Home Investing Strategy Commentary: Investment in people offers path forward to fix Baltimore infrastructure

Commentary: Investment in people offers path forward to fix Baltimore infrastructure

by WOOWinvest
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Commentary: Investment in people offers path forward to fix Baltimore infrastructure

During the past few months, many of us in Baltimore have been boiling our water before using it. You read that right: In the highest-income state, in the wealthiest country in the entire world, in our largest city, many of us are not sure we have safe, drinking water. The late-summer water crisis appears to have passed, but it stands as a reminder that many of our kids have been unable to drink the water in our schools for decades because of issues with our water systems.

Water, our safety, our transportation infrastructure, our climate resilience -— all these are a reminder of how officials at every level neglect places such as Harlem Park and Sandtown-Winchester, but also Clifton Park, Cherry Hill, New Broadway East, and so many of our neighbourhoods.

Legislative efforts in recent years have targeted some of the challenges these and other Baltimore neighborhoods face: Maryland Senate Bill 481 in 2019 provided $1.8 million to reduce lead in schools’ drinking water; Senate Bill 199 in 2021 provided $2.2 million in additional funding for transportation safety; Senate Bills 585 and 586 in 2022 added $2 million and $500,000 respectively, for public safety.

It will take more than bites of the apple to get to the core of our issues. We have failed by merely using words such as “unacceptable” and “unconscionable” when speaking on our pressing issues but not following up with specific actions at sufficient scale and aggressiveness to address the issues we so loudly bemoan. As a result, our city is left without resources or tools to do anything beyond continuing to Band-Aid whatever the crisis might be.

In the wake of World War II, after Europe had been decimated by six years of conflict, the United States led an effort to rebuild the continent — a strategy known as the Marshall Plan. The strategy was to restart the economy of Europe, rebuild the decimated infrastructure of the continent, and reorient its views around hope for the future, rather than daily survival. Today, we need this kind of strategy for Baltimore.

In Baltimore, after decades of neglect and disinvestment, we would require $2 billion in necessary construction and maintenance just to get our roads, bridges and tunnels to basic adequacy for a modernized economy. We have 4,000 miles of water and sewer lines that have 800 water main breaks each year and E. coli outbreaks, but we are only dedicating enough money to repair 15 miles of those lines each year. We have at least 20% of our city without high-speed internet access at home. We have 4,600 acres of open space at 276 sites, 50 recreational centers, plus numerous other open spaces, many of which are filled with trash, dangerous play equipment and other soul-crushing hazards.

Simultaneously, and almost shockingly, we have amazing untapped assets. We have people — incredible, talented citizens — who have been left without a pathway to basic economic security. We have apprenticeship programs for people to become electricians, carpenters, painters, plumbers, insulators and large equipment operators. They are run largely by skilled trade unions in our state, and have been run effectively for many decades or more.

We have globally known, midsize manufacturers that produce some of the items we need to build the infrastructure we require, such as Paramount Die, the largest US producer and exporter of wire dies, which help to produce the wire that goes into so much of our infrastructure. We have an ecosystem of builders who are already doing good work with incremental improvements, launching a new recreation center or two a year, replacing a bit of water main — but without the resources or mandate to transform at scale.

Yes, we have money. We have an annual state budget of more than $50 billion per year and a surplus this year of more than $2 billion. This past year, Baltimore City received $641 million in ARPA money, and that is before we leverage the federal government for specific credit or funds for the investments we need.

Consider a scenario under which we would spend $1.3 billion per year for three years to quickly, aggressively and at scale address the deferred maintenance of Baltimore City. As part of that, we would hire 10,000 skilled trades and manufacturing apprentices who could enter those professions, paired with experienced tradespeople who could teach their crafts to new entrants to these professions.

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Here is the rest of the math: We could pay for 100% of child care for each of the 10,000, cover all transportation costs, give each a $2,000 forgivable loan to cover up-front costs and use a variation of what the skilled trade unions are already doing to pair apprentices with journeypersons and ensure a high ratio of apprentices to teachers on contracts for this work. Our costs would still be negligible compared to our cash flow simply from economic mobility for the 10,000. Just the 10,000 would give our state and local governments an additional $100 million per year directly — that is, from increased tax revenue and decreased direct costs because 10,000 people are making more money.

So let us put aside, for a moment, all the additional economic benefit. This would include improved public safety, not having to replace tires and get car realignments so often, everyone having broadband access, and 10,000 of our fellow citizens earning a middle-income wage north of $65,000 per year in contrast to the current average income for a Baltimore City high school graduates six years after graduation of only $24,000 per year.

Then there’s the economic benefit to more companies growing in Baltimore City because their employees are not afraid — the economic and public safety and human benefit of hope. If we put all that aside, we invest $4 billion over three years, and we generate $100 million a year in additional money for state and local governments without increasing taxes. And we have good roads, good bridges, broadband, functioning water, functioning sewers and clean and safe playgrounds. And heaps.

You might say, only 10,000 people? We live in a city of 576,000 people and 230,000 households, with an average household income of $52,000. Each of those 10,000 people would make at least $65,000 per year as mature skilled trade or manufacturing professionals. That means tens of thousands of our fellow citizens with the opportunity to rise out of poverty. That means multiples of those tens of thousands with a neighbor with enough to live a secure life with dignity. And that means all 576,000, and the millions in our broader metro area, will be able to enjoy our streets, our water, our internet access, our parks.

And the beauty is, the money is available. It is available from the $7 trillion budget of the federal government, through the US Department of Transportation, or the Department of Health and Human Services, or through any number of other parts of the federal government. It is available from the state and its $50 billion budget and $2 billion surplus and its associated credit that gives it the ability to float bonds of this scale. Pieces are available from national philanthropy focused on Baltimore as representative of the largest challenges we face as a country. And it is available from us in bond issuances, secured by the future cash we will generate.

We need to confront our challenges head-on, at scale, recognize the magnitude of the physical and human disinvestment and neglect of the last half-century in Baltimore. We can fix these issues, but we need the will. We need not deploy $10 million, or $100 million, at a time. We need a commitment of billions of dollars, not over decades, but now. We need to come together as a community and region and recognize that incrementalism will not solve this challenge, but by combining our needs for infrastructure with our opportunities to enable pathways of economic mobility for many of our fellow citizens, we can finance a transformation that enables heaps.

We are tired of feeling unsafe in our streets and our homes and when using our kitchen and school sinks. If we look at the bigger picture, start to focus on what we need, and pursue that, we can achieve the transformation we all know is possible.

Cory McCray represents District 45 in the Maryland Senate. He is an electrician, a member of Local 24, International Brotherhood of Electrical Workers and the chair of the Baltimore City Senate Delegation.

Mike Rosenbaum is a Baltimore-based entrepreneur who is founder and executive chair of Catalyte and Arena Analytics.

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