Moving forward with infrastructure

State and local governments are increasingly adopting “on-their-own” strategies to pay for infrastructure projects, according to a new report, "Infrastructure 2012: Spotlight on Leadership." The report, from the Washington-based Urban Land Institute (ULI) and the financial consulting firm Ernst & Young, found that governments are using bond issues, ballot initiatives, user/toll fees and other strategies to make up for fading federal funding.

Federal infrastructure funding is stalled, as Congress negotiates a long-term transportation plan and reauthorization of the Highway Trust Fund. But many states, regions and cities have decided they can’t wait, according to the report.

In some locales, residents 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.

 In 2011, Durham County, N.C., voters approved a ballot referendum to fund part of a planned regional transit system spanning three counties. In Oklahoma City, Okla., voters approved a series of ballot initiatives to pay for downtown parks and other infrastructure.

Local governments also are exploring private investment as a way to fund infrastructure. The $1.7 billion Chicago Infrastructure Trust, approved by the City Council in April, plans to use private funds to pay for infrastructure projects, including a $225 million energy upgrade of municipal facilities.

“Progress often precipitates from failures — tough times have a way of helping reshape priorities,” said ULI senior resident fellow Maureen McAvey. “Local governments are stepping up to the plate, assuming more responsibilities and leveraging many sources of funding to build the infrastructure to bolster flagging economies and position for the future.”

The infrastructure report is based on research and interviews with infrastructure professionals. It highlights six case studies showing how local and regional governments are moving forward with infrastructure projects.