Earlier this month, it seemed President Donald Trump’s infrastructure plan had stalled, with plenty of discussion taking place, but no concrete proposals or spending plans. This week, things have started to take shape, with the release of a long-awaited infrastructure proposal on Tuesday, an addendum to the proposed 2018 budget.
In a statement Transportation Secretary Elaine Chao made to Politico, the administration seeks “long-term reform on how infrastructure projects are regulated, funded, delivered and maintained.” This week’s announcement lays out the “main key principles” that will be expanded upon with legislation later this year.
During the early days of the administration, some Democrats expressed a willingness, and even eagerness, to work together on an infrastructure plan, which was a frequent talking point on the campaign trail and a key part of Trump’s plan to invest in the country and its workers. With this new proposal, the bipartisan support seems to have disappeared.
“President Trump’s campaign promises on infrastructure are crumbling faster than our roads and bridges,’’ Senate Democratic leader Chuck Schumer said in a statement. “The fuzzy math and sleight of hand can’t hide the fact that the president’s $200 billion plan is more than wiped out by other cuts to key infrastructure programs.”
While that discord suggests additional debates are sure to come, with the Trump plan coming more clearly into focus, here’s a breakdown of what these key principles may mean for the future of urban transportation.
Private investment is a priority
As expected, the administration put its plan to leverage private sector investments front and center. The plan calls for using $200 billion in public funds to leverage a $1 trillion in private funding for infrastructure, a concept that has been advanced previously with similar funding levels. Additional tools, such as expanding the Transportation Infrastructure Finance and Innovation Act federal loan program and lifting the limit on tax-exempt bonds for private investors, would also provide more incentives to bring private sector cash into infrastructure programs. Lifting other restrictions, such as a ban on interstate toll roads and private investment in rest areas, would ideally bring more investors on board.
Public-private partnerships, akin to the ones being promoted, have been successful for some projects. But in many ways, according to Democratic critics, the Trump proposal is too good to be true. How does the plan intend to attract so much private capital? The fact sheet for the infrastructure proposal lays out top-level details, but for such a huge potential investment, there are still a lot of points to clarify. As Laura Bliss writes at CityLab, “the alchemy that turns $200 billion into $1 trillion features nowhere in the budget.”
Another part of the proposal includes a process called “asset recycling,” which would encourage state and local governments to sell assets such as airports, bridges and highways to private investors (a similar process has been used extensively in Australia). The proceeds, plus a proposed sales bonus paid by the federal government, would then be poured into new infrastructure projects.
Many have questioned whether these types of privatization plans would truly fix the country’s many needs, especially those that may not generate an extensive profit, such as water infrastructure or projects in rural areas, which would be unattractive to investors. Would a profit focus shift funding away from projects that we really need?
Federal direct funding will shrink
The proposed budget would make substantial cuts to transportation funding in general, a roughly 13 percent reduction in federal spending over fiscal 2017. In addition to some of the larger transit-specific cuts to programs like TIGER and New Starts, even core funding programs will be hit.
The Highway Trust Fund has been a bedrock of American transportation funding, but its impact has shrunk over the last few decades as Congress has refused to raise the federal gas tax rate. In the past, Congress has helped prop up the fund with money from other sources. Trump’s new budget would further diminish this important source of infrastructure funding, cutting federal support by $95 billion through 2027.
As Duke professor and infrastructure expert Henry Petroski told Curbed earlier this month, in the face of federal inaction, many cities and states have raised the fuel tax on their own, or passed bills to support long-term infrastructure projects. “Close to half the states have raised the state gasoline taxes in the last couple of years, and the others are considering it,” he said.
Builders are also questioning how the combination of cuts and incentives will impact the country. According to a Bloomberg story, the American Road & Transportation Builders Association commissioned an analysis of the plan, and concluded that “it is possible that the proposed infrastructure Initiative will actually result in less, not more, federal investment in infrastructure.”
Trump’s way is the highway
Many opponents of the plan point out that the budget would make deep cuts in programs that support any methods of transportation outside of automobiles. The budget proposal would hit a number of key sources of transit funding: the Department of Transportation’s 2018 discretionary budget would lose $2.4 billion, a 13 percent cut; the TIGER Program, which is being used to fund many mass transit programs, would be completely eliminated with transit projects cut by $928 million; and Amtrak would lose $630 million.
These cuts would effectively stop mass transit projects at various stages of completion. According to the American Public Transportation Association, about 50 public transit projects in 23 states are at risk. If fully implemented, these cuts could lead to a “possible loss of $90 billion in economic output.”
Take federal funding for cycling. According to the advocacy group People for Bikes, the cuts would harm many important programs that have helped install new and improved bike lanes, such as the TIGER Program. In addition, cuts elsewhere in the budget would have a trickle-down effect on expanding cycling. For example, cuts to the Department of the Interior and the Land and Water Conservation Fund would impact the ability to create many new trails, especially in parks and recreational areas.
Imagine landing at a shiny new airport recently renamed for a global corporation but the only way to get to your destination is by driving a car on privately owned, expensive toll roads. If the the precepts outlined in this Trump administration proposal become enshrined in the final 2018 budget, this may be America’s future.