California is the most populous state in the Country; if it were a country it would have the world’s 8th largest economy. So it’s probably no surprise to hear that a new study has found California needs to spend $853 billion to improve its transportation, water and K-12 schools infrastructure over the next decade just to keep up with expected growth in the economy and the population. The question is how to pay for these needs and how to prioritize what gets built and when.
The report is the second in a series prepared by California Forward, a group that “distills the work of public commissions and private think tanks and articulate[s] specific reforms to restore the ability of elected leaders to solve problems, public managers to improve results, and voters to hold government accountable for those results”. Here’s a link to their report.
The report discusses the existing revenue sources to fund this infrastructure need and finds there’s a $358 billion gap. And the report itself acknowledges this is likely an underestimate of what is truly needed. The State Department of Water Resources alone estimates the need for $200 billion of new water treatment and delivery facilities over the next 10 years. For transportation the gap is even greater—almost $300 billion in large part due to the failure of the gas tax to keep up with needed repair, reconstruction and development of new roads, highways, bridges and transit systems.
Identifying and prioritizing funding for this vast infrastructure need is not just about where the money is going to come from—we need to look more closely at how we deliver these projects to better allocate the risks of cost, schedule and long-term maintenance and encourage private innovation in ways that will produce long-term benefits. This report is the second in a series—another is expected and we would encourage the authors to consider how the private sector can be more involved in helping to solve the problem through the use of private finance techniques and innovative contracting methods, such as long-term, performance based public-private agreements.