water projects

New Leak Confirms Infrastructure Package Outline

The long-promised Trump infrastructure package may be unveiled later this month when the President delivers his State of the Union Address. A new leak confirms what we reported several weeks ago, including money that could be used to expand broadband access in rural areas.

The long-promised Trump infrastructure package may be unveiled later this month when the President delivers his State of the Union Address. A new leak confirms what we reported several weeks ago, including money that could be used to expand broadband access in rural areas.

Expectations are building that President Trump will unveil his long-promised infrastructure package during his State of the Union Address January 30.

A well-publicized leak of his proposal emerged this week, which conforms closely with what we reported – also based on leaked material – last month in this blog.

There will be four pots of money. The largest, totaling $100 billion, is intended to provide a federal incentive for transportation, water, hydroelectricity and brownfield reclamation projects. Money from this pot would cover 20 percent of project costs and non-federal funding would make up the rest.

A second pot sets aside $50 billion for rural projects, which also can include broadband investments. The last leak indicates $40 billion from this pot would be allocated to states after they produce a comprehensive rural investment plan.

A third pot would give the Department of Commerce the discretion to spend $20 billion on what are called transformative projects, including higher-risk and higher-reward projects.

Around $30 billion would be dedicated to federal capital financing and credit programs including TIFIA and WIFIA that are intended to spur public-private partnerships such as toll roads.

There are congressional proposals on infrastructure, so the final shape of a package that can pass remains to be seen. But it is encouraging to see the debate over an actual package may begin soon in Congress.

Congressional attention has been focused – and will continue to focus – on reaching an agreement on spending. The nation is operating under its fourth continuing resolution, with a February 8 deadline to negotiate a longer-term agreement under the shadow of other issues that range from increased military spending and immigration.

The three-day partial federal government shutdown that ended Monday may be a precursor of what’s to come. Senate Democrats want to use their limited leverage to filibuster to secure the future of 800,000 “Dreamers.” Trump and conservative Republicans in the House want to use the Dreamers as a bargaining chip to get up to $18 billion for a border wall and other changes in immigration policy.

The consensus view of political observers is that Senate Democrats folded fairly quickly because they weren’t geared up for a war of words in print and on social media. Republicans pounded them, saying they shut down the government to protect illegal immigrants.

Government shutdowns probably don’t shower any political party with praise, but Democrats may be better armed to defend their position if February 8 rolls around and there is no deal on immigration, border security or military spending.

Transportation Bill Finally Moving

Congressional conferees reached agreement on a 5-year, $305 billion transportation bill that will hike funding for public transportation.

Congressional conferees reached agreement on a 5-year, $305 billion transportation bill that will hike funding for public transportation.

House and Senate conferees have agreed on a transportation bill that funnels more money to local government, boosts funding to improve highway freight corridors, increases spending on buses and enhances safety for crude oil rail shipping.

The 1,300-page, five-year, $305 billion transportation authorization compromise is expected to land on President Obama's desk as early as Friday, the day the current authorization bill expires. If the process slows in the House or Senate, another short-term extension may be likely and will push the bill signing to next week.

In addition to transportation provisions, the so-called FAST Act revives the Export-Import Bank, which was effectively mothballed Oct. 1, and removes a restriction on financing large water projects.

While observers are still looking at the fine print, here are several highlights in the conference agreement: 

•  More money in the Surface Transportation Program is allocated for local government. The allocation will grow from 50 percent to 55 percent, which could mean an average increase of $300 million annually for local transportation projects.

•  Funding also increased for the Transportation Alternative Program. States and local government use this money for economic development, trail and other access projects.

•  Bus funding increases by 89 percent over the life of the bill. This provides both stable formula funding and a competitive grant program to address bus and bus facility needs.

•  A brand new National Highway Freight Program will focus on funding critical urban and rural freight corridors across the country. The new program is funded at $1.15 billion in 2016 and rises to $1.5 billion in 2020.  

•  The Nationally Significant Freight and Highway Projects, a new competitive grant program, will start at $800 million in FY16. After that, it increases by $50 million each year for a total of $1 billion. The program will reduce the impact of congestion, generating national and regional economic benefits and facilitating the efficient movement of freight.

•  Crude oil shipments will be required to move in railcars with a thermal blanket and other safety features. Local governments have demanded these additional measures along rail routes.

•  Conferees jump started the Water Infrastructure Finance & Innovation Act  (WIFIA) program. They made this possible by removing the restriction that disallows use of municipal bonds as the local match. The EPA designed the program to reduce the financing costs of large scale water projects. It's estimated that the WIFIA program could save an estimated 20 percent on the cost of construction.