“The Next American Economy”

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According to an article from the New York Times, the city of Chicago is preparing to partner with the private sector to invest $7 billion in transit, schools and parks.  In the article, Mayor Emanuel hints that this is the kind of drastic investment that will be required for “building a new Chicago.”  In fact, the mayor’s efforts might actually be the key to building “the next American economy” as suggested by Robert Puentes, Senior Fellow in the Metropolitan Policy Program at The Brookings Institution during NLC’s Building Cities, Building Futures tour.

In 2011, the National League of Cities, with sponsorship from the Siemens Corporation, held Building Cities, Building Futures (BCBF), a national tour with stops in Houston, Los Angeles, Charlotte, and Chicago, which looked at the impact infrastructure investment would have on local economic development.  One of the focal points of the discussions that took place during the tour was how local governments would finance infrastructure initiatives.  With a transportation bill that’s on its ninth extension, limited funding for water infrastructure investment, and practically no funding for the expansion of a telecommunications infrastructure network from the federal government, cities are scrambling for financing options to maintain and expand their existing infrastructure.

Population growth, a strained transportation system, aging water infrastructure, and a piecemeal telecommunications system coupled with a lack of a comprehensive vision for a national infrastructure network has forced local governments to rely on themselves as they explore ways to meet the needs of their communities and regions.

Public-private partnerships, like the ones taking place in Chicago, are one promising solution to infrastructure investments but there are others as well.  In Los Angeles, a ballot initiative called Measure R that passed with the support of more than two-thirds of county voters.  It will raise $30 billion in new sales taxes over 30 years to finance countywide infrastructure projects.  At BCBF Chicago, we heard from Michael Pagano, Dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago ,who noted other opportunities such as capital markets that are making it easy for governments to borrow at historically low rates.

Today, cities are going to have to really think outside of the box when it comes to how they are going to meet their infrastructure needs.  Even with financing options available, obstacles can arise with federal and state preemptions, lack of political will, and an unclear vision for the future.  These are serious roadblocks that are not only impacting us today but will have consequences for the future.  During the BCBF tour, Robert Puentes talked about how wise investments in the nation’s infrastructure can help achieve national goals from growing exports to achieving energy security and shifting to a low-carbon economy and what the implications of these benefits are.  Infrastructure investment is not merely about building cities, it’s about building a strong national economy that will drive this country into the future.