[Senate Hearing 117-369]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 117-369


  21st CENTURY COMMUNITIES: LOCAL LEADERS ON THE INFRASTRUCTURE NEEDS 
               FACING AMERICA'S STATES, CITIES, AND TOWNS

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

EXAMINING INFRASTRUCTURE INVESTMENT AND ITS IMPACT ON AMERICA'S STATES, 
                           CITIES, AND TOWNS

                               __________

                             JUNE 15, 2021

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs



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                 Available at: https: //www.govinfo.gov /





                                 ______
                                 
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

48-636 PDF                WASHINGTON : 2022












            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                 Beth Cooper, Professional Staff Member

                Megan Cheney, Professional Staff Member

                 Dan Sullivan, Republican Chief Counsel

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                                  (ii)








                            C O N T E N T S

                              ----------                              

                         TUESDAY, JUNE 15, 2021

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    29

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    30

                               WITNESSES

Daniel Horrigan, Mayor, Akron, Ohio..............................     7
    Prepared statement...........................................    31
    Responses to written questions of:
        Senator Tester...........................................    48
Cyndy Andrus, Mayor, Bozeman, Montana............................     8
    Prepared statement...........................................    32
    Responses to written questions of:
        Senator Tester...........................................    49
Corey Woods, Mayor, Tempe, Arizona...............................    10
    Prepared statement...........................................    34
    Responses to written questions of:
        Senator Tester...........................................    51
John Parsons, County Commissioner, Lancaster County, Pennsylvania    12
    Prepared statement...........................................    36
    Responses to written questions of:
        Senator Tester...........................................    52
Brian Riedl, Senior Fellow, Manhattan Institute..................    14
    Prepared statement...........................................    37

                                 (iii)




 
  21st CENTURY COMMUNITIES: LOCAL LEADERS ON THE INFRASTRUCTURE NEEDS 
               FACING AMERICA'S STATES, CITIES, AND TOWNS

                              ----------                              


                         TUESDAY, JUNE 15, 2021

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10 a.m., remotely via Webex, Hon. 
Sherrod Brown, Chairman of the Committee, presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Senate Committee on Banking, Housing, 
and Urban Affairs will come to order. This hearing is in a 
virtual format. A few reminders as you begin. Once you start 
speaking there will be a slight delay before you are on the 
screen. To minimize background noise, please click the Mute 
button until it is your turn to speak or ask questions.
    You should also have one box on your screens labeled 
``Clock'' that will show time remaining. For witnesses, you 
will have 5 minutes for opening statements. For Senators, the 
5-minute clock still applies for your questions. At 30 second 
remaining you will hear a bell right to remind you your time is 
almost expired, ringing again when your time has expired.
    If there is a technology issue, we will move to the next 
witness or Senator until it is resolved.
    To simplify the speaking order process, Senator Toomey and 
I have agreed to go by seniority for this hearing. As most of 
my Senate colleagues on this Committee know, Thursday will be 
our first in-person hearing in more than a year, the first I 
have had the privilege to chair. I know that all of us, 
especially since the average age of a Senator is higher than 
the average age of the typical American citizen, we know we 
have all learned a lot about technology, some of us slower 
learners than others over the last 15 months.
    Today we are joined by local leaders who represent a cross-
section of this country. Whether it is an all-industrial city 
or a college town, whether it is Indian country or Appalachia, 
local leaders understand how proud people are of their 
hometowns. They want their town to be successful. They want 
their communities to grow and attract jobs. They do not want 
families to be told to pick up and leave to find opportunity. 
They do not want to lose workers forced out by rising housing 
costs.
    Mayors also know the many opportunities we can unleash if 
we make the once-in-a-generation investment to rebuild our 
country's infrastructure. They know what their communities 
need. They know the transit project that would revitalize a 
neglected neighborhood and bring new residents and customers to 
Main Street. They know where there are shovel-ready projects 
that would build new houses that workers can actually afford. 
They know where lead pipes and lead paint still poison kinds in 
America in the year 2021. They know the building trades workers 
that are ready to get to work replacing those water lines, 
retrofitting those homes.
    Mayors understand how all these pieces fit together. Jobs 
and infrastructure are inseparable. You cannot create the 
former without the latter. We know when a business decides 
where to build a new plant or office they look at the 
infrastructure. They want to know if there is broadband, if 
there are homes that workers can afford, if there is a bus or a 
train that runs nearby.
    When a young family decides to relocate for a new job they 
think about how they will get to work, how long will the 
commute be, whether the whole paycheck will get eaten up by 
rent or the mortgage. These issues intersect, and while they 
may look different in Bozeman and Akron and Tempe or Lancaster, 
we know they are national problems. Mayors and City Councils 
and County Commissioners can do a lot of good but they cannot 
do it all on their own.
    When we electrified the country in the beginning, but not 
ending in the 1930s--and in Senator Tester's book I read that 
in the '40s they were still electrifying parts of Montana--from 
the Plains to Appalachia to the Deep South, as we electrified, 
we didn't ask each individual mayor to come up with their own 
grid or build his own dam.
    When we built the interstate highway system we did not 
expect every county in central Pennsylvania or southeast Ohio 
to foot the bill for a stretch of road. We became the world's 
largest economy, with the strongest middle class, because we 
came together to invest in great national projects that joined 
us all together as one country. We did not force workers and 
their families to foot the bill.
    The corporations that rely on our public goods to make 
their vast growing profits should contribute to that upkeep. 
Stock buybacks climb, corporate profits soar, yet America's 
States and cities, from Akron to Bozeman to Tempe, America's 
States and cities and towns scrape by each year, making hard 
choices about their budgets. They do not want to short-change 
public safety so they wait another year to replace aging buses. 
They do not want to cut teacher salaries and lose talent, so 
there is no money to turn dilapidated properties into 
affordable homes in my Slavic village neighborhood in 
Cleveland.
    Over and over I hear the same thing from leaders in places 
large and small, rural and urban. To attract good jobs we need 
more resources. We need homes that workers can afford and ways 
for them to get to work.
    Today we will hear from my long-time friend, Mayor Dan 
Horrigan, from Akron, a proud Midwestern city that has endured 
decades of a national tax and trade policies, a policy that 
encouraged its businesses to shut down production in Akron in 
the Goodyear neighborhood, in Firestone Park in Akron, and move 
good-paying union jobs abroad, where companies can pay lower 
wages to exploit workers. That outsourcing does not just affect 
individual workers and their families in Akron, as Mayor 
Horrigan will tell you. It erodes the tax base, making it that 
much harder for cities like Akron to build the infrastructure 
that would draw new investment.
    We will hear from Tempe, Arizona, mayor, Corey Woods, whose 
work in a fast-growing city, working to tackle their affordable 
housing shortage, showing the country how new transit 
innovation is not just for New York and Philadelphia and 
Washington. It is not just for big coastal cities. That 
investment has the potential to spur growth in sunbelt cities 
and across the country.
    And we will hear from Mayor Cyndy Andrus of Bozeman. She 
will tell you that high housing prices are not just a problem 
in wealthy neighborhoods in big cities. Her fast-growing city's 
housing shortage, as young people move there, as the university 
thrives, and as people from the coast are relocating there, 
that it is driving up home prices and leaving families without 
options.
    All these mayors and the local leaders I talk to in Ohio, 
from Mansfield to Lima to Cleveland to Cincinnati will tell you 
they have tried to make it on their own, because they have to, 
not because they want to, not because they do not need 
investment. They want to be part of a broad national project. 
They want to build thriving, equitable, resilient communities. 
It is time for all of our communities and the workers and their 
families that call them home to share in our country's 
prosperity. In part, it begins with us doing our job in 
Washington, in extending that helping hand to these great 
cities across our country.
    Senator Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you, Mr. Chairman, and thank you to 
our witnesses, especially my fellow Pennsylvanian, Josh Parsons 
from Lancaster County.
    At our last hearing about infrastructure, about a month 
ago, I noted that a group of my Republican colleagues and I had 
had a constructive discussion with President Biden about a 
potential bipartisan infrastructure package. I also noted three 
features of an infrastructure package that I think would have 
very broad bipartisan support.
    First, it should responsibly support real physical 
infrastructure, that is, the platforms and systems that we 
share and we use to move people, goods, and services throughout 
the economy. That means things like roads and bridges and ports 
and airports.
    Second, a package cannot undo the 2017 tax reform that 
helped create the best economy of my lifetime. Remember, before 
COVID, we were experiencing an extraordinary economic boom. We 
had the lowest unemployment rate in 50 years. We had more job 
openings than people looking for jobs. We had a record-low 
poverty rate, and wage growth across the board, with wages 
growing fastest for the lowest-income earners. That is exactly 
the economy we should all be wanting to get back to.
    And third, we should not pay for infrastructure by 
borrowing or printing billions of additional dollars. Now the 
good news in this is we have hundreds of billions of unspent 
COVID funds that Congress can repurpose. According to the 
Congressional Budget Office, over $700 billion of the 
Democrats' March spending bill will not be spent until after 
2021.
    Now, unfortunately, the Biden administration would not 
agree to these sensible features, and they walked away from 
negotiating with some of us, but I understand that there are 
bipartisan discussions underway, and my hope is that an 
agreement can be reached that is consistent with these 
principles.
    But the scope and size of the Administration's [inaudible] 
at this point is simply untenable. I mean, take the scope of 
the plan. The Administration wants to redefine what 
infrastructure means in order to spend taxpayer dollars on 
their Green New Deal agenda and other liberal policies.
    Consider some specific examples. The Administration 
proposed almost a quarter of a trillion dollars for housing. 
Now set aside whether it is the responsibility of taxpayers to 
buy and build everyone a home. Housing is not infrastructure. 
Housing is housing. The Administration also proposed $100 
billion in consumer rebates to purchase electric vehicles, and 
$10 billion for the Civilian Climate Corps. This is not 
infrastructure.
    In addition to that, the $2.2 trillion size of the Biden 
administration plan is wildly excessive. Even the plan spending 
on the real physical infrastructure portion does not comport 
with economic reality, given how much money Congress has spent 
over the past year already.
    Take transit spending, for example. The Administration 
wants $85 billion of additional money over the next 5 years, 
above and beyond what we would ordinarily spend over the next 5 
years. Well, this does not take into account the tens of 
billions of dollars the Federal Government already provided for 
transit recently. This past March, our Democratic colleagues 
passed a bill spending $30 billion on transit. They did that 
after Congress provide more than $40 billion for transit in 
response to COVID in 2020.
    CBO estimates that of this $70 billion, $22 billion, almost 
a third of COVID transit dollars, will not be spent until after 
2021. Oh, and the $70 billion? That was on top of the $13 
billion we annually spend. So if you did not have your 
calculator out, that is a total of $83 billion that Congress 
spent on transit over the course of 1 year. Amazingly enough, 
that number exceed both the annual operating and capital costs 
of every single transit agency in the U.S., combined, and now 
they want $85 billion more over the next 5 years, on top of 
what we ordinarily spend.
    The Administration seems to have lost sight of the fact 
that the Federal role in infrastructure spending has 
historically been limited. State and local governments are 
primarily responsible for funding infrastructure projects, for 
the obvious reason that most infrastructure projects are 
generally local or regional in nature. For example, a bus or a 
light-rail station in San Francisco does not really do a lot 
for people in Pittsburgh.
    And States and local governments are currently awash with 
cash. In the aggregate, State and local tax collections set an 
all-time record in 2020. In addition to record revenues over 
the course of 12 months, Congress sent more than $850 billion 
to State and local governments. So States are now trying to 
figure out ways to spend this huge windfall. California has a 
budget surplus of over $75 billion, and at this point they may 
just send out free money to Californians. My home State of 
Pennsylvania is sitting on a $3 billion revenue surplus, plus 
$7 billion in unused Federal money.
    So still more wasteful spending by Congress is not what our 
economy needs. It has already contributed to the harmful 
inflation Americans are experiencing right now. Inflation is at 
5 percent right now, the highest it has been in 13 years, and 
this should not come as a surprise.
    Earlier this year, President Clinton's Treasury Secretary, 
Larry Summers, was warning us of the significant inflationary 
risks of the excessive spending, and that was before our 
Democratic colleagues passed the $1.9 trillion spending bill in 
March. But his warning was ignored, and now our Democratic 
colleague want to spend hundreds of billions, maybe over $1 
trillion more.
    Congress still has an opportunity to enact a sensible, 
bipartisan infrastructure package, but that is only possible if 
we support real physical infrastructure, that we pay for with 
existing funds, without raising taxes or borrowing tens or 
hundreds of billions more. We can meet our country's 
infrastructure needs without jeopardizing our economic recovery 
and putting future generations of Americans further in debt.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you very much, Senator Toomey.
    I will introduce our first witness. Daniel Horrigan is the 
mayor of Akron. He previously served as the Summit County Clerk 
of Courts, as an Akron City Councilmember, as a teacher at St. 
Vincent-St. Mary, LeBron James' alma mater, I might add, and at 
Stow-Munroe Falls High School. Mayor Horrigan, thank you for 
being here today and representing a legacy from America's 
heartland.
    I will turn to my colleague, Senator Tester, to introduce 
the witness from his State.
    Senator Tester. Thank you, Chairman Brown, and I want to 
thank you both for your opening statements. I just want to say 
a couple of things before I get to Cyndy Andrus, the mayor of 
Bozeman, Montana.
    Nobody likes wasteful spending, and I will tell you that if 
you really believe the pacing threat to this country is China 
then we better get serious about infrastructure. The bottom 
line is that if you do not have places for people to live, you 
do not have a manufacturing base, you do not have the ability 
for businesses to expand, you do not have the ability for 
people to recruit. Cyndy Andrus will probably tell you that in 
Bozeman, Montana, there is no such thing as a first-time home 
buyer, because, quite frankly, the cost of homes is so damn 
high.
    So I think we need to make an expenditure, a serious 
expenditure, or let's just turn the keys over to the Xi, OK? 
Just let him do it. The fact of the matter is we need to step 
up. We need to do something that is meaningful, and housing and 
transit is the right way to do it, and we need to have a 
debate. If the money is wasteful spending, count me in. We will 
pare it down. But the bottom line is the needs are huge across 
this country, because we have been living on my grandparents' 
and my parents' investment in infrastructure, and I am not 
exactly young anymore.
    As far as Cyndy Andrus goes, it is a pleasure to have her 
in front of the Committee today. She is an incredible leader in 
the State of Montana. She has been on the City Council of 
Bozeman since 2010, and she has served as mayor of Bozeman for 
the last 2 or 3 years--nod your head, Cyndy, if that is right. 
The fact is that she has been a great leader for the Bozeman 
region, which is, by the way, one of the highest, fastest-
growing areas in our State.
    She has worked in the tourism industry for over 25 years, 
and we all know how important tourism is, and the outdoor 
economy is, for our great State of Montana. And she also serves 
on the Board of Directors for the National League of Cities and 
Towns. She is also the past chair of Montana Tourism Advisory 
Council.
    As mayor, when I visited with her about her willingness to 
participate in this hearing, she pointed out that housing is an 
incredibly complex yet critical challenge in rapidly growing 
Bozeman, as it is, by the way, in other areas across this 
country. And so to address this and other infrastructure 
challenges it is important that we hear from people like Cyndy 
Andrus, and other local officials, on the ground, about what is 
working what is not working. Both of those are critically 
important.
    I look forward to this hearing, and I want to thank you, 
Chairman Brown and Ranking Member Toomey, for having this 
hearing, and welcome, Cyndy Andrus.
    Chairman Brown. Thank you, Senator Tester.
    Senator Sinema will introduce the mayor of Tempe. Senator 
Sinema?
    Senator Sinema. Thank you, Mr. Chairman, and thank you for 
holding this hearing today. I am pleased to introduce my 
friend, the Honorable Corey Woods, who serves as the mayor of 
Tempe, Arizona. He is also the chief of staff at ASU 
Preparatory Academy.
    Mayor Woods served as a councilmember for the city of Tempe 
from 2008 to 2016. He earned his B.A. from the University of 
Michigan and his M.A. from Arizona State University's Mary Lou 
Fulton College of Education.
    The city of Tempe has prioritized a multilevel approach to 
transit, helping make the city more livable and walkable, and 
improving the quality of life for Tempe residents. Like many 
cities in Arizona and across the country, they face challenges, 
taking good, locally driven ideas, like the Tempe Streetcar, 
and bringing them to life. I am proud to have worked with the 
city to secure critical funding for the Streetcar, and the 
Federal Government needs to continue to be a reliable, capable 
partner that helps cities and towns across Arizona grow and 
thrive.
    I am so pleased to have an Arizona witness in today's 
hearing, and I am committed to ensuring that the infrastructure 
needs of local Arizona communities are met now and into the 
future.
    Thank you, Mr. Chairman, and welcome, Mayor Woods.
    Chairman Brown. Thank you, Senator Sinema. I will introduce 
the next two witnesses.
    Commissioner Josh Parsons is the chairman of the Board of 
County Commissioners in Lancaster County, Pennsylvania. He has 
served on the County Commission since 2015, previously serving 
as the Clerk of Courts, a prosecutor in Lancaster County 
District Attorney's Office, and an infantry officer in the 
Army.
    Brian Riedl is a senior fellow at the Manhattan Institute, 
focusing on budget, tax, and economic policy. He previously 
served as chief economist to one of our colleagues, to my 
colleague, Senator Rob Portman, as the lead research fellow on 
Federal budget and spending policy, from 2001 to 2011.
    Welcome, both Commissioner Parsons and Mr. Riedl.
    You are now recognized for 5 minutes, Mayor Horrigan, to 
begin.

         STATEMENT DANIEL HORRIGAN, MAYOR, AKRON, OHIO

    Mr. Horrigan. Good morning, Chairman Brown and Members of 
the Banking, Housing, and Urban Affairs Committee. I am honored 
to provide testimony to the Committee on the critical need for 
a comprehensive approach and the understanding of housing and 
transportation infrastructure, and how they are backbone for 
our communities. I would ask the Committee to submit my 
testimony in full for the record.
    And I am privileged to serve as the Mayor of Akron, Ohio, 
and represent roughly 200,000 people. We are the home of 
Goodyear, Bridgestone-Firestone, Go-Jo Industries--and I would 
venture a guess, if I looked around at all of your desks, I 
would see bottles of Purell. They are made right here in Akron 
and in Ohio, so thank you for the support--the University of 
Akron, and so many other essential industries. Our people are 
the resilient but burdened workers of the Industrial Heartland. 
We are a legacy city, and we are in critical need of 
infrastructure investment.
    And as a mayor, I deal with the daily reality of how the 
Federal Government impacts local citizens and the economic 
impact Congress has on Americans.
    Over the past few decades, Akron has experienced economic 
downturns with major companies on the verge of leaving, a 
pandemic that shut down our local businesses, and critical 
housing issues, exacerbated by the Great Recession over a 
decade ago, that we are still addressing. Communities of color 
have been the hardest hit by these crises. And racial income 
and wealth disparities are vicious and persistent in the city 
of Akron, as they are across this country.
    Housing is a basic human need, and this is something I 
believe we can all agree on. In fact, by creating HUD, a 
cabinet-level position, over 50 years ago, cemented this truism 
to all of us. But housing is also a unique and complex network 
of physical and financial structures, regulated and managed by 
Federal, State, and local institutions. Local municipalities 
have been faced with major problems such as foreclosures, an 
aging housing stock, out-of-town landlords, banks not lending, 
and insufficient Federal housing investments. Housing is 
critical infrastructure.
    All other infrastructure, whether it be water meters, 
roads, electrical lines, broadband fiber, sewers, ultimately 
connect to houses. Many of the most frequently discussed 
housing topics covered by the national media are simply not 
issues in a city like Akron. Our challenge is not displacement 
of the poor, by the wealthy, or middle-class people being 
priced out of the market and having to make long commutes into 
the city. Our challenge is property values that are often too 
low to allow capital stacks for new housing construction, or 
home improvement loans for residents of modest means.
    We need a Federal infrastructure framework that is geared 
toward legacy cities like Akron, and we need programs that can 
help leverage private capital for real estate investment and 
development so that we can keep existing residents in their 
homes, attract new residents to our city, and create markets 
for retail and other small businesses that can serve and employ 
our residents.
    Finally, we cannot ask our citizens to return to work 
without first ensuring they have a stable and healthy place to 
return home. With regard to surface transportation and transit 
options for workers, like housing, our challenges are not 
necessarily those that you read about in the national media. My 
constituents are not facing 2-hour-long commutes and 
intolerable levels of traffic congestion. Our challenge, 
instead, is maintaining the legacy infrastructure that was 
built for a city that once had 30 percent more population than 
it does today, with a limited tax base that is supported by 
working-class residents.
    Our residents have put real skin in the game, demonstrating 
their willingness to invest in our infrastructure, by voting in 
favor of a recent local income tax increase for roadway 
improvements, but that does not come close to addressing all 
our needed transportation investments. It does not eliminate 
the need a Federal transportation program that focuses on 
maintaining the roads that we already have, and providing more 
assistance for alternatives to driving, such as public transit, 
bike, and pedestrian improvements. It does not help electrify 
our bus fleet, or replace our crumbling transit maintenance 
facility, or expand the Bus Rapid Transit into neighborhoods 
cutoff from the regional economy.
    During this pandemic, the U.S. Congress have asked people 
to contribute to their local economy by continuing to work, 
keep paying their mortgages and taxes, and most did just that. 
Further, as we emerge from the pandemic, we want those who lost 
employment to come back to work. That requires stable housing 
and the means to get to and from that job.
    Finally, housing is the foundation of a healthy community. 
I firmly believe that investing in housing infrastructure is 
the absolute best way we can help our children thrive in 
school, decrease neighborhood blight. Stronger and more stable 
housing is key to Akron's future, for our country and our 
future, and I would argue it is where all infrastructure begins 
and ends.
    Thank you for the opportunity to offer these thoughts, and 
I look forward to the conversation today.
    Chairman Brown. Thank you, Mayor Horrigan.
    Mayor Andrus is recognized for 5 minutes.

       STATEMENT OF CYNDY ANDRUS, MAYOR, BOZEMAN, MONTANA

    Ms. Andrus. Good Morning, Chairman Brown, Ranking Member 
Toomey, and Members of the Senate Banking Committee. It is an 
honor to testify before you this morning about the 
infrastructure challenges facing cities and towns across our 
country. As you know, my name is Cyndy Andrus, and I am the 
mayor of Bozeman, Montana, a city of about 50,000, located in 
the southwest corner of the State, 90 miles north of 
Yellowstone National Park. We are one of the fastest-growing 
cities of our size in the United States.
    To support that growth, we need infrastructure--water and 
sewer infrastructure, robust, public transit options, and 
faster broadband. But at the end of every sewer line, bus 
route, and broadband fiber conduit is a home, a long-term, hard 
capital asset. High-quality infrastructure must include 
affordable housing, period.
    I am here today to ask your help in solving our housing 
crisis and to offer some thoughtful solutions to a growing 
problem, not just in Bozeman but across the country.
    In April of 2021, the median single-family home price in 
Bozeman was $660,000, a 50 percent increase over 1 year. 
Townhomes and apartments experienced a 22.4 percent median 
price increase during that same time period.
    Unfortunately, wages are not able to keep up pace with 
these costs. Business owners cannot find employees. Third-, 
fourth-, and fifth-generation Montanans are considering 
uprooting their families, and young couples who have built 
businesses and want to start a family no longer see a way to be 
long-term members of our community.
    I hear stories from business owners every week about top-
tier candidates turning down jobs because they cannot find an 
affordable place to live. These are not just businesses looking 
for workers making $15 an hour, but potential employees with 
Ph.D.'s and salary offers between $75,000 and $100,000 per 
year.
    We have been working with community members and developers 
to solve our affordable housing crisis for years now, using 
every possible tool and incentive to get housing built. In 
2018, we passed an inclusionary zoning ordinance. This led to 
the construction of 17 affordable homes and more than $448,000 
for our cash-in-lieu program. We have an additional 50 homes in 
the pipeline, when in April this year the legislature outlawed 
the tool, putting a stop to the progress we made tackling this 
affordable housing crisis.
    Still, we continue to find ways to incentivize affordable 
housing construction, through reduced impact fees, reduced 
minimum lot sizes, and reduced parking requirements. We have 
also hired code experts to identify where our code 
unintentionally drives up the price of a home through onerous 
overregulation.
    But it is not enough. The rising cost of land, labor, and 
lumber force prices out of reach for many in our community. The 
Federal Government needs to recognize that housing is a basic 
building block of our community. Why build the infrastructure 
if no one can afford to live in the community? We need housing 
that everyone can afford, not just the wealthy.
    We need your help. Here are a few ideas.
    Provide more flexibility and access to tools like CDBG and 
HOME to work for every community to construct more housing. A 
one-size-fits-all solution does not work.
    Provide resources to assist communities in simplifying 
their development review process through hiring more staff and 
auditing the entirety of their code.
    Offer a program that offsets the cost of infrastructure, 
construction, and improvement in exchange for denser 
development.
    In addition to housing, our public transit system in 
Bozeman needs significant Federal investment. It is an 
invaluable service providing over 300,000 rides per year. 
Federal money could help expand routes and upgrade to a greener 
fleet to align with our climate goals to reduce carbon 
emissions.
    I believe we are doing everything we can with the tools we 
have to get affordable housing built in Bozeman. I do not 
expect the Federal Government to build new housing from the 
ground up, but I do have an expectation that you will do 
something by providing tools to local governments to fill the 
gaps that the private sector is not currently meeting.
    On behalf of the 50,000 residents in Bozeman, I am asking 
you to include housing in the American Jobs Plan and to fund it 
as the long-term capital asset it is.
    Thank you Chair Brown, Ranking Member Toomey, and Members 
of the Banking Committee. I look forward to your questions.
    Chairman Brown. Thank you, Mayor Andrus.
    Mayor Woods is recognized for 5 minutes. Mayor Woods.

        STATEMENT OF COREY WOODS, MAYOR, TEMPE, ARIZONA

    Mr. Woods. Thank you. Good morning, Chairman Brown, Ranking 
Member Toomey, and Members of the Committee. Thank you for 
inviting me to be here today to speak with you about the 
housing and transportation infrastructure needs of America's 
cities. I am the Mayor of Tempe, Arizona, and the 2020 census 
will likely say that about 200,000 residents live within our 
borders. However, due to many residents and businesses that 
call Tempe home, including the main campus of Arizona State 
University, we have a daytime population that is 70 percent 
greater than our census population. We are a land-locked 
community, so we only have the option to buildup as we continue 
to grow in size. With our focus on sustainable development, 
density and public transportation are central to our city's 
long-term planning.
    The median income of Tempe residents is about $58,000, a 
bit lower than the national average of $62,800. But the average 
cost of a home is more than $270,000, nearly 25 percent higher 
than the national average. In Tempe, this disparity between 
income and housing costs results in 42 percent of renters and 
24 percent of homeowners being considered cost-burdened, which 
HUD defines as when a household pays more than 30 percent of 
their annual gross income on housing expenses.
    In addition to a dire need for more affordable housing for 
middle-income workers, we also have struggled with the housing 
needs of individuals experiencing homelessness. From 2015 to 
2020, Tempe experienced an increase of over 900 percent in our 
unsheltered population. Federal programs such as the Community 
Development Block Grants, HOME Investment Partnership Programs, 
and Emergency Solutions Grant funding have become essential 
components in delivering housing options to our most vulnerable 
populations.
    In 2016, Valor on Eighth, a 50-unit affordable housing 
complex that serves veterans and their families, opened to our 
community. This project used CDBG to acquire the land and HOME 
funds assisted with the construction of the facility. Low 
Income Housing Tax Credits (LIHTC) were utilized to finance the 
development with Project Based Vouchers in the facility also 
allow for long-term affordability to be financially viable for 
its residents.
    And just last week, I was at the construction site of the 
Nation's first 3D-printed home. The city of Tempe transferred 
the property, originally purchased through CDBG funds, to 
Habitat for Humanity for construction of a total of 16 homes.
    Our city has invested heavily in affordable housing 
initiatives, and through our Hometown for All initiative, we 
negotiate voluntary contributions from developers to our 
affordable housing fund and we dedicate an amount equal to half 
of all permitting fees to these efforts.
    Unfortunately, even with our city's own investments, 
private partnerships, and creative use of Federal programs, we 
do not come close to meeting the needs of our cost-burdened 
residents nor addressing our extraordinary increase in 
unsheltered individuals. Tempe has benefited greatly from a 55 
percent increase in allocations of CDBG, HOME, and ESG over the 
last 5 years, and this upward trajectory of Federal support is 
critical for us to continue our collaboration with our private 
and nonprofit partners. We simply cannot begin to meet the 
housing needs of our residents without increased Federal 
support.
    Public transportation is the other key to Tempe's 
sustainable growth strategy. Many of Tempe's future affordable 
housing projects will be strategically located along the 
existing, metro-area Light Rail system. We have also been very 
fortunate to have broad support from our business community for 
a proposed expansion of this system, known as the Tempe 
Streetcar program. Businesses along the Streetcar corridor have 
actually voluntary increased their self-assessments to meet the 
project's funding needs.
    We also work very closely with our private sector partners 
to plan Tempe's future through thoughtful development that 
includes affordable housing and public transportation to ensure 
financial stability and access to economic opportunity for 
Tempe residents. We invest a significant amount of Tempe tax 
dollars into these efforts and are committed to expanding these 
community resources. We are hopeful for an increased investment 
from the Federal Government so they can become an even bigger 
partner in the process of planning for Tempe's future.
    I would be remiss if I did not note that our city is 
managing through challenging financial times. The city's hotel 
transaction privilege tax revenues are down 50 percent January 
2021 as compared to January 2020, reflecting the steep decline 
in travel and tourism to our region. Similarly, tax revenue 
derived from restaurants and bars and amusements is down over 
20 percent and 60 percent, respectively, over the same time 
period.
    The loss of special events, ASU attendance, workers coming 
into the high-rises, conferences, and spring training has meant 
that the city has fewer resources to provide services while our 
residents and businesses are experiencing more needs.
    Increased investments in infrastructure would provide the 
city with an important tool to address the negative economic 
effects of COVID-19 and continue to develop our community with 
a sustainable and smart approach. We need continued and 
increased Federal dollars to supplement our local investments 
in affordable housing, public transit, infrastructure, and 
programs to provide relief to the homeless, those at risk of 
eviction, and other at-risk groups as our economy recovers and 
local revenues get back on track.
    I am so grateful for the time you have allowed me to speak 
to you about Tempe's perspective and I look forward to 
answering any questions you might have.
    Chairman Brown. Thank you, Mayor Woods.
    Commissioner Parsons, you are recognized for 5 minutes. 
Welcome.

   STATEMENT OF JOSH PARSONS, COUNTY COMMISSIONER, LANCASTER 
                      COUNTY, PENNSYLVANIA

    Mr. Parsons. Thank you, Chairman Brown, Ranking Member 
Toomey, and other Members of the Committee. My name is Josh 
Parsons and I am chairman of the Board of County Commissioners 
in Lancaster County, Pennsylvania. I am a former prosecutor and 
a former Army infantry officer.
    The Board of County Commissioners is the seat of 
legislative and executive powers in the county and has broad 
authority over the county's budget, finances, taxes, debts, and 
contracts.
    At around 550,000 citizens, Lancaster County is the sixth 
most populous of Pennsylvania's 67 counties. Although we are 
best known for our Amish and Mennonite communities, like 
Pennsylvania itself we are a diverse community with urban, 
suburban, and rural residents. Lancaster County is made up of 
60 municipalities: 1 city, 18 boroughs, and 41 townships. We 
pride ourselves on fiscal responsibility and restraint.
    Lancaster County Government has approximately the highest 
general fund balance, which is like a personal savings account 
for an individual, that it has ever had. This was achieved 
through conservative budget management, not through raising 
taxes. Lancaster County's current Board of Commissioners has 
never raised taxes, and, in fact, our county taxes have not 
been raised in nearly a decade, which is difficult to do as a 
county in Pennsylvania.
    Lancaster County has the third-lowest tax rate of the 67 
counties in Pennsylvania, and the lowest of any large county. 
Our bond rating has been rising and we have been good stewards 
of our infrastructure. We are steadily working through a plan 
to repair or replace all of our structurally deficient county 
bridges.
    Like everywhere else, the last year-and-a-half has been a 
challenge for Lancaster County. We went into COVID with the 
best economy we had seen in a generation. Our businesses were 
thriving and our wages were rising for all groups and 
demographics. The impact of the pandemic, and our Governor's 
ensuing draconian lockdowns and refusal to address the economic 
damage of the pandemic, did great harm to our economy.
    However, I am very proud of our county's response to COVID. 
Our county favored a middle course, where we addressed COVID 
and the economic crisis. We pulled together as a community and 
executed what was, in many ways, a model medical and economic 
recovery plan in the Commonwealth of Pennsylvania.
    The Federal CARES Act resources were instrumental in this 
recovery. Lancaster County received approximately $95 million. 
This was a huge amount of money for us. These funds were 
disbursed to us very rapidly after the passage of the bill, and 
arrived during the crisis. We, in turn, put the money quickly 
to use for both medical and economic recovery plans across our 
county. The CARES Act had sufficient flexibility in the 
Treasury guidance that counties were able to use it in varied 
and necessary ways.
    As fiscal conservatives, we were, of course, concerned 
about the cost of the CARES Act and the debt being accrued at 
the national level to pay for it, but we recognized it was a 
necessary response to the crisis because the Government had 
effectively shut down the economy and prevented people from 
earning a living. We felt a heavy responsibility to use this 
money wisely to help our community.
    Unlike the CARES Act, I do not think the so-called American 
Rescue Plan was necessary. Under this act, Lancaster County is 
slated to receive another $106 million. Again, this is a huge 
amount of money for us. Moreover, every other county in 
Pennsylvania, and many municipalities, are receiving 
allocations. This money is arriving after the COVID crisis is 
over, and now come proposals for even more money to be sent out 
through an infrastructure plan.
    At this point, rather than sending out more money, the 
better solution would be to get Government fully out of the way 
and let the economy come roaring back. As I talk to people 
around my county, what I hear about is concern about costs 
going up. Groceries, gas, lumber, everything costs more.
    Inflation is a natural and predictable result of huge 
amounts of money being pumped into the economy. Numbers from 
May show inflation is up 5 percent. All this new money is 
chasing the same amount of goods and services, including here 
in Lancaster County.
    Inflation hurts working-class people in Lancaster County 
the worst because rising prices for things like groceries and 
gas outpace wages. You can see and feel this happening already 
around us. It also eats away at the value of any money put way 
in a bank account for a rainy day.
    So I would fervently ask that before you consider borrowing 
more money from our grandchildren to hand out across the 
country, just stop and take a pause. There is a huge amount of 
money already circulating. For example, if you want to provide 
for infrastructure, Congress could allow more flexibility for 
counties and other municipalities in the use of the existing 
American Rescue Plan funds. What need there still is could then 
be addressed in a much more targeted way.
    Please do not further bankrupt our country and take from 
our yet unborn grandchildren without waiting to use the 
existing massive amounts of money that have already been 
distributed to States and local governments like ours.
    Thank you.
    Chairman Brown. Thank you, Commissioner Parsons.
    Mr. Riedl is recognized for 5 minutes. Welcome.

  STATEMENT OF BRIAN RIEDL, SENIOR FELLOW, MANHATTAN INSTITUTE

    Mr. Riedl. Good morning, Chairman Brown, Ranking Member 
Toomey, and Members of the Committee. Thank you for inviting me 
to participate in today's hearing. My name is Brian Riedl. I am 
a senior fellow at the Manhattan Institute, and I will offer 
four principles for a responsible infrastructure proposal.
    First, Congress should avoid piling on new taxes and debts. 
The Federal budget outlook is already totally unsustainable, 
and the American Jobs Plan would be the most expensive 
nonemergency law in half a century. And it is coming at a time 
when the national debt is already projected to double, from $17 
trillion to $35 trillion, between 2019 and 2030.
    And it gets worse. Washington is projected by CBO to run 
$100 trillion in budget deficits over the next 30 years, and 
that is assuming low interest rates. If interest rates exceed 
the CBO baseline by 1 percentage point it would add $30 
trillion in additional interest costs over three decades, just 
a 1 percent rise in interest rates.
    Even if this infrastructure spending is mostly paid for in 
new taxes, it is still not fiscally responsible because we 
already need nearly every progressive tax proposal just to pay 
for the current programs we have. Let's pay for our current 
commitments before piling on new ones.
    Second, States should use the Federal windfalls they have 
received. State and local governments are in the process of 
receiving $350 billion for budget deficits that mostly no 
longer exist. As Mr. Toomey mentioned, California is reporting 
a $75 billion budget surplus. States are also holding 
approximately $180 billion in unspent K-12 education grants 
from earlier relief bills. That is $530 billion in short-term 
funding for State and local governments that are mostly in 
surplus.
    The best use of a large, one-time windfall is to make a 
large, one-time investment in infrastructure, which is mostly a 
State and local function anyway. Washington can even use 
matching funds, if necessary, to encourage States to reapply 
this money.
    Third, any additional Federal funding should be funded 
within the current $61 trillion spending baseline over the 
decade. Any Federal matching funds or truly national projects 
can be funded this way. For example, trimming discretionary 
spending by just 1.5 percent this year would save $500 billion 
over the decade, that could be spent on infrastructure. Cutting 
spending on the rich could save $1 trillion over the decade. If 
infrastructure is truly a national priority, the responsible 
offsets are already there within the budget.
    Finally, while infrastructure can certainly use some 
upgrades, lack of funding is not the main problem. Rather, 
America's infrastructure is among the most expensive, 
bureaucratic, and slowly built in the world. Consider that CBO 
reports that Federal investments deliver average returns of 
just 5 percent, versus 10 percent for private sector 
investments. The per-mile cost of the interstate highway 
construction quadrupled from 1960 through 1990, and has 
quadrupled again since.
    The Davis-Bacon Act raises wage costs by as much as 22 
percent. Mandatory project labor agreements add costs too. Our 
subway systems cost as much as quadruple the world average to 
build.
    Many delays are driven by the necessary but slow 
Environmental Impact Statements and Historical Artifact 
Reviews. Consider that environmental reviews commonly exceed 
1,000 pages and average 7 years to complete, some taking more 
than 17 years, and no ground can be broken until the project 
has survived the legal gauntlet, including appeals by any 
litigant. By comparison, these statements take 1 to 2 years in 
Canada, and 3.5 years in the EU.
    Let me wrap up by predicting that we may hear much today 
about how investments will grow the economy and bring in enough 
revenue to nearly pay for themselves. Yet the University of 
Pennsylvania's Penn-Wharton Budget Model reports that 
investments in the American Jobs Plan will, over the long run, 
create no net jobs, reduce wages by 0.3 percent, reduce the 
capital stock by 1.5 percent, and reduce the GDP by 0.3 
percent. That is just the spending side. The taxes would make 
the drag even larger, and Penn-Wharton cannot be dismissed as a 
right-wing group.
    Therefore, I recommend that Congress encourage State and 
local governments to use their $500 billion in recent aid, 
offset any Federal supplemental funding, and reform our 
infrastructure policies to make them more effective and 
efficient.
    Thank you.
    Chairman Brown. Thank you, Mr. Riedl. We will begin the 
questions. Let's start with Mayor Horrigan. Some have 
suggested, given the Federal funding Akron has received from 
the American Rescue Plan Act that you are flush with cash. That 
is the rhetoric. But, Mayor, what is the reality? Is there 
anything extra or, ``left over,'' that can be used for the 
housing and public transit investments that you have called for 
in your community?
    Mr. Horrigan. You know, I have heard those concerns about 
the influx of cash. We are also dealing with a State 
legislature that wants to even the score, kind of, and cut our 
funding. You know, we have to run a balanced budget every year, 
so we do not get a chance to borrow to be able to make sure 
that we can do that.
    You know, the other part of that is that, you know, it kind 
of remind of an analogy too. When a lead-off hitter comes up at 
the beginning of a baseball game and they hit a home run, the 
crowd cheers and his teammates are congratulating him. But the 
manager is not so sure yet, because he knows that there are 
8\2/3\ innings left yet before they have to get through the 
rest of the game.
    It is a good start. I mean, that transportation 
infrastructure, the Rescue Plan dollars have been a good start 
to be able to address a lot of those needs. And I understand 
the amounts are staggering in that way, but there is a 
significant amount of investment that we have made, and quite 
frankly, we need partners on these things too. And I agree 
that, you know, some of those things that take a long time for 
environmental review also look at, you know, some of the 
mandates from the EPA. I mean, we are still working through our 
consent decree, was a billion-dollar mandate from the EPA that 
received no funding.
    At the end of the day, we have to go out and fix these 
things. You know, we can't wait necessarily for someone to come 
along. But it really sure would be nice to have a partner in a 
lot of these efforts too.
    Chairman Brown. Mayor Horrigan, your city, many parts of 
your city, in North Akron and Goodyear Heights and Firestone 
Park and Kenmore look a lot like the neighborhood, parts of the 
neighborhood that I live in, in Cleveland. The homes may look 
affordable but too often banks will not make the small mortgage 
loans that families need to buy or fix them up.
    What would it mean for a young family and for the growth of 
the community in Akron if there were funds available to do 
repairs on these homes, existing homes, that could sell for 
$50,000 or $60,000 or $80,000 or $90,000 here?
    Mr. Horrigan. You know, 6 years ago I kind of started this 
with a question to the community, and to me I think it is a 
customer service question. And I asked them, ``Tell me what you 
want,'' and they said, ``We want to be able to stay in our 
neighborhoods. We want to be able to have a decent job. How are 
we able to fix up homes?'' And even if we took the Rescue Plan 
dollars now, we could probably fix up, depending on whether it 
is a $20,000--not an addition but an improvement to a home.
    We are also an age-friendly city, so if it is a young 
family who wants to move in, we want to be able to give them, 
you know, a house that is livable. You know, we have an aging 
housing stock that most of it was built before 1970. In fact, 
we did more construction, you know, during the '20s and '30s 
than we did in the last 20 years. Fortunately, we have seen a 
significant amount of construction in new housing. We have an 
over-supply of bad housing, so if we can repair those houses 
and help those young families, they are able to stay in Akron.
    And we are trying to grow our population, and there are 
each different markets to say what do different neighborhoods 
want? Some want to stay and improve their homes. Maybe somebody 
wants to downsize. Those are all the different markets that we 
are trying to be in, and we are actually seeing a fairly robust 
real estate market, where time on market has been cut in half 
and the average price of a home has almost doubled in the last 
6 years, because we have not been able to keep up with that 
supply.
    Chairman Brown. Well, we know in a city like yours, or a 
city like Lancaster or York, Pennsylvania, that the housing 
that is that old often has challenges with lead-based paint and 
all of that too.
    Mayor Woods, what would it mean for a city like Tempe if 
you could count on Federal funding being available, count on it 
available for new transit projects as soon as you could use it, 
instead of waiting for years? Would that affect how quickly you 
could get workers on the job?
    Mr. Woods. Oh, absolutely. I mean, there is a huge 
connection, Senator, between, you know, like housing and 
transit equate to job growth, I mean, just as a connection. We 
have a 28-mile-long light rail line that spans from Mesa to 
Tempe to Phoenix, that opened in 2008. And since then over 
35,000 jobs have been created within a half-mile of those rail 
services. And if you add onto that, there has been over $11 
billion in public and private investment in that corridor, and 
5.5 million square feet of new education facilities.
    So the connections between sort of transit investment and 
quality of life and job growth are very clear, from our 
perspective. So the reality is increased Federal funding and 
more support for infrastructure would be huge to the city of 
Tempe and huge for our entire region.
    Chairman Brown. Thank you. Mayor Andrus, you and Mayor 
Woods both lead cities that are fast growing, attracting new 
residents, especially from the West Coast. That is creating a 
housing challenge, as you mentioned. Would additional Federal 
investments in affordable housing help you meet these 
challenges?
    You are on mute, Mayor.
    Ms. Andrus. Oh, pardon me.
    Chairman Brown. Go ahead.
    Ms. Andrus. Sorry. Yes, absolutely. Additional dollars 
would help us, whether that is additional dollars through new 
programming or additional dollars to look at how we can access 
programs that already exist and allow more flexibility in some 
of those programs that already exist would be very helpful to 
my community.
    Chairman Brown. Thank you, Mayor.
    Senator Toomey is recognized.
    Senator Toomey. Thank you, Mr. Chairman. Commissioner 
Parsons, first of all, thanks very much for joining us. I think 
you mentioned that Lancaster County will receive about $106 
million as a result of the bill passed in March by our 
Democratic colleagues, and that $106 million is on top of 
roughly $95 million Lancaster County got from the CARES Act. So 
that is $201 million in just a little over a year.
    Approximately, if you happen to know, off the top of your 
head, about what percentage of the total Lancaster County 
budget is that?
    Mr. Parsons. Thank you, Senator Toomey. Our total budget 
with State money is about $334 million. Our general fund 
budget, which is mostly county money, is about $215 million. So 
you are talking about basically the whole value of our general 
fund budget. Our yearly total budget, it is, you know, about 
two-thirds.
    Senator Toomey. About two-thirds. Now Lancaster County, as 
I understand it, was a county in which revenue was a little bit 
below last year. Do you know about how much lost revenue you 
had that could be reasonably attributed to COVID and the 
lockdown?
    Mr. Parsons. We are estimating right now somewhere around 
$9 million for 2020.
    Senator Toomey. Around $9 million. So the Federal 
Government, between the CARES Act and this most recent bill, 
sent, what, 25 times the lost revenue, approximately.
    So let me ask you about another question. You know, if it 
were the case that States and municipalities simply could not 
borrow funds when needed, then I understand how people would 
suggest, well, that is something the Federal Government can do 
so we ought to do this.
    But my understanding is across the credit rating spectrum, 
large and small municipalities are like borrowing costs for 
States and municipalities are actually significantly below 
their pre-COVID levels, and municipal debt issuance has been 
very strong. So far in 2021, State and local governments have 
issued nearly $190 billion in bonds than the same period in 
2019, and an ordinary year, pre-COVID, was only $152 billion. 
So the combination of low interest rates and high volume 
certainly does not suggest that municipalities cannot borrow.
    Now I understand Lancaster County, awash with cash from the 
Federal Government, so you do not need to issue debt, but if 
you did, do you think the county would have a difficult time 
issuing bonds or otherwise borrowing funds that were needed?
    Mr. Parsons. I talk to a lot of my colleagues around the 
State and I am not aware of any difficulties in borrowing for 
capital projects. In Lancaster County, we are trying to pay 
down our debt. We have paid down around $100 million of debt, 
and we would like to continue that. But we do, from time to 
time, still need to borrow new money or sometimes refinance 
debt. We did that, I think, twice in the last year, once in 
March, right around the beginning of the pandemic, and then 
once in August, and we did not have any difficultly borrowing, 
and I am not aware of any significant difficulty.
    Senator Toomey. Thank you. Mr. Riedl, you made a point that 
U.S. infrastructure tends to be more costly than our 
international peers, which is kind of maddening for taxpayers 
to think that they have to pay more than the going rate, so to 
speak.
    An example that is pretty amazing, New York's East Side 
Access Project, which will connect the Long Island Railroad 
with New York's Grand Central Station, is estimated to cost 
$3.5 billion per mile, which is more than 7 times the 
international average for this type of project, 7 times. Can 
you help us understand why American infrastructure is so 
expensive and inefficient?
    Mr. Riedl. Thank you, Senator. There are multiple reasons. 
If you are looking at the New York system, that is actually not 
atypical. Four times the global average is the subway cost in 
New York City. A lot of it, the reason that American 
infrastructure is expensive, as I mentioned, the environmental 
reviews can take 7, sometimes 17 years to finish. And then you 
have to build defensively, because basically anybody can 
challenge the environmental reviews and the historical 
artifacts reviews. There are so many lawsuits that can delay 
you for years. So you end up with defensive construction that 
is more meant to avoid lawsuits than to necessarily build 
efficiency.
    You also have things like the Davis-Bacon Act, which I know 
a lot of Senators [audio disruption]. You also simply have 
contracting problems, where often Governments can contract with 
the lowest bid, even with contractors who have a reputation for 
going way over the cost. There are a lot of places to reform 
infrastructure.
    Senator Toomey. OK. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey. Senator Van 
Hollen I am not sure is here. He is not.
    Chair Smith from Minnesota is recognized.
    Senator Smith. Chair Brown, does my identification still 
say Chair Smith?
    Chairman Brown. No, it does not, but I thought I would say 
it anyway, because of the excellent Subcommittee you chaired 
last week. So I will not make it a habit, but thank you.
    Senator Smith. Thank you so much, Chair Brown, and also 
Ranking Member Toomey, and I want to thank very much all of our 
guests today. It is great to hear from you.
    I think that we have such a huge opportunity in this moment 
to make significant strides forward on infrastructure. And I 
approach this conversation as being a former chief of staff for 
the mayor Minneapolis, and understanding what mayors go through 
as they are trying to address real needs in a community. And I 
would like to focus in on two of those if I can today.
    The first is affordable housing, and if we have a moment I 
would like to also talk a little bit about clean energy 
infrastructure. These are two things that I think are essential 
to include in the American Jobs Plan infrastructure package 
that the Senate is working on.
    So I suspect that as mayors you all are experiencing first-
hand the crisis of housing in our country, a complete mismatch 
between supply and demand for housing, especially affordable 
housing, and especially for renters. I am interested in hearing 
what it is like in your cities. There is a shortage of housing 
stock, and this, I think, is something that we can really 
address, both rental housing as well as home ownership.
    Now what I hear in Minnesota is that the cost of new 
construction is a significant barrier to building, especially 
in rural areas but also in small towns and big cities, and that 
we are seeing sort of all sorts of challenges with supply chain 
as we build out of COVID, literally, particularly lumber, for 
example. By some estimates, the recent lumber shortage has 
raised the price of building a new home by almost $40,000. And 
then also there are issues--you know, there are just so many 
issues.
    So let me ask the mayors that are with us today, what 
barriers do you see to building new housing in your community, 
and how can Congress help you, as local leaders, address these 
challenges? And maybe I will start with you, Mayor Woods.
    Mr. Woods. Well, thank you, Chair Smith. I really respect 
it. If Senator Brown called you Chair Smith, I am going to call 
you Chair Smith as well.
    I just wanted to say, so on our end we, actually, in the 
city of Tempe, recognize, from a study that was conducted even 
before I became mayor, that we need 11,000 additional units of 
housing by the year 2040, just to keep pace with current 
demand.
    Some of the challenges, quite honestly, are not just simply 
the cost of lumber and steel and everything else. It is the 
fact that our State legislature has implemented policies such 
as we are the only State in the entire country without tax 
increment financing as a tool. Inclusionary zoning, rent 
control, those are all practices that have been banned by our 
State legislature.
    But the reality is from being a mayor on the ground, and 
you know this from being a former chief of staff to a mayor, 
that, you know, we still have an obligation to provide housing 
and solutions to our cities. I cannot just, as a mayor, blame 
the State legislature and wash my hands of it. We have to 
figure out other ways to get things done.
    So we currently invested $1.2 million of city-owned funds 
from our Hometown For All program, which we developed in a 
proprietary fashion here, to clean up five different lots of 
land along our light rail corridor for development. The purpose 
of that is to make sure that when we are giving land to 
developers they are actually getting clean dirt without the 
remediation costs, which allows for them to truly deliver 
affordable and workforce housing solutions. And we think what 
we are currently doing, just as a city, we will get, in the 
next couple of years, 325 units of new, affordable rental 
housing, and 50 more affordable home ownership units as well.
    But that, as we said, from the 11,000 units I first talked 
about, that only scratches the surface. So we need additional 
support from the Federal Government to make sure that everyone 
can continue to live and work within our city, regardless of 
income and regardless of occupation.
    Senator Smith. Thank you. Thank you. Mayor Andrus, I am 
sure you experience what mayors in my State experience, which 
is that a lack of access to housing becomes a limiting factor 
on economic growth, because companies cannot find people to 
work if there are not places for them to live, and Bozeman is a 
fast-growing community.
    How can the Federal Government help communities like 
Bozeman on housing?
    Ms. Andrus. Well, thank you for the question. I agree that, 
you know, we are one of the fastest-growing cities in the 
entire country, and we are doing everything we can, reducing 
impact fees and reducing minimum lot sizes and parking 
requirements.
    But I think where the Government can help is to look at the 
existing programs and allow more flexibility and access in 
those particular areas, particularly when you think about the 
size of Bozeman, almost 50,000, we fall in the cracks there. We 
are not big enough to be a city. We are too big to be 
considered rural. So I think looking at those existing programs 
and really thinking about flexibility there.
    And I would also just add that preemption is becoming a 
huge issue in Bozeman, and in Montana as well, with the 
legislature taking away tools, as I mentioned in my testimony, 
like inclusionary zoning.
    We also have real short houses that do come on the market. 
They are on for less than a month, so our turnover is quite 
rapid.
    Senator Smith. Right. Thank you very much, Chair Brown. I 
will hold my clean energy questions for later, if we have time.
    Chairman Brown. Thank you, Senator Smith. Senator Scott 
from South Carolina is recognized for 5 minutes.
    Senator Scott. Thank you, Mr. Chairman, for holding this 
hearing. It is really important, certainly. And thank you to 
the Ranking Member Toomey for participating in this process as 
well. It is so important for us to uncover some of the ways 
that we can accelerate some of the projects that are so 
important to our local communities.
    As many of you may recognize, I spent 13 years on the 
county level, four times as the chairman of Charleston County 
government, and I will say that the length of time that it 
takes to go through the environmental process to see road 
projects begin is incredibly important. I remember one 
southeastern rail project that was submitted in 1992, and was 
not approved until 2017.
    We have projects in our State, projects that are really 
important to the citizens of the low country, and especially 
coastal South Carolina, projects like I-73, that is a really 
important project for my State, and frankly, would create about 
29,000 jobs, in addition to providing a hurricane evacuation 
route for those folks living in Horry County. This is a product 
of a 30-year planning process, with environmental permit 
requests submitted back in 2011, and finally completed just a 
few years ago.
    The previous Administration sought to address the 
longstanding issue of environmental requirements delaying 
progress by codifying interagency requirements that would 
hopefully bring it down to about a 2-year process, as opposed 
to 5 years or 7 years, or as in the rail project that I just 
named, 25 years.
    I was incredibly disappointed to see that the Executive 
order was revoked by the Biden administration, signaling a 
return to a lengthy, overly detailed permitting and 
environmental review process for new infrastructure projects.
    Let me ask you, Mr. Parsons and Mr. Riedl, how can Congress 
work to responsibly address the strenuous environmental 
regulation times so that States and municipal governments can 
reap the benefits of these much-needed projects in a timely 
fashion?
    Mr. Parsons. Well, thank you, Senator, for the question. I 
agree with your comments. I was at the White House when 
President Trump had a discussion with many of our colleagues 
across the country at the county level about rolling back many 
of those burdensome environmental regulations. So it is really, 
as you mentioned, to add years and years to the process.
    The other piece, I think, for our county, is there is a 
huge amount of money that has already been allocated. So if we 
can repurpose some of that money and allow it to be used for 
actual infrastructure, like the most recent American Rescue 
Plan funds, a lot of that we are not even going to be able to 
use it on infrastructure unless Treasury changes some of the 
guidance on that. So I think that is the two pieces I would add 
to that.
    Senator Scott. Thank you.
    Mr. Riedl. If I could jump in on that too. One key 
difference between the U.S. versus Canada and the EU is when 
they have disputes with the environmental review process, with 
local stakeholders, they are solved at the agency level very 
quickly. In the United States, they are solved through lawsuits 
that can take years.
    So a very simple fix, which is to adjudicate at the agency 
level instead of through lawsuits, could significantly cut down 
the amount of time, while still making sure that stakeholders 
have a voice.
    Senator Scott. Thank you, Mr. Riedl. I will say that before 
I left as chairman of County Council in Charleston County I 
approved projects, new road projects, to take the truck traffic 
through minority neighborhoods out of those neighborhoods, 
through an access road. That road was literally just finished--
I think I approved that in 2007, I think it was--this year, 14 
years later, and much of the delay, literally the environmental 
studies that need to be done. No one is suggesting that they do 
not need to be done, but when there are challenges or issues, 
we need to find a way to accelerate that process so that we 
will not see road projects double in price before we actually 
get it done. The voters say yes to something on the local 
level, but that they do not see for 14 years. That is just 
ridiculous, and I really appreciate both of your comments.
    And, Mr. Chairman, I will yield back the balance of my 
time.
    Chairman Brown. Thank you, Senator Scott. Senator Van 
Hollen from Maryland is recognized for 5 minutes.
    Senator Van Hollen. Thank you, Mr. Chairman, and to all the 
witnesses, thank you for being here.
    Mayor Woods, I have a question for you about the HOME 
program, which, in most States, local jurisdictions, cities, is 
the primary Federal tool available to local governments to 
produce more affordable rental and owner-occupied housing. It 
is a flexible program.
    So my question to you is, President Biden has proposed 
additional $35 billion for this program as part of his American 
Jobs Plan, his Build Back Better initiative. Could you talk 
about how you might use some of these funds to build and 
produce more affordable housing?
    Mr. Woods. Absolutely. Thank you, Senator Van Hollen. I 
appreciate the question. We actually use HOME funds in the city 
of Tempe to purchase units outright. Our Housing Department is 
very active. We are a completely landlocked, 42-square-mile 
community, and so all of the development, frankly, is infill. 
It is redeveloping things that were already developed. So we 
actually go out there and actively purchase land ourselves, and 
purchase units with those HOME funds.
    And what we really feel that this allows us to do is to 
create permanent affordability, not a situation where we have 
to do a deal, kind of in a one-off with the developer, and they 
have the rates as sort of workforce for a couple of years, then 
at some point the apartment complex gets flipped, and then the 
rates simply become market rate or luxury rates. We really do 
use those funds to ensure that the city can really be in the 
driver seat, with our hands on the steering wheel at 10 and 2, 
purchasing units outright, expanding the affordable and 
workforce housing in our community, and most importantly, 
making those units permanently affordable.
    Senator Van Hollen. Thank you. Thank you, Mayor. Mayor 
Horrigan, in addition to programs like the HOME program that 
can help expand production of affordable housing, I think most 
folks who have looked at this agree that we also need to expand 
the HUD affordable housing voucher programs, choice vouchers. 
In fact, Senator Todd Young from Indiana and I have introduced 
bipartisan legislation to expand the use of vouchers for 
families with young kids. We proposed 500,000 additional 
vouchers over 5 years.
    Could you comment on that? Is it your experience that there 
is a shortage of affordable housing vouchers in your city?
    Mr. Horrigan. Thank you, Senator Van Hollen. In fact, we 
work very closing with our Public Housing Authority. In fact, 
there is a significant shortage. There is probably a 19,000-
person waiting list at this particular point. In fact, 2 weeks 
ago, we passed legislation locally that prevents landlords from 
refusing a voucher during the pandemic. So we need to be able 
to keep people in their homes.
    One of the first things I did, and this was back 5 years 
ago, we took a really good look at our housing market, and 
quite frankly, we had issued about 15 building permits in 2014. 
Last year, there were about 1,000 building permits issued, that 
are in construction or are finished. And one of the things that 
we tried to do, and I think it highlights what Mayor Woods just 
said, you know, with the strong demand, we did not have any 
demand. The housing market was coded and it was flatlined. So 
we needed to incentivize the market, so we abated property 
taxes for 15 years. That part has worked.
    So we are seeing a lot of new housing being constructed, 
but what are we doing with the aging housing stock? And I do 
not care if it is my mom who needs to stay in her home and she 
needs a ramp, and I do not care if it is a young family that 
maybe needs a new furnace. That is the kind of flexibility and 
I think partnership that we can all kind of agree on, to say 
let's keep a person in their home. Let's let them use a voucher 
to be able to stay there.
    Because it kind of that critical piece. If you want to be 
able to get to your job, you have got to have a way to get 
there, and you have got to have somewhere to come back to. And 
I think that has been our focus--how do we use all of those 
different capital stacks and partnerships to keep people in 
their homes, and I think growing our city once again.
    Senator Van Hollen. I appreciate that, Mayor Horrigan. And, 
you know, my view is that one of the shortcomings of the 
proposed American Jobs Plan is that it does not create a major 
additional source of funds for the affordable housing voucher 
programs. The President's budget does a very good job, but we 
will be working with the Chairman and Ranking Member and others 
on this other piece. Thank you all very much.
    Mr. Horrigan. Thank you.
    Chairman Brown. Thank you, Senator Van Hollen. Senator 
Daines from Montana, is recognized for 5 minutes.
    Senator Daines. Chairman, thank you, as well as Ranking 
Member Toomey, and thank you for holding this hearing today, 
and I am especially proud to see my very own mayor of my 
hometown, Mayor Andrus, here. I went from kindergarten through 
college in Bozeman, and it is good to have our mayor in front 
of the hearing.
    I do not have to tell anyone here on the call, in this 
virtual hearing, that Montana has been discovered. Just this 
weekend, in fact, the New York Post wrote an article about the 
out-of-control housing market in Montana, and the desire for 
more and more people to move into our great State. We 
understand why that is the case, but it creates additional 
burden for our infrastructure. And that is nothing new for 
Bozeman. We have seen this rapid growth now, over the last 
decade, and frankly, during my lifetime, watching what is 
happening in Bozeman, it has just accelerated to a level now 
that we have never seen before.
    As you are probably all aware, a recommendation to increase 
the threshold of a metropolitan statistical area, called MSAs, 
from 50,000 to 100,000 residents, was made to the Office of 
Management and Budget earlier this spring. I penned my own 
letter to OMB. I know we are working together here with Senator 
Tester, expressing opposition to this proposal, and joining a 
number of my colleagues in this effort as well.
    Bozeman is one, and has been one of the fastest-growing 
micropolitan in the country, and we just recently crossed that 
50,000 threshold, so now we are called a metropolitan.
    Mayor Andrus, could you talk for a moment about the impact 
this change would have on the affected Montana communities, and 
what it would mean in the future?
    Ms. Andrus. Thank you, Senator. It is nice to see you, and 
I appreciate the question. Yeah, I think that Bozeman has been 
preparing to become a city of 50,000 for some time now, and 
changing the goal posts, so to speak, in the middle of the game 
would be a real game-changer.
    Money that we get from the Federal Government, particularly 
around transit, have a significant impact in my community, and 
without that availability, all those options, we are not able 
to access any of those options for housing--excuse me, 
transportation.
    So I believe that if that number were to change it would 
have a severe impact on our opportunities to access funding as 
we grow into a larger community.
    Senator Daines. Thanks, Mayor, and I agree with you. I 
think it is changing the rules kind of in the middle of that 
game that is most concerning, as you all work your long-term 
plans for growth in the future, and I appreciate that answer.
    As many warn, as we know now, the unnecessary stimulus 
package in March has led to inflation across the board, 
regardless. Some of my colleague are pushing for more deficit 
spending under the impression that the infrastructure somehow 
will pay for itself.
    Mr. Riedl, do you think more deficit spending on 
infrastructure, like what has been requested by the President's 
plan, is essentially costless?
    Mr. Riedl. Thank you for the question. The data shows that 
it certainly not costless. For Federal spending or tax cuts to 
pay for themselves, you actually need to have a 500 percent 
return on investment, because you then tax that 500 percent, 
you back the 100 percent.
    Instead of a 500 percent, the CBO reports that Federal 
investments have a 5 percent return on investment, not 500 
percent. That means that in terms of paying for themselves, you 
would need 100 years to pay for one-fifth of the program in net 
present value. That does not mean that these programs are 
unworthy or that we should not do them, but they are not going 
to pay for themselves.
    I will add that that is just for typical investments. In 
terms of the American Jobs Plan, the University of Pennsylvania 
Penn-Wharton Budget Model concluded that the American Jobs Plan 
spending provisions will create no net jobs, will reduce wages 
by 0.3 percent over the long term, reduce the capital stock by 
1.5 percent, and reduce the long-term GDP by 0.3 percent over 
the long term. And again, Penn-Wharton is not a conservative 
group.
    So not only is investments, well, sometimes worthy, do not 
pay for themselves, but specific investments in the American 
Jobs Plan have actually been projected by Penn to reduce 
economic growth.
    Senator Daines. Thank you, Mr. Riedl. Chairman Brown, I am 
going to return some time back to you. I know it is highly 
unusual in a Senate hearing, but thank you for the time, and 
Mayor Andrus, it is really good to have you here. Your 
background there makes me homesick.
    Chairman Brown. Thank you, Senator Daines.
    The senior Senator from Montana is recognized for 5 
minutes.
    Senator Tester. Thank you, Chairman Brown, and I appreciate 
Senator Daines giving me an extra 30 seconds, because Montana 
is Montana, right? Now, Cindy, it is good to have you here. I 
very much appreciate your commitment to the cause on housing.
    From a Bozeman perspective, could you just tell me, number 
one--and if you have already done this, I apologize--can you 
tell me what kind of shortage you have in Bozeman? Is there a 
number of units that you are short on, if you could tell me 
that? And then tell me what we could do, at the Federal level, 
to address the affordability challenge.
    Now look, I have read some of the testimony and I have 
heard what some folks have said here, and I may get to a point 
where we ask that question, is affordable housing even 
available. It is not in Montana. I do not think Montana is an 
outlier. I think it is this way all over the country. But could 
you tell me what you are short in Bozeman, and then what 
Federal program do you look at and say, ``You know what? That 
one is really doing some good things for housing.''
    Ms. Andrus. Thank you, Senator Tester. We, over the last 
year, have done a study to look at our housing inventory, and 
we need approximately 6,000 homes to be constructed by 2025. 
And at the pace we are going, that is a lot of housing to 
provide.
    What I believe can help, and I think where I have seen some 
great impacts, are some of those programs that we have right 
now. But what needs to happen is that there needs to be more 
flexibility and accessibility in those programs, like CDBG and 
HOME.
    As you know, Bozeman is 50,000, and we fall, or have fallen 
between the cracks. So, as I mentioned, we are not a large 
city, we are not considered rural, and so access to those 
dollars are difficult for us.
    So as I mentioned before, we have issues around not only 
housing, but when you do not have housing you have the 
economics. People are having a hard time finding employees to 
work. We have young people that are not able to stay in 
Bozeman. We have seniors on fixed incomes who are having 
difficulty here as well.
    And as you may have seen in our paper, in the Bozeman 
Chronicle last February, I am sure all of you may have seen 
this, but there was a young gentleman, standing out on the 
street corner with a sign that said, ``Local business owner, 
wife pregnant, paid rent for 10 years. Please sell me a home.'' 
And so that is the kind of problem that we have here. He was 
lucky enough to find a place, but it is a problem.
    Senator Tester. So can you tell me--and I do not know if 
you have had anybody do any projections, or just tell me from 
regular old mayor's perspective, is this having a serious 
negative impact on economic development to Bozeman?
    Ms. Andrus. Well, absolutely, because when you have 
companies that have jobs available, between $75,000 and 
$100,000, for example, and you have top-tier candidates that 
come in and are qualified for those jobs, but they cannot find 
a house, they cannot find any affordable housing, even with a 
job that pays that much. So that is one problem. You also have 
those folks that are making $15 an hour, who are even having a 
tougher time of finding housing. So it is definitely having an 
impact.
    Not only that, we have more tourists than we can count. We 
are not able to have a local option sales tax. Even, as you 
know, we have been trying for years and years and years. So 
that continues to be a problem, as they have a huge impact on 
our infrastructure here.
    Senator Tester. Yeah. Just so people know, you said you 
need 6,000 homes by 2030 in the Bozeman region. How many homes 
do you have currently now? Is that 10 percent of what you have, 
or 5 percent, or what?
    Ms. Andrus. In terms of----
    Senator Tester. Your total houses now. Do you know how many 
you have now?
    Ms. Andrus. I am sorry, Senator Tester, I do not have that 
number right off the top of my head.
    Senator Tester. That is OK. And I want to thank Senator 
Daines and others who have gotten on the bill that I have to 
stop the threshold doubling that was done by the ops 
management, that was done, by the way, on the very last day of 
the Trump administration. I do not know what you did to the 
Trump administration to make them be so angry with you, but 
they really put the boots to you on this one. And I was told 3 
weeks ago that OMB was going to have a decision on this in a 
month. Well, guess what? They have got 1 week. And hopefully 
they are listening, and we are looking for them to take it back 
to the 50,000 population threshold.
    With that, Mr. Chairman, I will forego the 30 seconds that 
Senator Daines gave me. We can give those to Warnock. Talk to 
you later. Thank you.
    Chairman Brown. Thank you, Senator Tester. Senator Ossoff 
is recognized for 5 minutes, from Georgia.
    Senator Ossoff. Thank you, Mr. Chairman, and thank you to 
our panel.
    Mayor Horrigan, like you have done in Akron, many cities 
across Georgia are looking to make major investments in 
infrastructure, including Columbus, Georgia, the Chattahoochee 
River Valley region in Muscogee County. And these investments 
in transit and transportation networks can better connect 
communities and businesses, make it easier for folks to get to 
work, attract more jobs and investments.
    So as we build infrastructure legislation here in the 
Senate, Mayor Horrigan, do you agree that regions of Georgia, 
like the Chattahoochee River Valley, Columbus, Georgia, can 
benefit, as have the community you represent, with major 
investments in transit and transportation infrastructure?
    Mr. Horrigan. Thank you, Senator. Absolutely. Actually, 
Akron sits between Cleveland and Canton, and I appreciate 
Senator Daines' and Mayor Andrus' efforts to not be on that 
MSA. They tried to lump us in with Cleveland's MSA. They are a 
distinct region, and, quite frankly, the market will figure 
out, you know, when people need to get back and forth 
someplace. We happen to be blessed with two Federal highways 
that connect both of those cities. But getting people back 
there and getting them, you know, on public transportation, 
back and forth to where the jobs are so they can get back home, 
is absolutely critical, you know, for them to be able to get to 
that job and make sure that they can get back home too.
    So those investments, they do pay off, because people are 
able to get around better and they have a stable option to be 
able to get to work and get back home.
    Senator Ossoff. Thank you so much, Mayor. I appreciate 
that.
    Mayor Andrus, like in Bozeman, a lot of the economic 
development and job growth we are seeing in Georgia is taking 
place in smaller communities outside of the State capital. 
Evans, Georgia, is the perfect illustration of such a town. 
Evans is located just outside of Augusta, where we have Fort 
Gordon, which hosts the U.S. Army Cyber Center for Excellence. 
And from 2015 to 2020, Evans saw a 17 percent increase in its 
employed population.
    Growing cities and towns need to invest in infrastructure 
to build more roads, connect people with accessible transit, 
attract more jobs. How could a city like Evans, Georgia, 
benefit from historic investments in infrastructure, based upon 
your experience leading Bozeman, please?
    Ms. Andrus. Well, thank you. I really appreciate the 
question. Are you asking specifically about housing or transit? 
Maybe you could clarify that for me.
    Senator Ossoff. Your experience with investments in the 
infrastructure that is right for your community.
    Ms. Andrus. Oh, thank you. Well, I think that we have a 
capital improvement plan that we look at for 5 years out, and 
we look at where we need to make those investments and what 
kinds of things are really going to help us open development 
and open up areas for new building in Montana.
    And I believe that some of those investments, some of the 
programs that I mentioned that Federal Government offers 
through the CDBG and the HOME program, if you look at making 
them a little more flexible. We are not an entitlement 
community, I am sure perhaps the community that you are 
mentioning is not either, so we have to compete for funding 
from some of our smaller communities in Montana. And if we were 
able to have a little more flexibility in that program, a 
little more funding in that program, I think it would help a 
lot to aid in the infrastructure decisions that we are making.
    Senator Ossoff. Thank you so much, Mayor Andrus. In my 
remaining time, please, Mayor Woods, Tempe is making big 
strides in clean energy, and congratulations to you for the 
investments that you are making in renewable energy 
infrastructure, which creates jobs and helps us sustain our 
natural habitat.
    In southwest Georgia, including areas of the State like 
Albany, Valdosta, Bainbridge, and Thomasville, we are also 
uniquely positioned to take advantage of opportunities in solar 
energy production, given our location and infrastructure that 
already exists there.
    Can you please reflect, Mayor Woods, based on your 
experience, on how southwest Georgia, given the assets that we 
have, might benefit economically from increased investment in 
clean energy, as you have made such investments in and around 
Tempe?
    Mr. Woods. Absolutely, Senator Ossoff. Thank you for the 
question. So energy use accounts for about 70 percent of our 
municipal carbon emissions, and about 50 percent of our 
community investments. We have actually six municipal buildings 
here in the city of Tempe with solar on them right now, to 
minimize municipal carbon emissions.
    And so one of our big priorities is working on these sort 
of resiliency hubs with our local electric companies--Arizona 
Public Service, Salt River Project. These hubs really do 
demonstrate how solar and battery storage can be used in the 
case of extreme heat and temperatures. And right now, today is 
an 118-degree day, right here in Arizona. So the fact that we 
are studying the use of these resiliency hubs is huge, and 
really will help to protect us when there are issues when it 
comes to extreme heat.
    So funding that really helps to continue to prioritize this 
kind of work, when it comes to the solar [audio disruption] 
environmental sustainability and reducing emissions is huge for 
the city of Tempe and for the entire region.
    Senator Ossoff. Thank you, Mayor Woods. Thank you, Mr. 
Chairman.
    Chairman Brown. Thank you, Senator Ossoff. I believe no one 
else is in the queue for questions?
    Senator Toomey, I do not know if you have anything else. I 
think that you are not in the queue.
    So thank you. Thanks to all of you, all five of you, for 
being here today. We have heard from mayors across the country 
that they and their citizens are doing all they can to serve 
their communities, to create places where families and 
communities and businesses can flourish.
    We have heard from these local officials that they are 
doing all they can but that they need help from the Federal 
Government to build the infrastructure of the 21st century, and 
decidedly that includes housing and transit in that 
infrastructure. It does not matter if you are in the industrial 
Midwest or surrounded by the Rocky Mountains or a booming 
community in the Southwest, Federal help has played in the past 
and needs to play an essential role in supporting communities 
in the private sector in allowing our workers and businesses to 
compete around the world.
    My friend, Jon Tester, I think summed it up when he said we 
can either get serious about this or we can turn the keys over 
to China.
    Thanks to our witnesses. For Senators who wish to submit 
questions for the record, these questions are due by the close 
of business Tuesday, June 22. For our witnesses, please submit 
your responses to those questions for the record 45 days from 
today.
    Thank you all for being here. The meeting is adjourned.
    [Whereupon, at 11:26 a.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    Today we're joined by local leaders who represent a cross section 
of the country.
    Whether it's an old industrial city or a college town, whether it's 
Indian Country or Appalachia, local leaders understand how proud people 
are of their hometowns.
    They want their town to be successful, they want their communities 
to grow and attract jobs. They don't want families to be told to pick 
up and leave to find better opportunities. They don't want to lose 
workers forced out by rising housing costs.
    And Mayors also know the many opportunities we can unleash, if we 
make a once-in-a-generation investment to rebuild our country's 
infrastructure.
    They know what their communities need: They know the transit 
project that would revitalize a neglected neighborhood and bring new 
residents and customers to Main Street.
    They know where there are shovel-ready projects that would build 
new houses workers can actually afford.
    They know where lead pipes and lead paint are still poisoning kids 
today, in America in the year 2021--and they know the Building Trades 
workers that are ready to get to work replacing those water lines and 
retrofitting those homes.
    And mayors understand how all of these pieces fit together. Jobs 
and infrastructure are inseparable--you can't create the former without 
the latter.
    We know when a business decides where to build a new plant or 
office, they look at the infrastructure--they want to know if there is 
broadband, if there are homes their workers can afford, if there is a 
bus or a train that runs nearby.
    When a young family is deciding whether to relocate for a new job, 
they think about how they'll get to work, how long will the commute be, 
whether their whole paycheck will get eaten up by rent or the mortgage.
    These issues all intersect--and while they may look different in 
Bozeman and Akron and Tempe, we know they are national problems. Mayors 
and city councils and county commissions can do a lot of good--but they 
can't do it all on their own.
    When we electrified the country--from the plains to Appalachia to 
the Deep South--we didn't ask each individual mayor to come up with 
their own grid or build their own dam.
    When we built the interstate highway system, we didn't expect every 
county to foot the bill for its stretch of road.
    We became the world's largest economy, with the strongest middle 
class, because we came together to invest in great national projects 
that joined us all together as one country.
    And we did not force workers and their families to foot the bill.
    The corporations that rely on our public goods to make their vast, 
growing profits should contribute to the upkeep.
    While stock buybacks climb and corporate profits soar, Americans' 
States, cities, and towns scrape by each year, making hard choices 
about their budgets.
    They don't want to shortchange public safety, so they wait another 
year to replace aging buses. They don't want to cut teacher salaries 
and lose talent, so there's no money to turn dilapidated properties 
into affordable homes in their neighborhoods.
    Over and over, I hear the same thing from leaders in places large 
and small, rural and urban: to attract good jobs, they need more 
resources.
    They need homes their workers can afford, and ways for them to get 
to work.
    Today, we'll hear from Mayor Daniel Horrigan, from Akron, Ohio--a 
proud Midwestern city that has endured decades of a tax and trade 
policy that encouraged its businesses to shut down production in Ohio, 
and move good-paying union jobs abroad, where companies can pay lower 
wages and exploit workers.
    That outsourcing doesn't just affect individual workers and their 
families--as Mayor Horrigan will tell you, it erodes the tax base, 
making it that much harder for cities to build the infrastructure that 
would draw in new investment.
    We'll also hear from Tempe, Arizona, Mayor Corey Woods, who is 
working to tackle their affordable housing shortage and showing the 
country how new transit innovation isn't just for big coastal cities--
that investment has the potential to spur growth in Sunbelt cities, and 
across the country.
    And we'll hear from Mayor Cyndy Andrus of Bozeman, Montana. She'll 
tell you that high housing prices aren't just a problem in wealthy 
neighborhoods in big cities--her city's housing shortage is driving up 
home prices and leaving families without options.
    All of these mayors, and the local leaders I talk to in Ohio, will 
tell you they've tried to make it on their own because they have to--
not because they want to, not because they don't need investment.
    They want to be part of a broad national project. They want to 
build thriving, equitable and resilient communities.
    It's time for all our communities, and the workers and the families 
that call them home, to share in our country's prosperity.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Thank you, Mr. Chairman. And thank you to our witnesses, especially 
my fellow Pennsylvanian, Josh Parsons from Lancaster County.
    Our last hearing about infrastructure was almost a month ago. At 
that time, I noted that a group of my Republican colleagues and I had a 
constructive discussion with President Biden about a potential 
bipartisan infrastructure package. I also noted three features of an 
infrastructure package that should have broad, bipartisan support.
    First, it should responsibly support real physical infrastructure. 
That is, the platforms and systems we share and use to move people, 
goods, and services. That means things like roads, bridges, ports, and 
airports.
    Second, a package cannot undo the 2017 tax reforms that helped 
create the best economy of my lifetime. Before COVID, we were 
experiencing an economic boom. We had the lowest unemployment rate in 
50 years, more jobs than people looking for work, a record low poverty 
rate, and wage growth across the board with wages growing fastest for 
the lowest income earners. That's the economy we should work to get 
back to.
    Third, we should not pay for infrastructure by borrowing billions 
of more dollars. The good news is we have hundreds of billions of 
unspent COVID funds that Congress can repurpose. According to CBO, over 
$700 billion of the Democrats' March spending bill won't be spent until 
after 2021.
    Unfortunately, the Biden administration would not agree to these 
sensible features and walked away from negotiations with us. I 
understand there are bipartisan discussions under way and my hope is 
that an agreement can be reached that's consistent with these features.
    The scope and size of the Administration's infrastructure plan is 
particularly untenable. Take the scope of the plan. The Administration 
wants to redefine what infrastructure means in order to spend taxpayer 
dollars on their Green New Deal agenda and other liberal policies.
    Let's consider some examples. The Administration proposed almost a 
quarter-of-a trillion dollars for housing. Setting aside the issue of 
whether it's the responsibility of Federal taxpayers to buy and build 
everyone a home, housing is not infrastructure. Housing is housing. The 
Administration also proposed $100 billion in consumer rebates to 
purchase electric vehicles, and $10 billion for a Civilian Climate 
Corps.
    In addition, the $2.2 trillion size of the Biden administration's 
plan is wildly excessive. Even the plan's spending on real physical 
infrastructure, does not comport with economic reality, given how much 
money Congress has spent over the past year.
    Take transit spending, for example. The Administration wants $85 
billion dollars for transit. This figure fails to account for the 
billions of dollars the Federal Government has recently provided for 
transit.
    In March, Democrats spent $30 billion dollars on transit. Democrats 
did that after Congress provided more than $40 billion dollars for 
transit in response to COVID in 2020. CBO estimates that of this $70 
billion, $22 billion--almost one-third of COVID transit dollars--won't 
be spent until after 2021. And this $70 billion was on top of the $13 
billion we annually spend. That's a total of $83 billion dollars that 
Congress spent on transit over the course of 1 year. Amazingly, that 
number exceeds both the annual operating and capital costs of all the 
transit agencies in the U.S combined.
    The Biden administration seems to have lost sight of the fact that 
the Federal role in infrastructure spending has historically been 
limited. States and local governments are primarily responsible for 
funding infrastructure projects--for the obvious reason that 
infrastructure projects are generally local or regional in nature. For 
example, bus and rail stations built in San Francisco don't do a lot 
for people in Pittsburgh.
    And States and local governments are currently awash with cash. In 
the aggregate, State and local tax collections set a new record in 
2020. In addition to record revenues, over the course of 12 months, 
Congress sent more than $850 billion to States and local governments.
    States are now looking for ways to spend this windfall. For 
example, California has a budget surplus of over $75 billion that it 
may use to send out ``free'' money to Californians. And my home State 
of Pennsylvania is sitting on a $3 billion revenue surplus, plus $7 
billion in unused Federal aid.
    More wasteful spending by Congress is not what our economy needs. 
It's already contributed to the harmful inflation Americans are 
experiencing now. Inflation is at 5 percent--the highest it's been in 
13 years.
    None of this should come as a surprise. Earlier this year President 
Clinton's Treasury Secretary Larry Summers was warning us of the 
significant inflationary risks of excess spending. And that warning was 
before the Democrats' March $1.9 trillion spending bill. But Democrats 
ignored his warning. And now Democrats want to spend hundreds of 
billions more.
    Congress still has an opportunity to enact a sensible, bipartisan 
infrastructure package. But that's only possible if we support real 
physical infrastructure that we pay for with existing funds--without 
raising taxes or borrowing billions. We can meet our country's 
infrastructure needs without jeopardizing our economic recovery and 
putting future generations of Americans further into debt.
                                 ______
                                 
                 PREPARED STATEMENT OF DANIEL HORRIGAN
                           Mayor, Akron, Ohio
                             June 15, 2021
    Chairman Brown and Members of the Banking, Housing, and Urban 
Affairs Committee, I am honored to provide testimony to the Committee 
on the critical need for a comprehensive approach and understanding of 
housing and transportation infrastructure, and how they are the 
backbone for our communities. I would ask the Committee to submit my 
testimony in full for the record. I am privileged to serve as the Mayor 
of Akron, Ohio, and represent roughly 200,000 people. We are the home 
of Goodyear, Bridgestone-Firestone, Go-Jo Industries, the makers of 
Purell, the University of Akron, and so many other essential 
industries. Our people are the resilient but burdened workers of the 
Industrial Heartland. We are a legacy city, and we are in critical need 
of infrastructure investment.
    As Mayor, I deal with the daily reality of how the Federal 
Government impacts local citizens and the economic impact Congress has 
on Americans. Over the past few decades, Akron has experienced economic 
downturns with major companies on the verge of leaving, a pandemic that 
shut down our local businesses, and critical housing issues, 
exacerbated by the Great Recession over a decade ago, that we are still 
addressing. Communities of color have been the hardest hit by these 
crises. And racial income and wealth disparities are vicious and 
persistent in Akron, as they are across this country.
    Housing is a basic human need. This is something I believe we can 
all agree on. In fact, by creating HUD, a cabinet level position, over 
50 years ago, cemented this truism to all of us. However, ``housing'' 
is more than what we see as our home. Housing is a unique and complex 
network of physical and financial structures--regulated and managed by 
Federal, State, and local institutions. Local municipalities have been 
faced with major problems such as foreclosures, an aging housing stock, 
out-of-town landlords, banks not lending, and insufficient Federal 
housing investments. Housing is critical infrastructure. All other 
infrastructure--water meters, roads, electrical lines, broadband fiber, 
sewers ultimately connect to houses.
    Many of the most-frequently discussed housing topics covered by the 
national media are simply not issues in cities like Akron. Our 
challenge is not displacement of the poor by the wealthy, or middle-
class people being priced out of the market and having to make long 
commutes into the city. Our challenge is property values that are often 
too low, to allow capital stacks for new housing construction, or home 
improvement loans for residents of modest means.
    We need a Federal infrastructure framework that is geared toward 
legacy cities like Akron. We need programs that can help leverage 
private capital for real estate development so that we can keep 
existing residents in their homes, attract new residents to our city, 
and create markets for retail and other small businesses that can serve 
and employ our residents. Finally, we cannot ask our citizens to return 
to work without first ensuring they have a stable and healthy place to 
return HOME.
    With regard to surface transportation and transit options for 
workers, like with housing, our challenges are not necessarily those 
that you read about in the national media. My constituents are not 
facing 2-hour long commutes and intolerable levels of traffic 
congestion. Our challenge, instead, is maintaining the legacy 
infrastructure that was built for a city that once had 30 percent more 
population than it has today, with a limited tax base that is supported 
by working-class residents. Our residents have put real skin in the 
game, demonstrating their willingness to invest in our infrastructure, 
by voting in favor of a recent local income tax increase for roadway 
improvements, but that doesn't come close to addressing all our needed 
transportation investments. It doesn't eliminate the need a Federal 
transportation program that focuses on maintaining the roads that we 
already have, and providing more assistance for alternatives to 
driving, such as public transit and bike and pedestrian improvements. 
It doesn't help electrify our bus fleet, or replace our crumbling 
transit maintenance facility, or expand Bus Rapid Transit into 
neighborhoods cut off from the regional economy.
    During this pandemic, you--the United States Congress--have asked 
people to contribute to their local economy by continuing to work, keep 
paying their mortgage and taxes, and most did just that. Further, as we 
emerge from the pandemic, we want those who lost employment to come 
back to work. That requires stable housing and the means to get to and 
from that job. Finally, housing is the foundation of a healthy 
community. I firmly believe that investing in housing infrastructure is 
the absolute best way we can help our children thrive in school, 
decrease neighborhood blight and violence, and decrease economic 
disparities among our Black residents. Stronger and more stable housing 
is key to Akron's future, and for our country's future, and I would 
argue it's where ALL infrastructure begins and ends.
    Thank you for the opportunity to offer these thoughts, and I look 
forward to the conversation today.
                                 ______
                                 
                   PREPARED STATEMENT OF CYNDY ANDRUS
                        Mayor, Bozeman, Montana
                             June 15, 2021
    Good Morning, Chairman Brown, Ranking Member Toomey, and Members of 
the Senate Banking Committee. It is an honor to testify before you this 
morning about the infrastructure challenges facing cities and towns 
across our country. I am Mayor Cyndy Andrus. I am the mayor of Bozeman, 
Montana, one of the fastest-growing cities in the country. Bozeman is a 
vibrant community with the State's land grant university, Montana 
State; a thriving tech sector; a booming tourism economy; and a 
pristine outdoor environment neighboring America's first National 
Park--Yellowstone. These assets have drawn people from all over the 
country and the world to Bozeman and our great State of Montana.
    To support such growth, Bozeman certainly needs improved water 
infrastructure, faster broadband, and more robust public transit 
options. But at the end of every sewer line, bus route, and broadband 
fiber conduit is a home--a longterm, hard capital asset. That home must 
be affordable and occupied for these investments to provide a return to 
the taxpayer. Clearly, in Bozeman and so many communities like ours, 
high-quality infrastructure must include affordable housing. Period.
    Housing affordability and lack of housing stock are not just 
coastal, urban issues. As I hope to illustrate in my testimony, housing 
affordability challenges impact communities of all sizes across the 
country.
    As reported in the Bozeman Daily Chronicle, the median home price 
in Bozeman was $660,000 in April 2021. \1\ That reflects a 50 percent 
increase in the median price for a single-family home in 1 year. 
Similarly, townhomes and apartments in Bozeman experienced a 22.4 
percent median price increase from April 2020 to April 2021. \2\ 
Unsurprisingly, it is impossible for wages in Gallatin County to keep 
pace with this explosive growth in housing costs. The divergence 
between wages and home prices affects everyone. Business owners cannot 
find employees; thus, they must reduce hours or turn down clients. 
Third-, fourth-, and fifth-generation Montanans have to consider 
uprooting their families after contributing for decades to what makes 
Montana special. Young couples who have built businesses and want to 
raise children in Bozeman no longer see a way to be long-term members 
of our community.
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     \1\ https://www.bozemandailychronicle.com/news/city/as-housing-
costs-skyrocket-bozemans-workers-andemployers-feel-the-pinch/article--
5ad77d72-8578-5134-b5fe-b5ea0b1df9d8.html
     \2\ https://www.bozemandailychronicle.com/news/economy/housing-
prices-in-bozeman-decline-frommarch-to-april-but-theyre-still-way-up-
from/article--364d1f82-1fa9-54d2-86a2-6a649b8379c7.html#
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    Every week, I hear from business owners in our community who have 
top tier candidates turn down job offers because home prices are out of 
control. The people who cannot afford a home in Bozeman are not just 
hourly workers making $15/hour, but also potential employees with 
Ph.D.'s and salary offers between $75,000 and $100,000 per year. Rising 
housing prices and an unemployment rate of 3 percent \3\ create the 
perfect storm where businesses in our community cannot attract the 
talent they need, nor is there a local talent pool actively looking for 
jobs. Construction companies and developers cannot even find the 
workforce to build workforce housing.
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     \3\ https://fred.stlouisfed.org/series/MTGALL1URN
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    Without an affordable place to live, residents of Bozeman cannot 
participate in our community. They cannot enjoy our trails, they cannot 
send their kids to our top-notch local schools, and they cannot 
contribute to our economy as consumers, employees, or employers.
    Now, as Senators Tester and Daines know, Montanans do not just sit 
around and complain about our problems. We find solutions. After 
consulting with community members including low-income families, 
business owners, and developers, the City of Bozeman adopted an 
inclusionary zoning ordinance in 2018. The ordinance required projects 
with ten or more single family homes to sell 10 percent of the homes to 
be affordable at 70 percent of AMI or pay cash-in-lieu to the City's 
community housing fund. The regulation led to the construction of 17 
affordable homes, more than $448,000 for our cash-in-lieu program, and 
roughly 50 more homes were in the development review process. \4\ Not a 
bad start to a program that was just over 2 years old in a city of 
about 50,000 with construction timelines averaging 18-24 months. 
However, in April, our legislature outlawed this tool to get 
firefighters, teachers, and nurses--the backbone of our community--into 
homes at a reasonable price point. They put a stop to the progress we 
had made combatting this crisis.
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     \4\ https://community-housing-hub-bozeman.hub.arcgis.com/
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    Even with inclusionary zoning no longer an option, Bozeman has 
continued to find ways to incentivize affordable housing construction 
through reduced impact fees, reduced minimum lot sizes, and reduced 
parking requirements. In addition, Bozeman no longer approves projects 
using the City's most restrictive single-family zoning designation, RS. 
Further, the City's minimum development density requirements for 
projects encourage dense, compact development. Finally, the City has 
hired development code and urban planning code experts to identify 
where Bozeman's code unintentionally drives up the price of a home 
through onerous overregulation.
    Despite all of these efforts, it still is not enough. The rising 
cost of land, labor, and lumber force prices for many homes out of 
reach in our community. The City will continue to pursue ways we can 
ease the burden of regulations and facilitate denser development. 
However, we are asking for help.
    The Federal Government needs to recognize that housing goes hand in 
hand with streets, sewers, and bridges. Housing is the basic building 
block of a community. Why build all that infrastructure if no one can 
afford to live in the community?
    We need housing that the community as a whole can afford, not just 
the wealthy. Many Senators on this Committee have seen what happens to 
communities when the middle tier of housing is hollowed out, and only 
the wealthy can afford to live there. It is not pretty.
    Luckily, Congress can help and there is no need to create new 
programs. Nonentitlement communities like Bozeman must compete for 
Federal funds through existing programs like the Community Development 
Block Grant program, the HOME program, and the Housing Trust Fund from 
within the State's allocation. Thus, competition for these limited 
funds pits Bozeman against much smaller nonentitlement communities in 
Montana, all with limited resources to construct more housing. And our 
rural neighbors in places like Three Forks and Wilsall, Montana, need 
similar investments for the critical rural housing programs at USDA 
Rural Development. Finding solutions that only work for large 
metropolitan areas is not a way to solve this crisis. We need the 
Senate Banking Committee to provide more flexibility and access to 
tools like CDBG and HOME to work for every community to construct more 
housing. A one-size-fits-all solution does not work.
    In addition to programs that help working families, the Federal 
Government needs to invest in communities that are innovating to solve 
this problem. For example, the Federal Government can provide resources 
to assist communities in simplifying their development review process 
through hiring more staff and auditing the entirety of their code. 
Additionally, the Federal Government can offset the costs of 
infrastructure construction and improvement in exchange for denser 
development. No Mayor or any other community member expects the 
Government to construct new housing from the ground up, but we do 
expect you to act rather than sit on your hands in the middle of a 
crisis. Your actions can provide tools to local governments and fill 
the gaps that the private sector is not currently meeting.
    Housing is not the only aspect of Bozeman's infrastructure under 
the Banking Committee's jurisdiction in need of more significant 
Federal investment. Our public transit system, called Streamline, is an 
invaluable service in our community by providing more than 300,000 
rides per year. \5\ Federal dollars could allow Streamline to expand 
its route network to serve more members of our community. Additionally, 
Streamline could use Federal money to upgrade to a greener fleet in 
line with Bozeman's climate goal to reduce emissions.
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     \5\ https://streamlinebus.com/about/achievements/
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    On behalf of the more than 50,000 residents of Bozeman, I am urging 
you to fund housing in the American Jobs Plan and to allow us to 
continue to build the infrastructure to keep Bozeman the Most Livable 
Place.
    Thank you, Chair Brown, Ranking Member Toomey, and Members of the 
Banking Committee; I look forward to your questions.
                                 ______
                                 
                   PREPARED STATEMENT OF COREY WOODS
                         Mayor, Tempe, Arizona
                             June 15, 2021
    Good morning Chairman Brown, Ranking Member Toomey, and Members of 
the Committee. Thank you for inviting me to be here today to speak with 
you about the housing and transportation infrastructure needs of 
America's cities.
    I am the Mayor of Tempe, Arizona. You may not have heard as much 
about our city as our neighbors in the Maricopa County urban area such 
as Phoenix and Scottsdale, but we are a thriving and innovative city. 
The 2020 Census will likely say that about 200,000 residents live 
within our borders. However, due to many businesses that call Tempe 
home, including the main campus of Arizona State University, we have a 
daytime population that is 70 percent greater than our census 
population. We are a land-locked community, so we only have the option 
to build up as we continue to grow in size. With our focus on 
sustainable development, density and public transportation are central 
to our city's long-term planning.
    The median income of Tempe residents is about $58,000, a bit lower 
than the national average of $62,800. But the average cost of a home is 
more than $270,000, nearly 25 percent higher than the national average. 
In Tempe, this disparity between income and housing costs results in 42 
percent of renters and 24 percent of homeowners being considered cost-
burdened, which HUD defines as when a household pays more than 30 
percent of their annual gross income on housing expenses.
    In addition to a dire need for more affordable housing for middle-
income workers, we also have struggled with addressing the housing 
needs of individuals experiencing homelessness. From 2015 to 2020, 
Tempe experienced an increase of over 900 percent in our unsheltered 
population. Federal programs such as Community Development Block 
Grants, HOME Investment Partnership Programs and Emergency Solutions 
Grant funding have become essential components in delivering housing 
options to our most vulnerable populations. In 2016, Valor on Eighth, a 
50-unit affordable housing development that serves veterans and their 
families opened to our community. This project used CDBG to acquire the 
land and HOME funds assisted with the construction of the facility. Low 
Income Housing Tax Credits (LIHTC) were utilized to finance the 
development while Project Based Vouchers in the facility allows for 
long-term affordability to be financially viable for its residents. 
Just last week, I was at the construction site of the Nation's first 3D 
printed home. The City of Tempe transferred the property, originally 
purchased through CDBG funds, to Habitat for Humanity for construction 
of a total of 16 homes. This 3D-printed home offers an innovative model 
for the future of home ownership with a scalable, cost-effective 
solution and the Federal Government has a part in this success story.
    Our city has invested heavily in affordable housing initiatives. 
Through our Hometown for All initiative, we negotiate voluntary 
contributions from developers to our affordable housing fund and we 
dedicate an amount equal to half of all permitting fees to these 
efforts. Since January of this year, this program has raised nearly 
$4.5 million. Our City Council recently approved investing $1.2 million 
for the purposes of conducting environmental and archaeological 
assessments on city owned land for the eventual development of 325 
affordable rental housing units and 50 affordable home ownership units. 
We are currently waiting for the developer to receive approval for Low 
Income Housing Tax Credits in order to get the project started.
    Unfortunately, even with the city's own investments, private 
partnerships, and creative use of Federal programs, we do not come 
close to meeting the needs of our cost-burdened residents nor 
addressing our extraordinary increase in unsheltered individuals. Tempe 
has benefited greatly from a 55 percent increase in allocations of 
CDBG, HOME, and ESG over the last 5 years, and this upward trajectory 
of Federal support is critical for us to continue our collaboration 
with our private and nonprofit partners. We simply cannot begin to meet 
the housing needs of our residents without increased Federal support.
    Public transportation is the other key to our sustainable growth 
strategy. Many of Tempe's future affordable housing projects will be 
strategically located along the existing, metro-area Light Rail system. 
This regional train creates a travel corridor between central Phoenix 
and Mesa, the third largest city in the State, with downtown Tempe and 
the ASU campus at the center of the regional light rail system.
    We have been fortunate to have broad support from our business 
community for a proposed expansion of this system, known as the Tempe 
Streetcar program. Businesses located along the Streetcar corridor have 
instituted voluntary self-assessments to contribute to the project's 
funding needs. Recently, the Federal Government, through the Federal 
Transit Administration, approved additional funding for the Streetcar 
project and we are grateful for that investment. Mesa, our neighboring 
municipality, and home to the Chicago Cubs spring training facility, 
has partnered with us to explore the feasibility in expanding the 
Streetcar from downtown Tempe into the City of Mesa. This expansion 
would span the public transportation corridor through downtown Tempe, 
ASU's upcoming 355-acre innovation corridor, and a 1.3 million square 
foot open air shopping development to the Cubs' Stadium, all the while 
linking industrial zones and creating opportunity for future affordable 
housing development.
    Just Friday, our City Council held a joint meeting with the Boards 
of the Tempe Chamber of Commerce, Tempe Tourism Office, and other local 
business leaders. We work very closely with our private sector partners 
to plan Tempe's future through thoughtful development that includes 
affordable housing and public transportation to ensure financial 
stability and access to economic opportunity for Tempe residents. We 
invest a significant amount of Tempe tax dollars into these efforts and 
are committed to expanding these community resources. We are hopeful 
for an increased investment from the Federal Government so they can 
become an even bigger partner in the process of planning for Tempe's 
future.
    I would be remiss if I didn't note that the city itself is managing 
through challenging financial times.
    The city's hotel transaction privilege tax revenues are down over 
50 percent January 2021 as compared to January 2020, reflecting the 
steep decline in travel and tourism to our region. Similarly, tax 
revenue derived from restaurants/bars and amusements is down over 20 
and 60 percent, respectively, over the same time period.
    The loss of special events, ASU attendance, workers coming into the 
high-rises downtown, conferences, and spring training has meant that 
the city has fewer resources to provide services while our residents 
and businesses are experiencing more needs.
    To that end, we have been proactive in enacting cost cutting 
measures for the city, and Federal aid has played an important part in 
helping to maintain services while offering relief programs for our 
residents and businesses. Increased investments in infrastructure would 
provide the city with an important tool to address the negative 
economic impacts of COVID-19 and continue to develop our community with 
a sustainable and smart approach.
    We need continued and increased Federal dollars to supplement our 
local investments in affordable housing, public transit, 
infrastructure, and programs to provide relief to the homeless, those 
at risk of eviction, and other at-risk groups as our economy recovers 
and local revenues get back on track.
    I am so grateful for the time you have allowed me to speak to you 
about Tempe's perspective. I feel fortunate to do what I do every day. 
I look forward to answering any questions you might have.
Additional Resources
Tempe data source: https://www.census.gov/quickfacts/tempecityarizona
National data source: https://www.census.gov/quickfacts/fact/table/US/
    PST045219
Tempe Affordable Housing Strategy: https://www.tempe.gov/home/
    showpublisheddocument/75941/637008820631300000
City of Tempe Hometown for All: https://www.tempe.gov/home/
    showpublisheddocument/86729/637424358222370000
Maricopa Association of Governments, Point In Time Count: https://
    www.azmag.gov/Programs/Homelessness/Point-In-Time-Homeless-Count
Maricopa Association of Governments, Management Committee Meeting, Day 
    Time Population: http://azmag.gov/Portals/0/Documents/MagContent/
    MC--2018-04-11--AGD-Packet.pdf?ver=2018-04-04-111733-210
                                 ______
                                 
                   PREPARED STATEMENT OF JOHN PARSONS
          County Commissioner, Lancaster County, Pennsylvania
                             June 15, 2021
    Thank you Chairman Brown, Ranking Member Toomey, and the other 
Members of the Committee.
    My name is Josh Parsons and I am Chairman of the Board of County 
Commissioners in Lancaster County, Pennsylvania. I am a former 
prosecutor and a former Army Infantry Officer.
    The Board of County Commissioners is the seat of legislative and 
executive powers in the county and has broad authority over the 
county's budget and finances, taxes, debts, and contracts.
    At around 550,000 citizens, Lancaster County is the 6th most 
populous of Pennsylvania's 67 counties. Although best known for our 
Amish and Mennonite communities, like Pennsylvania itself, we are a 
diverse community with urban, suburban, and rural residents. Lancaster 
County is made up of 60 municipalities--1 City, 18 Boroughs, and 41 
Townships.
    We pride ourselves on fiscal restraint and responsibility.
    Lancaster County Government has approximately the highest general 
fund balance (like a personal savings account for an individual) that 
it has had ever. This was achieved through conservative budget 
management, not raising taxes. Lancaster County's current Board of 
Commissioners has never raised taxes. In fact, our county taxes have 
not been raised in nearly a decade, which is difficult to do as a 
county in Pennsylvania.
    Lancaster County has the 3rd lowest tax rate of the 67 counties in 
Pennsylvania and the lowest of any large county. Our bond rating has 
been rising and we have been good stewards of our infrastructure. We 
are steadily working through a plan to repair or replace all of our 
structurally deficient bridges.
    Like everywhere else, the last year-and-a-half has been a challenge 
for Lancaster County. We went into COVID with the best economy we had 
seen in a generation. Our businesses were thriving and wages were 
rising for all groups and demographics.
    The impact of the pandemic, and our Governor's ensuing draconian 
lockdowns and refusal to address the economic damage of the pandemic, 
did great harm to our economy.
    However, I am very proud of our County's response to COVID. Our 
County favored a middle course--we addressed COVID and the economic 
crisis. We pulled together as a community and executed what in many 
ways was a model medical and economic recovery plan in the Commonwealth 
of Pennsylvania.
    The Federal CARES Act resources were instrumental in our recovery. 
Lancaster County received approximately $95 million. This was a huge 
amount of money for us. These funds were disbursed to us very rapidly 
after passage of the bill and arrived during the crisis. We in turn put 
the money quickly to use for both our medical and economic recovery 
plans across our county. The CARES Act had sufficient flexibility in 
the Treasury guidance that counties were able to use it in varied and 
necessary ways.
    As fiscal conservatives, we were, of course, concerned about the 
cost of the CARES Act and the debt being accrued at the national level 
to pay for it. But we recognized it was a necessary response to the 
crisis because the Government had effectively shut down the economy and 
prevented people from earning a living. We felt a heavy responsibility 
to use the money wisely to help our community.
    Unlike the CARES Act, I do not think the so-called American Rescue 
Plan was necessary. Under this Act Lancaster County is slated to 
receive about $106 million. Again, this is a huge amount of money for 
us. Moreover, every other county in Pennsylvania, and many other 
municipalities, are receiving allocations.
    This money is arriving after the COVID crisis is over. And now come 
proposals for even more money to be sent out through an infrastructure 
plan.
    At this point, rather than sending out more money, the better 
solution would be to get Government fully out of the way and let the 
economy come roaring back.
    As I talk to people around my county, what I hear about is concern 
about costs going up. Groceries, gas, lumber--everything costs more.
    Inflation is a natural and predictable result of huge amounts of 
money being pumped into the economy. Numbers from May show inflation is 
up 5 percent. All this new money is chasing the same amount of goods 
and services, including here in Lancaster County.
    Inflation hurts working class people in Lancaster County the worst 
because rising prices for things like groceries and gas outpace wages. 
You can see and feel this happening already around us. It also eats 
away at the value of any money put away in a bank account for a rainy 
day.
    So, I would fervently ask that before you consider borrowing more 
money from our grandchildren to hand out across the country--just stop 
and take a pause. There is a huge amount of money already circulating. 
For example, if you want to provide for infrastructure, Congress could 
allow more flexibility for counties, and other municipalities, in the 
use of the existing American Rescue Plan funds. What need there still 
is could then be addressed in a much more targeted way.
    Please do not further bankrupt our country and take from our yet 
unborn grandchildren without first waiting to use the existing massive 
amounts of money that have already been distributed to States and local 
governments.
    Thank you.
                                 ______
                                 
                   PREPARED STATEMENT OF BRIAN RIEDL
                   Senior Fellow, Manhattan Institute
                             June 15, 2021
    Good morning Chairman Brown, Ranking Member Toomey, and Members of 
the Committee. Thank you for inviting me to participate in today's 
hearing.
    My name is Brian Riedl. I am a Senior Fellow in Budget, Tax, and 
Economic Policy at the Manhattan Institute for Policy Research. The 
views I express in this testimony are my own, and should not be 
construed as representing any official position of the Manhattan 
Institute.
    My testimony today will offer four principles for responsible 
infrastructure investments:

    First, Congress should avoid piling on new taxes or debt. 
        The Federal budget is already facing $100 trillion in baseline 
        deficits over 30 years, and any taxes should address that 
        first.

    Second, State and local governments should use for 
        infrastructure the $530 billion in additional Federal windfalls 
        they have recently received. In fact, infrastructure is a 
        perfect use of one-time Federal funding.

    Third, any additional Federal investments should be funded 
        within the current $61 trillion spending baseline over the 
        decade. The offsets are there if infrastructure is truly a 
        Congressional priority.

    Finally, America's main infrastructure policy challenge is 
        not funding, but rather the slow, bureaucratic, high-cost 
        implementation of the policies. Spending another $1 trillion 
        without making these programs more effective is a poor use of 
        taxpayer dollars.

    As an addendum, I will show that there is a broad economic 
consensus that infrastructure policies do not provide short-term 
stimulus, and most new construction jobs are redistributed from other 
jobs.
Principle #1: No New Taxes or Deficits
    Washington has proven to be increasingly unable to pay for its 
current spending commitments. It is on pace to borrow nearly $7 
trillion across 2020 and 2021, and faces $100 trillion in baseline 
budget deficits over the next 30 years. Adding trillions more in 
spending will further raise the spending baseline to levels that no 
plausible tax system can finance. Even if this new infrastructure 
spending is financed with trillions in new taxes, that would still use 
up a large portion of the taxes that will instead be needed to address 
the $100 trillion in baseline deficits. Thus, lawmakers should commit 
to not worsen the unsustainable budget outlook by adding more debt, or 
diverting its limited tax options into financing new spending programs.
    Let's dive deeper into the numbers. The cost of the American Jobs 
Plan\1\--$2.6 trillion over 8 years, an average of 1.25 percent of 
GDP--would represent the most expensive nonemergency spending bill in 
at least 50 years.\2\ And it follows Washington enacting $5.4 trillion 
in (mostly necessary) pandemic spending over the past 12 months--a 
total that comprises one-fifth of the entire national debt. The 
American Families Plan would add $1.8 trillion more in spending.
    The underlying fiscal outlook is unsustainable. The national debt 
held by the public is already projected to double from $17 trillion to 
$35 trillion between the end of 2019 and 2030.\3\ If President Biden's 
entire campaign agenda is enacted, and expiring provisions are 
extended, it would mean the national debt rising from $17 trillion to 
$44 trillion over that period.\4\ This would leave the national debt at 
130 percent of GDP, or one-quarter higher than at the end of World War 
II.
    And it only gets worse thereafter. The Congressional Budget Office 
projects that--due overwhelmingly to escalating Social Security and 
Medicare shortfalls--Washington will run $100 trillion in baseline 
budget deficits over the next 30 years. This would leave the national 
debt at nearly 200 percent of GDP. At the end of that period, 
Government interest payments will consume half of all tax revenues.\5\
    That is the rosy scenario that assumes no new legislation is 
enacted, the 2017 tax cuts expire, no new recessions, and low interest 
rates. If interest rates exceed the CBO baseline assumption by even 1 
percentage point, it would add $30 trillion in interest costs over 
three decades. Deficits would reach 18 percent of GDP, the debt would 
hit 264 percent of GDP, and two-thirds of all tax revenues would merely 
pay the interest on the debt.\6\
    That is simply the CBO baseline, with interest rates rising by an 
additional percentage point.

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    And that is why it is shortsighted to assert that low interest 
rates make this the right time to borrow. Washington is behaving like a 
subprime homeowner and making long-term debt commitments based on 
short-term interest rates. The average maturity of the U.S. debt is 5 
years and declining, which means most of the national debt would 
quickly roll over into any future interest rate increase.
    In short, the Federal Government is essentially gambling our fiscal 
future on the hope that interest rates never again exceed 4 percent. 
Because if they do, simple math shows that combining rising interest 
rates with a debt approaching 200 or 300 percent of GDP risks a 
catastrophic debt crisis.
    In that context, Washington should focus on paying for our current 
escalating commitments before undertaking the most expensive 
nonemergency spending bill in half-a-century.
    Some suggest that fully financing this infrastructure bill with new 
taxes would make it fiscally responsible. That is not the case. If a 
family facing a $100,000 credit card debt suddenly finds a $20,000 
windfall, spending it all on expensive new furniture would not be a 
responsible use of that money simply because it is ``fully paid for'' 
by the windfall. Similarly, there is a limited universe of plausible 
tax increases on families and businesses.\7\

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    Enacting all of these taxes would not even close the current 10-
year projected budget deficit of $14.3 trillion, much less finance the 
President's new spending proposals.\8\ And even if they did, the 
escalating spending levels projected by CBO would re-open large budget 
deficits in the 2030s and 2040s.
    In short, it will take aggressive tax increases--or drastic and 
painful spending cuts--just to finance Washington's current 
commitments. Applying the easiest $3 trillion in taxes to a historic 
spending expansion simply leaves fewer options to close the remaining 
deficits. The only people left to pay the remaining taxes will be the 
middle class.
    Large spending increases create the difficult financing choice 
between using up our limited plausible tax increases, and going deeper 
into debt. The American Jobs Plan includes approximately $1.8 trillion 
in new corporate taxes that dwarf the $300 billion in net corporate tax 
cuts (over 10 years) enacted in the 2017 Tax Cuts and Jobs Act. That 
law reduced the corporate tax rate from 35 percent to 21 percent, but 
offset most of those savings by curtailing key business tax 
preferences. The president would raise the corporate rate back to 28 
percent (33 percent including State taxes)--restoring America to the 
highest rate in the OECD--while also raising international taxes and 
retaining the lost 2017 tax deductions. Moreover, the president would 
severely weaken the 2017 tax reforms that finally gave U.S. 
multinational corporations a more level playing field when competing 
internationally. Now, once again, American companies abroad may face 
higher tax rates than our global competitors.
    No, infrastructure won't pay for itself through economic growth. 
Some advocates suggest that infrastructure spending is not a major 
budgetary drag because it will provide enough growth and prosperity to 
pay for itself, or at least become more affordable down the road. This 
spending version of the free-lunch Laffer Curve collapses under basic 
scrutiny. Infrastructure spending is not like borrowing $100,000 for a 
college degree that brings $1 million in higher future income. A 
Government program requires a 500 percent return on investment to pay 
for itself in future tax revenues. (Imagine a $100 expenditure creating 
$500 in new GDP that is then taxed at the long-term average Federal 
rate of 20 percent to bring in $100 in tax revenues.)
    Do Government investments typically produce a 500 percent return? 
Try 5 percent. A 2016 CBO report concluded that Federal investments 
typically return only 5 percent\9\--compared with 10 percent for 
private-sector investments--because Federal investments are costly, 
bureaucratic, unresponsive to market forces, and are often offset by 
State and local governments cutting back their own investments. Under 
this rate of return--and adjusted into net present values--it would 
take 100 years for tax revenues to recoup even 20 percent of the cost.
    Moreover, this 5 percent figure refers to traditionally defined 
Government investments, rather than new broader definitions that 
include roughly $2 trillion in combined proposals for long-term care 
for seniors, corporate welfare, public housing, Government-building 
renovation, child credits, and Affordable Care Act subsidies. By 
contrast, just $500 billion of the American Jobs Plan and American 
Families Plan would go toward roads, bridges, highways, airports, water 
transportation, and even electrical infrastructure. Some of those other 
policies may have merit, but they are not going to bring a historic 
burst of new productivity and economic growth that recoups any 
significant share of the initiative's $4 trillion overall cost.
    In fact, economists at the University of Pennsylvania found that 
the spending provisions in the American Jobs Plan would actually reduce 
economic growth and wages over the long-term. Any modest productivity 
benefits from these new public investments would be more than offset by 
the productivity losses caused by the necessary Government borrowing 
crowding out more-productive private-sector investment. In other words, 
stronger economic growth means encouraging private-sector investment, 
not transferring those resources to the Government. Specifically, the 
Penn-Wharton Budget Model projected that the infrastructure spending in 
the American Jobs Plan will--over the long run:

    Create no net jobs;

    Reduce wages by 0.3 percent (0.8 percent when including the 
        proposed taxes);

    Reduce the capital stock by 1.5 percent (3.0 percent when 
        including the proposed taxes);

    Reduce the GDP by 0.3 percent (0.8 percent when including 
        the proposed taxes).\10\

    So not only would the President's infrastructure proposal fail to 
produce the 500 percent return needed to pay for itself, it would 
likely produce a negative overall return.
    Additionally, on the tax side of the proposal, the Tax Foundation 
estimates that:

        An increase in the Federal corporate tax rate to 28 percent 
        would raise the U.S. Federal-State combined tax rate to 32.34 
        percent, highest in the OECD and among Group of Seven (G7) 
        countries, harming U.S. economic competitiveness and increasing 
        the cost of investment in America. We estimate that this would 
        reduce long-run economic output by 0.8 percent, eliminate 
        159,000 jobs, and reduce wages by 0.7 percent. Workers across 
        the income scale would bear much of the tax increase. For 
        example, the bottom 20 percent of earners would on average see 
        a 1.45 percent drop in after-tax income in the long run.\11\

Principle #2: States Should Use Their Federal Windfalls
    State and local governments have received more than $850 billion 
from the Federal Government's pandemic emergency bills.\12\ A portion 
of this spending was for necessary costs related to public health. On 
the flip side, State and local governments recently received $350 
billion to close budget deficits that--for the most part--no longer 
exist. California's State government received $26 billion (and their 
local governments received an extra $16 billion)\13\ despite facing a 
$75 billion surplus for the upcoming fiscal year.\14\ My home State of 
Wisconsin has reported an ``unprecedented'' revenue surge and projects 
a $5.8 billion surplus over the next 2 years--enough to rebate 30 
percent of all State income taxes.\15\ And yet the State will receive 
an additional $2.5 billion bailout from Washington, DC, to address a 
budget shortfall that does not exist. These stories are being repeated 
across America: State and local governments with large one-time cash 
windfalls that they do not know how to spend, as well as frustration of 
strings attached on Federal funds they are receiving.
    States are also holding approximately $180 billion in unspent K-12 
education grants from earlier relief bills.\16\ This money is 
purportedly to cover pandemic-related renovations and costs, but CBO 
estimates that most will not be spent until between 2023 and 2028, 
likely well after COVID has passed.\17\
    All in all, State and local governments are sitting on more than 
$500 billion in Federal funds, the vast majority of which lacks any 
clear direct purpose. It would be irresponsible for States to create 
new permanent spending programs that outlast this temporary cash 
windfall, and Washington has tried (perhaps unconstitutionally) to 
forbid these States from cutting taxes. Thus, applying most of that 
$500 billion towards a one-time infrastructure boost makes the most 
sense.
    This amount is well sufficient for most States. Government at all 
levels spends approximately $235 billion annually on highways, roads, 
and bridges,\18\ split equally between capital improvements and 
maintenance.\19\ Even applying half of the States' $500 billion towards 
highways, roads, and bridges would more than double the $115 billion in 
the President's plan, and amount to a doubling of their total budget--
surely enough to meaningfully address any backlog (without Washington 
micromanagement of the projects).
    And it would cost taxpayers nothing above what Congress has already 
distributed.
    Additional State spending can go towards other infrastructure needs 
such as modernizing the electrical grid, purifying the water supply, 
improving broadband access, or renovating schools. Even putting $100 
billion into these priorities would represent ``moonshot'' reforms over 
current spending levels.
    The key question is how to encourage State and local governments to 
apply these funds towards infrastructure. Congress could offer perhaps 
$150 billion in infrastructure matching funds (this is still much 
cheaper than Washington spending $2 trillion) and also pass legislation 
freeing up the education funds for broader infrastructure uses. At the 
same time, if governors truly resist investing their large windfalls in 
infrastructure, that may be a sign to Washington that it is less of a 
national priority after all.
Principle #3: Washington Can Add Spending Within the Current Budget
    It is not unreasonable for Washington to contribute somewhat more 
to infrastructure, whether through matching funds for States, or truly 
national projects like interstate waterways or rail. But Washington is 
already projected to spend more than $60 trillion over the next decade. 
If it cannot apply $500 billion of that amount towards infrastructure 
priorities--less than 1 percent of the budget--then it is fair to 
question how serious Congress and the President are about 
infrastructure. Congress already spends $306 billion annually on 
nondefense investment (including $112 billion for physical 
infrastructure), and should be able to repurpose some of this 
spending.\20\
    The most straightforward carve-out would bring back caps in 
discretionary spending. Rather than drastically increase this spending 
by 8.4 percent as President Biden has proposed, Washington could save 
$500 billion over the decade by cutting that budget by 1.5 percent in 
2021, and then capping its annual growth at the inflation rate over the 
decade. Alternatively, Congress could inflation-adjust Federal spending 
using the more accurate chained CPI, sell hundreds of billions worth of 
excess Federal assets and land, or even begin broader entitlement 
reforms.\21\ Some modest rescissions of leftover pandemic spending may 
be available as well. The money is there if Congress wants to pay for 
infrastructure.
    As an alternative to taxing the rich, I have recently released a 
report proposing upwards of $1 trillion in potential savings over the 
decade from reducing spending benefits for these same upper-income 
families.\22\ This includes slightly trimming Social Security benefits 
and raising Medicare premiums for retirees with millions in financial 
assets, and reducing farm subsidies for families earning more than 
$300,000 annually. Spending savings are never easy or popular, but 
living within our means and building a sustainable Federal budget means 
that new priorities should be offset with lower-priority savings.
Principle #4: Reform Infrastructure Waste and Delays--Do Not Throw 
        Money at an Unreformed, Broken System
    The easiest answer to most political problems is simply to throw 
more money at them. Yet America's infrastructure is not held back by 
low spending levels, but rather by its status among the world's most 
expensive, bureaucratic, and slowly built. It has become cliche to 
contrast the 410 days needed to build the Empire State Building in 
1930-31 with the more recent 25-year process of building Boston's ``Big 
Dig.'' Yet the persistence of delays, cost-overruns, and death-by-
NIMBYism can be seen today in California's high-speed rail project that 
is now expected to take nearly 40 years from planning to completion 
(which itself is increasingly unlikely) and cost $70 billion more than 
originally estimated.
    Our infrastructure can certainly use some upgrades, particularly 
its roads and electrical grid. That said, the crumbling State of 
American infrastructure has been overstated. A 2019 report of the World 
Economic Forum ranked the United States' infrastructure first among the 
10 geographically largest countries (i.e., the countries that likely 
have the most extensive infrastructure needs).\23\
    Similarly, last year a Congressional Research Service report titled 
``The Condition of Highway Bridges Continues to Improve'' noted that 
``the number and share of bridges in poor condition have dropped 
significantly over the past 20 years. Furthermore, repairing every 
deficient bridge in just a few years is unrealistic, and not every 
bridge repair is likely to be justified when considering both the 
economic benefits and costs. FHWA's own analysis of bridge data 
suggests a relatively modest increase in spending could substantially 
reduce or eliminate the backlog of economically justifiable investments 
if sustained over a 20-year period.''\24\
    Spending levels remain healthy. Transportation infrastructure 
spending (adjusted for inflation) rose from $332 to $371 billion 
between 2008 and 2018.\25\ Government spending on transportation and 
water infrastructure at all levels is 2.3 percent of the GDP ($440 
billion), just slightly below the 30-year average of 2.5 percent.\26\ 
That said, there has been a modest shift from capital spending to 
operations and maintenance. Spending on energy and the electrical grid 
continues to rise, although challenges remain.\27\
    America's main infrastructure challenge is not spending levels, but 
rather its general ineffectiveness per dollar spent. In 2016, CBO 
released a report entitled ``The Macroeconomic and Budgetary Effects of 
Federal Investment''. Economist Scott Hodge succinctly summarizes the 
reports three leading conclusions:\28\

  1.  ``Federal investments deliver only half the economic returns as 
        private sector investments, 5 percent versus 10 percent.

  2.  A dollar of Federal spending results in only $0.67 worth of 
        actual investment because State, local, and private sector 
        entities reduce their spending in response to the Federal 
        dollars.

  3.  Federal investment financed by debt or taxes could do more 
        economic harm than good because Federal borrowing and taxes 
        crowd out private investment. To avoid harming the economy, 
        Federal investments should be financed by cuts in other 
        discretionary programs.''

    Diving deeper, America's transportation infrastructure is among the 
most expensive, bureaucratic, and slowly built in the world.\29\ 
Consider that:

    The cost of interstate construction spending per mile 
        quadrupled from 1960 through 1990, and has continued to grow 
        since then (adjusted for inflation).\30\

    Labor costs are higher in part because the Davis-Bacon Act, 
        which mandates that those awarded Government contracts pay a 
        ``prevailing wage,'' raises wage costs by as much as 22 
        percent.\31\

    Government-mandated project labor agreements (PLAs) have 
        been shown to significantly raise labor costs as well.\32\

    America requires many more workers to do the same 
        construction work as Europe.\33\

    Most U.S. construction projects are performed only during 
        the workday, while much of Europe has round-the-clock 
        shifts.\34\

    U.S. subway systems are by far the most expensive to build 
        in the world, and in New York City cost quadruple the world 
        average to build. The difference is high labor costs, poor 
        contractor work, poor oversight, and defensive designs meant to 
        avoid a cascade of stakeholder lawsuits related to 
        environmental and historical artifact protection.\35\

    Coordination between various local governments and 
        stakeholders--while often necessary--brings endless delays and 
        veto points, particularly for transportation projects.

    Nearly a century ago, the Empire State Building was built 
        in 410 days. More recently, Boston's Big Dig took 25 years from 
        planning to completion. Today, California's high-speed rail is 
        expected to take nearly 40 years from planning to completion. 
        Some delays are helpful--we want to ensure safety and 
        environmental protection--but the U.S. has become a global 
        outlier.

    A major cause of delays are the necessary-but-slow Environmental 
Impact Statements and Historical Artifact Reviews. Consider that:

    Environmental reviews commonly exceed 1,000 pages and 
        require on average 7 years to complete (compared to no more 
        than 1 to 2 years in Canada and 3.5 years in the European 
        Union).\36\

    Several environmental impact statements now take more than 
        17 years to complete--and no ground can be broken until the 
        project has survived the legal process, including appeals by 
        any litigant.\37\

    In America--unlike many other countries--environmental and 
        historical reviews can be challenged in court by a wide range 
        of stakeholders, and these challenges can take years or even 
        decades to be decided. Other countries use faster, nonjudicial 
        options to enforce these regulations, rather than expensive and 
        time-consuming lawsuits that essentially become a project 
        veto.\38\

    Megan McArdle cites an egregious example: ``The 
        Southeastern High Speed Rail Corridor was proposed in 1992. You 
        will be thrilled to learn that in September 2017, the 
        Department of Transportation announced the completion of the 
        project's Tier II Draft Environmental Impact Statement.''\39\

    President Biden's physical infrastructure component throws $1 
trillion at this broken system. In fact, it would raise costs further 
by tightening higher-wage requirements and imposing stricter ``Buy 
America'' requirements that limit trade and lower-cost options. And it 
allocates more funding to transit and high-speed rail ($165 billion) 
than highways, roads, and bridges ($115 billion) despite the surging 
costs\40\ and declining public interest\41\ in the former.
    There is certainly a case for increasing infrastructure investment. 
But any new funding should be accompanied by reforms to spend that 
money more effectively.
    The $213 billion proposal to build, rehabilitate, and retrofit 
millions of homes is expensive and vaguely defined. While public 
housing should obviously not be left in disrepair, lawmakers should 
focus more on housing vouchers that provide low-income families with 
more options to escape public housing if they so choose. Thus, building 
more private housing and addressing zoning restrictions would be more 
helpful. That said, local communities must play a lead role. 
Additionally, the proposal to ``build, preserve, and retrofit homes'' 
is vaguely defined, and it is unclear if tax credits will be sufficient 
to bring such expensive projects--especially given the push for more 
expensive unionized workers in an industry that is only 13 percent 
unionized.\42\
    Additionally, the proposed $100 billion for K-12 school 
construction and renovation ($50 billion in direct grants plus $50 
billion through bonds) is unnecessary. School construction has long 
been a responsibility of State and local governments, and federalizing 
this role engages in mission creep while diminishing the role of the 
governors, mayors, and school boards closer to these schools. 
Furthermore, States are flush with $180 billion in K-12 grants from 
earlier pandemic bills that well exceed their COVID-related expenses 
(which is why CBO assumes most will not be spent until between 2023 and 
2028).\43\ Congress should clarify that these $180 billion in recent 
grant funds may be used for broader education expenses.
Addendum: Economists Agree That Infrastructure Is Not ``Stimulus'' or 
        Job Creation
    Finally, let's address the ``jobs'' portion of the American Jobs 
Plan. The Biden administration and other advocates assert that massive 
infrastructure spending will stimulate short-term economic growth and 
create jobs.
    Economists across the political spectrum have debunked this myth 
for the obvious reason that infrastructure projects require several 
years of planning and regulatory reviews before they begin--at which 
point the economy has already recovered. In fact, as stated above, 
environmental impact statements typically take 7 years to complete. 
After allocating $94 billion for mostly ``shovel-ready'' stimulus 
projects in 2009, President Obama later joked that ``Shovel-ready was 
not as . . . shovel-ready as we expected.''
    Former Obama White House chief economist Jason Furman and former 
Congressional Budget Office director Doug Elmendorf added that ``In the 
past, infrastructure projects that were initiated as the economy 
started to weaken did not involve substantial amounts of spending until 
after the economy had recovered.''\44\
    Delays are not the only stimulus barrier. Stanford economists John 
Cogan and John Taylor observed that State and local governments 
receiving 2009 Federal stimulus infrastructure grants simply cut back 
on their own spending and borrowing almost dollar-for-dollar, 
completely negating the impact of the Federal spending.\45\
    The stimulus case is also undermined by Washington distributing 
spending largely based on politics rather than local economic needs. 
Harvard economist Edward Glaeser revealed that 2009 stimulus dollars 
were disproportionately distributed to regions with lower unemployment 
rates that did not need stimulus. On one level, this makes sense--many 
high unemployment regions are rural or losing population, and are thus 
not the best candidates for widening local highways or adding high-
speed rail. However, this approach exposes the disconnect between the 
goals of infrastructure and job creation. Glaeser also writes that, 
unlike the past infrastructure projects that relied more on manual 
labor, today's ``big infrastructure requires fancy equipment and 
skilled engineers, who aren't likely to be unemployed.''\46\
    Because of these factors, a review of 2009 stimulus highway 
projects shows no sustained effect on county-level employment.\47\ 
Another study found that half of all new employees hired at firms that 
received stimulus dollars had been poached from other firms (rather 
than coming from the ranks of the unemployed), and many of these 
companies were forced to turn down other construction projects to 
accommodate the new ``stimulus'' projects.\48\
    Overall, CRS examined highway spending and concluded that ``to the 
extent that financing new highways [comes from] reducing expenditures 
on other programs or by deficit finance . . . the net impact on the 
economy of highway construction in terms of both output and employment 
could be nullified or even negative.''\49\
    Adherents to the infrastructure stimulus argument should consider 
the case of Japan, which responded to a sustained economic downturn 
with $6.3 trillion in infrastructure investment between 1991 and 
2008.\50\ One of the largest investments in airports, trains, highways, 
and tunnels in world history helped push Japan's national debt from 38 
percent to 140 percent of GDP, yet its per-capita GDP was roughly the 
same in 2008 as in 1994.
    Third, political considerations can limit the stimulative effect of 
infrastructure. The geographic distribution of infrastructure spending 
has historically been driven by the political leverage of lawmakers, as 
well as political considerations within Federal agencies. It is naive 
to expect politics remove to be removed from the allocations.
    Consequently, Washington has historically over-invested in large 
vanity projects that provide ribbon-cutting ceremonies. such as high-
speed rail, the expansion of interstate highways, and the famous (and 
eventually canceled) $223 million ``Bridge to Nowhere.'' However, 
economist Aaron Renn has shown that ``America's infrastructure crisis 
is local,'' and repairing local streets, bridges, and potholes is a 
much higher and more affordable priority. These locally managed 
projects are often ineligible for Federal funding.\51\
    State governments face their own misaligned incentives with Federal 
dollars. A State funding a $100 million project with its own 
transportation revenues must convince its taxpayers that the project 
will provide $100 million in value. By contrast, if the State is 
required to put up just $20 million of its own funds--and can use a 
Federal infrastructure grant for the remaining $80 million--it need 
only convince its citizens that the project is worth $20 million. In 
other words, the ability to offload the costs on the Federal Government 
makes States more cavalier with how the funds are spent.
    Consequently, past infrastructure stimulus bills and 
reauthorizations have not sufficiently relieved traffic congestion, 
repaired bridges and roads, or improved waterways. Instead, they 
brought unfinished high-speed rail projects, cost overruns, a $3.4 
million ``eco-passage''\52\ to help turtles cross a highway in 
Tallahassee, Florida, and a $54 million ``Napa Valley Wine Train.''\53\ 
Better to eliminate the Federal middleman and empower State and local 
governments to more easily raise the funds to finance local projects 
based on local priorities.
Conclusion: Fix the System First, and Be Fiscally Responsible
    The laws of economics have not been repealed. Budget constraints 
still exist. Doubling or tripling the national debt is extraordinarily 
reckless. There is no guarantee that interest rates will never rise 
again--indeed such a result is overwhelmingly likely. There are no 
plausible taxes that can finance the projected spending levels, and 
counting on the Federal Reserve to monetize much of this debt is a 
recipe for economic chaos.
    Spending $1 trillion on infrastructure without fixing the 
underlying waste, inefficiencies, and delays in our system represents 
an extraordinary missed opportunity, and confuses spending levels with 
outcomes. Lawmakers should first reform the infrastructure costs and 
delays, and encourage States to use their $530 billion in Federal aid 
to address local infrastructure priorities.


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        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TESTER
                      FROM DANIEL HORRIGAN

Q.1. What does this lack of housing mean for your community and 
other places with housing challenges?

A.1. We have made significant investment around trying grow our 
population. Rather than manage population decline, I have made 
an intentional and strategic decision to understand our real 
estate market supply and demand, leverage our considerable 
urban assets, and compete for people and investment.
    But none of this is easy. A lack of competitive residential 
options in many of our older residential neighborhoods 
translates into many people making decisions with their feet 
and moving to surrounding communities.
    As the city's population has declined, from a high of 
290,000 in 1960, to 197,000 today, our city budget has 
struggled to keep up with demands and legacy costs for public 
services (police, fire, streets, aging and outdated water and 
sewer infrastructure) that have not shrunk along with the 
population, but have increased. As a result, residents today 
are paying proportionally more in taxes and fees for basic city 
services than residents in the past were.
    Inadequate and obsolete housing, along with a lack of new 
construction, has led to population loss, which in turn has led 
to a loss of tax base, jobs, and shopping opportunities in our 
city, as people, employers, and stores have relocated to our 
suburbs.

Q.2. What are the greatest challenges that you seen your 
communities to access and affordability of housing?

A.2. Akron, like many of the Nation's legacy cities, has a 
large proportion of its housing that is older and was built for 
people living at a different time, with different needs and 
expectations. Much of our housing was built for industrial 
workers in the early 20th century, and while some of these 
homes have aged gracefully, many are in need of significant 
repair, and many are functionally obsolete, lacking many of the 
basic features that homeowners are looking for today.
    We have an oversupply of older housing that is not very 
marketable in today's day and age, and an undersupply of modern 
houses and apartments with features that today's buyer or 
renter is looking for.
    Essentially our challenge is threefold: (1) Replace some of 
our older, unmarketable, and obsolete houses; (2) Repair many 
of our older, but still marketable houses; and (3) Build more 
new houses and apartments that today's consumers are looking 
for.
    We are working on reforming our zoning code, which, like 
those in many cities, is outdated and not as conducive as it 
should be to allowing developers and builders to construct the 
types of housing and commercial building that are in demand 
today: a greater variety of single-family houses, townhomes, 
and apartments; a mix of residential and retail land uses; and 
an urban environment that is walkable and prioritizes good 
urban design, such as having buildings built up to the 
sidewalk, with the parking located in the rear.

Q.3. Where are there gaps in resources from Federal programs?

A.3. While Akron has often been well-served by the Community 
Development Block Grant (CDBG) funds in the past, I do believe 
that this program, and other programs managed by the Department 
of Housing and Urban Development (HUD) need to take a fresh, 
innovative approach that better helps cities like Akron remain 
competitive as places to live, work, and play.
    Many Federal programs are still following the same general 
playbook that was used in the 1970s and 1980s, and today we 
have different needs than we did at that time.
    I think that it is important that Congress and executive 
branch agencies like HUD tailor Federal funding to assist 
legacy cities like Akron, that often struggle with low real 
estate prices which lead to appraisal gaps for new home 
construction and where existing homeowners have difficulty 
obtaining home improvement loans.
    Today, we need Federal funds that are earmarked 
specifically toward the housing needs of legacy cities like 
Akron, which could leverage additional private and nonprofit 
funding to help with appraisal gap financing, and to provide 
assistance to lower and moderate income homeowners with basic 
home repairs, so that our older urban neighborhoods can remain 
attractive and competitive with newer neighborhoods in the 
suburbs.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TESTER
                       FROM CYNDY ANDRUS

Q.1. Gap in Housing Need in Bozeman--What is the need, in terms 
of units, for housing in Bozeman?

A.1. Bozeman, Montana, continues to face the challenges of 
growth. Our 2019 Community Housing Needs Assessment (before the 
COVID pandemic) revealed the City of Bozeman needs 
approximately 6,000 units of housing constructed by 2025. To 
meet that goal, the pace of construction would need to be over 
850 units per year. We need units at every price point and for 
every member of our community, especially as we watch housing 
prices continue to climb.
    Additionally, we continue to see a large influx of remote 
workers and others relocating to Bozeman seeking a high-amenity 
community. Our best estimate now is that 6,000 units of housing 
is too low.

Q.2. Economic Trends--For years, the lack of housing has been a 
challenge in Bozeman and many areas of Montana. It hasn't just 
been a lack of affordable housing, but housing at any price 
point. This is keeping families from being able to live and 
work in their own communities. From your perspective,
    What does this lack of housing mean for your community and 
other places' housing challenges?

A.2. Bozeman's lack of housing is a direct result of our 
explosive growth over the last several decades. As more and 
more Americans have discovered the beauty and opportunity in 
our region, they continue to relocate to Bozeman. While we 
welcome anyone interested in coming to our great city, they 
have placed a heavy burden on our housing market. Broadly, the 
lack of housing is negatively impacting the ability of our 
local businesses to expand due to a lack of employees. 
Additionally, companies looking to come to Bozeman for 
synergies in sectors like photonics, the outdoor industry, 
bioscience, manufacturing, technology, health care, and others 
are making decisions about relocating based on the availability 
of housing that meets a variety of price points.
    Currently, homeowners in Bozeman receive all-cash offers 
well over their asking price in the first 48 hours of listing 
their home. These offers are an excellent boon for residents 
ready to depart Bozeman for a new career or be closer to 
family. However, a competitive market and high prices make it 
very difficult for residents to purchase their first home or to 
move into a house with more space for their growing family. 
Additionally, our residents, especially the elderly, living on 
fixed incomes cannot keep up with rising property taxes, 
maintenance costs, and spiraling housing prices. Given the high 
demand for housing in the valley, the costs of labor and 
materials have also skyrocketed. Finally, Bozeman is home to 
Montana State University, where 17,000 of our Nation's best and 
brightest pursue higher education. Students who are often 
renters are watching their rent prices jump by 30-40 percent in 
1 year as landlords see an opportunity to capitalize on a 
market with very strong demand but severely limited supply.
    Bozeman is one of the most desirable places to live in the 
Rocky Mountain West. We are a regional retail and cultural hub 
with excellent amenities, all contributing to our high quality 
of life. As more and more people move to Bozeman, residents see 
more economic opportunity, rising incomes, increased amenities, 
and more demand for housing. No one in Bozeman is immune to the 
pain of increasing housing costs. Our greatest fear is the 
explosive growth in home prices will not only slow our economic 
growth but will force working- and middle-class residents out 
of Bozeman.

Q.3. What are the greatest challenges that you see in your 
communities to access and affordability of housing?

A.3. Bozeman faces many challenges when attempting to create 
more accessible and affordable housing for our community. 
First, the cost of land continues to climb in Bozeman. If you 
do not have land, you cannot build housing. High land costs set 
a higher initial starting price for homes in Bozeman.
    Second, the construction industry in Bozeman faces its own 
unique set of challenges. Supply prices are very high, 
including the much-reported high price of lumber. Additionally, 
contractors are experiencing difficulty hiring plumbers, 
carpenters, and electricians because of Bozeman's high cost of 
housing and a lack of skilled tradespeople living in the 
region.
    Third, the City of Bozeman needs more robust transit 
options. Without transit, homeowners and renters are paying an 
additional cost for developers to construct parking on site.
    Finally, we are currently conducting a code audit to look 
at how our regulations, such as minimum lot sizes or parking 
minimums, unintentionally drive up the cost of housing. 
Further, Bozeman is interested in exploring ideas such as 
guaranteed development review timelines, creating a database of 
preapproved plans to reduce design costs, and reducing the 
parkland requirements for new development.

Q.4. Where are there gaps in resources from Federal programs?

A.4. Federal programs up to this time have focused on the 
lowest rungs of the housing ladder. Without the Federal 
Government, it would be near impossible for our partners at the 
Human Resource Development Council (HRDC) in Bozeman to 
construct housing for those on the lowest end of the continuum. 
However, even those programs remain woefully underfunded. 
Opening funding to more census tracts in our community would 
help to bridge the funding gap.
    Further, cities like Bozeman often fall into a donut hole. 
Bozeman does not qualify for most rural housing programs 
administered by the U.S. Department of Agriculture but is not 
large enough for dedicated formula funding from programs like 
the Community Development Block Grant (CDBG) program. Thanks to 
the leadership of Senator Tester with support from Senator 
Daines, the City of Bozeman will likely become a metropolitan 
area and, therefore, an entitlement community after the release 
of the final population counts during the 2020 census.
    Cities could use resources for the Federal Government to 
purchase land, create revolving loan funds, hire more engineers 
and community development staff to move projects through the 
review process faster. Also, the Federal Government should 
create grant programs encouraging cities to review their 
development codes for provisions increasing the cost of 
housing. Additional grants or tax credits should go to projects 
that use upzoning or increase density to construct affordable 
housing units. Cities need more resources to help remove 
regulatory barriers and create new incentives to encourage 
developers and the private sector to build more units.
    Finally, we need more programs on all levels of the area 
median income (AMI). Currently, programs like HOME cap funding 
for housing at up to 80 percent of AMI. The City of Bozeman 
calls on the Federal Government to expand eligibility for HOME 
up to 150 percent of AMI. Bozeman and many similar cities need 
an increase in AMI eligibility because the rise in home prices 
far outpace wage increases for our workers. When it comes down 
to it, the City of Bozeman needs more supply to create greater 
options for all residents when selecting their housing.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TESTER
                        FROM COREY WOODS

Q.1. For years the Jack of housing has been a challenge in 
Bozeman and many areas of Montana. It hasn't just been a Jack 
of affordable housing, but housing at any price point. This is 
keeping families from being able to live and work in their own 
communities. From your perspective, What does this Jack of 
housing mean for your community and other places housing 
challenges?
    What are the greatest challenges that you see in your 
communities to access and affordability of housing?
    Where are there gaps in resources from Federal programs?

A.1. Response not received in time for publication.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TESTER
                       FROM JOHN PARSONS

Q.1. For years, the Jack of housing has been a challenge in 
Bozeman and many areas of Montana. It hasn't just been a Jack 
of affordable housing, but housing at any price point. This is 
keeping families from being able to live and work in their own 
communities. From your perspective,
    What does this Jack of housing mean for your community and 
other places housing challenges?

A.1. Housing, like other products, is driven by market forces 
and normally corrects unless there is overregulation that 
distorts the market.

Q.2. What are the greatest challenges that you see in your 
communities to access and affordability of housing?

A.2. Excess Government regulations at every level make 
developing housing more expensive than it should be. This is 
especially true in our city and boroughs where revitalizing 
existing housing stock is important. Further, we should be 
helping people in affordable housing move toward opportunities 
for home ownership and self-sufficiency rather than 
incentivizing long term, generational use of affordable 
housing.

Q.3. Where are there gaps in resources from Federal programs?

A.3. There are numerous Government programs. The premise of the 
question seems to assume there should be more. In Lancaster 
County we contend you should focus on making existing 
Government programs work more efficiently and effectively.