Related Links: Full report: Infrastructure 2012: Spotlight on Leadership


States and localities are getting more active in advancing more infrastructure projects as deficit pressure prompts the federal government to pull back on its public works spending, says a new report on infrastructure trends.

The study, “Infrastructure 2012: Spotlight on Leadership,” released on May 9 by the Urban Land Institute and consulting firm Ernst & Young LLP, also says financial stresses and economic slowdowns have caused some other countries, such as India, Brazil and even China, to scale down their infrastructure funding.

Looking at the U.S., the report’s authors cite several examples of state and local infrastructure efforts. They include a Los Angeles ballot measure that voters approved in 2008 that aims to provide $40 billion for transportation projects; and Chicago Mayor Rahm Emanuel’s three-year, $7.2-bilion plan to reconstruct transportation and water systems and improve parks and schools;

Maureen McAvey, ULI senior resident fellow, says that in the U.S., “The message is: We are seeing more and more dollars generated locally and we’re seeing every possible kind of new fees, new taxes…new toll lanes.”

McAvey adds, “We are looking across the board at new ways of getting money to support our infrastructure needs.”

She says a prime reason why state and local action is important is that “the national situation, from a federal funding standpoint, is gridlocked.” McAvey points to the lengthy delay on Capitol Hill in reauthorizing federal highway and transit programs, which has produced nine short-term stopgap authorizations since September 2009.

Examining the picture overseas, the report notes that in the United Kingdom, tight fiscal policy has forced a reevaluation of infrastructure priorities, and other European countries’ financial crises have also caused public works plans to be put on the back burner.

Even in China, the nation’s massive infrastructure push has been ratcheted down, the study says, because of a fatal crash on a high-speed rail line and an overall economic slowdown.

Malcolm Bairstow, Ernst & Young’s global infrastructure and construction leader, says that when foreign governments seek to boost their national economies, people prefer that officials put money into infrastructure instead of launching stimulative monetary plans, because building public works adds or protects jobs.

But Bairstow observes, overseas politicians and voters have “zero tolerance” for cost overruns on projects.