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Cities no longer ignore urban decay, but money is hard to find

Whatever happened to all those collapsing bridges, crumbling highways, and broken water mains? Following a spate of news stories several years ago, much less has been written about the nation's ``infrastructure'' in recent years. Yet, with some exceptions, the problem -- and its several trillion-dollar repair bill -- remains as serious as ever.

More than half of nearly 1,000 communities recently surveyed reported roads and bridges in only fair or good condition, according to Touche Ross & Co., an accounting and management consulting firm. Almost two out of three expected to spend twice as much on infrastructure upkeep during the next five years as in the last five.

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The federal government, in recent years, has become far less available as a funding ally. The difference now is that most city and state officials are keenly aware of weaknesses in roads, sewers, and water pipes that affect economic development and hold communities together.

``The encouraging thing I see is almost philosophical,'' notes Pat Choate, co-author of ``America in Ruins,'' one of the chief documenters of the problem in the early 1980s.

``Cities are realizing they've got to pull up their own socks and do something. One of the things that was always amazing (to me) in the 1970s was the extent to which communities would delay projects -- waiting to get a federal grant. Now all of a sudden they realize they're on their own.''

As a first step, a growing number of city and state governments are taking stock of the physical plant they have and the condition it's in.

``A number of cities are really trying to get a good handle now on what it is they need to do,'' says Nan Humphrey, an infrastructure specialist with the Urban Institute.

In Midland, Mich., officials have used television cameras to document the condition of local sewer pipes. ``You can't deal with the infrastructure problem unless you know what you have,'' explains Midland Finance Director Robert E. Fisher, one of 4,000 officials recently in Chicago for a meeting of the Government Finance Officers Association (GFOA).

Federal, state, and local spending for upkeep of the nation's public works has been virtually cut in half (to a current $25 billion in 1972 dollars), during the last 20 years. ``We just sort of built it and thought we could forget it,'' says Mr. Choate.

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In addition to inventorying physical assets, determining wear and tear on facilities and potential for economic development are priorities among local governments.

Some sewer pipes in St. Paul, Minn., were in top shape after a century of service while others were worn out after 25 years, Mayor George Latimer told a GFOA audience. Yet ``repairing the worst first won't necessarily give you the greatest economic benefit,'' cautions Deborah Stone of the [Chicago] Metropolitan Housing and Planning Council.

Traditionally when cities need money to repair or expand their physical plant, they tap any available federal grant, increase user fees, raise taxes, or float a bond issue. Some voters, particularly in still-growing areas of the South and West, are more apt than others to say ``yes'' to bond issues.

Houston taxpayers tell pollsters that transportation, not crime, is the city's No. 1 problem. They recently approved a $250 million bond issue to expand the city's street network.

But that isn't the case in some older communities. In Wood River, Ill., where unemployment has been high, ``bond issues don't go over too well anymore,'' says Finance Director Michael Sweda.

In any case most cities need all the help they can get to keep infrastructure in shape. Many are enthusiastic about recent moves by a handful of states to enhance local credit ratings and broaden access to more capital by setting up bond banks or revolving loan funds. Some are setting aside pots of money (Washington State is relying on a utility tax increase) for low- or zero-interest loans. Others, such as Indiana and Illinois, aim to pool several small communities' needs into one large bond issue.

With the exception of the recent federal gas tax earmarked to maintaining the nation's highways, federal grant money for everything from new waste-water treatment plants to repairing bridges have been increasingly scarce.

But in his fiscal 1986 budget proposals, the President was required by Congress for the first time to include detailed information on the condition of the nation's public facilities and the cost of their upkeep.

Congress has also been weighing the idea of establishing a loan fund or public-works bond bank for states and cities at the national level. The concept, still in the discussion stage, may or may not require some state and local appropriations to match federal dollars. If it does Jim Joseph of GFOA predicts an uphill battle.

But states and cities may face an additional uphill battle of their own in keeping their infrastructure up to date if the President's proposed tax changes go through.

Elimination of the deductibility of state and local taxes on federal returns may make taxpayers fight harder against local tax hikes. Tighter limits on use of tax-exempt bonds is expected to make borrowing more expensive.

``Both proposals are pretty severe in their implications,'' says Freda Stern Ackerman, director of Municipal Services for Moody's Investors Service.

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