WASHINGTON, DC–The outline of President Donald Trump's $1.5 trillion infrastructure was laid out during his State of the Union address earlier this year: to leverage $200 billion in federal money with local and state tax dollars and private investment. This week he followed up with a 53-page [PDF] blueprint containing additional details.
“For too long, lawmakers have invested in infrastructure inefficiently, ignored critical needs, and allowed it to deteriorate,” the report began. “As a result, the United States has fallen further and further behind other countries.”
The plan describes how the 20% of federal money could be matched by an 80% contribution from local funds. It notes, for example, that existing funding sources such as sales taxes levied to pay for transit projects may be included in a local jurisdiction's contribution.
The $200 billion is to be divvied up into several categories: $100 billion is to be provided as incentives to local government entities; $20 billion would be applied to “projects of national significance”; $50 billion is to be devoted to rural block grants and the remainder of the money would support existing infrastructure-related programs.
The plan also calls for a reduction in the permitting time and less red tape around development projects.
Finally, the plan calls for the sale of several assets, such as the Ronald Reagan and Dulles International Airports, the Tennessee Valley Authority and Bonneville Power Authority's transmission assets and the Washington Aqueduct. The Trump Administration argues that these assets would be better managed by local entities, although some communities have already expressed qualms about losing the federal commitment to these properties.
The proposal still needs to be approved by Congress, which has little taste for conflict after the wrangling surrounding its recently-passed spending plan — to say nothing of adding to the federal deficit. The infrastructure plan would be paid for, per the budget that the White House also submitted on Monday by shifting money from domestic and social programs to this plan, as well as to defense spending.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
