President Trump used documents released with his 2018 budget proposal to provide more information on his plans for major infrastructure investment, along with a request to spend an initial $5 billion for it in the fiscal year that starts Oct. 1.
In all, Trump as expected proposed allocating $200 billion in additional direct federal infrastructure funding over 10 years, with a goal of leveraging non-federal dollars to produce $1 trillion in new project investment over a decade.
Although the budget was short on specific details about the infrastructure plan – such as how the administration would spend that $5 billion in the first year and higher subsequent amounts – the budget package included a six-page fact sheet on that initiative.
It began by criticizing how federal dollars for project construction have been invested until now, including to help fund interstate highways.
“We will reevaluate the role for the federal government in infrastructure investment,” the fact sheet said. “For example, in the Interstate System, the federal government now acts as a complicated, costly middleman between the collection of revenue and the expenditure of those funds by states and localities.
“Put simply, the administration will be exploring whether this arrangement still makes sense, or whether transferring additional responsibilities to the states is appropriate.”
It added that “the administration’s goal is to seek long-term reforms on how infrastructure projects are regulated, funded, delivered, and maintained. Providing more federal funding, on its own, is not the solution to our infrastructure challenges.”
The fact sheet also contained a set of four “key principles” the Trump team will focus on for infrastructure investments.
They include targeting federal dollars “on the most transformative projects and processes” as a means to leverage use and benefit of taxpayer funds. “When federal funds are provided, they should be awarded to projects that address problems that are a high priority from the perspective of a region or the nation, or projects that lead to long-term changes in how infrastructure is designed, built and maintained,” it said.
To back up a second principle – encourage self-help – the fact sheet said: “Many states, tribes and localities have stopped waiting for Washington to come to the rescue and have raised their own dedicated revenues for infrastructure. Localities are better equipped to understand the right level – and type – of infrastructure investments needed for their communities, and the federal government should support more communities moving toward a model of independence.”
In another, it said the administration “will look for opportunities to appropriately divest from certain functions, which will provide better services for citizens and potentially generate budgetary savings. The federal government can also be more efficient about disposing underused capital assets, ensuring those assets are put to their highest and best use.”
Its fourth key principle is to leverage the private sector in building projects, saying private investors can provide “better procurement methods, market discipline and a long-term focus on maintaining assets. While public-private partnerships will not be the solution to all infrastructure needs, they can help advance the nation’s most important, regionally significant projects.”
The White House said its investment initiative will pursue policies to increase tolling of highways and to allow commercialization of rest areas. “Tolling is generally restricted on interstate highways,” the fact sheet said. “This restriction prevents public and private investment in such facilities. We should reduce this restriction and allow the states to assess their transportation needs and weigh the relative merits of tolling assets. The administration also supports allowing the private sector to construct, operate and maintain interstate rest areas, which are often overburden and inadequately maintained.”
It favors expanding the size of the Department of Transportation’s low-interest TIFIA program for making long-term loans to infrastructure projects, and expanding the range of projects that would qualify for TIFIA loans. It also wants to lift a current $15 billion cap on private-activity bonds, which are tax-exempt securities used to finance some highways and freight facilities.
For waterway projects under the jurisdiction of the Army Corps of Engineers, the administration wants to encourage more non-federal project sponsors to build them without the Corps. “Many projects authorized for construction, though a priority for non-federal sponsors, do not present a high return for the nation and therefore do not receive federal funding,” the fact sheet said. “Some non-federal sponsors have therefore chosen to fund construction activities on their own. The administration will leverage the Corps’ authorities to enter into such agreements to take advantage of this innovative approach to delivering projects.”