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Tuesday, January 13, 2009

If Obama Builds It, Who Will Maintain It?

Barack Obama is about to propose a massive, trillion dollar stimulus package, the centerpiece of which is infrastructure projects. Large-scale infrastructure projects have a long history of cost-overruns, mob-influence through corrupt unions, and are not effective at long-term job creation.

But that is not the worst of it. Once built, who will maintain this infrastructure? And if the infrastructure is not self-sustaining, will the projects be a massive drain on state and local budgets for decades?

Local municipalities, cities and states are rapidly putting together "wish-lists" of "shovel-ready" projects. A report by the United States Conference of Mayors has issued a report listing almost $100 billions in proposed projects:

Today we are reporting that in 641 cities of all sizes in all regions of the country, a total of 15,221 local infrastructure projects are “ready to go.” These projects represent an infrastructure investment of $96,638,419,313 that would be capable of producing an estimated 1,221,677 jobs in 2009 and 2010.
Even Illinois Gov. Rod Blagojevich has taken time out from his impeachment case to put together a wish list. Some of these projects are necessary, and would be constructed regardless of the stimulus package. The evidence is mounting that the stimulus project will give life to projects that are marginal from an economic standpoint, such as new transportation systems, parks, concert halls, and the like. One mayor is quoted as saying “It’s kind of like a feeding frenzy. It’s a little bit unsettling to me.”

Municipalities may be itching for federal funding, but I have not heard ANY discussion as to who will pay to maintain these projects once they are built. New rail and bus systems, if not fully funded by fares (and they never are), create a permanent drain on state and city budgets. A concert hall must be operated, and if it is not economically viable, then the concert hall will cause long-term financial problems. A park requires constant maintenance, but local budgets have a hard enough time cutting existing lawns and maintaining existing parks.

The Obama stimulus plan seems too good to be true for state and local governments. It is.

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