“Cities and towns across America are struggling with the issue of crumbling infrastructure and how to finance new investment. In older American cities, the potential for infrastructure failure can no longer be ignored. We know that infrastructure investment creates construction jobs immediately and lays the foundation for a stronger economy. How can we stimulate a more serious, bipartisan discussion about the importance of investing in America’s infrastructure on a national scale? And what can we learn from other nations that are making smart investments in roads, bridges, transit, water systems, and broadband?”
We clearly need to modernize our infrastructure, including better roads and bridges, smarter electrical grids, upgraded water, sanitation, and mass transit systems, clean energy and more energy-efficient buildings, and globally competitive broadband. And as Sandy so tragically demonstrated, the increase in extreme weather events means it’s even more important to act soon to make all our infrastructure more resilient.
This is also a huge economic opportunity to create jobs, attract private investment, and increase long-term economic growth and productivity. The most important thing we can learn from other nations is to budget more public funds for investment and to attract more private capital to infrastructure projects. The American Society of Civil Engineers estimates that the U.S. needs $3.6 trillion in infrastructure investment by 2020.
The most promising opportunity for bipartisan cooperation is a national infrastructure bank, which would be seeded with a modest amount of public money, then mostly funded by private investment with an attractive and secure rate of return. Originally, this proposal had bipartisan support. If Republicans in Washington are no longer willing to back the bank, then state and city officials should establish their own. Based on Mayor Rahm Emanuel’s experience in Chicago, there is plenty of bipartisan support outside Washington for this idea. In fact, at last year’s CGI America conference in Chicago, Mayor Emanuel and 16 other mayors established the U.S. Conference of Mayors’ Infrastructure Financing for Cities Task Force, and I’m glad to be working with them.
As you know from being on the Task Force, we’re learning from the challenges and successes in other cities. In your hometown of Baltimore, for example, Baltimore Housing and the city of Baltimore, along with more than 20 partner organizations, plan to eliminate 3,000 vacant residential buildings over the next three years—rehabilitating 1,500 properties and demolishing an additional 1,500. Besides eliminating dangerous, blighted structures, this will mean increased opportunities for quality housing and the creation of jobs and job training opportunities. It will serve as a model for cities facing similar issues.
In 2012, United Water, through CGI America, partnered with institutional investors to provide Nassau County, N.Y., and the city of Bayonne, N.J., with private capital to pay down accumulated debt and invest in their municipal water systems. In exchange for resident-paid user fees, United Water will operate and repair the systems, while the municipalities will maintain ownership and regulatory oversight. Bayonne has already cleared $150 million in debt, which upgraded its bond rating and is helping the city make investments to increase economic growth. These kinds of creative approaches will repair outdated infrastructure, create a cleaner environment, and expand the economy.