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Smarter spending key to improving U.S. infrastructure

While the current conditions of transportation and water infrastructure funding in the United States are not as critical as what is widely perceived, a new study has found that priority shifts and policy changes are needed on a local, state, and federal level for more effective spending.

Research from the RAND Corporation has revealed that just a 2.5 to 3 percent annual spending increase above the $235 billion which is currently spent on transportation and water infrastructure could eliminate existing maintenance backlogs by 2030.

According to the study, a national consensus on capital spending priorities is needed to target strategies to meet 21st century needs, while also taking into consideration the varying needs of urban and rural areas.

State and local governments are primarily responsible for building and maintaining infrastructure such as highways, bridges, water and sewage treatment, airports and ports. The RAND study suggests that these state projects need federal support through tax advantaged financing, efficiency improvements in regulatory processes, and research and development.

“Spreading federal dollars around to fund short-term, ‘shovel-ready’ projects without a sense of national purpose or priority will not get the nation where it needs to be,” said study lead author Debra Knopman. “The federal government should focus on maintaining and modernizing vital federal infrastructure and on targeting nationally significant projects that are beyond the capacity of individual states and cities.”

Federal assistance could be provided through direct spending or through the tax code. The researchers recommend for Congress to preserve the federal tax exemption on interest earned from municipal bonds for at least the next ten years, reinstate taxable Build America Bonds, and experiment with other financing alternatives that keep capital flowing so that state and local agencies have sustained and reliable capital for building projects.

RAND researchers also suggest investing in advanced technologies to support newer construction methods that would utilize more durable and sustainable materials and sensor technologies to benefit maintenance. Furthermore, the researchers say that federal funding should require projects to focus on resilience to natural disasters and climate change in order to reduce the need for additional spending in the future.

By Chrissy Sexton, Staff Writer

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