The Trump Administration has officially released an infrastructure proposal calling for $1.5 trillion in infrastructure investments, with $200 billion of direct federal spending over the course of 10 years. The federal investment is meant to spur investments from state and local governments and private investors. The proposal is divided into four main parts: funding and financing infrastructure improvements, additional provisions for infrastructure improvements, infrastructure permitting improvements, and workforce development. The plan does not identify a way to pay for the $200 billion in Federal investment, nor does it offer a plan to address the looming insolvency of the Highway Trust Fund (HTF). The Administration says that this plan will not add to the federal deficit, which means that funds must either come at the expense of other non-mandatory federal programs or the funding will be raised through a new source of revenue. ASCE President Kristina Swallow released a statement in response to the proposal, which can be viewed here.
Funding & Financing Infrastructure Improvements
Incentives Program: $100 billion federal incentive (or 50%) program to encourage state, local, and private investment by awarding project sponsors incentives for generating revenue, reducing timelines and improving performance. These funds would constitute 20% of the project costs and would be chosen based on factors such as potential return on investment. Incentive dollars will be administered through the U.S. Department of Transportation (DOT), United States Army Corp of Engineers (USACE) and the Environmental Protection Agency (EPA).
Rural Infrastructure Program: $50 billion in federal funds (or 25%) will be made available for capital investments in transportation, water resources, drinking water and wastewater, broadband, and energy infrastructure projects in rural areas with populations of less than 50,000. The bulk of this funding will be distributed to states via formula as block grants.
Transformative Projects: $20 billion in federal funds (or 10%) will be dedicated to high-risk, high-reward transportation, clean water, drinking water, commercial space, telecommunications, and energy infrastructure projects. Three pots of funding will be made available to support three different project lifecycle phases (demonstration, project planning, capital construction).
Infrastructure Financing Programs: $20 billion (or 10%) will be directed to increasing the existing Federal credit programs and broaden the use of Private Activity Bonds (PABs). $14 billion will be used to expand existing credit programs including Transportation Infrastructure Finance and Innovation Act (TIFIA), Railroad Rehabilitation and Improvement Financing (RRIF), Water Infrastructure Finance and Innovation Act (WIFIA), and Agriculture Rural Utilities Service (RUS). $6 billion will be spent on expanding PABs, and remaining funds will be diverted to the Federal capital financing fund.
Federal Capital Revolving Fund: $10 billion (or 5%) will be used to establish a mandatory revolving fund to finance purchases, construction or renovation of federally owned civilian real property. Currently, federal government real estate deals are made during the annual appropriations process.
Public Lands Infrastructure: This provision would establish an “Interior Maintenance Fund” to help reduce the deferred maintenance infrastructure backlog at our National Parks. The fund would be financed using revenues the government collects in royalties from current and expanded onshore and offshore production of oil, gas, coal, and other mineral operations.
Additional Provisions for Infrastructure Improvements
Transportation: The plan calls for alternative project delivery and financing for our highways, transit, rail, and airport infrastructure. Specifically, the plan allows states to toll on existing interstates and “commercialize” rest areas, transfer permitting authority to states and transfer unused funds back to federal government, apply FAST Act streaming to rail projects, and reduce barriers to encourage alternative project delivery for airports.
Water Resources: The proposal authorizes the USACE to enter into public-private partnerships (P3s) to use Inland Waterways Trust Fund revenues for the construction, repair, rehabilitation, and maintenance and operation of inland water projects. It also includes several provisions to remove barriers to implementation of USACE projects, including those relating to Section 5014 of the Water Resources and Reform Development Act (WRRDA) of 2014 – the agency’s P3 pilot project authorization, of which ASCE has been a long-time advocate. In fact, ASCE’s Coasts, Oceans, Ports, and Rivers Institute’s Subcommittee on Alternative Financing of Waterways Infrastructure released a 2016 report on the new authorization; several of the report’s recommendations are included in President Trump’s infrastructure plan.
Brownfield and Superfund Reform: This proposal creates a Superfund Revolving Loan Fund to facilitate new investment into Superfund cleanup, as well as a new Brownfield grants programs for National Priorities List sites, which are currently not eligible for Brownfield grants.
Infrastructure Permitting Improvement
This proposal restructures federal environmental review and permitting for major infrastructure projects through a series of reforms, including having one lead agency steer the environmental review process; allowing agencies to conduct their reviews concurrently, rather than sequentially; and eliminating Section 309 of the Clean Air Act, which requires EPA to review, comment on and rate other agencies’ Environmental Impact Statements in an effort to reduce the permitting process to no more than 2 years. These provisions will codify parts of President Trump’s August 2017 Presidential Executive Order on Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure.
Workforce Development
Under the proposal, the Administration aims to increase the training opportunities in the construction trades to meet the increased demand that will come from the increased infrastructure investment. Increased job opportunity will be developed through expanded Pell grant eligibility, technical education, and licensing reform.
We are encouraged that President Trump has taken the first step and released his own set of of guiding infrastructure principals. Similarly, ASCE has its own principles for investing in our nation’s infrastructure which include:
- Ensuring dedicated public funding sources on all levels are consistently and sufficiently funded from user-generated fees, with infrastructure trust funds never used to pay for or offset other parts of a budget.
- Fixing the Highway Trust Fund by raising the federal motor fuel tax to ensure long-term, sustainable funding for the federal surface transportation program.
- Authorizing programs to improve specific categories of deficient infrastructure and support that commitment by fully funding them in an expedient, prioritized manner.
- Ensuring infrastructure owners and operators charge, and Americans are willing to pay, rates and fees that reflect the true cost of using, maintaining, and improving all infrastructure, including our water, waste, transportation, and energy services.
In ASCE’s 2017 Report Card, our overall infrastructure grade was a “D+” with an infrastructure investment deficit of $2 trillion over 10 years. In order to raise our grade and compete in the global economy, we need strong investment and leadership. We look forward to working with Congress and the Trump Administration on addressing our infrastructure deficit and building a stronger nation.