AASHTO Journal

Trump Offers Complex Mix of Spending, Cuts in Investment Plan, Budget

​President Trump released both his long-awaited infrastructure investment plan and his fiscal 2019 budget request Feb. 12, proposing big cuts in transit and rail funding at the same time he would provide $200 billion in new federal grants and loans over 10 years to leverage $1.5 trillion in total project spending nationwide.

His investment plan did not address a central issue for many transportation stakeholders – how to provide enough dedicated new revenue to make the Highway Trust Fund sustainable over the long term.

Currently, that fund, which provides resources for all federal highway programs and for formula-based transit programs, is on course to  face a "fiscal cliff" of sharply lower outlays starting in 2021.

Trump's plan also did not spell out how he would pay for the new project spending he proposes, although in a Feb. 14 White House meeting with members of Congress from both parties the president reportedly said he would support a 25-cent hike in the federal motor fuels tax, a per-gallon fee that currently helps support the Highway Trust Fund.

construction6-inside.jpgAnd in a pre-release briefing to reporters, senior administration officials made clear they consider the president's investment recommendations to be an opening document to start negotiations with Congress on how to upgrade U.S. infrastructure.

The plan called for Congress to further streamline the federal permitting process to speed projects toward the construction phase, something transportation groups have long urged while saying the industry can accomplish that goal without harming the environment.

And it recommended allowing states to toll interstate highways and commercialized their on-highway interstate rest areas, proposals that triggered sharp protest from some industry groups.

According to a staff analysis of the investment plan and budget proposals by the American Association of State Highway and Transportation Officials, the administration proposed to allocate $100 billion – half the total federal share – to a new "Infrastructure Incentives Program."

The plan said that money "would provide support to wide-ranging classes of assets, including the following governmental infrastructure: surface transportation and airports, passenger rail, ports and waterways, flood control, water supply, hydropower, water resources, drinking water facilities, wastewater facilities, stormwater facilities, and brownfield and Superfund sites."

It did not detail how much would go toward each infrastructure category, but said "the funds would be divided in specific amounts" to be administered by the Department of Transportation, Army Corps of Engineers that oversees navigation and flood control projects, and the EPA that handles drinking water and clean air investments.

Trump's plan would allocate $50 billion over 10 years for a Rural Infrastructure Program that would fund projects to improve transportation, broadband service, drinking water and waste systems, power and waterways. It said 80 percent of that would be distributed to states through a formula based on lane miles and population, and the rest through competitive grants.

Another $20 billion would go into a Commerce Department-administered program to support "transformative projects," which the plan would award funds "on a competitive basis to projects that are likely to be commercially viable, but that possess unique technical and risk characteristics that otherwise deter private-sector investment."

Of the rest, $20 billion would support what the AASHTO analysis said would be "a dramatic increase in federal budget support for various infrastructure credit assistance" – the USDOT's TIFIA for highways and transit, RRIF for rail, and the EPA's WIFIA for water resources plus an expansion of tax-exempt private activity bonds that can support public-private partnerships.

The other $10 billion, the plan proposed, would go to a "Federal Capital Financing Fund," to support capital budgeting of such things as new federal buildings as opposed to seeking congressional appropriations for the full purchase price in any given fiscal year, a practice that encourages the use of annual lease payments.

Trump also suggested selling off some federal property including the Washington-area Reagan National and Dulles airports, the George Washington and Baltimore-Washington parkways, and Tennessee Valley Authority power transmission assets.

In his budget request, Trump proposed more than $750 million in cuts to federal Amtrak grants, and said states should match federal funding on Amtrak's long-distance routes that run through their communities. That would be on top of the funding many already provide to separate state-supported passenger train routes.

He proposed slashing transit capital grants, as he had done in his 2018 budget, which would reduce such funding to $1 billion in 2019 from $2.396 billion in 2018.

His budget would also eliminate funding for various rail grants authorized by the last surface transportation law in 2015, including state-of-good-repair partnership grants to states. It would hold funding flat in the Airport Improvement Program and both curb funding and limit eligibility for the Essential Air Service program that subsidizes commercial air travel to smaller, rural airports.

And by projecting a sudden drop in revenues into the Highway Trust Fund after 2020, it projects a $122 drop in its outlays from fiscal 2021 through 2018.

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

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