Rethinking statewide infrastructure policies: Lessons from California and beyond

Over the next 10 years, California faces a daunting infrastructure challenge. According to the California State Treasurer’s Office, the state needs to invest $82 billion to repair and maintain current structures and build new ones. Projected state and local revenue sources will meet only about 50 % of this need. Unfortu-nately, California’s infrastructure planning and financing process seems to be bro-ken as well. According to the Legislative Analyst’s Office, the state government (a) lacks a stable funding source for infrastructure investment programs, (b) reviews these programs on an ad hoc basis, and (c) does not have an administrative or legis-lative evaluation of infrastructure investment requirements. This commentary argues that many states, including California, need to rethink their approach toward infrastructure planning and finance. Infrastructure Policy: Supply Versus Demand Whether it is for public infrastructure or private facilities, investment planning should be demand driven and predicated on both the willingness and ability to pay for services. The demand for infrastructure services is dynamic and sensitive to economic, social, and technolog