You would not be alone in viewing skeptically a plan that seems to conjure up free money. Senate Minority Leader Charles E. Schumer (D-N.Y.) argued in a Post op-ed Monday for a "major, direct federal investment," rather than relying on the expectation of cash flowing in from state treasuries and private sources. Even Mr. Trump has reportedly expressed skepticism about the plans his staff has been working on.
In fact, not all the skepticism is warranted. So-called public-private partnerships have a mixed history, and they would not work for every needed infrastructure project. But there are notable public-private successes here and around the world. It would be foolish for the federal government to ignore the idea.
State governments facing constraints on how much they can spend have used public-private arrangements for years, often agreeing to allow private companies to collect tolls or other fees in return for their help building and operating infrastructure. In traffic-choked Northern Virginia, the experience has been largely positive, pulling private money and expertise into building, maintaining and renovating critical arteries — upgrades that likely would not have happened, or happened as quickly, without private participation. If deals are well-structured, private companies have incentives to lower building costs, minimize operating expenses and maximize the user experience. Public-private arrangements can bring unique private-sector expertise — for example, in traffic-control technology and new building materials.
These alliances are not a panacea, however. Investing in a new road through a poor area may be in society's interest but not a particularly attractive market opportunity for private builders. Settling on contract terms and overseeing private companies also brings the constant threat of cronyism, incompetence and waste, with taxpayers or users potentially left on the hook for unexpectedly high long-term costs. Meanwhile, public opposition can make some tolling projects nonviable.
It is also far from clear that the federal government could expect a rush of private money into infrastructure, even with hundreds of billions of dollars on the table. In fact, under the White House plan, state governments may be expected to pony up much of the nonfederal cash.
As Congress attempts to assemble an infrastructure bill, lawmakers should leave the door open for public-private partnerships, but they should not count on mountains of money materializing to solve the nation's chronic underinvestment. Rather, they should prepare to make a large and sure federal investment. If they need to find money to finance national rebuilding, there is an obvious source that they have left untapped: A moderate carbon tax could raise large sums for infrastructure construction, discourage overuse of the roads and cut energy waste, all at the same time.
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