What's Up With Infrastructure? Who Really Knows.
See the attached CSG Perspective and Market Commentary from FTN’s Kimberly Olsan, edited by Guest Editor, Liz Farmer, fiscal policy writer for Governing.
With the third Infrastructure Week of the Trump Administration now at a close, this week's commentary highlights some of the issues driving the desire for a federal infrastructure policy and what’s standing in the way.
Managing Partner George Friedlander notes that the ill-defined federal role in infrastructure policy to-date is unlikely to be resolved before the next presidential election. Nevertheless, states and localities must still be thinking about how they will address important factors that will affect infrastructure planning such as climate change resilience and adopting new technologies. These costs and preparation will take considerable time, leaving potential project managers reluctant to get started, Friedlander says. “This means state and local governments will continue to be cautious about borrowing for new projects — and leave new issue supply at paltry levels.”
Such a reluctance is a lost opportunity, given the near-ideal conditions for issuers in the current municipal bond market. Partner Joseph Krist highlights several infrastructure projects that could easily be financed through the bond market. Among those: a federal flood mitigation loan plan to support resiliency projects akin to already existing water revolving loan funds. “The structure is there and the market has money to invest,” says Krist. “It should be an easy choice.”
Other infrastructure projects include: a $10 billion investment in Boston’s public transit, a wind farm off the coast of Martha’s Vineyard, toll roads in Georgia and a P3 bridge in Louisiana
Elsewhere: the quibbling over spending in Puerto Rico continues; the sharing economy is cluttering sidewalks and streets; and Rhode Island has launched a new self-driving shuttle service. In healthcare news, Washington state’s payroll tax could help pay for its aging population while wearable medical devices can improve health outcomes but raise questions about patient privacy.
Last, amid a new slew of challenges to Roe v. Wade last week, some red states are inching to the left on other health policies. Montana is sticking with its Medicaid expansion, while North Dakota has decriminalized marijuana and may consider full legalization. “The argument for legalization has been tied to those for criminal justice reform,” says Krist. “In a state as conservative as North Dakota, this is likely to be the driving element that puts legalization over the top.”
For a full report, contact us.