Why Cities Struggle to Fund Infrastructure

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As President Trump and Congressional leadership emerge from a strategy meeting at Camp David this week, the infrastructure debate is heating up. There is now little doubt: Trump, Ryan, and McConnell are expected to announce that they intend to prioritize infrastructure on their 2018 to-do list.

For cities, the coming focus on America’s long infrastructure to-do list will come as a relief. City leaders know the horror stories of emergency repairs and incidents — but also the looming needs as very old systems approach the end of their lifespans.

To tackle this long-awaited issue, Congress will need to leverage every funding tool in their arsenal. A significant amount will be needed to make a dent in the $2 trillion dollar infrastructure gap, which been accumulating for some time. They’ve also stated they will be looking to states and cities to use all the tools at their disposal as well.

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However, as they start digging into the details, Congress may be surprised to find that many cities are actually missing some of the most common tools to help raise local funds for infrastructure. That’s the simple fact: Not every city can pass a sales tax, or put a fee on vehicle registration, or enter into a well-thought-out public-private partnership — even if they wanted to.

These tools are missing from their infrastructure toolbox because of a variety of factors outside of a city’s control — often because of their state’s structure, limitations placed on certain taxes at the state level or perhaps due to a lack of statewide legislation that allows them to enter into public-private partnerships. A lot has been made of cities that raise their own funds to “self-help” for infrastructure through these mechanisms, but often they are the exception rather than the rule.

To help illustrate this, in addition to our comprehensive report, Paying for Infrastructure in a New Era of Federalism that took a state-by-state look at limitations, NLC’s City Solutions team has taken a sample of fifteen cities across the country to highlight the limitations that exist in a new brief, Missing Infrastructure Tools for Cities.

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These resources highlight what we all know — states and the federal government must make sure all tools to finance infrastructure are available to cities. Cities are financing two out of every three infrastructure projects, but a strong federal partnership is essential to create a seamless, integrated and efficient network of infrastructure that meets our national economy’s needs.

The needs are vast, and a more collaborative partnership is needed now to correct course. The federal government must invest significantly as a national economic priority, states must lift their limitations on cities, and cities must continue to identify the where infrastructure needs are greatest and fulfill them with their partners.

As Congress puts pen to paper on a package that can draw bipartisan support, cities will continue to be a significant partner. Hopefully that partnership will be met with equal commitment from Washington.

Brittney2_readyAbout the Author: Brittney Kohler is NLC’s Program Director for Transportation and Infrastructure. 

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