by Byron Schlomach
Arizona’s economy seems to be headed for a long, gradual recovery. Policymakers have the opportunity now to set the stage with thoughtful decisions about what kind of infrastructure will support future economic growth.
A recent story in the Arizona Republic described a luncheon sponsored by the Salt River Project and the East Valley Partnership to discuss future infrastructure needs. It is clear from the story that many policymakers understand that additional transportation options will be key to Arizona’s prosperity.
The state’s almost 7 million people are relatively isolated by geography. The nearest large metropolitan areas to Phoenix are hundreds of miles to the east and west. That means we have to make it convenient and inexpensive to move goods and the raw materials to make goods into and out of our state, whether by rail or by truck.
Fortunately, two years ago the Arizona Legislature foresaw these needs and reformed the state’s public-private partnership law to make it easier for private investors to help fund new highways.
Arizona isn’t as well positioned with rail, but we could be. Policymakers could make it easier to get freight through the state by approving projects such as the Union Pacific rail line expansion that has been held up for years in a public relations battle.
There is also the danger of infrastructure policy heading in the wrong direction. One option discussed at that luncheon was high-speed passenger rail. Robert Poole of the Reason Foundation has done a good job of explaining its shortcomings: the vast expanse of the United States and a lack of passengers willing to pay the true cost of high-speed rail means taxpayer subsidies would have to be much larger than Arizona can afford.
We need transportation infrastructure options with benefits to the economy that clearly outweigh the costs. The way to achieve this is to make sure users pay for most of the construction and operating expenses. Roads and freight rail meet these criteria. High speed rail, on the other hand, would be taxpayer-subsidized forever and would offer limited economic benefit.
Byron Schlomach, Ph.D., is an economist and director of the Center for Economic Prosperity at the Goldwater Institute.