Infrastructure spending should benefit the public good, but Donald Trump’s plan benefits private interests at the expense of the rest of us.
One of the very worst ideas getting championed by our erratic new President — a man who has never worked in government and quite obviously never considered the meaning of “public service” — may be the notion of depending on private companies to repair America’s decaying infrastructure.
This reliance on private companies proposal raises all sorts of practical questions, of course, but when we peel back all of the reasons to suspect that the Trump administration is manipulating our genuine need to repair our roads, bridges, and electrical grid to leverage another giveaway to the rich and connected, we find a profound issue that generally gets ignored: Who should own and benefit from our country’s infrastructure?
I was prompted to focus on that question by an article in Engineering News-Record (not, I confess, a periodical I regularly read. My husband, a retired architect, subscribes). The article described a challenge against the Gordie Howe International Bridge now being built between the United States and Canada.
This challenge to the authority of Michigan’s governor to acquire land for the approach to the bridge was brought by the Moroun family, private owners of an existing bridge that also connects Detroit with Windsor.
Supporters of the new bridge argue that their project will open up a badly needed U.S.-Canada commercial transit point and boost jobs in Detroit. But the Moroun family has estimated that its own bridge could lose 75 percent of its traffic and might have to close if the new bridge opens.
What is really being lost here is the public interest. Infrastructure should primarily serve public needs, not generate profits for enterprises owned and controlled by companies that care far more about their own bottom lines than the common good.
That’s not to say that private interests can never build roads or bridges to augment those constructed with our tax dollars, but those efforts should be undertaken with a clear understanding of the primary purpose of the network they join and the risks they assume.
The Michigan situation hardly rates as an isolated case.
America’s prolonged anti-tax hysteria has meant that local governments — desperate for revenues to provide public services — have increasingly sold off public assets. In my home city of Indianapolis, the city entered into a fifty-year “lease” of its parking meters, trading control of its curbsides and parking rates for upfront cash. The results — which haven’t been pretty — offer an object lesson in why infrastructure should be civically owned and operated.
In Indianapolis, parking rates skyrocketed, parked hours expanded, and the number of paid spaces increased after the city leased its parking meter operations to a private company. But the city is reaping only about a quarter of the dollars the private vendor projected when it paid the city $20 million for the rights to operate the meters until 2061.[pullquote]America’s prolonged anti-tax hysteria has meant that local governments have increasingly sold off public assets.[/pullquote]
Decisions about where to place meters and how to price them have an enormous impact on local businesses and residential neighborhoods. These decisions require flexibility in the face of changing circumstances. These decisions should most definitely not be held hostage to contracting provisions aimed at protecting a vendor’s profits.
The Indianapolis contract profited the vendor at the expense of citizens. More often than not, new construction interrupts adjacent parking. If a city is managing its own meters, it can choose to ignore that loss of parking revenue or decide to charge the developer, based upon the city’s best interests.
Street festivals and other civic celebrations also require that meters be bagged, and cities usually have good reasons not to charge the not-for-profit or civic organization running the event. The Indianapolis contract requires the city to pay the vendor whenever such interruptions disrupt its projected meter revenue.
Why couldn’t Indianapolis have retained control of its infrastructure and issued revenue bonds to cover the costs of the necessary improvements? Interest rates, after all, were running at a historic low at the time, making bonds an even more advantageous option. And if city administrators felt too inept to manage parking, they could have created a Municipal Parking Authority and hired people competent to do so.
Indianapolis really had no compelling reason to enrich private contractors and reduce (desperately needed) City revenues.
So-called “public-private partnerships” can at times be useful and appropriate. But other times they amount to theft from the public purse. It behooves us to distinguish between those situations and to remember that constructing and maintaining an infrastructure owned by and operated for the use of all our citizens, rich and poor, makes up a foundational obligation of government.
Sheila Suess Kennedy teaches law and public policy in the School of Public and Environmental Affairs at Indiana University Purdue University at Indianapolis. Kennedy, a frequent lecturer, public speaker, and contributor to popular periodicals, also writes a column for the Indianapolis Business Journal. She blogs at www.sheilakennedy.net.