The federal government just passed a $ 1 trillion “infrastructure bill” that, for a while, will increase the amount of federal funding for infrastructure. Most of the actual spending, however, will be continue to be done by state and local governments, just as has been the case in the past. The modest increase in spending, adjusted for inflation, is intended to address a backlog of needed projects. But federal funding is only one source of money for state and local infrastructure. State and local taxes are another, and bonds, usually paid off over 30 years, are a third.
The extent of infrastructure varies from place to place. In rural areas the only public infrastructure might be a county or town road, supplemented by power supplied by a rural electrification co-op, and telephone and postal service cross-subsidized by those in cities. Instead of paying for public water, sewer, and solid waste collection, people provide these for themselves. In cities, on the other hand, there may be mass transit, public sidewalks, airports, seaports, public water, sewer, solid waste collection, and in some places public electric utilities. So do low-density rural states spend less on, and receive less in federal funds for, infrastructure? Do states with low past infrastructure spending also have low debts? How are the estimated $1.4 trillion infrastructure spending shortage and the $3.2 trillion in state and local government debt distributed around the country? Read on and find out.Continue reading