For over 60 years, the concept of a “federally assisted, state run” program was the underlying premise for our nation’s transportation infrastructure system. The federal “assistance” came largely in the form of money, providing the majority share of funds for capital projects across the country. The central government also offered states and its other grantees a framework for engineering and safety considerations. In exchange for federal financial support, Congress required grantees to advance substantial policy goals, addressing labor, procurement, and environmental initiatives.
The Trump administration’s long-awaited Legislative Outline for Rebuilding Infrastructure in America essentially turns that paradigm on its head. States and localities would bear a much larger portion of the financial burden for building and repairing infrastructure. Reliance on private funding, a well-established but relatively small fraction of our collective infrastructure budget, would increase. State and local control would be elevated over federal standards, most notably in the area of environmental protection. Although the word never appears in the document, the plan clearly favors the concept of “devolution” of our nation’s infrastructure system away from the federal government and toward the states.
Prior leaks of key elements of the outline resulted in few surprises when it was formally released. The $200 billion figure of federal assistance did materialize, roughly divided into $100 billion for an Incentives Program for a wide range of infrastructure assets, $50 billion for a Rural Infrastructure Program, $20 billion for “Transformative Projects” (those that create significant new services through innovation or other metrics), and $20 billion of additional support for existing federal loan programs. As the president previewed in the State of the Union address, this federal investment is designed to stimulate $1.5 trillion in overall infrastructure spending.
The funding proposals do not represent additional federal investment when the plan is viewed in the context of the administration’s fiscal year 2019 budget proposal, released on the same day. The budget cuts substantially from existing transit and rail programs, among others, as a means of financing the federal incentives in the infrastructure plan. In this way, the administration has left the heavy financial lifting to Congress, which will decide if there is any room for additional infrastructure spending in light of the recently passed tax cuts and spending bill compromise. Initial reactions from the Hill do not indicate a large appetite for that, and certainly not on a bipartisan basis (notwithstanding calls to raise the federal gas tax from outgoing House Transportation and Infrastructure Chair Bill Shuster and the U.S. Chamber of Commerce).
Environmental permitting and other streamlining proposals mirrored those that we had previously summarized, and the reactions were predictable. If, as some members of Congress have stated, “everyone” recognizes the need for approving infrastructure proposals more quickly, it does not appear that “everyone” is on board with the far-reaching scope of the administration’s outline. Specific proposals would and should receive support, such as creating a uniform 150-day statute of limitations for all federal court challenges to infrastructure environmental reviews and permitting decisions. However, it is unclear whether legislators will take the time and make the effort to unravel the various environmental proposals in the absence of agreement on funding.
There’s definitely an air of asking whether the glass is half-full or half-empty when it comes to the state of infrastructure legislation. On the one hand, there are elements of the administration’s plan that have been discussed for years and would likely garner support from both sides of the aisle. For example, an expansive definition of “infrastructure” that includes essential public assets far beyond highways and bridges is a welcome perspective. On the other hand, the plan’s heavy reliance on incentives to create or encourage state and local financial support may not be grounded in reality. It seems unlikely that many governors can safely predict additional investment, especially given uncertainties over how the new tax code could impact state coffers. One need only look to Connecticut, which just recently suspended spending on hundreds of transportation projects because of financial difficulties.
Looming over all these essential policy debates, of course, is the contentious deliberation over immigration reform now kicking off in Congress, as well as already fractured political relationships on the eve of the 2018 midterm elections (yes, I’m counting eight months in advance of November as the “eve”). Surprises abound in Washington, DC these days, so do not rule out action on an infrastructure bill. But the stars will have to align in fairly short order if we are to see such a result in this legislative session.
Above all else, as a harbinger of warmth and good feelings, remember that pitchers and catchers just reported to spring training across Florida and Arizona. As the baseball saying goes, hope springs eternal.