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Special Briefing: Strategies for Closing the US Infrastructure Gap
October 16, 2025
11:00 am — 12:00 pm
Event Recap
Strategies for Closing the US Infrastructure Gap
Public infrastructure gaps and deferred maintenance are critical challenges for state and local governments. For a discussion of how states and municipalities can better measure, manage, and fund infrastructure gaps, Penn IUR and the Volcker Alliance convened a panel of public finance experts for “Special Briefing on Strategies for Closing the U.S. Infrastructure Gap” on October 16, 2025.
William Glasgall, Penn IUR Fellow and Public Finance Adviser at the Volcker Alliance, and Susan Wachter, Co-Director of Penn IUR, co-hosted the Special Briefing. The panel included Fatima Yousofi, Senior Officer, The Pew Charitable Trusts; Camila Fonseca Sarmiento, Director of Fiscal Research, Institute for Urban and Regional Infrastructure Finance; Geoffrey Buswick, Managing Director & Sector Leader in U.S. Public Finance, S&P Global Ratings; Leslie Richards, Professor of Practice, City & Regional Planning, Weitzman School of Design and Director of the newly launched Transportation Initiative at Penn (R-TRIP); and Hughey Newsome, Chief Financial Officer, Sound Transit.
Glasgall framed the discussion by announcing the publication of the Volcker Alliance’s Meeting the Trillion-Dollar Challenge, a package of new reports released the day of the briefing covering “innovative strategies that states are rolling out to help upgrade their deteriorating roads, bridges, buildings.”.
Following Glasgall’s introduction, Yousofi opened with a stark reminder: Deferred maintenance is one of the largest hidden costs facing state and local governments. She pointed to Pew's research showing $105 billion in unmet road and bridge repairs since 1999, alongside Environmental Protection Administration estimates of $1.2 trillion needed to modernize water management infrastructure over the next two decades. Yousofi emphasized that the problem isn't just underinvestment—it's the lack of consistent tracking and reporting. “Maintenance postponed today can result in more expensive rebuilds and replacements needed tomorrow,” she said, noting that climate change is compounding these risks. She drew parallels to pension underfunding, warning that “these hidden costs can quietly accumulate for years until they really start crowding out spending priorities and straining government budgets.” The Volcker Alliance’s new tool kit offers a roadmap for states to measure obligations, plan ahead, and begin closing the trillion-dollar infrastructure gap. Yousofi highlighted promising practices in California and Arizona, where governments have begun publishing deferred maintenance estimates. “Consistent measurement and transparent reporting by governments can help them target their funds more strategically, manage costs more effectively, and really build public trust in how taxpayer dollars are being spent,” she said.
Glasgall then introduced Fonseca, principal author of the Meeting the Trillion-Dollar Challenge. She provided an overview of the report, which includes a 50-state review, 10 state case studies, and a toolkit for policymakers. “Back in 2018, we found that only 23 states were disclosing some information about deferred maintenance,” she said. “Now, in this 2025 report, we found 30 states are actually disclosing deferred maintenance in their capital budgeting documents.” Despite progress, Fonseca noted that definitions and approaches vary widely, and funding remains insufficient. “When we look into the 10 case studies, the funding that is allocated for deferred maintenance only covers 4% of the total need,” she said. The report highlights innovative strategies in certain states including Montana, Oklahoma, Illinois, and California, including revolving funds, interest-free loans, and targeted bond initiatives.
Wachter then introduced Buswick, who continued with a discussion of the risks central to resolving the nation’s infrastructure challenges. “The risk is heightened by the familiar practice in public finance of delivering needed infrastructure on a ‘just-in-time’ basis,” he said. Buswick said that 75% of U.S. infrastructure is funded through municipal bonds, with 2025 on track for a record $600 billion in bond volume. As federal incentives are curtailed, more costs are shifting to lower levels of government. “This could further challenge this needed upkeep in spending,” he warned. Buswick cited the American Society of Civil Engineers’ estimate of $3.7 trillion in capital needs above current funding levels over the next decade. He also pointed to the Governmental Accounting Standards Board (GASB), which is developing new guidance on deferred maintenance reporting, expected in early 2026. “Comparable data is hard to come by,” he said, “so anything GASB can do to help will likely be welcomed.”
Glasgall introduced Richards, former Pennsylvania Transportation Commissioner and CEO of SEPTA, southeast Pennsylvania’s regional mass transit system, who brought the conversation to ground level. “What SEPTA is dealing with right now really highlights the broader challenge facing American transit systems,” she said. “And that is trying to keep aging equipment safe and reliable with limited resources and growing expectations.” Richards described recent fires involving SEPTA’s Silverliner IV cars, which have been in service since the mid-1970s. “You can't maintain your way out of a 50-year-old fleet,” she said. “At some point, the equipment simply needs to be replaced.” With no capital to buy new rail cars, SEPTA redirected $350 million from capital projects to operations. “Using capital funds for operations is like using your roof repair fund to pay the light bill,” Richards said. “It keeps things working today, but the storm is still coming.” She warned that federal shutdowns could delay reimbursements and grants, undermining local efforts. “We can't keep running a 21st century service on 20th century equipment with 19th century funding models,” she said. “We have to build a new approach, one that values reliability, transparency, and safety of the people who ride and operate these systems every day.”
Wachter thanked Richards for her comments and congratulated her on the launch of the Transportation Initiative at Penn (R-TRIP): “Today, it's my great pleasure to tell you all that Leslie Richards is inaugurating a new program at Penn on transportation research. This initiative will bring together academics and leaders of state and local governments and transit agencies throughout the country to take on this very critical challenge.”
Following an introduction by Wachter, Newsome shared his experience tackling this challenge at the local level with Sound Transit, a public transit agency serving the Seattle metropolitan area, where rapid expansion has created opportunities and risks. “We’re trying to be very proactive in terms of the way we think about State of Good Repair,” he said. Newsome noted that while Sound Transit’s equipment is relatively new, the agency is already planning for future maintenance costs. “We have to find ways to fund our State of Good Repair program in perpetuity,” he said. He described the agency’s use of federal grants and Transportation Infrastructure Finance and Innovation Act (TIFIA) loans but warned that the current shutdown could disrupt cash flow. “We’re watching very carefully to make sure that we don’t have a liquidity challenge,” he said. Newsome described a “cascading impact” of operation and maintenance challenges meeting global supply chain issues due to reliance on global manufacturing systems.
The briefing closed with an open discussion led off by Wachter, who posed the question, “Why do U.S. infrastructure construction costs exceed those in other countries?” Panelists pointed to fragmentation—multiple agencies with overlapping responsibilities, inconsistent standards, and limited coordination. “From the state's perspective, you have your state DOT, your Department of Environmental Quality, your different quasipublic water utilities, and then you have separately the state budget directors and finance officials,” said Yousofi. “How they communicate with each other and with state policymakers seems incredibly fragmented.” A second question focused on fiscal federalism: “What level of government is right for a project?” Panelists agreed that while federal support is critical, local and state governments must lead planning and implementation. Buswick said that “every level of government has a say,” but emphasized the need for predictable funding and streamlined regulations to ensure project success.
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Learn more about Leslie Richard’s new Transportation Initiative at Penn (TRIP)
