Sun Editorial Calls For Innovative Infrastructure Funding Proposals

As previously reported by Conduit Street, the recent collapse of a bridge in Washington State has raised infrastructure funding concerns at both the state and the federal level.  A May 28 Baltimore Sun editorial highlights the slow decay of the nation’s roads and bridges and reiterates the need for a strong federal transportation funding program.

The problem is that U.S. funding for transportation and other types of  infrastructure has not kept pace with inflation or the country’s needs. …
But [state funding efforts] surely won’t be enough if the federal government abdicates its  historic role in financing transportation and other public works projects. The  federal Highway Trust Fund remains in danger of going broke this year, chiefly  because Congress has not seen fit to raise the federal gas tax in two decades.

Recognizing that an increase in the federal gasoline tax is unlikely, the editorial instead supports a proposal that would allow private companies to guarantee transportation funding bonds in exchange for lowering the costs of repatriating overseas holdings.

Make no mistake, the federal government’s 18.4-cents-per-gallon motor fuel  tax isn’t likely to be increased any time soon.  …

But there are some alternatives worth exploring. One particularly promising  idea came to light last week from an unlikely source — Maryland’s newest  congressman, freshman Rep. John K.  Delaney. A Democrat with a background in finance who represents the  6th District, which runs from Montgomery  County through Western Maryland, Mr. Delaney is lead sponsor of a bill to  create a $750 billion infrastructure fund financed through bond sales.

But here’s the rub. Those 50-year bonds with a 1 percent interest rate  wouldn’t be guaranteed by the federal government but by private companies  looking to repatriate overseas holdings.  …

Mr. Delaney’s Partnership to Build America Act would set up an auction in  which U.S. corporations would bid down the price to repatriate their funds. If,  for instance, the winning bid was a 4-to-1 ratio, a company like Apple would  have to purchase $1 in bonds for every $4 repatriated — the equivalent of an 8  percent tax rate.

The editorial argues that such innovative ideas are needed to generate funding for transportation and other necessary infrastructure.