Trillion-dollar Infrastructure Plan Promises Big But Still Lacks Details
Six months ago, President Trump made a pledge to fund a $1 trillion infrastructure program to address our aging infrastructure needs. It remains a hot topic, but has taken a back seat for now to other legislative measures, namely tax reform and health care. The Trump administration has released some executive orders on the infrastructure plan and establishing discipline and accountability in the environmental review and permitting process.
Although nothing concrete has happened for infrastructure yet, some of the outlined points of the infrastructure plan could have a positive effect on projects along the waterways. As we reported in the last issue, funding for the U.S. Army Corps of Engineers could be better for 2018 (making better use of the Harbor Maintenance Trust Fund), but proposed funding levels are up from the previous year. Current funding levels can do little, however, to make a true dent in the backlog of deferred maintenance on the U.S. waterways. The new administration’s solutions include limiting the federal government’s role in the construction and maintenance of waterway resource infrastructure, leveraging private funding for projects, and revamping and streamlining the environmental approval and permitting process.
We have seen little in the way of substantive details on the $1 trillion plan. In fact, the long-promised vision for our nation’s infrastructure was slipped quietly into the Trump administration’s proposed 2018 budget. But the six-page fact sheet outlines some important details of the proposed reform.
The plan blames some of our issues with infrastructure on “confusion about the federal government’s role in infrastructure” and that the federal government has taken on an unhealthy role in funding local infrastructure projects, encouraging state and local governments to delay projects in the hope of receiving federal funds. “Overreliance on federal grants and other federal funding can create a strong disincentive for non-federal revenue generation,” the plan said. Yet the very next paragraph acknowledges that the federal government is responsible for only approximately one-fifth of infrastructure spending. And we need to cut from that?
Part of reevaluating the federal government’s role in infrastructure also includes a look at the environmental permitting process (something the Corps of Engineers and Congress has acknowledged as an issue and taken steps to remedy already). But the administration has yet to connect the dots between cutting federal spending and lowering federal responsibility, and constructing a $1 trillion infrastructure investment.
The proposed budget for 2018 includes $200 billion for infrastructure spending over the next 10 years, and the plan calls for the other $800 billion to be sourced from the private sector, but how will that happen?
According to the infrastructure plan fact sheet, “The administration’s goal is to seek long-term reforms on how infrastructure projects are regulated, funded, delivered and maintained. Providing more federal funding, on its own, is not the solution to our infrastructure challenges. Rather, we will work to fix underlying incentives, procedures and policies to spur better infrastructure decisions and outcomes, across a range of sectors.” This is not unlike many of the goals of the Water Resources Reform and Development Act of 2014 and the Water Resources Development Act of 2016 and actions already taken by the Corps to streamline the permitting and funding process.
In August, the Trump administration also released “Presidential Executive Order on Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure.”
Again, it was not unlike many of the initiatives resulting from WRDA legislation and Corps projects, and not unlike the Infrastructure Fact Sheet, in that it lacked real details about exactly how to solve the problems. However, many of the ideas are good for project facilitation and expediting funding and permitting at the federal level, such as providing transparency and accountability to the public regarding environmental reviews and decisions; speaking with a coordinated voice when conducting environmental reviews and making authorization decisions; and making timely decisions (environmental reviews and authorizations within two years), as the fact sheet says, “to give public and private investors the confidence necessary to make funding decisions for new infrastructure projects.”
The plan also has an interesting concept for multi-agency collaboration and accountability – a CAP Goal. The Office of Management and Budget (OMB) has 180 days from the date of the executive order (by mid-February) to establish a CAP Goal on Infrastructure Permitting Modernization that makes federal environmental reviews and authorization processes “consistent, coordinated and predictable,” and no longer than two years. Those are laudable goals and ones that could help expedite waterways resource projects, but all we have are goals, not the details on how to achieve those. And we’re much, much farther off from that plan becoming legislation and law.
The inland waterways also make a case for the need for continued federal funding and support. Their needs can’t be fully supported by local government or private funds. After Trump released his plan, Michael J. Toohey, president and CEO of the Waterways Council Inc. (WCI), said public-private partnerships won’t work for the inland waterways system. Investors need to see returns for those partnerships to be successful, which is difficult on local, small-scale projects. Toohey said the federal government must continue paying at least half the money to maintain and improve the inland waterways system. WCI also blasted the administration’s charge to up operators’ user fee tax to the Inland Waterways Trust Fund, while simultaneously cutting the government’s appropriations for inland waterways.
This is a very similar situation to the Harbor Maintenance Trust Fund and the user-fees collected from ports. Waterways would not be in such dire need of maintenance and private funding, if all the money collected from ports was used for waterways projects.
The infrastructure fact sheet did make reference to the federal government mucking up the user fee/tax process. In reference to the interstate highway system, the plan said that, “the federal government now acts as a complicated, costly middleman between the collection of revenue and the expenditure of those funds by states and localities.” Without any details it’s hard to guess at how that might affect the HMTF, but the suggestion is that the federal government should get out of the way of that collection and distribution. Would that mean that local ports could keep their own user generated fees for maintenance and capital projects, instead of being gobbled up by the federal budget? For now, we wait on details and legislation that would represent any real changes.
Not all of Congress is caught up on tax reform and health care, and the House Transportation and Infrastructure Committee has taken steps to begin the process for a Water Resources Development Act of 2018. On October 27, the committee held a hearing, “America’s Water Resources Infrastructure: Concepts for the Next Water Resources Development Act.” Chairman Garret Graves (R–LA) of the subcommittee on Water Resources and Environment highlighted some of the progress made with WRRDA 2014 (reformed bureaucracy and increased Congressional oversight) and WRDA 2016 (reforming the two-year legislative cycle and removing barriers for state, local and non-federal investment), and opened the discussion on how to build from there.