Wanted-New Infrastructure and a Way to Pay for it02/20/2018
President Donald Trump has been talking about the need to rebuild our nation’s roads, bridges and ailing infrastructure since his early days on the campaign trail. But it wasn’t until this week that we saw his “official” proposal to spur $1.5 trillion in new infrastructure investment.
The 55-page plan highlights the need to improve rural, roads, bridges, waterways and internet access. Trump’s “Legislative Outline for Rebuilding Infrastructure in America” has a price tag of $200 billion, and he would dedicate $50 billion, or 25 percent of the total proposed price tag, to be distributed to states in the form of block grants, potentially giving rural areas a big boost.
“Nearly everyone agrees we’ve got to rebuild our roads, bridges and waterways. For the United States to stay ahead in the 21st century, the nation needs infrastructure that can compete,” noted Iowa Senator Chuck Grassley in response to the president’s plan.
The initial plan prompted positive feedback from both the National Farmers Union and the American Farm Bureau Federation. And that’s usually not an easy thing to do.
“We are encouraged that the administration is acknowledging the need for significant investment in rural infrastructure,” said National Farmers Union President Roger Johnson. “With over $3.6 trillion required to overcome decades of deferred maintenance, our nation’s roads, bridges, rails, locks and dams, water and waste systems, and rural broadband are in desperate need of robust funding. We look forward to working with Congress to maximize opportunities to improve rural America’s failing infrastructure.”
“While past infrastructure plans have left rural America in the dust, this administration has not forgotten the rural communities that form the backbone of our nation,” said American Farm Bureau President Zippy Duvall. “The proposed $50 billion in rural spending will help restore our deteriorating infrastructure and protect U.S. agriculture’s place as a world leader in production.”
“We also applaud the administration for placing the decisions of how these dollars should be spent back at the local level,” Duvall said. “Governors and local officials know their roads and bridges better than anyone, and they are ready to set the priorities for rebuilding rural America.”
And Matthew Chase, the executive director of the National Association of Counties, also welcomed the president’s focus on upgrading our nation’s infrastructure.
Counties invest more than $122 billion in infrastructure and public works annually, he noted.
“Counties build and maintain the largest share of public road miles — 46 percent — and 38 percent of America’s bridges. Counties are also involved in a third of the nation’s airports and support 78 percent of all public transportation systems. Additionally, counties construct water and sewer systems, hospitals, libraries and other public facilities and public safety communications networks.”
So, there’s little disagreement about the need for new infrastructure — it’s mainly a debate about who should pay for it — and how. Trump envisions funding from federal, state, local and private funds. The $1.5 trillion plan calls $200 billion from the federal government and another $1.3 trillion dollars of state, local, and private money — to be determined sometime in the future.
His plan seeks to spark non-rural infrastructure investment in two ways — through direct federal investment that’s matched with state and local funds ($100 billion) and through loans and private activity bonds ($20 billion). An additional $20 billion would be directed solely at “transformative” projects designed to “lift the American spirit,” and $10 billion would go toward a capital financing fund that would “reduce inefficient leasing of federal real property which would be more cost-effective to purchase.”
The $50 billion in incentive funding for rural infrastructure projects would be handled differently than the other $100 billion in direct federal investment. Those funds would go directly to state governors as block grants to allow states to set their own priorities.
But several states don’t have extra income to deliver on infrastructure improvements — even if the funds are matched. And that’s where the “pocketbook issues” start to raise concerns. Will there be new tolls, new fuel taxes or other user fees?
If so, that’s a problem for people who move commodities over 12,000 miles of U.S. inland waterways. The infrastructure plan, said Waterways Council Inc. President and CEO Mike Toohey, would increase repairs of aging locks and dams, but also install “third party service providers” to collect higher tolls that would only be paid by commercial users of the rivers.
“Carriers, and therefore shippers like American family farmers, energy/petroleum and coal producers, cement and construction material companies, and many others who rely on the cost-competitive waterways to ship their products around the U.S. and the world, would be saddled with massive increases that will deter freight from the waterways and cause a modal transportation shift,” Toohey said.
Similar concerns surfaced from the American Trucking Associations.
“A proposal that relies on fake funding schemes like highway tolls and privatizing rest areas will not generate the revenue necessary to make significant infrastructure improvements,” said American Trucking Associations President and CEO Chris Spear.
The plan also includes a few provisions that could reduce infrastructure costs by reducing the time it takes to go through the environmental permitting process. Currently, it can take more than a decade to get a federal permit to start a project like rebuilding one of the crumbling locks on the Mississippi River. Trump’s plan calls for a maximum of two years.
However, that part of the package drew criticism from environmental groups.
“It is categorically false to suggest that we must sacrifice public health standards and basic environmental protections in order to build critical infrastructure projects efficiently,” said Collin O’Mara, president and CEO of the National Wildlife Federation. “Americans want and deserve both.”
Source: Sara Wyant, Agweek