Public-private infrastructure financing is a hot idea these days, and no wonder. With state budgets still hurting from the Great Recession and Capitol Hill tied in knots, private investors look like very good partners for rebuilding our sewers, bridges, and roads.
But when the rubber of a partnership proposal meets the road you want to finance, it often hits an oil slick. Public officials and taxpayers want their dollars to create good jobs. Some projects call for community input and oversight. Investors have pushed back on these “conditionalities” because they can increase costs and limit return on investment. Since they control the money, the private investors commonly win – and we get infrastructure projects with limited social payoffs.
At Community Labor United we are developing a different model. It has three components.
First, we are approaching union pension funds as lead investors. Union pension trustees actually want their money to create good jobs and raise labor standards. They are looking for long-term investments with a stable return, like infrastructure projects. They are open to community involvement, particularly in places where labor-community alliances are developing.
As lead investors, union pension funds can set the tone and terms of a public-private partnership. Working with state officials, they can outline the job standards and community participation that will make their partnership a responsible investment.
Then they can approach Wall Street and see who’s interested in participating on those terms. Now the shoe is on the other foot. The public officials and union trustees have most of the financing they need, and if one investor balks, others may respond differently.