The Washington, D.C.-based Bipartisan Policy Center proposed what it called a new financing "model" that it says could sharply increase private-sector investment in transportation projects and other infrastructure through a series of policy changes.
In a proposal labeled "A New Model to Modernize U.S. Infrastructure," the BPC first outlined the benefits of investing in aging systems and bring them up to date. But it acknowledged the resistance to using public, tax-generated funds to close the funding gap.
"Investing in our nation's roads, rails, bridges, ports, waterways, aviation, and civic buildings creates jobs and prosperity," said an introductory message from a panel of BPC political advisers. "Over the long term these investments also make Americans safer and healthier, allow our economy to operate with maximum efficiency, and capture innovative technological advances.
"The public sector, however, lacks the resources to make these necessary investments. As a result, our infrastructure, the very foundation of our communities and economy, is literally falling apart."
The report's executive summary said: "There are many competing demands for public resources – healthcare, public pensions, and existing debt – that are expected to overwhelm public budgets. If we are to meet our nation's future needs and preserve our American quality of life, the public sector cannot continue to cover the cost and absorb the risk of our degrading infrastructure alone."
The report also said that the private sector has resources to deploy, and is doing so in other countries, but is much more limited in this country. "There are a number of barriers preventing the investment of private capital into U.S. infrastructure projects. As a result, America is leaving dollars on the table as capital flows to more receptive shores.
The group recommended a number of actions to give private investors more certainty about projects, so they can better assess the risks and rewards of putting their own money into those efforts.
That includes better showing the public benefits – as well as costs and risks – of proposed construction work and building broad support, to reduce the political risk of it later being canceled or delayed. The report likewise identified lengthy permitting processes as adding to the risks for potential investors.
Among other steps, the BPC called for states and local governments to "set up a dedicated development fund to provide financial assistance to meet the upfront costs of public-private partnerships."
It also called for project sponsors to identify revenue "to leverage financing," such as user fees, tolls or specific taxes that would help repay the upfront costs.
It called for more use of asset-backed securities to help pay for projects, and for the federal government to authorize tax-incentivized bonds linked to infrastructure.
And at both the state and federal level, the BPC urged "action to provide long-term, stable infrastructure funding, derived from the breadth of revenue options available, such as motor fuel tax, vehicle miles traveled charge, facility use charge, sales tax, rate payer fees and license surcharge."