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State Infrastructure Investments Pay Off Now and Later

May 18, 2016 at 2:00 PM

Just in time for Infrastructure Week, a new report from the American Society of Civil Engineers highlights the deterioration in our roads, bridges, water treatment systems, and other infrastructure. As our recent report explains, states and localities partners are neglecting investments that are both overdue and economically beneficial. 

State and local spending on infrastructure has fallen to a 30-year low.  Now’s the right time to reverse that trend, with revenues returning in most states to pre-recession levels, interest rates for debt-financed projects at low rates, and the job market still recovering from the recession.

Investing in infrastructure would improve state economies, now and in the future.  In the short term, it would create jobs for Americans who are working less than they’d like and making less than they need to get by.  Large public construction projects can create hundreds of well-paying jobs, both to build and maintain them. 

Projects that bring money into a state because they’re funded with federal dollars or through borrowing (as most state infrastructure projects are) can be particularly effective at boosting employment and earnings.  These dollars further improve the local economy as workers spend their paychecks in the area.  Purchases of materials and equipment from in-state companies have a similar effect.

In the longer run, higher-quality and more efficient infrastructure will boost productivity in states that make the needed investments, lifting long-term economic growth and wages. 

States miss these opportunities if they try to grow their economies solely by cutting taxes and offering corporate subsidies, which spur little if any growth and take money from schools, universities, and other public investments essential to producing the talented workforce that businesses need. 


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