Mayors, senators call for infrastructure plan, financing.

A panel of mayors called on Congress last week to develop a national strategic focus for improving the condition of the nation's infrastructure and help find creative solutions for funding it.

In testimony before the Senate Banking Committee, local officials detailed the impact of infrastructure on theft local, regional and national economies and the need for a strong federal role to help local taxpayers fund it. According to the Congressional Budget Office, in 2004 the federal government financed roughly 15 percent of the total capital spending on transportation, utilities and other public facilities while state and local governments funded 42 percent with the private sector funding the balance.

"These mayors, like their colleagues across the country, bear the lion's share of responsibility for maintaining the roads, bridges, mass transit systems, drinking water systems, wastewater removal systems and other vital 'components of our national structure," said Sen. Christopher Dodd (D-Conn.) chairman of the Senate Banking Committee.

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New York City Mayor Michael Bloomberg, co-chair of Building America's Future, a coalition of state and local officials he founded with Pennsylvania Gov. Ed Rendell and California Gov. Arnold Schwarzenegger, called for a new national focus on infrastructure investment, warning that that the U.S. is "facing an infrastructure crisis in this country that threatens our status as an economic superpower--and threatens the health and safety of the people we serve."

In 1980, the federal government was spending 6 percent of its entire domestic budget on infrastructure. Today, that figure is less than 4 percent. As a result, state and local governments are now responsible for $3 out of every $4 spent on public infrastructure.

Kansas City, Mo., Mayor Mark Funkhouser highlighted the importance of the nation's metropolitan communities as the incubators of the 21st century American economy.

"In order to provide meaningful support to the national economy, then we must sustain and improve the quality of life within our metro communities, and provide a sound foundation upon which to continue to produce and innovate," Funkhouser told the committee. "Yet as municipalities, we simply are unable to meet the infrastructure needs of our region on our own.... The expense is far too large and the challenges too far reaching to be adequately addressed by local and municipal governments alone. Only the federal government has the resources to match the scale of problems."

Jacksonville, Fla., Mayor John Peyton noted the importance of metropolitan areas as economic centers critical to the national economy, and the benefits of physical assets such as a major rail and air cargo facilities and expanding deep water ports to moving millions of tons of raw materials and manufactured good to destinations across the U.S.

"However, the financial burden is increasingly being assigned to local and state governments," said Peyton. "While I recognize that infrastructure needs exceed available funding at all levels--federal, state and local--there must be a more realistic balance and prioritization for federal investments."

Atlanta Mayor Shirley Franklin noted, "We mayors are on the front lines, coping daily with frequent shortfalls in our aging infrastructure while we struggle to address the staggering costs of repairs and more often than not are unable to even consider the expense of replacement of these critical systems.... Local governments cannot do it alone."

Sen. Chuck Hagel (R-Neb.) noted that the mayors testifying at the hearing are working on major infrastructure improvements in their cities while facing fiscal constraints. "These leaders are making these investments--under tight budget pressures--because they understand that investing in our infrastructure is an investment in our future economic well-being," he said.

Sens. Dodd and Hagel have proposed creation of a National Infrastructure Bank to help finance infrastructure costs. The infrastructure bank would establish a board to rate different infrastructure projects on the basis of merit and invest in those projects of regional and national significance.

It would have authority to raise capital by issuing up to $60 billion in tax credit bonds and give loans, grants or loan guarantees to states and local governments for major infrastructure improvements.

"This proposal will not solve all of our problems, but we believe that it will go a long way in addressing many of the concerns," noted Hagel. "As we face the prospect of significant long-term budget deficits, a weakening economy, decreasing tax revenue, and increasing unemployment, it is clear that the current ways by which we invest in our nation's infrastructure have become as obsolete as many of our infrastructure systems themselves."

Sens. Dodd and Hagel hope to move their legislation next month. Several additional proposals for infrastructure funding have been introduced in the House.