May 23, 2017

The Infrastructure Initiative Accompanying President Trump’s FY18 Budget

Becky Weber

A six-page fact sheet on the infrastructure initiative accompanied the President’s FY 18 budget, the most detail we have seen from the administration on their plan thus far.  Link to the fact sheet is here:

https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/fact_sheets/2018%20Budget%20Fact%20Sheet_Infrastructure%20Initiative.pdf

Below are highlights of the infrastructure initiative fact sheet:

Key Principles:

Targeted Federal Investment – high priority on regional or national projects;

Encourage Self Help – shifting more responsibility to States and localities;

Align Infrastructure Investment with Entities Best Suited to Provide Sustained and Efficient Investment – Feds divest from certain assets and functions;

Leverage Private Sector – public private partnerships

Funding:

States that $200 billion in outlays for direct Federal funding will be provided, funded from cuts to current DOT and other federal programs in order to leverage a total of $1 trillion in infrastructure investment – budget does NOT indicate how the $200 billion would be allocated amongst DOT and other programs

Other Proposals Contained in FY 18 Budget: 

Air Traffic Control –  Shift to FAA operated to independent, non-governmental organization.  Entity would set and collect user fees for operation of system.

Increase Infrastructure Flexibility at Veterans Affairs facilities – expand VA lease authority and speed ability to pursue facility renovations and improvements; encourage P3’s and barriers to contracting.

Divestiture of Power Marketing Administration’s Transmission Assets – Sell and lease out PMA transmission assets (lines, towers, substations and rights of way)

Reform Laws Governing Inland Waterways Trust Fund (locks and dams) – Establish increased fee to commercial navigation users of inland waterways for future capital investments (users currently pay 50% of capital costs).

Illustrative Examples of Funding Proposals:

(budget states the administration will pursue these proposals as part of the infrastructure package)

Expand Transportation and Infrastructure Finance and Innovation Act (TIFIA) program – (loans, loan guarantees and lines of credit for transportation projects) – increase to $1 billion annually and expand TIFIA eligibility

Lift $15 billion Private Activity Bond (PAB) cap and Expand PAB Eligibility to other Non-Federal Public Infrastructure (tax exempt bonds on behalf of private entities to construct certain transportation facilities)

Incentivize Innovative Approaches to Congestion Mitigation – competitive grants to urbanized areas embracing congestion pricing, enhanced transit, increased telecommuting and flex scheduling an deployment of advanced technology

Liberalize Tolling Policy and Private Investment in Rest Areas – allow tolling on Interstate highways and allow privatization of rest areas

Fund Water Infrastructure Finance and Innovation Act (WIFIA) – loan program to leverage private investment in large drinking water and wastewater infrastructure projects

Encourage Army Corps of Engineers Contributed/Advanced Funding Authorities –  more non-Federal sponsors funding construction activities on their own without Corps involvement

New Federal Tools:

(budget states the administration will be discussing these proposals to address limits of cash basis Federal budgeting)

Federal Capital Revolving Fund – Fund is “in development” and would finance Federally-owned civilian capital assets – fund would be repaid with future annual appropriations – would help address underinvestment in capital assets due to large up front procurement costs

Partnership Grants for Federal Assets – Proposal “in development” to allow a private partner to build or improve a Federal facility, donate it to the Government in exchange for the right to retain revenues from associated activities.

Environmental Review and Permitting Process Enhancements:

(budget states the administration will pursue these proposals as part of infrastructure package)

Improve Environmental Performance – pilot programs to experiment with different ways to evaluate projects to better protect the environment

Accountability – hold agencies accountable for their performance – letting public know how much underperformance costs taxpayers and projects

One Federal Decision – designating a single entity responsible for shepherding each project through various review and permitting processes

Unnecessary Federal Approvals – put approval process in hands of State and local entities where appropriate

Judicial Reform – proposals forthcoming to curtail needless litigation of permits and environmental documents