Credit Programs
By the U.S. Congress Joint Economic Committee


Dr. Douglas Holtz-Eakin, President
American Action Forum, Washington, DC

Mr. Jason Delisle, Director, Federal Education Budget Project
New America, Washington, DC

Mr. Douglas Elliott, Fellow
Brookings Institution, Washington, DC

Mr. Paul Van de Water, Senior Fellow
Center on Budget and Policy Priorities, Washington, DC

Read and watch the hearing.

Q&A With the Experts: P3 Digest Talks with Virginia’s P3 Director
By the National Council for Public-Private Partnerships

“Virginia recently celebrated 20 years of using public-private partnerships to conduct a variety of innovative infrastructure projects and has more projects in several stages of development. Successful examples include the open $925 million 95 Express Lanes project with 29-miles of managed toll lanes on Interstate 95 and the $1.7 billion 495 Express Lanes project in the metropolitan Washington area. Virginia also has under construction in the Hampton Roads region a new tunnel and a new roadway as well as an improvement to another tunnel that will significantly improve traffic flow in the region. The state also is exploring the feasibility of obtaining public financing to reduce congestion on heavily traveled Interstate 66 and is considering projects to develop alternative energy sources and enhance communications networks.” Read the interview.

Funding Long-Term Infrastructure Needs For Growth, Sustainability & Equity
By Rick Rybeck, D.C. Tax Revision Commission

“General taxes can leave consumers oblivious to the consequences of some of their actions and create no incentives for changed behavior in relation to the public goods or services being consumed. User fees and public service access fees, however, can inform consumers about the impacts of their consumptive behavior and motivate behavior that takes those impacts into account. This paper will show that user fees and public service access fees, to the extent that they are properly designed and executed, can mimic market transactions, thereby generating revenue while simultaneously internalizing externalities to encourage more responsible and efficient use of public resources.

“Public service user fees and access fees can be designed so that economic incentives are better aligned with public policy objectives. As a result, the general desire of people and businesses to save money and avoid fees will enlist the private sector’s energy to advance public purposes.” Read the report.

Transportation Trumps ‘No Taxes’ in Many States
By Elaine Povich, Pew Charitable Trusts – Stateline

“Falling bridges and crumbling roads trumped anti-tax sentiment in more than a half-dozen states during this year’s legislative sessions, prompting them to increase gasoline and other taxes to address infrastructure needs. In some states, the taxes hadn’t gone up in decades.

“Tired of waiting for federal transportation dollars, eight states, all but one of them headed by Republican governors, either hiked gas taxes or scaled back a planned cut to bring in more money. They are: Georgia, Idaho, Iowa, Kentucky, Nebraska, North Carolina, South Dakota and Utah. At least four states are putting the final touches on increases or are still considering them. And in California, Democratic Gov. Jerry Brown has called for a special session to determine how to finance $59 billion in freeway and road repairs.” Read the article.

Water systems everywhere, a lot of pipes to fix
By Patrick Sabol, Joseph Kane and Robert Puentes, Brookings Metropolitan Infrastructure Initiative

“From burst pipes in Syracuse, N.Y. to chemical contamination in West Virginia and Ohio, America’s drinking water systems face a growing list of maintenance and investment challenges. Perhaps surprisingly, one big challenge is simply the sheer number of systems.

“The United States has over 51,000 community water systems (CWS), which provide public water to more than 300 million people. That averages out to about 6,000 people per system, but few systems are average: 28,300 “very small” systems serve populations under 500; another 13,700 “small” systems serve 501 to 3,300 people; and 4,900 “medium” systems serve 3,301 to 10,000 people. As a result, the vast majority of public drinking water facilities serve a relatively small portion of America’s population.” Read the article.

Sens. Reed, Collins Advocate for Reauthorization of Successful TIGER Grant Program
By Senators John Thune and Bill Nelson

“In a letter to the Chairman and Ranking Member of the U.S. Senate Committee on Commerce, Science and Transportation, U.S. Senators Jack Reed (D-RI) and Susan Collins (R-ME) today wrote to express their concern with a proposed overhaul to the Transportation Investment Generating Economic Recovery (TIGER) grant program within the Committee’s surface transportation reauthorization bill. Senator Collins is Chairman of the Transportation, Housing and Urban Development Appropriations Subcommittee, and Senator Reed serves as the panel’s Ranking Member.

“In the letter, Senators Reed and Collins highlighted the tremendous value of the TIGER grant program, noting that, ‘We strongly believe that the TIGER grant program has been a resounding success, and has allowed the U.S. Department of Transportation (USDOT) to explore ways to deliver projects faster, save on construction costs, and make investments in our nation’s infrastructure that make communities more sustainable.’” Read the press release and letter.

Public-Private Partnerships Offer Alternative Model For Water Infrastructure Projects
By Anatoly Darov and Matthew Feher, Burns & Levinson LLP

“In February 2012, the Commonwealth of Massachusetts completed a study of the state’s drinking, wastewater, and stormwater infrastructure needs that identified a funding gap of at least $39 billion over the next 20 years. The Water Infrastructure Finance Commission, which prepared the report, concluded that funding from traditional government sources is likely to decline over the same period. This scenario of rising infrastructure needs coupled with declining government resources is playing out in cities and towns across the country. As part of the solution to this funding gap, states and municipalities have been looking to public-private partnerships, or P3s, as an alternative to traditional methods of financing and delivering public infrastructure projects, including projects in the water sector.” Read the article.

A tale of two states: Comparing PPPs in North Carolina and Ohio
By Patrick Sabol and Robert Puentes, Brookings Metropolitan Infrastructure Initiative

“As states struggle to build and renew their infrastructure assets, they are increasingly turning to the private sector for solutions. States like Virginia have used these so-called public-private partnerships (PPPs) for decades to collaborate with private firms to design, build, finance, operate, and maintain certain public infrastructure facilities.” Read the article.

The Politics of Infrastructure: Balancing User Fees and Value Capture
By Rick Rybeck, Eno Center for Transportation

“On November 23rd, “60 Minutes” broadcast an episode about crumbling infrastructure in the United States. According to the show, most politicians, corporations, business interest groups and labor unions recognize the importance of infrastructure in maintaining our economic competitiveness, both at home and abroad. But, nobody can agree about how to raise the funds to maintain and repair roads, runways, ports, railroads, etc.” Read the full article.

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