Local Projects Should Be Funded Locally

| Tue Feb. 14, 2012 3:23 PM EST

Tyler Cowen points us to Ed Glaeser, who has a bunch of advice about infrastructure spending. I don't agree with all of it, but some of his suggestions seem pretty sound. For example:

DE-FEDERALIZE TRANSPORT SPENDING: Most forms of transport infrastructure overwhelmingly serve the residents of a single state. Yet the federal government has played an outsized role in funding transportation for 50 years. Whenever the person paying isn’t the person who benefits, there will always be a push for more largesse and little check on spending efficiency. Would Detroit’s People Mover have ever been built if the people of Detroit had to pay for it? We should move toward a system in which states and localities take more responsibility for the infrastructure that serves their citizens.

To some extent, federal dollars simply represent a redistribution of money from wealthy areas to poorer areas. I don't really have a problem with that. But it does sometimes promote spending that local residents plainly don't think is important enough to fund themselves even though they could.

For example, I live in Irvine, California, which is a pretty upscale community. However, there are train tracks that run through the middle of town and until a few years ago the crossings were all at grade level. This was, frankly, not a huge problem: maybe a dozen trains a day came through town, and they were mostly short passenger trains that held up traffic for only a minute or so. Nonetheless, we built a multimillion-dollar underpass at one of the crossings, then another one, and now we're working on a third. There were a bunch of reasons provided for this (safety, future growth of train travel, etc.), but there was, I think, zero chance that we would have built any of them if we'd had to pay the full cost ourselves. But we didn't. The state and the feds ponied up about two-thirds of the cost.

Maybe these underpasses will eventually prove to be worth the cost. As a local resident who drives on these streets all the time, I doubt it, but you never know. But what I do know is that even though Irvine is pretty well off, my neighbors and I were very plainly not willing to spend the money it took to build them. We were barely willing to pay 30% of the cost. But if a construction project isn't worth the cost even to well-off local residents, by what measure is it worth the cost at all?

And now, just to disagree with something Glaeser says, there's this:

SPLIT UP THE PORT AUTHORITY: Last week gave us another painful audit of the work by the Port Authority of New York and New Jersey to manage the World Trade Center site. I’m not going to pile on, but this super-entity is too big to succeed. How can the Port Authority possibly focus on tasks such as making New York’s airports more functional when it has so much else on its plate?

I don't know squat about the Port Authority, though I don't doubt for a second that it's a dysfunctional mess. But generally speaking, there's nothing inherently more efficient about ten different $1 billion authorities compared to a $10 billion authority with ten divisions. Splitting up the Port Authority might be a good idea, but you need to make an actual argument for it, not merely assert that it's too big to succeed. Moving around the boxes on the organization chart may sound good, but all too often it's just the last refuge of someone who's run out of good ideas.