Making Sense of the Leaked Trump Infrastructure Plan

Don't be fooled, it's mostly terrible policy.

Photo: Gage Skidmore/Flickr
Photo: Gage Skidmore/Flickr

Earlier this week, the Beltway news site Axios got its hands on a leaked a six-page outline of the Trump administration’s long-rumored infrastructure proposal. Since then, a few other details have come to light, and the White House infrastructure plan is starting to look like more than just vaporware.

It’s not quite the all-out, guns blazing assault on transit and cities that right-wing think tanks like the Heritage Foundation have been dreaming of. But don’t be fooled just because it doesn’t resemble previous Trump spending proposals to zero out federal transit funds altogether. What we do know suggests that it’s still terrible policy.

With the caveat that the leaked information is vague, often contradictory, and subject to change, here’s an overview of the important points that have surfaced so far.

It doesn’t actually raise new money

For months, the catchphrase for this policy was “trillion dollar infrastructure plan.” Then the administration scaled it back to $200 billion in federal funds over 10 years, with states and cities covering the bulk of the spending. Now, Roll Call reports that it won’t entail raising any new federal money at all.

Instead, Trump infrastructure advisor DJ Gribbin told a gathering of mayors that existing pots of federal transportation funding will mostly remain in place. But the White House does intend to poach from some programs to pay for its priorities, and — maybe you saw this coming — rail and transit programs will be targeted for cuts.

It could give the White House much more power over transportation funds, while weakening the power of local governments

The program described in the leaked memo published by Axios would be a big departure from current practice if it applies to a large amount of money. That’s because it lets the Trump administration — not states, regional governments, and transit agencies — decide where the money goes. Currently there are some small programs, like TIGER, that the White House controls, but they don’t involve spending several billion dollars each year.

Politically, it would be extremely difficult to disrupt the federal funding formulas that state and local governments now plan around. Every state is used to getting a certain amount of federal transportation dollars, and it’s hard to imagine the White House torpedoing that system. The memo published by Axios may be describing a new, separate funding program.

It’s mostly awful for cities

Giving the Trump White House authority over a significant chunk of federal transportation funding would almost certainly end badly for cities. The administration has already shown itself to be hostile to transit and urban areas generally. The leaked outline gives the game away by setting aside 25 percent of the program funds for rural infrastructure — there is no similar set-aside for cities, even though urbanized areas generate the bulk of the nation’s economic activity.

In addition to the potential loss of transit funds, there would also be new strings attached to federal transit grants under the Trump proposal.

A requirement to receive major transit capital grants from the Trump program would be to raise local funds via value capture. This typically entails setting up a special tax district that “captures” some of the increased value of real estate attributable to a transit improvement. It’s a defensible way to fund transit in some cases, but it can also deprive cities of local tax revenue that would be spent on other priorities, like education.

There are plenty of other ways to fund transit, and it makes no sense for the federal government to limit cities’ flexibility like this.

It would make it easier to toll Interstates

If you’re looking for the upside to this plan, here it is. The White House says it wants to allow states to toll existing Interstates. Federal law presently allows tolling only on newly constructed Interstate segments. Tolling existing roads could help manage traffic without building new highways, and set off some virtuous circles of more compact land use and less car-centric sprawl.

While there might be a few good planks in whatever the White House ultimately releases, all indications so far are that the downsides for cities will far outweigh any benefits.

  • Southeasterner

    “A requirement to receive major transit capital grants from the Trump program would be to raise local funds via value capture. This typically entails setting up a special tax district that “captures” some of the increased value of real estate attributable to a transit improvement.”

    I believe this will fully favor the cities. Currently almost all federal funds are distributed directly to State DOT which are mostly controlled by the Republican party. State DOTs have two big problems when it comes to providing the required federal match, they would need full statewide approval to tax everyone for an improvement that would only benefit a specific subarea, and they are mostly controlled by anti-tax (and mostly anti-toll) republicans. In addition State DOTs will be dealing with a proposed $10 billion/year funding cut from Trump’s proposed federal DOT budget cuts.

    City and county DOTs will now be able to directly apply for $100 billion in federal funds they never had access to previously and they already know all about how to authorize and pass local tax and TOD initiatives as well as private partnerships to pay for infrastructure, as 95% of county/city DOT funding is already local. They will have a clear edge in providing the “match” for federal funds compared with state DOTs.

    The big wild card is who approves grant funding at the federal level. If it’s a bipartisan group of lawmakers the cities/counties have a great chance, if the decision is made by the head of the DOT Chao and her husband Mitch, who also controls the Senate, it will be a great time to live in Kentucky…as long as you make it out of grade school alive.

  • Larry Littlefield

    If Trump wants transit to be funded by property taxes, roads to be funded by tolls, and the cost of construction to be reduced (at least outside New York), then all he has to do is cut federal surface transportation spending to zero.

    The 20 percent the federal government puts up is probably less than the added cost of federal regulations — starting with “buy American.”

  • TakeFive

    I find this much more interesting:

    In the latest edition of the POLITICO Money podcast, Sen. Jim Inhofe (R-Okla.), chair of a key subcommittee on the issue … Inhofe said Republicans and Democrats should look at “whatever it takes” to fund an infrastructure bill and take an “all of the above” approach to potential sources of funding, including a potential increase in the gas tax despite opposition to that approach from Trump.

    “I think while he has made the statement that the gas tax is not something that he is pushing, I have a feeling that’s still on the table. Whatever it takes to get this done, we are going to get it done.”

  • Jeffrey Baker

    Can I get a link to that source material? Inhofe is a well-known poophead. I find the idea that he said anything of the kind completely preposterous.

  • TakeFive

    Thanks for the request; it was an unintentional oversight that I didn’t include the link. I’ve made the correction.

  • Newtonmarunner

    Value capture for mass transit is a horrible idea. It encourages building subways/light rail in wealthy suburbs (with park ‘n rides) where ridership is low rather than places like Dudley Sq. (Roxbury) and Blue Hill Ave. (Mattapan), Utica and Nostrand Aves., 125th St., H St., Geary Blvd., etc. — which are far more transit-dependent — because more revenue is raise from building in wealthier neighborhoods.

    A gas tax, carbon tax, or congestion tax is much better for funding public transit.

  • Jeffrey Baker

    Thanks. Now I am not so shocked. They don’t actually quote him, and what they implied is not inconsistent with his past statements, going back many years. He’s OK with gas tax as a user fee. He specifically is not OK with gas tax funding “infrastructure” unless you define infrastructure as roads.

  • TakeFive

    Well they both paraphrase and quote Inhofe but I wasn’t aware of his past positions. In any case the FAST Act which was passed in Dec of 2015 was written in the House (Shuster’s committee) and they ruled out gas tax increase as a possibility.

    There’s also this from The Hill: http://thehill.com/policy/transportation/261500-poll-70-percent-of-us-residents-support-transit-funding-increase

    Federal transportation funding is typically split between road and transit projects on an 80 percent to 20 percent basis. The money is stored in a separate Mass Transit Account within the Department of Transportation’s Highway Trust Fund, created during the Reagan administration.

    I knew there was that provision but not the specifics. Whether there’s any fine print that would allow them to sidestep that provision I dunno.

  • Southeasterner

    Fully agree but value capture is only one tool in the toolbox. A local transit agency has the flexibility to pay for capital asset improvements through localized regional or county tax measures and could “privatize” vehicle purchases through mid to long term operating agreements, many agencies throughout the country (and Europe) already do this with companies like First Group and Stagecoach. This would qualify as your private match. If you have strong unions and there is no possible way to privatize bus operations you could look at just privatizing the bus fleet and maintenance base operations, as MBTA is exploring in Boston.

  • Larry Littlefield

    Right. Get the federal government out. They just drain and destroy cities.

  • Bernard Finucane

    Given the current national political climate cities need to focus on the cheapest ways to implement public transportation. That means infill development, BRT (or BRT lite) and bike sharing.

  • HamTech87
  • Guy Ross

    As long as roads are funded with user fees as close to 100% as possible, I’m fine with this. The drumbeat of building more roads will vanish.

  • crazyvag

    Bike sharing isn’t transit. If it were, then we’d be able to use pre-tax dollars on the fees like we can with train passes.

  • crazyvag

    Well, taken to the extreme MTR owns apartments near stations that it can build to significant density to subside transit. I don’t know if that is even allowed in America.

  • TakeFive

    That is stinkin’ thinkin’. I’m a yuge transit fan and the notion of using only user fees to pay for transit is laughable. In Denver for example ALL taxpayers help fund transit while only a small percentage actually use it.

    With respect to roads, they are paid for by all taxpayers and btw everybody relies on roads for their daily bread. Whether it’s a use fee or some other tax, who cares? How many cities or counties rely on user fees? None that I know of but there may be some.

  • TakeFive

    There is an important role for Federal funding especially outside of cities like in states, ie agricultural states, with there’s little density but where needs are just as important.

    BTW, many, many cities would be at a total loss in trying to build and operate transit etc w/o Federal grants. I assume you live where you see local funding as not a problem. Lucky you.

  • Earl D.

    I would disagree. Generally, it encourages building transit infrastructure in places where land is highly utilized, which is practically always in metropolitan cores. Dense working-class neighborhoods are more than a match property-value-wise to far flung mcmansioned cul-de-sacs. Unlike school funding where property taxes are rationed out on a per-pupil basis, density serves as a double incentive for public transit: it provides higher cost recovery by the fare box, and it provides a way to quantify the value such transit brings to neighborhoods.

    It also could serve a third purpose, which is to finally get CA to rid itself of prop 13 which basically provides the opposite incentives: to underutilize real-estate, rewarding communities that keep density low while availing themselves of costly state and federal funded infrastructure.

  • Guy Ross

    I don’t want to pay for the travel methods of the rich. The same methods which kill tens of thousands a year, destroy neighborhoods, feed obesity and insert ferrous micro-particles into my brain. I know, crazy….

    You have a strange take on this: auto subsidy is fine, transit subsidy is bad.

  • TakeFive

    Try rereading my comment. No way did I say roads are good but transit is bad. Newsflash: buses typically use roads as well.

    Not sure where you live that only the rich use roads but it’s nearly the opposite where I live.

    Lastly if you don’t want taxpayers to pay for transportation (regardless of method) does that mean you want all transportation to be privatized?

  • Charles

    Then what do you call the daily portion of my commute that I do on CitiBike?

  • Guy Ross

    Hi, the poor use public transit, the rich drive in their private car. Yes, this is an oversimplification but it is true. Are poor people forced to drive? Sure, Do rich people use transit? Yes. But we are talking about generalizations here, right? Do you dispute this?

    Lastly, privatization entails a profit motive for capitalists/investors. This is not desirable nor necessary. Just look at how the private prison industry has led to more demand for their services… What I support is users of all transportation systems pay for what they use in the form of users fees. You say we all profit from roads. Sure, we profit from most of what the government provides. If it is goods taken by truck, it will be priced in, if it is taken by train, that mode is priced in.

    Do you feel that transportation in itself is a private activity which should be encouraged through public subsidy? I don’t.

  • Seems rather strange to suggest that the IRS is the decider of what is transit for transportation purposes, as opposed to only tax purposes.

  • crazyvag

    From IRS’s point of view, you might as well be driving a car. And if you did, you could pay for parking with pre-tax money.

  • crazyvag

    That logic fails when you consider your tax dollars also go to roads that only 1% of drivers use.

  • TakeFive

    I dunno where you live but in most places close to 95% of taxpayers drive on roads as do those who ride on buses. Plus as I said virtually 100% rely on roads for their daily bread. So no failure with my logic.

  • TakeFive

    I can agree with a lot of that.

  • crazyvag

    Since, you’re complaining about spending money on a mode of transport that isn’t convenient for you, why aren’t you complaining about spending money any transportation that isn’t personally convenient to you?

  • crazyvag

    In Denver all taxpayers pay for roads, even for ones they never use.

    Cities can easily rely on user fees for roads. Simply raise the car registration, gas tax and tolls to match the costs. If you think it’s not affordable, then you begin to understand the level of subsidy that roads need from the fed (federal income tax), state (state income tax), cites (sales tax and property tax).

  • TakeFive

    Is what’s good for the goose also good for the gander? As I suggested, can you envision transit users paying for 100% of the capital and operating costs?

    User fees ie gas taxes at the federal level have been a political problem; politics is complicated; I don’t even want to go there.

  • TakeFive

    In many or most places over 90% of taxpayers use roads; 100% of taxpayers rely on roads for their daily bread. Nothing at all wrong with my logic.

  • TakeFive

    Wut? I make real world observations, not complain.

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