AASHTO Journal

Trump Aims for $1.5T Investment Plan Tied to Leveraging State, Local, Private Funds

President Trump told Congress he wants lawmakers to pass a bipartisan infrastructure plan "that generates at least $1.5 trillion" in new project spending, one that would depend heavily on leveraging federal dollars to spur more state, local and private investment.

"I am asking both parties to come together to give us safe, fast, reliable and modern infrastructure that our economy needs and our people deserve," Trump said in his Jan. 30 "State of the Union" speech.

Trump did not offer any ideas on how to pay for the plan, which administration officials have said will include $200 billion of new federal infrastructure spending over 10 years, spread across an array of sectors including transportation.

But as he has in the past, the president used transportation examples to highlight his investment goals. "We will build gleaming new roads, bridges, highways, railways, and waterways all across our land," he said.

construct.jpgThe White House has not said when it would unveil its full proposal, and provided a fact sheet to augment his speech references that offered only a few details.

Trump said that in the plan Congress passes, "every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment to permanently fix the infrastructure deficit."

He also called for further streamlining the federal permitting process to speed projects to the construction phase, repeating his goal to get permit approvals "down to no more than two years, and perhaps even one."

In all, Trump devoted a few paragraphs of his 80-minute speech to infrastructure.

In its infrastructure fact sheet, the White House said the president will propose generating at least $1.5 trillion in new project spending partly by directing that half of any new federal funding "would go towards incentivizing new state and local investments in infrastructure."

In addition, it said that "a quarter of the federal funds will be dedicated to addressing rural infrastructure needs prioritized by state and local leaders," while the plan will also "encourage the development of new, transformative infrastructure projects."

Many stakeholder groups, including the American Association of State Highway and Transportation Officials that represents state departments of transportation, have called for the president and Congress to direct new federal funding into established formula programs – such as those for highways and transit – that route money efficiently to states to use on projects they choose. [See related story.]

In particular, stakeholders have emphasized that any infrastructure plan should provide a long-term funding fix to the Highway Trust Fund, which is on course to shrink highway spending starting in 2020 and run out of money for road and transit programs starting in 2021 unless Congress acts to bolster it.

And many in Congress, especially opposition Democrats but including some Republicans, have said an infrastructure plan that relies too much on leverage will leave out too many areas of the country and will not pass. They have said a bill must invest more in direct federal funds, and that Congress will need to raise revenue to achieve that goal. [See related story​.]

Until recently the administration had talked of using $200 billion in new federal funding to leverage $800 billion in nonfederal investment to produce a $1 trillion 10-year program.

But Jeff Davis, editor of the Eno Transportation Weekly, wrote in a Jan. 31 column for U.S. News and World Report that the pending Trump plan will devote $20 billion to new subsidized federal infrastructure loans and private activity bonds to stoke private-sector interest.

Davis added that the new tax-cut legislation "may have drastically altered the assumptions for how much in loans and bonds can be supported by the $20 billion in credit subsidies and foregone taxes on interest contained in the Trump plan."

He also said that "Trump's fiscal 2019 budget proposal, due out in mid-February, will include a more detailed proposal" on infrastructure.

Questions regarding this article may be directed to editor@aashtojournal.org.

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