There was a collective sigh of relief when President Obama signed into law the Fixing America’s Surface Transportation (FAST) Act last December. After all, it was the first comprehensive multi-year surface transportation reauthorization bill to pass Congress in ten years, and it contained a number of innovations and firsts that suggested the possibility of change from the policies of previous surface transportation measures. Other provisions of the act signaled the evolution of key elements of the previous surface transportation reauthorization, the Moving Ahead for Progress in the 21^st Century Act (MAP-21).

But as the dust settles, and serious analysis of the FAST Act emerges, it’s clear that the FAST Act is not so fast, and there is much work to be done to improve transportation policy and to shore up the chronic lack of engagement and commitment by governments at all levels just to put America’s transportation infrastructure in a state of good repair, not to mention in a condition to meet the challenges of a nation whose population is expected to grow by nearly 100 million by 2050.

To its credit, the Congress recognized the need to invest more in infrastructure. But in the end Congress took a pass by barely increasing the levels of funding authorization over levels in MAP-21, and by engaging a number of slight-of-hand maneuvers like raiding the Federal Reserve and anticipating revenue from unidentified or unrealized tax reforms rather than stepping up and actually raising the revenue to fund the nation’s transportation needs.

And to the concept that America’s transportation system is self-supported by its users…with each passing reauthorization, the United States is moving further and further away. The federal gas tax has not been increased since the early 1990s and while total vehicle miles traveled has increased, actual revenue has stagnated and Congress has augmented the highway trust fund with general tax revenue and creative bookkeeping.

In the absence of congressional courage many policy makers and advocates are thrashing around for other funding and financing sources to support the renovation and expansion of America’s transportation infrastructure. Among the most widely funding and financing alternatives being considered are the privatization of existing infrastructure, and the use of public/private partnerships (P3s) to expand or build new transportation capacity.

All of the discussion of these alternatives reminds one of a favorite meme of the late Senator Russell Long (D-LA) who in the heat of tax reform debate in the 1980s attacked anti-tax proponents by declaring, “Don’t tax you…Don’t tax me…Tax the guy behind the tree.” It all begs the question, “whose going to pay to maintain and build America’s infrastructure in the 21^st Century?”

To answer that question, several think tanks and political entities have offered suggestions ranging from live with what you’ve got, to suck it up and raise the gas tax, to candy-coating the sour pill and offering solutions like, “Anew American Model for Investing in Infrastructure,” the recent white paper of the Bipartisan Policy Center’s (BPC) executive council on infrastructure, a bipartisan group of infrastructure, policy, and financial experts.

In actuality the model is more of a strategy for winning public support for infrastructure investment than it is the discovery of a new pot of gold that relieves infrastructure users of the burden of paying for what they use.

The BPC strategy relies on establishing an ongoing collaboration between government and the private sector that is “transparent to the public, focuses on long term costs and benefits, allocates risks efficiently, and puts all available resources to work, whether public or private.”

At its core the principles of the New American Model for Investing in Infrastructure are:

• to make infrastructure investment decisions in a completely transparent manner that incorporates full life-cycle costs…well beyond upfront construction costs;
• to evaluate the cost of not investing versus the cost of investment; and,
• to invite private sector investment in public works projects, and share the risk of the investment between the private and public sectors.

The BPC panel believes that by adopting this model policy makers and private sector investors will transform both how the nation invests and how much it invests. The panel suggests that as a result investment decisions made using this model the country’s growing needs will be met and the nation will be put in a position to effectively respond to the shifting demands of the coming century.   The panel reasons that the more projects completed through this new model, the easier it will be to attract private investment for future infrastructure needs.

The BPC recommendation is not dissimilar to recommendations made by other leading think tanks and policy bodies. In fact, even the FAST Act contained provisions that authorized the consolidation and streamlining of funding and financing procedures at the U.S. Department of Transportation through the creation of a new Build American Bureau. The bureau, as noted in a GLDPartners blog, will be responsible for driving transportation infrastructure development projects by serving as a one-stop center for identifying credit opportunities and grants, and providing access to appropriate credit and grant programs with more speed and transparency.

As an independent international investment advisory firm that creates and executes growth solutions for manufacturing companies, and for public and private logistics and property asset owners and investors, GLDPartners is well positioned to help its clients understand and comply with the current regulatory environment and to seek and find the finite resources to support their projects. Where the regulatory environment imposes onerous requirements, or the funding opportunities are too limited, GLDPartners can pursue regulatory changes, and pursue new funding strategies more supportive of the client’s needs.

GLDPartners’ experience in the public policy arena spans more than three decades and includes regulatory and legislative successes before local, state, and national legislative and regulatory bodies