If You Build it, Growth Will Come
VELSHI: U.S. infrastructure is crumbling but some fear that we can't afford to rebuild. To those people, I offer a solution. Public/private partnerships. It's exactly what it sounds like. Government and business working together. It works elsewhere in the world but it is scarcely used in the United States. Now it's not a one-size-fits-all solution. There are many different ways for this kind of collaboration to work but in an ideal world it would look something like this. Say we wanted to build a new highway, for instance. You used some public money, some public capital, that's state government money, and you attract private capital either through an infrastructure bank which we've discussed here, or by issuing bonds for the project. Now there's big money waiting in the private sector to get the steady long-term returns that infrastructure investments provide. So that's how you get the money. Then the government enlists a private company to construct and operate the highway. Once it's up and running they charge fees to use the highway. You'll know that as tolls. Now the money generated at the toll booth creates profits for the operator of the highway and returns for the public governments and private investors. This kind of partnership works with any infrastructure project that generates user fees. So we are talking airports, you see a lot of those kinds of public/private partnership out there, water ways, rail ways, electric and gas grids. Broadband systems. The list is endless. One state leading the way in these types of partnerships is Illinois where Governor Patrick Quinn has made historic investments in infrastructure. He joins us now. Governor Quinn, good to see you. Thank you for being with us. Your Illinois plan now put $31 billion of capital to invest in infrastructure and public/private partnerships. You created an initiative to expand broadband network, statewide, as an example. Tell our viewers what role government played and what role the private sector played to make this work.</s>GOV. PAT QUINN (D), ILLINOIS: Well, we're still going. Matter of fact, we added $12 billion more with our toll way system, Ali, and you mentioned about the public/private partnerships. We've very interested in that with respect to our roads and also for our broadband deployment. We have 4100 miles of broadband. We're laying fiber right now across Illinois. We've done over 7,000 miles of roads, over 1,000 bridges. We like to build buildings as well, school buildings. And so anytime we can tract private interests, we're always interested in that. We understand that the government does have to put some money on the table. That's what we're doing, And you know, there are opportunities for private investors. We passed a law in Illinois for public/private partnerships and we want to build, for example, a new airport south of the metropolitan area of Chicago. And we really are looking for a public/private partnership there.</s>VELSHI: And airports are the one thing we do in America that people get when it comes to -- private/public partnerships. There's always criticism of this, there's criticism that the governments don't have money, there are criticisms that governments don't make the right decisions. The city of Chicago famously struggled with its public/private partnership on its parking meters in 2008. The city leased its parking system to a group of private investigators. For those who don't know the story, they did a poor job of managing the transition. There were steep rate hikes and confusion and it actually resulted in the downgrade of the city's credit rating. Now I know, Governor, that's not your watch, that's not one of your projects.</s>QUINN: No, that's right.</s>VELSHI: But what are the lessons of that type of thing for your own initiatives?</s>QUINN: You got to be very careful. You know, the city also did one with the skyway, a bridge across from Chicago to Indiana. And that was done in a better fashion. If it's not carefully done, it can really backfire. So that's why we take each step and do it in a very reasonable sound way. We're embarking on this. This is brand new for our state of Illinois. We do see, for example, the federal gas tax not just being able to finance the kind of infrastructure and highway and bridge improvement and expansion that we've had over the last half century. The federal gas tax is declining. And with fuel economy in our vehicles and we want that, we're just not going to have the revenues from the gas tax to build the roads and repair the roads we need for the future. So we do have to look for these new ways of financing important matters that create jobs today. A lot of construction jobs are created. At the same time they lay the foundation for economic growth for decades to come. So investing in things like roads, bridges, rail systems, we're doing high speed rail from Chicago to St. Louis. We'd like to do high speed rail, super high speed rail from Chicago to Champaign on top St. Louis and Indianapolis. That's going to require private investment if we're going to get the job done.</s>VELSHI: You know, I was over in China. It was one of the most impressive things about the place, high-speed rail all over the place, cutting travel time. Listen, speaking about China, of the cities with the best infrastructure in the world, more than half of them are in Europe. Take a look at where public/private partnerships are happening. There's no coincidence. It's part of the reason we're not seeing much of these partnerships here in the United States is that the legislative structure for them doesn't every where. It only exists in 31 states. Governor, in your state, there are several large-scale roadway projects. You've been talking about that.</s>QUINN: Right.</s>VELSHI: The Illinois has been looking at for a long time getting involved in. When you do projects like this, there are always accusations that it's pork and its favors to people. How do you decide where roadways and bridges at high-speed rail need to go?</s>QUINN: Well, it's a matter with the legislature. Elected representatives and the people have their priorities. We have a five- year plan in Illinois for our highway system, and then also a plan for our toll way system. We tell people ahead of time what the priorities are and people work on the priorities. They work together with us in the executive branch. You know, when we're building a bridge across the Mississippi River as we're doing right now near east St. Louis, that's something that everybody understands. There's a bridge in Minneapolis that fell in to the river. Now we don't want that to happen anywhere in our country and certainly not in our state. And so we want to work together with people on something as big as a bridge that might take six years to build. We also need to build a bridge near the Quad City Airport, Rock Island and Moline, we want to build a bridge across the Mississippi to Iowa there.</s>VELSHI: My friend -- my friend Christine Romans will be very happy to hear that you guys are building a bridge up to the Quad cities. She's from that part of the country. Governor, great to see you.</s>QUINN: We're bridge builders.</s>VELSHI: Thank you, Governor Quinn. All right, I've given you my take on infrastructure and the fiscal cliff. But why are you even listening to me? Millennials are the future. They've got some remarkable answers as to why you need to change the way you think about work and life. I'll tell you about it on the other side. You're watching YOUR MONEY.