Last month, the Trump Administration presented its plan to overhaul U.S. public infrastructure. The plan is structured around four goals: stimulate $1.5 trillion in new infrastructure investment over the next 10 years, streamline the permitting process down to two years or less, invest in rural infrastructure projects, and advance workforce training. The Trump administration is proposing $200 billion of federal seed money will generate $1.5 trillion by incentivizing local, state and private organizations to invest $6.50 for every $1.00 spent by the federal government. The proposed distribution of the $200 billion is as follows:
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The proposed infrastructure plan establishes an Interior Maintenance Fund to allow for deferred maintenance and capital needs in national parks and wildlife refuges to be paid for by receipts generated from energy development on public lands. It also includes provisions for Disposition of Federal Real Property to establish authority to allow for the disposal of Federal assets to improve the allocation of economic resources in infrastructure investment.
The $200 billion in federal dollars will come from funding cuts in the proposed fiscal year 2019 budget. This includes budget cuts to many federal agencies, like the Department of Agriculture, the Environmental Protection Agency, and the Interior Department. The proposed budget also limits project funding under the Federal Transit Administration’s Capital Investment Grant Program, also known as New Starts, to projects that have already been awarded full funding grant agreements. Some agencies and programs, such as the Economic Development Administration, the TIGER grant program for infrastructure projects, the Rural Economic Development Program, and the Community Development Block Grant program would also be eliminated under the proposed budget.
Cuts to funding, rather than proposing new revenue sources is a cause of concern for some lawmakers. The White House said its proposal is just the beginning of negotiations to find the best solution for infrastructure in the U.S. The plan will fall under the purview of at least six House committees and five Senate committees.
What can municipalities to do adapt to budget changes?
While the infrastructure plan and the budget are not signed into law yet, public private partnerships and other creative infrastructure financing approaches will increasingly be a way for local governments to leverage their investment dollar. By bringing new partners into the investment process, utilities can often reduce the impact of investments on their customer base’s bills while also reducing the amount of borrowing required to maintain compliance with existing laws. If you would like help finding a way to finance an upcoming infrastructure project, please reach out to me at tfedder@woodardcurran.com.
