California’s vibrant economy and communities rely on an extensive infrastructure network of highways, bridges, ports, levees, rail lines, schools, hospitals, and energy, water, and wastewater systems. Over the past several decades, much of the state’s infrastructure has been inadequately maintained and is facing a backlog of deferred maintenance, even as new needs arise. Funding has not kept pace with aging infrastructure or the demands of a growing economy and population. On the current spending trajectory, California’s infrastructure funding gap will reach $1 trillion by 2050, according to a new report by the Bay Area Council Economic Institute that examines how public private partnerships (P3) can help close the gap.
The Economic Institute’s earlier research on this exciting form of investment was instrumental in guiding UC Merced’s use of P3s to finance and begin work on its massive campus expansion. Investment in infrastructure has one of the highest economic multipliers of any form of government spending, but due to California’s failure to invest in and maintain its infrastructure at all levels, the state is putting its future growth and prosperity at risk. The Economic Institute’s latest report examines how governments can innovate, attract investment, and improve infrastructure performance through the use of public-private partnerships.