WASHINGTON, D.C.-President Trump has released his proposed infrastructure plan, including $200 billion the administration says will spur at least $1.5 trillion in infrastructure investments by state and local governments and private parties over the next decade.
The plan relies largely on state, local, and private investment, relying on federal funding to leverage more than six times as much new revenue from those sources. The proposal also looks to expedite project permitting, limit environmental reviews, and increase workforce development.
According to guidance released by the White House and the proposal itself, headed to Congress for consideration, $100 billion would be set aside for an Infrastructure Incentives Program, providing grants to states and municipalities for specific projects. Each grant would comprise up to 20 percent of the project cost, with states expected to generate new revenue to cover the majority of the cost of the work.
Grant proposals would be solicited from state and local governments every six months after the establishment of the program, and projects would be chosen largely on the basis of how the project will leverage new, non-Federal investment. Other criteria would include the dollar value of the project, evidence of improvements to efficiency in project delivery, plans to incorporate new and evolving technologies, and evidence the project will spur economic and social returns on investment. Any one state should not receive more than 10 percent of the funds available via the incentives program, according to the plan.
The proposed Rural Infrastructure Program would include $50 billion in federal investment, funds that would be distributed to state governors, who would decide how the money would be best used on infrastructure improvement. Another $20 billion would be allocated to the Transformative Projects Program, which would fund bold and innovative projects that may not attract private investment due to technical and risk characteristics.
A total of $20 billion would be allocated to expanding infrastructure financing, including $14 billion for existing programs. The remaining $6 billion would go to the expansion of Private Activity Bonds, money the administration says would provide tools and mechanisms for market participants to invest in public infrastructure. Another $10 billion would go to a new Federal Capital Revolving Fund, which would help with the purchase of federal real property in order to cut down on the long-term cost of leasing property.
The proposal includes language establishing a One Agency, One Decision protocol for environmental reviews on federal projects to streamline the process. The plan also calls on federal agencies to shorten the permitting process to expedite infrastructure projects. Also in the interest of expediting project starts, the proposal calls for two pilot programs that would have the potential to replace the current environmental review-the performance-based pilot and the negotiated mitigation program pilot. It also includes steps to increase federal support of workforce development programs, including expanding Pell grants and encouraging apprenticeship and career and technical education.
The plan is part of Trump’s proposed $4.4 billion federal budget for fiscal year 2019, a proposal that cuts the DOT’s discretionary budget by 19 percent from the 2017 budget. In addition to spending increases for the infrastructure initiative, the budget proposal increases defense spending by $80 billion compared with 2017.
The plan does not specify where the money for the increased infrastructure investment will come from, other than to note that a new fund would allow fees from energy development on public land would help bankroll infrastructure development on public lands.
In a statement, the Associated General Contractors of America (AGC) called the plan “needed and thought-provoking,” but said the organization “will seek changes to further improve upon the president’s concept.” In particular, the AGC is concerned that the plan does not address shortfalls in the Highway Trust Fund, which has faced funding crises in recent years because it is based primarily on the federal gasoline tax, which has not been raised since 1993.