Why We Should Focus Infrastructure Spending on Urban America

Metropolitan areas are the homes of our economic engines, and that's where the need for infrastructure investment is greatest.
by | March 7, 2014
 

For nearly seven years now, polls have consistently ranked jobs and the economy as the top concerns of the American people, far outpacing non-economic issues and our collective fears of jihad and terrorism. President Obama acknowledged as much in his latest State of the Union address by once again calling for increased spending on infrastructure and training.

Unmentioned, paradoxically, was that if all levels of government actually increased spending in those areas, that investment would primarily be realized in urban settings. It's not hard to see why: The nation's economic engines are for the most part located in its metropolitan regions, the geographical space that houses 81 percent of its population while consuming only 3 percent of its land mass, according to the Census Bureau.

This is not to argue that government policy should only include investment in metropolitan regions at the expense of rural areas. Agriculture, mining and other industrial sectors tend to be located outside metropolitan regions and certainly merit public-policy considerations. Rather, the president had an opening to reflect on the role of metropolitan America as the harbinger of future opportunities, economic progress, and growth and development, but passed it by as if geography did not matter. It does.

Public investment in infrastructure and human or social capital combine to provide a societal foundation for dynamic economic growth and development by connecting the various economic sectors and industries. Innovation, entrepreneurship and patentable ideas are concentrated in metropolitan areas and supported by public investment in infrastructure and human capital. Why is it so difficult, then, to knit together a transformative economic strategy that is explicitly rooted in and mediated by a metropolitan- or urban-focused set of policies?

This is a particularly troubling question in light of the extraordinary costs of deferred maintenance on existing urban infrastructure, let alone the need to invest in new assets. "Shovel-ready" should not be the criterion for public investment, even if it does hold the possibility of stimulating short-term local and state investment and putting money in workers' pockets. The greater need is for the infrastructure that is already in place. Why invest in more and expanded infrastructure when its current state is so poor? Why subsidize sprawl when our fixed assets need repair? A cooperative federal program could leverage local and state dollars to repair or replace deteriorated assets and employ idle hands immediately, with no need for new plans, environmental impact statements or land acquisition.

If new or expanded infrastructure projects are required, there must be an economic demand for those economic activities, and the political entities that gain from them should pay the lion's share of their costs. Local governments should be required to invest an amount that demonstrates the need for the new or expanded assets and to establish maintenance funds sufficient for the life of that infrastructure.

The president's proposal to augment infrastructure investment ought to be a deliberately urban policy to funnel federal, state and local funds into regions and metropolitan areas. The modern economy is not demarcated by the political boundaries of states or cities. Its engines of growth are metropolitan regions.

During the Great Depression, billions were spent to stimulate the economy and build new infrastructure for a heavy-manufacturing economy. Eight decades later, maintenance of an infrastructure serving a networked knowledge economy must trump our voracious appetite to build, build, build.


VOICES is curated by the Governing Institute, which seeks out practitioners and observers whose perspective and insight add to the public conversation about state and local government. For more information or to submit an article to be considered for publication, please contact editor John Martin.

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Michael A. Pagano

Michael A. Pagano is dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago and author of many books and articles on urban finance, infrastructure, federalism and urban development.

ABOUT VOICES

VOICES is curated by the Governing Institute, which seeks out practitioners and observers whose perspective and insight add to the public conversation about state and local government. For more information or to submit an article to be considered for publication, please contact editor John Martin.

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