By: Britney Johnson
On February 12th, the Trump administration released what they’re calling a $1.5 trillion dollar infrastructure plan. The plan puts forward $200 billion from the federal government intended to match up to $1.3 trillion dollars in state and local dollars, as well as private investment. $50 billion dollars of the money is intended to go towards power, water, waste, transportation improvements, airports, railway upgrades, flood management, and broadband access. $20 billion would go to “private activity bonds,” infrastructure built by the private sector (think toll roads).
The plan is a far cry from what some expected to be significant direct investments into public infrastructure. Even more, it requires most of the spending to be done by state and local governments. Trump’s plan calls for $200 billion in federal dollars, but the administration has left it up to Congress to decide where that money will come from. The University of Pennsylvania’s Penn Wharton Budget Model predicts that the infrastructure plan would result in $20 billion to $230 billion in combined public and private infrastructure spending over the next 10 years. They believe the plan will have no impact on US Gross Domestic Product (GDP).
Trump’s Plan relies heavily on incentivizing private investors in addition to state and local governments. States would be given more flexibility to add tolls to existing interstate highways. Supporters of the plan argue that those who are using the roads should be paying a price to upkeep them. Some Congressional Republicans are opposed to the idea. Pennsylvania Republican Representative, Bill Shuster, chairs the House Committee on Transportation and Infrastructure. Shuster would rather increase the gas tax over adding tolls to highways.
According to the Department of Transportation, 2,900 miles of the 46,730-mile federal Interstate Highway System currently include toll booths. That can change if Republicans are able to overcome opposition in their own party, or gain some support from centrist Democrats.
Potential privatization is also part of the infrastructure plan. The White House budget released on February 12th also gives federal agencies the power to sell assets they believe could be better managed by state and local governments, or private institutions. Airports like Ronald Reagan Washington National and Dulles International Airports are among potential assets that can be subject to sale or privatization.
The infrastructure plan comes on the heels of the new Republican tax plan (The Tax Cuts and Jobs Act of 2017). That plan is already leading to larger-than-expected annual deficits and will lead the US towards a $30 trillion dollar national debt. These federal funds will be spread pretty thinly across the country, with $20 billion a year on average being put out over 10 years. It is unknown how much of the funds will be new money, rather than repurposed funds.
Some states are better positioned than others to make effective use of the infrastructure funds. California raised gas taxes and vehicle registration fees in 2017 in order to pay for repairing their highways. These new funds can go even further with additional federal dollars from the Trump infrastructure plan. California Republicans are leading an effort to repeal the 2017 gas tax and fee hikes. Their hope is the anti-tax November ballot measure will motivate the Republican voting base to minimize political losses. Republican consultant Dave Gilliard is among those running the gas tax repeal campaign.
Members of Congress from Western New York aren’t sold on the plan either. Buffalo Representative Brian Higgins, a Democrat, said the plan wouldn’t be helpful when it comes to projects on Western New York’s infrastructure wish list, like a new plaza at the Peace Bridge. He told the Buffalo News that “For every $6.50 of local and state road and bridge spending, the federal government will offer $1.” Republican Representative Chris Collins of Clarence, a strong supporter of President Trump, also had concerns, but said he believes “we will see serious changes and improvements.”
The $200 billion in infrastructure dollars will be devoted to new projects, maintenance, and upgrades. On the maintenance side of the equation, it’s no secret that roads, bridges, airports, water facilities, and more are in dire need of repair and improvement. The American Society of Civil Engineers has estimated that it would take over 3 trillion dollars to bring roads, bridges, water pipes, electric grid, and other infrastructure to what they classify as good condition by 2025.
Environmental groups have their own concerns about the plan. Shelley Poticha of the Natural Resources Defense Council has called the president’s proposal “a disaster.” She believed that “It fails to offer the investment needed to bring our country into the 21st century. Even worse, his plan includes an unacceptable corporate giveaway by truncating environmental reviews.”
Politically speaking, maintenance has been a losing proposition for years. Beth Osborne, a former Transportation official in the Obama Administration, told Wired Magazine that “When you rebuild or reconstruct or repair, you have to cut off traffic for it, and you will get a raft of negative articles.” Infrastructure maintenance is an expected element of the governments work. Whether the federal government invests $200 billion, $1.5 trillion, or even $3 trillion, the improvements will be sure to attract less appreciation from the public than those working hard to realize these changes would hope.