Filling the Gap in Innovative Ways

19 Mar

Chicago Mayor Rahm Emanuel is hoping that public-private partnerships can save the city’s ailing infrastructure. He recently proposed the establishment of a Chicago Infrastructure Trust. The fund would act as a mechanism that would enable the city to leverage resources and find new forms of funding for public infrastructure projects.

Public works projects in Chicago are funded through one of two ways: (1) by borrowing money, or (2) by leasing a city asset for upfront cash and transferring its revenue to a private operator for decades.

The Mayor wants to try a third method; namely, enlisting the help of private investors. To woo these investors, the city hopes to identify stable revenue sources that will provide returns over the long-run. Those revenues may come from user fees, public subsidies, or “a combination of creative funding streams.”

Perhaps unsurprisingly, the plan mimics President Obama’s (currently stalled) National Infrastructure Bank proposal. Like the Chicago Trust, the National Bank was intended to help rebuild critical infrastructure like roads, bridges, and fund mass transit.

While Mayor Emanuel is confident that his proposal will help fund public works projects, his recent pitch for the development of the Trust has raised some eyebrows. The backlash caused by the privatization of public assets (read: parking meters) is still fresh in the minds of many Chicagoans. City officials have remained tight-lipped about what kinds of projects would qualify for funding. And these days, anything that relies on “a combination of creative funding streams” is bound to set off alarm bells.As always, the devil is in the details. As plans for the Chicago Infrastructure Trust are solidified, we’ll be in a better position to evaluate the merits of Mayor Emanuel’s proposal. One thing that can be said with certainty is that governments throughout the country need to find innovative ways to fund the nation’s much-needed infrastructure repairs. It’s hard to say if the model being floated in Chicago will be a success, but there are traces of renewed optimism about these new ways of thinking.
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One Response to “Filling the Gap in Innovative Ways”

Trackbacks/Pingbacks

  1. Chicago Infrastructure Trust Embarks on its First Project « The ELP Blog - December 18, 2012

    […] we noted back in March, the Infrastructure Trust has been met with skepticism by the public. The overseer of the trust has […]

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