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Trump Releases Infrastructure Plan Details

Tuesday, February 13, 2018

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President Donald J. Trump released his proposed infrastructure plan Monday (Feb. 12), including $200 billion the administration says will “spur at least $1.5 trillion in infrastructure investments” by state and local governments and private parties over the next decade.

The plan relies largely on state, local and private investment, relying on federal funding to leverage more than six times as much new revenue from those sources. The proposal also looks to expedite project permitting, limit environmental reviews and increase workforce development.

$100M for State and Local Governments

According to guidance released by the White House and the proposal itself, headed to Congress for consideration, $100 billion would be set aside for an Infrastructure Incentives Program, providing grants to states and municipalities for specific projects. Each grant would comprise up to 20 percent of the project cost, with states expected to generate new revenue to cover the majority of the cost of the work.

Highway construction
© iStock.com / T_A_Hammonds

President Trump's infrastructure plan includes $200 billion in federal funding that's meant to leverage $1.3 trillion in state and private investment.

The money would be distributed through the Department of Transportation, Army Corps of Engineers and Environmental Protection Agency, and would support projects addressing surface transportation, 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.

Grant proposals would be solicited from state and local governments every six months after the establishment of the program, and according to the plan, projects would be chosen largely on the basis of how the project will leverage new, non-Federal investment. Other criteria would include the dollar value of the project, evidence of improvements to efficiency in project delivery, plans to incorporate new and evolving technologies and evidence the project will spur economic and social returns on investment.

Any one state should not receive more than 10 percent of the funds available via the incentives program, according to the plan.

Other Expenditures

The proposed Rural Infrastructure Program would include $50 billion in federal investment, funds that would be distributed to state governors, who would decide how the money would be best used on infrastructure improvement. (Some funds would also be distributed to tribes and territories for their infrastructure, via the DOT.)

Another $20 billion would be allocated to the Transformative Projects Program, which would fund “bold and innovative projects” that may not attract private investment due to “technical and risk characteristics.” Transformative Projects Program grants would be distributed via three tracks, for different phases of projects: demonstration (funds could cover up to 30 percent of total cost), project planning (up to 50 percent) and capital construction (up to 80 percent).

President Trump
White House

Infrastructure Incentives Program funds would be distributed through the Department of Transportation, Army Corps of Engineers and Environmental Protection Agency.

A total of $20 billion would be allocated to expanding infrastructure financing, including $14 billion for the existing programs like the Transportation Infrastructure Finance and Innovation Act (TIFIA), Railroad Rehabilitation and Improvement Financing (RRIF) and Water Infrastructure Finance and Innovation Act (WIFIA). TIFIA, under the plan, would be expanded to include airports and ports, in addition to surface transportation projects.

The remaining $6 billion would go to the expansion of Private Activity Bonds, money the administration says would “provide tools and mechanisms for market participants to invest in public infrastructure.”

Another $10 billion would go to a new Federal Capital Revolving Fund, which the administration says would help with the purchase of federal real property in order to cut down on the long-term cost of leasing property. The administration says year-to-year spending limits sometimes mean a lease is authorized even if the overall cost would be lower if the property were purchased outright.

Regulatory Provisions

Other provisions of the plan include:

  • Relaxing rules to make it easier for states to toll on interstate highways;
  • Removing regulations that require projects to meet federal requirements on projects if the federal government’s share of the funding is minimal;
  • Expanding qualified credit assistance for state infrastructure banks;
  • Raising the cost threshold for major project requirements to $1 billion (from the current level, $500 million);
  • Relieving smaller highway projects from the federal procurement rules used on major projects;
  • Applying FAST Act streamlining provisions to rail projects; and
  • Expanding the Clean Water State Revolving Fund to lend to private owners of public-purpose water-treatment facilities.

The proposal includes language establishing a “One Agency, One Decision” protocol for environmental reviews on federal projects, to streamline the process, a move previously discussed by the administration. The plan also calls on federal agencies to shorten the permitting process to expedite infrastructure projects.

Also in the interest of expediting project starts, the proposal calls for two pilot programs that would have the potential to replace the current environmental review. One, the performance-based pilot, would “experiment with using performance measures instead of an environmental review,” allowing the project sponsor to commit to meeting performance objectives in lieu of undergoing the review process. The administration says this would “focus on good environmental outcomes rather than a lengthy environmental review process.”

The other pilot would be a negotiated mitigation program, in which authorities would negotiate approaches such as offsets, avoidance of anticipated impacts and “in-lieu-fee dedicated to an advanced mitigation fund.”

The plan also includes steps to increase federal support of workforce development programs, including expanding Pell grants and encouraging apprenticeship and career and technical education.

2019 Budget

The plan is part of Trump’s proposed $4.4 billion federal budget for fiscal year 2019, a proposal that cuts the Department of Transportation’s discretionary budget by 19 percent in comparison with the 2017 budget. In addition to spending increases for the infrastructure initiative, the budget proposal increases defense spending by $80 billion compared with 2017.

The plan does not specify where the money for the increased infrastructure investment will come from, other than to note that a new fund would allow fees from energy development on public land would help bankroll infrastructure development on public lands.

Reaction

The American Association of State Highway and Transportation Officials reacted Monday to the release of the plan, saying it looks forward to working with the president and Congress on infrastructure investment, while stopping short of endorsing the plan as it stands.

Gas pump
© iStock.com / aydinmutlu

AASHTO and The Associated General Contractors of America said in their statements reacting to the infrastructure plan that the Highway Trust Fund—underfunded and dependent on a gasoline tax that hasn't been raised in 25 years—must be shored up.

"State DOT leaders appreciate the president's ongoing interest in, and support for, increased federal investment in infrastructure," said Bud Wright, AASHTO executive director. "We hope the release of the Trump infrastructure plan can be a starting point for a robust conversation on how best to make the critical investments in surface transportation. AASHTO and its members stand ready to work with the administration and Congress to address the long-term viability of the Highway Trust Fund and to speed the federal review and permitting process."

In a statement, The Associated General Contractors of America called the plan “needed and thought-provoking” but said the organization “will seek changes to further improve upon the president’s concept.”

AGC chief executive officer Stephen E. Sandherr said the plan touches on the importance of increasing funding for infrastructure improvement and streamlining the environmental review process, but it also points to the need to address shortfalls in the Highway Trust Fund.

The Highway Trust Fund, which has faced funding crises in recent years, is based primarily on the federal gasoline tax, which has not been raised since 1993.

Just ahead of the Trump plan reveal, Democrats in Congress called for what they call “A Better Deal to Rebuild America,” a $1 trillion federal investment.

   

Tagged categories: Government; Infrastructure; President Trump

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