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AASHTO Journal

WSJ Report: Trump Officials Want to ‘Upend’ Current Public Works Funding Methods

Top advisers to President Trump who are shaping his infrastructure investment plan "say they aim to upend the way U.S. public works are financed," the Wall Street Journal reported, "shifting the bulk of the decision-making and costs to states and cities and away from Washington."

The story focused on how Trump advisers want to use $200 billion in proposed direct federal funding over 10 years as leverage to get $800 billion in new state, local and private-sector investment. The Journal compared that with the traditional federal-aid highway program, in which the Highway Trust Fund usually provides 80 percent to a new capital project while state funds cover the other 20 percent.

Under the emerging Trump plan, advisers say they want backers of projects to put together a funding package that only needs a small portion of federal dollars to put the project over the top, the story said.

capitol0816.jpgThe Journal quoted a senior White House official from a recent interview, saying, "We'd rather have people come and say, 'Listen, we're chipping in this much, give us this little increment and we can make this thing happen.'"

While the Trump team plans to offer that funding template in a set of "principles" it will unveil this fall for its special infrastructure plan, the Journal story said the administration's "proposed 20-80 split of federal to local contributions would dramatically change parts of the current system."

It added that "the White House wants to change the way states and cities approach the pools of federal capital that are used to initiate large projects."

The administration had itself indicated earlier this year, in its fiscal 2018 budget proposal, that it wants to use the infrastructure plan to make long-term changes to various aspects of federal support for projects.

"The administration's goal is to seek long-term reforms on how infrastructure projects are regulated, funded, delivered, and maintained," the White House said in a budget briefing paper on its infrastructure initiative. That included, it said, "focusing federal dollars on the most transformative projects" and on a process that "stretches the use and benefit of taxpayer funds."

The Journal also cited public comments by White House Budget Director Mick Mulvaney, who told state department of transportation executives and other industry officials in an Aug. 30 meeting that he would put at the top of the priority list such proposals as a bridge project he cited that only needed $20 million in federal funds to complete a $200 funding package.

"The administration's approach," the Journal story said, "alarms supporters of some of the country's biggest planned projects, who say that local cost-sharing and private financing efforts would fall well short of making up for sharply reduced federal funding."

The Journal said the administration already faces "early signs of resistance from the Republican-controlled Congress, which will draft and ultimately vote on the administration's plan." It noted that a Senate transportation subcommittee "reversed an array of 2018 budget cuts proposed by the White House, including in infrastructure grant programs relied on by states and cities for new transit lines."

The administration also points to a growing number of state and local infrastructure funding measures "as evidence for the wisdom of its approach," the Journal said.

However, states and cities continue to count heavily on the federal partner's contribution in the longstanding federal-state partnership that has built the nation's highway and transit systems.

In fact, the federal funding is already just a fraction of total transportation investment. For instance, federal figures show that states and localities contribute about 80 percent of all government dollars spent to build, operate and repair U.S. highways and streets. The federal partner kicks in just 20 percent of the total, which is largely to help fund some of the new construction projects but does not aid all new road projects and leaves states paying the substantial ongoing maintenance costs.

Any weakening of the federal share of new projects would also put state governments in more of a bind. The AASHTO Journal has often reported that state legislatures have had to raise new revenue to either meet their matching-dollar requirements to use all available federal funds, or to pay for needed road system improvements that federal funds don't stretch far enough to cover.

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

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