Monday, February 7, 2011

A Dramatic Moment For Infrastructure Investment?

People are talking in both Washington DC and in Sacramento about the “30-10 plan” and its potential to become a national model for financing badly needed transportation infrastructure investments that can catalyze jobs and prosperity ­– without exacerbating the federal deficit. Move LA Executive Director Denny Zane was in Washington DC recently to present 30-10 to a national meeting of the Mayors Innovation Project, a learning network of mayors committed to “high road” policy and governance. Denny spoke on a panel with USDOT Deputy Director Roy Kienitz and others about recent innovations in land use planning and transportation finance.

Meantime, longtime Move LA colleague Scott Bernstein from the Center for Neighborhood Technology in Chicago was part of a summit about 30-10 and funding innovations in Sacramento last week. Interested parties are eager to find a way that the state of California can supplement the innovative financing strategies being discussed by the federal and local governments.

The idea of 30-10 and the implications for a national infrastructure finance program is simple: The long-term revenue from the 30-year Measure R sales tax passed by voters in 2008 could secure long-term bonds and a low-cost federal loan, allowing Metro to build 12 rail and bus rapid transit projects in 10 years. Using long-term revenue streams to secure financing is a familiar concept to elected officials. Using it to frontload the Measure R construction program at lower interest rates than can be gotten from private sector lenders would greatly magnify the economic and environmental benefits in the short term. Benefits include job creation and significantly reduced construction costs – because contracts will be negotiated at lower prices due to the recession, and the price of construction and materials won’t be subjected to as many years of inflation.

Denny told the mayors the federal government can get more bang for the buck “as a lender than as a spender” because as money is recouped it can be lent to other communities. All that would be required of regions is for voters to step forward and create a revenue stream through fees, tolls or – like Measure R –local taxes. This is potentially a very powerful tool for infrastructure investment because local voters are much more likely to pass a tax than Congress – local voters trust local governments more than either state or federal governments, especially when it comes to implementing capital projects like 30-10.

Says Denny, “The fact that innovative finance is being discussed at all levels of government suggests that this could be a dramatic moment for infrastructure investment in the nation.”

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