Infrastructure 2012 Report Highlights Innovative Solutions at State, Regional and Local Level

Constrained public budgets and a growing recognition at the local level of the importance of infrastructure — combined with lack of action at the federal level — are causing states, regions and cities across the United States to seek innovative infrastructure approaches and solutions. Local governments are utilizing a range of strategies, including ballot measures taken directly to the public, increased utilization of technology and pricing and public-private partnerships, according to Infrastructure 2012: Spotlight on Leadership, recently released by the Urban Land Institute (ULI) and Ernst & Young LLP.

This year’s report looks at an overall decline in infrastructure funding globally, and it focuses on funding solutions underway in the United States. Even as efforts to increase infrastructure revenues at the federal level remain stalled, states and localities are looking at other ways of overcoming fiscal woes in an effort to move forward with projects that can lay the foundation for economic growth. State and local governments are funding critical infrastructure building or refurbishment needs with increased sales or gas taxes, bond issues and user fees, including tolls. Public-private partnerships are a growing part of the equation.

Infrastructure 2012 notes that in many localities, people are voting to raise taxes for infrastructure investment. From 2008 through 2011, ballots allocating funds to transit capital or operations had a 73 percent success rate. More than a dozen states have raised fuel taxes over the past year, and drivers nationwide are accepting higher tolls for roads and bridges. Local governments are taking advantage of tax increment financing and special assessment districts as well as public-private partnerships, while exploring alternative sources of private investment such as sovereign wealth funds and pension plans.

The study highlights six case studies showing how local and regional governments are moving forward with much-needed infrastructure investments such as transit, ports, bridges, roads, parks and water supply. “Global economic competitiveness demands new kinds of regional entrepreneurship,” the report states, noting that each of the case studies can provide insight and inspiration for other localities seeking infrastructure solutions.

Cited examples include:

• North Carolina’s Research Triangle is raising local funds for a planned regional transit system spanning three counties. In late 2011, one of the three counties (Durham) passed a ballot referendum to fund its portion of the system; now the other two must follow suit.
• Ballot measures also are being used in Oklahoma City, which has achieved success with bundling proposed civic projects into short-term, focused packages and subjecting them to a vote. The city’s third Metropolitan Area Projects initiative passed in late 2009 and is generating $777 million for downtown parks and other civic infrastructure.
• In Los Angeles, strong leadership from public officials and grass-roots campaigning supported a $40 billion ballot initiative, Measure R, to fund critical transportation investments.