Business Roundtable President John Engler, the former governor of Michigan, and Howard Dean, former governor of Vermont and Democratic national chairman, saw eye-to-eye on at least one topic today at a conference sponsored by Governing Magazine -- infrastructure.
The two participated in a moderated discussion, "To Tell the Truth: Former Governors Chime in on the State of the Union, the upcoming elections, strategies for states and localities and more…," at the two-day program, "Outlook in the States & Localities Conference - 2012." The magazine led its coverage with the former governors' comments on political leadership and campaign finance, while other topics included nuclear power and health care reform.
It was on infrastructure where the former governors came closest to sharing the same point of view. Asked about the issue, they responded:
John Engler: I think infrastructure is a major challenge. I represent a group of leading companies from around the world, but primarily they’re all headquartered in the United States. They care about the country, and there’s a recognition that failure to invest in infrastructure does hurt your competitiveness over time. Over longer periods of time, it will hurt more.
So whether it’s ports, or whether it’s roads, or air traffic control …You’ve got to break it down. It’s not a single thing.
I read a number of the State of the State addresses of the governors. Gov. Shumlin up in Vermont, he was bragging about they had significant hurricane damage, and how they cut the red tape and rebuilt the highways in record time. They didn’t do it with disregard of the environment, but they chopped through a whole bunch of rules, old barriers and got the projects done. You need that kind of attitude around the country.
The air traffic control system in the country is a $30 to $40 billion investment. That actually has a return on investment. There’s no taxpayer funding to do that. That needs the executive will to get it organized and get it done….If a state or company were in charge of that, that’s a capital project, you’d bond it, you’d do the whole project, then you’d export the technology around the world. It’s sort of everything you need.
You’ve got the Army Corps of Engineers that owns power generating facilities up in the northwest – all of the Bonneville [Power Administration]. That’s a revenue stream that can be bonded, so the Corps ought to be using that to upgrade the locks and dams along the Mississippi River, which are undersized today. Again, there’s an ROI on that. …
You simply have to organize your work. If you want to have czars in charge of things, these are the things that need somebody in charge of. So let’s cut the red tape, let’s get the decisions made and get moving.
On roads? I was a governor who signed a gas tax increase, worked very hard to get it passed in the legislature. The federal gas tax hasn’t’ been raised in a long time. I think there’s a pretty good business case to be made. You’re seeing states trying to figure out how, with tolling – or Indiana, with the assets sale and then the bond issue. There’s some creativity there, but the federal process can’t even pass the highway bill. And now, they’re passing highway bills that are funded in part by borrowing the money to give back to the states. That’s a pretty silly long-term strategy for the country, and frankly, won’t get very far in building infrastructure. …
Infrastructure, there’s a lot to it, but we’re way, way underperforming in this country.
Howard Dean: Quickly, and this is an area where I suspect John will agree with – public-private partnerships. If people don’t want taxes, then they’re going to have to have user fees, and what better user fees than to put a system in place with an ROI. There’s lots of things.
Public-private partnerships are an interesting example of what happens when people start thinking.
That’s an idea that started on the right, and migrated to the center. There’s a lot of ways to do it. Unions, now want union pension plans invested in these, unions are interested in public-private partnerships.
This is something we need to do. We can’t pass taxes because of everybody doesn’t want taxes, but they also want more services. Public-private partnerships, ROI, that’s something you’re going to see, and you’re going to see that on a bipartisan basis.
Again, it’s going to start with the states, and it’s going to start with the municipalities. And it’s started already. And there’s been some enormous screw-ups. Chicago sold its parking meters and then used the money to plug a hole in the budget. You can’t do that. You’ve got have some people who understand you don’t use operating revenues and mortgage the future to plug an existing hole in the budget. You keep the revenue stream ongoing.
But there are ways to do this right, and I think we’ve learned a lot of things over the last 10 years through failures and some very, very good successes.
Engler agreed, noting that the interest costs involved in financing projects was now very low.
* Howard Dean on the potential Supreme Court ruling on the Affordable Care Act, saying it was just conjecture, "My own bet is that by 5-4 the mandate gets declared unconstitutional and by 5-4 it’s severable." But you don't need the mandate to make the law work, Dean argued, downplaying the problems involved in free-riding.
Topics: Health Care Reform.
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