WASHINGTON — President-elect Donald Trump’s call for a new trillion-dollar infrastructure program got the attention of those who have long been pointing to the nation’s crumbling roads, aging dams and outdated medical facilities.
“It’s certainly the biggest step we’ve seen discussed or mentioned in quite a while from a political leader,” said Casey Dinges, senior managing director of the American Society of Civil Engineers.
That organization has identified $3.6 trillion in total infrastructure needs by 2020, but only $2 trillion in revenue to pay for it. So a trillion-dollar infusion would go a long way toward closing the gap, about half of which represents transportation systems.
But questions abound as to how Trump’s plan will work and how the specifics will be received by state officials and lawmakers in Congress. While some Trump allies have argued that deficit spending for such a program would make sense because of low interest rates, Capitol Hill Republicans are unlikely to simply throw so much spending on the federal credit card.
Trump also has suggested more creative ways to fund it.
Trump could seek to tap private sector money, either through public-private partnerships such as toll roads or by leveraging private dollars through tax incentives. For example, Trump advisers wrote a lengthy paper about how infrastructure projects could be paid for by leveraging billions of dollars in tax incentives and credits. The idea is that tax revenues paid by the companies handling the projects — and the new jobs being created — would offset the cost of the tax incentives.
Critics, however, have questioned the feasibility of that approach.
Who foots the bill has long been the sticky question when it comes to infrastructure.
The federal gas tax once provided much of that money, but its rate has been unchanged since 1993 and its purchasing power has steadily eroded.
The political will to raise the federal tax simply doesn’t exist, which is a major reason why states — including Iowa and Nebraska — have raised their own gas taxes in recent years.
“There are always going to be more needs than dollars,” said Kyle Schneweis, director of the Nebraska Department of Roads.
Sen. Deb Fischer, R-Neb., has been touting her own proposal for an infrastructure bank and says corporate tax reform could help pay for it.
Fischer, who has long focused on infrastructure issues, has been discussing her ideas with the Trump transition team. Fischer met with Trump’s nominee to the Transportation Department, Elaine Chao, for an hour last month.
The Nebraska senator also plans to roll out broader infrastructure proposals in the new Congress to give states more flexibility in addressing their needs.
In Nebraska, state roads officials solicited input from Nebraskans last winter — an effort that produced a wish list of future projects totaling $8 billion. They recently trimmed that list to $2.7 billion for a presentation to state lawmakers. State initiatives in recent years will raise about half the money needed over the next 17 years.
The Nebraska projects include upgrading to four lanes the hundreds of miles of roads that make up the state’s expressway system.
State officials also are eyeing large-scale projects such as south and east beltways in Lincoln. The first is scheduled for construction in 2020 while the other is more on the planning horizon.
Meanwhile, Nebraska officials know there will be future needs in Omaha as the state’s largest city continues to grow.
Schneweis said he supports looking for creative approaches to financing. But he also said that the typical formula-based distribution of federal funding to the states is solid and ensures that the funds will be put to good use.
“The traditional methods work, they’re proven,” Schneweis said.
He and others said they are curious to see the details on Trump’s plans, however. They also noted that Trump could seek to pump more money through existing programs, from the latest recent highway bill known as the FAST Act to the most recent water resources development bill.
As for toll roads, highway officials and other experts note that they can work well on high-volume roadways like a bridge into New York City. But the financial numbers don’t really work to use tolls to finance, say, a stretch of Interstate 80 west of Grand Island.
Dinges said his organization has called for a funding approach that will work over the long haul. Given that the federal gas tax is likely to continue losing steam with more fuel-efficient vehicles, a financing system based on vehicle miles traveled could be more useful.
“What can we put in place for the long term that will be sustainable?” Dinges said.
If Trump succeeds in boosting infrastructure spending, there also will be questions about how the money is distributed.
Dinges said that from a policy standpoint officials should avoid incentivizing projects that would happen anyway. At the same time, they need to take into account that some states have been better about maintaining their infrastructure than others. The federal government should avoid rewarding states that let their infrastructure fall apart and counted on federal funds to save the day, he said.
Republicans have said they don’t want to back a program that will look like the stimulus package that President Barack Obama, a Democrat, pushed through early in his tenure. That effort was focused on finding “shovel-ready” projects that could quickly put people to work.
Schneweis said the country’s economy is in a different place now.
“When you look back on it, you’ll see a lot of projects that put people to work right away but didn’t have that long-term economic growth,” he said. “That’s where I would hope for a little more balance as we go forward.”
Stuart Anderson, director of the Iowa Department of Transportation’s planning division, said the first thing he’s looking for in the Trump administration is the money already approved by Congress.
Iowa has a long list of needs — from airports to dams to transit funding.
“Our fleet is aging rapidly,” Anderson said. “Well over 50 percent of the public transit fleet in the state exceeds federal useful life standards.”
There was money in the FAST highway bill from which the state secured grants to replace some of its aging buses, but more money is needed, he said.
As Iowa considers its critical needs, it targets safety issues, higher volume thoroughfares and the roadways most important for transporting farm products to market.
Prior to Iowa’s gas tax increase, the state had identified a shortfall of $215 million per year for the most critical needs. That funding shortfall has been met, mainly through the fuel tax hike and some additional federal money.
Still, Iowa’s total annual shortfall for its infrastructure needs is about $1.6 billion a year, and the state, cities and counties could get work done faster if they receive additional resources. The increased attention to the issue has state officials excited.
“To have the president-elect talk about it the night of his election — that’s a great sign for a recognition of the importance of investing in the nation’s infrastructure,” Anderson said.