Summit sends Governor letter outlining strategy for infrastructure crisis

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California Route 180 (Photo Credit: SpecMode/Flickr)

The three leaders of California Economic Summit’s Infrastructure Action Team offered the Summit’s support to Gov. Jerry Brown’s administration this week in two letters detailing commitments (PDF) made by regional leaders at the 2013 California Economic Summit in Los Angeles. The letters outline the Summit’s comprehensive new strategy for taking on the state’s looming infrastructure funding crisis—one of seven initiatives the Summit is advancing in the coming year.

“As the Administration prepares [next year’s] budget and finalizes its infrastructure plan, we encourage you to consider the recommendations of several hundred regional leaders developed through the 2013 California Economic Summit,” wrote the Summit’s infrastructure team leaders—Mark Pisano, senior fellow at the USC Sol Price School of Public Policy; Sean Randolph, president and CEO of the Bay Area Council Economic Institute; and Kim Walesh, director of economic development and chief strategist for the City of San Jose.

The letters detail the “daunting fiscal challenges” facing California’s aging infrastructure system—an area the state auditor recently put in the same “high-risk” category as California’s pension and health care systems. Pisano, Randolph, and Walesh also share the growing sense of urgency among the 450 regional leaders who participated in the Summit about the importance of finding a solution—and the Summit leaders’ willingness to collaborate with the governor’s office to develop them.

The Summit has offered its support, in particular, to the two officials responsible for developing the state’s immediate response to its infrastructure challenges—Michael Cohen, director of the Department of Finance (who is already at work on the governor’s January budget proposal) and Brian Kelly, head of the state’s transportation agency (who created a workgroup earlier this year to help the state set transportation spending priorities, a task that is nearing completion).

The Summit letters encourage the Brown administration to think broadly about potential solutions—and to consider the Summit’s four-point strategy for (1) focusing the state’s infrastructure investments on results, producing greater value for the dollars invested; (2) building public confidence in infrastructure spending; (3) accessing adequate revenue; and (4) providing the tools needed to utilize private investment.

A plan and a team ready to collaborate

“While the plan’s proposals are important, the commitments made by regional leaders to support these efforts may be even more so—with many of them offering opportunities for collaboration with the Administration in the months ahead,” write Pisano, Randolph, and Walesh.

The letters highlight three major themes, in particular, that may be relevant to the work the Department of Finance and Transportation Agency in the months ahead:

  1. Education and advocacy: At the Summit, participants committed to supporting a wide-ranging educational and advocacy effort to raise awareness about the importance of investing in California’s infrastructure system—transportation, in particular. They pledged to work together to highlight the value these investments provide to individuals and businesses in the state and the cost of doing nothing—as well as the possibility of alternative financing methods—in order to build public confidence and buy-in.
  2. Developing performance measures: Regional and city leaders also committed to supporting the administration as it develops metrics for measuring infrastructure performance—how many jobs the infrastructure creates, for example, as well as improvements in the sustainability of our communities and other quality-of life metrics.
  3. Accessing adequate revenue: While commitments were made to work with the State Infrastructure Bank to create a pipeline of projects that could attract private investment, Summit participants also pledged to support efforts to help the State access public resources the transportation system needs. These include the following commitments:
  • Expanding use of benefit assessments: Commitments were made by regional leaders to encourage the creation of a new set of institutions, “Benefit Increment Financing Districts,” that would use existing benefit assessment authority to capture user payments for infrastructure investment. Summit participants also pledged to work with the State Infrastructure Bank to identify regional opportunities for adopting this approach.
  • Lowering vote thresholds: Many regional and city leaders at the Summit committed to support efforts to lower the local vote threshold to 55 percent for increasing local taxes and approving General Obligation bonds dedicated to infrastructure.
  • Special fund loan repayment: Several regional leaders committed to assisting the state in efforts to identify and seek repayment of loans made by transportation special funds to the General Fund that are currently part of the “Wall of Debt”—a figure some estimate could be as high as $1.5 billion.
  • Replacing redevelopment authority: The Summit plan also identifies several proposals for replacing redevelopment authority, with Summit participants supporting an approach that allows local governments to finance economic development by reinvesting tax-increment growth in the infrastructure that supports it.
  • Raising the VLF: Many regional and city leaders also supported the idea of new ad valorem financing on vehicles to support operation and maintenance of the state’s transportation system. (This recent piece on the Summit website explores how ballot language filed in November by two of California’s largest transportation coalitions proposes to do so.)


Justin Ewers

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