Brookings Institute takes a look at infrastructure, funding cuts, financing options

The Hutchins Center at the Brookings Institute has published a nice explainer on public investment, which includes a look at various official definitions of infrastructure, and trends in state and federal public investment over the last decades.

You’ve probably had your day get off to a bad start thanks to a public transportation meltdown, a dive into an unexpected pothole, a circuitous detour thanks to unexpected emergency bridge repair, or other evidences of below-par public infrastructure. If these occurrences seem more frequent, there’s a reason—spending on infrastructure by both the federal government is down, and on the state level, it’s down almost everywhere.

Surprisingly, considering how prosperous some parts of the Commonwealth are, Massachusetts leads New England in the decline in state infrastructure spending. We’ve cut it by over 20%, according to this article, a rate more common in the west, southern states, and rustbelt. Connecticut, Vermont, and Rhode Island have increased infrastructure spending; decreases in Maine and New Hampshire were under 20%.

The article proposes two fixes and the first is an infrastructure bank, and while they imagine that bank being an independent federal agency, there’s no reason why a state can’t step up to set up such an institution on their own, as we propose Massachusetts do. Proponents of a federal infrastructure bank point to better coordination and higher-quality projects being selected. We say that the biggest wins for Massachusetts towns would be the ability to access lower-cost financing for projects in a way that would keep municipal money invested in Massachusetts, instead of Wall Street.

But an infrastructure bank makes sense for Massachusetts beyond the immediate economic benefits of lower costs to municipalities and more good-paying jobs. The more easygoing among us can deal with an extra 20 minutes in traffic. Organized types can just take out their phones and catch up on office email while waiting to squeeze onto the next train (if it comes). But it’s much harder to deal with decaying roads and bridges if you have a long commute, time is tight, and your job pays by the hour. It’s even harder to shrug off leaky roofs or failing furnaces at your kids’ school. Infrastructure investment reaps important, but intangible, good: less day to day stress, a bolstered sense of common good, and a lot more pride in your town and state.

Public banks and sanctuary cities: local finance for better decision-making?

Post-election, Donald Trump has threatened sanctuary cities—municipalities that have formally stated they will not detain individuals for violating federal immigration laws—with the loss of federal funding. Santa Fe is one such city facing the potential loss of 2% of their budget, about $6 million. In an NPR interview, Mayor Javier Gonzales said the loss would be “difficult to absorb,” but they will if they have to, out of respect for a 400-year tradition of welcoming immigrants. In Massachusetts, Somerville’s mayor has voiced similar sentiments, facing a 3% cut. But other Massachusetts cities will be possibly losing higher percentages, and with smaller tax bases, will really struggle to balance budgets.

Proponents of sanctuary cities emphasize that letting local or state police do their jobs—a job that requires cooperative interaction with all community members—without also having to do the job of federal immigration investigators is simply common sense. This is why after the election, police chiefs in cities across the country pledged to stand behind sanctuary city policies.

So is there a way to respect local sanctuary status without breaking a municipal budget? As Matt Stannard and Mark Armstrong of the Public Banking Institute have pointed out, public banks could help meet budget shortfalls by reducing debt costs and paying interest directly back to state (or city) treasuries, and by directing credit toward projects, sectors and services that will have the biggest positive impacts on local economies.

It turns out that many sanctuary cities “have strong movements for public banks…Public banking movements exist in San Francisco, Los Angeles, Portland (Ore.), Denver, Washington D.C., New York City, and Seattle, as well as in states like New Jersey and Vermont, which contain sanctuary cities.”

Public banking is a good idea regardless of how a city or state uses the money they save. For cities looking to preserve local autonomy on any issue—from policing to environmental monitoring and remediation to alternative energy—a public bank could, as Stannard and Armstrong write, “provide a financial foundation for municipalities charting their own courses in the face of an aggressive national executive.”