Lafayette, La., like many other U.S. cities, is running a huge hidden deficit in the form of backlogged infrastructure maintenance. Charles Marohn, founder of the Strong Towns movement, has done a brilliant job of illuminating the time bomb ticking away in municipal budgets around the country. This week he has honed in on Lafayette, a midsize city of about 125,000. His tale probably could apply to many Virginia localities.
In “The Real Reason Your City Has No Money,” he lays out the problem:
Lafayette had the written reports detailing an enormously large backlog of infrastructure maintenance. At current spending rates, roads were going bad faster than they could be repaired. With aggressive tax increases, the rate of failure could be slowed, but not reversed. The story underground was even worse. Ironically, this news had historically been the rationale for building even more infrastructure (theory: this is a problem that we’ll grow our way out of). …
When we added up the replacement cost of all of the city’s infrastructure — an expense we would anticipate them cumulatively experiencing roughly once a generation — it came to $32 billion. When we added up the entire tax base of the city, all of the private wealth sustained by that infrastructure, it came to just $16 billion. This is fatal. …
The median house in Lafayette costs roughly $150,000. A family living in this house would currently pay about $1,500 per year in taxes to the local government of which 10%, approximately $150, goes to maintenance of infrastructure (more is paid to the schools and regional government). A fraction of that $150 – it varies by year – is spent on actual pavement.
To maintain just the roads and drainage systems that have already been built, the family in that median house would need to have their taxes increase by $3,300 per year. That assumes no new roads are built and existing roadways are not widened or substantively improved. That is $3,300 in additional local taxes just to tread water.
That does not include underground utilities – sewer and water – or major facilities such as treatment plants, water towers and public buildings. Using ratios we’ve experienced from other communities, it is likely that the total infrastructure revenue gap for that median home is closer to $8,000 per year.
Freaking out? We haven’t even talked about schools and unfunded pension liabilities yet.
Can we find the information in local government’s Comprehensive Annual Financial Reports to make these same calculations ourselves? I don’t know. But every local government officials are living in La La Land if they can’t calculate the unfunded maintenance backlogs for their community.
There is a solution to the problem, by the way, but it isn’t raising taxes, and it isn’t unleashing infrastructure spending in Washington — it’s changing the land- and infrastructure-intensive pattern of development commonly called suburban sprawl. A few localities in Virginia get it. But most will have no appetite to make the necessary changes until they reach a Lafayette-level of desperation. Too bad.
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