Title: Why We Still Can’t Afford to Fix America’s Broken Infrastructure | FiveThirtyEight
Headings: Why We Still Can’t Afford to Fix America’s Broken Infrastructure
Why We Still Can’t Afford to Fix America’s Broken Infrastructure
Content: They’re on the hook to pay pensions and benefits to retired government workers, and they borrowed a lot of money in the capital markets in the run-up to the 2008 financial crisis. As a result, they’ve been more focused on paying down debt than on investing in big capital projects — and in some cases, they’re proud of that. Florida’s transportation secretary, Ananth Prasad, spoke with me last week and pointed out that Gov. Rick Scott has paid down $3.6 billion in state debt. In the chart below, showing state debt levels, the apparent spike in 2004 is due to the a revision of the Federal Reserve’s Flow of Funds statistics to reflect a change in data sources, which resulted in municipal debt levels being revised up by $740 billion. To finance big infrastructure projects, state and local governments usually go to the municipal bond market, but in the last few years, they’ve issued few bonds for new capital projects despite historically low interest rates, according to the Securities Industry and Financial Markets Association, a trade group. ( Much of the current municipal bond issuance seems to be refinancing .) The federal government does play a critical role in one area of infrastructure: transportation. Nearly 30 percent of all transportation funding comes from the federal government, with state and local governments making up the rest, according to another recent Pew study . A regular and important source of financing comes from the federal Highway Trust Fund, a program that uses revenues from the federal gas tax to fund state transportation infrastructure.