Former governor Rendell uses his political expertise to campaign for overhaul of US infrastructure
At a time when many politicians are shy about the need for government spending, former Pennsylvania governor Edward Rendell does not mince words about the urgent need to invest in U.S. infrastructure – and the cost for shirking this responsibility.
“We invest or we die,” Rendell said at a keynote address at American Water Summit 2010. “If the day comes that we don’t spend, if the day comes that we don’t differentiate between good government spending and bad government spending, we don’t differentiate between targeted and effectively implemented spending as opposed to wasteful and abusive government spending, we are cooked.”
The message is a bold one in the current political climate, but necessary, at a time when the American Society of Civil Engineers (ASCE) has given the United States a D- for its water and wastewater infrastructure. ASCE estimates that as much as $1 trillion needs to be invested in the next twenty years to address the situation.
His message also comes from a perspective seasoned with 34 years of public service, and the tough fiscal decisions he had to make while in office. Rendell, who had served as a district attorney for Philadelphia, was elected mayor of Philadelphia in 1991, and had to take on a $250 million deficit, which he eliminated, going on to produce five years of budget surpluses.
Rendell recalled one particularly harsh winter as mayor, when the temperature shot up to 65 degrees after a 50 day cold spell, and the horrible mess that aging water infrastructure can create.
“We had 58 water main explosions all around the city in that two day period, and most of these were caused by pipes that had been laid in the 19th century,” said Rendell. “I was always generally interested infrastructure issues, but this really brought it home.”
Rendell said that these kinds of experiences and the money and awareness needed to bring investment into infrastructure led him to form the organization, Building America’s Future with former Californian Gov. Arnold Schwarzenegger and New York City Mayor Michael Bloomberg. The organization was formed in 2010 and is a bipartisan coalition of elected officials who advocate vigorously about the urgency of bringing about a new era of U.S. investment in infrastructure. Rendell and his Building America’s Future colleagues also believe that infrastructure investment could be a powerful engine for job generation, estimating that a federal investment of $20 billion in ready-to-go water infrastructure jobs could create more than 400,00 jobs in 2011.
“As you finalize legislation to help create more jobs in America, we urge you to provide the same level of funding for infrastructure (nearly $50 billion) as the House provided in its “Jobs for Main Street Act of 2010,” wrote Rendell, Schwarzenegger and Bloomberg in a Building America’s Future letter to Congress on March 4, 2010. “This level of funding would ensure additional investments in our critically important transportation projects, drinking water and wastewater treatment systems, and upgrades to our electrical grid.”
Rendell is candid about the challenges of bringing infrastructure needs to the forefront of the American imagination, especially in a country already struggling with its third year of a recession and two foreign wars.
“Water doesn’t have a lot of sex appeal,” Rendell admitted. “But people have to understand, you get what you pay for.” Marcia Hale, president of Building America’s Future and a longtime colleague of Rendell, dating back to his days as mayor, said that he is exactly the right person to make Americans enthusiastic about this kind of investment.
“Philadelphia really needed some leadership, it needed a spark,” said Hale, recalling the time period when Rendell first became mayor. “He did that really well; Philly is a radically different city than it was when he became mayor. He made them believe in themselves again.”
Rendell’s history for knowing how to cut unnecessary costs makes his appeal for investment in infrastructure as essential to the nation’s future all the more compelling. The message is also consistent with Rendell’s priorities in public office, where those who worked with him say water infrastructure was one of his priorities.
“He brought (wastewater infrastructure) light years into the future,” said Joseph Manko, chair of Pennvest , the infrastructure investment authority for Pennsylvania. “He was an environmental governor; he was concerned that we would have enough money to address the myriad of pollution problems and how to make the most bang for the buck, as well as the need to address the Chesapeake Bay.”
Among Rendell’s achievements as governor is more than $1.2 billion of water and wastewater infrastructure projects throughout Pennsylvania, funded through a bond referendum and state borrowing, including 50 million for clean-up of the Chesapeake Bay.
But while the amount seems impressive, Rendell emphasized that it nowhere near the $36.5 billion that the Pennsylvania DEP has estimated needs to be spent over the next 20 years. The gap is one that Rendell strongly believes should be filled by the private sector, who he says play a critical role in bringing the U.S. to where it needs to be in terms of its infrastructure investment.
“Private-public collaborations are essential,” Rendell said. “There is no way we are going to be able to do this with public financings; we are going to have to have private participation.”
He also acknowledges the need for a fair return for the private sector in exchange for their efforts, and noted that it is the government’s byzantine business methods that make it impossible to compete with the private sector.
“One of the reasons that the private sector does it better than the public sector is that it doesn’t have the same procurement rules that are so time consuming and so cost enhancing as the public sector,” Rendell said.
While Rendell has received kudos for his ability to bridge the needs of the private and public sector in many areas, the question of how much regulation and taxation should go along with drilling in the Marcellus Shale is one battle that Rendell unsucunsuccessfully waged.
Rendell is a firm supporter of hydraulic fracturing, commonly known as frac’ing, arguing that its benefits are legion, including job creation, environmental benefits, and the potential of energy independence from unsavory foreign regimes. However, his 18-month effort to push for an extraction tax for drilling met with strong resistance from the industry and led to a stalemate in the Pennsylvania legislature, who made it clear their intention to wait for the incoming governor, who had said he would not support such a tax.
Rendell predicts that while the gas industry may have won the immediate battle, actions such as these would contribute to a public distrust of shale gas drilling.
“This is going to come full circle and bit them,” said Rendell. “They think they have bought off the new governor, but when public opinion reaches a crescendo, it doesn’t matter.”
Rendell said that he views government funding as more necessary for poorer areas where the private sector would find impossible to cover their investments.
“There are many things that are not going to be privatized – an old mining town in northeastern Pennsylvania that has a declining property tax base, its population has been cut in half in the last ten years and there is no reasonable chance for population growth,” Rendell said. “I can’t imagine any private company wanting to come in and take over that water authority.”
Rendell called the ‘no taxing, no spending, no borrowing’ approach, which has been endorsed by some politicians, as a “roadmap to disaster”, saying that “it’s a path for us to have some of the same health and public safety problems that we think of countries that are inferior to us have a routine basis.”
“Name one American business that grew successful without investing in its own future, without spending or borrowing, without spending from its capital reserves to acquire new factories, to step up research and development,” Rendell challenged. “How are we going to maintain and make safe our roads, our bridges, our highways, our dams, our levies – how are we going to prevent levies breaking in New Orleans and Cedar Rapids, airports and ports – how are we going to do that and keep them in decent condition if we don’t invest in our infrastructure?”