California is supposed to represent a shining beacon of blue governance, proof-positive that enlightened progressive policies can produce effective public services and a well-functioning public sector. But as as Joel Kotkin notes in a column on the collapse of California’s Oroville dam, much of the state’s infrastructure—a basic government provision—is in a state of serious disrepair:
Once a national and global leader in infrastructure, according to a report last year by the Center for Budget and Policy Priorities, California now spends the least percentage of its state budget on infrastructure of any state.In the critical Sacramento-San Francisco Delta, an ancient levee and dike system is decaying, and ever more stringent environmental regulations limit key state and federal water facility operations… In terms of preparing for the future, California’s current penchant for endless studies and environmental hand-wringing is fostering pre-Katrina Louisiana conditions, rather than the forward-looking capital investments previously the state’s hallmark.
Meanwhile, as Kotkin notes, much of the state’s infrastructure efforts been devoted to the high-speed rail, a boondoggle project that looks less and less likely to deliver on most of its promises, and which the federal government recently put on hold in the face of cascading construction delays and cost overruns.
Another factor in California’s infrastructure crisis is its catastrophically mismanaged pension system. CalPERS, the union-dominated fund that pays benefits to retirees, has dramatically downplayed its liabilities through accounting chicanery, and the state’s pensions are now $1.2 trillion dollars in the hole. CalPERS was recently forced to begin to reduce its projected rate of return so as to force bigger contributions from Sacramento and local governments. These reductions will squeeze infrastructure budgets even further.
If the Trump administration is serious about improving infrastructure in America as a whole, it should keep the experience of California in mind. That means, first, that it needs to reform regulatory and tort policy so that prospective projects aren’t as a rule subject to endless reviews and lawsuits that halt them in their tracks. Second, it needs to preserve space for infrastructure in the budget. The federal government has much more leeway to borrow than state governments do, but ballooning entitlement obligations will crowd it out in the long-run.