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Trump’s infrastructure plan: Small federal investment, more state and local control

Proposed $200 billion federal investment meant to be catalyst for additional local, private funds

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Infrastructure week has finally arrived. Today, President Trump released his long-awaited infrastructure plan, a key priority and core part of his stump speech that nonetheless took a back seat to health care and a tax bill during his first year in office.

The newly introduced plan, which follows the broad contours of previously floated proposals, aims to levy federal incentives and investments to spur additional private and local funding, creating a $1.5 trillion pool over the next decade to invest in repairs and new construction.

But the size of the plan actually isn’t the biggest news being generated by Trump’s proposal. By changing funding mechanisms and challenging expectations of federal support, the proposal may upend decades of infrastructure spending protocol. Transportation officials have reacted strongly to the shift toward local funding, as well as the proposed defunding of existing transit programs. NACTO, the National Association of City Transit Officials, just released a statement condemning the plan, noting:

The White House released a “1.5 trillion” plan that is largely smoke and mirrors—funding a minuscule 13% of the stated need, with funds taken from some of our country’s most successful infrastructure programs, New Starts and TIGER.

The Trump administration believes the current federal system is where the problems lie. Red tape and micromanagement in Washington has stifled innovation and construction, the White House argues, creating a permitting process that takes years, even decades, to build needed infrastructure.

“If you go and ask the public what their preference is, they would prefer to invest locally as opposed to sending money to Washington,” said a White House official who briefed reporters Saturday, according to the Los Angeles Times.

State and local government gets more control, and picks up more of the tab

The plan focuses on local funding and control, attempting to get states and municipalities to “put more skin in the game” and take more responsibility, according to an administration official. The proposal would leverage $200 billion in federal dollars, matched by cuts elsewhere in the overall federal budget, to leverage $1.3 trillion in state, local, and private spending. As an example, the administration praised Measure M, a Los Angeles initiative that raised local sales tax revenue to pay for transportation improvements.

The Trump blueprint also calls for specific funding to be set aside for rural communities ($50 billion), apprenticeship and workforce training, as well as an unspecified number of transformative, “next-century-type” showcase projects ($20 billion).

In addition, the plan would seek to speed up federal permitting processes the White House says hinder construction. The goal is to have one federal agency respond to each project, making a decision within 21 months. During a press call Saturday, a White House official said the administration would not seek to change “major provisions of signature environmental laws, such as the Endangered Species Act or the Clean Water Act,” according to Governing magazine.

But that hasn’t mollified environmental groups, who claim the proposal is an effort to rollback important environmental regulations. The Natural Resources Defense Council denounced the plan Sunday as a “disaster” and an “unacceptable corporate giveaway.”

Other urban planners and researchers also point to the plan’s failure to address climate change or resiliency (neither are mentioned in the 56-page proposal). A 2017 report by the Environmental Protection Agency noted the the country would need to spend $280 billion by 2100 to adapt roads and railways for climate change.

Still a long road forward for the proposal

Trump’s plan has already met with strong resistance from Democrats, who believe the plan doesn’t include nearly enough federal support for long-overdue repairs and new projects. They’ve proposed a $1 trillion federal investment. Some Republicans are also wary, since this relatively small amount of direct federal investment would add to the deficit exacerbated by recent Republican legislation.

“This is not a real infrastructure plan—it’s simply another scam, an attempt by this administration to privatize critical government functions, and create windfalls for their buddies on Wall Street,” said Oregon Representative Peter DeFazio, the top Democrat on the House transportation committee.

Opponents of the Trump administration’s infrastructure proposal argue it will favor toll roads and other revenue-generating infrastructure, as opposed to other needed repairs and investments.
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The plan also faces resistance from local politicians of both parties, who want more federal help to repair and replace infrastructure. The plan aims to end the “over-reliance on federal dollars” and incentivize local and private actors to invest; half the federal dollars would be held aside as part of a competitive bidding process favoring projects that have already generated funding or will be revenue-creating, such as toll roads or bridges.

“Trump’s misguided ‘plan’ fails to renew the federal government’s partnership,” said Oregon Representative Earl Blumenauer in a statement. “Instead, it shifts the burden to cash-strapped state and local governments, while setting up a feeding frenzy that will only deepen political divisions and geographic inequality. Any serious proposal would provide more than a laundry list of wishes and budgetary gimmicks, but this is not a serious plan. The American people are being sold a bill of goods. With our roads, bridges, and transit systems in disrepair, Trump’s proposal just doesn’t cut it.”

Many local leaders have already raised additional taxes or bond measures to fund transit and roadway improvements, including raising the gas tax in some states. They aren’t fans of the White House plan to ask for even more revenue generation to qualify for federal support. Local leaders, who are already “facing blowback for what their taxpayers will allow,” according to a Brookings Institution report, are also concerned the plan doesn’t address the long-term health of the Highway Trust Fund, a huge source of funds that has struggled to maintain solvent.

Those opposed to the administration’s plan argue that by focusing on state and local funding, the plan favors projects with immediate revenue generation potential at the cost of a unified federal vision. This morning, on NPR, former Secretary of Transportation Ray LaHood said that type of larger vision and investment is why Europe and Asia have some of the best rail systems: “The national government made a commitment.”