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: The report was released in April, with data through fiscal year 2013 (which is preliminary and could be revised) and using appropriations for fiscal year 2014. So why aren’t states pulling the trigger on big capital projects? First, states are continuing to struggle with the legacy of the financial crisis, paying down debt they acquired during the boom years. And second, many state transportation projects are in limbo as the federal government’s Highway Trust Fund is expected to run out of money in August, unless Congress replenishes it. State and local governments remain heavily indebted. 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. (