Tag Archives: infrastructure finance

“We Will Build the Information Superhighway”

That’s what lobbyists for the telecommunication companies promised in the mid-1990s, in the run up to the Telecommunications Act of 1996. What the industry’s lobbyists were trying to beat back was municipally owned telecommunications utilities, which are far more common in electric, gas, and even cable television than those living in urban New York might expect. State- and local government- owned electric and gas utilities employed 88,343 full time equivalent workers in the U.S. in FY 2014, according to U.S. Census Bureau data. Excluding water and sewer utilities, private utilities employed 500,000 people in 2014, according to the Bureau of Labor Statistics.

The telecom companies got their way. There would be no equivalent of the federal government’s rural electrification program for high speed internet. So 20 years latter did the industry keep its promises, or was the general public bamboozled by lobbyists and campaign cash?

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Sold Out Futures By State: Debt and Capital Construction Investments, Census of Governments Data

When people think about America’s debt problem, they generally think about the national debt, which is to say the on-the-books debts of the federal government held by the general public. U.S. debts in general, however, have soared from a total of less than 170 percent of GDP from the 1950s to the early 1980s to nearly 350 percent of GDP in 2008, as I noted here.

https://larrylittlefield.wordpress.com/2015/03/18/the-american-economy-hair-of-the-dog-means-more-debt-for-the-doomed/

Consumer debt soared. Business debt soared. And state and local government debt soared, from 12.4% of GDP in 1980 to 20.6% of GDP in 2009, before dropping back. While state and local governments are generally required to run balanced budgets, they also tend to have separate capital budgets, under which money is borrowed for long-term capital investments. While state and local government debt has been trending up, however, infrastructure expenditures have trended in the other direction. The result is a sold-out future.

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Infrastructure: Census of Governments Data

The United States, based on press reports, is heading for an infrastructure crisis that today’s politicians are desperate to ignore, in the hopes that their generation can avoid paying for it and pass on before the consequences hit those coming after. In the suburbs and Sunbelt the post-WWII infrastructure, often built with federal money redistributed from older cities, is reaching the point where substantial rehabilitation and replacement will be required. But no one wants to pay. In New York State, one sees this in the financial drama over the replacement of the 1954-built Tappan Zee Bridge, and the insistence that tolls be kept far lower on the new bridge than in the Port Authority Crossings to the south, or the Triborough Bridge and Tunnel Authority crossings within New York City.

Even where the infrastructure has been maintained money has been borrowed for past maintenance, and the interest on that debt now consumes revenues that were supposed to be reserved for transportation. There is no real money for the next MTA Capital plan, most of which is maintenance. Almost all the money being paid into the New York State transportation trust fund for roads and bridges is going to past debts, as is all the money going in to the New Jersey transportation trust fund. Twenty years of selfishness by Generation Greed politicians has come home to roost, and the wolf is at the door. And yet their more recent replacements – New York City Mayor DeBlasio, New York State Governor Cuomo, New Jersey Governor Christie, President Obama, and whoever will follow the indicted and should-be indicted members of the state legislatures and Congress – want to do nothing but close their eyes and hope it goes away. It is in this depressing context that the following post will review data on Infrastructure revenues and expenditures from the U.S. Census Bureau’s Census of Governments.

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