Challenges and Opportunities for Innovation in the Public Works ...

While not considered traditional intergovernmental financing, regional infrastructure
programs have also been established to deal with increased capital requirements. In general,
the bulk of the financing for regional programs and authorities, comes from the individual
member communities, with contributions either made from debt issuances or own-source
revenues. As an example, the Massachusetts Water Resource Authority acts as a water and
sewer "wholesaler" to over 40 Boston area communities. There are, however, many states that
provide matching funds for some regional efforts, especially in the environmental
infrastructure areas.
Public-Private Partnerships
The significant source of infrastructure finance is the various forms of public-private
partnerships. "Privatization" means different things to different people. It can mean private
ownership and operation of a facility, private operation alone, or something in between.
Privately owned or operated toll-roads, bridges, water and sewer systems, airports and ports
have all been proposed or inaugurated in recent years. When Loudoun County, Virginia was
approached just a few years ago by private concerns armed with a proposal to build and operate a
private toll-road extension, the idea was considered either revolutionary or a throwback to early
Federalist days, depending on the philosophy of the officials. Now, that concept is vigorously
supported by national leaders, and loans for such projects are contained in the federal
Intermodal Surface Transportation Efficiency Act of 1991. In another example of partnership
efforts, governments have entered into relationships with the private sector that have resulted in
large equity contributions from directly affected entities. These kinds of private-sector
solutions help to supplement the increasingly scarce resources available from governments for
infrastructure and are clearly going to continue to be the subject of debate.
Barriers to Financing Infrastructure
Constitutional Restraints
One of the barriers to national solutions to infrastructure problems is the very nature of
the United States. The elaborate federal system of government allows the individual states to
retain tremendous unique institutional powers. This means, in effect, that there must be 50
separate adaptations to each national solution. Each state has its own distinct constitution, and
its own unique relationship with its subordinate units of government. These basically distinct
constitutions create significant differences in infrastructure provision between states and may
contain provisions that retard or complicate that provision.
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