Private sector's help sorely needed to spur construction, say infrastructure advocates.

WASHINGTON -- A more significant role for the private sector in infrastructure financing, is one of the major keys needed to encourage construction, administration officials and municipal bond issuers mid Congress yesterday.

Their comments came as the House Public Works and Transportation Committee held the last of five hearings on the condition of the nation's infrastructure, focusing yesterday on alternative financing methods.

"The common goal is to increase the investment capital available to transportation in order to drive the economy forward by attracting private sector investment and leveraging the availability of federal funds," said Louise Frankel Stoll, assistant secretary for budget and programs at the Department of Transportation.

In recent years the states have been given increased flexibility in using federal funds for their priority projects, but many states have not taken advantage of the innovative financing methods available, Stoll said.

For example, the Intermodal Surface Transportation Efficiency Act of 1991 gave the states numerous alternative financing options. States "have reported concerns about several issues including the complexity" of the new opportunities, Stoll said.

Federal and state governments must learn to look at infrastructure financing differently than they do today, said Rep. Robert A. Borski, D-Pa, a committee member and chairman of the investigations and oversight subcommittee.

"Existing government programs are resistant to change, to innovation, and to long-term planning for future.needs. Instead of preparing for future needs, as successful corporations do, we have been lurching from crisis to crisis," Borski said.

The United States is the only industrialized Western nation with practices that discourage private involvement in financing public infrastructure, said Daniel V. Flanagan Jr., chairman of the Infrastructure Investment Commission. The commission was created by Congress in 1991 under the sweeping surface transportation legislation.

"The idea is to grow the pie. This is not an either/or but rather an additional outlet on the financing artery of infrastructure," Flanagan said.

"We are at the end of an era... and we are frankly looking for new ways for capital to replenish and augment our thinning infrastructure across the land," he said.

"Bean courtiers are bean counters," said committee Chairman Norman Y. Mineta, D-Calif, agreeing that it is time for the country to move forward with infrastructure financing. "We have to turn to the future and not just look at where the money was spent yesterday."

The 1991 surface transportation law was one way to get Congress focused on infrastructure financing, but another Congress must also ease the curbs on municipal bonds put into law in the Tax Reform Act of 1986, said Joseph Bendel, a city council member in McKeesport, Pa., who represented the National League of Cities.

Bendel praised the bill offered by Rep. William J. Coyne, D-Pa., that would case many of the curbs on municipal bonds resulting from the 1986 act and said its most helpful provision is the one that "will create the community economic development bond -- an aid targeted at economically hard hit communities."

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