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The reality of declining federal resources

Bruce Katz of Brookings writes about the 2015 federal budget proposed by President Obama:

Non-defense discretionary spending—including critical investments in infrastructure, education, and innovation—will continue to drop severely, from 3.1 percent of gross domestic product (GDP) in 2013 to just 2.2 percent in 2024. When compared to an average of 3.8 percent for the last 40 years, it’s clear how dramatic an impact these cuts will have.

Meanwhile, total spending on mandatory programs will rise from 12.6 percent of GDP to 14.1 percent, an increase of almost $1.8 trillion per year.

The point is that there will be less federal funding for what our nation desperately needs to create and maintain a stronger, more competitive, job-creating economy. In response, our cities and metropolitan areas—and the networks of institutions and leaders who co-govern these communities—will need to step up and assume responsibility for key productive investments.

A couple of quick thoughts:

  • This is from a Democratic administration. Imagine how much deeper the cuts might be from a Republican administration.
  • The cuts are indicative of what cities and regions will be facing in the future - declining resources. The public has expressed itself for years now that it has very little appetite to raise revenues (except at the high end of incomes or for very specific local projects) and increasingly federal dollars will have to be used to meet its own substantial obligations.

Does this mean doom and gloom for cities and our infrastructure? Not at all. But, it does mean a structural change and it will force a re-prioritization. As the trough of federal dollars dissipates, we'll collectively become much more focused on return on investment and efficiency. That bodes well for projects that enhance walking, biking and transit (in most cases). 

I, for one, am not sad about a declining federal role in funding infrastructure. Cities and regions rely far too much on federal dollars for transportation, which often leads to bad decisions about priorities and projects. While truly inter-state projects need federal funding, I see no reason why federal dollars should pay for local projects. A return to a system that is funded entirely at the local or regional level is nothing to be afraid of. That is, unless you are in the camp that benefits from wasteful spending.

Leadership matters, ctd.:

Urbanism going "lean"

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