White House Infrastructure Plan Puts Burden on State and Private Money

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Unveiled last week, President Trump’s $200 billion plan to rebuild America is intended to attract a huge amount of additional money from states, localities and private investors. The goal is to generate a total pot of $1.5 trillion to upgrade the country’s highways, airports and railroads.

With his infrastructure framework, the president is rethinking Washington’s role; recasting the federal government as a minority stakeholder in the nation’s new infrastructure projects. Half of the $200 billion promised over 10 years will be used for incentives to spur greater contributions from states, localities and the private sector.

In new White House guidelines, the ability to find sources of funding outside the federal government will be the most important yardstick — accounting for 70% of the formula for choosing infrastructure projects. How “the project will spur economic and social returns on investment” ranks at the bottom — at just 5%.

In this new competition for federal funds, a project with the potential to bring in more dollars from private investors could have a stronger chance of getting the green light. “Instead of the public sector deciding on public needs and public priorities, the projects that are most attractive to private investors are the ones that will go to the head of the line,” said Elliot Sclar, professor of urban planning and international affairs at Columbia University. By comparison, proposals intended to serve more impoverished communities that require more state and local money could be given short shrift. Financial investors may not see a big profit in such a project.

Along with private investors, cities and states are being counted on to put up significant funds. States have been struggling for years to rejuvenate creaky roads, bridges and ports — and even if the plan appears to put much of the onus on them to finance projects, any additional federal funding is welcome. John Hicks, executive director of the National Association of State Budget Officers, says the plan is “seen primarily as a positive, because it continues to shine light on a shared need of infrastructure improvement.” But many states have already expressed concern that it will be hard for them to increase state and local taxes to garner more funds.

California State Treasurer John Chiang says the “proposal offers too little and asks for too much.” Chiang’s statement said, “Given that California alone has at least $850 billion in new public works that must be built or repaired in the coming years — including 1,388 crumbling bridges and woefully deficient water infrastructure that deprives too many communities of safe drinking water — the $200 billion national investment is no better than a spit in the ocean.”

Southern California Partnership for Jobs supports infrastructure investment, public and private, particularly for transportation. It enhances our overall quality of life and supports individuals’ employment and their families’ well-being. We work closely with other advocates to seek funding at the state, regional and local levels.

Source: New York Times

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