The New New Deal of 2020

People are reeling from the pandemic and Connecticut’s infrastructure is crumbling, endangering the state’s economic future.  We say “solve both problems:” Connecticut needs its own New Deal to rebuild our broken infrastructure and put our unemployed friends and neighbors back to work.

In 1935, President Franklin Roosevelt established the Works Progress Administration (WPA) as part of The New Deal.  The program employed more than 8 million people who built more than 1 million kilometers of roads, 10,000 bridges, airports, housing, municipal buildings, reservoirs, and all manner of infrastructure that many of us still enjoy today.  Here in Connecticut, the Merritt Parkway, Saville Dam and Barkhamsted Reservoir, and Danbury Airport are among the many shining examples of the WPA’s local achievements that put the unemployed of the Great Depression back to work and helped drive our economy’s recovery.

By contrast, the current federal government has failed to develop a national, coordinated plan to tackle the pandemic-induced economic crisis.  We need a state-centric approach, a Connecticut Works Progress Administration, to tackle our state’s 10.2% unemployment rate and relieve embattled households.

There are plenty of infrastructure projects to pursue; Connecticut has about 20 major infrastructure projects underway, from the I-91 Charter Oak Bridge to the Stamford Railroad Station Parking Garage. More than 7,300 miles of public roads are considered in “poor condition.”

Beyond transportation infrastructure, our needs are quite expansive and urgent, including:

• Over $4.6 billion in wastewater infrastructure repair and replacement
• $4 billion in drinking water infrastructure needs
• Nearly $700 million in estimated school construction expenditures
• Over 280 dams deemed “high hazard potential”

The biggest question is how do we pay for all of this?  Earlier this summer, Connecticut’s State Bond Commission approved borrowing roughly $550 million for projects.  While approximately 20% is designated for road and bridge repair, the vast bulk of the funding will go to new schools, hospitals, internet technology, and community policing.  Borrowing is fine when times are good, but the stress on state finances during a pandemic-induced recession makes borrowing more of a challenge.

When our friends return to work, they’ll spend their hard-earned paychecks on more groceries, household goods, cars, and, when public health officials advise, restaurants and other services.

Connecticut should embrace public private partnerships (P3) as a means of accelerating these infrastructure projects.  Private sector partners can utilize the “design-build-finance-operate-maintain” model that has been successful in other states like Colorado, Florida, Pennsylvania, Virginia, and Texas.  We can create incentives for these private sector partners to hire our unemployed citizens.

But the P3 concessionaires want a return on their money.  Availability payments use revenue streams like taxes, fees, and tolls to compensate the concession company, based on achieving project construction milestones and operational performance standards.  In exchange, the P3 concessionaire accepts certain obligations and risks, including construction cost overruns, late completion, and risks related to operations, maintenance, and rehabilitation.  Let’s face it: for highway projects, tolls would need to be the primary repayment source.  The decision made against tolls last December will have to be revisited.

The construction sector already employs more than 57,000 people in Connecticut.  We have 193,000 citizens that are unemployed. Not everyone will know how to weld, pour concrete, or swing a hammer, so we’ll provide training through Connecticut’s community colleges.

And when our friends return to work, they’ll spend their hard-earned paychecks on more groceries, household goods, cars, and, when public health officials advise, restaurants and other services.  All that new demand will create the need for more employees to provide those goods and services, stimulating the overall economy.

We should not forget how Connecticut’s recovery lagged the rest of the United States in the wake of the Great Recession of 2008-2009.  A Connecticut Works Progress Administration could be the vehicle to reestablish our state as an economic powerhouse in New England.

State Rep. Jonathan Steinberg serves the 136^th Assembly District of Westport and the former Chairman of the Connecticut Pension Sustainability Commission; Michael Imber also served on the Commission and is a Managing Director of Conway MacKenzie, Inc.